/raid1/www/Hosts/bankrupt/TCR_Public/160923.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, September 23, 2016, Vol. 20, No. 266
Headlines
124 WEST MADISON: Case Summary & Unsecured Creditor
1601 WEST SUNNYSIDE: Lashley Offers $120K for Scottsdale Property
21ST CENTURY: Ernst & Young LLP Raises Going Concern Doubt
21ST CENTURY: Incurs $17.1 Million Net Loss in Second Quarter
21ST CENTURY: Posts $2.6 Million Net Income for First Quarter
2490 US 1: US Trustee Fails to Appoint Creditors' Committee
4LICENSING CORP: Case Summary & 4 Unsecured Creditors
4LICENSING CORP: Files Chapter 11 Bankruptcy Petition
ACB RECEIVABLES: Hires David Alan Ast as Attorney
ACQUIRE HEALTHCARE: Case Summary & 20 Largest Unsecured Creditors
AGRIEURO CORP: Funding Uncertainty Raises Going Concern Doubt
AIX ENERGY: Plan Confirmation Hearing Set for Oct. 24
ALAN MISHKIN: Unsecureds To Be Paid in Full Under Plan
ALCOA CORP: S&P Assigns 'BB-' CCR; Outlook Stable
ALCOA INC: Fitch Withdraws 'B+' Convertible Preferred Stock Rating
ALLEGIANT TRAVEL: Moody's Affirms Ba3 Corporate Family Rating
ALLEGIANT TRAVEL: S&P Cuts CCR to BB- on Expected Declining Metrics
AMERICAN BUILDERS: S&P Affirms 'BB' CCR, Off CreditWatch Negative
AMERICAN POWER: Matthew van Steenwyk Reports 42.4% Stake
AMERICAN POWER: Recurring Losses Casts Going Concern Doubt
AMN HEALTHCARE: S&P Assigns 'BB-' CCR & Rates Sec. Loans 'BB+'
AMPLIPHI BIOSCIENCES: Updates Progress in Rhinosinusitis Trial
ANTERO ENERGY: Plan Confirmation Hearing Set for Oct. 24
ARCH COAL: Wins Confirmation of Reorganization Plan
ARIZONA ACADEMY: U.S. Trustee Forms Three-Member Committee
ATINUM MIDCON: Hires BDO USA as Tax Service Provider
AVACEND INC.: Case Summary & 10 Unsecured Creditors
AVIS BUDGET: S&P Assigns 'B+' Rating on EUR250MM Sr. Notes
AXALTA COATING: Moody's Rates New Sr. Euro Notes Due 2025
AZURE MIDSTREAM: S&P Lowers CCR to 'CCC+', Outlook Negative
BALTAZAR ANTONIO: Unsecureds To Recover 4.2% Under Plan
BARBARA JEAN DENNIS: Gets Prison Term for Bankruptcy Fraud
BJORNER ENTERPRISES: Hires MacConaghy & Barnier as Counsel
BP ORTHOLITE: S&P Assigns 'B+' CCR & Rates New 1st Lien Loans 'BB'
BRINKER INT'L: Moody's Cuts Non-Guaranteed Note Ratings to Ba1
BRINKER INTERNATIONAL: S&P Lowers CCR to 'BB+'; Outlook Stable
C1 INVESTMENT: S&P Affirms 'B' CCR & Rates $335MM Loan 'B'
CAESARS ENTERTAINMENT: Proposes to Increase Contributions to Plan
CALLON PETROLEUM: S&P Assigns 'B' CCR & Rates $350MM Notes 'B+'
CANNABIS SCIENCE: Robert Kane Appointed as COO
CAPE COD COMMERCIAL: UST Says Plan Needs to Be Revised
CARIBBEAN TRANSPORT: Hires Lube & Soto as Attorney
CCHN GROUP: S&P Assigns 'B' CCR & Rates New $248MM Facility 'B'
CENTRAL PACIFIC: Fitch Affirms BB- Rating on Trust Pref. Securities
CHC GROUP: Brown, Neligan Represent Ad Hoc Consortium of Noteholder
CHGC INC.: Case Summary & 10 Unsecured Creditors
CINCINNATI BELL: S&P Assigns 'B' Rating on New $425MM Unsec. Notes
CLAIRE'S STORES: Supplements U.S. Credit Facility Amendment
CLUBCORP CLUB: 1st Lien Loan Repricing No Impact on Moody's B1 CFR
COBALT INT'L: S&P Lowers CCR to 'CCC-' on Possible Restructuring
COEUR MINING: Moody's Hikes Corporate Family Rating to B2
COMMUNITY HEALTH: Fitch Puts 'B' IDR on Rating Watch Evolving
COMSTOCK RESOURCES: S&P Raises CCR to 'CCC+' on Debt Restructuring
CONSOLIDATED COMMUNICATIONS: Moody's Rates New $1BB Loans Ba3
CONSOLIDATED COMMUNICATIONS: S&P Rates New $1BB Secured Debt 'BB-'
CORTES NP: S&P Assigns 'B' Rating on New $750MM Sr. Unsec. Notes
CROSSFIRE MANUFACTURING: Platinum Bank Objects to Plan Outline OK
CRYSTAL WATERFALLS: Selling All Assets to PFM for $25M
CVB STATUTORY: Fitch Affirms 'BB-' Preferred Stock Rating
D.A.B. GROUP: Flintlock Opposes Approval of Plan Outline
DELIVERY AGENT: Meeting to Form Creditors' Panel Set for Sept. 29
DETROIT PUBLIC SCHOOLS: Moody's Revises Outlook to Developing
DETROIT PUBLIC: S&P Lowers Rating on 2011 & 2012 GO Bonds to 'B'
DONNELLEY FINANCIAL: S&P Assigns 'BB-' CCR; Outlook Stable
DYNAMIC PRECISION: S&P Lowers CCR to 'B-' on Weak Financials
EKD REALTY: Names Robinson Brog as Counsel
ELDORADO RESORTS: S&P Puts 'B' CCR on CreditWatch Positive
ENBRIDGE INC: DBRS Puts BB Subordinated Debt Rating Under Review
ENERGY FUTURE: NextEra Merger Deal OK'd, Plan Support Deal Revised
ENERGY FUTURE: TCEH Deal Adds $37.8-Mil. to Creditor Recovery
EVANS & SUTHERLAND: Peter Kellogg Holds 27.4% Stake as of Sept. 16
EXGEN TEXAS: S&P Lowers Project Rating to 'B'; Outlook Negative
FIRED UP INC: Hires Lewis Brisbois as Special Counsel
FIRST DATA: Moody's Hikes Corporate Family Rating to B1
FIRST MIDWEST: Fitch Affirms 'B+' Preferred Stock Rating
FIRST PHOENIX-WESTON: US Trustee Fails to Appoint Creditors' Panel
FOCUS BRANDS: S&P Assigns 'B' Rating on $625MM 1st Lien Loans
G-III APPAREL: Moody's Assigns Ba3 Corporate Family Rating
GLADES BREWERY: Unsecureds To Get $50,000 Under Plan
GLOBAL HEALTHCARE: Recurring Losses Raises Going Concern Doubt
GREAT BASIN: Enters Into Separate Leak-Out Agreements
GYPSUM MANAGEMENT: S&P Affirms 'B+' Rating on $490MM 1st Lien Loan
HARSCO CORP: Fitch Affirms 'BB' LT Issuer Default Rating
HEALTH DIAGNOSTIC: Trustee Files $600M Suit vs. Execs, Contractors
HILLCREST INC: Randall Robb to Retain Ownership Under Plan
I-69 DEVELOPMENT: S&P Lowers Rating on $243.84MM Bonds to 'BB-'
ICRCO INC.: Case Summary & 20 Largest Unsecured Creditors
INTERTAIN GROUP: S&P Puts BB Debt Ratings on CreditWatch Negative
INTOWN COMPANIES: Hires Jason Burgess as Counsel
ISLE OF CAPRI CASINOS: S&P Alters Outlook to Stable, Affirms B+ CCR
ITT EDUCATIONAL: Ch. 7 Causes Veterans to Lose GI Bill Benefits
JELD-WEN INC: S&P Raises CCR to 'B+' on Improved Margins
JOURNEY HOSPICE: Taps Gordon Dana as Special Counsel
KAIROS DEVELOPMENT: Unsec. Creditors to Recover 5% Under Plan
KEY ENERGY: Makes Changes to Cash Bonus Incentive Plan
KEYCORP: DBRS Assigns BB(high) Preferred Stock Rating
LAKEVIEW PROPERTIES: Unsecureds To Get $3K Each Under Plan
LAST CALL GUARANTOR: Russell R. Johnson Representing Utilities
LAVA ENTERPRISES: Hires Stephen Dunn as Attorney
LCM XXII: S&P Assigns Prelim. BB Rating on Class D Notes
LEAH M. GANSLER: Exit Plan to Return 100% to Unsec. Creditors
LEAP FORWARD: Amends Disclosure Statement to Discuss Suits
LUCAS ENERGY: Registers 13 Million Common Shares for Resale
MARGHERITA ARVANITES: Plan Confirmation Hearing Set for Nov. 9
MDC PARTNERS: S&P Revises Outlook to Stable & Affirms 'B+' CCR
MFLR LLC: Unsecureds To Recover 100% Under Plan
MOBILE FOX: US Trustee Fails to Appoint Creditors' Committee
MULLAN AGRITECH: Working Capital Deficit Raises Going Concern Doubt
MURRAY ENERGY: S&P Raises CCR to 'B-', Outlook Stable
MUSCLEPHARM CORP: Chief Financial Officer Quits
NAVIENT CORP: S&P Assigns 'BB-' Rating on $500MM Sr. Unsec. Notes
NEUSTAR INC: Moody's Assigns Ba2 Rating on Term Loan A
NEXSTAR BROADCASTING: S&P Rates New $3.3BB Credit Facility 'BB+'
NORD RESOURCES: Securities Registration Revoked by SEC
OPEN TEXT: S&P Affirms 'BB+' CCR on Dell EMC Biz Acquisition
PACIFIC WEBWORKS: Unsecureds To Recoup 80% Under Plan
PARKLAND FUEL: S&P Assigns 'BB-' Rating on C$300MM Sr. Notes
PEABODY CORP: Illinois Self-Bonding Stipulation Approved
PEAK WEB: Hires Isler Northwest as Accountant
PHOTOMEDEX INC: Amends Purchase Agreement With Pharma Cosmetics
PHOTOMEDEX INC: Closes Asset Purchase Agreement with PHARMA
PICKENPACK HOLDING: Chapter 15 Case Summary
PICKENPACK HOLDING: Seeks U.S. Recognition of German Proceedings
PIONEER BREAKER: Case Summary & 20 Largest Unsecured Creditors
PIONEER ENERGY: Presented at Johnson Rice Energy Conference
PITNEY BOWES: Fitch Affirms 'BB' Preferred Stock Ratings
PLAZA LAS AMERICAS: Hires Jose Calderon as Attorney
PLY GEM: S&PP Raises CCR to 'B+', Outlook Stable
PRO-FIT DEVELOPMENT: Hires Weiss as Certified Public Accountant
RALSTON, NE: S&P Lowers Rating on 2011/2012 GO Arena Bonds to BB
RINCON ISLAND: Hires Claro Group to Help in DIP Loan Talks
RMS TITANIC: Creditors' Panel Hires Storch Amini as Attorney
RMS TITANIC: Creditors' Panel Hires Thames Markey as Counsel
ROSARIO MENDOZA: To Pay Nationstar Mortgage Claim in 30 Years
RP CROWN: Moody's Hikes Corporate Family Rating to B2
RR DONNELLEY: Moody's Cuts Corporate Family Rating to B1
SCRIPSAMERICA INC: Hires Bolognese as Special Litigation Counsel
SCRIPSAMERICA INC: Hires Ciardi as Bankruptcy Counsel
SETAI 3509: Hires Brown Harris as Leasing Broker
SIGA TECHNOLOGIES: Plans to Issue $35.2MM in Common Shares
SKYLINE CORP: Shareholders Elect Eight Directors
SMS SYSTEMS: S&P Assigns 'B' CCR & Rates $300MM Sec. Loans 'B+'
SPECTRUM BRANDS: S&P Rates New EUR375MM Sr. Notes 'BB-'
ST. ELIZABETH COLLEGE: S&P Rates 2016 Revenue Bonds 'BB'
ST. JAMES NURSING: Hires Berry as Feasibility Expert Witness
STAFFING GROUP: Recurring Losses Raises Going Concern Doubt
STAG INDUSTRIAL: Fitch Assigns 'BB+' Preferred Stock Rating
STEAK N SHAKE: S&P Lowers CCR to 'B-', Outlook Stable
SUNEDISON INC: BlackRock Said to Bid for YieldCo
TALLAHASSEE INDOOR: US Trustee Fails to Appoint Creditors' Panel
TGHI INC: Gets Court Approval of Prepackaged Liquidating Plan
TOWERSTREAM CORP: Inks Exchange Agreements with Stockholders
TPC GROUP: S&P Lowers CCR to 'CCC+'; Outlook Negative
TRIMEDYNE INC: Reports $123-K Net Loss for June 30 Quarter
TRIN POLYMERS: Hires Wardrop & Wardrop as Counsel
TRINITY 83: Hires Cohen & Krol as Attorney
US TELEPACIFIC: S&P Assigns 'B' Rating on Sr. Sec. Notes Due 2021
W&T OFFSHORE: S&P Raises CCR to 'CCC' After Unsec. Note Exchange
WARREN RESOURCES: Wins Plan Confirmation, Eyes Sept. 30 Ch.11 Exit
WD WOLVERINE: S&P Assigns 'B' CCR & Rates 1st Lien Loans 'B'
WEST LANE PROPERTIES: Hires Mark Hannon as Counsel
WEST VIRGINIA HIGH: Taps Arnett Carbis as Accountants
YELLOW CAB AFFILIATION: Hearing on Committee's Plan Outline Oct. 5
YRC WORLDWIDE: Analyst Presentation Held
ZEST HOLDINGS: S&P Retains 'B' CCR on Proposed $70MM Add-On
*********
124 WEST MADISON: Case Summary & Unsecured Creditor
---------------------------------------------------
Debtor: 124 West Madison, LLC
26 John St
Englewood Cliffs, NJ 07632
Case No.: 16-28079
Chapter 11 Petition Date: September 21, 2016
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Judge: Hon. Vincent F. Papalia
Debtor's Counsel: John O'Boyle, Esq.
NORGAARD O'BOYLE
184 Grand Ave
Englewood, NJ 07631
Tel: (201) 871-1333
Fax: (201) 871-3161
E-mail: joboyle@norgaardfirm.com
Total Assets: $1.06 million
Total Liabilities: $638,688
The petition was signed by Adonis Morfesis, managing member.
The Debtor lists Connect One Bank as its largest unsecured creditor
holding a claim of $23,490.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/njb16-28079.pdf
1601 WEST SUNNYSIDE: Lashley Offers $120K for Scottsdale Property
-----------------------------------------------------------------
1601 West Sunnyside Drive #106, LLC, asks the U.S. Bankruptcy Court
for the District of Idaho to authorize the private sale of
condominium unit 1709, Sunrise Phase 1, located at 3500 N. Hayden
Road, Scottsdale, Arizona, and includes as personal property a
refrigerator and a dryer, to Nathan Lashley for $120,000.
A copy of the Residential Resale Real Estate Purchase Contract
attached to the Motion is available for free:
http://bankrupt.com/misc/1601_West_Sunnyside_82_Sales.pdf
The property has been exposed to the market since July 21, 2016,
and was listed for $130,000. Debtor had a previous offer of
$125,000; that Buyer withdrew from the sale following an
inspection. Debtor has not received any other offers.
The sale will close on Oct. 24, 2016, if approved by the U.S.
Bankruptcy Court, at the office of Fidelity National Title, 60 E.
Rio Salado Parkway, Suite 1104, Tempe, Arizona.
The sale complies with Section 363(f)(3) because the real property
is being sold for more than the consensual lien and outstanding
real property taxes, which together total approximately $61,175.
The claims secured by these liens will be paid from closing.
Wells Fargo Home Mortgage holds a mortgage securing approximately
$60,815, according to a pay-off statement Wells Fargo provided on
Sept. 12, 2016, adjusted for interest through Oct. 24, 2016. Debtor
estimates that it will pay about $360 in real property taxes,
pro-rated through the closing of sale, for current year property
taxes.
Subject to Court approval, Debtor requests permission to pay at
closing from the real property sale proceeds, the Wells Fargo Home
Mortgage deed of trust encumbering the real property, pro-rated
property taxes pro-rated as of the date of closing, realtor fees,
closings costs, outstanding property taxes and water assessments,
and any and all other reasonable costs of sale. Debtor proposes
that the purchase price be distributed in the following approximate
amounts at the time of closing:
Sale Price: $120,000
Less Estimated Deductions:
Wells Fargo Home Mortgage: $60,815
Real Property Taxes: $390
Real Estate Commissions at 5%: $2,400
Escrow Fees: $699
Homeowners Insurance: $820
Net Sales Proceeds (est.): $54,876
The Debtor will pay only a 2% commission to the realtor on the
sale. The real estate commission has been reduced from $6,250 (5%
of $125,000) to $2,400 (2% of $120,000).
The Debtor requests that approval of the sale be effective
immediately and the 14-day stay imposed by Fed. R. Bankr. P6004(h)
and other rules be waived.
About 1601 West Sunnyside
1601 West Sunnyside Drive #106, LLC, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Idaho Case No.
15-40587) on June 15, 2015. The Debtor tapped Randal J. French,
Esq., at Randal J. French, P.C., in Boise, Idaho, as counsel.
21ST CENTURY: Ernst & Young LLP Raises Going Concern Doubt
----------------------------------------------------------
21st Century Oncology Holdings, Inc., filed with the U.S.
Securities and Exchange Commission its annual report on Form 10-K,
disclosing a net loss of $126.84 million on $1.08 billion of total
revenues for the year ended December 31, 2015, compared to a net
loss of $352.70 million on $1.02 billion of total revenues for the
fiscal year in 2014.
Ernst & Young LLP states that the Company has not complied with
certain covenants of loan agreements with banks and noteholders as
it pertains to the timely reporting of annual and quarterly
financial information, the resolution of which is contingent upon
the generation of specific net cash proceeds to be received within
certain time periods. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
The Company's balance sheet at December 31, 2015, showed $1.13
billion in total assets, $1.39 billion in total liabilities,
$389.51 million in series A convertible redeemable preferred stock,
$19.23 million in Noncontrolling interests—redeemable, $26.32
million in Noncontrolling interests—nonredeemable, and a
stockholders' deficit of $700.95 million.
A copy of the Form 10-K is available at:
https://is.gd/teLAgU
About 21st Century
21st Century Oncology, Inc., formerly known as Radiation Therapy
Services, Inc. ("RTS") owns and operates radiation treatment
facilities in the US and Latin America.
21st Century reported a net loss of $127 million on $1.07 billion
of total revenues for the year ended Dec. 31, 2015, compared to a
net loss of $353 million on $1.01 billion of total revenues for the
year ended Dec. 31, 2014.
As of Dec. 31, 2015, the Company had $1.12 billion in total assets,
$1.39 billion in total liabilities, $390 million in series A
convertible redeemable preferred stock, $19.2 million in redeemable
non-controlling interests and a total deficit of $675 million.
* * *
As reported by the TCR on Feb. 27, 2015, Moody's Investors Service
upgraded 21st Century Oncology, Inc.'s Corporate Family Rating and
Probability of Default Rating to B3 and B3-PD, respectively. The
upgrade of the Corporate Family Rating to B3 and SGL to SGL-2
reflects the receipt of a $325 million preferred equity investment
from the Canada Pension Plan Investment Board and subsequent debt
reduction.
As reported by the TCR on May 20, 2016, S&P Global Ratings lowered
its corporate credit rating on 21st Century to 'CCC' from 'B-' and
placed the rating on CreditWatch with negative implications.
21ST CENTURY: Incurs $17.1 Million Net Loss in Second Quarter
-------------------------------------------------------------
21st Century Oncology Holdings, Inc., filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $17.06 million on $258 million of total revenues for
the three months ended June 30, 2016, compared to a net loss of
$64.2 million on $278.21 million of total revenues for the three
months ended June 30, 2015.
For the six months ended June 30, 2016, the Company reported a net
loss of $14.4 million on $529 million of total revenues compared
with a net loss of $78.6 million on $554 million of total evenues
for the six months ended June 30, 2015.
As of June 30, 2016, the Company had $1.10 billion in total assets,
$1.39 billion in total liabilities, $430 million in series A
convertible redeemable preferred stock, $19.82 million in
non-controlling interests - redeemable, and a $735.60 million total
deficit.
The Company is highly leveraged. As of June 30, 2016, the Company
had approximately $1.1 billion of long-term debt outstanding. The
Company has experienced and continues to experience losses from its
operations. The Company reported net losses of approximately
$126.8 million, $14.4 million and $78.6 million for the year ended
Dec. 31, 2015, and six month periods ended June 30, 2016 and 2015,
respectively. At June 30, 2016, the Company had $52.2 million of
unrestricted cash and was fully drawn under its revolver.
The Company said its high level of debt could have material adverse
effects on its business and financial condition.
"While the Company is pursuing a variety of initiatives to satisfy
the requirements of the 2015 Credit Facilities and Senior Notes
Indenture, it does not have commitments to obtain the required
equity or dispose of assets in place, and it may not be able to
maintain the required levels of liquidity. Consequently there is
substantial doubt about the Company's ability to continue as a
going concern," the Company stated in the report.
Management Transition
21st Century Oncology announced that the Company has appointed
William R. Spalding as president and chief executive officer of the
Company, effective as of Sept. 9, 2016, and that Dr. Daniel E.
Dosoretz will continue to serve as a member of the Company's board
of directors and senior physician.
The Company also announced, on Sept. 9, 2016, that Canada Pension
Plan Investment Board (CPPIB), a professional investment management
organization, has purchased an additional $25 million of preferred
stock in the company.
Bill Spalding, president and chief executive officer, commented,
"Dr. Dosoretz led the development of a remarkable organization that
today has unparalleled size, scale and relevance in the delivery of
academic-quality, integrated cancer care. Our integrated business
model is a distinct advantage, and positions the Company to succeed
in the current health care environment. The Company's unwavering
commitment to providing patients with high-quality, efficient care
remains unchanged."
"Mr. Spalding continued, "I'm grateful to CPPIB for their continued
commitment to 21st Century Oncology."
The Company's quarterly report on Form 10-Q is available from the
SEC website at https://is.gd/9anbAf
About 21st Century
21st Century Oncology, Inc., formerly known as Radiation Therapy
Services, Inc. ("RTS") owns and operates radiation treatment
facilities in the US and Latin America.
21st Century reported a net loss of $127 million on $1.07 billion
of total revenues for the year ended Dec. 31, 2015, compared to a
net loss of $353 million on $1.01 billion of total revenues for the
year ended Dec. 31, 2014.
* * *
As reported by the TCR on Feb. 27, 2015, Moody's Investors Service
upgraded 21st Century Oncology, Inc.'s Corporate Family Rating and
Probability of Default Rating to B3 and B3-PD, respectively.
The upgrade of the Corporate Family Rating to B3 and SGL to SGL-2
reflects the receipt of a $325 million preferred equity investment
from the Canada Pension Plan Investment Board and subsequent debt
reduction.
As reported by the TCR on May 20, 2016, S&P Global Ratings lowered
its corporate credit rating on 21st Century to 'CCC' from 'B-' and
placed the rating on CreditWatch with negative implications.
21ST CENTURY: Posts $2.6 Million Net Income for First Quarter
-------------------------------------------------------------
21st Century Oncology Holdings, Inc. filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $2.62 million on $270 million of total revenues for
the three months ended March 31, 2016, compared to a net loss of
$14.4 million on $276 million of total revenues for the three
months ended March 31, 2015.
As of March 31, 2016, the Company had $1.14 billion in total
assets, $1.41 billion in total liabilities, $409 million in series
A convertible redeemable preferred stock, $19.95 million in
noncontrolling interests - redeemable and a $695.96 million total
deficit.
The Company is highly leveraged. As of March 31, 2016, the Company
had approximately $1.1 billion of long-term debt outstanding. The
Company has experienced and continues to experience losses from its
operations. The Company reported a net loss of approximately
$126.8 million, net income of $2.6 million and net loss of $14.4
million for the year ended Dec. 31, 2015, and three month periods
ended March 31, 2016 and 2015, respectively. At March 31, 2016,
the Company had $72.4 million of unrestricted cash and was fully
drawn under its revolver.
Going Concern
"...[S]subject to certain qualifications, the credit agreement
governing the Company's term loan facility (the "2015 Term
Facility" and together with the 2015 Revolving Credit Facility, the
"2015 Credit Facilities") and the indenture governing our notes
(the "Senior Notes Indenture"), each as currently in effect,
require us to receive, subject to certain important qualifications
set forth therein, (1) no later than September 10, 2016, net cash
proceeds from the issuance or sale of the Company's capital stock
or from other equity investments in an aggregate amount of at least
$25.0 million (the "First Capital Event"), (2) no later than
November 30, 2016, additional net cash proceeds from the issuance
or sale of the Company's capital stock or from other equity
investments and/or sales of assets (which sale transactions must be
deleveraging transactions on a pro forma basis) in an aggregate
amount of at least $25.0 million (or a lesser amount such that when
combined with the proceeds from the First Capital Event, the total
amount is not less than $50.0 million) (the "Second Capital Event")
and (3) no later than March 31, 2017, additional net cash proceeds
from the issuance or sale of the Company's capital stock or from
other equity investments and/or sales of assets (which sale
transactions must be deleveraging transactions on a pro forma
basis) in an aggregate amount of at least the lesser of (A) $75.0
million (or a lesser amount such that when combined with the
proceeds from the First Capital Event and the Second Capital Event,
the total amount is not less than $125.0 million), and (B) an
amount such that, after giving effect to such issuance or sale of
capital stock or other equity investments and/or sales of assets,
the Company's cash and cash equivalents plus unused revolving loan
commitments equals at least $120.0 million and the Company's
consolidated leverage ratio is not greater than 6.4 to 1.00 (the
"Third Capital Event" and together with the First Capital Event and
the Second Capital Event, the "Capital Events" and each, a "Capital
Event"). At least $50 million of the proceeds from the First
Capital Event, Second Capital Event and Third Capital Event must be
from the issuance or sale of 21C'capital stock or from other equity
investments. The Company is also required to comply with a minimum
liquidity covenant in an amount not less than $40.0 million after
the completion of the First Capital Event, to be tested monthly
prior to the completion of the Third Capital Event and quarterly
thereafter. Its failure to satisfy such requirements could result
in an event of default under our 2015 Credit Facilities or Senior
Notes Indenture, which could result in the debt thereunder being
accelerated. While the Company is pursuing a variety of
initiatives to satisfy the requirements of the 2015 Credit
Facilities and Senior Notes Indenture, it does not have commitments
to obtain the required equity or dispose of assets in place, and it
may not be able to maintain the required levels of liquidity.
Consequently there is substantial doubt about the Company's ability
to continue as a going concern."
The Company's quarterly report on Form 10-Q is available from the
SEC Web site at
https://is.gd/iMgCLJ
About 21st Century
21st Century Oncology, Inc., formerly known as Radiation Therapy
Services, Inc. ("RTS") owns and operates radiation treatment
facilities in the US and Latin America.
21st Century reported a net loss of $127 million on $1.07 billion
of total revenues for the year ended Dec. 31, 2015, compared to a
net loss of $353 million on $1.01 billion of total revenues for the
year ended Dec. 31, 2014.
* * *
As reported by the TCR on Feb. 27, 2015, Moody's Investors Service
upgraded 21st Century Oncology, Inc.'s Corporate Family Rating and
Probability of Default Rating to B3 and B3-PD, respectively.
The upgrade of the Corporate Family Rating to B3 and SGL to SGL-2
reflects the receipt of a $325 million preferred equity investment
from the Canada Pension Plan Investment Board and subsequent debt
reduction.
As reported by the TCR on May 20, 2016, S&P Global Ratings lowered
its corporate credit rating on 21st Century to 'CCC' from 'B-' and
placed the rating on CreditWatch with negative implications.
2490 US 1: US Trustee Fails to Appoint Creditors' Committee
-----------------------------------------------------------
The U.S. Trustee informs the U.S. Bankruptcy Court for the Middle
District of Florida that a committee of unsecured creditors has not
been appointed in the Chapter 11 case of 2490 US 1, LLC, due to
insufficient response to the U.S. Trustee communication/contact for
service on the committee.
About 2490 US 1
2490 US 1, LLC fdba 2498 US 1, LLC, based in Palm Coast, Fla.,
filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 16-02622) on
July 11, 2016. Robert Altman, Esq., at Robert Altman, P.A., as
bankruptcy counsel. The Debtor disclosed total assets at $1.36
million and total liabilities at $1.57 million. The petition was
signed by Sherry Arnett, president.
The Debtor listed Z Best Rentals, Inc., as an unsecured creditor
holding a claim of $275,000. A full-text copy of the petition is
available at: http://bankrupt.com/misc/flmb16-02622.pdf
4LICENSING CORP: Case Summary & 4 Unsecured Creditors
-----------------------------------------------------
Debtor: 4Licensing Corporation
1924 South Utica Avenue, Suite 1120
Tulsa, OK 74104
Case No.: 16-11714
Chapter 11 Petition Date: September 21, 2016
Court: United States Bankruptcy Court
Northern District of Oklahoma (Tulsa)
Judge: Hon. Terrence L. Michael
Debtor's Counsel: Neal Tomlins, Esq.
TOMLINS & PETERS, PLLC
2431 East 61st Street, Suite 305
Tulsa, OK 74136
Tel: 918-949-4411
Email: Neal@tplawtulsa.com
Total Assets: $867,142
Total Liabilities: $2.11 million
The petition was signed by Phil Frohlich, president.
A copy of the Debtor's list of four unsecured creditors is
available for free at http://bankrupt.com/misc/oknb16-11714.pdf
4LICENSING CORP: Files Chapter 11 Bankruptcy Petition
-----------------------------------------------------
4Licensing Corporation on Sept. 22, 2016, disclosed that on Sept.
21, 2016 (the "Petition Date"), 4Licensing Corporation (the
"Debtor") filed a petition in the United States Bankruptcy Court
for the Northern District of Oklahoma seeking relief under the
provisions of Chapter 11 of the United States Bankruptcy Code.
The plan of reorganization has not yet been finalized, but
management does not currently anticipate any recovery for
shareholders.
4Licensing Corporation ("4LC") (otc pink:FOUR) is a licensing
company specializing in specialty brands, technologies and
youth-oriented markets.
ACB RECEIVABLES: Hires David Alan Ast as Attorney
-------------------------------------------------
ACB Receivables Management, Inc. seeks authorization from the U.S.
Bankruptcy Court for the District of New Jersey to employ David
Alan Ast, P.C. as attorney.
The Debtor requires David Alan to:
(a) advise the Debtor of its rights, powers and duties as
Debtor and Debtor-in-Possession continuing to manage its
property under Chapter 11 of the Bankruptcy Code;
(b) advise the Debtor concerning, and assist in the negotiation
and documentation of, financing agreements, debt and cash
collateral orders and related matters;
(c) advise and assist the Debtor selling assets as necessary;
(d) review the nature and validity of any liens and security
interests asserted against the Debtor's assets and advise
the Debtor concerning the enforceability of such liens and
security interests;
(e) advise the Debtor concerning actions that it might take to
collect and recover property for the benefit of its estate;
(f) prepare on behalf of the Debtor all necessary and
appropriate applications, motions, orders, other pleadings,
notices, schedules and other documents, and review all
financial and other reports to be filed in this Chapter 11
case;
(g) advise the Debtor concerning, applications, motions, other
pleadings, notices and other papers that may be filed and
served in this Chapter 11 case, and prepare responses
thereto;
(h) advise and assist the Debtor in connection with the
formulation, negotiation and promulgation of a plan of
reorganization or liquidation and related documents, and
act as the Debtor's primary interface with its creditors,
including any creditors' committee to be appointed in this
case;
(i) advise the Debtor concerning executory contract and
unexpired lease assumptions, assignments and rejections and
lease restructuring and re-characterizations;
(j) assist the Debtor in reviewing, estimating and resolving
claims asserted against the Debtor's estate;
(k) commence and conduct litigation necessary or appropriate to
assert rights held by the Debtor, protect assets of the
Debtor's Chapter 11 estate or otherwise further the goal of
successfully completing this case; and
(l) perform all other necessary and appropriate legal services
in connection with this chapter 11 case for or on behalf of
the Debtor.
David Alan will be paid at these hourly rates:
David A. Ast $390
Robert L. Schmidt $390
David Alan will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Robert L. Schmidt, member of David Alan, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtor and its estate.
David Alan can be reached at:
Robert L. Schmidt, Esq.
DAVID ALAN AST, P.C.
P.O. Box 1309
222 Ridgedale Avenue
Morristown, NJ 07962-1309
Tel: (973) 984-1300
Fax: (973) 984-1478
About ACB Receivables Management
ACB Receivables Management, Inc., filed a chapter 11 petition
(Bankr. D.N.J. Case No. 16-27343) on Sept. 9, 2016. The petition
was signed by Oleg Shnayderman, president. The Debtor is
represented by David A. Ast, Esq., at David Alan Ast, P.C. The
case is assigned to Judge Christine M. Gravelle. The Debtor
estimated assets at $0 to $50,000 and liabilities at $1 million to
$10 million at the time of the filing.
The Debtor is a collection agency. The Debtor's clients consist
primarily of physicians and medical facilities.
ACQUIRE HEALTHCARE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Acquire Healthcare, LLC
dba Premier Home Health Care
dba Premier Hospice
9331 Bartlett Falls
San Antonio, TX 78250
Case No.: 16-52129
Nature of Business: Health Care
Chapter 11 Petition Date: September 21, 2016
Court: United States Bankruptcy Court
Western District of Texas (San Antonio)
Judge: Hon. Craig A. Gargotta
Debtor's Counsel: David T. Cain, Esq.
LAW OFFICE OF DAVID T. CAIN
8610 N New Braunfels, Suite 309
San Antonio, TX 78217
Tel: (210) 308-0388
Fax: (210) 341-8432
E-mail: caindt@swbell.net
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mariles Miralles, president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/txwb16-52129.pdf
AGRIEURO CORP: Funding Uncertainty Raises Going Concern Doubt
-------------------------------------------------------------
AgriEuro Corp. filed its quarterly report on Form 10-Q, disclosing
a net loss of $32,863 on $51,485 of revenues for the three months
ended June 30, 2016, compared with a net loss of $78,797 on $nil of
revenues for the same period in the prior year.
The Company's balance sheet at June 30, 2016, showed $4.23 million
in total assets, $2.46 million in total liabilities, and a
stockholders' equity of $1.77 million.
As of June 30, 2016, the Company has a working capital deficit of
approximately $1.7 million. The Company completed its winter reed
harvest and has recorded 349,088 raw bundles effective March 31,
2016 a portion of which were subsequently cleaned, culled and
prepared for initial sales commencing late May 2016. As at June
30, 2016, the Company has sold approximately 20% of its total
expected saleable inventory and holds 10,312 saleable bundles in
inventory as well as approximately 256,000 raw bundles for
processing. The Company expects to burn its crop fields during the
third quarter of fiscal 2016 and should have completed sale of the
finished reed bundles by close of the third quarter as well. As of
the date of these financial statements, the Company has not
acquired automated harvesting equipment and is again relying on
manual labor in order to harvest and produce its saleable reed crop
in 2016. The result of not purchasing automated harvesting
equipment is an approximate 85% reduction in potential yield while
at the same time increasing costs due to the required use of manual
labor. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
The Company has to date received substantial funding from and has
generally been able to obtain waivers to extend its debt from its
related parties as those obligations come due. The Company is
expecting to offer its stock in a public offering during fiscal
2016 in order to satisfy its working capital needs in the
agricultural and aquaculture industries and also to begin the
process of expanding into the hospitality business, however, there
can be no assurance that the Company will be able to raise these
funds on terms acceptable to the Company and that the related
parties will continue to lend to the Company and waive payment
obligations as they come due under the short term notes and
advances. If the Company is unable to raise additional funds or
should its related parties demand repayment of notes and or
advances currently due, the Company may be required to curtail
operations and if necessary cease operations.
A copy of the Form 10-Q is available at:
http://bit.ly/2cpulWm
About AgriEuro Corp.
AgriEuro Corp., formerly Artex Corp., is engaged in the business of
agriculture, aquaculture and hospitality. The Company holds
interests in S.C. Piscicola Tour A.P. Periteasca S.R.L. (SRL).
SRL's investments and assets are located in the country of Romania
in the Periteasca - Leahova area, on the administrative territory
of Murighiol locality, Tulcea County, between Black Sea, Grindul
Lupilor and Lagoon Complex Razim - Sinoe.
AIX ENERGY: Plan Confirmation Hearing Set for Oct. 24
-----------------------------------------------------
The Honorable Stacey G. Jernigan of the U.S. Bankruptcy Court for
the Northern District of Texas has conditionally approved the
Disclosure Statement explaining the joint Chapter 11 plan of
liquidation filed by The Official Committee of Unsecured Creditors
of AIX Energy, Inc., the Chapter 11 trustee of AIX, and the Chapter
11 trustee of Antero Energy Partners, LLC.
The hearing to consider final approval of the Disclosure Statement
and to consider the confirmation of the Plan will be held on
October 24, 2016 at 1:30 p.m.
The deadline for filing and serving Objections to final approval of
the Disclosure Statement, or confirmation of the Plan, as well as
the deadline for the receipt of completed and duly-executed Ballots
by the counsel to the Committee, are fixed as Oct. 17, 2016.
The purpose of the plan is to create a trust to liquidate the
remaining assets of the companies. The assets, which consist
primarily of causes of action, will be transferred to the trust for
the benefit of general unsecured creditors.
To recall, concurrent with the Chapter 11 Trustees' marketing of
the Debtors' assets through PLS, Inc., the Chapter 11 Trustees, the
Official Committee of Unsecured Creditors, LegacyTexas, ERG, and
NextEra engaged in a series of settlement meetings and discussions
with the goal of reaching agreement on case resolution.
Ultimately, those parties reached a global settlement that, with
input from PLS, contained a sale component. The Court approved the
Settlement.
The terms of the Settlement were to be implemented through a
combination of (a) a sale of substantially all of the assets of AIX
and Antero to ERG, and (b) confirmation of a joint chapter 11 plan
of liquidation for AIX and Antero. To that end, on June 21, 2016,
in addition to entering the Settlement Orders, the Court entered
the Order Approving the Sale of the Debtors' Assets. On July 5,
2016, the parties consummated the sale of substantially all of the
assets of AIX and Antero to ERG. The Settlement and Sale
Transactions resolved the secured claims of LegacyTexas, ERG, and
NextEra.
The liquidating plan classifies general unsecured claims in Class
3. General unsecured creditors will receive pro rata beneficial
interests in the trust.
Distributions to creditors will occur on the effective date of the
plan. Funds needed to make distributions will come from the net
proceeds received by AIX from the sale of most of its assets to
Energy Reserves Group LLC. Other potential recoveries may be made
by the trust from claims and causes of action assigned to it.
The amount of cash available from the net proceeds received by AIX
and funds held by the company and Antero is anticipated to be about
$1.5 million, according to the disclosure statement explaining the
plan.
A copy of the disclosure statement is available for free at
https://is.gd/HSGyTL
About AIX Energy
AIX Energy, Inc., is an oil and gas exploration and production
company. AIX's business includes drilling oil and gas wells and
selling the petroleum products that result from such drilling
activities. As such, AIX acquires and holds drilling and
production rights over various tracts of land located in Louisiana
through a number of oil, gas and mineral leases.
AIX Energy sought Chapter 11 bankruptcy protection (Bankr. N.D.
Tex. Case No. 15-34245) on Oct. 22, 2015. The petition was signed
by Robert A. Imel, president.
The AIX case was originally assigned to Judge Barbara J. Houser,
but was transferred to Judge Stacey G.C. Jernigan, who oversees the
bankruptcy case of Antero Energy Partners.
AIX tapped The Harvey Law Firm, P.C., as counsel when it filed for
bankruptcy. The Debtor won approval to engage Orenstein Law Group,
P.C. as special counsel.
The Official Committee of Unsecured Creditors won approval to
retain Michael S. Haynes and the firm Gardere Wynne Sewell LLP as
counsel.
* * *
The Sec. 341(a) meeting of creditors was held Nov. 19, 2015, which
was continued to Jan. 5, 2016.
AIX on Feb. 12, 2016, filed a motion to extend by 90 days its
exclusive period to propose a Chapter 11 plan by May 19, 2016, and
its exclusive period to solicit acceptances of that that plan by
Aug. 19, 2016. No order was entered.
Instead, the Court on March 23 entered an order directing the
appointment of a Chapter 11 trustee in AIX's case.
On March 14, 2016, Judge Houser held a hearing on the motion for
joint administration of the Chapter 11 cases of AIX and Antero. At
the conclusion of the hearing, the Court determined not to order
the joint administration of the cases and further determined to
transfer the AIX case to Judge Jernigan.
On March 18, 2016, the Official Committee of Unsecured Creditors
and LegacyTexas Bank entered a stipulation extending the
Investigation Period as defined in Final DIP the Order with
respect to the Committee is extended through and including April
21, 2016.
ALAN MISHKIN: Unsecureds To Be Paid in Full Under Plan
------------------------------------------------------
Alan R. Mishkin filed with the U.S. Bankruptcy Court for the
District of Arizona a second amended disclosure statement in
support of the Debtor's first joint amended plan of reorganization
dated June 24, 2016.
Class 3-D Allowed General Unsecured Claims Not Otherwise Treated
consists of the all other Allowed Unsecured Claims against the
Debtor not otherwise classified or treated in the Plan. On the
Effective Date of the Plan, the Debtor will pay to each holder of
an allowed unsecured claim which is not otherwise classified or
treated in the Plan, in cash, from the proceeds of the exit
funding, the full amount of each of the creditors' allowed claim as
of the Petition Date. This class is not impaired.
The Plan will be funded by (a) ILMD, LLC's contribution of the exit
funding to the Debtor's estate pursuant to the exit funding
agreement between ILMD and the Debtor and (b) with respect to
SLPR's allowed secured claim, the Debtor's transfer and conveyance
to SLPR of the transferred membership interests in an amount equal
to SLPR's allowed secured claim as determined by a final court
order.
ILMD's commitment to fund is conditioned upon the Court's finding a
value for the membership interests that is equal to or greater than
the value ascribed thereto in the SLPR offer that was the subject
of the Official Committee of Unsecured Creditors' motion to force
sale of estate assets. As discussed elsewhere in this Disclosure
Statement, the Court has denied the Committee's motion to force the
sale.
The Debtor's current monthly income is comprised of approximately
$2,657.50 in social security payments (this includes social
security payments for Debtor and his non-filing spouse). Pursuant
to the stipulated DIP financing court order and second DIP
financing court order, the Debtor has also received, and will
continue to receive, up to $12,000 per month from a post-petition
loan by ILMD thought at least September 2016. The social security
and loan amounts provide the Debtor with the funds to meet living
expenses.
The Debtor is attempting to reestablish his real estate development
business, and the exit funding will provide him with additional
funds to pay living and business expenses following the
confirmation of the Plan.
The Second Amended Disclosure Statemnt is available for free at:
http://bankrupt.com/misc/azb15-15440-307.pdf
The First Joint Amended Plan was filed by the Debtor's counsel:
Philip R. Rudd, Esq.
Wesley D. Ray, Esq.
James S. Samuelson, Esq.
SACKS TIERNEY P.A.
4250 N. Drinkwater Boulevard, 4th Floor
Scottsdale, AZ 85251-3693
Tel: (480) 425-2600
Fax: (480) 970-4610
E-mail: Philip.Rudd@SacksTierney.com
Wesley.Ray@SacksTierney.com
Samuelson@SacksTierney.com
Alan R. Mishkin filed for Chapter 11 bankruptcy protection (Bankr.
D. Ariz. Case No. 15-15440) on Dec. 7, 2015.
ALCOA CORP: S&P Assigns 'BB-' CCR; Outlook Stable
-------------------------------------------------
S&P Global Ratings said that it has assigned its 'BB-' corporate
credit rating to Alcoa Upstream Corp. (Alcoa Corp.). The outlook
is stable.
At the same time, S&P assigned its 'BB-' issue-level rating and '3'
recovery rating to the company's proposed $1.0 billion senior
unsecured notes. The '3' recovery rating indicates S&P's
expectation for meaningful (50%-70%; lower half of the range)
recovery in the event of a payment default.
S&P's recovery analysis, and resultant 'BB-' issue-level rating on
the company's proposed $1.0 billion senior unsecured notes, assumes
a capital structure that includes a $1.5 billion senior secured
revolving credit facility, which S&P expects to rate once
supporting documentation is provided.
S&P has reviewed the implications of Alcoa Inc.'s business
separation and assessed Alcoa Corp. on a stand-alone basis.
Following its separation from Alcoa Inc., Alcoa Corp. will be
solely focused on bauxite mining, alumina refining, and aluminum
production via its large smelting operation, as well as aluminum
can packaging for the North American market. The direct price risk
of alumina and aluminum previously absorbed by Alcoa Inc. will
reside entirely at Alcoa Corp. "We expect Alcoa Corp. to maintain
its strong brand and cost-competitive industry leading positions
across the aluminum value chain, which it will inherit from Alcoa
Inc.," said S&P Global credit analyst Ryan Gilmore. "However, our
assessment also takes into account that Alcoa Corp. is an unproven,
smaller, and less diversified stand-alone entity whose earnings
will be highly sensitive to volatile aluminum prices." As such,
S&P views Alcoa Corp.'s business risk profile to be fair.
The stable outlook on Alcoa Corp. reflects S&P's expectation that
the company will maintain strong liquidity, with sources of at
least 1.5x its uses over the next 12 months. S&P also expects it
to maintain an FFO-to-debt ratio of more than 20% and an adjusted
debt leverage metric of about 3x over the next 12 months.
S&P could lower its ratings on Alcoa Corp. if the company's
operating results experienced meaningful pressure, which could
occur if aluminum prices weakened or the company's volumes declined
due to weaker economic conditions. S&P could also take a negative
rating action on the company if Alcoa Corp.'s suite of credit
ratios weakened to a level that corresponds with a highly leveraged
financial risk profile, versus an aggressive financial risk
profile, or if its FFO-to-total debt ratio fell below 12% for a
prolonged period.
S&P could consider raising our rating on Alcoa Corp. if market
conditions allow the company to generate substantial cash flow and
improve its credit measures. Specifically, S&P could raise its
ratings if the company improved its credit measures and sustained
them, specifically an adjusted debt-to-EBITDA metric of notably
less than 2x or a FFO-to-debt ratio of greater than 30%. S&P could
also raise its rating if it revised its assessment of the company's
business risk profile to satisfactory from fair due to materially
greater product, end-market, and geographic diversity; an improved
scope of operations; and less commodity price sensitivity or a
stronger contract profile.
ALCOA INC: Fitch Withdraws 'B+' Convertible Preferred Stock Rating
------------------------------------------------------------------
Fitch Ratings has withdrawn the 'B+' ratings on Alcoa Inc.'s
(ParentCo; NYSE: AA) $1.3 billion of mandatory convertible
preferred stock.
Fitch's "Treatment and Notching of Hybrids in Non-Financial
Corporate and REIT Credit Analysis" cross-sector criteria dated
Feb. 29, 2016 (Hybrid Criteria) states that Fitch does not assign
ratings to mandatory convertible instruments, or similar
instruments that are exclusively redeemable into shares. The prior
version of Fitch's Hybrid Criteria effective in 2014 states the
same. However, Fitch inadvertently assigned ratings to Alcoa'a
mandatory convertible instruments in 2014, when they were issued.
The rating withdrawal corrects the inadvertent rating assignment.
ALLEGIANT TRAVEL: Moody's Affirms Ba3 Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service affirmed Allegiant Travel Company's
Corporate Family Rating (CFR) and Probability of Default Rating
(PDR) of Ba3 and Ba3-PD, respectively, and senior unsecured rating
of B1. Moody's also changed Allegiant's Speculative Grade Liquidity
rating to SGL-3 from SGL-2. The rating outlook is stable.
Moody's also assigned a B1 rating to the announced $300 million of
senior unsecured notes due 2023 that Allegiant plans to issue. The
proceeds of the notes will be used for general corporate purposes,
including repayment of debt and returns to shareholders,
particularly given the company's current commitments to purchase 22
used and 12 new Airbus A320 family aircraft and its penchant for
funding aircraft purchases with amortizing bank debt.
RATINGS RATIONALE
The affirmation of the ratings reflects Moody's belief that
Allegiant will sustain its industry leading operating margin in
upcoming years as it more than replaces its 49 McDonnell Douglas
MD80 aircraft with Airbus A320 family aircraft (mix of A319s and
A320s). Moody's expects credit metrics to remain supportive of the
Ba3 rating; however, the cushion in debt and financial leverage
metrics that the company has sustained since first rated in 2014
will shrink because of the investment required for the Airbus
aircraft. Moody's estimates capital outlays of more than $800
million through 2019, and that the company will use mostly debt to
purchase the aircraft. While the Airbus aircraft cost significantly
more than Allegiant's investment in the MD-80s, the A320 family
aircraft have lower operating cost on a per passenger basis because
of fuel and maintenance savings and higher seat counts on the
A320s, versus the MD80s. The lower operating cost per seat should
support earnings and operating cash flow going forward,
notwithstanding the increased capital cost. The rating also
considers that the company is facing increased contract costs for
its newly unionized pilots and could face additional cost pressure
if its flight attendants decide to conclude a contract or other
work groups organize. Higher labor expense and higher interest
expense associated with the fleet acquisitions could negatively
affect operating flexibility.
A record of strong operating cash flow supports the ratings. The
company has maintained CFO to revenue between 18% and 23% since
2013, with a trough of 17% in 2014. These levels have bested the
average for the aggregate of the six other US airlines Moody's
rates by at least seven percentage points during this period. This
performance highlights the benefits of the company's differentiated
passenger airline model. The current lower cost of jet fuel has
meaningfully boosted profitability and incented Allegiant to take
its differentiated, point-to-point scheduled passenger airline
model to more small and mid-size cities, now connecting to 20
leisure destinations across the US. Moody's expects Allegiant to
continue to flex capacity up and down with trends in oil prices and
US economic activity, to maximize its profitability and operating
cash flow through the cycle. Although the investment in the fleet
will significantly increase, the average acquisition cost of the
Airbus aircraft have been, and will be, at levels that the company
believes will allow it to sustain the sharp swings in daily
utilization that have been a cornerstone of its financial
performance to date.
Cash should exceed $500 million following the closing of the
planned new notes. Nevertheless, we lowered the Speculative Grade
Liquidity rating to SGL-3 from SGL-2, signifying adequate liquidity
because of the absolute size of the investment needed to change
over the fleet. Moody's estimates that Debt to EBITDA will remain
below 3.0 times absent a significant jump in fuel prices, which
also supports the ratings affirmation. The loans the company
arranges for used Airbus aircraft have typically amortized over
five years. Moody's believes this will continue, which will help
mitigate upwards pressure on financial leverage. Any upwards
pressure from metrics typically found at investment grade-rated
issuers is offset by Moody's belief that the company will continue
to return cash to shareholders, in lieu of less borrowing for
aircraft purchases.
The stable outlook reflects Moody's belief that the resiliency of
the company's business model will allow it to maintain its credit
profile as it replaces and grows the fleet with Airbus narrow-body
aircraft. The ratings could be upgraded if Allegiant sustains its
operating performance, current credit metrics and liquidity while
changing over the fleet. For example, Funds from operations +
Interest to Interest above 7.0 times, Debt to EBITDA below 2.2
times and an operating margin above 15% while adding the Airbus
aircraft. The ratings could be downgraded if growth of the network,
the operation of the Airbus aircraft, or labor cost increases
weaken profitability and credit metrics, such as Funds from
Operations + Interest to Interest of below 4.5 times or Debt to
EBITDA approaching 3.5 times. Larger returns to shareholders that
are debt-funded or cause unrestricted cash to be sustained below
$300 million for more than one quarter could also pressure the
ratings.
Allegiant Travel Company, headquartered in Las Vegas, Nevada,
operates a low-cost passenger airline marketed to leisure travelers
in small and mid-sized cities, selling air travel, hotel rooms,
rental cars and other travel related services on a stand-alone or
bundled basis. Revenue for the 12 months ended June 2016 were $1.3
billion.
Assignments:
Issuer: Allegiant Travel Company
-- Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD5)
Affirmations:
Issuer: Allegiant Travel Company
-- Probability of Default Rating, Affirmed Ba3-PD
-- Corporate Family Rating, Affirmed Ba3
-- Senior Unsecured Shelf, Affirmed (P)B1
-- Senior Unsecured Regular Bond/Debentures, Affirmed B1 (LGD5)
Lowered ratings:
Issuer: Allegiant Travel Company
-- Speculative Grade Liquidity Rating, lowered to SGL-3 from
SGL-2
Outlook Actions:
Issuer: Allegiant Travel Company
-- Outlook, Remains Stable
The principal methodology used in these ratings was Global
Passenger Airlines published in May 2012.
ALLEGIANT TRAVEL: S&P Cuts CCR to BB- on Expected Declining Metrics
-------------------------------------------------------------------
S&P Global Ratings said that it has lowered its corporate credit
rating on Las Vegas-based Allegiant Travel Co. to 'BB-' from 'BB'.
The outlook is stable.
At the same time, S&P assigned its 'BB-' issue-level rating and '4'
recovery rating to the company's proposed senior unsecured notes.
The '4' recovery rating indicates S&P's expectation that lenders
would receive average recovery (30%-50%; lower end of the range) in
the event of a payment default.
Additionally, S&P lowered its issue-level rating on the company's
existing senior unsecured notes to 'BB-' from 'BB'. The '4'
recovery rating remains unchanged, indicating S&P's expectation
that lenders would receive average recovery (30%-50%; lower end of
the range) in the event of a payment default.
"The downgrade reflects our expectation that Allegiant's credit
measures will decline from their 2015 levels," said S&P Global
credit analyst Tatiana Kleiman. Specifically, S&P believes that
the company will maintain a debt-to-EBITDA metric of around 2x and
a funds from operations (FFO)-to-debt ratio in the low-30% area for
2016. This compares with a debt-to-EBITDA metric of 1.36x and a
FFO-to-debt ratio of 52.37% in 2015. S&P do not expect that the
company's credit measures will return to their 2015 levels over the
next two years given the combined impact from the company's
elevated capital spending needs, rising operating costs, declining
passenger revenue per available seat mile (PRASM), and increased
capacity (due to the new aircraft being delivered in 2017). S&P
now assess Allegiant's financial risk profile as significant.
The stable outlook on Allegiant reflects S&P's expectation that,
following a decline in its credit metrics, the company's financial
risk profile will remain relatively consistent through 2017 due to
the various factors associated with its fleet expansion and
retirement initiatives. S&P expects Allegiant's FFO-to-debt ratio
to decline to the mid-30% area and its debt-to-EBITDA metric to
increase to the low 2x area over the next year, though a
greater-than-expected level of shareholder rewards could increase
the company's leverage above S&P's expectations.
S&P could lower its ratings on Allegiant if the pressure on its
earnings, caused by increased competition, lower utilization,
greater-than-expected capacity and costs, and a
higher-than-expected level of shareholder rewards, causes its
FFO-to-debt ratio to decline to 20% or below and remain there on a
sustained basis.
Although unlikely over the next year, S&P could raise its ratings
on Allegiant if the company's earnings are better than S&P expects
such that its FFO-to-debt ratio increases to more than 40% and its
free operating cash flow (FOCF)-to-debt ratio increases to at least
5% and remains there on a sustained basis.
AMERICAN BUILDERS: S&P Affirms 'BB' CCR, Off CreditWatch Negative
-----------------------------------------------------------------
S&P Global Ratings said that it has affirmed its 'BB' corporate
credit rating on Beloit, Wis.-based American Builders & Contractors
Supply Co. Inc. (ABC Supply) and removed the rating from
CreditWatch, where S&P had placed it with negative implications on
Aug. 30, 2016.
At the same time, S&P assigned its 'BB+' issue-level rating and '2'
recovery rating to the company's proposed $1.875 billion senior
secured term loan B due 2023. The '2' recovery rating indicates
S&P's expectation that lenders will receive substantial (70%-90%;
upper half of the range) recovery in the event of a payment
default. The ratings are subject to final documentation and
issuance.
In addition, S&P lowered its senior unsecured issue-level ratings
on both the $500 million and $350 million senior unsecured notes
due 2021 and 2023, respectively, to 'B+' from 'BB' and revised
S&P's recovery ratings on the notes to '6' from '4'. The '6'
recovery rating indicates S&P's expectation for negligible (0-10%)
recovery in the event of a payment default.
"The CreditWatch resolution and affirmation follow the completion
of our analysis of the impact of the pending acquisition of L&W
Supply and its related debt financing on ABC's overall credit
profile," said S&P Global credit analyst Kimberly Garen. The
company expects the acquisition to close in the fourth quarter of
2016.
The stable outlook on ABC reflects S&P's expectation that over the
next 12 months the company will continue to generate positive free
cash flow and maintain strong liquidity. At the same time, S&P
expects the company to maintain total leverage (including lease
obligations) of between 4x and 5x and a FFO-to-debt ratio of
between 12% and 20%, which are commensurate with an aggressive
financial risk profile. S&P expects ABC to reduce its debt
leverage to the lower end of that range over the next 12 months.
S&P could downgrade ABC within the next 12 months if the company's
leverage remains above 4.5x following the acquisition of L&W
Supply. This could occur if the U.S. housing recovery and consumer
spending stall. In addition, downward pressure could occur if the
company's EBITDA falls in excess of 20% below S&P's 2017 forecast,
causing its leverage to increase above 5x. This could also occur
in a recessionary environment with at least a 100 bps decline in
its gross margins; however, S&P's economists only place a 20%-25%
probability of a new recession occurring.
In S&P's opinion, an upgrade is less likely over the next 12
months. However, upside momentum could occur if the increase in
new home construction and repair and remodeling spending is much
greater than S&P expected, causing the company's leverage to
improve and remain below 4x and its FFO-to-debt ratio to increase
above 20%, which is in line with a significant financial risk
profile.
AMERICAN POWER: Matthew van Steenwyk Reports 42.4% Stake
--------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Matthew van Steenwyk disclosed that as of Sept. 13,
2016, he beneficially owns 80,455,498 shares of common stock of
American Power Group Corporation representing 42.4 percent of the
shares outstanding.
Mr. van Steenwyk has sole voting and dispositive power over
20,307,497 shares of Common Stock and shared voting and dispositive
power with respect to 60,148,001 shares of Common Stock, comprising
42.4% of outstanding shares of Common Stock, 15 shares of Series D
Preferred Stock, 220.4048 shares of Series D-2 Preferred Stock, and
150 shares of Series D-3 Preferred Stock.
Ms. Betty van Steenwyk may be deemed to beneficially own 1,000
shares of Common Stock, comprising less than 0.1% of outstanding
shares of Common Stock, and has shared voting and sole dispositive
power with respect to said 1,000 shares of Common Stock.
Arrow, LLC may be deemed to beneficially own (i) 56,614,683 shares
of Common Stock (16,766,159 shares of which Arrow has the right to
acquire), comprising 29.8% of outstanding shares of Common Stock,
(ii) 15 shares of Series D Preferred Stock, comprising 68.2% of
outstanding shares of Series D Preferred Stock, and may be deemed
to have shared voting and dispositive power with respect to all
shares which it is deemed to beneficially own.
The Matthew Donald Van Steenwyk GST Trust may be deemed to
beneficially own 4,782,318 shares of Common Stock (2,391,159 of
which the Trust has the right to acquire) comprising 2.5% of
outstanding shares of Common Stock.
A full-text copy of the regulatory filing is available at:
https://is.gd/PMpoAp
About American Power Group
American Power Group's alternative energy subsidiary, American
Power Group, Inc., provides a cost-effective patented Turbocharged
Natural Gas conversion technology for vehicular, stationary and
off-road mobile diesel engines. American Power Group's dual fuel
technology is a unique non-invasive energy enhancement system that
converts existing diesel engines into more efficient and
environmentally friendly engines that have the flexibility to run
on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and
compressed natural gas; (3) diesel fuel and pipeline or well-head
gas; and (4) diesel fuel and bio-methane, with the flexibility to
return to 100 percent diesel fuel operation at any time. The
proprietary technology seamlessly displaces up to 80% of the
normal diesel fuel consumption with the average displacement
ranging from 40 percent to 65 percent. The energized fuel balance
is maintained with a proprietary read-only electronic controller
system ensuring the engines operate at original equipment
manufacturers' specified temperatures and pressures. Installation
on a wide variety of engine models and end-market applications
require no engine modifications unlike the more expensive invasive
fuel-injected systems in the market. See
http://www.americanpowergroupinc.com/
As of June 30, 2016, American Power had $10.23 million in total
assets, $9.62 million in total liabilities and $610,000 in total
stockholders' equity.
American Power reported a net loss available to common stockholders
of $1.04 million on $2.95 million of net sales for the year ended
Sept. 30, 2015, compared to a net loss available to common
stockholders of $920,066 on $6.28 million of net sales for the year
ended Sept. 30, 2014.
AMERICAN POWER: Recurring Losses Casts Going Concern Doubt
----------------------------------------------------------
American Power Group Corporation filed its quarterly report on Form
10-Q, disclosing a net loss of $1.45 million on $524,194 of net
sales for the three months ended June 30, 2016, compared with a net
loss of $1.60 million on $555,662 of net sales for the same period
in the prior year.
For the nine months ended June 30, 2016, the Company listed a net
loss of $5.80 million on $1.63 million of net sales, compared to a
net income of $2.12 million on $2.09 million of net sales for the
same period in 2015.
The Company's balance sheet at June 30, 2016, showed $39.08 million
in total assets, $35.05 million in total liabilities, and a
stockholders' equity of $4.03 million.
As of June 30, 2016, the Company had $434,894 in cash, cash
equivalents and restricted certificates of deposit and a working
capital deficit of $2,617,097. The accompanying financial
statements have been prepared on a basis that assumes the Company
will continue as a going concern and that contemplates the
continuity of operations, realization of assets and the
satisfaction of liabilities and commitments in the normal course of
business. The Company continues to incur recurring losses from
operations, which raises substantial doubt about its ability to
continue as a going concern unless the Company secures additional
capital to fund its operations as well as implement initiatives to
reduce its cash burn in light of lower diesel/natural gas price
spreads and the impact it has had on its business as well as the
slower than anticipated ramp of its flare capture and recovery
business.
A copy of the Form 10-Q is available at:
http://bit.ly/2cCOJD9
About American Power Group Corporation
American Power Group's alternative energy subsidiary, American
Power Group, Inc., provides a cost-effective patented Turbocharged
Natural Gas conversion technology for vehicular, stationary and
off-road mobile diesel engines. American Power Group's dual fuel
technology is a unique non-invasive energy enhancement system that
converts existing diesel engines into more efficient and
environmentally friendly engines that have the flexibility to run
on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and
compressed natural gas; (3) diesel fuel and pipeline or well-head
gas; and (4) diesel fuel and bio-methane, with the flexibility to
return to 100 percent diesel fuel operation at any time. The
proprietary technology seamlessly displaces up to 80% of the
normal diesel fuel consumption with the average displacement
ranging from 40 percent to 65 percent. The energized fuel balance
is maintained with a proprietary read-only electronic controller
system ensuring the engines operate at original equipment
manufacturers' specified temperatures and pressures. Installation
on a wide variety of engine models and end-market applications
require no engine modifications unlike the more expensive invasive
fuel-injected systems in the market. See
http://www.americanpowergroupinc.com/
As of June 30, 2016, American Power had $10.23 million in total
assets, $9.62 million in total liabilities and $610,000 in total
stockholders' equity.
American Power reported a net loss available to common stockholders
of $1.04 million on $2.95 million of net sales for the year ended
Sept. 30, 2015, compared to a net loss available to common
stockholders of $920,066 on $6.28 million of net sales for the year
ended Sept. 30, 2014.
AMN HEALTHCARE: S&P Assigns 'BB-' CCR & Rates Sec. Loans 'BB+'
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' corporate credit rating to
San Diego-based health care staffing and workforce solutions
provider AMN Healthcare Services Inc. The outlook is stable.
At the same time, S&P assigned its 'BB+' issue-level rating to
operating subsidiary AMN Healthcare Inc.'s senior secured credit
facilities, consisting of a $275 million revolver, a $150 million
term loan A ($18 million outstanding), and a $75 million
incremental term loan A ($72 million outstanding). The recovery
rating on the secured credit facilities is '1', indicating S&P's
expectation for very high (90%-100%) recovery of principal in the
event of payment default. S&P also assigned its 'B+' issue-level
rating to AMN Healthcare Inc.'s proposed $300 million senior
unsecured notes. The recovery rating on the proposed notes is '5',
indicating S&P's expectations of modest (10%-30%, at the upper end
of the range), recovery of principal in the event of payment
default.
"AMN Healthcare Services Inc. is a leading provider of health care
workforce solutions and staffing services in the U.S.," said S&P
Global Ratings credit analyst Matthew O'Neill. The company has
evolved from a traditional staffing company to a full service
workforce solutions provider. Some of its offerings include
managed service programs, vendor management systems, and staffing
placement. Its clients include acute-care hospitals, community
health centers and clinics, physician practice groups, retail
urgent care centers, and many other health care settings. AMN
conducts its business through four main service offerings,
including staffing and recruitment, workforce solutions, executive
leadership, and advisory services.
AMN has benefited from the positive demand environment created by
physician and nurse shortages, growing its operations by
diversifying its service lines to cross sell its services to new
and existing customers. However, AMN has a concentrated exposure
to the health care staffing business, which remains fragmented, is
highly competitive and cyclical, and has relatively low profit
margins and exposure to the economic environment. Still, the
company has nearly doubled its revenue base over the past few years
and has grown EBITDA margins to around 11%.
The health care staffing sector benefits from favorable trends that
include a shortage of health care professionals, an aging
population, and health care reform (over the long term). S&P
expects the company's nursing and allied health staffing segment
volumes will continue to benefit from an improving economy and
market share gains from its growing managed service provider (MSP)
contract base.
The stable outlook on AMN Healthcare Services reflects S&P's
expectation that the company will benefit from positive EBITDA
growth and steady cash flow generation. S&P expects the company's
adjusted debt leverage will remain below 3x over the next 12 months
because of its conservative financial policies.
S&P could lower the rating on AMN if it sustains leverage above 3x,
due to a deterioration in business prospects or a significant
increase in debt due to an acquisition. A drop in margins by 200
basis points due to an increase in payment to nurses or an adverse
pricing environment could prompt a downgrade. S&P could also lower
the rating if AMN experiences an unforeseen operating issue that
results in meaningful customer losses and a sharp contraction in
EBITDA that results in negligible free cash flow. A downgrade may
also result from a $225 million debt-financed acquisition (without
considering any additional EBITDA contribution).
S&P could raise the rating if it expected the company to sustain
leverage below 2x due to a 250-basis-point improvement in EBITDA
margins. However, S&P believes this scenario is unlikely in the
near term.
AMPLIPHI BIOSCIENCES: Updates Progress in Rhinosinusitis Trial
--------------------------------------------------------------
AmpliPhi Biosciences Corporation announced an update on the
progress of its ongoing Phase 1 clinical trial for the treatment of
S. aureus infections in patients suffering from chronic
rhinosinusitis with AmpliPhi's proprietary and investigational
phage cocktail AB-SA01.
The Phase 1 clinical trial was initiated in January 2016 and is
being conducted at the Queen Elizabeth Hospital in collaboration
with the University of Adelaide and Flinders University. A total
of nine patients are expected to be dosed in the trial, in three
equal cohorts: Cohort 1-low dose, twice daily for seven days;
Cohort 2-low dose, twice daily for 14 days; and Cohort 3-high dose,
twice daily for 14 days. To date, seven patients have completed
dosing and the final two patients are expected to be enrolled
shortly. The Company expects to report topline results and final
results from this trial later this year.
The preliminary safety results for the first seven patients
indicate AB-SA01 was well tolerated; no body temperature
variability throughout the treatment period and no difference in
blood panels before and after dosing was observed. No drug-related
serious adverse events were reported.
The primary outcome of eradication of S. aureus was achieved in two
of the three patients in Cohort 2 and zero of three patients in
Cohort 1. In both Cohorts 1 and 2, patients reported improvements
in symptoms, as measured on days 0, 7 and 14 by Visual Analogue
Scale (VAS) and Sino-Nasal Outcome Test (SNOT-22) score. In Cohort
2, there have been improvements post treatment in endoscopic video
examinations using the Lund Kennedy Score.
About AmpliPhi
AmpliPhi Biosciences Corp. is a biotechnology company focused on
the discovery, development and commercialization of novel phage
therapeutics. Its principal offices occupy approximately 1,000
square feet of leased office space pursuant to a month-to-month
sublease, located at 3579 Valley Centre Drive, Suite 100, San
Diego, California. It also leases approximately 700 square feet of
lab space in Richmond, Virginia, approximately 5,000 square feet of
lab space in Brookvale, Australia, and approximately 6,000 square
feet of lab and office space in Ljubljana, Slovenia.
Ampliphi Biosciences reported a net loss attributable to common
stockholders of $10.79 million on $475,000 of revenue for the year
ended Dec. 31, 2015, compared to net income attributable to common
stockholders of $21.8 million on $409,000 of revenue for the year
ended Dec. 31, 2014.
As of June 30, 2016, Ampliphi had $29.3 million in total assets,
$7.79 million in total liabilities and $21.5 million in total
stockholders' equity.
Ernst & Young LLP, in Richmond, Virginia, issued a "going concern"
qualification on the Company's 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.
ANTERO ENERGY: Plan Confirmation Hearing Set for Oct. 24
--------------------------------------------------------
The Honorable Stacey G. Jernigan of the U.S. Bankruptcy Court for
the Northern District of Texas has conditionally approved the
Disclosure Statement filed by The Official Committee of Unsecured
Creditors of AIX Energy, Inc., the Chapter 11 trustee of AIX, and
the Chapter 11 trustee of Antero Energy Partners, LLC.
The hearing to consider final approval of the Disclosure Statement
and to consider the confirmation of the Plan will be held on
October 24, 2016 at 1:30 p.m.
The deadline for filing and serving Objections to final approval of
the Disclosure Statement, or confirmation of the Plan, as well as
the deadline for the receipt of completed and duly-executed Ballots
by the counsel to the Committee, are fixed as Oct. 17, 2016.
The purpose of the plan is to create a trust to liquidate the
remaining assets of the companies. The assets, which consist
primarily of causes of action, will be transferred to the trust for
the benefit of general unsecured creditors.
To recall, concurrent with the Chapter 11 Trustees' marketing of
the Debtors' assets through PLS, Inc., the Chapter 11 Trustees, the
Official Committee of Unsecured Creditors, LegacyTexas, ERG, and
NextEra engaged in a series of settlement meetings and discussions
with the goal of reaching agreement on case resolution.
Ultimately, those parties reached a global settlement that, with
input from PLS, contained a sale component. The Court approved the
Settlement.
The terms of the Settlement were to be implemented through a
combination of (a) a sale of substantially all of the assets of AIX
and Antero to ERG, and (b) confirmation of a joint chapter 11 plan
of liquidation for AIX and Antero. To that end, on June 21, 2016,
in addition to entering the Settlement Orders, the Court entered
the Order Approving the Sale of the Debtors' Assets. On July 5,
2016, the parties consummated the sale of substantially all of the
assets of AIX and Antero to ERG. The Settlement and Sale
Transactions resolved the secured claims of LegacyTexas, ERG, and
NextEra.
The liquidating plan classifies general unsecured claims in Class
3. General unsecured creditors will receive pro rata beneficial
interests in the trust.
Distributions to creditors will occur on the effective date of the
plan. Funds needed to make distributions will come from the net
proceeds received by AIX from the sale of most of its assets to
Energy Reserves Group LLC. Other potential recoveries may be made
by the trust from claims and causes of action assigned to it.
The amount of cash available from the net proceeds received by AIX
and funds held by the company and Antero is anticipated to be about
$1.5 million, according to the disclosure statement explaining the
plan.
A copy of the disclosure statement is available for free at
https://is.gd/HSGyTL
About Antero Energy
Antero Energy Partners, LLC, filed a Chapter 11 petition (Bankr.
N.D. Tex. Case No. 16-30308) in Dallas on Jan. 25, 2016. Judge
Stacey G. Jernigan is assigned to the case. The Debtor tapped
Keith William Harvey, Esq., at The Harvey Law Firm, P.C., as
counsel. The Debtor estimated $10 million to $50 million in assets
and debt.
The petition was signed by Robert A. Imel, managing member.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
William T. Neary, the United States Trustee for Region 6, sought
for and obtained from the U.S. Bankruptcy Court for the Northern
District of Texas, Dallas Division, the approval of the
appointment
of Jeffrey Mims to serve as Chapter 11 Trustee.
The Official Unsecured Creditors' Committee of AIX Energy, Inc.,
is
represented by:
Michael S. Haynes, Esq.
Matthew J. Pyeatt, Esq.
GARDERE WYNNE SEWELL LLP
3000 Thanksgiving Tower
1601 Elm Street
Dallas, TX 75201-4761
Telephone: (214)999-3000
Facsimile: (214)999-4667
E-mail: mhaynes@gardere.com
mpyeatt@gardere.com
ARCH COAL: Wins Confirmation of Reorganization Plan
---------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Missouri on
Sept. 13, 2016, entered an order confirming Arch Coal, Inc. and its
debtor-affiliates' Fourth Amended Joint Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code, dated Sept. 11, 2016.
A copy of the confirmed Plan is available at https://is.gd/Rib7UC
A copy of the Confirmation Order is available at
https://is.gd/vF12YU
The Plan will not become effective until certain conditions are
satisfied or waived, including, (a) the documents governing the
Reorganized Debtors' new $326.5 million first lien debt facility
will have been duly executed and delivered by the Reorganized
Debtors parties thereto, and all conditions precedent to the
consummation of the New First Lien Debt Facility shall have been
waived or satisfied in accordance with the terms thereof, and the
closing of the New First Lien Debt Facility shall have occurred;
(b) the Debtors' existing securitization facility shall be
reinstated on terms substantially as set forth in the Plan
Supplement; (c) all documents and agreements necessary to implement
the Plan, including the Plan Supplement and the Confirmation Order,
shall have been executed; and (d) the Debtors shall have received
all authorizations, consents, regulatory approvals, rulings,
letters, no-action letters, opinions or documents that are
necessary to implement the Plan and that are required by law,
regulation or order. The date on which all conditions to the
effectiveness of the Plan have been satisfied or waived will be the
"Effective Date" of the Plan. It is possible that amendments could
be made to the Plan prior to effectiveness.
The Plan contemplates that:
* Holders of allowed administrative expense claims, priority
claims (other than administrative expense claims and priority tax
claims) and secured claims (other than claims arising under
priority claims, the prepetition first lien credit facility and
prepetition second lien notes) will be paid in full.
* Holders of allowed claims arising under the Debtors'
prepetition first lien credit facility ("First Lien Credit
Facility") will receive their pro rata distribution of (i) total
cash payments equal to the greater of (A) $144,796,527.78 less the
amount of the adequate protection payments and (B) $30,000,000;
(ii) $326.5 million in principal amount of New First Lien Debt
Facility; and (iii) 94% of the common stock of Reorganized Arch
Coal (the "New Common Stock"), subject to dilution on account of
(a) any Class A Common Stock (as defined below) issued upon
exercise of the warrants (the "New Warrants") issued pursuant to
the Plan to purchase up to 12% of the fully diluted Class A Common
Stock as of the Effective Date and exercisable at any time for a
period of 7 years from the Effective Date at a strike price
calculated based on a total equity capitalization of $1.425 billion
and (b) the issuance of New Common Stock in an amount of up to 10%
of the New Common Stock, on a fully diluted basis, pursuant to a
management incentive plan (the "Management Incentive Plan").
* Holders of allowed claims on account of prepetition second
lien or unsecured notes (the "Prepetition Notes") will receive
their pro rata distribution of (i) $22.636 million in cash, (ii) at
such holder's election, either (A) such holder's pro rata share of
the New Warrants or (B) such holder's pro rata share of $25 million
in cash and (iii) 6% of the New Common (subject to dilution on
account of any exercise of the New Warrants and pursuant to the
Management Incentive Plan).
* Holders of allowed general unsecured claims against Debtors
(other than claims on account of the First Lien Credit Facility or
Prepetition Notes) will receive their pro rata distribution of
$7.364 million cash, less fees and expenses incurred by any
professionals retained by a claims oversight committee up to
$200,000.
* The Reorganized Debtors will waive and release any claims or
causes of action that they have, had, or may have that are based on
sections 502(d), 544, 545, 547, 548, 549, 550, 551, 553(b) and
724(a) of the Bankruptcy Code and analogous non- bankruptcy law for
all purposes against (i) prepetition trade creditors and (ii)
officers, directors, employees or representatives of the Debtors or
the Reorganized Debtors and all agents and representatives of all
of the foregoing. However, the Reorganized Debtors will retain the
right to assert any said claims as defenses or counterclaims in any
cause of action brought by any creditor.
Pursuant to the Plan and a condition to its effectiveness, holders
of allowed claims on account of the First Lien Credit Facility will
receive their pro rata share of the New First Lien Debt Facility to
be entered into on the Effective Date in an aggregate original
principal amount of $326.5 million. The New First Lien Debt
Facility will mature on the date that is five years after the
Effective Date. Wilmington Trust, National Association will serve
as administrative agent and collateral agent thereunder.
Borrowings under the New First Lien Debt Facility will bear
interest at a per annum rate equal to, at the option of Arch Coal,
either (i) a London interbank offered rate plus an applicable
margin of 9%, subject to a 1% LIBOR floor, or (ii) a base rate plus
an applicable margin of 8%. Interest payments will be payable
quarterly in cash, unless the Debtors' liquidity after giving
effect to the applicable interest payment would not exceed $300
million, in which case interest will be payable in kind.
The New First Lien Debt Facility will be guaranteed by all wholly
owned domestic subsidiaries of Arch Coal subject to customary
exceptions, and will be secured by first priority security
interests on substantially all assets of each Reorganized Debtor,
including 100% of the voting equity interests of directly owned
domestic subsidiaries and 65% of the voting equity interests of
directly owned foreign subsidiaries, subject to customary
exceptions.
On the Effective Date, Arch Coal expects to extend and amend the
existing $200 million trade accounts receivable securitization
facility provided to Arch Receivable Company, LLC, a non-debtor
special-purpose entity that is a wholly owned subsidiary of Arch
Coal, which will continue to support the issuance of letters of
credit and will also reinstate Arch Receivable's ability to request
cash advances as existed prior to the Petition Date. The Extended
Securitization Facility will terminate at the earliest of (i) three
years from the Effective Date, (ii) if the Liquidity (defined in
the Extended Securitization Facility) is less than $175,000,000 for
a period of 60 consecutive days, the date that is the 364th day
after the first day of such 60 consecutive day period and (iii) the
occurrence of certain predefined events substantially consistent
with the existing transaction documents. Under the Extended
Securitization Facility, Arch Receivable and certain of the
Reorganized Debtors party to the Extended Securitization Facility
will grant to the administrator of the Extended Securitization
Facility a first priority security interest eligible trade accounts
receivable generated by such Debtors from the sale of coal and all
proceeds thereof.
On the Effective Date, the term of the members of the Arch Coal
board of directors shall expire and such members shall be replaced
by a new board of directors, the classification and composition of
which shall be consistent with the certificate of incorporation of
Reorganized Arch Coal and the bylaws of Reorganized Arch Coal.
Pursuant to the Plan, as of the Effective Date, John W. Eaves, who
was an existing director of Arch Coal, and Patrick Bartels, James
N. Chapman, Sherman K. Edmiston III, Patrick A. Kriegshauser,
Richard A. Navarre and Scott D. Vogel, will become directors of
Reorganized Arch Coal. Pursuant to the Plan, the members of the
boards of directors of the Filing Subsidiaries before the Effective
Date shall continue to serve in their current capacities as of the
Effective Date. In addition, pursuant to the Plan, the principal
officers of each Debtor immediately before the Effective Date will
be the officers of the corresponding Reorganized Debtor as of the
Effective Date.
Wyoming Self-Bonding
No later than 15 days after the Effective Date, Arch Western
Resources, LLC, Thunder Basin Coal Company, L.L.C., Arch of
Wyoming, LLC and Energy Development Co. will replace all former
self-bonds relating to reclamation obligations in the State of
Wyoming with surety, cash or collateralized financial assurances.
Equity Securities to be Authorized,
Issued and Reserved for Issuance After Emergence
Arch Coal currently has 21,298,872 shares of common stock, par
value $0.01 per share, issued and outstanding. On the Effective
Date, all outstanding shares of Arch Coal's common stock will be
cancelled and extinguished, and any rights of any holder in respect
thereof, will be deemed cancelled, discharged and of no force or
effect.
On the Effective Date, Reorganized Arch Coal will file with the
Secretary of State of the State of Delaware an Amended & Restated
Certificate of Incorporation authorizing the issuance of 25 million
shares of New Common Stock, divided among Class A common stock, par
value $0.01 per share ("Class A Common Stock"), Class B common
stock, par value $0.01 per share ("Class B Common Stock"), and
50,000,000 shares of preferred stock, par value $0.01 per share.
The Class B Common Stock will have identical terms to the Class A
Common Stock, except that the Class B Common Stock will not be
listed on any national securities exchange registered under Section
6 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
On the Effective Date, Reorganized Arch Coal will issue or reserve
for issuance shares of New Common Stock for distribution in
accordance with the Plan. Pursuant to the Plan, 25 million shares
of New Common Stock will be issued to the holders of allowed claims
on account of the First Lien Credit Facility and holders of allowed
claims on account of Prepetition Notes, as discussed above under
"Treatment of Claims." Reorganized Arch Coal will reserve for
issuance the maximum number of shares of Class A Common Stock
issuable upon exercise and settlement of the New Warrants (assuming
all New Warrants are physically settled) and a sufficient number of
shares pursuant to honor incentive awards to be granted under the
Management Incentive Plan.
Treatment of Executory Contracts
or Unexpired Leases
On the Effective Date, pursuant to sections 365 and 1123 of the
Bankruptcy Code, each executory contract and unexpired lease to
which any Debtor is a party shall be deemed automatically rejected
by the Debtors, except for any executory contract or unexpired
lease that (i) has been assumed or rejected pursuant to an order of
the Bankruptcy Court entered before the Effective Date, (ii) is the
subject of a motion to assume or reject pending on the Effective
Date, (iii) is assumed, rejected or otherwise treated pursuant to
Section 9.3 of the Plan, (iv) is listed on Schedule 9.2(a) or
9.2(b) of the Plan.
Assets and Liabilities
As of July 31, 2016, the total assets and liabilities of Arch Coal
were approximately $4.6 billion and $3 billion, respectively.
* * *
On September 6, 2016, Mingo Logan Coal Company, a subsidiary of
Arch Coal, Inc., received an imminent danger order under section
107(a) of the Federal Mine Safety and Health Act of 1977 at the
Mountaineer II mine located in Logan County, West Virginia for
excessive measurable limits of methane air mixtures. The order was
terminated on September 7, 2016.
About Arch Coal
Founded in 1969, Arch Coal, Inc., is a producer and marketer of
coal in the United States, with operations and coal reserves in
each of the major coal-producing regions of the Country. As of
January 2016, it was the second-largest holder of coal reserves in
the United States, owning or controlling over five billion tons of
proven and probable reserves.
Arch Coal, Inc., and 71 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. E.D. Mo. Case Nos. 16-40120 to
16-40191) on Jan. 11, 2016. The petition was signed by Robert G.
Jones as senior vice president-law, general counsel and secretary.
The Debtors disclosed total assets of $5.84 billion and total debt
of $6.45 billion at the time of the bankruptcy filing. Judge
Charles E. Rendlen III has been assigned the case.
The Debtors engaged Davis Polk & Wardwell LLP as counsel, Bryan
Cave LLP as local counsel, FTI Consulting, Inc. as restructuring
advisor, PJT Partners as investment banker, and Prime Clerk LLC as
notice, claims and solicitation agent.
An Official Committee of Unsecured Creditors was appointed in the
case. The Committee retained Kramer Levin Naftalis & Frankel LLP
as counsel; Spencer Fane LLP as local counsel; Berkeley Research
Group, LLC as financial advisor; Jefferies LLC as investment
banker; and Blackacre LLC as coal consultant.
ARIZONA ACADEMY: U.S. Trustee Forms Three-Member Committee
----------------------------------------------------------
Ilene J. Lashinsky, the U.S. Trustee for District of Arizona,
appointed on Sept. 20 three creditors of Arizona Academy of Science
and Technology, Inc., to serve on the official committee of
unsecured creditors.
The committee members are:
(1) Craig Anderson
1718 S. Longmore No. 118
Mesa, Arizona 85202
Tel: (480) 347-6413
E-mail: cmanderson47@yahoo.com
(2) Bruce Weinstein
11267 E. Palomino Road
Scottsdale, Arizona 85259
Tel: (602) 705-4555
E-mail: bruce@psigllc.com
(3) Central United Methodist Church
Attention: Donald E. Morse
1875 North Central Avenue
Phoenix, Arizona 85004
Tel: (602) 258-8048
E-mail: donmorse@cox.net
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 Arizona Academy of Science and Technology
Arizona Academy of Science and Technology, Inc., filed a Chapter 11
bankruptcy petition (Bankr. D.Ariz. Case No. 16-09573) on Aug. 18,
2016. Hon. Scott H. Gan presides over the case. Davis Miles
McGuire Gardner, PLLC, represents the Debtor as counsel.
In its petition, the Debtor estimated $0 to $50,000 in assets and
$1 million to $10 million in liabilities. The petition was signed
by Grant Creech, director.
ATINUM MIDCON: Hires BDO USA as Tax Service Provider
----------------------------------------------------
Atinum Midcon I, LLC, seeks authority from the U.S. Bankruptcy
Court for the Southern District of Texas to employ BDO USA, LLP as
tax service provider to the Debtor.
Atinum Midcon requires BDO USA to:
a. complete its 2015 tax returns, currently due September 15,
2016, and 2016 tax returns; and
b. prepare the following tax returns with respect to the tax
years ended December 31, 2015 and December 31, 2016: (i)
Form 1065, US Partnership Return; (ii) Kansas Form K-1205;
and (iii) Oklahoma Form 514.
BDO USA will be paid a flat fee of $15,625 for the 2015 tax returns
and $22,965 for the 2016 tax returns.
Richard K. Dyo, member of BDO USA, LLP, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtor and its estates.
BDO USA can be reached at:
Richard K. Dyo
BDO USA, LLP
2929 Allen Parkway, 20th Floor
Houston, TX 77019
Tel: (713) 960-1706
Fax: (713) 407-3100
About Atinum MidCon I
Headquartered in Houston, Texas, Atinum MidCon I, LLC, owns
non-operated working interests in oil and gas wells and properties
located in Kansas and Oklahoma.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Tex. Case No. 16-33645) on July 22, 2016, estimating its assets at
between $100 million and $500 million and its debts at between $100
million and $500 million. The petition was signed by Robert E.
Ogle, chief restructuring officer.
Judge Marvin Isgur presides over the case.
Timothy Alvin Davidson, II, Esq., at Andrews Kurth LLP serves as
the Debtor's counsel.
Claro Group LLC is the Debtor's financial advisor. PLS. INC. is the
Debtor's sales agent. BDO USA, LLP serves as tax service provider.
AVACEND INC.: Case Summary & 10 Unsecured Creditors
---------------------------------------------------
Debtor: Avacend, Inc.
3155 Northpoint Pkwy,
Bldg G, Suite 100
Alpharetta, GA 30005
Case No.: 16-66654
Chapter 11 Petition Date: September 21, 2016
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: William A. Rountree, Esq.
MACEY, WILENSKY & HENNINGS LLC
Suite 4420
303 Peachtree Street, NE
Atlanta, GA 30308
Tel: 404-584-1200
Fax: 404-681-4355
E-mail: swenger@maceywilensky.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kanchana Raman, authorized
representative.
A copy of the Debtor's list of 20 unsecured creditors is available
for free at http://bankrupt.com/misc/ganb16-66654.pdf
AVIS BUDGET: S&P Assigns 'B+' Rating on EUR250MM Sr. Notes
----------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue rating and '5' recovery
rating to Parsippany, N.J.-based car and truck renter Avis Budget
Group Inc.'s (Avis Budget) EUR250 million senior notes due 2024.
The '5' recovery rating indicates S&P's expectation that lenders
would receive modest recovery (10%-30%; upper half of the range) of
their principal in the event of a payment default.
Avis Budget Finance plc is issuing the notes. The proceeds will be
used to redeem a portion of the 6.000% senior notes due 2021, to
pay fees and other related offering expenses, and for general
corporate purposes.
S&P's ratings on Avis Budget reflect the company's position as one
of the largest global car rental companies and the
price-competitive and cyclical nature of on-airport car rentals.
S&P's ratings also incorporate the relatively stable cash flow that
the company's car rental business generates--even during periods of
earnings weakness--and its substantial capital spending
requirements, which it has the ability to reduce if industry or
economic conditions warrant. S&P assess the company's business
risk profile as fair and its financial risk profile as aggressive.
The stable outlook on Avis Budget reflects S&P's expectation that
despite some pricing pressure, it expects credit metrics to remain
relatively consistent through 2016, with EBITDA interest coverage
in the high-5x area, funds from operations (FFO) to debt in the
high teens and low-20% area, and debt to EBITDA in the low-4x area.
S&P could raise the ratings if the company is able to execute on
its various operating initiatives, including fleet and pricing
optimization, such that EBITDA interest coverage would exceed 6x
and FFO to debt would rise to the low-20% area and remain there
over a sustained period. Although unlikely over the next year, S&P
could lower the rating if pricing pressure is greater than
expected, causing FFO to debt to decline to the mid-teens percent
area and EBITDA interest coverage to decline to 4.5x and remain
there on a sustained basis.
RATINGS LIST
Avis Budget Group Inc.
Issuer Credit Rating BB-/Stable/--
New Rating
Avis Budget Finance plc
Senior Unsecured
EUR250 mil notes due 2024 B+
Recovery rating 5H
AXALTA COATING: Moody's Rates New Sr. Euro Notes Due 2025
---------------------------------------------------------
Moody's Investors Service assigns B1 ratings to the new senior
unsecured Euro Notes due 2025 at Axalta Coating Systems Dutch
Holding B B.V., and affirms Axalata's Corporate Family rating (CFR)
at Ba3. At the same time, Moody's upgrades the senior secured
first lien revolver and term loans of Axalta's wholly owned
subsidiaries -- Axalta Coating Systems Dutch Holding B B.V.,
co-borrower Axalta Coating Systems U.S. Holdings Inc. to Ba1 from
Ba2 and the senior unsecured notes of these entities and Axalta
Coating Systems, LLC to B1 from B2. Proceeds from the new notes
are expected to be used pay off or reduce outstandings of the
existing senior secured Euro notes and the Euro term loan. The
existing ratings on the secured Euro notes and term loan will be
withdrawn once the debt is repaid.
"The upgrade of the secured and unsecured tranches reflect the
significant decrease in secured debt in Axalta's capital structure,
leaving the USD term loan and possibly a small portion of the Euro
term loan as the remaining secured obligations on the company's
balance sheet," according to Joseph Princiotta, VP, Senior Credit
Officer at Moody's. "The new debt issuance is expected to be
virtually leverage neutral while allowing for lower interest
expense and an extended maturity profile."
Upgrades:
Issuer: Axalta Coating Systems Dutch Holding B B.V.
Senior Secured 1st Lien Term Loan B due 2020, Upgraded to Ba1
(LGD2) from Ba2 (LGD3)
Gtd Senior Secured Regular Bond/Debenture due 2021, Upgraded to
Ba1 (LGD2) from Ba2 (LGD3)
Senior Secured Bank Credit Facility, Upgraded to Ba1 (LGD2) from
Ba2 (LGD3)
Issuer: Axalta Coating Systems, LLC
Backed Euro Senior Unsecured Regular Bond/Debenture, Upgraded to
B1 (LGD5) from B2 (LGD5)
Backed Senior Unsecured Regular Bond/Debenture, Upgraded to B1
(LGD5) from B2 (LGD5)
Assignments:
Issuer: Axalta Coating Systems Dutch Holding B B.V.
Backed Euro Senior Unsecured Regular Bond/Debenture, Assigned B1
(LGD5)
Affirmations:
Issuer: Axalta Coating Systems, Ltd.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Speculative Grade Liquidity Rating, Affirmed SGL-1
Outlook, remains Stable
Issuer: Axalta Coating Systems Dutch Holding B B.V.
Outlook, remains Stable
Issuer: Axalta Coating Systems, LLC
Outlook, remains Stable
RATINGS RATIONALE
The recent upgrade of Axalta's CFR to Ba3 in August of this year
reflects the company's strong margin growth and positive free cash
flow that has allowed steady debt reduction the last few years. The
Ba3 rating also reflects leading positions in performance and
transportation coatings, strong margins overall but especially in
the refinish segment, highly competitive technology, geographic
diversity, and long and stable customer relationships. The ratings
also reflect Moody's expectations for further operational
improvements, despite the immediate and near-term foreign exchange
headwinds, that support Axalta's credit profile and the rationale
for the higher ratings, Moody's added.
Factors constraining the ratings include what is still relatively
high leverage (despite the meaningful improvement on this front),
significant exposure to the cyclical OEM automotive industry,
exposure to raw material price swings (although Moody's expects
this to be neutral or a modest tailwind in 2016), and material Euro
and Chinese Yuan exposure.
Despite the relatively short operating history, Axalta's track
record thus far has been very favorable with substantially all of
the transition-related activities completed, including IT system
conversion, strategic refocus, new investments completed or soon to
be, and material margin and leverage improvements, Moody's
reiterated.
Positive free cash flow has allowed for debt reduction; total debt
has been further reduced by $363 million over the last six quarters
to $3,353 million at June 30, 2016, and leverage (including Moody's
adjustments for pensions and operating leases) has declined by more
than one turn to roughly 4 times since the outlook was changed to
positive. Over this same time period, Axalta has improved its
adjusted EBITDA margin by roughly 400 bp to 22.5% at June 30,
2016.
Moody's believes that Axalta is likely to experience favorable
operating trends over the next several years, assuming a stable
macroeconomic environment and new auto builds at a pace consistent
with industry consensus of roughly 2-3% global growth. Moody's
believes that further sales and profit growth is possible from
ongoing productivity improvements and modest volume growth
resulting from new contract wins, market share gains, robust
investment in R&D and select market penetration into previously
underserved markets. Expanded R&D in China and recently completed
investments in Germany and Mexico should support additional volume
growth, Moody's added.
Ongoing cost reduction initiatives target $200 million in savings
by year end 2017, which should more than offset fixed cost
inflation over this period. The company intends to achieve $60
million in savings this year with run-rate savings approaching $150
million by year end.
Axalta's liquidity profile is excellent due to the company's
undrawn $400 million revolver, cash balances of roughly
$550 million (pro forma for the August bond issuance), and
projected positive free cash flow generation. Moody's does not
expect any drawings (aside from L/Cs) on the revolver over the next
12 months, barring acquisitions of meaningful scale.
The stable outlook reflects Moody's expectation that Axalta will
continue to achieve earnings and EBITDA growth going forward,
organically and from additional bolt-on acquisitions, and to
continue to generate positive free cash flow for further debt
reduction. The company is targeting net leverage of 2.5 -- 3.0x
(which roughly equates to Moody's adjusted gross leverage of 3.1x
to 3.6x).
Moody's could raise the ratings if leverage (including Moody's
adjustments) were to fall sustainably below 3.5x, retained cash
flow to adjusted debt is sustained above 15%, and free cash flow to
adjusted debt is sustained at low double-digit rates.
A downgrade is unlikely given Moody's current view of the company
and its metrics and its end markets. However, negative surprises
that alter the fundamentals in the auto OEM or refinish markets and
result in sustainable leverage approaching 4.5x could cause Moody's
to reconsider the appropriateness of the Ba3 rating.
The Ba1 rating on the guaranteed senior secured revolving credit
facility, term loans, and notes at two notches above the CFR is due
to the superior positioning in the capital structure as well as the
presence of the $1.5 billion of unsecured debt in the capital
structure. The $1.9 billion of secured debt (pro forma for paying
off the Euro secured debt) in the capital structure notches the
ratings on the Unsecured Notes down to B1.
The principal methodology used in these ratings was Global Chemical
Industry Rating Methodology published in December 2013.
Axalta Coating Systems Ltd. and its affiliates are legal entities
formed in conjunction with the acquisition of DuPont's Performance
Coatings by an affiliate of the Carlyle Group. The company is
headquartered in Philadelphia, PA, with revenues as of LTM June,
2016 of roughly $4 billion.
AZURE MIDSTREAM: S&P Lowers CCR to 'CCC+', Outlook Negative
-----------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on Azure
Midstream Energy LLC to 'CCC+' from 'B-'. The outlook is negative.
At the same time, S&P lowered the rating on the senior secured term
loan to 'CCC+' from 'B-'. The '3' recovery rating reflects S&P's
expectations for meaningful (50% to 70%; lower half of the range)
recovery in a payment default.
"The downgrade reflects our view that Azure's credit measures have
worsened due to unfavorable commodity prices and weak industry
conditions, which has made it more challenging to meet its
financial commitments," S&P Global Ratings analyst Mike Llanos
said.
Although commodity prices do not directly impact Azure's cash flows
as the majority of cash flows are fee-based in nature, poor
commodity prices have resulted in low utilization rates across
Azure's assets and throughput volumes continue to remain below MVC
levels. Although MVCs ensure a base level of cash flow stability,
those cash flows are only as stable as the quality of their
counterparties. S&P notes that Azure's MVC is with a joint venture
between Royal Dutch Shell PLC (formerly BG Group PLC) and EXCO
Resources Inc. EXCO's creditworthiness continues to be challenged
and BG is not responsible for any EXCO non-performance in paying
the MVCs. If counterparties to MVCs are unable to meet those
volume deficiency payments or there are delays in the timing of
those payments, Azure's annual adjusted EBITDA could end up being
below the $60 million to $70 million level or the company will have
less cash to sweep and repay debt. Thus the company could end up
violating its leverage covenant of 4.5x. The term loan matures in
2018 and, in S&P's view, the refinancing risk is elevated given
that a large percentage of the MVCs expire by 2018, thus if natural
gas prices remain at or below $3 per million Btu (mmbtu), 2019
EBITDA could end up being at levels that are roughly half of 2016
levels.
The negative outlook reflects S&P's view that liquidity could come
under further pressure over the next 12 to 24 months if commodity
prices do not improve or counterparties to the MVCs do not meet
their contractual agreements.
S&P could lower the ratings if liquidity deteriorates further or if
S&P expects the company to restructure its debt or default over the
next 12 months. This could occur if commodity prices decline
further and if the company is unlikely to refinance debt before
maturity.
S&P could revise the outlook to stable if the company repays a
greater percentage of its outstanding debt balance. This could
occur if commodity prices improve such that volumes exceed minimum
volume commitment levels and adjusted debt to EBITDA is expected to
be sustained below 5x.
BALTAZAR ANTONIO: Unsecureds To Recover 4.2% Under Plan
-------------------------------------------------------
Baltazar Antonio Negron Soto filed with the U.S. Bankruptcy Court
for the District of Puerto Rico an amended disclosure statement
explaining the Debtor's plan of reorganization dated Aug. 29,
2016.
It is anticipated that Class 2 General Unsecured Claims will result
in Allowed Class 2 Claims in the approximate amount of
$105,127.81.
The Plan anticipates a 4.2% distribution on these claims for an
approximated total distribution of $4,500. These claims will be
paid via monthly payments in the amount of $187.50; commencing on
the first day of the 37th month following the Effective Date of the
Plan and continue through the last day of the 60th month following
the Effective Date of the Plan. Payments will be based on
principal only, without any payment of interest.
The Plan establishes that the Plan will be funded from the
Reorganized Debtor's cash flow generated by the Debtor. It
generally consists of the rental income generated by the commercial
property, the income generated by the Debtor's employment, and the
income generated by Debtor’s employment as a preacher. The
Debtor will contribute his cash flows to fund the Plan commencing
on the Effective Date of the Plan and continue to contribute said
income through the date that Holders of Allowed Class 1 and 2
Claims receive the payments specified for in the Plan.
The Disclosure Statement is available at:
http://bankrupt.com/misc/prb14-08847-163.pdf
The Plan was filed by the Debtor's counsel:
Jesus Enrique Batista-Sanchez, Esq.
The Batista Law Group, PSC
Cond. Mid-Town Center
420 Avenue Juan Ponce De León
Suite 901
San Juan, PR 00918
Tel: (787) 620-2856
About Baltazar Antonio
Baltazar Antonio Negron Soto owns a 100% interest in the shares of
Funeraria Ebenezer. Funeraria, which is managed and operated by
the Debtor, is a corporation dedicated to funeral services.
Funeraria does not own any real property. The Debtor also owns an
investment real property located at Calle 601 Bloque 222 Casa 15
Villa Carolina, Carolina, Puerto Rico. Additionally, the Debtor
also owns the real property located at Bloque 142 Calle 412 No. 13
Villa Carolina, Carolina, Puerto Rico, which is the Debtor's
primary residence. The primary residence is owned by the Debtor
free and clear of any liens and encumbrances.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. D.
P.R. Case No. 14-08847) on Oct. 28, 2014.
BARBARA JEAN DENNIS: Gets Prison Term for Bankruptcy Fraud
----------------------------------------------------------
The American Bankruptcy Institute, citing Jeff German of the Las
Vegas Review-Journal, reported that a former Las Vegas real estate
agent who filed multiple bankruptcy petitions to avoid paying
mortgages on rental properties has been sentenced to 11 months in
prison.
According to the report, Barbara Jean Dennis, 60, also was ordered
to serve two years of supervised release after prison and pay
$83,000 in restitution.
"As this case demonstrates, the fallout from the housing crisis in
Nevada is still impacting federal investigations and prosecutions,"
Nevada U.S. Attorney Daniel Bogden said in a news release, the
report cited. "The prosecution of these cases typically takes
years and requires a significant amount of resources. This
sophisticated fraud scheme involved mortgage fraud, bankruptcy
fraud, 12 properties in two states, and five bankruptcy
petitions."
Dennis pleaded guilty in February to bankruptcy fraud, admitting
that she used the automatic stay provision in bankruptcy
proceedings to avoid paying the mortgages while collecting rent
from her tenants, the report related.
She filed three bankruptcy petitions in Nevada and two in Texas
between August 2009 and November 2010, the report said, citing
prosecutors.
BJORNER ENTERPRISES: Hires MacConaghy & Barnier as Counsel
----------------------------------------------------------
Bjorner Enterprises, Inc., a California Corporation, seeks
authorization from the U.S. Bankruptcy Court for the Northern
District of California to employ MacConaghy & Barnier, PLC as
counsel for the Debtor-in-Possession.
The Debtor requires MacConaghy & Barnier to:
a. advise the Debtor regarding matters of bankruptcy law;
b. represent the Debtor in proceedings or hearings in the
Bankruptcy Court;
c. assist the Debtor in the preparation and litigation of
appropriate applications, motions, adversary proceedings, answers,
orders, reports and other legal papers;
d. advise the Debtor concerning the requirements of the
Bankruptcy Code and Rules relating to the administration of this
case and the operation of Debtor's business;
e. assist the Debtor in the negotiation, preparation,
confirmation, and implementation of a plan of reorganization; and
f. perform all other legal services for Debtor as
Debtor-in-Possession as may be necessary herein; and it is
necessary for Debtor as Debtor-in-Possession to employ such legal
services.
MacConaghy & Barnier lawyers who will work on the Debtor's case and
their hourly rates are:
John H. MacConaghy, Esq. $500
Jean Barnier, Esq. $450
Prior to the filing of the petition for relief, the Debtor paid to
MacConaghy & Barnier, PLC a retainer for bankruptcy services in the
amount of $25,000.
John H. MacConaghy, Esq., principal of the firm of MacConaghy &
Barnier, PLC, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estates.
MacConaghy & Barnier may be reached at:
John H. MacConaghy, Esq.
Jean Barnier, Esq.
MacConaghy & Barnier, PLC
645First St. West, Suite D
Sonoma, CA 95476
Telephone: (707)935-3205
Facsimile: (707)935-7051
E-mail: macclaw@macbarlaw.com
About Bjorner Enterprises, Inc.
Bjorner Enterprises, Inc. filed a chapter 11 petition (Bankr. N.D.
Cal. Case No, 16-10637) on July 26, 2016. The petition was signed
by John Bjorner, president. The Debtor is represented by John H.
MacConaghy, Esq., at MacConaghy & Barnier, PLC. The case is
assigned to Judge Alan Jaroslovsky. The Debtor estimated assets
and debts at $1 million to $10 million at the time of the filing.
BP ORTHOLITE: S&P Assigns 'B+' CCR & Rates New 1st Lien Loans 'BB'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' corporate credit rating to
Amherst, Mass.-based BP Ortholite LLC. The outlook is stable.
At the same time, S&P assigned its 'BB' issue-level rating to the
company's proposed first-lien credit facilities, including a $12
million revolving commitment expiring in 2021 and a $200 million
term loan due in 2023. The recovery rating on the facilities is
'1', indicating S&P's expectation for very high recovery (90%-100%)
in the event of a payment default. O2 Partners LLC is the issuer.
S&P estimates the company's adjusted debt will be approximately
$205 million at closing, which includes S&P's adjustments for
operating leases.
The ratings on Ortholite reflect its narrow business focus and
small scale as a provider of customized open-cell foam innersoles
used by branded footwear companies. It also reflects Ortholite's
participation in the competitive global footwear industry, its
exposure to potentially volatile input costs, and the operating
risks inherent in high-growth companies. The company's sources of
revenue are concentrated among the leading global footwear brands.
S&P's ratings also reflect Ortholite's strong profitability and
proprietary technical capability. The superior performance of its
insole designs, together with its brand recognition and
relationships with leading footwear companies, provide a modest
barrier to entry and contribute to the company's solid operating
metrics. Ortholite is controlled by private equity firm Blue Point
Capital, which is recapitalizing Ortholite with an initial leverage
target of 4.2x based on S&P's credit metrics.
S&P expects the company will further penetrate the global footwear
industry based on the superior attributes of its open-cell
technology compared with other manufacturers' innersole products.
Ortholite's customer base is concentrated among leading footwear
companies (Nike, Adidas, Wolverine, Asics, and Clarks) but spread
among numerous products. For these firms' products, the attributes
of open-cell technology are desirable and contribute to better
footwear comfort and performance, supporting higher retail price
points. Nevertheless, the loss of a large customer could have a
material impact on Ortholite's financial condition due to its
relatively small size and narrow product focus.
The stable outlook reflects S&P's expectation that Ortholite's
operating performance, profitability, and cash flow will remain
healthy following the closing, leading to debt-to-EBITDA
approaching 3.8x by year-end 2017 from about 4.2x at closing. S&P
expects the company will maintain its position as a leading
supplier of high-end insoles to branded footwear companies based on
strong product appeal, continuous innovation, anticipated continued
favorable and stable input costs, and improving working capital
dynamics. S&P projects debt-to-EBITDA leverage of 3.8x-4.2x over
the next year. Nevertheless, S&P believes the risk inherent with
private equity ownership, mainly the intrinsic characteristics and
sometimes aggressive nature of financial sponsor's strategies,
constrains the long-term potential of a significantly stronger
balance sheet.
S&P could lower the rating if it expected Ortholite's credit
metrics to weaken considerably, including debt-to-EBITDA leverage
sustained above 5x. This could occur from developments such as the
loss of product placement, an unexpected rise in input costs that
cannot be recovered through higher prices, or another significant
dividend payout. S&P estimates that leverage would go above 5x if
EBITDA at year end were to decline by approximately 12% or debt
were to increase by $30 million (assuming current debt and pro
forma EBITDA.)
Although unlikely in the next 12 months, S&P could raise the
ratings if the company meaningfully diversifies its customer base,
grows scale, and diversifies its product offering and geographic
exposure. S&P could also raise its ratings if Blue Point Capital
and other private equity co-investors were to reduce their
ownership stake below 40% and Ortholite maintained debt-to-EBITDA
below 4x.
BRINKER INT'L: Moody's Cuts Non-Guaranteed Note Ratings to Ba1
--------------------------------------------------------------
Moody's Investors Service downgraded Brinker International, Inc.'s
unsecured non-guaranteed note ratings to Ba1 from Baa3. In
addition, Moody's assigned the company a Ba1 Corporate Family
Rating (CFR) and Ba1-PD Probability of Default Rating (PDR).
Moody's also assigned a Baa3 rating to Brinker's proposed $350
million guaranteed senior unsecured notes and a Speculative Grade
Liquidity Rating of SGL-2. The outlook is stable. This concludes
Moody's review initiated on August 11, 2016.
The downgrade follows Brinker's announcement of its intention to
increase leverage to support shareholder initiatives, which Moody's
views as the adoption of a more aggressive financial policy, that
will result in a sustained deterioration in credit metrics and
could limit its financial flexibility.
"Overall, Moody's views this initiative of funding share
repurchases with additional leverage during a period of soft
operating performance as Brinker adopting a more aggressive
financial policy towards shareholders that will result in higher
debt levels, weaker credit metrics and limit its financial
flexibility," stated Moody's Senior Credit Officer Bill Fahy.
Moreover, Brinker's ability to strengthen credit metrics from these
elevated levels could be challenging going forward in the event the
company's success with turning around recent operating trends fall
short of expectations. In addition, given Moody's view that the
recent announcement reflects a change in Brinker's financial policy
to manage its balance sheet toward higher leverage overall, the
company's willingness to strengthen credit metrics overtime remains
uncertain.
Ratings downgraded are:
-- $250 Million Senior Unsecured Notes due 2018 to Ba1 (LGD4)
from Baa3
-- $300 Million Senior Unsecured Notes due 2023 to Ba1 (LGD4)
from Baa3
Ratings assigned are:
-- Corporate Family Rating of Ba1
-- Probability of Default Rating of Ba1-PD
-- Speculative Grade Liquidity Rating of SGL-2
-- $350 Million Guaranteed Senior Unsecured Notes of Baa3
(LGD3)
RATINGS RATIONALE
Moody's recognizes Brinker's high level of brand awareness,
meaningful scale, improved cost structure and strong product
pipeline and technology initiatives that should help drive
incremental traffic and higher check. In addition, a steady
improvement in earnings growth historically helped to maintain an
appropriate level of credit metrics and good liquidity despite
higher funded debt levels to help support shareholder initiatives.
However, the high level of promotional activities across the
industry and a value focused consumer will continue to pressure
operating trends and earnings.
The Ba1 rating on the existing non-guaranteed notes, the same as
the CFR, reflect the position of these notes within Brinker's
unsecured capital structure. The Baa3 rating on the proposed new
guaranteed notes incorporate the benefit these notes derive from
guarantees of certain material subsidiaries which also house all
domestic trademarks for Brinker.
The stable outlook reflects Moody's expectation that Brinker will
maintain moderate leverage and good coverage metrics while
preserving good liquidity. In addition, the outlook incorporates
Moody's view that management will balance returns to shareholders
in a manner that preserves leverage and coverage metrics that are
appropriate for its ratings.
Ratings could be downgraded in the event a decline in operating
performance for an extended period or the adoption of a more
aggressive financial policy caused a sustained deterioration in
earnings and debt protection metrics. Specifically, ratings could
be downgraded in the event debt to EBITDA increased above 4.5 times
or EBIT coverage of interest fell below 2.5 times on a sustained
basis.
Factors that could result in an upgrade include a sustained
improvement in improved operating trends and a consistent financial
policy that result in a sustained strengthening of earnings and
debt protection metrics. Specifically, this would include debt to
EBITDA of under 3.5 times and EBIT coverage of interest exceeding
3.5 times on a sustained basis. A higher rating would also require
maintaining good liquidity.
Brinker International, Inc. ("Brinker") owns, operates and
franchises the casual dining concepts Chili's Grill & Bar (Chili's)
and Maggiano's Little Italy. Annual revenues are approximately $3.1
billion.
The principal methodology used in these ratings was Restaurant
Industry published in September 2015.
BRINKER INTERNATIONAL: S&P Lowers CCR to 'BB+'; Outlook Stable
--------------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on
Dallas-based Brinker International Inc. to 'BB+' from 'BBB-'. At
the same time, S&P lowered the issue-level ratings on the company's
senior unsecured debt to 'BB+' from 'BBB-' and assigned a '3'
recovery rating, reflecting S&P's expectation of meaningful
recovery in the event of a default at the low end of the 50% to 70%
range. S&P removed the ratings from CreditWatch with negative
implications, where it placed them in August 2016. The outlook is
stable.
S&P also assigned a 'BB+' issue level rating the company's proposed
$350 million senior unsecured notes. The recovery rating is '3',
indicating S&P's expectation for meaningful recovery in the event
of default, at the lower end of the 50% to 70% range.
"The downgrade primarily reflects our expectation of the company's
higher leverage (with adjusted debt to EBITDA above 3x) on a
sustained basis, following the completion of the proposed note
offering," said credit analyst Helena Song. "This is a meaningful
shift from the company's previous financial policy (with adjusted
debt to EBITDA below 3x) and as a result, we reassessed the
company's financial risk profile as significant."
The stable outlook on Brinker reflects S&P's expectation of
generally stable operating performance as the company implements
additional operating initiatives to drive traffic and protect
margins, following modestly weakened performance in recent
quarters. S&P also believes Brinker will maintain leverage in the
low- to mid-3x area, following the completion of the proposed debt
issuance.
S&P could consider a downgrade if Brinker further increases
leverage meaningfully to repurchase shares, or if operating
underperformance causes credit metrics to weaken such that leverage
is sustained in the high-3x area or above. Leverage could rise to
3.7x if, for example, Brinker's gross margin deteriorates by about
250 basis points (bps) in fiscal 2017 while revenues remain in line
with S&P's base-case expectation.
Although unlikely in the near term given the company's financial
policy, S&P could raise the ratings if Brinker retains its market
position and elects to improve credit metrics, resulting in total
debt to adjusted EBITDA in the high 2x range or better on a
sustained basis, and the trend is supported by the company's
financial policy. This would occur if the company reduces debt by
about $500 million.
C1 INVESTMENT: S&P Affirms 'B' CCR & Rates $335MM Loan 'B'
----------------------------------------------------------
S&P Global Ratings said it affirmed its 'B' corporate credit rating
on Eagan, Minn.-based C1 Investment Corp. The outlook is stable.
At the same time, S&P assigned its 'B' issue-level rating to the
ConvergeOne Holdings Corp.'s $335 million first-lien term loan due
2023 and $50 million revolving facility due 2021 with a '3'
recovery rating (50%-70%, lower half of the range) , and a 'CCC+'
issue-level rating on the company's $100 million second-lien term
loan due 2024 with a '6' recovery rating (0%-10%).
"The rating affirmation reflects our expectation that ConvergeOne's
adjusted leverage will remain below the mid-6x area over the next
year and that operating performance will continue to improve as the
company integrates recent acquisitions," said S&P Global Ratings
credit analyst Dee Banson.
The company's plan to refinance its existing capital structure to
fund a dividend will result in a little more than $100 million of
incremental debt, leading to adjusted leverage in the low 6x area
up from around the high 4x area at June 30, 2016.
The rating also reflects the company's narrow scope of operations
in a competitive and highly fragmented market, considerable
supplier concentration with significant dependence on Avaya Inc.
and Cisco Systems Inc., and the company's relatively high leverage
with pro forma leverage in the low-6x area after the transaction
close. ConvergeOne's leadership position in this niche market,
diverse customer base, and growing addressable markets combined
with the increasing complexity of communications solutions partly
offset the aforementioned risk factors.
The stable outlook reflects S&P's expectation that the company will
sustain its operating trends and improve free cash flow despite
dependence on two key suppliers, Avaya and Cisco.
CAESARS ENTERTAINMENT: Proposes to Increase Contributions to Plan
-----------------------------------------------------------------
Caesars Entertainment Corporation on Sept. 21, 2016, disclosed that
it, along with affiliates of Apollo Global Management, LLC and TPG
Capital, L.P. (together, the "Sponsors"), have proposed an
enhancement to their contributions to Caesars Entertainment
Operating Company, Inc.'s current restructuring plan. The proposed
increase follows discussions with major creditor constituencies of
CEOC and its Chapter 11 debtor subsidiaries (collectively, the
"Debtors") in an effort to reach a consensual debt restructuring
agreement with all creditor groups in CEOC's restructuring.
Caesars Entertainment believes this proposal meets the requirements
of the holders of CEOC's second lien notes and is optimistic that
such proposal will be acceptable.
The revised proposal contemplates additional contributions from
Caesars Entertainment and the Sponsors that will result in
approximately $1.6 billion of additional value being distributed to
the second lien noteholders. These additional contributions, which
will enhance the recovery to the second lien noteholders and
unsecured creditors, have been proposed by Caesars Entertainment
and the Sponsors who are engaged in negotiations with the first
lien bondholders and bank lenders on these points. This additional
value consists of:
An estimated $954 million of Caesars Entertainment equity
contributed by the Sponsors and an estimated $92 million of Caesars
Entertainment equity contributed by Caesars Entertainment on behalf
of non-sponsor only shareholders. The Sponsors' contribution
represents more than a 10 to 1 disproportionate incremental
contribution as compared to non-sponsor only shareholders. Taken
together, this would result in the depletion of all of the
sponsor-held equity in Caesars Entertainment. Additionally,
assuming the previously announced merger of Caesars Entertainment
and Caesars Acquisition Company ("Caesars Acquisition") is
completed, the Sponsors' only continuing ownership in Caesars
Entertainment would be as a result of their ownership in Caesars
Acquisition and CEOC creditors would control more than 62% of the
equity of the combined entity. A significant cash contribution in
excess of $100 million by individual directors and officers through
funding by D&O insurance; and
A small reduction in recovery for the first lien banks and
bondholders valued in the hundreds of millions of dollars. Caesars
Entertainment has asked holders of CEOC's first lien notes to forgo
the excess cash sweep and for the holders of CEOC's prepetition
credit agreement claims to forgo 2.7% of the reorganized company's
equity, both of which are provided for in the Debtors' current
Chapter 11 plan.
The revised proposal expires on Friday, September 23, 2016 at 11:59
p.m. (New York time). In the event the proposal is not accepted by
the deadline, CEOC has indicated that Caesars Entertainment and the
Sponsors' support for the plan is superceded and unnecessary.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.,
is one of the world's largest casino companies. Caesars casino
resorts operate under the Caesars, Bally's, Flamingo, Grand
Casinos, Hilton and Paris brand names. The Company has its
corporate headquarters in Las Vegas. Harrah's announced its
re-branding to Caesar's in mid-November 2010.
In January 2015, Caesars Entertainment and subsidiary Caesars
Entertainment Operating Company, Inc., announced that holders of
more than 60% of claims in respect of CEOC's 11.25% senior secured
notes due 2017, CEOC's 8.5% senior secured notes due 2020 and
CEOC's 9% senior secured notes due 2020 have signed the Amended and
Restated Restructuring Support and Forbearance Agreement, dated as
of Dec. 31, 2014, among Caesars Entertainment, CEOC and the
Consenting Creditors. As a result, The RSA became effective
pursuant to its terms as of Jan. 9, 2015.
Appaloosa Investment Limited, et al., owed $41 million on account
of 10% second lien notes in the company, filed an involuntary
Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case
No.
15-10047) on Jan. 12, 2015. The bondholders are represented by
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP.
CEOC and 172 other affiliates -- operators of 38 gaming and resort
properties in 14 U.S. states and 5 countries -- filed Chapter 11
bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on
Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and
total debt of $19.8 billion as of Sept. 30, 2014.
Delaware Bankruptcy Judge Kevin Gross entered a ruling that the
bankruptcy proceedings will proceed in the U.S. Bankruptcy Court
for the Northern District of Illinois.
Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is
the Debtors' restructuring advisors. Prime Clerk LLC acts as the
Debtors' notice and claims agent. Judge Benjamin Goldgar presides
over the cases.
The U.S. Trustee has appointed seven noteholders to serve in the
Official Committee of Second Priority Noteholders and nine members
to serve in the Official Unsecured Creditors' Committee.
The U.S. Trustee appointed Richard S. Davis as Chapter 11
examiner.
* * *
The U.S. Bankruptcy Court for the Northern District of Illinois
approved the adequacy of the disclosure statement explaining the
second amended joint Chapter 11 plan of reorganization of Caesars
Entertainment Operating Company Inc. and its debtor-affiliates.
The Court set Oct. 31, 2016, at 4:00 p.m. (prevailing Central Time)
as last day for any holder of a claim entitle to vote to accept or
reject the Debtors' plan.
A hearing is set for Jan. 17, 2017, at 10:30 a.m. (prevailing
Central Time) in Courtroom No. 642 in the Everett McKinley Dirksen
United States Courthouse, 219 South Dearborn Street, Chicago,
Illinois, to confirm the Debtors' plan. Objections to
confirmation, if any, are due Oct. 31, 2016, at 4:00 p.m.
(prevailing Central Time).
CALLON PETROLEUM: S&P Assigns 'B' CCR & Rates $350MM Notes 'B+'
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Callon Petroleum Co. The outlook is stable.
At the same time, S&P assigned a 'B+' issue-level rating to the
company's proposed $350 million senior unsecured notes with a
recovery rating of '2', indicating S&P's expectation of substantial
(in the upper half of the 70% to 90% range) recovery in the event
of a payment default.
The company will use the proposed unsecured notes to refinance its
existing $300 million second-lien facility and for general
corporate purposes.
"The ratings on Callon Petroleum Co. reflects our assessment of the
company's weak business risk, aggressive financial risk, and
adequate liquidity," said S&P Global Ratings credit analyst David
Lagasse. "The ratings incorporate the copany's limited scale of
operations, lack of geographic diversity, and the benefits from its
high percentage of crude oil production, expected to be close to
80%," he added.
In addition the ratings reflect S&P's expectation that CPE will be
able to successfully grow average production to 16,000 to 19,000
barrels (bbl) a day over the next 12 months while maintaining
moderate debt leverage and adequate liquidity. Finally, the
ratings incorporate the company's exposure to volatile commodity
prices and the capital intensity of the exploration and production
(E&P) industry which can lead to greater variability in operating
and financial performance.
The stable outlook on Callon Petroleum Co. reflects S&P's
expectation that the company will maintain solid financial measures
including FFO/debt above 20% and at least adequate liquidity over
the next two years despite volatile commodity prices.
S&P could lower the rating if it expected CPE's FFO/debt to fall
below 12% for a sustained period and/or liquidity weakened
considerably, which would most likely occur if the company's
operational performance declines or the company finances a large
acquisition with debt.
S&P could raise the rating if CPE broadened its geographic
diversity and increased its production and reserves to levels more
consistent with 'B+' peers while maintaining FFO/debt above 20%.
CANNABIS SCIENCE: Robert Kane Appointed as COO
----------------------------------------------
On Sept. 14, 2016, a shareholder holding majority voting power of
the shares of Cannabis Science, Inc., by written consent,
considered it expedient and in the interests of the Company to
remove Chad S. Johnson as a director of the Company and appointed
Benjamin C.K. Tam as a director. Also, on the same day, the
Company's Board of Directors acted by written consent to remove
Chad S. Johnson as an officer of the Company and appointed Robert
Kane as chief operating officer and Benjamin C.K. Tam as secretary
of the Company.
Also on Sept. 14, 2016, the Board of Directors of the Company
received Robert Kane's resignation as chief financial officer and
appointed Benjamin C.K. Tam as chief financial officer. For the
sake of clarity, the following are the current officers and
directors of the Company:
Raymond C. Dabney, president, chief executive officer and
director;
Robert Kane, chief operating officer and director;
Benjamin C.K. Tam, secretary, chief financial officer and
director; and
Mario Lap, director.
Benjamin C.K. Tam has worked as a contract controller for a chain
of grocery stores since May 2013. Prior to that he served as chief
financial officer of Ever88 Entertainment N.V. from 2010 to 2013,
chief financial officer of CGTV Games Limited from 2006 to 2010,
chief financial officer of Digifonica Canada Limited and Molaris
Corp. from 2005 to 2006, Public Accountant and Consultant from 1996
to 2005, chief financial officer/chief executive officer and
director of Darius Technology Ltd from 1987 to 1996, and
vice-president of Finance and Director of Bulldog Bag Ltd from 1978
to 1987.
Mr. Tam has been assisting the filing of financial reports of the
Company since December 2015. He is a member of Chartered
Professional Accountants (CPA)/Certified General Accountant (CGA)
and obtained his CGA through University of British Columbia. He
also holds a diploma of Business Administration from Lethbridge
Community College, Alberta.
Mr. Tam will serve as a Company director and officer until his duly
elected successor is appointed or his resignation. There are no
arrangements or understandings between Mr. Tam any other person
pursuant to which he was selected as an officer or director. There
are no family relationships between Mr. Tam and any of the
Company's officers or directors.
Mr. Kane will serve as a Company director and officer until his
duly elected successor is appointed or his resignation. There are
no arrangements or understandings between Mr. Kane any other person
pursuant to which he was selected as an officer or director. There
are no family relationships between Mr. Kane and any of the
Company's officers or directors.
About Cannabis
Cannabis Science, Inc., was incorporated under the laws of the
State of Colorado, on Feb. 29, 1996, as Patriot Holdings, Inc. On
Aug. 26, 1999, the Company changed its name to National Healthcare
Technology, Inc. On June 6, 2007, the Company changed its name
from National Healthcare Technology, Inc., to Brighton Oil & Gas,
Inc., and converted to a Nevada corporation. On March 25, 2008 the
Company changed its name to Gulf Onshore, Inc. On April 6, 2009,
the Company changed its name to Cannabis Science, Inc., and
obtained a new CUSIP number.
Cannabis is at the forefront of medical marijuana research and
development. The Company works with world authorities on
phytocannabinoid science targeting critical illnesses, and adheres
to scientific methodologies to develop, produce, and commercialize
phytocannabinoid-based pharmaceutical products. In sum, the
Company is dedicated to the creation of cannabis-based medicines,
both with and without psychoactive properties, to treat disease and
the symptoms of disease, as well as for general health
maintenance.
As of June 30, 2016, Cannabis had $2.01 million in total assets,
$5.14 million in total liabilities and a stockholders' deficit of
$3.13 million.
The Company reported a net comprehensive loss of $18.6 million in
2015, following a net comprehensive loss of $16.9 million in 2014.
Turner, Stone & Company, L.L.P., Certified Public Accountants,
issued a "going concern" opinion on the Company's consolidated
financial statements for the year ended Dec. 31, 2015, citing that
the Company has suffered recurring losses from operations since
inception, has a working capital deficiency and will need to raise
additional capital to fund its business operations and plans.
Furthermore, there is no assurance that any capital raise will be
sufficient to complete the Company's business plans. These
conditions raise substantial doubt about its ability to continue as
a going concern, the auditors said.
CAPE COD COMMERCIAL: UST Says Plan Needs to Be Revised
------------------------------------------------------
The United States Trustee states that the proposed disclosure
statement dated August 9, 2016, submitted by Cape Cod Commercial
Linen Service, Inc. and This Is It, LLC, fails to provide adequate
information regarding the proposed plan of reorganization of even
date.
"The Disclosure Statement and Plan (and [Projected] Budget/Exhibit)
should be amended to clearly and consistently state what creditors
are going to get and when they are going to receive it, DS pp. 10
(The first quarter of the payment shall be made on the Effective
Date. . ., Because the only holders of general unsecured claims of
This Is It hold the same claims against CCCLS, the Plan does not
include a separate class of general unsecured creditors for This Is
It. . .), and 12 (On the 1st day of the first quarter after the
Effective Date. . .) as well as PL pp. 2 (The first quarter of the
payment shall be made on the Effective Date. . ., Unsecured
Creditors of This Is It will receive no distribution under the
Plan. . .), 8 (The first quarter of the payment shall be made on
the Effective Date, and the remaining payments shall be made over a
period of four (4) years, and will be payable in sixteen (16)
equal, consecutive quarterly payments, beginning on the first day
of the first full quarter after the Effective Date.), and 9 (On the
business day of the full first quarter after the Effective Date of
the Plan, the Debtors will commence making
payments under the Plan and according to the Budget)," the U.S.
Trustee said in its Limited Objection to the Disclosure Statement.
"The Disclosure Statement, Plan and Budget should be further
amended to include the following: i) monthly historical financial
information in the same format as the [Projected] Budget, DS p. 18
and Exhibit; ii) a statement indicating the Debtors will currently
file all Federal and state tax returns through 2015 on or before
any hearing on confirmation of the Plan and a provision for the
payment of estimated taxes for 2015 and 2016 in the [Projected]
Budget, DS p. 10; iii) a summary of the Debtors' appraisal for the
real estate and a discussion concerning the basis for the value(s)
listed concerning the personal property, DS p. 4 and 16-17; iv)
removal of the reference to forever barred administrative expense
claims for Non-Professional Persons (where no notice of an
administrative bar date has been/will be served on all potential
expense claimants), DS p. 10 and PL p. 8; v) disclosure of
post-confirmation salaries for insiders, DS p. 18; and vi)
correction of typographical errors identified by counsel during
conference including discussion of treatment for various classes of
claims concerning Cape Cod Five."
The UST said that upon information and belief (communication with
Debtor's counsel, Attorney Madoff), the Debtors intend to file an
amended Disclosure Statement and Plan, which will address the
concerns raised by the UST.
The Chapter 11 Plan
As reported in the Aug. 16, 2016 edition of the TCR, Cape Cod
Commercial Linen Service, Inc., and This Is It, LLC, filed a
Chapter 11 Plan that says general unsecured creditors owed $2.65
million will receive 20% of their claims over four years. A copy
of the disclosure statement is available for free at
https://is.gd/76evP5
About Cape Cod Commercial
Cape Cod Commercial Linen Service, Inc., based in Hyannis,
Massachusetts, filed a Chapter 11 petition (Bankr. D. Mass. Case
No. 16-11811) on May 13, 2016. Hon. Joan N. Feeney presides over
the case. David B. Madoff, Esq., and Steffani Pelton Nicholson,
Esq., at Madoff & Khoury LLP, serves as counsel to Cape Code
Commercial. The Debtor's financial advisor is Bruce A. Erickson of
B. Erickson Group, LLC. In its petition, the Debtor listed total
assets of $1.24 million and liabilities of $4.62 million. The
petition was signed by Jeffrey Ehart, president.
This Is It, LLC, based in Hyannis, Mass., filed a Chapter 11
petition (Bankr. D. Mass. Case No. 16-11813) on May 13, 2016. Hon.
Joan N. Feeney presides over the case. This Is It tapped David B.
Madoff, Esq., and Steffani Pelton Nicholson, Esq., at Madoff &
Khoury LLP, as bankruptcy counsel. In its petition, This Is It
listed $2.20 million in assets and $3.05 million in liabilities.
The petition was signed by Jeffrey Ehart, president/manager.
The Debtors' cases are jointly administered.
CARIBBEAN TRANSPORT: Hires Lube & Soto as Attorney
--------------------------------------------------
Caribbean Transport Refrigeration & Power Systems, Inc., seeks
authority from the U.S. Bankruptcy Court for the District of Puerto
Rico to employ Lube & Soto Law Offices, PSC as attorney to the
Debtor.
Caribbean Transport requires Lube & Soto to represent the Debtor in
the bankruptcy case.
Lube & Soto will be paid at these hourly rates:
Teresa M. Lube Capo $250
Madeline Soto Pacheco $250
Paralegal $50
Lube & Soto will be paid a retainer in the amount of $10,000, of
which $5,000 was paid on September 2, 2016 and the balance to be
paid on September 8, 2016. The amount of $1,717 was advanced as
filing fee.
Lube & Soto will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Teresa M. Lube Capo, member of the law firm of Lube & Soto Law
Offices, PSC, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estate.
Lube & Soto can be reached at:
Teresa M. Lube Capo, Esq.
LUBE & SOTO LAW OFFICES, PSC
1130 Franklin D. Roosevelt Avenue
San Juan, PR 00920-2906
Tel: (787) 722-0909
Fax: (787) 294-5120
E-mail: lubeysoto@gmail.com
About Caribbean Transport
Caribbean Transport Refrigeration & Power Systems Inc., based in
Morovis, PR, filed a Chapter 11 petition (Bankr. D.P.R. Case No.
16-06766) on August 25, 2016. Teresa M. Lube Capo, Esq., at Lube &
Soto Law Offices, PSC, serves as bankruptcy counsel.
In its petition, the Debtor estimated $0 to $50,000 in assets and
$1 million to $10 million in liabilities. The petition was signed
by Isidro Ojeda, president.
No official committee of unsecured creditors has been appointed in
the case.
CCHN GROUP: S&P Assigns 'B' CCR & Rates New $248MM Facility 'B'
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Scottsdale, Ariz.–based CCHN Group Holdings Inc. The rating
outlook is stable.
At the same time, S&P assigned its 'B' issue-level rating and '3'
recovery rating to Community Care Health Network LLC's proposed
$248 million senior secured credit facility, consisting of a
$10 million revolving credit facility and a $238 million term loan.
S&P's '3' recovery rating indicates its expectation for meaningful
(50%-70%, at the lower end of the range) recovery to lenders in the
event of payment default.
CCHN Group Holdings (doing business as Matrix Medical Network)
provides comprehensive health assessments and chronic care
management services to customers across 37 states. The company's
customers, which consist primarily of Medicare Advantage plans,
contract with Matrix to provide health assessments to ensure
accurate data on patient health conditions, which drives higher
reimbursement to compensate plans that enroll sicker and at-risk
patients. The company's health assessments are provided by its
1,200 provider network, which consists primarily of nurses
practitioners. In S&P's view, the size of this network is a key
competitive advantage, as prospective new entrants would need to
recreate this provider network to enter this business.
"We view the company's business as very narrowly focused, with
almost all of its revenues derived from health assessments for
Medicare Advantage plans," said S&P Global Ratings credit analyst
Shannan Murphy. For this reason, S&P views regulatory risk from
the U.S. Center for Medicare and Medicaid Studies (CMS) as a key
credit risk, as any changes to the required frequency of health
assessments or regulatory changes that increased costs to Matrix or
its customers could have a meaningful impact on operating results.
The company's customer base is fairly concentrated, with about half
of all revenues derived from two payers; this risk is only
partially offset by the company's high historical customer
retention rates. While the company is also seeking to expand into
the fast-growing chronic care management services, this segment
currently contributes minimal revenues, and S&P views this space as
very fragmented and intensely competitive. While Matrix is
positioned as a high quality service provider, supporting premium
pricing, pricing has declined over time due to its limited size and
bargaining power compared to the large insurance companies that
comprise its customer base. For this reason, S&P expects further
price erosion over the next few years. Still, the company has
modestly expanded its margins over time, in part by improving its
scheduling efficiency and reducing fixed and variable costs.
S&P's stable rating outlook on Matrix reflects its view that the
company is likely to grow organically at least at a
mid-single-digit pace or better, reflecting growth in Medicare
Advantage enrollment. It also reflects S&P's expectation that CMS
will continue to support the use of data generated from in-home
health assessments to support risk adjustment, and that any
regulatory changes will not impact Matrix's business model. While
S&P expects Matrix will generate $15 million to $20 million in
annual discretionary cash flow, S&P believes that the financial
sponsor will prioritize business expansion and diversification over
deleveraging, and expect leverage to be sustained between 4x-5x.
S&P could lower the rating if Medicare's approach to using data
from health assessments becomes less favorable, resulting in a
sharp reduction in demand for Matrix's services. S&P could also
lower the rating if the company experiences increasing competitive
pressures that result in customer losses and sharp declines in
revenue per assessment. If revenues and revenue per assessments
each declined in the low double digits (most likely as a result of
severe competition that resulted in customer losses and much lower
pricing), S&P believes margins would decline about 700 basis points
and free cash flow would be very thin, resulting in a lower
rating.
S&P views upgrade prospects as limited over the near term given
that the company's business is so narrowly focused, and because S&P
expects the company to prioritize growth over deleveraging.
CENTRAL PACIFIC: Fitch Affirms BB- Rating on Trust Pref. Securities
-------------------------------------------------------------------
Fitch Ratings has upgraded Central Pacific Financial Corp's (CPF)
Long-Term Issuer Default Rating (IDR) and Viability Rating (VR) to
'BBB-/bbb-' from 'BB+/bb+' following the review of its Community
Bank Peer Group. The Rating Outlook has been revised to Stable from
Positive.
KEY RATING DRIVERS
IDRS AND VR
Today's upgrade reflects CPF's demonstration of its revised risk
appetite and risk management framework post-crisis that is in line
with investment-grade rated peers. The bank has successfully
resolved most of its nonperforming assets (NPAs) while incurring a
low level of net charge-offs (NCOs). Management has also
demonstrated some success in improving CPF's core earnings profile
through loan growth, improved efficiency, and other revenue
initiatives. The Stable Outlook reflects Fitch's view that the
improvements in asset quality and risk management will be sustained
in line with similarly rated banks.
While Fitch has noted a degree of improved earnings performance,
CPF's core earnings, as measured by pre-provision net revenue,
remain weak compared to its peer group and other investment-grade
rated banks. CPF continues to benefit from reserve releases. In 12
of the last 14 quarters (since beginning of 2013), management has
taken negative provisions to augment earnings performance. Over the
last five quarters, reserve releases have accounted for 13% of
pre-tax income and have resulted in returns on assets (ROA) in-line
with higher rated peers.
Fitch views this relatively lower level of core earnings as having
constrained CPF's ratings. Today's action encompasses Fitch's
belief that the company will achieve some additional incremental
improvement in core earnings.
Fitch believes management has instituted risk management practices
that are supportive of the upgrade. The company has made a
substantial investment in systems over recent years which have been
an important tool for management, as the bank has reduced problem
assets, grown its loan portfolio, and established new risk
underwriting standards. Fitch said, “We view the bank's
establishment of new risk standards and controls as to
concentrations and loan products, along with its renewed focus on
its core Hawaii market, favorably.”
CPF's improved risk management framework is particularly important
given the bank's significant loan growth, and this higher than peer
level of growth is viewed cautiously given the very competitive
environment banks currently face. Still, Fitch recognizes that
growth has primarily been derived from loan originations within
CPF's operating footprint while being opportunistic with loan
purchases and participations from mainland banks. Fitch's
expectation that growth will level off at the mid-single-digits and
continue to primarily be derived from on-island opportunities is
reflected in today's rating action.
Fitch calculates CPF's NPAs at 1% as of the second quarter of 2016
(2Q16), an improvement of about 70bps year-over-year. This
improvement has brought CPF's asset quality in line with peer group
averages. Over the same time period, the dollar volume of NPAs has
been reduced by 33% as management has remained successful in
resolving problem loans, particularly those classified as
non-accrual. Fitch said, “We note that the reduction in NPAs has
not come at the cost of higher credit costs, as evidenced by a
cumulative net recovery over the past five quarters.”
Over one-half of CPF's remaining NPAs are accruing troubled debt
restructurings (TDRs), the vast majority of which are residential
real estate-related. While residential-related TDRs have produced
higher than average losses at mainland banks, Fitch expects CPF's
to result in fairly nominal losses. Fitch expects relatively low
re-default rates due to strong housing prices and economic trends
in Hawaii where the vast majority of the TDRs are located. Fitch's
expectation that these accruing TDRs will continue to perform well
and that asset quality improvement relative to peers will be
sustained both support today's rating action and are reflected in
the Stable Outlook.
CPF's capital and liquidity profiles remain stable and support the
ratings at their new level. Fitch expects loan growth to outpace
capital generation over the next year as the bank rotates the
balance sheet into loans from securities. Nevertheless, given the
bank's solid 12.5% Common Equity Tier 1 Ratio under Basel III and
its low loan to deposit ratio of 77.5%, both as of June 30, 2016, a
moderate deterioration in risk-based capital and liquidity would be
viewed as manageable at CPF's rating level.
Fitch also expects CPF to be able to take advantage of a rising
rate environment relatively more than some higher-rated peers given
its unique operating market. During the last rate-tightening period
between 2004 and 2007, CPF, along with other Hawaii-based banks,
was able to substantially lag deposit pricing compared to mainland
banks. While the ultimate behavior of depositors is not expected to
directly mirror past tightening cycles, Fitch expects CPF's
depositor base to behave very similarly given the rational
competition in Hawaii and the lack of banking alternatives.
SUPPORT RATING AND SUPPORT RATING FLOOR
CPF has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, CPF is not systemically important and, therefore,
the probability of support is unlikely. The IDRs and VRs do not
incorporate any support.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
CPF's trust preferred stock rating has been upgraded to 'BB' from
'BB-' and remains two notches below CPF's VR of 'BBB-' in
accordance with Fitch's assessment of the instruments'
non-performance and loss severity risk profiles.
HOLDING COMPANY
CPF IDR and VR are equalized with its operating company, Central
Pacific Bank, reflecting its role as the bank holding company,
which is mandated in the U.S. to act as a source of strength for
its bank subsidiaries.
LONG- AND SHORT-TERM DEPOSIT RATINGS
CPF's uninsured deposit ratings at the subsidiary banks are rated
one notch higher than the company's IDR and senior unsecured debt
because U.S. uninsured deposits benefit from depositor preference.
U.S. depositor preference gives deposit liabilities superior
recovery prospects in the event of default.
RATING SENSITIVITIES
IDRS AND VR
Following the upgrade, Fitch envisions limited upward ratings
momentum within the Outlook time horizon. The rating action
incorporates Fitch's view that CPF will improve its earnings
performance over the medium term and assumes that asset quality
will remain solid and that capital will be maintained at an
appropriate level, with a moderate level of deterioration expected.
If asset quality and capital remain within expectations and CPF's
core earnings performance shows consistency at a level displayed by
higher-rated peers, there could be further upside to CPF's ratings
over a long-term time horizon.
While not anticipated based on today's action, negative rating
action could occur if asset quality metrics deteriorate below peer
averages. Additionally, ratings would be sensitive should
management seek to bring the bank's mainland credit exposure back
to the levels leading up to the financial crisis. Furthermore, more
aggressive capital management practices that lead to risk-based
capital metrics falling by more than 150bps below current levels
could result in a negative rating action.
SUPPORT RATING AND SUPPORT RATING FLOOR
CPF's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption as to the bank's capacity to procure
extraordinary support in case of need.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Hybrid capital issued by CPF and its subsidiaries are all notched
down from the VRs of CPF in accordance with Fitch's assessment of
each instrument's respective non-performance and relative loss
severity risk profiles, which vary considerably. Their ratings are
primarily sensitive to any change in the VRs of CPF.
LONG- AND SHORT-TERM DEPOSIT RATINGS
The ratings of long- and short-term deposits issued by CPF and its
subsidiaries are primarily sensitive to any change in the company's
IDR. This means that should a Long-Term IDR be downgraded, deposit
ratings could be similarly affected.
SUBSIDIARY AND AFFILIATED COMPANIES
If CPF became undercapitalized or increased double leverage
significantly there is the potential that Fitch could notch the
holding company IDR and VR down from the ratings of the operating
companies.
The rating actions are as follows:
Central Pacific Financial Corp.
-- Long-Term IDR upgraded to 'BBB-' from 'BB+'; Outlook Stable;
-- Viability Rating upgraded to 'bbb-' from 'bb+';
-- Short-Term IDR upgraded to 'F3' from 'B';
-- Support affirmed at '5';
-- Support Rating affirmed at 'NF'.
Central Pacific Bank
-- Long-Term IDR upgraded to 'BBB-' from 'BB+'; Outlook Stable;
-- Viability Rating upgraded to 'bbb-' from 'bb+';
-- Short-Term IDR upgraded to 'F3' from 'B';
-- Long-Term Deposits upgraded to 'BBB' from 'BBB-';
-- Short-Term Deposits upgraded to 'F2' from 'F3';
-- Support affirmed at '5';
-- Support Rating affirmed at 'NF'.
CPB Capital Trust I, II & IV
CPB Statutory Trust III & V
-- Trust preferred securities affirmed at 'BB-'.
CHC GROUP: Brown, Neligan Represent Ad Hoc Consortium of Noteholder
-------------------------------------------------------------------
Brown Rudnick LLP and Neligan Foley LLP filed with the U.S.
Bankruptcy Court for the Northern District of Texas a joint
verified statement pursuant to Rule 2019 of the Federal Rules
of Bankruptcy Procedure with respect to Counsel's representation of
the Ad Hoc Consortium of Holders of 9.375% Senior Unsecured Notes
due 2021 issued by CHC Helicopter S.A. under that certain
indenture, dated as of May 13, 2013.
In June 2016, members of the Consortium contacted and then engaged
Brown Rudnick to represent the Consortium in connection with
potential restructuring discussions with the Debtors. Subsequently
in September 2016, the Consortium engaged Neligan Foley as local
counsel in connection with the Debtors' Chapter 11 cases.
Neither Brown Rudnick nor Neligan Foley: (a) represents or purports
to represent any other entities with respect to the Debtors'
Chapter 11 cases; or (b) holds any claim against or interest in the
Debtors, except to the extent that Brown Rudnick and Neligan Foley
have claims against the Debtors for services rendered in connection
with their representation of the Consortium. In addition, neither
the Consortium nor any member thereof purports to act, represent,
or speak on behalf of any other entities in connection with the
Debtors' Chapter 11 cases.
The members of the Consortium (or affiliates thereof) hold
disclosable economic interests, or act as investment advisors or
managers to funds and accounts of their respective subsidiaries
that hold disclosable economic interests, in relation to the
Debtors. The members are:
a. Marble Ridge Capital L.P.
112 West 34th Street
New York, New York 10120
Senior Unsecured Notes: $11,207,950
b. Solus Alternative Asset Management LP
410 Park Avenue
New York, New York 10022
Senior Unsecured Notes: $28,280,200
Revolving Credit Facility: $10,010,000
The Counsel can be reached at:
Douglas J. Buncher, Esq.
NELIGAN FOLEY LLP
325 North Paul Street, Suite 3600
Dallas, Texas 75201
Tel: (214) 840-5300
Fax: (214) 840-5320
E-mail: dbuncher@neliganlaw.com
-- and --
Edward S. Weisfelner, Esq.
Sigmund S. Wissner-Gross, Esq.
Steven B. Levine, Esq.
Andrew M. Carty, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, New York 10036
Tel: (212) 209-4800
Fax: (212) 209-4801
E-mail: eweisfelner@brownrudnick.com
swissnergross@brownrudnick.com
slevine@brownrudnick.com
acarty@brownrudnick.com
About CHC Group Ltd.
Headquartered in Irving, Texas, CHC is a global commercial
helicopter services company primarily servicing the offshore oil
and gas industry. CHC maintains bases on six continents with major
operations in the North Sea, Brazil, Australia, and several
locations across Africa, Eastern Europe, and South East Asia. CHC
maintains a fleet of 230 medium and heavy helicopters, 67 of which
are owned by it and the remainder are leased from various
third-party lessors.
CHC Group Ltd. and 42 of its wholly-owned subsidiaries each filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Case No. 16-31854) on May 5, 2016. As of
Jan. 31, 2016, CHG had $2.16 billion in total assets and $2.19
billion in total liabilities. The Debtors have hired Weil, Gotshal
& Manges LLP as counsel, Debevoise & Plimpton LLP as special
aircraft counsel, PJT Partners LP as investment banker, Seabury
Corporate Advisors LLC as financial advisor, CDG Group, LLC, as
restructuring advisor, and Kurtzman Carson Consultants LLC as
claims and noticing agent.
The Office of the U.S. Trustee on May 13, 2016, appointed five
creditors of CHC Group Ltd. to serve on the official committee of
unsecured creditors.
CHGC INC.: Case Summary & 10 Unsecured Creditors
------------------------------------------------
Debtor: CHGC, Inc.
5740 Center Road
Valley City, OH 44280
Case No.: 16-52298
Chapter 11 Petition Date: September 21, 2016
Court: United States Bankruptcy Court
Northern District of Ohio (Akron)
Judge: Hon. Alan M. Koschik
Debtor's Counsel: Jonathan P. Blakely, Esq.
JONATHAN P. BLAKELY, ESQ.
PO Box 217
Middlefield, OH 44062
Tel: (440) 339-1201
Fax: (440) 632-9091
Email: jblakelylaw@windstream.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mark Haddad, president.
A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/ohnb16-52298.pdf
CINCINNATI BELL: S&P Assigns 'B' Rating on New $425MM Unsec. Notes
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Cincinnati, Ohio-based Cincinnati Bell Inc.'s
proposed $425 million senior unsecured notes with an eight-year
maturity. The '3' recovery rating indicates S&P's expectation for
meaningful recovery (50%-70%; lower end of the range) of principal
for lenders in the event of a payment default.
S&P expects the company will use net proceeds from the offering
along with cash from the balance sheet to redeem all of its
$397 million outstanding of 8.375% senior unsecured notes due 2020
including estimated fees and expenses.
The 'B' corporate credit rating and stable outlook on Cincinnati
Bell are unchanged since S&P don't expect the transaction to
materially affect leverage. Adjusted leverage including pension
obligations was about 4.6x as of June 30, 2016, and S&P expects
will remain in the mid-4x area by year-end 2016.
RATINGS LIST
Cincinnati Bell Inc.
Corporate Credit Rating B/Stable/--
New Rating
Cincinnati Bell Inc.
$425 mil. senior unsecured notes B
Recovery Rating 3L
CLAIRE'S STORES: Supplements U.S. Credit Facility Amendment
-----------------------------------------------------------
As previously disclosed, on Aug. 12, 2016, Claire's Stores, Inc.
entered into Amendment No. 3 to the Amended and Restated Credit
Agreement, dated as of Sept. 20, 2012, among Claire's Stores,
Claire's Inc., the subsidiaries party thereto and Credit Suisse AG,
Cayman Islands Branch, as Administrative Agent, and the other
lenders named therein, which was supplemented by the entry by
Claire's Stores, Parent, the Guarantor and the Lenders into
Supplement No. 1 thereto on Sept. 9, 2016.
On Sept. 15, 2016, Claire's Stores, Parent, the Guarantors and the
Lenders entered into Supplement No. 2 to the Third Amendment to:
(i) amend the definition of Permitted Refinancing Indebtedness
in each of the Second Amended and Restated Credit Agreement
among Claire's Stores, Parent, the Guarantors and the
Lenders and the ABL Credit Facility among Claire's Stores,
Parent, the Guarantors and the Lenders to become effective
pursuant to the terms of the U.S. Credit Facility;
(ii) change the effective date of each of the Second Amended and
Restated Credit Facility and the ABL Credit Facility from
Sept. 15, 2016, to Sept. 23, 2016; and
(iii) clarify that certain intellectual property assets owned by
CBI Distributing Corp., an indirect wholly owned subsidiary
of Claire's Stores, will not constitute collateral under
the ABL Credit Facility pending completion of the
previously announced Exchange Offer pursuant to which such
assets are expected to be transferred to a newly formed
indirect wholly owned subsidiary that is offering new term
loans to be secured by such assets.
A full-text copy of the Amended and Restated Credit Agreement
Supplement No. 2 is available for free at https://is.gd/56gdzu
About Claire's Stores
Claire's Stores, Inc. -- http://www.clairestores.com/-- operates
as a specialty retailer of fashion accessories and jewelry for
preteens and teenagers, as well as for young adults in North
America and internationally. It offers jewelry products that
comprise costume jewelry, earrings, and ear piercing services; and
accessories, including fashion accessories, hair ornaments,
handbags, and novelty items.
Based in Pembroke Pines, Florida, Claire's Stores operates under
two brands: Claire's(R), which operates worldwide and Icing(R),
which operates only in North America. As of Jan. 31, 2009,
Claire's Stores, Inc., operated 2,969 stores in North America and
Europe. Claire's Stores also operates through its subsidiary,
Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint
venture with AEON, Co., Ltd. The Company also franchises 198
stores in the Middle East, Turkey, Russia, South Africa, Poland
and Guatemala.
As of April 30, 2016, Claire's Stores had $2.27 billion in total
assets, $2.87 billion in total liabilities and a stockholders'
deficit of $606 million.
* * *
The TCR reported on April 11, 2016, that Moody's Investors Service
downgraded Claire's Stores, Inc. Corporate Family Rating (CFR) and
Probability of Default Rating to Caa3 and Caa3-PD, respectively.
"[The] downgrades reflect our view that there is an acute
likelihood of a debt restructuring ahead of the June 2017 maturity
of Claire's subordinated notes due to continuing erosion of
liquidity and weak operating performance," stated Moody's Vice
President Charlie O'Shea.
As reported by the TCR on Aug. 22, 2016, S&P Global Ratings
lowered its corporate credit rating on Florida-based Claire's
Stores Inc. to 'CC' from 'CCC-' and placed it on CreditWatch with
negative implications.
CLUBCORP CLUB: 1st Lien Loan Repricing No Impact on Moody's B1 CFR
------------------------------------------------------------------
Moody's Investors Service said that ClubCorp Club Operations,
Inc.'s proposed repricing of its $675 million first lien term loan
is a moderate credit positive, but it does not impact the company's
B1 Corporate Family Rating (CFR) or stable rating outlook.
ClubCorp Club Operations, Inc. is one of the largest owners,
operators and managers of private golf, country, business, sports
and alumni clubs in North America and the largest owner of golf
clubs in the US. As of June 14, 2015 the company operated over 200
clubs (inclusive of golf & country clubs and business, sports &
alumni clubs) with locations in 26 states, the District of
Columbia, and two foreign countries (Mexico and China) serving more
than 430,000 individual members via approximately 185,000
memberships. The company's parent, ClubCorp Holdings, Inc. (NYSE:
MYCC), completed an IPO in September 2013. During the twelve month
period ended June 14, 2016, ClubCorp generated approximately $1.07
billion of revenues.
COBALT INT'L: S&P Lowers CCR to 'CCC-' on Possible Restructuring
----------------------------------------------------------------
S&P Global Ratings lowered its unsolicited corporate credit rating
on Cobalt International Energy Inc. to 'CCC-' from 'CCC+'. The
outlook is negative.
At the same time, S&P lowered its unsolicited issue-level rating on
the company's convertible senior notes to 'C' from 'CCC-'. The
recovery rating on this debt remains '6', indicating S&P's
expectation of negligible (0%-10%) recovery in the event of
default.
The downgrade follows CIE's announcement that it has retained
Goldman, Sachs & Co. and Lazard Ltd. as financial advisors and
Davis Polk & Wardwell LLP and Kirkland & Ellis LLP as legal
advisors.
"The company is looking into strategic alternatives as well as
initiatives to improve liquidity following the failed Angolan asset
sale to Sonangol," said S&P Global Ratings credit analyst Kevin
Kwok. "We would likely view any restructuring of debt as a
selective default on the convertible notes, which currently trade
substantially below par value," he added.
The negative outlook reflects the potential for a downgrade if the
company announced a distressed exchange or default on its debt.
S&P could lower the ratings if the company restructured its debt or
missed an interest payment.
S&P could raise the ratings if it no longer believed the company
would consider a debt exchange or restructuring, which would most
likely occur if the company were able to sell its Angolan assets at
a reasonable price.
Ratings List
Downgraded
To From
Cobalt International Energy, Inc.
Corporate Credit Rating |U CCC-/Neg./-- CCC+/Neg./--
Issue-Level Rating Lowered; Recovery Rating Unchanged
Cobalt International Energy, Inc.
Senior Unsecured |U C CCC-
Recovery Rating |U 6 6
|U Unsolicited ratings.
COEUR MINING: Moody's Hikes Corporate Family Rating to B2
---------------------------------------------------------
Moody's Investors Service upgraded the ratings of Coeur Mining,
Inc. (Coeur), including corporate family rating (CFR) to B2 from B3
and senior unsecured rating to B2 from Caa1. The Speculative Grade
Liquidity rating is affirmed at SGL-2. The outlook is stable.
Issuer: Coeur Mining, Inc.
Upgrades:
-- Probability of Default Rating, Upgraded to B2-PD from B3-PD
-- Corporate Family Rating, Upgraded to B2 from B3
-- Senior Unsecured Regular Bond/Debenture, Upgraded to B2
(LGD4) from Caa1 (LGD4)
Affirmation:
-- Speculative Grade Liquidity Rating, Affirmed at SGL-2
Outlook Actions:
-- Outlook, Remains Stable
RATINGS RATIONALE
The upgrade reflects the company's recent cost reduction and
deleveraging efforts, including the paydown of $99 million term
loan in July 2016, predominantly with the proceeds of a common
stock offering. The upgrade also recognizes the continued
improvement in the company's earnings and cash flows, following
improved pricing environment, successful cost reduction efforts,
integration of the Wharf mine acquired in February 2015, and
transition to the renegotiated Franco-Nevada agreement related to
gold production from Palmarejo. The ratings also recognize improved
operational and geographic diversity, with three key mines
contributing roughly a quarter each to total revenues, and 60% of
revenue generated in the United States. Moody's said, “We also
anticipate modest growth in earnings going forward, as the
company's mine plan calls for continued development of the higher
grade deposits at Palmarejo. Given the run-up in gold prices in
2016 on economic concerns and geopolitical risks, we also recently
modestly revised upward our gold price sensitivities.”
Coeur's B2 corporate family rating continues to reflect its modest
size and cost structure, limited operational diversity, and
exposure to geopolitical risk in Bolivia (even though we expect
proportionate cash flow contribution from Bolivia to continue to
decline).
The B2 rating on senior unsecured debt, in line with CFR, reflects
the preponderance of unsecured debt in the capital structure.
The Speculative Grade Liquidity of SGL-2 reflects our expectation
that the company will maintain good liquidity over the next twelve
months, predominantly supported by the cash cushion of $258 million
at June 30, 2016, prior to the $99 million debt pay down in July
2016.
The stable outlook reflects our expectation that the company will
maintain stable or improving credit metrics over the next twelve to
eighteen months.
A positive rating action would be considered if Debt/ EBITDA, as
adjusted, were expected to be maintained below 3x.
Ratings could be downgraded if liquidity were to deteriorate and/or
Debt/ EBITDA, as adjusted, was sustained above 5x.
The principal methodology used in these ratings was Global Mining
Industry published in August 2014.
Coeur Mining, Inc. (Coeur) is a mid-tier silver and gold producer
whose producing properties include the Kensington gold mine in
Alaska, Rochester silver and gold mine in Nevada, Palmarejo silver
and gold mine in Mexico, the San Bartolomé silver mine in Bolivia,
and the Wharf gold mine in South Dakota. The company also has
additional assets in Mexico, Argentina and Australia. For the last
twelve months as of June 30, 2016, the company generated $657
million of revenue.
COMMUNITY HEALTH: Fitch Puts 'B' IDR on Rating Watch Evolving
-------------------------------------------------------------
Fitch Ratings has placed the ratings of Community Health Systems,
Inc. (CHS), including the 'B' Issuer Default Rating (IDR), on
Rating Watch Evolving. The ratings apply to $15.6 billion of debt
outstanding at June 30, 2016.
KEY RATING DRIVERS
Strategic Review Announced: CHS announced that the company has
retained advisors to conduct a strategic review of its business.
The Evolving Watch reflects uncertainty as to the credit profile
implications of the outcome of the review. At this time, there are
few details of the timing and likely resolution of the review. If
the review does culminate in a transaction, the effect on the
ratings will depend on the business profile implications and the
resultant capital structure. Fitch believes there is also a
heightened risk of management distraction during the review, which
increases the likelihood of a downgrade of the ratings based on
continued deterioration in operating trends, particularly organic
growth in patient volumes.
Repositioning Hospital Portfolio: Prior to announcement of the
strategic review, CHS was engaged in efforts to reposition its
portfolio of hospitals in larger and faster-growing markets.
Earlier in 2016, the company spun off 38 hospitals into a separate,
publicly traded entity, and announced plans to divest another 12
hospitals before the end of the year. Repositioning the portfolio
should help CHS's organic volume growth by reducing exposure to
lower acuity patients. This strategy is aligned with secular trends
in healthcare delivery, which are resulting in more patients being
treated in outpatient settings.
Persistent Operational Challenges: CHS acquired rival hospital
operator Health Management Associates (HMA) in a 2014 deal that
added about $7 billion of debt to CHS's capital structure. Since
the close of the transaction, growth in EBITDA has been hampered by
operational issues at the HMA hospitals, and ongoing government
investigations and lawsuits. In second quarter 2016 (2Q16), CHS
recognized a $1.4 billion goodwill impairment charge, reflecting
lower earnings prospects for the company's hospitals than at the
time of the HMA acquisition.
Restructuring Proceeds Reduce Debt: Progress towards deleveraging
has been slow since the HMA acquisition; total debt/EBITDA is about
6.4x, versus 5.2x prior to it. So far in 2016, CHS has paid down
about $1.5 billion of debt with the proceeds from the spin-off of
Quorum Health Corporation (QHC) and the sale of a minority interest
in several hospitals in Las Vegas. This was the first substantial
debt repayment since the HMA acquisition. Prior to announcement of
the strategic review, management said CHS plans to divest another
12 hospitals before the end of 2016, and expects to apply the
proceeds to debt reduction. If the company were to execute on those
divestitures as planned, Fitch would expect debt to be about $2.3
billion lower at the close of 2016 versus the January 2016 level,
which is equal to about one-turn of EBITDA.
More Profitable Hospital Portfolio: Fitch's respective $2.38
billion and $2.26 billion EBITDA forecasts for CHS for 2016 and
2017 reflect the loss of a cumulative $380 million in EBITDA as a
result of the company's portfolio pruning. The largest portion of
EBITDA divested was the 38 hospitals involved in the QHC spin-off.
Headwinds to Lower Acute Volumes: CHS's legacy hospital portfolio
is exposed to rural markets and therefore headwinds to lower acuity
patient volumes. Volume trends in these markets are highly
susceptible to weak macro-economic conditions and seasonal
influences on flu and respiratory cases. Health insurers and
government payors have been increasing scrutiny of short-stay
admissions and preventable hospital readmissions. CHS has made some
headway in turning around the company's hospital industry-lagging
volume trends, but these challenges have proven difficult to
overcome.
Progress in Resolution of Legal Issues: CHS has been dealing with
government investigations and lawsuits related to the issue of
short-stay hospital admissions. CHS has made good progress in
resolving the legal issues facing the legacy CHS hospitals, which
did not involve financial fines significant enough to threaten
financial flexibility and provided some comfort that the scope of
the potential HMA fines or penalties will be similarly manageable.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for CHS include:
-- Top-line declines 5.3% and 8.7% in 2016 and 2017,
respectively, reflects completed and planned hospital
divestitures. Underlying same-hospital growth of 2%-3% is
driven primarily by pricing.
-- EBITDA before deduction of non-controlling interest and
including equity earnings of affiliates of $2.38 billion and
$2.26 billion in 2016 and 2017, respectively, assumes that
operating EBITDA margin recovers about 50 bps by the end of
2017 versus the June 30, 2016 latest 12 months (LTM) level,
mostly as the result of divesting less-profitable hospitals.
-- Free cash flow (FCF) margin recovers to 1.4% in 2016 and
2.5% in 2017, benefiting from lower cash interest expense
due to debt repayment, and lower capital intensity based on
management's projections for capital expenditures of about
4% of revenues in 2016.
-- The company divests another 12 hospitals in late 2016,
raises net proceeds of $850 million and uses the cash to
repay debt; thereafter, debt levels are fairly constant
through the projection period assuming minimal cash towards
acquisitions and share repurchases.
-- Total debt/EBITDA is sustained between 6.0x and 6.5x.
RATING SENSITIVITIES
Maintenance of the 'B' Issuer Default Rating (IDR) considers CHS
maintaining total debt/EBITDA at or below 6.5x, an operating EBITDA
margin of at least 12% and an FCF margin of 1%-2%. A downgrade
could result from leverage sustained above 6.5x and a breakeven FCF
margin. Risks to the operating outlook include the inability of
management to execute on operational improvements necessary to
improve organic volume growth and profitability. This could be
evidenced by difficultly completing the remaining planned
divestitures and associated debt pay-down, negative growth in
organic adjusted admissions, and/or lack of progress toward
resolution of HMA's legal issues.]
LIQUIDITY
At June 30, 2016, sources of liquidity included $461 million of
cash on hand, $935 million of available capacity on the senior
secured credit facility cash flow revolver and LTM FCF of about $64
million. CHS's EBITDA/interest paid is solid for the 'B' rating
category at 3.3x and the company had adequate operating cushion
under the bank facility financial maintenance covenants, one of
which requires net secured debt leverage maintained at or below
4.25x. Despite a forecasted decline in EBITDA, Fitch expects the
company to remain in compliance with the financial maintenance
covenants through the projection period. Upcoming debt maturities
include the A/R facility maturing in 2017 with $673 million
outstanding at June 30, 2016, and $1.5 billion in bank term loans
and $700 million of secured notes maturing in 2018.
FULL LIST OF RATING ACTIONS
Fitch has placed the following ratings on Evolving Watch:
Community Health Systems, Inc.:
-- IDR 'B'.
CHS/Community Health Systems, Inc.:
-- Senior secured credit facility 'BB-/RR2';
-- Senior secured notes 'BB-/RR2';
-- Senior unsecured notes 'B/RR4'.
The 'BB-/RR2' rating for CHS's secured debt (which includes the
bank term loans, revolver and senior secured notes) reflects
Fitch's expectations for 72% recovery under a hypothetical
bankruptcy scenario. The 'B/RR4' rating on CHS's $6.1 billion
senior unsecured notes reflects Fitch's expectations for principal
recovery of 36%.
In the U.S. healthcare sector, Fitch consistently uses a
going-concern approach to valuation as opposed to assuming a
liquidation value; intrinsic value is assumed to be greater than
liquidation value for these companies, implying that the most
likely outcome post-default would be reorganization rather than
liquidation.
The going-concern cash flow (measured by EBITDA) estimate assumes
an initial deterioration that provokes a default which is somewhat
offset by corrective actions that would take place during
restructuring. Fitch assumes a 37% discount to its 2016 forecasted
EBITDA less distributions to non-controlling interests of $2.3
billion for CHS, resulting in a post-default cash flow estimate of
$1.4 billion.
Fitch applies a 7x multiple to CHS's post-default cash flow
estimate of $1.4 billion, resulting in a going concern enterprise
value (EV) of $10.1 billion. The 7x multiple is based on
observation of both recent transactions/takeout and public market
multiples in the healthcare industry. Administrative claims are
assumed to consume 10%, or about $1 billion of going concern EV,
which is a standard assumption in Fitch's recovery analysis. Also
standard in its analysis, Fitch assumes that CHS would fully draw
the $1 billion available balance on its bank credit revolver in a
bankruptcy scenario and includes that amount in the claims
waterfall.
Fitch applies a waterfall analysis to the going-concern EV based on
the relative claims of the debt in the capital structure. Fitch
estimates EV available for claims of $9 billion, net of a standard
assumption of 10% for administrative claims. At June 30 2016, about
60% of consolidated net revenue resides in the guarantor group, so
Fitch assumes that 60% of the going-concern EV, or $5.4 billion, is
recovered by first-lien secured holders, leaving $3.6 billion of
non-collateral value to be distributed to unsecured claimants.
Based on $9.5 billion of total secured claims (which includes the
bank term loans, revolver and senior secured notes), the resulting
first-lien secured deficiency claim of $4.1 billion is added to
$6.1 billion of senior unsecured claims, resulting in $10.2 billion
of total unsecured claims, recovery of which is assumed on a pro
rata basis.
COMSTOCK RESOURCES: S&P Raises CCR to 'CCC+' on Debt Restructuring
------------------------------------------------------------------
S&P Global Ratings raised its corporate credit rating on Comstock
Resources Inc. to 'CCC+' from 'SD' (selective default). The
outlook is negative.
At the same time, S&P assigned a 'CCC+' issue-level rating to the
company's new 10% first-lien secured toggle notes. The recovery
rating is '3', reflecting S&P's expectation for meaningful (50% to
70%, upper half of the range) recovery in the event of default.
S&P also assigned a 'CCC-' issue-level rating to the company's new
7.75% and 9.50% second-lien convertible payment-in-kind (PIK)
notes. The recovery rating is '6', reflecting S&P's expectation
for negligible (0% to 10% recovery) in the event of default.
S&P also raised its issue-level rating on the company's remaining
outstanding 10% senior secured notes to 'CCC-' from 'D'. S&P
revised the recovery rating on these notes to '6', reflecting its
expectations of negligible (0% to 10% recovery) in the event of
default, from '2'. In addition, S&P raised its issue-level ratings
on the company's 7.75% and 9.50% senior unsecured notes to 'CCC-'
from 'D'. The recovery rating on these notes remains '6'.
"The rating actions on Comstock are in conjunction with the
Sept. 6, 2016, close of their comprehensive debt exchange and our
assessment of the company's revised capital structure and credit
profile," said S&P Global Ratings credit analyst Aaron McLean.
The 'CCC+' corporate credit rating reflects S&P's view that the
company's debt levels are unsustainable under its current price
assumptions. The recent debt exchange frees up approximately $37
million of interest payments per year related to the PIK feature on
the second-lien notes and the potential for an additional $75
million tied to the PIK toggle feature on the first-lien notes that
will help the company fund a new two-rig drilling program starting
in October 2016. However, given S&P's current price assumptions,
it expects that liquidity constraints may lead the company to
reduce its capital spending and that production could subsequently
grow less than expected over the next 12 to 24 months.
The negative outlook reflects S&P's expectation that Comstock's
liquidity will deteriorate under S&P's current pricing assumptions
as the company outspends internally generated cash flows in 2017
and could be forced to seek additional debt restructuring if the
second-lien convertible notes are not converted to equity.
S&P could lower the ratings if it foresaw a specific scenario of
default within 12 months or the likelihood of further debt
exchanges S&P would view as distressed increased.
S&P could raise the outlook to stable if Comstock is able to
maintain adequate liquidity and reduce leverage to levels S&P views
as sustainable. Such a scenario would be likely if commodity
prices increased and business conditions improved.
CONSOLIDATED COMMUNICATIONS: Moody's Rates New $1BB Loans Ba3
-------------------------------------------------------------
Moody's Investors Service has assigned Ba3 ratings to Consolidated
Communications, Inc.'s proposed new $900 million first lien term
loan B and new $100 million revolving credit facility. The proceeds
of the term loan will be used to refinance the existing $887
million term loan which matures in December 2020, pay transaction
related fees and expenses, and repay existing revolver borrowings.
At the closing of the transaction, Moody's will withdraw the
ratings on its existing term loan and revolver. The outlook remains
stable.
Assignments:
Issuer: Consolidated Communications, Inc.
-- Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3)
RATINGS RATIONALE
Consolidated's B1 Corporate Family Rating reflects its strong
EBITDA margins in the mid 40% range (including dividends received
from its wireless investments) good cash flow (prior to dividend
payments and capex spend), and the company's track record of
successfully integrating prior acquisitions. The company is
successfully transforming from a Tier 2 voice provider to a next
generation IP service provider. Consolidated benefits from
diversified operations as well as an advanced fiber network that
has more stable revenue prospects. Enhanced VOIP, IPTV, and
broadband services offer the potential to sell double or triple
play packages that could reduce churn rates and diversify its
revenue stream away from traditional access lines. However, these
services have lower margins and subject the company to potentially
higher TV programming expenses compared to larger competitors, and
expose Consolidated to potential new internet based TV offerings.
The rating faces pressure from continued access line losses from
its high margin legacy telecommunications segment, intense
competition from cable, wireline, and wireless operators, and its
aggressive financial policy of paying out free cash flow as
dividends, limiting free cash flow available for future debt
repayment. Also incorporated into the rating is the relatively high
leverage of 4.8x (Moody's adjusted) as of 2Q 2016. However, barring
any meaningful acquisitions, Moody's expects leverage to slightly
improve over time.
Moody's rates the new first lien bank debt Ba3, one notch higher
that the Corporate Family Rating. The first lien facility consists
of a $100 million revolving credit facility and a $900 million term
loan B. First lien lenders benefit from a pledge of stock and
security in assets of all subsidiaries, with the exception of
Illinois Consolidated Telephone Company and its majority-owned
subsidiary, East Texas Fiber Line Incorporated. However, lenders do
have a pledge of the stock of the excluded subsidiaries.
The stable outlook incorporates expectations for slight decreases
in revenues the next few years, slightly positive free cash flow
(after dividends and capex), a stable leverage profile, and EBITDA
margins above 40%.
Upward rating pressure could ensue if there was a deleveraging
transaction followed by a greater commitment to debt reduction and
an increase in revenue that reduced leverage below 3.25x (Moody's
adjusted) on a sustained basis.
Rapid erosion in EBITDA margins prompted by increased pressure on
its core business line or a leveraging transaction that increased
leverage above 5.25x (Moody's adjusted) would put downward pressure
on the ratings. A likely covenant violation or a lack of liquidity
could also trigger a downgrade.
The principal methodology used in these ratings was Global
Telecommunications Industry published in December 2010.
Consolidated Communications Holdings, Inc. provides communications
services in consumer, commercial and carrier channels in
California, Illinois, Iowa, Kansas, Minnesota, Missouri, North
Dakota, Pennsylvania, South Dakota, Texas and Wisconsin. The
company maintains headquarters in Mattoon, IL, and its LTM revenue
is approximately $758 million as of 6/30/16.
CONSOLIDATED COMMUNICATIONS: S&P Rates New $1BB Secured Debt 'BB-'
------------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '2'
recovery rating to Consolidated Communications Inc.'s proposed $1
billion senior secured credit facilities, which will consist of a
five-year $100 million revolving credit facility and a seven-year
$900 million term loan B. The '2' recovery rating indicates S&P's
expectation for substantial (70% to 90%; the upper half of the
range) recovery for lenders in the event of a payment default.
S&P expects the company will use proceeds from the new
$900 million term loan B along with $7 million cash on balance
sheet to repay $10 million revolver outstanding, $887 million term
loan outstanding, and estimated fees and expenses.
S&P's 'B+' corporate credit rating and stable outlook on parent
Consolidated Communications Holdings Inc. remain unchanged as the
transaction will be leverage neutral while extending the company's
debt maturity profile. The increase in the company's new revolver
availability will provide the company with more liquidity and
flexibility. Financial covenants will remain unchanged, and
include a maximum 5.25x total net leverage ratio and a 2.25x
minimum interest coverage ratio.
RATINGS LIST
Consolidated Communications Holdings Inc.
Corporate Credit Rating B+/Stable/--
New Rating
Consolidated Communications Inc.
$100 mil. revolver due 2021
Senior Secured BB-
Recovery Rating 2H
$900 mil. term loan B due 2023
Senior Secured BB-
Recovery Rating 2H
CORTES NP: S&P Assigns 'B' Rating on New $750MM Sr. Unsec. Notes
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level and '5' recovery
rating to Cortes NP Acquisition Corp.'s $750 million proposed
senior unsecured notes. The '5' recovery rating denotes prospects
for modest recovery (lower half of the 10%-30% range) in the event
of a payment default.
The company will use proceeds to finance a portion of Platinum
Equity's $4 billion acquisition of an 85% equity stake in Emerson
Electric Co.'s Network Power business. This transaction was
considered as part of our overall rating on Cortes NP Acquisition
Corp. (d/b/a Vertiv), and therefore the corporate credit rating and
outlook are unchanged. Moreover, the issue-level and recovery
ratings on the proposed $2.3 billion term loan debt at Cortes NP
Acquisition Corp. likewise are unchanged.
The corporate credit rating on Cortes NP Acquisition Corp. reflects
its highly leveraged financial risk assessment, with leverage pro
forma for the transaction about 5.6x and expected to improve to
near 5x over the next 12 months. S&P assess the company's business
risk as satisfactory, given its good market position and
established customer base, partially offset by participating in a
competitive market with well-capitalized companies and the risks
inherent with becoming a stand-alone business.
RATINGS LIST
Cortes NP Acquisition Corp.
Corporate Credit Rating B+/Stable/--
New Rating
Cortes NP Acquisition Corp.
$750 mil. senior unsecured notes B
Recovery Rating 5L
CROSSFIRE MANUFACTURING: Platinum Bank Objects to Plan Outline OK
-----------------------------------------------------------------
Secured creditor Platinum Bank filed with the U.S. Bankruptcy Court
for the Northern District of Texas an objection to Crossfire
Manufacturing, LLC and its owners Clifford and Kathryn
Holland's joint disclosure statement accompanying the Debtors'
joint Chapter 11 plan of reorganization.
As reported by the Troubled Company Reporter on Aug. 11, 2016, the
Debtors filed a Chapter 11 plan of reorganization that will set
aside $220,000 to pay creditors that have unsecured claims against
the company and its owners. The plan filed with the U.S.
Bankruptcy Court for the Northern District of Texas proposes to pay
$220,000 to general unsecured creditors except those with claims of
less than $2,500. These creditors will receive quarterly payment
of $3,000 for 10 years, plus an annual payment of $10,000.
Platinum Bank objects to the Disclosure Statement on these
grounds:
a. Insufficient Income Information. The Disclosure Statement
does not provide information about the Debtors' historical
and projected income. The Plan proposes to extend
Platinum Bank over a 20 year repayment and amortization.
The Disclosure Statement should include historical and
projected income so parties in interest including Platinum
Bank can evaluate the Plan's feasibility and whether the
proposed payments are fair and reasonable;
b. Insufficient Information About the Debtors' prospects.
Platinum Bank is to be paid over 20 years under the
proposed Plan. The Disclosure Statement should disclose
the value of the Debtors' current contracts, what new
contracts are anticipated going forward, and the Debtors'
prospects; and
c. Treatment of Platinum Bank: The Disclosure Statement
should disclose how the Debtors determined the interest
rate, amortization, and 20 year maturity proposed for
Platinum Bank and why the Debtors consider the terms fair
and reasonable.
Platinum Bank is represented by:
James W. Brewer, Esq.
KEMP SMITH LLP
221 N. Kansas, Suite 1700
El Paso, Texa 79901
Tel: (915) 533-4424
Fax: (915) 546-5360
E-mail: jim.brewer@kempsmith.com
About Crossfire Manufacturing
Crossfire Manufacturing, LLC, and its owners Clifford and Kathryn
Holland sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N. D. Texas Lead Case No. 16-50070) on March 28, 2016. The
petition was signed by Clifford B. Holland, manager.
At the time of the filing, Crossfire Manufacturing estimated its
assets at $500,000 to $1 million and debts at $1 million to $10
million.
CRYSTAL WATERFALLS: Selling All Assets to PFM for $25M
------------------------------------------------------
Crystal Waterfalls, LLC, asks the U.S. Bankruptcy Court for the
Central District of California to authorize the sale of real
property and improvements located at 1211 East Garvey Street,
Covina, California bearing assessor's parcel numbers 8447-031-045
and APN 8447-031-053 ("Real Property"), upon which the Debtor
operates a Park Inn by Radisson hotel ("Hotel") to PFM Ltd./Hillary
Shockley, et al. and/or assignee, for the aggregate amount of
$25,000,000, subject to overbid.
A hearing on the Motion is set for Sept. 23, 2016 at 11:00 a.m.
The Motion involves the proposed sale of substantially all of the
Debtors' assets ("Assets"), including: (i) the Real Property and
the Hotel; (ii) all of the Debtor's furniture, fixtures and
equipment ("FF&E") and inventory of personal property; and (iii)
all permits, licenses, authorizations, registrations, consents and
approvals relating to the Debtor's business, whether governmental
or otherwise, to the extent they are assignable or transferable in
connection with the sale transaction.
The Hotel includes 258 rooms (some of which require certain forms
of rehabilitation and currently are not in use), and offers guest
accommodations and various amenities, such as a fitness center, an
outdoor heated swimming pool and whirlpool, complimentary wireless
internet access, on-site steakhouse known as Hamilton's, which is
operated by Sequoia Hospitality (F&B) Covina, Inc. ("Tenant"), and
approximately 9,000 square feet of meeting space that could
comfortably accommodate groups of up to 450 people.
The Debtor operates the Hotel pursuant to a "License Agreement"
between Park Hospitality LLC, as licensor and the Debtor, as
licensee, effective as of
Nov. 16, 2012. The License Agreement has a 15-year term. Both the
Debtor and Park Hospitality conduct various forms of marketing for
the Hotel, both locally and regionally, as set forth and in
accordance with the License Agreement.
Prior to 2014, the Debtor employed a manager to run the day-to-day
business and financial affairs of the Hotel. The Debtor later
determined that this manager was not adequately communicating with
the Debtor regarding operations and overall financial condition,
was underperforming and, in fact, failed to pay various real
property taxes and transient occupancy taxes ("TOT") obligations.
As a result, in April 2014, the Debtor entered a Hotel Management
Agreement with Rim Corp. Pursuant to the Management Agreement, Rim
serves as the "sole and exclusive Operator of the Hotel" and
manages, operates, conducts, and oversees the day-to-day operations
and financial affairs of the Hotel, in accordance with the License
Agreement. The Debtor pays Rim a management fee each month in an
amount equal to 3.0% of the Hotel gross revenues, plus a
performance fee.
On July 1, 2014, the Debtor entered into a lease with the Tenant
for the onsite Steakhouse known as Hamilton's ("Restaurant Lease").
Per the terms of the Restaurant Lease, the initial term is for five
years from the date of commencement, subject to four renewal
options of 5 years each. Rent is fixed at $150,000 per year/$12,500
per month, commencing on Jan. 1, 2017.
On Sept. 12, 2016 ("Execution Date"), after months of negotiations,
the Debtor and a third party unrelated to and unaffiliated with the
Debtor, Purchaser, entered into a Commercial Property Purchase
Agreement and Joint Escrow Instructions ("Purchase Agreement") for
the sale and purchase of substantially all of the Debtor's Assets.
A copy of the Purchase Agreement attached to the Motion is
available for free at:
http://bankrupt.com/misc/Crystal_Waterfalls_211_Sales.pdf
The salient terms of the Purchase Agreements are:
a. The purchase price is $25,000,000, all cash, broken down as
follows: (i) $24,650,000 for all of the Debtor's real and personal
property assets, except for the Debtor's Liquor License(s); (ii)
$150,000 for the Seller's Liquor License(s), for which a separate
escrow will need to be opened in accordance with California law;
and (iii) $200,000 to the Tenant as a fee for terminating the
Restaurant Lease prior to its expiration and for assisting the
Purchaser in the release and assignment of the Seller's Liquor
License(s).
b. The amount of the initial deposit is $750,000 or 3% of the
purchase price, payable within 10 business days of the Execution
Date.
c. Within 10 business days of the Execution Date, the Purchaser
will provide written verification of sufficient funds to consummate
the sale.
d. The Purchaser will 10 calendar days from the date the
Purchase Agreement was executed to complete all due diligence.
e. The close of escrow will occur within 30 calendar days of the
Court approval.
f. The total commissions to be paid from the sale of the Assets
to both the Debtor's real estate agents and the Purchaser's real
estate agents is 3.5%, broken down as follows: a. 1.5% to the
Debtor's real estate agents and 2.0% to the buyer's real estate
agent.
On March 29, 2016, the Debtor filed a Notice and Application to
Employ Keller Williams Realty as Real Estate Broker ("RE Employment
App"). Per the terms of the RE Employment App, Jeffrey Peldon and
Lulu Knowlton of Keller Williams Realty Westside will be the agent
primarily responsible for assisting the Debtor with the sale of the
Hotel.
The marketing and sale efforts of the Debtor, the Debtor's counsel,
Mr. Peldon and Ms. Knowlton have been fruitful and have resulted in
the successful negotiation of the Purchase Agreement. In addition,
the Debtor has received expressions of interest from other
potential purchasers, and believes that there is likely to be
spirited bidding at the auction.
Though the Debtor is prepared to consummate a sale of the Assets to
the Purchaser, the Debtor is also interested in obtaining the
maximum price for the Assets. Accordingly, the Debtor required
that any sale of the Assets be subject to better and higher bids.
However, to induce the Purchaser to submit a formal "stalking
horse" offer to purchase the Assets, the Purchaser is requiring
that certain bidding procedures be implemented in connection with
the sale of the Property, including, without limitation, the
payment of a breakup fee in an amount not to exceed $150,000
("Breakup Fee") to be paid to the Buyer at the closing of the sale
in the event that the winning bidder of the Assets following the
auction is a party other than the Purchaser.
Based on the foregoing considerations, the Debtor seeks Court
approval of its proposed bidding procedures in connection with the
sale ("Sales Procedures"):
a. Alternative Bid: $750,000 more than the purchase price
b. Bid Deadline: Sept. 17, 2016
c. Auction: 45 days after the Court enters its order approving
the Motion
d. Overbid: Not less than $200,000 increments
e. Break-up Fee: No greater than $150,000
The Debtor believes that the proposed Sale Procedures are intended
to increase the likelihood that the Debtor will receive the best
offer for the Assets. Moreover, the proposed Sale Procedures
require quick action in order to avoid potential harm and immediate
potential deterioration in the value of the estates and the
opportunity for recovery by creditors.
About Crystal Waterfalls
Crystal Waterfalls LLC owns real property in Covina, California,
on
which it currently operates a hotel known as the Park Inn by
Radisson. Situated in the heart of Southern California, the Hotel
is just east of downtown Los Angeles at the base of the San
Gabriel
Mountains, and a short distance from West Covina, San Dimas,
Irwindale, City of Industry, Pomona, and Ontario, and many major
attractions (such as amusement parks, the Pomona Fairplex, and
Irwindale Speedway). The Hotel includes 258 rooms (50 of which
require certain forms of rehabilitation and currently are not in
use), and has a fitness center, an outdoor heated swimming pool
and
whirlpool, and 9,000 square feet of meeting space.
Facing an imminent foreclosure sale by its senior lender, Crystal
Waterfalls LLC filed a Chapter 11 petition (Bankr. C.D. Cal. Case
No. 15-27769) in Los Angeles, California, on Nov. 19, 2015. Judge
Ernest M. Robles presides over the case. The petition was signed
by
Lucy Gao, managing member.
Crystal Waterfalls currently has two members: (1) Lucy Gao, who
serves as the Debtor's managing member; and (2) Golden Bay
Investments LLC, a California limited liability company ("Golden
Bay"). Ms. Gao is the sole and managing member of Golden Bay.
The Debtor disclosed $52.5 million in assets and $71.4 million in
liabilities in its schedules. The schedules say that the Covina,
California hotel property is worth $52 million.
The Debtor received approval to employ Landsberg Law, APC, as
bankruptcy counsel.
The U.S. Trustee has filed a motion seeking to convert Crystal
Waterfalls' bankruptcy case to a Chapter 7 case, or to dismiss the
case.
CVB STATUTORY: Fitch Affirms 'BB-' Preferred Stock Rating
---------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDR) and Viability Rating (VR) of CVB Financial Corp. (CVBF) and
its primary bank subsidiary, Citizens Business Bank, at 'BBB'. The
Rating Outlook remains Stable.
KEY RATING DRIVERS
IDR and VR
The affirmation of CVBF's ratings reflects the company's solid
capital position, consistent and strong financial performance and
stable and improving asset quality. The Stable Outlook reflects
Fitch's expectation that CVBF will continue to deliver sufficient,
albeit spread-reliant core earnings while maintaining strong credit
performance relative to peers.
CVBF's ratings remain solidly situated at their current levels
given the company's asset and geographic concentrations. Loans
secured by commercial real estate (CRE) account for just over 60%
of total loans as of the second quarter of 2016 (2Q16). These CRE
loans are largely concentrated in Los Angeles County, Orange County
and the Inland Empire.
CVBF's non-performing assets (NPAs) ratio has shown significant
improvement in recent years but at 1% is still one of the highest
in the community bank peer group, although it is low based on
long-term averages. The ratio is down from 3% at the end of 2014 as
accruing troubled debt restructures (TDRs) have declined by nearly
50% in the first half of 2016. However, Fitch notes that CVBF's
level of accruing TDRs remains a large portion of the bank's NPAs.
At 2Q16, CVBF's accruing TDRs totalled $20.3 million, or 45% of
total NPAs.
Fitch attributes part of this to CVBF's conservatism in not only
recognizing TDRs but also ensuring a commercial credit has been
cured under current market terms and conditions before taking it
off TDR status. Therefore, Fitch expects NPAs to remain elevated
versus similarly rated peers while the credit costs remain
relatively lower.
CVBF's earnings continue to be some of the highest and most
consistent within the community bank peer group as well as in
Fitch's rating universe. The company's return on assets (ROA) over
the past five quarters has averaged over 1.29%, driven by a fairly
stable net interest margin (NIM), good cost controls and steady
asset quality. Over the last year, a decline in assets yields and
accretion income has been partially offset by interest recoveries.
With a loan-to-deposit ratio of 64% at 2Q16, Fitch notes that
management still has capacity to deploy cash and liquidity into
loans.
Capital ratios continue to compare favourably relative to similarly
rated peers and are supported by CVBF's good internal capital
generation. Given the bank's previously noted concentrations, Fitch
notes that robust capital levels help to support the current
rating.
CVBF's Fitch Core Capital (FCC) ratio remains toward the top end of
the peer group as do risk-based measures. Fitch expects CVBF to
manage capital down over the intermediate term through repurchases
and/or strategic acquisitions, which is encompassed in today's
action.
Fitch notes that CVBF has not taken a provision in 21 quarters
having released $38 million in provisions since 2013. While the
bank continues to manage the reserve coverage ratio lower, it
remains at the high end of the community bank peer group and stood
at 1.44% of total loans the end of the 2Q16. The bank built an
outsized reserve during the most recent financial crisis while
remaining profitable.
Fitch is sensitive to potential credit deterioration CVBF's
agribusiness and dairy & livestock loan portfolios given that these
two portfolios account for around 5% of the bank's total loan
portfolio as of 2Q16.
CVBF conducts most of its agribusiness and a portion of its dairy
and livestock lending in the San Joaquin Valley. Significant
drought conditions over the last few years have resulted in tighter
operating margins and altered farmer's strategic plans in the area.
Fitch notes that while there has been modest improvement in drought
conditions, credit risk in this portfolio is expected to remain
elevated in the near term.
Fitch believes CVBF's risk appetite is relatively conservative and
views it as a rating strength and supports the current rating.
Fitch notes that on average, CVBF's net charge-offs (NCOs) have
consistently been lower than the industry and higher rated peers
over the long term, pointing toward sound underwriting practices.
Even with consistent and high earnings, Fitch continues to view
CVBF's earnings profile as a rating constraint relative to the
Fitch rated bank universe. As a community bank, the company
primarily relies on spread income for revenue generation. Net
interest income through 2Q16 accounted for 88% of core revenue.
This compares to the community bank average of between 70%-75%.
CVBF's liquidity and funding profile remain solid. The company
consistently manages its loan-to-deposit ratio below the community
bank peer group median which typically falls between 70%-80%. Fitch
considers CVBF's ability to attract and maintain high-quality,
low-cost deposits as a core competency and a ratings strength. Core
deposits account for nearly 90% of total deposits based on
regulatory definitions.
SUPPORT RATING AND SUPPORT RATING FLOOR
CVBF has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, CVBF is not systemically important and therefore,
the probability of support is unlikely. The IDRs and VRs do not
incorporate any support.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
CVBF's preferred stock is notched five levels below its VR. These
ratings are in accordance with Fitch's criteria and assessment of
the instruments' non-performance and loss severity risk profiles.
Thus, these ratings have been affirmed due to the affirmation of
the VR. CVBF's preferred stock is notched 2x from the VR for loss
severity, and 3x for non-performance.
HOLDING COMPANY
The IDR and VR of CVBF are equalized with its operating company -
Citizens Business Bank, reflecting its role as the bank holding
company, which is mandated in the U.S. to act as a source of
strength for its bank subsidiaries.
LONG- AND SHORT-TERM DEPOSIT RATINGS
CVBF's uninsured deposit ratings at the subsidiary banks are rated
one notch higher than the company's IDR and senior unsecured debt
because U.S. uninsured deposits benefit from depositor preference.
U.S. depositor preference gives deposit liabilities superior
recovery prospects in the event of default.
RATING SENSITIVITIES
IDRS and VR
CVBF's ratings are well-situated at 'BBB'. Upside is limited over
the near-to-intermediate term given the relatively narrow business
model and concentrated CRE loan portfolio. However, increased
business and portfolio diversity could be a driver of positive
rating momentum over the long term provided the company maintains
its conservative risk management practices and continues to grow at
a manageable rate.
Fitch expects CVBF to optimize its capital position either through
share repurchases or strategic acquisitions. However, if capital
management were to become more aggressive than Fitch's
expectations, demonstrated by a greater than 200 basis points (bps)
decline in the common equity tier 1 (CET 1) capital ratio over one
year, negative rating action could ensue.
Fitch believes that asset quality improvement will moderate going
forward and could even reverse nominally if credit metrics initiate
a mean reverting path. However, if CVBF's credit trends reverse at
a faster pace than peers, particularly if large loans become
impaired or stressed or the agricultural portfolio deteriorates
materially, negative rating action could be taken.
In the context of CVBF's spread reliant business model and while
currently not expected, should CVBF's balance sheet prove to be
significantly more liability sensitive than peers in a rising rate
environment, negative rating action could also develop.
SUPPORT RATING AND SUPPORT RATING FLOOR
CVBF's Support Rating and Support Rating Floor are sensitive to
Fitch's assumption as to capacity to procure extraordinary support
in case of need.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
All hybrid capital issued by CVBF and its subsidiaries is notched
down from the VRs of CVBF in accordance with Fitch's assessment of
each instrument's respective non-performance and relative loss
severity risk profiles, which vary considerably. Their ratings are
primarily sensitive to any change in the VRs of CVBF.
HOLDING COMPANY
If CVBF became undercapitalized or increased double leverage
significantly there is the potential that Fitch could notch the
holding company IDR and VR from the ratings of the operating
companies.
LONG- AND SHORT-TERM DEPOSITS
The ratings of long- and short-term deposits issued by CVBF and its
subsidiaries are primarily sensitive to any change in the company's
IDR. This means that should a Long-Term IDR be downgraded, deposit
ratings could be similarly impacted.
Fitch has affirmed the following ratings with a Stable Outlook:
CVB Financial Corp.
-- Long-Term Issuer Default Rating (IDR) at 'BBB';
-- Short-Term IDR at 'F2';
-- Viability Rating at 'bbb';
-- Support floor at 'NF';
-- Support at '5'.
Citizens Business Bank
-- Long-Term IDR at 'BBB';
-- Long-term deposit at 'BBB+';
-- Short-Term IDR at 'F2';
-- Short-term deposit at 'F2';
-- Viability Rating at 'bbb';
-- Support floor at 'NF';
-- Support at '5'.
CVB Statutory Trust III
-- Preferred stock at 'BB-'.
D.A.B. GROUP: Flintlock Opposes Approval of Plan Outline
--------------------------------------------------------
Flintlock Construction Services LLC filed an objection to the
disclosure statement explaining the Chapter 11 plan of
reorganization of D.A.B. Group LLC.
In its objection, Flintlock said the disclosure statement "failed
to provide sufficient information" to address the issue concerning
Orchard's $2.92 million claim for attorney's fees.
"There is no disclosure whatsoever by the trustee concerning the
amount of such attorney's fees," Flintlock said in the court
filing.
Ronald Friedman, the Chapter 11 trustee, on July 21 filed the
restructuring plan that will serve as mechanism for distributing to
creditors the proceeds from the sale of D.A.B.'s real property and
other assets in New York.
Under the plan, each Class 5 general unsecured creditor will
receive a pro rata share of the so-called recovery fund, which will
initially consist of $1.5 million of the sale proceeds.
Flintlock is represented by:
Harold M. Somer, Esq.
Harold M. Somer, PC
1025 Old Country Road, Suite 404
Westbury, NY 11590
Phone: (516) 248-8962
-- and --
Larry B. Hollander, Esq.
Hollander Law Group, PLLC
40 Cutter Mill Road, Suite 203
Great Neck, NY 11021
Phone: (516) 498-1000
About D.A.B. Group
D.A.B. Group LLC, owner of a stalled 16-story Allen Street Hotel
project in Orchard Street, New York, sought Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 14-12057) in Manhattan on July 14, 2014,
to pursue a prompt sale of the property. The case is assigned to
Judge Shelley C. Chapman.
The property has been in the hands of a receiver since July 18,
2011. Simon J.K. Miller, of Blank Rome LLP, serves as receiver.
J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP, in
New York, serves as counsel to the Debtor.
DAB Group said in a court filing that its property is contiguous to
the commercial property owned by its affiliate, 77-79 Rivington
Street Realty LLC (Bankr. S.D.N.Y. Case No. 14-10339).
Accordingly, DAB's Chapter 11 case is being filed as a related
proceeding.
* * *
Orchard Hotel LLC and Orchard Construction LLC filed a motion
asking the Court to convert D.A.B. Group LLC's Chapter 11 case to a
case under Chapter 7 or alternatively to appoint a Chapter 11
trustee for the Debtor. To resolve the motion, the Debtor agreed
to withdraw its proposed Chapter 11 plan and consented to the
appointment of a Chapter 11 trustee.
On Nov. 16, 2015, the Office of the United States Trustee appointed
Ronald J. Friedman, Esq., as Chapter 11 Trustee of D.A.B. Group.
Mr. Friedman tapped his own firm, SilvermanAcampora LLP, as his
attorney in the Chapter 11 case.
Mr. Friedman only serves as the Chapter 11 Trustee of D.A.B. Group.
77-79 Rivington continues to serve as debtor-in-possession.
DELIVERY AGENT: Meeting to Form Creditors' Panel Set for Sept. 29
-----------------------------------------------------------------
Andy Vara, Acting United States Trustee for Region 3, will hold an
organizational meeting on Sept. 29, 2016, at 10:00 a.m. in the
bankruptcy case of Delivery Agent, Inc.
The meeting will be held at:
The Double Tree Hotel
700 King Street, Salon C
Wilmington, DE 19801
The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' case.
The organizational meeting is not the meeting of creditors pursuant
to Section 341 of the Bankruptcy Code. A representative of the
Debtor, however, may attend the Organizational Meeting, and provide
background information regarding the bankruptcy cases.
To increase participation in the Chapter 11 proceeding, Section
1102 of the Bankruptcy Code requires that the United States Trustee
appoint a committee of unsecured creditors as soon as practicable.
The Committee ordinarily consists of the persons, willing to serve,
that hold the seven largest unsecured claims against the debtor of
the kinds represented on the committee.
Section 1103 of the Bankruptcy Code provides that the Committee may
consult with the debtor, investigate the debtor and its business
operations and participate in the formulation of a plan of
reorganization. The Committee may also perform other services as
are in the interests of the unsecured creditors whom it
represents.
About Delivery Agent
Headquartered in San Francisco, California, Delivery Agent, Inc.,
turns audiences into revenue generating customers for brands,
device manufacturers, and media companies worldwide. It offers
ShopTV, a technology that allows audiences to engage with and
transact directly from advertisements and television shows through
Web, mobile, and advanced television applications; a cloud-based
shopping platform, which enables omni-channel commerce for its
clients with simplicity; eCommerce platform for omni-channel
shopping; relevant and personalized product offers to viewers
based
on the content they are watching with the help of contextual
database; and advertising solutions.
Delivery Agent, Inc., and affiliates MusicToday, LLC, Clean Fun
Promotional Marketing, Inc., and Shop the Shows, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 16-12051) on
Sept. 15, 2016.
The Debtors hired Pachulski Stang Ziehl & Jones LLP as local
Counsel; Keller & Benvenutti LLP as general counsel; Arch & Beam
Global, LLC as financial advisor; and Epiq Bankruptcy Solutions,
LLC, as claims and noticing agent.
The cases are assigned to Judge Laurie Selber Silverstein.
DETROIT PUBLIC SCHOOLS: Moody's Revises Outlook to Developing
-------------------------------------------------------------
Moody's Investors Service has revised the outlook on Detroit Public
Schools' (DPS) issuer rating to developing from negative. The
district's Caa1 issuer rating is maintained. The issuer rating
reflects the district's general obligation (GO) equivalent rating
as Moody's does not have an underlying rating on any of the
district's outstanding debt. Moody's has an enhanced Aa1 rating
with stable outlook on the district's GO capital bonds based on the
strength of State of Michigan's (Aa1 stable) School Bond
Qualification and Loan Program (SBQLP). The Caa1 issuer rating
continues to reflect the credit pressures associated with the City
of Detroit's (B2 stable) challenged tax base and weak demographic
profile, including low income levels, high unemployment, and
population loss. The rating further factors the significant
leverage on the district's tax base. Although recent legislative
reforms are intended to allow the local tax base to address accrued
debts while the state takes on the operating expenses of educating
students in the newly created Detroit Public School Community
District, the debt burden remains substantial rating drag.
Rating Outlook
The developing outlook reflects the legislative reforms, effective
July 1, 2016, that split the previously existing Detroit Public
Schools (DPS) into two distinct entities. DPS will continue to
operate as a taxing authority that funds debt service expenditures
only, while Detroit Public Schools Community District (DPSCD),
which we do not rate, will be funded by the state and provide
educational services, without the direct burden of repaying the
district's accumulated debts and obligations. The outlook reflects
the continued significant unknowns facing DPS, the outcomes for
which could pose both positive or negative credit implications. The
separation of DPS from DPSCD, allowing the district's taxing
resources to be focused soley on repaying obligations is generally
a positive. However, the uncertainty as to how the district will
refinance its general obligation limited tax (GOLT) state aid
revenue bonds, lack of more recent property tax collection trends,
and uncertain impacts of transferring governance from the Emergency
Manager to a voter approved Board of Education, under the oversight
of the FRC, could mute or supercede any positive impacts of the
separation of DPS from DPSCD.
Factors that Could Lead to an Upgrade
-- Material tax base expansion and improved collection trends
-- Stable to positive demographic trendsManageable structuring
of liabilities supported by the district's 18-mill operating
levy
-- Material moderation of outstanding liabilities
Factors that Could Lead to a Downgrade
-- Material tax base contraction or weakened tax collection
trends
-- Further deterioration in demographic metricsInability to
meet annual debt service on non-enhanced debt
-- Breakdown of enacted reforms and indication that district
leadership may recommend filing for protection under Chapter
9
Legal Security
The district's GOULT bonds are secured by the authorization and
pledge to levy a tax unlimited as to rate and amount to pay debt
service. The bonds are further secured under the SBQLF state
enhancement program, which provides for the issuance of state loans
to repay any portion of debt service not covered by the district's
levy, which, in order to remain qualified under the state
enhancement program, cannot exceed 13-mills. Repayment on the loans
from the state also benefits from an unlimited tax pledge.The
district's state aid revenue bonds are currently secured by a
limited tax pledge, payable from the district's 18-mill operating
levy. The bonds are further secured by a state aid intercept
enhancement and are currently being paid from a direct flow of
state aid paid from the state treasurer to the trustee. As
per-pupil state aid payments to the district have ended effective
August 2016, the district is currently working towards refunding
the outstanding Series 2011 and Series 2012 bonds.
Use of Proceeds
Not applicable.
Obligor Profile
Detroit Public Schools is a taxing authority which is coterminous
with the boundaries of the City of Detroit. Effective July 1, 2016
the district transferred all fixed assets to the newly created
Detroit Public Schools Community District (DPSCD) and assumed all
outstanding liabilities. The district will remain in place until
all obligations of the district are retired, at which point the
district will dissolve and the taxing authority will be transferred
to the DPSCD.
Methodology
The principal methodology used in this rating was US Local
Government General Obligation Debt published in January 2014.
DETROIT PUBLIC: S&P Lowers Rating on 2011 & 2012 GO Bonds to 'B'
----------------------------------------------------------------
S&P Global Ratings lowered its rating on Detroit Public Schools
(DPS), Mich.'s series 2011 and 2012 bonds secured by state school
aid and a limited tax general obligation (GO) pledge to 'B' from
'BB' and 'BB-', respectively. The ratings are no longer
differentiated by lien level in S&P's view, given both series are
equally affected by impending loss of the state school aid revenue
pledge on Oct. 1, 2016. The ratings remain on CreditWatch with
negative implications, where they were placed March 10, 2016.
When an obligation is rated 'B', the obligor currently has the
capacity to meet its financial commitment on the obligation.
However, adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.
"The downgrade is based on the lack of a finalized plan regarding
bondholder repayment terms following the district's recent
restructuring, and the resultant elimination of a pledged revenue
stream at the end of the state's fiscal year," said S&P Global
Ratings credit analyst Jane Ridley. Although the Michigan Finance
Authority's intent is to take out the existing debt at full value,
in S&P's view, as October looms closer and ushers in the new fiscal
year, it creates greater uncertainty as to whether bondholders will
receive full and timely payment on their bonds.
The continuation of the CreditWatch with negative implications
reflects the possibility that we could lower the rating further
prior to Oct. 1 if the state gets closer to that deadline without a
resolution for bondholders. The resolution could take the form of
a redemption, refunding, or defeasance. In addition, S&P could
lower the rating to 'D' if such actions do not transpire by
Oct. 1.
The CreditWatch reflects S&P's view that at this juncture the
complexity of the situation, the looming requirement and limited
time available to redeem, defease, or refund the bonds, and the
numerous parties involved -- including the split district and
Michigan -- result in a more than 50% chance of another downgrade
prior to Oct. 1, 2016. If the situation is not resolved in a
timely manner and the risk to bondholders increases to a level
consistent with S&P's 'CCC' criteria, it will lower its rating to
reflect its opinion of the deterioration in the credit quality of
the bonds. Furthermore, if S&P views the redemption as providing
less than the original promise, it is likely to consider it as a
distressed exchange, which S&P rates 'D'. In a redemption,
refunding, or defeasance without a loss of value, S&P would
withdraw the rating. Given the timing and circumstances, there is
no upward potential for the rating at this time.
DONNELLEY FINANCIAL: S&P Assigns 'BB-' CCR; Outlook Stable
----------------------------------------------------------
S&P Global Ratings said that it assigned its 'BB-' corporate credit
rating to Chicago-based financial information communications
company Donnelley Financial Solutions Inc. (DFS). The rating
outlook is stable.
Simultaneously, S&P assigned its 'BB+' issue-level rating and '1'
recovery rating to the company's $300 million secured revolving
credit facility due 2021 and $350 million term loan due 2023. The
'1' recovery rating indicates S&P's expectation for very high
(90%-100%) recovery of principal in the event of a payment
default.
S&P also assigned its 'B' issue-level rating and '6' recovery
rating to the company's $300 million senior notes due 2024. The
'6' recovery rating indicates S&P's expectation for negligible
(0%-10%) recovery of principal in the event of a payment default.
"The 'BB-' corporate credit rating reflects DFS' niche market
position in the financial information communications services
industry, its good brand recognition and client relationships,
technology capabilities, and its adjusted leverage, pro forma for
its spin-off transaction, forecast of 3.7x in 2016" said S&P Global
Ratings' credit analyst Minesh Patel.
The stable rating outlook reflects S&P's expectation that DFS'
adjusted debt leverage will remain in the 3x-4x range over the next
few years, its adjusted EBITDA margins will be in the 20% area, and
its operating performance will not decline following its spin-off
transaction.
S&P could lower its corporate credit rating on DFS if the company's
operating performance declines after the spin-off transaction or if
volatility in the capital markets leads to lower-than-expected
revenue, resulting in EBITDA margins declining to the mid-teens
percentage area or sustained debt leverage above 4x. S&P could
also consider a downgrade if the company initiates any
shareholder-rewarding programs or pursues a large acquisition that
changes S&P's view of the company's financial policy.
Although unlikely over the next 12 months, S&P could raise the
rating if the company improves the diversity of its revenue
sources, if it decreases the percentage of revenue generated from
its print solutions and increases the percentage of recurring
revenue, and if S&P expects it to maintain adjusted leverage below
3x.
DYNAMIC PRECISION: S&P Lowers CCR to 'B-' on Weak Financials
------------------------------------------------------------
S&P Global Ratings said it lowered its corporate credit rating on
Dynamic Precision Group Inc. (DPG) to 'B-' from 'B'. The outlook
is stable.
At the same time, S&P lowered its issue-level rating on the
company's $330 million senior secured credit facility to 'B-' from
'B'. The '3' recovery rating remains unchanged, indicating S&P's
expectation for meaningful recovery (50%-70%; lower half of the
range) in the event of a payment default.
"The stable outlook on DPG reflects our expectation that the
company's credit measures will remain weak but improve gradually
over the next 12-24 months, although the pace of this improvement
is somewhat uncertain," said S&P Global Ratings credit analyst
Tennille Lopez. "We expect the company's revenue and earnings to
grow modestly next year, driven largely by the launch of new
programs and management's restructuring efforts. This should lead
DPG's debt-to-EBITDA to decline to between 6.5x and 7.5x by the end
of 2016."
S&P could raise its ratings on DPG over the next 12 months if its
revenue and earnings increase faster than S&P expects due to higher
demand, increased cost savings, or additional debt reduction,
causing its debt-to-EBITDA metric to decline below 6.5x on a
sustained basis and S&P expects that its liquidity will remain
adequate.
S&P could lower its ratings on DPG over the next 12 months if the
company's revenue and earnings do not improve as S&P expects or
continue to deteriorate due to further weakness in its markets,
causing its liquidity to weaken. S&P could also lower the ratings
if sustained high leverage leads it to believe that the company's
capital structure is no longer sustainable.
EKD REALTY: Names Robinson Brog as Counsel
------------------------------------------
Amadeus 140 LLC and EKD Realty LLC ask for permission from the Hon.
Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern
District of New York to employ Robinson Brog Leinwand Greene
Genovese & Gluck P.C. as counsel, effective July 8, 2016.
The Debtors require Robinson Brog to:
(a) provide advice to the Debtors with respect to their powers
and duties under the Bankruptcy Code in the continued
operation of their business and the management of their
property;
(b) negotiate with creditors of the Debtors, preparing plans of
reorganization and taking the necessary legal steps to
consummate the plans, including, if necessary, negotiations
with respect to financing the plans;
(c) appear before the various taxing authorities to work out
a plan to pay taxes owing in installments;
(d) prepare on the Debtors’ behalf necessary applications,
motions, answers, replies, discovery requests, forms of
orders, reports and other pleadings and legal documents;
(e) appear before the Court to protect the interests of the
Debtors and their estates, and representing the Debtors in
all matters pending before this Court;
(f) perform all other legal services for the Debtors that may
be necessary herein; and
(g) assist the Debtors in connection with all aspects of the
chapter 11 cases.
Robinson Brog will be paid at these hourly rates:
Shareholders $450-$650
Associates $365-$450
Paralegals $190-$225
Robinson Brog will also be reimbursed for reasonable out-of-pocket
expenses incurred.
A. Mitchell Greene, shareholder of Robinson Brog, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Robinson Brog can be reached at:
A. Mitchell Greene, Esq.
ROBINSON BROG LEINWAND GREENE
GENOVESE & GLUCK P.C.
875 Third Avenue
New York, NY 10022
Tel: (212) 603-6399
Fax: (212) 956-2164
E-mail: amg@robinsonbrog.com
About EKD Realty LLC
EKD Realty LLC filed a chapter 11 petition (Bankr. S.D.N.Y. Case
No. 16-11957) on July 8, 2016. The petition was signed by
Haroutiun Derderian, member. The Debtor is represented by Arnold
Mitchell Greene, Esq., at Robinson Brog Leinwand Greene Genovese &
Gluck, P.C. The case is assigned to Judge Shelley C. Chapman. The
Debtor disclosed total assets at $9 million and total liabilities
at $4.84 million.
ELDORADO RESORTS: S&P Puts 'B' CCR on CreditWatch Positive
----------------------------------------------------------
S&P Global Ratings placed its ratings on Reno, Nev.-based gaming
operator Eldorado Resorts Inc., including the 'B' corporate credit
rating, on CreditWatch with positive implications.
"The CreditWatch listing reflects our expectation that we could
raise our rating on Eldorado one notch to 'B+' from 'B' if the
company completes the acquisition of Isle of Capri Casinos Inc.
under the terms Eldorado has outlined," said S&P Global Ratings
credit analyst Ariel Silverberg. "We believe the acquisition of
Isle of Capri will strengthen Eldorado's business risk position by
increasing its scale and expanding its geographic diversity,
reducing its concentration in more challenged markets, and
improving its profitability, given Isle of Capri's EBITDA margin is
higher than Eldorado's."
Eldorado plans to finance the $1.7 billion purchase price (net of
expected Lake Charles sale proceeds of $124 million) with around
$400 million in equity and the remainder with debt. The planned
equity issuance will lessen the leveraging impact of the
acquisition. Under this financing scenario, and based on S&P's
operating forecast for the combined company, it expects adjusted
leverage to be in the mid-5x area or below by the end of 2017.
Given S&P's view that the acquisition of Isle will likely improve
Eldorado's business risk profile to fair from its current weak
assessment, S&P expects to revise its leverage threshold for
Eldorado for a one-notch higher rating to below mid-5x from below
5x based on S&P's current assessment of Eldorado's business risk.
S&P believes entities with stronger business risk assessments can
tolerate modestly higher levels of leverage.
The acquisition of Isle of Capri significantly increases Eldorado's
asset base by adding 13 additional properties (after giving effect
to the sale of Isle of Capri's Lake Charles, La. property) to its
current portfolio of seven properties. Additionally, the
acquisition will improve Eldorado's geographic diversity by adding
five new states (Missouri, Iowa, Florida, Colorado, and
Mississippi). Eldorado currently operates properties in Nevada,
Ohio, Pennsylvania, and West Virginia. S&P believes the increased
geographic diversity reduces Eldorado's exposure to the negative
impact of increased competition in its markets and the potential
negative impact of any regional economic weakness, regulatory
changes, or weather-related events. Additionally, it will lessen
Eldorado's concentration in its most challenged markets.
Currently, about 20% of Eldorado's property-level EBITDA comes from
its Mountaineer and Presque Isle properties, which have been hurt
over the past few years by significant increases in competition in
the eastern Ohio market and a smoking ban at the Mountaineer
property. Pro forma for the transaction, these properties will
represent less than 10% of Eldorado's combined EBITDA.
Furthermore, given that Isle of Capri's property EBITDA margins are
generally higher than those of Eldorado, and S&P expects the
company will achieve the majority of its $35 million in expected
cost savings related to the acquisition, S&P believes the
acquisition will lead to a modestly higher EBITDA margin for
Eldorado, in the low-20% area, compared with the high-teens percent
area currently. S&P believes the high gaming tax rates in
Eldorado's current markets combined with the highly competitive
nature of its markets, which S&P believes drives high levels of
marketing spending, have caused Eldorado's EBITDA margin to be
slightly weaker than that of its peers. S&P also believes the
acquisition will improve Eldorado's national presence and provide
an opportunity to achieve scale and efficiency in terms of
marketing programs.
In resolving the CreditWatch listing, S&P will monitor the
company's progress in completing the acquisition, including
securing required regulatory approvals and executing its planned
debt and equity issuances. In the event the acquisition is
completed as outlined and Eldorado funds it with at least the level
of equity currently anticipated by Eldorado, S&P would likely raise
its ratings on Eldorado one notch because S&P expects to revise its
business risk profile assessment favorably to fair and S&P expects
the combined company will maintain adjusted debt to EBITDA below
the mid-5x area. If the terms of the acquisition change, or
Eldorado issues more debt to fund the purchase of Isle than S&P
currently anticipates, it would likely affirm its current ratings
on Eldorado since adjusted debt to EBITDA would likely stay around
the mid-5x area or above, above S&P's threshold for a higher
rating, even if it has a more favorable view of Eldorado's business
risk.
ENBRIDGE INC: DBRS Puts BB Subordinated Debt Rating Under Review
----------------------------------------------------------------
DBRS Limited placed all ratings of Enbridge Inc. (ENB), Enbridge
Income Fund (EIF), Enbridge Pipelines Inc. (EPI), Enbridge Gas
Distribution Inc. (EGD) and Enbridge Energy Partners, L.P. (EEP)
Under Review with Developing Implications, as follows:
-- ENB, Issuer Rating of BBB (high)
-- ENB, Medium-Term Notes & Unsecured Debentures rated BBB
(high)
-- ENB, Cumulative Redeemable Preferred Shares rated Pfd-3
(high)
-- ENB, Commercial Paper rated R-2 (high)
-- EIF, Issuer Rating of BBB (high)
-- EIF, Senior Unsecured Long-Term Notes rated BBB (high)
-- EPI, Issuer Rating of “A”
-- EPI, Medium-Term Notes and Unsecured Debentures rated
“A”
-- EPI, Commercial Paper rated R-1 (low)
-- EGD, Issuer Rating of “A”
-- EGD, Unsecured Debentures & Medium-Term Notes rated “A”
-- EGD, Commercial Paper rated R-1 (low)
-- EGD, Cum. & Cum. Redeemable Convertible Preferred Shares
rated Pfd-2 (low)
-- EEP, Issuer Rating of BBB
-- EEP, Senior Unsecured Notes rated BBB
-- EEP, Junior Subordinated Notes rated BB (high)
-- EEP, Commercial Paper rated R-2 (middle)
The rating actions follow ENB's announcement that it has entered
into a definitive merger agreement with Spectra Energy Corporation
(SEC), a Houston, Texas-based energy company that indirectly owns
and operates a large and diversified portfolio of predominantly
natural gas-related assets in North America, including pipelines,
storage and processing operations in the Northeastern and
Southwestern United States and Western Canada and natural gas
distribution and storage in Ontario through its wholly owned
subsidiary, Spectra Energy Capital, LLC (Spectra Capital, rated
BBB; see DBRS rating report dated August 4, 2016, for details).
Spectra Capital's subsidiaries include 79%-owned Spectra Energy
Partners, 100%-owned Westcoast Energy Inc. (Westcoast, rated A
(low)), Union Gas Limited (Union, rated “A”; 100% owned by
Westcoast) and a 50% investment in DCP Midstream, LLC (Phillips 66
is the other 50% owner).
ENB will acquire all of the common shares of SEC in a
stock-for-stock transaction (the Transaction) that values SEC
common stock at approximately $37 billion (USD 28 billion) based on
the closing price of ENB's common shares on September 2, 2016. ENB
will also assume consolidated SEC debt of approximately $22 billion
(USD 14.8 billion). The Transaction, which is expected to close in
Q1 2017, has been unanimously approved by the boards of directors
of both companies, but remains subject to ENB and SEC shareholder
approval and certain regulatory approvals. Upon closing, SEC will
become an indirect wholly-owned subsidiary of ENB and will cease to
be a publicly held corporation.
ENB plans a 15% annualized dividend increase in 2017 and annual 10%
to 12% dividend growth thereafter through 2024. This is expected to
result in a common dividend payout of 50% to 60% of available cash
flow from operations (ACFFO), compared with ENB's current 50%
target payout ratio. ENB also plans to divest of approximately $2
billion of non-core assets over the next 12 months to provide
additional financial flexibility. Annual run-rate synergies of $540
million (USD 415 million) are expected, the majority of which is
expected to be achieved in the latter part of 2018. In addition,
approximately $260 million (USD 200 million) of tax savings are
anticipated commencing in 2019. On a combined basis, ENB will have
a secured project and risked development inventory of $74 billion
(USD 56 billion) currently in execution, with a very strong
contractual profile.
With respect to the financial risk profile, ENB stated that it
expects to fund future growth in a manner that is consistent with
maintaining a strong investment-grade credit profile with key
target metrics of 15% funds from operations (FFO) to debt and five
times debt-to-EBITDA. DBRS notes that both ENB and SEC have
significant capex programs over the medium term, with ENB's being
back-end loaded and SEC's being front-end loaded, with the
combination smoothing out the overall pattern somewhat over the
2017 to 2019 period. DBRS expects near-term pressure on ENB's
credit metrics to continue as a result of assumption of SEC's
existing debt and the relatively high near-term capex ($12.9
billion in 2017), partly offset by issuance of substantial common
equity. Execution risk with respect to generating expected proceeds
from the proposed asset sales is also present.
In its August 23, 2016, press release, DBRS's confirmation of ENB
ratings incorporated DBRS's assessment of ENB's strong business
risk profile, which was expected to benefit over the medium term
from completion of its current large portfolio of low-risk capital
projects, combined with an aggressive financial risk profile that
continued to pressure its credit metrics and has resulted in
increased structural subordination at the ENB level over time. The
Stable trends incorporated DBRS's expectation that any incremental
investments in new projects would be consistent with maintaining a
strong overall business risk profile and medium-term improvement in
key credit metrics with the completion of the current large capital
expenditure (capex) program.
DBRS will provide updated commentary shortly on the potential
impacts of the Transaction on ENB and its DBRS-rated subsidiaries.
Notes: All figures are in Canadian dollars unless otherwise noted.
ENERGY FUTURE: NextEra Merger Deal OK'd, Plan Support Deal Revised
------------------------------------------------------------------
NextEra Energy, Inc., on Sept. 19, 2016, disclosed that the U.S.
Bankruptcy Court for the District of Delaware has approved Energy
Future Holdings Corp. ("EFH") entering into the previously
announced definitive agreements with NextEra Energy pursuant to
which NextEra Energy will acquire 100 percent of the equity of
reorganized EFH, reorganized Energy Future Intermediate Holding
Company LLC ("EFIH"), Oncor Electric Delivery Holdings Company LLC
("Oncor Holdings") and certain other subsidiaries, including Oncor
Holdings' approximately 80 percent ownership interest in Oncor
Electric Delivery Company ("Oncor"). The proposed transaction was
announced on July 29, 2016. The definitive agreements are part of
EFH's overall plan of reorganization that is designed to allow the
company to emerge from Chapter 11 bankruptcy.
In addition, NextEra Energy on Sept. 19 disclosed that certain
funds advised by Fidelity Management and Research Company, which
such funds are creditors of EFH, have entered into the amended and
restated plan support agreement with EFH and NextEra Energy. The
plan support agreement is one of the definitive agreements included
in EFH's overall plan of reorganization.
NextEra Energy also said on Sept. 19 that it expects to file soon
with Oncor a joint application with the Public Utility Commission
of Texas requesting approval of the proposed transaction.
"We are pleased by t[he] bankruptcy court ruling and view it as an
important next step in the process to acquire Oncor," said Jim
Robo, chairman and chief executive officer of NextEra Energy. "Our
proposed transaction provides Oncor with a financially strong,
utility-focused owner that shares Oncor's commitment to providing
customers with affordable, reliable electric delivery service and
significant value and certainty for the EFH bankruptcy estate.
With this important milestone behind us, we look forward to working
closely with additional EFH creditors to gain their support for
successful confirmation of EFH's plan of reorganization and,
together with Oncor, filing our joint application for transaction
approval soon with the Public Utility Commission of Texas."
Benefits to Oncor and its customers
Should the necessary approvals be obtained, Oncor will join a
family of companies that shares its commitment to making the smart,
long-term investments necessary to maintain and support affordable,
reliable electric service. In returning Oncor to a traditional
utility ownership structure, the proposed transaction is expected
to, among other things:
-- Extinguish all EFH and EFIH debt that currently resides above
Oncor as part of the closing;
-- Improve Oncor's financial strength and credit ratings
resulting in more favorable borrowing rates to fund necessary
capital investments -- based solely on the news of the merger
announcement, Moody's Investors Service upgraded Oncor's senior
secured credit rating from Baa1 to A3 and placed the rating on
review for further upgrade. In addition, Standard & Poor's
Financial Services revised Oncor's outlook to positive from
developing and Fitch Ratings placed Oncor on Rating Watch
Positive;
-- Ensure the support of Oncor's existing five-year capital
plan, which includes substantial and necessary planned capital
improvement projects across the state;
-- Enhance Oncor's ability to provide safe, reliable and
affordable electric delivery service to its customers well into the
future by partnering with a world-class energy company with a
long-term commitment to Texas;
-- Retain local management, the Dallas headquarters and the
Oncor name;
-- Provide workforce stability and protections for Oncor
employees, including no material involuntary workforce reductions
at Oncor for at least two years after the transaction closes;
-- Embrace a robust set of regulatory and governance commitments
regarding electric reliability, operations, employee protections,
accounting, code of conduct and Public Utility Commission of Texas
reporting; and
-- Eliminate the financial risks to Oncor created by the 2007
EFH acquisition and facilitate the resolution of the EFH
bankruptcy.
Benefits to creditors
The proposed transaction provides significant value and certainty
for the creditors of the EFH bankruptcy estate. With creditor
repayment composed primarily of cash, the transaction would deliver
a high degree of certainty of value to the EFH bankruptcy estate.
Transaction details and approvals
On Sept. 19, NextEra Energy signed a merger agreement amendment
with EFH that, among other things, increased the previously
announced purchase price by $300 million. As part of the
transaction, NextEra Energy intends to fund $9.8 billion, primarily
for the repayment of EFIH debt for an implied total enterprise
value of $18.7 billion. Of that amount, it is expected that
certain creditors will be paid primarily in cash with the remainder
in NextEra Energy common stock. The number of shares issuable to
such creditors and EFH creditors will be determined based on the
estimated cash on hand at EFH at the closing of the transaction,
the volume weighted average price of NextEra Energy common stock
for a specified number of days leading up to the closing and other
factors specified in the definitive agreements. NextEra Energy
intends to use a combination of debt, convertible equity units and
proceeds from asset sales to fund cash being provided to
creditors.
The transaction is not subject to any financing contingencies.
NextEra Energy intends to repay in full the EFIH first lien
debtor-in-possession ("DIP") financing facility (currently
approximately $5.4 billion principal amount) using cash financed by
a non-EFH/Oncor NextEra Energy affiliate upon closing. As part of
EFH's plan of reorganization, the transaction would extinguish all
EFH and EFIH debt that currently exists above Oncor.
Except as set forth in the merger agreement, EFH is now prohibited
from soliciting proposals from third parties. At any time prior to
confirmation of the EFH plan of reorganization, which is currently
anticipated to occur in December, should EFH terminate the
definitive agreement because it chooses to proceed with a superior
alternative transaction, EFH would be obligated to pay NextEra
Energy a $275 million termination fee upon the closing of the
alternative transaction.
The transaction is subject to bankruptcy court confirmation of
EFH's plan of reorganization, approval by the Public Utility
Commission of Texas and the Federal Energy Regulatory Commission,
the expiration or termination of the waiting period under the
Hart-Scott-Rodino Act, and other customary conditions and
approvals.
NextEra Energy expects the transaction, which has been approved by
the boards of directors of both NextEra Energy and EFH, to be
completed in the first quarter of 2017.
A copy of the Amended Plan Support Agreement is available at
https://is.gd/XT1hlo
A copy of the Amendment No. 1 to Agreement and Plan of Merger is
available at https://is.gd/Jw3xna
The EFH/EFIH Debtors are represented by:
Edward O. Sassower, P.C.
Stephen E. Hessler, Esq.
Brian E. Schartz, Esq.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Facsimile: (212) 446-4900
E-mail: edward.sassower@kirkland.com
stephen.hessler@kirkland.com
brian.schartz@kirkland.com
- and -
Marc Kieselstein, P.C.
Chad J. Husnick, Esq.
Steven N. Serajeddini, Esq.
Kirkland & Ellis LLP
300 North LaSalle
Chicago, IL 60654
Facsimile: (312) 862-2200
James H.M. Sprayregen, P.C.
E-mail: james.sprayregen@kirkland.com
marc.kieselstein@kirkland.com,
chad.husnick@kirkland.com
steven.serajeddini@kirkland.com
- and -
Proskauer Rose LLP
Three First National Plaza
70 W. Madison Street, Suite 3800
Chicago, IL 60602
Facsimile: (312) 962-3551
Jeff J. Marwil, Esq.
Mark. K. Thomas, Esq.
Peter J. Young, Esq.
E-mail: jmarwil@proskauer.com
mthomas@proskauer.com
pyoung@proskauer.com
- and -
Philip Gelston, Esq.
Cravath Swaine and Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Facsimile: (212) 474-3700
E-mail: pgelston@cravath.com
- and -
Jenner & Block LLP
919 Third Avenue
New York, New York 10022
Facsimile: (212) 891-1699
Richard Levin, Esq.
E-mail: rlevin@jenner.com
- and -
Thomas B. Walper, Esq.
Seth Goldman, Esq.
Munger, Tolles & Olson LLP
355 South Grand Avenue, 35th Floor
Los Angeles, CA 90071
Facsimile: (213) 683-4022
E-mail: thomas.walper@mto.com
seth.goldman@mto.com
Funds and accounts advised or sub-advised by Fidelity Management &
Research Company or its affiliates, which are signatories to the
Amended PSA, may be reached at:
Fidelity Management & Research Company
82 Devonshire Street, #F6b
Boston, MA 02109
Nate Van Duzer
Daniel Chisholm
Email: Nate.VanDuzer@fmr.com
daniel.chisholm@fmr.com
and, are represented by:
Brad Eric Scheler, Esq.
Gary L. Kaplan, Esq.
Matthew Roose, Esq.
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
Email: brad.scheler@friedfrank.com
gary.kaplan@friedfrank.com
matthew.roose@friedfrank.com
NextEra Energy, Inc. is represented in the case by:
Howard Seife, Esq.
Andrew Rosenblatt, Esq.
Chadbourne & Parke LLP
1301 Avenue of the Americas
New York, NY 10019
E-mail: hseife@chadbourne.com
arosenblatt@chadbourne.com
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a Portfolio
of competitive and regulated energy businesses in Texas.
Oncor, an 80 percent-owned entity within the EFH group, is the
largest regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS). The Debtors are seeking to have their cases jointly
administered for procedural purposes.
As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in
book value and liabilities of $49.7 billion. The Debtors have $42
billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and
Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring agreement
are represented by Akin Gump Strauss Hauer & Feld LLP, as legal
advisor, and Centerview Partners, as financial advisor. The EFH
equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for the
second-lien noteholders owed about $1.6 billion, is represented by
Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A.
Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq.,
Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey,
Esq., and Howard L. Siegel, Esq. An Official Committee of
Unsecured Creditors has been appointed in the case. The Committee
represents the interests of the unsecured creditors of only of
Energy Future Competitive Holdings Company LLC; EFCH's direct
subsidiary, Texas Competitive Electric Holdings Company LLC; and
EFH Corporate Services Company, and of no other debtors. The
Committee has selected Morrison & Foerster LLP and Polsinelli PC
for representation in this high-profile energy restructuring. The
lawyers working on the case are James M. Peck, Esq., Brett H.
Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster
LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq., Shanti
M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC.
* * *
In December 2015, the Bankruptcy Court confirmed the Debtors' Sixth
Amended Joint Plan of Reorganization. In May 2016, certain first
lien creditors of TCEH delivered a Plan Support Termination Notice
to the Debtors and the other parties to the Plan Support Agreement,
notifying the parties of the occurrence of a Plan Support
Termination Event. The delivery of the Plan Support Termination
Notice caused the Confirmed Plan to become null and void.
Following the occurrence of the Plan Support Termination Event as
well as the termination of a roughly $20 billion deal to sell the
Debtors' stake in Oncor Electric Delivery Co., the Debtors filed
the Plan of Reorganization and the Disclosure Statement with the
Bankruptcy Court on May 1, 2016. On May 11, they filed an amended
joint plan of reorganization and a related disclosure statement.
In June 2016, Judge Sontchi approved the disclosure statement
explaining Energy Future Holdings Corp., et al.'s second amended
joint plan of reorganization of the TCEH Debtors and the EFH Shared
Services Debtors.
On Aug. 27, 2016, Judge Sontchi confirmed the Chapter 11 exit plans
of two of Energy Future Holdings Corp.'s subsidiaries, power
generator Luminant and retail electricity provider TXU Energy Inc.
ENERGY FUTURE: TCEH Deal Adds $37.8-Mil. to Creditor Recovery
-------------------------------------------------------------
Energy Future Holdings Corp., together with its subsidiaries, and
Energy Future Intermediate Holding Company LLC, filed with the U.S.
Bankruptcy Court for the District of Delaware a disclosure
statement for the third amended joint plan of reorganization, which
proposes that holders of EFH Beneficiary Claims are entitled to
receive, in addition to their other recoveries as Allowed EFH Corp.
Claims, their Pro Rata share of the TCEH Settlement Claim Turnover
Distribution in an aggregate amount not to exceed $37.8 million.
Holders of Class A9 - General Unsecured Claims against EFH Corp.
and Class A10 - General Unsecured Claims against the EFH Debtors
Other Than EFH Corp. are impaired but will recover 100% of their
allowed claims from their pro rata share of the EFH Creditor
Recovery Pool.
Holders of Class B6 - General Unsecured Claims against the EFIH
Debtors are impaired but will recover 100% of their allowed claims
from their pro rata share of the EFIH Creditor Recovery Pool.
Holders of Class A5 - EFH Unexchanged Note Claims, Class A8 - EFH
Non-Qualified Benefit Claims are also impaired but will recover
100% of their allowed claims from their pro rata share of the
Creditor Recovery Pool.
Holders of Class A4 - EFH Legacy Note Claims and holders of Class
A7 - EFH Swap Claims are impaired and will recover 16% of their
allowed claims. Holders of Class A12 - TCEH Settlement Claim will
recover 12% of its allowed claim.
The Disclosure Statement is available at:
http://bankrupt.com/misc/deb14-10979-9494.pdf
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.
* * *
In December 2015, the Bankruptcy Court confirmed the Debtors'
Sixth Amended Joint Plan of Reorganization. In May 2016, certain
first lien creditors of TCEH delivered a Plan Support Termination
Notice to the Debtors and the other parties to the Plan Support
Agreement, notifying the parties of the occurrence of a Plan
Support Termination Event. The delivery of the Plan Support
Termination Notice caused the Confirmed Plan to become null and
void.
Following the occurrence of the Plan Support Termination Event as
well as the termination of a roughly $20 billion deal to sell the
Debtors' stake in Oncor Electric Delivery Co., the Debtors filed
the Plan of Reorganization and the Disclosure Statement with the
Bankruptcy Court on May 1, 2016. On May 11, they filed an amended
joint plan of reorganization and a related disclosure statement.
In June 2016, Judge Sontchi approved the disclosure statement
explaining Energy Future Holdings Corp., et al.'s second amended
joint plan of reorganization of the TCEH Debtors and the EFH
Shared Services Debtors.
On Aug. 27, 2016, Judge Sontchi confirmed the Chapter 11 exit
plans of two of Energy Future Holdings Corp.'s subsidiaries, power
generator Luminant and retail electricity provider TXU Energy Inc.
EVANS & SUTHERLAND: Peter Kellogg Holds 27.4% Stake as of Sept. 16
------------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Peter R. Kellogg disclosed that as of Sept. 16, 2016,
he beneficially owns 3,066,618 shares of common stock of Evans &
Sutherland Computer Corporation representing 27.4 percent of the
shares outstanding. A full-text copy of the regulatory filing is
available for free at https://is.gd/ji9QDi
About Evans & Sutherland
Salt Lake City, Utah-based Evans & Sutherland Computer Corporation
in conjunction with its wholly owned subsidiary, Spitz Inc.,
creates innovative digital planetarium systems and cutting-edge,
fulldome show content. E&S has developed Digistar 5, the world's
leading digital planetarium with fulldome video playback, real-
time computer graphics, and a complete 3D digital astronomy
package fully integrated into a single theater system. This
technology allows audiences to be immersed in full-color, 3D
computer-generated interactive worlds. As a full-service system
provider, E&S also offers Spitz domes, hybrid planetarium systems
integrated with Digistar and a full range of theater systems from
audio and lighting to theater automation. E&S markets include
planetariums, science centers, themed attraction venues, and
premium large-format theaters. E&S products have been installed
in over 1,300 theaters worldwide.
Evans & Sutherland reported a net loss of $1.27 million on $35.3
million of sales for the year ended Dec. 31, 2015, compared to a
net loss of $1.30 million on $26.5 million of sales for the year
ended Dec. 31, 2014.
As of July 1, 2016, Evans & Sutherland had $22.31 million in total
assets, $23.61 million in total liabilities and a $1.30 million
total stockholders' deficit.
EXGEN TEXAS: S&P Lowers Project Rating to 'B'; Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered its project rating on ExGen Texas Power
LLC to 'B' from 'B+'. The outlook is negative.
At the same time, S&P revised the recovery rating on this debt to
'3' from '2'. The '3' recovery rating indicates expectations for
meaningful (50%-70%; higher half of the range) recovery of
principal in case of default.
"The downgrade stems from a continued weak power pricing
environment in ERCOT," said S&P Global Ratings credit analyst
Michael Ferguson. This has been driven by a variety of factors,
including less extreme weather, lower-than-anticipated demand
growth (based partially on economic changes), and considerable
renewable growth. S&P's revised power prices are now substantially
below our initial projections for this entity when S&P first rated
it in 2014. Given this weakness, S&P thinks there is an increased
likelihood of draws on the debt service, which could contribute to
weaker liquidity as well, and heightened refinancing risk.
The negative rating outlook reflects an ongoing lower power pricing
environment in ERCOT that should continue through much of the next
few years. This has come about in the past year, and is based on
lower natural gas prices, sluggish growth in demand (based on a
weaker oil and gas sector in Texas), and greater-than-expected
renewable generation, which has cut into peak demand and weakened
market heat rates. Additionally, S&P notes that there was a
partial outage at the Wolf Hollow facility during the fourth
quarter of 2015; while this is not the primary credit issue, S&P
will continue to monitor this to determine whether or not this
could persist and result in an increase in operating costs or lower
availability assumptions.
S&P could consider a downgrade if it expected debt service to fall
substantially below 1.3x and remain at that level, or if the
expected debt quantum exceeded $400 million at refinancing in S&P's
base case. Such a scenario would most likely happen due to a
consistently weaker ERCOT market after current hedges expire,
stemming from sluggish demand growth or increased renewable
penetration. Further, operational challenges could contribute to
financial weakness, and unexpected draws on liquidity could lead to
S&P to reassess the project's downside risk.
A revision to a stable outlook is unlikely during 2016, but could
occur if the project mitigates its exposure to merchant market risk
by entering into new, lucrative hedging agreements that increase
cash flow predictability through the end of the debt tenor, or if
S&P develops a higher level of confidence that energy prices will
rise and stabilize for an extended period in ERCOT. This might
manifest in DSCRs exceeding 1.5x at a minimum during the forecast
period.
FIRED UP INC: Hires Lewis Brisbois as Special Counsel
-----------------------------------------------------
Fired Up, Inc., seeks authority from the U.S. Bankruptcy Court for
the Western District of Texas to employ Lewis Brisbois Bisgaard &
Smith, LLP as special counsel to the Debtor, effective as of August
5, 2016.
The Bankruptcy Court entered an Order Granting Application for
Authority to Employ The Vernon Law Group, PLLC as Special Counsel
for the Debtor on September 6, 2016, authorizing the employment of
John Vernons, of the The Vernon Law Group, PLLC from the Petition
Date through August 5, 2016.
The Vernon Law Group provide the Debtor the preparation of the
Franchise Disclosure Documents for Johnny Carina's Italian
Restaurants, perform franchise registration and renewal filings in
applicable states, provide franchise advice with regard to ongoing
business operations, and to insure the necessary disclosures and
filings are made if a sale of the Debtor's assets includes its
franchises.
As of August 5, 2016, Mr. Vernon and his associate Taylor Vernon
joined Lewis Brisbois. The Debtor now seeks to substitute The
Vernon Law Group with Lewis Brisbois to continue the franchise
representation critical to the Debtor's restructuring efforts.
Lewis Brisbois will be paid at these hourly rates:
John Vernon $575
Vickie Driver $450
Associate $325
Lewis Brisbois will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Vickie Driver, member of the law firm of Lewis Brisbois Bisgaard &
Smith, LLP, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estates.
Lewis Brisbois can be reached at:
Vickie Driver, Esq.
LEWIS BRISBOIS BISGAARD & SMITH, LLP
2100 Ross Avenue, Suite 2000
Dallas, TX 75201
About Fired Up, Inc.
Fired Up, Inc., the Austin, Texas-based owner and operator of the
Johnny Carino's Italian restaurant chain, sought Chapter 11
bankruptcy protection (Bankr. W.D. Tex. Case No. 14-10447) on March
27, 2014, in Austin. It estimated assets and debt of $10 million to
$50 million.
As of the bankruptcy filing, Fired Up had 2,900 employees and owned
and operated 46 company-owned stores known as Johnny Carino's
Italian in seven states (Texas, Arkansas, Colorado, Louisiana,
Idaho, Kansas and Missouri) and 61 franchised or licensed locations
in 17 states and four other countries (Bahrain, Dubai, Egypt and
Kuwait).
The Debtor disclosed $10,360,877 in assets and $36,139,375 in
liabilities.
The Debtor is represented by Barbara M. Barron, Esq. and Lynn
Saarinen, Esq. at Barron & Newburger, P.C., in Austin.
The U.S. Trustee appointed a seven-member Official Committee of
Unsecured Creditors. The Committee tapped Pachulski Stang Ziehl &
Jones LLP as its counsel, and FTI Consulting, Inc., as its
financial advisor.
FIRST DATA: Moody's Hikes Corporate Family Rating to B1
-------------------------------------------------------
Moody's Investors Service upgraded First Data Corporation's
Corporate Family ("CFR") and Probability of Default ("PDR") ratings
to B1 and B1-PD from B2 and B2-PD, respectively. In addition,
Moody's upgraded the senior secured credit facilities and first
lien notes ratings to Ba3 from B1 and the second lien and unsecured
notes ratings to B3 from Caa1. The rating outlook was changed to
stable from positive.
RATINGS RATIONALE
The upgrade reflects Moody's view that First Data's adjusted debt
leverage will steadily improve to about 6x and mid 5x by the end of
2017 and 2018, respectively, from 6.8x currently. The leverage
improvement will be driven by a combination of debt reduction and
mid-single digit percentage profit growth. Moody's expects First
Data will use the majority of its free cash flow, estimated to
exceed $1 billion in 2017, to repay debt. Cash flow has benefited
from the reduction of annual interest expense to about $1 billion
in 2016 from a peak of $2 billion in 2013 as a result of debt pay
downs from equity offerings and refinancing activity.
The B1 CFR is supported by First Data's size, scale, and market
position as the leading merchant acquirer in the U.S. with a strong
bank alliance network. Moody's expects First Data's profitability
will benefit from modest economic growth in the U.S. of about 2%-3%
in 2017 with higher growth rates expected for retail electronic
payments volume due to the ongoing shift away from cash and checks.
In addition, First Data's revenues should be spurred by sales and
product investments for new payment, data analytic, and security
solutions, as well as the growth of credit card issuer processing.
Cash flow will also improve from international expansion, where
card usage penetration opportunities are greater than in the US.
The stable outlook reflects Moody's expectation that First Data
will remain committed to improving its leverage profile by using
the majority of its cash flow to reduce debt. Moody's expects First
Data to generate low to mid-single digit percentage revenue growth
with adjusted EBITDA over $3 billion in 2017. Profitability should
improve with operating leverage gained from higher transaction and
card issuance volumes and investments to expand the sales force and
develop new product and service offerings.
The ratings could be upgraded if First Data achieves at least
mid-single digit revenue and profit growth on a sustained basis and
Moody's expects adjusted debt to EBITDA to decrease to below 5
times with free cash flow to debt approaching 10%. The ratings
could be lowered if revenue or profitability declines, free cash
flow to debt remains in the low single digit percentage, or First
Data suffers a significant loss of market share due to emerging
payment technologies. Downward pressure could also arise if First
Data were to deviate from its de-leveraging plans by boosting
shareholder returns or engaging in elevated M&A activity.
Ratings Upgraded:
Issuer: First Data Corporation
-- Corporate Family Rating, B1 from B2
-- Probability of Default Rating, B1-PD from B2-PD
-- Senior Secured Bank Credit Facilities, Ba3 (LGD-3) from B1
(LGD-3)
-- Senior Secured First Lien Notes, Ba3 (LGD-3) from B1 (LGD-3)
-- Senior Secured Second Lien Notes, B3 (LGD-5) from Caa1 (LGD-
5)
-- Senior Unsecured Notes, B3 (LGD-6) from Caa1 (LGD-5)
Rating affirmed:
-- Speculative Grade Liquidity Rating, SGL-1
Outlook Actions:
Issuer: First Data Corporation
-- Outlook, to Stable from Positive
The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014.
With projected total annual consolidated revenues approaching $12
billion, First Data is a leading provider of electronic commerce
and payment processing solutions for financial institutions and
merchants worldwide.
FIRST MIDWEST: Fitch Affirms 'B+' Preferred Stock Rating
--------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) and Viability Ratings (VRs) of First Midwest Bancorp (FMBI)
and its primary bank subsidiary, First Midwest Bank, at 'BBB-'. The
Rating Outlook remains Stable.
Fitch recently affirmed FMBI's rating and maintained the Stable
Outlook when the company announced the acquisition of Standard
Bancshares, Inc. (SBI) in June 2016. For more information, please
see the press release titled 'Fitch Affirms First Midwest at 'BBB-'
following Acquisition Announcement; Outlook Stable' published June
29, 2016.
KEY RATING DRIVERS
IDRS, VR AND SENIOR DEBT
The affirmation of FMBI's ratings reflects its steady operating
performance and solid execution of several acquisitions. The
affirmation also reflects Fitch's view that management continues to
execute on its strategic plan to take measured, intentional actions
to cross the $10 billion threshold in order to maintain reasonable
earnings performance while maintaining adequate capital levels.
These strengths are offset by relatively high volatility in asset
quality metrics through down credit cycles, stronger loan portfolio
growth than peer institutions, and its geographic concentration
within the Chicagoland region, an area that has a comparatively
weaker fiscal and economic profile.
Fitch notes that FMBI's asset quality has continued its steady
improvement over the past year. FMBI's non-performing asset (NPA)
ratio dropped from 1.1% at June 30, 2015 (2Q15) to 0.9% at 2Q16.
Nevertheless, in Fitch's view asset quality metrics have benefited
from limited portfolio seasoning and a sizable level of organic
growth in recent periods coupled with low debt servicing
requirements in the current rate environment. Fitch expects FMBI's
level of NPAs to remain relatively flat in the near term as the
commercial loan portfolios season. This expectation is reflected in
today's rating affirmation as well as the Stable Outlook.
As noted above, FMBI's loan growth has been outsized relative to
peers and the industry. Organic growth continues to be
predominantly in the Commercial & Industrial (C&I) loan portfolio
and has been driven by FMBI's entrance into several specialty
lending segments including asset-based lending (ABL), healthcare
lending, agribusiness lending and equipment leasing. These
platforms tend to have wider geographic reach than FMBI's local
business banking which tends to be constrained Chicago's
aforementioned economic challenges.
While generally viewing FMBI's balance sheet diversification as
positive, Fitch continues to maintain a cautious view of strong C&I
growth across the industry. Fitch said, “Accordingly, we will
continue to monitor C&I loan growth relative to peers and assess
any deterioration in asset-quality leading indicators. For the time
being, FMBI's outsized growth remains a rating constraint.”
After the closing of SBI, Fitch observes that FMBI's pro forma loan
portfolio make-up should remain relatively constant. The company
will remain commercial-loan focused with C&I loans making up around
one-fourth of the loan book, and CRE, inclusive of owner-occupied
and multifamily, making up just under half. In Fitch's view, this
presents positives and negatives to FMBI's overall rating over
time. Positively, it shows management's desire to stay within its
core lending competencies. Negatively, the bank's pro forma CRE
concentration will continue to constrain FMBI's rating over time.
FMBI's ratings are supported by a solid funding and liquidity
profile. Similar to most in its peer group and across the industry,
FMBI has reduced its exposure to more volatile sources of funding
through good core deposit growth enabled by interest rates that
remain at historical lows.
As expected, FMBI's loan-to-deposit ratio has risen over the past
year to 89% at 2Q16 as loan growth has outpaced deposit growth.
However, the ratio remains within Fitch's expectations and
reasonable relative to FMBI's rating. Moreover, FMBI's cost of
deposits and interest bearing funds of 11bps and 41bps,
respectively through 1H16, are considered strong and supportive of
FMBI's current rating and Outlook. While Fitch expects FMBI and
other banks to experience deposit run-off once rates rise and
economic activity increases, the agency does not expect FMBI's
overall funding profile to revert to an outsized reliance on
wholesale funding.
Fitch expects FMBI's capital position to remain relatively stable
over the near- to medium-term. Estimated pro forma, combined
tangible common equity (TCE) ratio is expected to remain around 8%
when the SBI transaction closes. After closing, Fitch's expects
core capital levels to climb to the mid-to-high-8% range into 2017,
as earnings retention is expected to outpace shareholder
distributions and asset growth. This expectation is incorporated
into today's affirmation and the Stable Outlook.
SUPPORT RATING AND SUPPORT RATING FLOOR
FMBI has a Support Rating of '5' and Support Rating Floor of 'NF'.
In Fitch's view, FMBI is not systemically important and therefore,
the probability of support is unlikely. The IDRs and VRs do not
incorporate any support.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
FMBI's trust preferred stock is notched four levels below its VR.
These ratings are in accordance with Fitch's criteria and
assessment of the instruments' non-performance and loss severity
risk profiles. Thus, Fitch has affirmed these ratings due to the
affirmation of the VR. FMBI's trust preferred stock is notched two
times from the VR for loss severity, and two times for
non-performance.
HOLDING COMPANY
FMBI's IDR and VR are equalized with its operating company, First
Midwest Bank, reflecting its role as the bank holding company,
which is mandated in the U.S. to act as a source of strength for
its bank subsidiaries.
LONG- AND SHORT-TERM DEPOSIT RATINGS
FMBI's uninsured deposit ratings at the subsidiary banks are rated
one notch higher than the company's IDR and senior unsecured debt
because U.S. uninsured deposits benefit from depositor preference.
U.S. depositor preference gives deposit liabilities superior
recovery prospects in the event of default.
RATING SENSITIVITIES
IDRS, VR AND SENIOR DEBT
Consistent with what was communicated in June 2016, Fitch believes
there is limited upside to FMBI's ratings over the intermediate
term given the continued bank's geographic concentrations.
Moreover, rating upside is limited as FMBI works on closing and
integrating today's announced transaction.
FMBI's ratings are sensitive to its ability to achieve many of the
key targets undertaken for the SBI transaction. The acquisition
should aid in absorbing the adverse impact on revenue related to
the Durbin Amendment, allowing FMBI to maintain reasonable
profitability going forward. Although not expected, the bank's
ratings could be pressured if it is not able to realize/generate
the internal rate of return (IRR), estimated profitability
improvements, and cost saves incorporated in the deal. Further,
should unexpected operational and integration risks arise that are
material to financial performance, FMBI's rating could likely be
reviewed for negative rating action.
Additionally, ratings pressure could ensue should management take
an aggressive approach to capital management such as future
acquisitions of size or shareholder distributions that push capital
meaningfully below peer levels.
Over a much longer horizon, Fitch believes there could be limited
upside rating momentum. Catalysts for such rating actions would
include evidence of underwriting standards and performance in-line
with higher rated peers as its loan portfolio further seasons.
Further these would include the ability to generate stronger core
profitability measures while maintaining good capital ratios.
Lastly, Fitch would consider evidence that operational
infrastructure has kept pace with FMBI's expanded scale.
Finally, FMBI has a $115 million senior debt issuance maturing in
November 2016. FMBI's ratings are sensitive to the manner in which
this maturity is addressed. A significant usage of liquidity at the
holding company could put pressure on the rating or Outlook.
SUPPORT RATING AND SUPPORT RATING FLOOR
The Support Rating and Support Rating Floor are sensitive to
Fitch's assumptions regarding FMBI's capacity to procure
extraordinary support in case of need.
SUBORDINATED DEBT AND OTHER HYBRID SECURITIES
Hybrid capital issued by FMBI and its subsidiaries are all notched
down from the VRs of FMBI in accordance with Fitch's assessment of
each instrument's respective non-performance and relative loss
severity risk profiles, which vary considerably. Their ratings are
primarily sensitive to any change in FMBI's VRs.
HOLDING COMPANY
If FMBI became undercapitalized or increased leverage significantly
there is the potential that Fitch could notch the holding company
IDR and VR from the ratings of the operating companies.
LONG- AND SHORT-TERM DEPOSITS
The ratings of long- and short-term deposits issued by FMBI and its
subsidiaries are primarily sensitive to any change in the company's
IDR. This means that should a long-term IDR be downgraded, deposit
ratings could be similarly affected.
The rating actions are as follows:
Fitch has affirmed the following ratings with a Stable Outlook:
First Midwest Bancorp, Inc.
-- Long-Term IDR at 'BBB-';
-- Short-Term IDR at 'F3';
-- Viability Rating at 'bbb-';
-- Senior unsecured debt at 'BBB-';
-- Support at '5';
-- Support Floor at 'NF'.
First Midwest Bank
-- Long-Term IDR at 'BBB-';
-- Short-Term IDR at 'F3';
-- Long-Term deposits at 'BBB';
-- Short-Term deposits at 'F3'.
-- Viability Rating at 'bbb-';
-- Support at '5';
-- Support Floor at 'NF'.
First Midwest Capital Trust I
-- Preferred stock at 'B+'.
FIRST PHOENIX-WESTON: US Trustee Fails to Appoint Creditors' Panel
------------------------------------------------------------------
The U.S. Trustee informs the U.S. Bankruptcy Court for the Western
District of Wisconsin that a committee of unsecured creditors has
not been appointed in the Chapter 11 case of First Phoenix-Weston,
LLC, and FPG & LCD, L.L.C., due to insufficient response to the
U.S. Trustee communication/contact for service on the committee.
About First Phoenix-Weston
First Phoenix-Weston, LLC, and FPG & LCD, L.L.C., were formed in
2010 to organize, develop, and manage an assisted living and
skilled nursing care facility near three major regional hospitals
in Central Wisconsin including St. Clare's Hospital, which is just
a block away. The Facility combines an assisted living facility
together with a skilled nursing facility in a resort-like
atmosphere for its patients. The business is commonly known as the
"Stoney River" assisted living and rehab. The Facility is
comprised of two integrated businesses: a 35-unit skilled nursing
rehabilitation center (commonly referred to as the skilled nursing
facility, or "SNF"), and a 60- unit assisted living facility (the
"ALF").
First Phoenix-Weston, LLC, and FPG & LCD, L.L.C., filed Chapter 11
bankruptcy petitions (Bankr. W.D. Wisc. Case Nos. 16-12820 and
16-12821) on Aug. 15, 2016. The petitions were signed by Philip
Castleberg, as part-owner. The Debtors estimate assets and
liabilities in the range of $10 million to $50 million. Michael
Best & Friedrich LLP serves as counsel to the Debtors.
FOCUS BRANDS: S&P Assigns 'B' Rating on $625MM 1st Lien Loans
-------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Atlanta, Ga.-based quick-service restaurant
franchisor Focus Brands Inc.'s $625 million first lien secured
credit facilities, consisting of a $600 million term loan and
$25 million revolving credit facility. The '3' recovery rating
indicates S&P's expectation that lenders would receive meaningful
recovery (50%-70%, upper half of the range) of their principal in
the event of a payment default. This follows a leverage-neutral
refinancing to extend the company's maturity schedule, simplify its
capital structure, and lower its overall cost of capital. Proceeds
from the new facilities will be used to repay all borrowings under
the existing first and second lien term loans. All other ratings,
including the 'B' corporate credit rating and stable outlook on the
company, are unchanged.
As part of S&P's recovery rating analysis, it has valued the
company on a going-concern basis using a 6x multiple to S&P's
projected emergence-level EBITDA to arrive at a gross enterprise
value of $420 million. The valuation multiple used is in line with
other rated restaurant franchisors and reflects the relatively
stable stream of earnings and cash flow that are generated by
franchisors given the recurring nature of franchise fees and
royalties.
RATINGS LIST
Focus Brands Inc.
Corporate credit rating B/Stable/--
Ratings Assigned
Focus Brands Inc.
Senior secured
$600 mil. term loan B
Recovery rating 3H
$25 mil. revolver B
Recovery rating 3H
G-III APPAREL: Moody's Assigns Ba3 Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service assigned a Ba3 Corporate Family Rating
(CFR) and a Ba3-PD Probability of Default Rating (PDR) to G-III
Apparel Group, Ltd. Moody's also assigned a B1 rating to the
company's proposed $350 million senior secured term loan and an
SGL-3 Speculative Grade Liquidity rating. The rating outlook is
stable. This is a first time rating for G-III.
On July 25, 2016, G-III announced that it entered into a definitive
agreement to acquire Donna Karan International, Inc., parent of the
Donna Karan and DKNY brands, from LVMH Moët Hennessy Louis Vuitton
("LVMH"), in a transaction valued at $650 million, subject to
customary adjustments at closing. The transaction is expected to
close in late 2016 or early 2017, and will be financed with
proceeds from the proposed $350 million secured term loan along
with $220 million of borrowing under a proposed $650 million
asset-based revolver, a $75 million junior secured seller note and
$75 million of G-III equity. The assigned ratings are subject to
review of final documentation and completion of the transaction as
proposed.
The following ratings were assigned to G-III Apparel Group, Ltd.:
-- Corporate Family Rating at Ba3
-- Probability of Default Rating at Ba3-PD
-- Senior Secured Term Loan due 2022 at B1 (LGD4)
-- Speculative Grade Liquidity Rating at SGL-3
-- The ratings outlook is stable
RATINGS RATIONALE
G-III's Ba3 Corporate Family Rating reflects its solid market
position, well-known brands, broad product offering and track
record of growth, both organically and through new licenses and
acquisitions. The acquisition of Donna Karan will expand the
company's portfolio of owned brands and provide potential growth
opportunities through leveraging of G-III's sourcing and supply
chain as well as new and existing customers. Pro forma for the
acquisition, lease-adjusted debt/EBITDA will be moderate at around
4.0x, with meaningful improvement expected over the next several
years through both profitable growth and debt reduction. Liquidity
is adequate, supported by the expectation that balance sheet cash,
cash flow and excess revolver capacity will cover highly seasonal
working capital needs and capital expenditures over the next twelve
months, with excess used to reduce acquisition debt.
The rating is constrained by the company's ongoing reliance on
licensed brands for more than half of its sales, and relatively
short term of the licensed portfolio. Calvin Klein, its largest
licensed brand and longest current contract, expires in seven
years. In addition, as an apparel wholesaler/retailer, G-III's
business risk is high due to the potential for performance
volatility related to fashion risk or changes in consumer spending.
G-III's outerwear and retail store sales have recently been
pressured by weak traffic and adverse weather, and profitability
has declined due to increased markdown activity and incremental
investments made to support future growth. The addition of Donna
Karan losses will further weaken margins. Execution risk is also
high as the company plans significant growth of Tommy Hilfiger and
Karl Lagerfeld while improving its Bass and Wilson's retail
businesses and integrating an underperforming Donna Karan, all in a
very challenging industry environment.
The B1 rating on G-III's proposed $350 million senior secured term
loan is one notch below the Ba3 CFR. The term loan is secured by a
first lien on substantially all assets other than receivables and
inventory, on which they have a second lien position behind the
sizeable $650 million ABL revolver (unrated).
The stable rating outlook reflects Moody's expectation that the
company will integrate Donna Karan without significant disruption
while driving profitable growth across its portfolio of brands.
Moody's also expects the company to maintain a conservative
financial policy, including reducing leverage through profitable
growth and debt reduction.
The ratings could be upgraded over time if the company sustainably
expands revenue and EBITA margins, improves liquidity, including a
significant reduction in revolver borrowings, and maintains
conservative financial policies. Quantitatively, an upgrade would
require average lease-adjusted debt/EBITDA sustained below 3.5
times and EBITA/interest expense above 3.5 times.
The ratings could be downgraded if revenue growth and profit
improvement does not materialize or operating margins decline. Any
deterioration in liquidity or a more aggressive financial policy
could also lead to a ratings downgrade, as could failure to renew
major licenses or sustainably reduce leverage ahead of major
license expirations. Specific metrics include average
lease-adjusted debt/EBITDA sustained above 4.5 times or
EBITA/interest expense below 2.5 times.
G-III designs, manufactures and distributes apparel and accessories
under a portfolio of licensed, owned and private label brands,
including Calvin Klein, Tommy Hilfiger, Karl Lagerfeld, Guess,
Kenneth Cole, Andrew Marc, G.H. Bass and Vilebrequin, among many
others. The company also operates retail stores under the Wilson's
Leather, Bass, G.H. Bass & Co., Vilebrequin and Calvin Klein
Performance names. G-III is in the process of acquiring the Donna
Karan and DKNY brands. Moody's estimates pro forma revenue to be
around $2.7 billion for the twelve months ended July 31, 2016.
The principal methodology used in these ratings was Global Apparel
Companies published in May 2013.
GLADES BREWERY: Unsecureds To Get $50,000 Under Plan
----------------------------------------------------
Glades Brewery Partners, Ltd., and Glades Brewery Partners, Inc.,
filed with the U.S. Bankruptcy Court for the Southern District of
Florida a second amended disclosure statement describing the
Debtors' plan of reorganization.
Holders of Class 4 General Unsecured Claims will receive the sum of
$50,000 pro rata and without interest in one lump sum 60 days after
the Effective Date.
The funds necessary for implementation of the Plan will be derived
from the ongoing operations of the Debtor. To the extent necesary,
outside sources are contemplated.
The Second Amended Disclosure Statement is available at:
http://bankrupt.com/misc/flsb14-24492-316.pdf
The Plan was filed by the Debtors' counsel:
Kenneth S. Rappaport, Esq.
RAPPAPORT OSBORNE RAPPAPORT & KIEM, PL
1300 North Federal Highway
Squires Building, Suite 203
Boca Raton, Florida 33432
Tel: (561) 368-2200
E-mail: rappaport@kennethrappaportlawoffice.com
Glades Brewery Partners, Ltd. (Bankr. S.D. Fla. Case No. 14-24492)
and Glades Brewery Partners, Inc. (Bankr. S.D. Fla. Case No.
14-24493) filed for Chapter 11 bankruptcy protection on June 25,
2014.
GLOBAL HEALTHCARE: Recurring Losses Raises Going Concern Doubt
--------------------------------------------------------------
Global Healthcare REIT, Inc., filed its quarterly report on Form
10-Q, disclosing a net income of $389,784 on $738,808 of rental
revenue for the three months ended June 30, 2016, compared with a
net loss of $90,362 on $1.16 million of rental revenue for the same
period in the prior year.
For the six months ended June 30, 2016, the Company listed a net
loss of $725,488 on $1.46 million of rental revenue, compared to a
net loss of $307,679 on $2.28 million of rental revenue for the
same period in 2015.
The Company's balance sheet at June 30, 2016, showed $39.08 million
in total assets, $35.05 million in total liabilities, and a
stockholders' equity of $4.03 million.
For the six months ended June 30, 2016, the Company incurred a net
loss of $725,488, reported net cash used in operations of $271,086
and has an accumulated deficit of $5,507,415. These circumstances
raise substantial doubt as to the Company's ability to continue as
a going concern. The Company's ability to continue as a going
concern is dependent upon the Company's ability to generate
sufficient revenues and cash flows to operate profitably and meet
contractual obligations, or raise additional capital through debt
financing or through sales of common stock. The failure to achieve
the necessary levels of profitability and cash flows or obtain
additional funding would be detrimental to the Company.
A copy of the Form 10-Q is available at:
http://bit.ly/2cDnN9h
About Global Healthcare REIT, Inc.
Global Healthcare REIT, Inc., operates as a real estate investment
trust (REIT) for the purpose of investing in real estate and other
assets related to the healthcare industry. The Company acquires,
develops, leases, manages and disposes of healthcare real estate,
and provides financing to healthcare providers.
GREAT BASIN: Enters Into Separate Leak-Out Agreements
-----------------------------------------------------
Great Basin Scientific, Inc., entered into separate agreements with
certain buyers pursuant to a Securities Purchase Agreement, dated
Dec. 28, 2015. In each Leak-Out Agreement, the Company and a Buyer
agreed that during the period commencing on Sept. 20, 2016, through
Nov. 1, 2016, neither such Buyer nor any of its affiliates will
sell, directly or indirectly, on any trading day more than a fixed
percentage (as designated in such Leak-Out Agreement, which, in the
aggregate for all Buyers, equals approximately 35%) of the trading
volume of the Company's common stock on the Nasdaq Capital Market,
unless the Company's common stock is then trading above the lower
of (x) $5.50 or (y) 120% of the closing bid price of the Company's
common stock as of the trading day immediately preceding that date
of determination.
About Great Basin
Great Basin Scientific is a molecular diagnostic testing company
focused on the development and commercialization of its patented,
molecular diagnostic platform designed to test for infectious
disease, especially hospital-acquired infections. The Company
believes that small to medium sized hospital laboratories, those
under 400 beds, are in need of simpler and more affordable
molecular diagnostic testing methods. The Company markets a system
that combines both affordability and ease-of-use, when compared to
other commercially available molecular testing methods, which the
Company believes will accelerate the adoption of molecular testing
in small to medium sized hospitals. The Company's system includes
an analyzer, which it provides for its customers' use without
charge in the United States, and a diagnostic cartridge, which the
Company sells to its customers.
Great Basin reported a net loss of $57.9 million in 2015 following
a net loss of $21.7 million in 2014.
As of March 31, 2016, Great Basin had $27.6 million in total
assets, $70.99 million in total liabilities, and a total
stockholders' deficit of $43.4 million.
Mantyla McReynolds, LLC, in Salt Lake City, Utah, issued a "going
concern" opinion in its report on the consolidated financial
statements for the year ended Dec. 31, 2015, citing that the
Company has incurred substantial losses from operations causing
negative working capital and negative operating cash flows. These
issues raise substantial doubt about its ability to continue as a
going concern.
GYPSUM MANAGEMENT: S&P Affirms 'B+' Rating on $490MM 1st Lien Loan
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issue-level rating on
wallboard and ceiling distributor Gypsum Management & Supply Inc.'s
(GMS) $490 million first-lien term loan due 2021 (the same as the
corporate credit rating). The recovery rating on the loan is '3',
indicating S&P's expectation of meaningful (50%-70%; lower end of
the range) recovery in the event of default.
GMS seeks to add $100 million of incremental debt to its existing
$390 million first-lien term loan. The company will use the
proceeds to pay down its asset-based lending (ABL) facility, which
had a balance of $183 million outstanding as of Aug. 31, 2016.
The 'B+' corporate credit rating and stable outlook on GMS remain
unchanged on S&P's view of the company's business risk as weak and
its financial risk as aggressive.
RECOVERY ANALYSIS
Key analytical factors
-- S&P's recovery rating on GMS' $481 million senior secured
term loan (held under GYP Holding III Corp.) due 2021 is
unchanged at '3', which indicates S&P's expectation of
meaningful (50%-70%; lower half of the range) recovery in
the event of a payment default. As per S&P's notching
criteria, the issue-level rating of the term loan is 'B+'.
-- S&P assess recovery prospects for term loan lenders on the
basis of a reorganization value of approximately
$440 million. GMS completed three acquisitions in the
fourth quarter of fiscal 2016 and a total of seven in fiscal
2016. The company did another four bolt-on acquisitions in
fiscal 2017 with last 12 month sales of about $134 million.
-- S&P Global Ratings' simulated default scenario contemplates
a default in 2020, primarily reflecting a combination of
severe decreases in volume and price for wallboard, higher
operating costs, and significant competition.
Simulated default assumptions
-- Simulated year of default: 2020
-- EBITDA at emergence: $80 million
-- Implied EV multiple: 5.5x
-- Estimated gross EV at emergence of about $440 million
Simplified waterfall
-- Net EV (after 5% administrative costs): $420 million
-- Priority claims (ABL revolver): $175 million
-------------------------------------------------
-- Remaining value: $245 million
-- First-lien senior secured term loan: $490 million
-- First-lien term loan recovery rating: '3' (50%-70%; lower
half of the range)
All debts amounts include six months of prepetition interest.
Note: GMS' $160 million second-lien term loan due 2022 was recently
repaid in full; therefore, S&P had withdrawn the rating in
conjunction with its Sept. 9, 2016, article.
Ratings List
Gypsum Management & Supply Inc.
Corporate Credit Rating B+/Stable/--
Ratings Affirmed; Recovery Expectations Revised
To From
GYP Holdings III Corp.
First-lien term loan B+ B+
Recovery Rating 3L 3H
HARSCO CORP: Fitch Affirms 'BB' LT Issuer Default Rating
--------------------------------------------------------
Fitch Ratings has affirmed Harsco Corporation's Long-Term Issuer
Default Rating (IDR) at 'BB' and secured revolver and term loan at
'BB+/RR1'. Fitch has also affirmed Harsco's senior unsecured notes
at 'BB/RR4'.The Rating Outlook has been revised to Stable from
Negative.
The Outlook revision follows Harsco's announcement that it has sold
its 26% interest in Brand Energy & Infrastructure Services, Inc.
(Brand) for net proceeds of $145 million, with the proceeds to be
used for debt reduction. Harsco had $878 million of debt
outstanding as of June 30, 2016.
KEY RATING DRIVERS
The Outlook revision to Stable reflects expected debt reduction
with the proceeds from the sale of the company's interest in Brand
and from FCF, which has turned positive in 2016. Fitch expects
Harsco will continue to control costs and maintain a disciplined
cash deployment strategy, evidenced by its suspension of its
dividend and commitment to reduce financial leverage.
The Rating Outlook also reflects Fitch's expectation that Harsco's
results will not weaken materially from current levels as a result
of ongoing restructuring efforts in the M&M segment, offsetting
ongoing weakness in the rail and industrial segments. Fitch
recognizes the continuing uncertainty surrounding Harsco's
long-term operating strategy and the risk that weakness in its
end-markets may be protracted.
The metals and minerals (M&M) segment (64% of 2015 revenues)
reported a 17% revenue decline in the first half of 2016, due
primarily to site exits, but higher operating earnings as a result
of restructuring actions. While business conditions remain weak,
earnings from this segment are beginning to show signs of
stabilization.
Sales in the industrial segment (21% of sales) declined 33% in the
first half of 2016 and margins contracted by more than 500bps due
to sharply lower demand for heat exchangers used in natural gas
processing. At the same time, the rail segment (15% of sales)
experienced a 15% sales decline and sharply lower margins in the
first half reflecting weak rail markets in North America. In
addition, the company took a $40 million charge in the half for
anticipated losses on two contracts with the Swiss National
Railway.
FCF has turned positive as a result of the suspension of the
dividend, which saves $66 million annually, and a reduction in
capex. Fitch expects FCF after dividends will be in the $70 - 80
million range in 2016 compared with negative $72 million in 2015,
and that this cash flow will be used for debt reduction. Fitch
expects Harsco will maintain positive FCF going forward. In
addition, sale of the stake in the Brand joint venture (JV) will
save Harsco $22 million in optional annual payments to its partner
in the JV and save $8 million in annual pension payments.
Fitch expects debt/EBITDA will improve from 3.3x at mid-2016 to
below 3x at the end of 2016 due to the repayment of around $200
million of debt from the Brand sale proceeds and FCF, offsetting
lower EBITDA. Fitch expects the company will maintain leverage at
below 3x going forward.
Harsco announced in November 2015 that it is exploring strategic
options for a separation of its metals and minerals (M&M) segment.
Fitch expects that a separation of the metals and mining business
will take some time, having been slowed by weak market conditions,
and that it likely won't occur in the near-term. Fitch expects the
ultimate rating outcome for Harsco following a separation would be
in the 'BB' range depending on the proceeds received and the extent
to which they are used for debt reduction.
A separation of the M&M segment, either in the form of a sale or a
spin-off, would reduce the diversification and scale of Harsco's
operations, which are already relatively small, as the M&M segment
represents roughly two-thirds of revenues and three-quarters of
EBITDA in the LTM period. Assuming a separation occurs, Harsco's
business would be composed of the rail and industrial segments
which are currently posting weak results but generate better
margins than the M&M business and should have good growth prospects
longer-term when the oil and gas and U.S. rail markets recover.
KEY ASSUMPTIONS
-- Sales decline by around 16% in 2016, due to weakness in all
three segments;
-- The EBITDA margin recovers to around 17.5% from 16.3% in
2015, supported by the company's restructuring activities;
-- Debt levels are reduced by around $200 million with the
Brand sale proceeds and FCF;
-- FCF improves to $70 - 80 million due to the suspension of
the dividend;
-- Debt/EBITDA improves to below 3x from 3.2x at the end of
2015.
RATING SENSITIVITIES
Future developments that may, individually or collectively, lead to
a negative rating action include the following:
-- Separation of the M&M business, given the resulting reduced
scale and diversification;
-- Fitch's expectation that debt/EBITDA will remain above 3x –
3.5x and FFO adjusted leverage remain above 4x - 4.5x;
-- FCF turns negative on a sustained basis.
The ratings are unlikely to be upgraded in the medium-term.
Longer-term, developments that may, individually or collectively,
lead to a positive rating action include:
-- The company either retains the M&M business or the remaining
business develops into a larger, more diversified operation;
-- Stronger FCF generation;
-- Debt/EBITDA is sustained under 2.5x, and FFO adjusted
leverage under 3.5x.
LIQUIDITY
Harsco's liquidity at June 30, 2016 is supported by cash of $69.2
million, of which $67.5 million was held overseas, but could be
remitted to the U.S. with minimal tax implications. Liquidity is
further supported by a $350 million secured revolver, on which
$154.5 million was available. Liquidity is also supported by FCF,
which Fitch expects will turn positive in 2016.
Harsco faces some refinancing risk over the medium term as $449
million of unsecured notes mature on May 15, 2018. The secured
revolver and term loan both mature in June 2019, but the maturity
date on these facilities accelerates to 91 days before May 15, 2018
if the notes have not been repaid by that date.
FULL LIST OF RATING ACTIONS
Fitch affirms Harsco Corporation's ratings as follows:
-- Long-Term IDR at 'BB';
-- Senior secured RCF at 'BB+/RR1';
-- Senior secured term loan at 'BB+/RR1';
-- Senior unsecured debt at 'BB/RR4';
The Rating Outlook has been revised to Stable from Negative.
HEALTH DIAGNOSTIC: Trustee Files $600M Suit vs. Execs, Contractors
------------------------------------------------------------------
The American Bankruptcy Institute, citing Paula Squires of Virginia
Business, reported that the trustee for Health Diagnostic
Laboratory Inc. seeks to recover more than $600 million from the
company's insiders and top executives, as well as other players,
including its doctors, in a 205-page lawsuit filed Sept. 16.
According to the report, the complex lawsuit alleges 76 counts
against 105 defendants -- from HDL's top officers, shareholders and
directors on down to third-party sales contractors and others who
benefitted from what the suit describes as "fraudulent business
practices."
Heading the list are HDL co-founders Tonya Mallory, Joseph
McConnell and Russell Warnick along with Robert Bradford Johnson
and Floyd Calhoun Dent III, the executives at BlueWave Healthcare
Consultants, HDL's former sales contractor, the report related.
At the heart of the fraud allegations was HDL's practice of paying
a $20 process and handling fee to doctors who referred patients to
HDL for an extensive panel of blood testing for cardiovascular and
metabolic risks, the report further related. This $20 fee, in
exchange for ordering tests, prompted an earlier investigation by
the U. S. Department of Justice on grounds that it violated state
and federal anti-kickback statutes, the report said. That
investigation led to a $49.5 million settlement in April 2015 that
helped plunge HDL, one of Richmond's fastest-growing private
companies, into bankruptcy in June that year, the report added.
About Health Diagnostic
Health Diagnostic Laboratory, Inc., Central Medical Laboratory,
LLC, and Integrated Health Leaders, LLC, are health care
businesses
based in Richmond, Virginia. HDL is a blood testing company.
Health Diagnostic Laboratory, Inc. (Bankr. E.D. Va. Case No.
15-32919) and affiliates Central Medical Laboratory, LLC (Bankr.
E.D. Va. Case No. 15-32920) and Integrated Health Leaders, LLC
(Bankr. E.D. Va. Case No. 15-32921) filed separate Chapter 11
bankruptcy petitions on June 7, 2015. The petitions were signed
by
Martin McGahan, chief restructuring officer.
HDL disclosed $96,130,468 in assets and $108,328,110 in
liabilities
as of the Chapter 11 filing.
Justin F. Paget, Esq., Tyler P. Brown, Esq., Jason W. Harbour,
Esq., and Henry P. (Toby) Long, III, Esq. at Hunton & Williams LLP
serve as the Debtors' bankruptcy counsel.
Alvarez & Marsal is the Debtors' financial advisor. Robert S.
Westermann, Esq., at Hirshler Fleisher, P.C., serve as the
Debtors'
conflicts counsel. American Legal Claims Services, LLC, is the
Debtors' claims, noticing and balloting agent. Ettin Group, LLC,
will market and sell the miscellaneous equipment and other assets.
MTS Health Partners, L.P., serves as investment banker.
To assist them with their restructuring efforts and to help
maximize the value of their estates, the Debtors filed with the
Court an application seeking entry of an order authorizing the
Debtors to retain Alvarez & Marsal Healthcare Industry Group, LLC
("A&M") to provide the Debtors with a Chief Restructuring Officer
and certain additional personnel. Richard Arrowsmith is presently
the CRO.
On June 16, 2015, the Office of the United States Trustee for the
Eastern District of Virginia appointed the Committee, consisting
of
the following seven members: (i) Oncimmune (USA) LLC; (ii) Aetna,
Inc.; (iii) Pietragallo Gordon Alfano Bosick & Raspanti, LLP; (iv)
Mercodia, Inc.; (v) Numares GROUP Corporation; (vi) Kansas
Bioscience Authority; and (vii) Diadexus, Inc. On Sept. 23, 2015,
Oncimmune (USA) LLC resigned from the Committee and, on Nov. 3,
2015, the U.S. Trustee appointed Cleveland Heart Lab, Inc. to the
Committee.
The Creditors Committee retained Cooley LLP as its counsel and
Protiviti Inc. as its financial advisor.
* * *
On Nov. 5, 2015, the Court entered an order setting Dec. 22, 2015,
as the Bar Date for the filing of all proofs of claim.
The Debtors have sold substantially all of their operating assets
pursuant to two separate sales approved by the Court.
On Jan. 4, 2016, the Debtors filed a proposed Plan of Liquidation
and Disclosure Statement.
The Troubled Company Reporter on May 20, 2016, reported that Judge
Kevin R. Huennekens of the U.S. Bankruptcy Court for the Eastern
District of Virginia, Richmond Division, overruled the objections
to Health Diagnostic Laboratory, Inc., et al.'s Modified Second
Amended Plan of Liquidation and approved the Liquidating Plan and
approved the Plan.
HILLCREST INC: Randall Robb to Retain Ownership Under Plan
----------------------------------------------------------
According to its Second Amended Disclosure Statement, Hillcrest,
Inc., is seeking confirmation of a Plan of Reorganization that
provides that:
* Class 1: Priority Claims Pursuant to 11 U.S.C. Sec. 507
(a)(8): All Allowed Unsecured Priority claims for taxes. The
Debtor believes that no taxes are owed. To the extent that there
are any priority claims, each holder of a Class I is unimpaired by
this Plan, and each holder of a Class I Priority Claim will be paid
in full, in cash, upon the later of the effective date of this Plan
as defined in Article VII, or the date on which such claim is
allowed by a final non appealable order.
* Class 2: Secured Claim of Clay County Savings Bank: Clay
County Savings Bank's claim to the extent allowed under Code will
be for the principal amount of $503,578 plus all expenses and fees
incurred by the Bank which are permitted under the applicable loan
documents (including, but not necessarily limited to, legal fees
and costs and appraisal fees). The monthly payment will be $4,000
for principal and interest plus $1965 escrow for taxes and
insurance beginning June 1, 2016. Payments will be due on the 20th
of each month thereafter. The interest rate was 6%, but will be
reduced to 5.5%. The maturity date will be extended to December
31, 2018 (from Dec. 31, 2016). This claim is impaired.
* Class 3: Secured Claim of Bond Purchase LLC: Bond Purchase
LLC's holds a lien against the real estate. Debtor expects to file
an adversary proceeding against Bond Purchase LLC to determine the
liens, if any against the real estate. To the extent this claim is
allowed as a secured claim under Sec. 506 will be paid as follows:
the Debtor will tender $600 per month towards the lien. The
interest rate will be 4%. As the Debtor has disputed the amount of
the lien, if any, and will be filing an adversary case to have the
Court determine the validity and amount of the lien on the real
estate and the stock. After the case is concluded, if the Debtor
owes a balance, the Debtor will tender it within 90 days of the
order being final on the adversary case and any appeals.
* Class 4: Secured Claim of Bond Purchase LLC: Bond Purchase LLC
has a secured lien against the 5,330 shares of CCSB Financial Corp.
stock, which is the parent company of Clay County Savings Bank, the
primary lienholder of the Debtor. To the extent the claim is
allowed as a secured claim under Sec. 506, it will be paid as
follows: Bond Purchase will purchase the stock in CCSB Financial
Corp., the parent company of Clay County Savings Bank, for $10.25
per share, which is the value listed on Schedule A/B. The Debtor
has filed a Motion to Sell the Stock Free and Clear of All Liens
which has been approved and the proceeds of the sale will be paid
to Bond Purchase, LLC as a credit purchase to be applied first to
the lien against the stock and then to the lien against the real
estate. The Debtor is disputing the lien on the stock, and an
adversary case has been filed to have the Court determine the
validity and the amount of the lien on the Stock and the real
property.
* Class 5: Unsecured Claims. The Debtor does not believe that
there are any unsecured creditors, however, if there are any, the
plan will be amended.
* Class 6: Equity Security Holders of the Debtor: The Debtor is
owned by Randall Robb. He will retain this ownership in the
Debtor.
* Class 7: Administrative Costs and Expenses. The Class Seven
Claims will consist of the Allowed Administrative Claims, whether
incurred before or after the Confirmation Date, allowable under
Sec. 330 and Sec. 503(b) of the Bankruptcy Code, and which are
entitled to priority payment under Sec. 507(a)(1). The Claims of
this Class include attorneys' fees and accounting fees for
postpetition services rendered to the Debtor on and after the
Filing Date. These Claims also include Claims of the United States
Trustee to the extent of any quarterly fees due under 28 U.S.C.
Sec. 1930(a)(6) as of the Confirmation Date and postpetition taxes,
if any.
A copy of the Second Amended Disclosure Statement is available for
free at:
http://bankrupt.com/misc/mowb16-40054_138_2DS_Hillcrest.pdf
The Court fixed Oct. 4, 2016, at 9:00 a.m. for the hearing on final
approval of the Disclosure Statement and for the hearing on
confirmation of the Plan and related matters.
About Hillcrest Inc.
Hillcrest Inc. first owned the Hillcrest Mobile Home Park in
Liberty, Missouri. The mobile home park was sold and the proceeds
use to purchase the strip center located at 6801-6833 North Oak
Trafficway, Gladstone, Missouri 64118 which its currently owns and
operates.
Hillcrest Inc. sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Mo. Case No. 16-40054) on Jan. 12, 2016. The
Debtor estimated less than $50,000 in assets and debt.
Randall L. Robb is the President and Secretary of the Debtor, which
are the only offices filled. His has sole control of the Debtor.
I-69 DEVELOPMENT: S&P Lowers Rating on $243.84MM Bonds to 'BB-'
---------------------------------------------------------------
S&P Global Ratings lowered its issue rating to 'BB-' from 'BB+' on
the Indiana Finance Authority's (IFA) $243.845 million long-term
private activity bonds (PABs) series 2014 (various tranches fully
amortized in 2046) and borrowed by I-69 Development Partners LLC .
The rating remains on CreditWatch with negative implications.
S&P's recovery rating is unchanged at '1', indicating a very high
(90%-100%) expected recovery in the event of a payment default.
I-69 Development Partners LLC, a limited purpose entity, is to
design, build, finance, operate, and maintain section five of the
Interstate 69 roadway between Martinsville and Bloomington, Ind.,
through a public-private partnership agreement.
"The rating action reflects our view of increased construction risk
at the project, which is eight months behind schedule and about 56%
complete," said S&P Global Ratings credit analyst Tony Bettinelli.
The CreditWatch listing reflects S&P's uncertainty that
construction efforts will adhere to the revised substantial
completion date and that counterparty relationships could be
further strained.
ICRCO INC.: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: IcRco, Inc.
26 Coromar Drive
Goleta, CA 93117
Case No.: 16-11742
Nature of Business: Health Care
Chapter 11 Petition Date: September 21, 2016
Court: United States Bankruptcy Court
Central District of California (Santa Barbara)
Judge: Hon. Peter Carroll
Debtor's Counsel: William C Beall, Esq.
BEALL AND BURKHARDT, APC
1114 State St Ste 200
Santa Barbara, CA 93101
Tel: 805-966-6774
Fax: 805-963-5988
E-mail: will@beallandburkhardt.com
Total Assets: $4.54 million
Total Liabilities: $5.35 million
The petition was signed by Stephen Neushul, chief executive
officer.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/cacb16-11742.pdf
INTERTAIN GROUP: S&P Puts BB Debt Ratings on CreditWatch Negative
-----------------------------------------------------------------
S&P Global Ratings said it placed its 'BB' first-lien senior
secured revolver and term loan issue ratings of Canada-based online
gaming company The Intertain Group Ltd. on CreditWatch with
negative implications. At the same time, S&P Global Ratings
affirmed its 'B+' corporate credit rating on Intertain. The
outlook is stable.
"The CreditWatch placement follows the announcement of Intertain's
proposed GBP200 million senior secured notes offering," said S&P
Global Ratings credit analyst Andrew Ng. The placement reflects
S&P's opinion that the issuance of the senior secured notes will
likely reduce the recovery expectation on the company's first-lien
senior secured revolver and term loan from the existing 90%-100%
(very high recovery) to 70%-90% (substantial recovery; in the high
end of the range). "As a result, we are likely to revise the
recovery rating on the first-lien senior secured revolver and term
loan to '2' from '1'," Mr. Ng added.
The new notes will partially pay down existing loan and pre-pay
earn-out obligations in 2016 and fund earn-out payments in 2017, so
S&P do not expect the debt to have a material impact on Intertain's
credit metrics. S&P expects the company will remain in the
significant financial risk profile category, with adjusted
debt-to-EBITDA, including the remaining earn-out obligation, of
about 4.0x in 2016 and lowering to about 3.3x in 2017 as Intertain
continues to deleverage.
S&P will resolve the CreditWatch placement once the company has
closed the transaction on its senior secured notes offering. This
involves reviewing the terms and conditions of the newly secured
notes and reviewing the credit agreement amendment with existing
debtholders.
INTOWN COMPANIES: Hires Jason Burgess as Counsel
------------------------------------------------
The Intown Companies, Inc., seeks authority from the U.S.
Bankruptcy Court for the Northern District of Florida to employ The
Law Offices of Jason A. Burgess LLC as counsel to the Debtor.
The Intown Companies requires Burgess to:
a. give advice to the Debtor with respect to its powers and
duties as debtor-in-possession and the continued management
of its business;
b. advise the Debtor with respect to its responsibilities in
complying with the US Trustee's Operating Guidelines and
Reporting Requirements and with the Local Rules of the
Bankruptcy Court;
c. prepare motions, pleadings, orders, applications,
disclosure statements, plans of reorganization, commence
adversary proceedings, and prepare other such legal
documents necessary in the administration of this case;
d. protect the interest of the Debtor in all matters pending
before the bankruptcy Court; and
e. represent the Debtor in negotiations with their creditors
and in preparation of the disclosure statement and plan of
reorganization.
Burgess will be paid at these hourly rates:
Jason A. Burgess $295
Paralegal $75
Burgess will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Jason A. Burgess, member of the The Law Offices of Jason A. Burgess
LLC, assured the Court that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code and
does not represent any interest adverse to the Debtor and its
estates.
Burgess can be reached at:
Jason A. Burgess, Esq.
The Law Offices of Jason A. Burgess LLC
1855 Mayport Road
Atlantic Beach, FL 32233
Tel: (904) 372-4791
Fax: (904) 853-6932
About The Intown Companies
The Intown Companies, Inc., dba American Quality Lodge, based in
Tucker, GA, filed a Chapter 11 petition (Bankr. N.D. Fla. Case No.
14-50374) on Nov. 11, 2014. The Hon. Karen K. Specie presides over
the case. Thomas B. Woodward, Esq., serves as bankruptcy counsel.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and liabilities. The petition was signed by Melton
Harrell, president.
No official committee of unsecured creditors has been appointed in
the case.
ISLE OF CAPRI CASINOS: S&P Alters Outlook to Stable, Affirms B+ CCR
-------------------------------------------------------------------
S&P Global Ratings revised its outlook on St. Louis-based Isle of
Capri Casinos Inc. to stable from positive. At the same time, S&P
affirmed all its ratings on Isle, including S&P's 'B+' corporate
credit rating.
"The outlook revision to stable from positive reflects our
expectation that Isle's leverage will no longer improve below the
mid-4x area, the level at which we would consider higher ratings,"
said S&P Global Ratings credit analyst Ariel Silverberg. "This
stems from our belief that if the acquisition does close, on the
terms currently laid out by Eldorado, the adjusted leverage of the
combined entity would be in the mid-5x area, or modestly lower,
through 2017," she added.
S&P also expects that if the acquisition of Isle by Eldorado
Resorts Inc. does not close, Isle may seek to provide a return to
its shareholders that may result in an increase in adjusted debt to
EBITDA above our current mid-4x or below forecast. Notwithstanding
any potential leveraging event to provide a return to shareholders,
however, S&P expects Isle to continue to generate good levels of
discretionary cash flow through modest EBITDA growth, and from net
proceeds of $124 million following the completion of the sale of
its Lake Charles, La. property.
The stable outlook reflects S&P's belief that adjusted leverage
would likely remain between the mid-4x and mid-5x area through 2017
regardless of whether the acquisition closes. In a scenario where
the acquisition does close, on the terms currently laid out by
Eldorado, S&P expects leverage of the combined company to be in the
mid-5x area, or modestly lower, through 2017. If, however,
Eldorado's acquisition of Isle does not close, Isle may seek to
provide a return to its shareholders that may result in an increase
in adjusted debt to EBITDA above S&P's current forecast for
leverage in the mid-4x area or below. Nevertheless, S&P currently
do not expect any potential action to provide a return to
shareholders would result in leverage above the mid-5x area, the
level at which S&P would consider lower ratings for Isle.
S&P could lower ratings if it expects Isle's adjusted leverage will
increase above the mid-5x area over the long run. This would
likely occur if Isle pursues a more aggressive posture with respect
to funding returns to shareholders than S&P is currently
incorporating into its rating, or, if Isle pursues a leveraging
acquisition that S&P do not believe enhances its business risk
profile.
S&P could revise the outlook to positive if it believed Isle would
maintain adjusted leverage below the mid-4x area over the long run,
incorporating adverse weather events like flooding or regional
economic weakness, and S&P believed the company's financial policy
will be aligned with adjusted debt to EBITDA below this level.
ITT EDUCATIONAL: Ch. 7 Causes Veterans to Lose GI Bill Benefits
---------------------------------------------------------------
The American Bankruptcy Institute, citing Jillian Berman of Market
Watch, reported that military veterans lose GI bill rights as a
result of ITT Education's bankruptcy.
According to the report, once ITT collapsed, the military veterans'
access to the GI Bill benefits, which help them pay for their
classes at ITT, was cut off. They can't tap it again unless they
attend another school, the report said.
"A lot of us are still hurting right now," 32-year old Byron
Sumpter told Market Watch. "We were using the money to pay bills,"
Sumpter said of he and his fellow classmates who were also veterans
or members of the National Guard. "Now we're trying to scramble to
just try to get into anything."
The report, citing Student Veterans of America, a student veteran
advocacy organization, pointed out that it's hard to say exactly
how many GI Bill beneficiaries were affected by ITT's closure, but
12,500 students were using the benefits at the school last year.
The effect of the school's shutdown on veterans is likely of
historic proportions, Derek Fronabarger, the director of policy at
Student Veterans of America, told Market Watch. Fronabarger said
his organization is receiving about 15 to 25 calls a day from
veterans asking for help, the report related. At its peak last
week, the number of daily calls was closer to 40, he said, the
report further related.
About ITT Educational
ITT Educational Services, Inc., and its subsidiaries ESI Service
Corp. and Daniel Webster College, Inc. ceased operations and
commenced bankruptcy proceedings by filing voluntary petitions for
relief under Chapter 7 of the Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of Indiana,
Indianapolis
Division.
The Chapter 7 cases were filed on Sept. 16, 2016, and are pending
under the captions In re ITT Educational Services, Inc., In re ESI
Service Corp., and In re Daniel Webster College, Inc. As a result
of the filing of the Chapter 7 cases, a Chapter 7 trustee will be
appointed, who will assume control of the Company and the
Subsidiaries. The assets of the Company and the subsidiaries will
be liquidated and claims will be administered in accordance with
the Bakruptcy Code.
JELD-WEN INC: S&P Raises CCR to 'B+' on Improved Margins
--------------------------------------------------------
S&P Global Ratings said it raised its corporate credit rating on
JELD-WEN Inc. to 'B+' from 'B'. The outlook is stable.
At the same time, S&P raised its issue-level rating on JELD-WEN's
$1.3 billion term loans due 2021 and 2022 to 'B+' (the same as the
corporate credit rating) from 'B'. The recovery rating on the term
loans remains '3', indicating S&P's expectation of meaningful (50%
to 70%; upper half of the range) recovery in the event of a payment
default.
"The stable outlook reflects our view that JELD-WEN is likely to
continue to improve its EBITDA and leverage over the next year,
with the company maintaining leverage of about 4x or less over the
next year," said S&P Global Ratings credit analyst Pablo Garces.
S&P could lower the rating if the company assumed a more aggressive
financial policy than expected, using debt to finance a large
dividend or an acquisition in the next 12 months. A less likely
path to a downgrade would include a sharp decline in demand in
JELD-WEN's end markets leading to depressed volume and unfavorable
pricing, more specifically, a 15% decline in revenues or margins
almost 2% weaker than S&P's current expectations.
S&P could raise its rating within the next 12 months if JELD-WEN
achieves its target EBITDA levels and reduces adjusted debt
leverage to 3x-4x, a level consistent with a significant financial
risk profile. The company's current majority financial-sponsor
ownership could limit an upgrade unless JELD-WEN's sponsor-owner
reduced its stake in the company to less than 40% or if the company
reduced leverage to the stronger/lower end of the 3x-4x range in
addition to its owners committing to maintaining a more
conservative financial policy such that debt leverage would not
exceed 4x.
JOURNEY HOSPICE: Taps Gordon Dana as Special Counsel
----------------------------------------------------
Journey Hospice Care of Houma, Louisiana, LLC seeks authorization
from the U.S. Bankruptcy Court for the Northern District of Alabama
to employ Gordon, Dana & Gilmore, LLC as special counsel, nunc pro
tunc to September 1, 2016.
Gordon Dana will represent the Debtor with all matters relating to
the adversary proceeding that has been filed against the Debtor on
behalf of Thomas E. Reynolds.
The Debtor requires Gordon Dana to file an answer, conduct
discovery, mediation and any other filings as may become necessary,
at the direction of the Debtor.
Gordon Dana will be paid at these hourly rates:
Bruce Gordon $400
John Dana $400
Lindan Hill $300
Gordon Dana will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John G. Dana, member of Gordon Dana, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtor and its estate.
Gordon Dana can be reached at:
John G. Dana, Esq.
GORDON, DANA & GILMORE, LLC
600 University Park PI
Birmingham, AL 35209
Tel: (205) 874-7956
Fax: (205) 776-6546
E-mail: jdana@gattorney.com
About Journey Hospice Care
Journey Hospice Care of Houma, Louisiana, LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No.
16-02556) on June 23, 2016. The petition was signed by April H.
Rice, managing member.
The case is assigned to Judge Tamara O Mitchell.
At the time of the filing, the Debtor disclosed $486,081 in assets
and $6.63 million in liabilities.
The Debtor is operating its businesses and managing its assets as
debtor-in-possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code. No trustee or examiner has been appointed in the
Debtor's bankruptcy case.
KAIROS DEVELOPMENT: Unsec. Creditors to Recover 5% Under Plan
-------------------------------------------------------------
Kairos Development Corporation, Inc., intends to make two quarterly
payments to unsecured creditors owed $176,866 will receive payment
of $8,844, for a 5 percent recovery.
The Debtor's Further and Restated Plan of Reorganization consists
of two phases: the first phase extending 18 months, and a second
phase extending 45 months.
During the first phase, the Debtor will proceed with the repair and
renovation of its properties. Upon completion of the renovation,
the Debtor will lease the properties at increased rental amounts.
The Debtor will thereafter refinance the allowed secured claim of
U.S. Acquisition on the properties within 18 months of the
Effective Date. The Debtor will also pay allowed administrative
claims and allowed unsecured priority claims within this period.
The second phase of the Plan consists of the payment of unsecured
creditors. Specifically, the Debtor will provide 15 quarterly
payments during the period. The first quarterly payment will be in
the amount of $7,500 to be followed by 14 consecutive payments in
the amount of $5,000 per quarter, for distribution to pay the
allowed claims of unsecured creditors. Upon completion of the
quarterly payments, the Debtor's Plan will terminate.
The Debtor will fund the quarterly payments due under the Plan from
its operating revenues.
The Honorable S. Martin Teel, Jr., scheduled a hearing to consider
the confirmation of the Plan on Oct. 19, 2016 at 10:00 a.m., and
fixed Oct. 13, 2016 as the last day for filing and serving
objections to the confirmation of the Plan.
A copy of the Further Amended and Restated Disclosure Statement is
available for free at:
http://bankrupt.com/misc/mdb15-11158_243_Am_DS_Kairos.pdf
About Kairos Development
Kairos Development Corporation, Inc., is a non-profit, public
service organization that provides home ownership and financing
educational services to the public. Kairos assists primarily low
and moderate income families.
Kairos also provides affordable housing to low and moderate income
families. It owns nine parcels of real property located on
Middleton Lane in Camp Springs, Maryland, of which two properties,
located at 5620 and 5702 Middleton Lane, are currently leased.
Kairos filed a Chapter 11 petition (Bankr. D. Md. Case No.
15-11158), on Jan. 28, 2015. The petition was signed by Jay
Scruggs, president. The case is assigned to Judge Paul Mannes.
The Debtor's counsel is James Greenan, Esq. at McNamee Hosea, et
al. of Greenbelt, MD.
At the time of filing, the Debtor estimated $1 million to
$10 million in assets and liabilities.
KEY ENERGY: Makes Changes to Cash Bonus Incentive Plan
------------------------------------------------------
Key Energy Services, Inc., established a cash bonus incentive
compensation program during 2016 for certain employees, including
the Company's named executive officers. One of the performance
metrics that was originally designed for the plan was Key Value
Added, or "KVA."
On Sept. 14, 2016, the Company modified the Bonus Plan to replace
KVA with a new performance metric, gross cash earnings. Due to
recent events at the Company, the Company determined that the
calculation of KVA was no longer a viable performance measure for
the Bonus Plan, and replacing it with the GCE metric would
emphasize the Company's business goals of focusing on cash
management, seeking revenue growth and reducing expenses. Other
than the replacement of KVA with GCE, all other metrics and targets
remain the same for the Bonus Plan.
About Key Energy
Key Energy Services, Inc. (NYSE: KEG), a Maryland corporation,
claims to be the largest onshore, rig-based well servicing
contractor based on the number of rigs owned. The Company was
organized in April 1977 and commenced operations in July 1978 under
the name National Environmental Group, Inc. In December 1992, the
Company became Key Energy Group, Inc. and it changed its name to
Key Energy Services, Inc. in December 1998.
Key Energy reported a net loss of $917.70 million on $792.32
million of revenues for the year ended Dec. 31, 2015, compared to a
net loss of $178.62 million on $1.42 billion of revenues for the
year ended Dec. 31, 2014.
As of March 31, 2016, the Company had $1.22 billion in total
assets, $1.16 billion in total liabilities and $58.87 million in
total equity.
* * *
As reported by the TCR on June 20, 2016, S&P Global Ratings lowered
its corporate credit rating on U.S.-based Key Energy Services Inc.
to 'CC' from 'CCC-'. "The downgrade follow's Key's disclosure that
it entered into confidential agreements with certain holders of its
6.75% senior notes due 2021 and certain lenders of the term loans
regarding a financial restructuring," said S&P Global Ratings
credit analyst David Lagasse.
The TCR reported on May 20, 2016, that Moody's Investors Service
downgraded Key Energy's Corporate Family Rating (CFR) to 'Ca' from
'Caa2', Probability of Default Rating (PDR) to 'Ca-PD' from
'Caa2-PD', and senior unsecured rating to 'Ca' from 'Caa3'. The
SGL-4 Speculative Grade Liquidity (SGL) Rating was affirmed.
KEYCORP: DBRS Assigns BB(high) Preferred Stock Rating
-----------------------------------------------------
DBRS, Inc. assigned a rating of BB (high) with a Stable trend to
KeyCorp's (Key or the Company) preferred stock, including the
recent $525 million of Fixed-to-Floating Rate Perpetual
Non-Cumulative Preferred Stock, Series D issuance. The ratings are
positioned three notches below Key's Issuer & Senior Debt rating of
BBB (high), which also carries a Stable trend. This notching is
consistent with DBRS's base notching policy for preferred shares
issued for BBB (high) rated entities.
Key expects to use the net proceeds from the sale of the preferred
stock for general corporate purposes, which may include repurchases
of common stock among other potential uses.
Notes: All figures are in USD unless otherwise noted.
LAKEVIEW PROPERTIES: Unsecureds To Get $3K Each Under Plan
----------------------------------------------------------
Lakeview Properties II, LLC, filed with the U.S. Bankruptcy Court
for the District of Connecticut a first amended disclosure
statement for the Debtor's first amended plan of reorganization.
Under the Plan, Class 2 Allowed Unsecured Claims, approximately at
$106,209, are impaired. The Reorganized Debtor reserves the right
to review and if it deems appropriate, to object, contest or
otherwise challenge claims pursuant to the Plan. On a quarterly
basis each year commencing on the three-month anniversary of the
Effective Date and continuing for seven years and in full
satisfaction of the allowed unsecured claims, the Reorganized
Debtor will pay each creditor holding an allowed unsecured claim
their pro rata share of the sum of $3,793.18 in full and final
satisfaction of all the claims. The Reorganized Debtor reserves
the right to prepay any of these payments to each and all of these
creditors in this class under the Plan without penalty and in the
event of a prepayment by more than five months when the payment is
otherwise due, the Reorganized Debtor may discount each prepayment
at a rate of 6% per annum. The treatment will be in complete
satisfaction and discharge of the Reorganized Debtor's obligations
to each of its unsecured creditors on account of their respective
unsecured claim against the Debtor.
The payments required under the Plan will be made from the Debtor
and Reorganized Debtor's operations leasing the Debtor's property.
The First Amended Disclosure Statement is available at:
http://bankrupt.com/misc/ctb15-50983-107.pdf
Lakeview Properties II, LLC, filed for Chapter 11 bankruptcy
protection (Bankr. D. Conn. Case No. 15-50983) on July 17, 2015,
estimating its assets and liabilities at between $500,000 and $1
million. Matthew K. Beatman, Esq., at Zeisler And Zeisler serves
as the Debtor's bankruptcy counsel.
LAST CALL GUARANTOR: Russell R. Johnson Representing Utilities
--------------------------------------------------------------
Russell R. Johnson III of the Law Firm of Russell R. Johnson III,
PLC, filed with the U.S. Bankruptcy Court for the District of
Delware a verified statement of the Firm's multiple representations
of utility companies in the bankruptcy cases of Last Call
Guarantor, LLC, et al.
These Utilities provided prepetition utility goods/services to the
Debtors, and continue to provide postpetition utility
goods/services to the Debtors:
A. American Electric Power
Attn: Gregory Holland
40 Franklin Road
P.O. Box 2021
Roanoke, VA 24022-2121
B. Commonwealth Edison Company
PECO Energy Company
Attn: Merrick Friel
Exelon Corporation
2301 Market Street, 823~1
Philadelphia, PA 19103
C. Piedmont Natural Gas Company
Attn: Victoria Jordan
4339 S. Tryon Street
Charlotte, NC 28217~l733
D. Rochester Gas and Electric Corporation
Attn: Patricia Cotton
89 East Avenue
Rochester, NY 14649
E. Tucson Electric Power Company
Attn: Adam D. Melton, Esq.
Senior Attorney - Litigation
88 E. Broadway Boulevard
Tucson, AZ 85701
F. Virginia Electric and Power Company
dba Dominion Virginia Power
Attn: Sherry Ward
P.O. Box 26666
Richmond, VA 23261~6666
The nature and the amount of claims (interests) of the Utilities,
and the times of their acquisition are:
(a) American Electric Power, Commonwealth Edison Company,
PECO Energy Company, Piedmont Natural Gas Company, Inc.,
Rochester Gas & Electric Corporation, Tucson Electric
Power Company and Virginia Electric and Power Company
dba Dominion Virginia Power have unsecured claims against
the Debtors arising from prepetition utility usage; and
(b) For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer
to the objection of certain utility companies to the
motion of the Debtors for entry of interim and final
orders pursuant to Sections 105(a) and 366 of the
Bankruptcy Code (A) prohibiting utilities from altering,
refusing or discontinuing service, (B) deeming utilities
adequately assured of future performance, and (C)
establishing procedures for determining adequate assurance
of payment filed in the jointly-administered, bankruptcy
cases.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the Utilities in August 2016. The circumstances and
terms and conditions of employment of the Firm by the Utilities is
protected by the attorney-client privilege and attorney work
product doctrine.
The Firm can be reached at:
Russell R. Johnson III, Esq.
LAW FIRM OF RUSSELL R. JOHNSON III, PLC
2258 Wheatlands Drive
Manakin-Sabot, Virginia 23103
About Last Call Guarantor
Headquartered in Dallas, Texas, and with operations in 25 states,
Last Call Guarantor, LLC, et al., own and operate sports bar and
casual family-dining restaurants under three well-recognized
concepts, namely Fox & Hound, Bailey's Sports Grille, and Champps.
They operate 48 Fox & Hound locations, nine Bailey's locations, and
23 Champps locations. They have franchise agreements with five
franchisees for Champps Restaurants. The Company has more than
4,700 full and part-time employees.
On Aug. 10, 2016, each of Last Call Guarantor, LLC, Last Call
Holding Co. I, Inc., Last Call Operating Co. I, Inc., F&H
Restaurants IP, Inc., KS Last Call Inc., Last Call Holding Co. II,
Inc., Last Call Operating Co. II, Inc., Champps Restaurants IP,
Inc. and MD Last Call Inc. filed a Chapter 11 bankruptcy petition
(Bankr. D. Del. Case Nos. 16-11844 to 16-11852). The petitions were
signed by Roy Messing, the CRO.
Last Call Guarantor estimated assets in the range of $10 million to
$50 million and liabilities of $100 million to $500 million.
Dennis A. Meloro, Esq., Nancy A. Mitchell, Esq., Nancy A. Peterman,
Esq., Matthew Hinker, Esq., and John D. Elrod, Esq., at Greenberg
Traurig, LLP, represent the Debtors as counsel.
Judge Kevin Gross is assigned to the cases.
LAVA ENTERPRISES: Hires Stephen Dunn as Attorney
------------------------------------------------
Lava Enterprises, Inc. seeks authorization from the U.S. Bankruptcy
Court for the Western District of Virginia to employ Stephen E.
Dunn, PLLC as attorney.
The Debtor requires the firm to:
(a) take all necessary action to protect and preserve the
estate of the Debtor, including the prosecution of actions
on the Debtor's behalf, the defense of any actions
commenced against the Debtor, the negotiation of disputes
in which the Debtor is involved and the preparation and
objections to claims filed against the Debtor's estate;
(b) prepare on behalf of the Debtor, as Debtor in Possession,
all necessary motions, applications, answers, orders,
reports and other papers in connection with the
administration of the Debtor's estate;
(c) negotiate and prepare on behalf of the Debtor a plan of
reorganization and all related documents; and
(d) perform all other necessary legal services in connection
with the prosecution of the Chapter 11 case.
The firm received an advance fee in the amount of $15,000, plus the
filing fee of $1,717 on July 6, 2016. Of the advance fee, the
amount of $3,843.33 has been charged or paid for pre-petition
services. The remaining funds are being held in the firm's Trust
Account for services to be performed in the preparation and
administration of the Chapter 11 case.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Stephen E. Dunn assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estate.
The Bankruptcy Court will hold a hearing on the application on
October 12, 2016, at 11:30 a.m.
The firm can be reached at:
Stephen E. Dunn, Esq.
STEPHEN E. DUNN, PLLC
201 Enterprise Drive, Suite A
Forest, VA 24551
Tel: (434) 385-4850
About Lava Enterprises
Lava Enterprises, Inc., filed a Chapter 11 petition (Bankr. W.D.
Va. Case No. 16-61478), on July 22, 2016. The petition was signed
by Larry H. Williams, president. The Debtor is represented by
Stephen E. Dunn, Esq. of Stephen E. Dunn, PLLC. The Debtor
estimated assets at $100,001 to $500,000 and liabilities at
$500,001 to $1 million at the time of the filing.
LCM XXII: S&P Assigns Prelim. BB Rating on Class D Notes
--------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to LCM XXII
Ltd./LCM XXII LLC's $370.40 million floating-rate notes.
The note issuance is a collateralized loan obligation transaction
backed by broadly syndicated senior secured term loans.
The preliminary ratings are based on information as of Sept. 14,
2016. Subsequent information may result in the assignment of final
ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The diversified collateral pool, which consists primarily of
broadly syndicated speculative-grade senior secured term
loans that are governed by collateral quality tests. The
credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect
the performance of the rated notes through collateral
selection, ongoing portfolio management, and trading. The
transaction's legal structure, which is expected to be
bankruptcy remote.
PRELIMINARY RATINGS ASSIGNED
LCM XXII Ltd./LCM XXII LLC
Class Rating Amount (mil. $)
X AAA (sf) 2.40
A-1 AAA (sf) 252.00
A-2 AA (sf) 52.00
B A (sf) 28.00
C BBB (sf) 20.00
D BB (sf) 16.00
Subordinated notes NR 37.60
NR--Not rated.
LEAH M. GANSLER: Exit Plan to Return 100% to Unsec. Creditors
-------------------------------------------------------------
Leah M. Gansler filed a Chapter 11 plan that provides that
unsecured creditors will be paid 100% of their claims, over a
period of five years.
Unsecured claims are asserted by American Express, $175,000; Evans
Farm Homeowners Association, $7,000; Baltimore Gas and Electric
Company, $3,901; Bell South, $984; DirecTV, $339; Wells Fargo Bank,
$155; Anne Page, $25,000; Blades of Green, $3,784; Clear Choice
Pool Service, $2,435. The monthly payment to unsecured creditors
will be $3,700.00 and will be distributed on a pro-rata basis.
The proposed plan requires a partial liquidation of the Debtors'
real property. Upon investigation to determine the reasons why the
condominiums had not been sold within the initial nine months of
this case, the office of undersigned was able to determine that the
listing agent had made several egregious errors in the listing.
The condominiums were not linked properly to the Ritz Carlton Palm
Beach; luxury properties such as these condos in Palm Beach and
were listed only in the local version of the Multiple Listing
Service (MLS). The Debtors have attempted to rectify the situation
by petitioning the Court for authority to retain Concierge
Auctions, LLC, a premier international auctioneer of high-end
properties. Concierge is a luxury real estate auction company
based in New York. When Concierge is engaged they utilize
professional photographers for their web pages. When the listing
is uploaded, it automatically populates on over 500,000
subscribers, worldwide. Concierge purchases ad copy in the
international edition of the Wall Street Journal, local print
editions as well as other online links.
The normal marketing budget for Concierge is $125,000 to $150,000
per property. All costs of marketing are initially borne by
Concierge, recoverable for sales proceeds, and a buyer's premium of
10 percent is assessed on each sale and purchase. Any bidder of
Concierge must verify ability to close on any offer/bid by placing
a substantial deposit, via wire transfer to the credit of
Concierge; post a letter of credit from their financial institution
verifying the ability of the bidder to perform on any successful
bid and provide verification of account balances for the six month
period prior to the issuance of the documents.
The Debtors have filed expedited motions to sell the properties at
auction, together with expedited process for Court approval to
employ Concierge. Florida is a judicial foreclosure state. The
average time for foreclosure from beginning to end is 150 days.
This auction opportunity presents the best, quickest, most
affordable and most likely to succeed solution available.
A copy of the Amended Disclosure Statement is available for free
at:
http://bankrupt.com/misc/mdb15-25311_167_1DS_L_Gansler.pdf
About Leah M Gansler
Leah M Gansler filed a Chapter 11 petition (Bankr. D. Md. Case No.
15-25311) on Nov. 3, 2015. Her husband, Jacques Gansler, filed his
Chapter 11 petition (Case No. 15-26726) on Dec. 1, 2015. The cases
were consolidated under Mrs. Gansler's case on Dec. 14, 2015.
Mrs. Gansler was the head of a Washington, D.C area philanthropic
organization, Charity Works for many years. She has worked without
compensation. Charity Works has been closed. Mr. Gansler is a
professor emeritus at the University of Maryland, College Park. He
is also a published author and noted authority in the field of
logistics. He held the position of Under Secretary of Defense for
Logistics under two administrations. Mr. Gansler is a member of
the boards of directors of several corporations. In October 2015,
Mr. Gansler started the "Gansler Group LLC" which consults with
defense related organizations and corporations.
The Debtors have and continue to act as a debtors-in-possession. No
Trustee has been appointed and no Creditors Committee has been
created.
LEAP FORWARD: Amends Disclosure Statement to Discuss Suits
----------------------------------------------------------
Leap Forward Gaming, Inc., amended the Disclosure Statement
explaining its Chapter 11 plan to disclose that in addition to the
litigation with IGT, at the Petition Date, LFG was a party to three
lawsuits:
1. LFG v. Andrew Novotak, Jr., Case No. CV15-02014, Second
Judicial District Court, Washoe County;
2. Andrew Novotak, Jr. v. LFG, Ali Saffari, Case No. CV15-02420,
Second Judicial District Court, Washoe County; and
3. Peerless Indemnity Insurance Company v. LFG, Saffari, Cobb,
and Cunningham, Case No. 2:15-cv-02390-APG-CWH, United States
District Court, Las Vegas.
Civil actions 1 and 2 have been consolidated and as of the Petition
Date, documents have been exchanged in accordance with NRCP 16.1.
In these cases, LFG's claims against Novotak are essentially
contingent assets which LFG may pursue against Novotak. [Note: on
August 24, 2016, the parties to these consolidated actions
participated in a voluntary settlement conference conducted by
retired District Court judge Brent Adams. No settlement was
reached. Following that conference, LFG consented to the lifting
of the automatic stay to permit Novotak to pursue claims in state
court on the condition that any recovery would be limited to
available insurance proceeds, if any.
In the event the settlement conference is unsuccessful, LFG
reserves the right to pursue its affirmative claims against
Novotak. Civil action 3, Peerless Indemnity v. LFG, et al. is a
declaratory relief action pending in federal court. Peerless seeks
a determination that LFG, Saffari, Cobb and/or Cunningham are not
entitled to coverage under a Commercial General Liability Policy or
a Commercial Umbrella Liability Policy.
LFG has not filed an answer to the Peerless action; however, in the
event it is required to do so, available coverage is deemed by LFG
to be an asset of the bankruptcy estate.
A copy of the Amendment to the Disclosure Statement is available
for free at:
http://bankrupt.com/misc/nvb16-50850_65_1DS_Leap_Forward.pdf
The Liquidating Plan
As reported in the Aug. 10, 2016 edition of the TCR, Leap Forward
Gaming filed with the U.S. Bankruptcy Court its Plan of Liquidation
and accompanying Disclosure Statement, which provide for the use of
the prepetition secured parties' cash collateral to fund employee
payroll and operating expenses until the sale of Debtor's assets
(primarily intellectual property and inventory) to IGT. The
resulting $2,500,000 cash proceeds from the sale, plus any
remaining cash collateral, will be distributed to prepetition
secured parties. A full-text copy of the Disclosure Statement is
available at http://bankrupt.com/misc/nvb16-50850-btb-51.pdf
About Leap Forward Gaming
Leap Forward Gaming, Inc. filed a chapter 11 petition (Bankr. D.
Nev. Case No. 16-50850) on July 8, 2016. The petition was signed
by Darby Bryan, CFO/Controller. The Debtors are represented by
Jeffrey L. Hartman, Esq., at Hartman & Hartman. The case is
assigned to Judge Bruce T. Beesley. The Debtor disclosed assets of
$2.46 million and debt of $26.0 million at the time of the filing.
LUCAS ENERGY: Registers 13 Million Common Shares for Resale
-----------------------------------------------------------
Lucas Energy, Inc. filed a Form S-3 registration statement with the
Securities and Exchange Commission relating to the resale at
various times, by Alvin Thaggard, Alan Dreeben, Albert J. Range,
Jr., RAD2 Minerals, Ltd, et al., of up to 13,009,664 shares of
Common Stock, par value $0.001 per share, issued to the Sellers and
their assigns pursuant to an asset purchase agreement.
In December 2015, the Company entered into the APA, as purchaser,
with twenty-one separate sellers. Pursuant to the Asset Purchase
Agreement and subject to the terms and conditions thereof, the
Company agreed to acquire from the Sellers, working interests in
producing properties and undeveloped acreage in Texas and Oklahoma,
including varied interests in two largely contiguous acreage blocks
in the liquids-rich Mid-Continent region of the United States, and
related wells, leases, records, equipment and agreements associated
therewith as well as producing shale properties in Glasscock
County, Texas. The closing of the Acquisition occurred on Aug. 25,
2016.
The Shares are being offered by the Selling Stockholders. The
Company may add, update or change the Selling Stockholders
identified in this prospectus in a prospectus supplement. To the
extent that a statement made in a prospectus supplement conflicts
with statements made in this prospectus, the statements made in the
prospectus supplement will be deemed to modify or supersede those
made in this prospectus.
The Company will not receive any of the proceeds from the sale of
the Shares by the Selling Stockholders. The Selling Stockholders
may sell their Shares on any stock exchange, market or trading
facility on which the Shares are traded or quoted, or in private
transactions. These sales may be at fixed prices, at prevailing
market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time
of sale, or at negotiated prices.
The Company has agreed to pay certain expenses in connection with
the registration of the Shares.
The Company's common stock is listed on the NYSE MKT under the
symbol "LEI". On Sept. 19, 2016, the Company's common stock closed
at $3.54 per share.
A full-text copy of the Form S-3 prospectus is available at:
https://is.gd/Y5JmuW
About Lucas Energy
Based in Houston, Texas, Lucas Energy (NYSE MKT: LEI) --
http://www.lucasenergy.com/-- is a growth-oriented, independent
oil and gas company engaged in the development of crude oil,
natural gas and natural gas liquids in the Hunton formation in
Central Oklahoma in addition to the Austin Chalk and Eagle Ford
formations in South Texas.
Lucas Energy reported a net loss of $25.4 million for the year
ended March 31, 2016, compared to a net loss of $5.12 million for
the year ended March 31, 2015.
As of June 30, 2016, Lucas Energy had $14.73 million in total
assets, $12.91 million in total liabilities and $1.82 million in
total stockholders' equity.
Hein & Associates LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the year
ended March 31, 2016, citing that the Company has incurred
significant losses from operations and had a working capital
deficit of $9.6 million at March 31, 2015. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
MARGHERITA ARVANITES: Plan Confirmation Hearing Set for Nov. 9
--------------------------------------------------------------
Judge Brenda K. Martin of the United States Bankruptcy Court for
the District of Arizona will hold a hearing to consider
confirmation of the Chapter 11 Plan filed by Sheila Hall and
Margherita Arvanites on November 9, 2016, 11:00 a.m., at the United
States Bankruptcy Court, 230 N. First Avenue, 7th Floor, Courtroom
701, in Phoenix, Arizona.
Ballots accepting or rejecting the plan must be received by the
Plan Proponent at least seven days prior to the hearing date set
for the confirmation of the plan. Ballots must be mailed, emailed
or faxed to the proponent of the plan in care of:
Allan D. NewDelman, P.C.
80 East Columbus Avenue
Phoenix, AZ 85012
Fax No. 602-277-0144
e-mail: anewdelman@adnlaw.net
The last day for filing with the Court and serving to
parties-in-interest written objections to confirmation of the plan
is fixed at seven days prior to the hearing date set for
confirmation of the plan.
The Court approved the disclosure statement explaining the Chapter
11 Plan on September 19, 2016.
About Sheila Hall and Margherita Arvanites
Sheila Hall (Bankr. D. Ariz. Case No. 12-22842) and Margherita
Arvanites (Bankr. D. Ariz. Case No. 12-22847) sought protection
under Chapter 11 of the Bankruptcy Code on October 18, 2012.
The cases are assigned to Judge Brenda K. Martin. The Debtors are
represented by:
Allan D. NewDelman, Esq.
Roberta J. Sunkin, Esq.
ALLAN D. NEWDELMAN, P.C.
80 East Columbus Avenue
Phoenix, AZ 85012
Tel.: (602) 264-4550
E-mail: anewdelman@adnlaw.net
MDC PARTNERS: S&P Revises Outlook to Stable & Affirms 'B+' CCR
--------------------------------------------------------------
S&P Global Ratings revised its rating outlook on New York
City-based advertising holding company MDC Partners Inc. to stable
from positive and affirmed the 'B+' corporate credit rating on the
company.
At the same time, S&P affirmed its 'B+' issue-level rating on the
company's senior unsecured notes. The '4' recovery rating is
unchanged, indicating S&P's expectation for average recovery
(30%-50%; upper half of the range) of principal in the event of a
payment default.
"The outlook revision reflects MDC Partners' weaker-than-expected
first-half 2016 results," said S&P Global Ratings' credit analyst
Dylan Singh. "The company reported EBITDA growth was lower than we
expect, mainly due to the delays in the onboarding of its new
business wins from the first half of the year." These delays also
lowered MDC Partners' cash flows, necessitating a draw on its
revolver and the use of the proceeds from its March 2016 term loan
refinancing to finance its working capital use rather than to lower
its deferred acquisition costs (DAC) balance, which S&P had
expected.
S&P expects the company's EBITDA growth rate to improve in the
second half of 2016, returning to its normalized growth rate.
However, S&P expects that the weak first half will lower overall
EBITDA growth expectations for 2016 and 2017. As a result, S&P
believes this combination of higher debt and lower EBITDA growth
will likely keep adjusted leverage above S&P's 5x upgrade threshold
over the next 12-18 months.
The 'B+' corporate credit rating is based on S&P's assessment of
the company's business risk profile as fair and its financial risk
profile as highly leverage. The business risk profile assessment
reflects MDC Partners' healthy business prospects, greater scale,
and improved margins, in S&P's view, which are on par with those of
its much larger ad agency peers. The company has consistently
reported organic revenue growth rates above those of its ad agency
peers since 2008, and S&P expects this trend to continue.
"The stable rating outlook reflects our expectation that MDC
Partners' adjusted leverage will remain in the low-5x area over the
next 12 months," said Mr. Singh. "The outlook also incorporates
our expectation that EBITDA will grow about 10%-12% in 2016 and
4%-6% in 2017, with no additional debt issuance."
S&P could raise its corporate credit rating if the company lowers
adjusted leverage to below 5x on a sustained basis. This could
occur if the company continues to reduce its deferred acquisition
liabilities, coupled with EBITDA growth of at least 10%-12% in 2016
and 2017 and no significant increase in debt.
S&P could lower the rating if the company's operations weaken such
that its adjusted leverage remains consistently above 6x.
Alternately, S&P could lower the rating if the company makes a
sizable debt-financed acquisition that keeps its adjusted leverage
above 6x.
MFLR LLC: Unsecureds To Recover 100% Under Plan
-----------------------------------------------
Glasir Medical, LP, and MFLR, LLC, filed with the U.S. Bankruptcy
Court for the Western District of Texas a joint disclosure
statement describing the Debtors' joint plan of reorganization.
Under the Plan, the Class 3 claims consist of the claims of general
unsecured creditors. The unsecured claims included the claims
scheduled on the Debtors' Schedules (Schedule F) or filed with the
Court, including any amendments to schedules and claims, and are
estimated to be in the approximate amount of $233,000.
The Class 3 creditors will receive 100% of the creditor's allowed
claim in 20 quarterly payments starting the first day of the first
quarter occurring 30 days after the Effective Date. The Class 3
claims are deemed to be impaired under the Plan and will vote on
the Plan.
The fair and equitable requirement in the context of a class of
unsecured claims requires that either:
1. the holders are to receive property with a present value
equal to the allowed amount of their claims; or
2. no holders in a class junior to the rejecting class are to
receive any property.
Allowed unsecured claims will be paid 100% of their claims in
quarterly payments over five years from confirmation.
The Disclosure Statement is available at:
http://bankrupt.com/misc/txwb16-50613-23.pdf
The Plan was filed by the Debtors' counsel:
Ronald J. Smeberg, Esq.
THE SMEBERG LAW FIRM, PLLC
2010 West Kings Highway
San Antonio, Texas 78201
Tel: (210) 695-6684
Fax: (210) 598-7357
E-mail: ron@smeberg.com
About MFLR
Headquartered in San Antonio, Texas, MFLR, LLC, filed for Chapter
11 bankruptcy protection (Bankr. D. W.D. Tex. Case No. 16-50613),
estimating its assets at up to $50,000 and estimated Liabilities:
$1 million to $10 million. The petition was signed by Thomas
Wilson, manager.
Ronald J. Smeberg, Esq., at serves as the Debtor's bankruptcy
counsel.
About Glasir Medical
Headquartered in San Antonio, Texas, Glasir Medical, LP, filed for
Chapter 11 bankruptcy protection (Bankr. W.D. Tex. Case No.
16-50612) on March 15, 2016, estimating its assets and liabilities
at between $1 million and $10 million. The petition was signed by
Thomas Wilson, president of the general partner MFLR, LLC.
Judge Craig A. Gargotta presides over the case.
Ronald J. Smeberg, Esq., at The Smeberg Law Firm, PLLC, serves as
the Debtor's bankruptcy counsel.
MOBILE FOX: US Trustee Fails to Appoint Creditors' Committee
------------------------------------------------------------
The U.S. Trustee informs the U.S. Bankruptcy Court for the Middle
District of Florida that a committee of unsecured creditors has not
been appointed in the Chapter 11 case of The Mobile Fox, Inc., due
to insufficient response to the U.S. Trustee communication/contact
for service on the committee.
About The Mobile Fox, Inc.
The Mobile Fox, Inc., is a Florida corporation which offers
electronics and office supply products through internet based
storefronts like Amazon and eBay. The Mobile Fox, Inc., filed a
chapter 11 petition (Bankr. M.D. Fla. Case No. 16-02651) on July
13, 2016.
MULLAN AGRITECH: Working Capital Deficit Raises Going Concern Doubt
-------------------------------------------------------------------
Mullan Agritech, Inc., filed its quarterly report on Form 10-Q,
disclosing a net income of $1.22 million on $463,980 of revenues
for the three months ended June 30, 2016, compared with a net loss
of $766,224 on $146,505 of revenues for the same period in the
prior year.
For the six months ended June 30, 2016, the Company listed a net
income of $970,312 on $527,181 of revenues, compared to a net loss
of $1.58 million on $248,146 of revenues for the same period in the
prior year.
The Company's balance sheet at June 30, 2016, showed $19.20 million
in total assets, $15.23 million in total liabilities, and a
stockholders' equity of $3.97 million.
The Company's ability to continue as a going concern depends upon
the liquidation of current assets. For the six months ended June
30, 2016, and 2015, the Company reported net income of $970,312 and
net loss of $1,577,597, respectively. The Company had working
capital deficit of approximately $4.77 million and $4.99 million as
of June 30, 2016 and December 31, 2015. In addition, the Company
had net cash inflows of $2,499,550 and net outflow $3,469,281 from
its operating activities during the six months ended June 30, 2016
and 2015. The Company have improved its operating result, but the
Company still incurred a loss from operation of $702,924 for the
six months ended June 30, 2016, because the other income was as
large as $1,700,463 for the six months ended June 30, 2016. These
conditions still raise a substantial doubt as to whether the
Company may continue as a going concern.
In an effort to improve its financial position, the Company is
working to obtain new loans from banks and related parties, renew
its current loans, and to improve its operations upon its new
fertilizer factories start to operate. In 2015, the Company
obtained capital contribution of approximately $16 million from its
shareholders which successfully improved the Company's financial
position as of June 30, 2016. Additionally, one of the new
fertilizer factories was completed and put in operations in August
2015 and another factory was expected to put in operation in June
2016.
A copy of the Form 10-Q is available at:
http://bit.ly/2cX7yAw
About Mullan Agritech, Inc.
Mullan Agritech, Inc., was incorporated under the laws of the State
of Nevada on November 5, 2014. Mullan Agritech's core business
activities of developing, manufacturing, and selling organic
fertilizers and bio-organic fertilizers for use in agricultural
industry are conducted through several indirectly owned
subsidiaries in China.
MURRAY ENERGY: S&P Raises CCR to 'B-', Outlook Stable
-----------------------------------------------------
S&P Global Ratings raised its corporate credit rating on Murray
Energy Corp. to 'B-' from 'CCC+'. The outlook is stable.
S&P also raised the issue-level rating on Murray's first-lien B-1
and B-2 term loans to 'B-' from 'D' and the second-lien notes to
'CCC' from 'D'. The recovery rating on the company's first-lien
debt is unchanged at '3', indicating S&P's expectation for
meaningful (50% to 70%, lower half of the range) recovery in the
event of default. The recovery rating on the company's second-lien
debt is unchanged at '6', indicating S&P's expectation for
negligible (0% to 10%) recovery in the event of default.
"As a result of the execution of the new five-year collective
bargaining agreement, we expect Murray to realize significant
operational cost savings," said S&P Global Ratings credit analyst
Vania Dimova. "We expect the company to improve adjusted EBITDA
margins by 150 to 200 basis points and lower its leverage by about
half a turn in the second half of 2016, as a result of cost
reduction initiatives, contract buyouts, and debt restructuring."
The stable outlook reflects S&P's view that Murray will maintain
adequate liquidity in the next 12 months. S&P expects adjusted
debt to EBITDA of about 7.0x to 7.5x and funds from operations to
debt between 5.5x-6.5x in the next 12 months.
S&P could lower the rating if it considers Murray's liquidity
position to be less than adequate. S&P could also lower the rating
if it felt the company was dependent on favorable conditions to
meet its financial obligations. This could happen if free cash
flow generation slowed to a level where the April 2017 maturity
could not be repaid, particularly in an unfavorable refinancing
environment.
S&P would raise the rating if leverage declines below 5x or if
there is a material improvement in the business risk profile.
MUSCLEPHARM CORP: Chief Financial Officer Quits
-----------------------------------------------
MusclePharm Corporation announced that, effective as of Sept. 15,
2016, Mr. John Price voluntarily resigned from his position as
chief financial officer of the Company. The Company has engaged a
search firm to conduct a search for a new full-time chief financial
officer.
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 June 30, 2016, MusclePharm had $50.62 million in total
assets, $65.63 million in total liabilities and a total
stockholders' deficit of $15 million.
NAVIENT CORP: S&P Assigns 'BB-' Rating on $500MM Sr. Unsec. Notes
-----------------------------------------------------------------
S&P Global Ratings said it assigned its 'BB-' debt rating on
Navient Corp.'s (BB/Negative/B) $500 million senior unsecured notes
due in 2023. The debt rating is one notch below the counterparty
credit rating because Navient's tangible unencumbered assets are
less than its outstanding unsecured debt. S&P excludes from
unencumbered assets the company's overcollateralization balances
associated with its asset-backed securities trusts. Navient's
intended uses of proceeds are for general corporate purposes,
including debt repurchases.
Although S&P's ratings and outlook on Navient are unchanged at this
time, S&P views the demonstrated access to the unsecured debt
markets favorably, as well as any debt repurchases with the
proceeds. S&P expects Navient's portfolio of student loans will
produce substantial and stable cash flows; however, the majority of
its loan portfolio is encumbered by secured borrowings. The
negative outlook reflects that Navient's funding and liquidity
profile may weaken, in S&P's view, because of timing differences
between the residual cash flows from assets encumbered by secured
borrowings and the maturities of Navient's unsecured debt.
RATINGS LIST
Navient Corp.
Issuer credit rating BB/Negative/B
New Rating
Navient Corp.
Senior unsecured
$500 million notes due in 2023 BB-
NEUSTAR INC: Moody's Assigns Ba2 Rating on Term Loan A
------------------------------------------------------
Moody's Investors Service assigned a Ba2 to Neustar, Inc.'s
proposed $499 million Term Loan A and $200 million revolving credit
facility. In connection with the ongoing review of Neustar, the Ba2
rating assigned today will also be on review for possible
downgrade. The proposed transaction improves the company's
liquidity, lowers interest expense, and reduces leverage. The
proceeds, along with cash on hand, will be used to repay the
company's existing credit facilities. Neustar's maturity profile is
favorably impacted as the new facilities will mature in January of
2019, effectively extending the maturity of its secured loans by
one year.
As of June 2016, Neustar's leverage was 2.5x (including Moody's
standard adjustments). The new term loan has amortization of 22%
per annum through 12/31/2017 and 10% per annum thereafter. Moody's
believes Neustar's leverage will decline to under 2x (including
Moody's standard adjustments) prior to the spin as a result of the
aggressive amortization schedule. This does not incorporate any
voluntary debt repayment from the company which is probable as the
company aims to reduce its debt load significantly prior to
splitting. Moody's believes Neustar will generate approximately
$300 million of free cash flow annually while the company remains
intact mainly from the high-margin NPAC business. Moody's
anticipates Neustar will continue a balanced financial policy,
allocating a large portion of its cash towards debt repayment while
pursuing potential tuck-in acquisitions after the integration of
Markstshare and the TNS assets is complete.
In June of 2016, Moody's placed Neustar, Inc.'s ratings under
review for downgrade. The review was prompted by Neustar's
announcement of its intention to separate into two independent,
publicly traded companies, via a tax-free spin-off (the spin)
expected to close near the middle of 2017. Management remains in
the very early stages of executing this transaction and still in
the decision making process as it pertains to material
considerations such as sources of financing, capitalization, and
organizational structure.
In its review, Moody's will evaluate the finalized business
profiles of the separate businesses, its capital structures,
management teams, financial policies, projected operating
performance, and credit metrics, among other factors.
If the transaction concludes as expected, an upgrade of Neustar's
ratings is unlikely. Our interpretation of the plan suggests our
rated entity is likely to include order management and numbering
services, which will be a much smaller scale, less diversified
company with more limited cash flows. Revenues are likely to be
less than $100 million following the expiration of the NPAC
contract is anticipated at the end in the second half of 2018. A
negative rating action would be considered if the rated entity has
a credit profile with higher risk including a smaller scale, less
diversified revenue base, lower margins, weaker quality of
earnings, less liquidity, more limited cash flows, less
conservative financial policies including greater tolerance for
leverage and or shareholder distributions, slower growth rate, or a
weaker market position - among other factors of relevance. “Based
on our interpretation of the outline to split the company, we
believe a downgrade is possible.” Moody's said.
Assignments:
Issuer: Neustar, Inc
-- Senior Secured Bank Credit Facilities, Assigned Ba2 (LGD3);
Placed Under Review for Downgrade
RATINGS RATIONALE
Neustar, Inc's Ba3 corporate family rating reflects its healthy
balance sheet, strong cash flows, and high growth rate. The company
has a favorable market position in the information services sector
with business lines in marketing, data, and security services. Over
the past several years, Neustar has aggressively invested in its
business, diversifying its revenue base away from the impending
loss of its very large contract to provide Number Portability
Administration Center (NPAC) services. Today, NPAC generates
approximately 45% of its revenues, but the contract is scheduled to
expire in 2018. With organic growth and M&A that leverages its
expertise in managing real-time information systems, revenue from
non-NPAC services has reached a scale and level of profitability
that supports the credit profile after the loss of NPAC. This
position is supported by low leverage and a financial policy that
has shifted decidedly more conservative following the company's
recent acquisition of Marketshare which requires the company to pay
down new debt at a rapid pace. In connection with this shift, the
company has temporarily suspended its share repurchase program.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in December 2014.
Based in Sterling, VA, Neustar, Inc is the leading provider of
information and data services catering to carriers and enterprises.
For last twelve month ended in June 30, 2016, Neustar generated
approximately $1.1 billion in revenue.
NEXSTAR BROADCASTING: S&P Rates New $3.3BB Credit Facility 'BB+'
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '1'
recovery rating to Nexstar Broadcasting Inc.'s proposed $3.3
billion senior secured credit facility, which consists of a $175
million revolving credit facility due 2021, a $270 million term
loan A due 2021, and a $2.85 billion term loan B due 2023. The '1'
recovery rating indicates S&P's expectation for very high recovery
(90%-100%) of principal in the event of a payment default.
Nexstar will use the proceeds to repay its existing senior secured
facility and to fund its acquisition of Media General Inc. The
issue-level rating is two notches above our corporate credit rating
on Nexstar.
Pro forma for the debt offering and the Media General acquisition,
S&P expects Nexstar's adjusted debt to average
trailing-eight-quarter EBITDA to be in the mid- to high-5x area.
S&P also expects leverage to decrease to about 5x by the end of
2017 due to continued EBITDA growth, strong cash flow generation,
and modest debt repayment.
S&P views Nexstar's business risk profile as satisfactory. S&P's
assessment is based on the company's significant size, scale, and
diversity as one of the largest non-broadcast-network-owned TV
station groups; its growing revenue stream from the highly
predictable retransmission fees it collects from cable and
satellite video service operators; its growing digital media
business; and its presence in several election battleground states.
The corporate credit rating also reflects long-term structural
changes in media consumption as viewers shift to alternative media
for news and entertainment.
The stable rating outlook reflects S&P's expectation that Nexstar
will be able to leverage its increased size and scale to generate
significant discretionary cash flow, maintain its above-average
EBITDA margin profile (compared with similarly rated peers), and
reduce debt to average trailing-eight-quarter EBITDA to about 5x by
the end of 2017.
RATINGS LIST
Nexstar Broadcasting Inc.
Corporate Credit Rating BB-/Stable/--
New Ratings
Nexstar Broadcasting Inc.
Senior Secured
$175 mil rev credit facility due 2021 BB+
Recovery Rating 1
$270 mil term ln A due 2021 BB+
Recovery Rating 1
$2.85 bil term loan B due 2023 BB+
Recovery Rating 1
NORD RESOURCES: Securities Registration Revoked by SEC
------------------------------------------------------
The Securities and Exchange Commission has issued a notice that an
initial decision revoking the registration of each class of
registered securities of Nord Resources Corporation has become
final.
The SEC said, "The time for filing a petition for review of the
initial decision in this proceeding has expired. No such petition
has been filed by [the Company] and the Commission has not chosen
to review the decision on its own initiative.
"Accordingly, notice is hereby given, pursuant to Rule 360(d) of
the Commission's Rules of Practice,1 that the initial decision of
the administrative law judge has become the final decision of the
Commission. . . . The order contained in that decision is hereby
declared effective."
According to the Notice, "Nord Resources Corporation, CIK No.
72316, is a void Delaware corporation located in Tucson, Arizona,
with a class of securities registered with the Commission pursuant
to Exchange Act Section 12(g). The company is delinquent in its
periodic filings with the Commission, having not filed any periodic
reports since it filed a Form 10-Q for the period ended September
30, 2013, which reported a net loss of $6,455,500 for the prior
nine months. On October 15, 2015, the company filed a Chapter 11
petition in the U.S. Bankruptcy Court for the District of Arizona,
which was closed on February 23, 2016. As of June 8, 2016, the
company's ommon stock was quoted on OTC Link, had six market
makers, and was eligible for the "piggyback" exception of Exchange
Act Rule 15c2-11(f)(3).
Nord Resources Corporation filed a bare-bones Chapter 11 bankruptcy
petition (Bankr. D. Ariz. Case No. 15-13197) on Oct. 15, 2015,
estimating both assets and liabilities in the range of $50 million
to $100 million. Ron Hirsch signed the petition as chairman.
The Debtor engaged Eric Slocum Sparks PC as counsel. Judge Scott
H. Gan is assigned to the case.
Christopher G. Linscott of Keegan, Linscott & Kenon, P.C., was
appointed as receiver of Nord's assets. The receiver sought
dismissal of the Chapter 11 case, saying the bankruptcy petition
was signed by a party without authority and was a bad faith attempt
to avoid or delay the scheduled sale of Nord's assets.
OPEN TEXT: S&P Affirms 'BB+' CCR on Dell EMC Biz Acquisition
------------------------------------------------------------
S&P Global Ratings said affirmed its 'BB+' long-term corporate
credit rating on Open Text Corp. after the company announced its
US$1.62 billion acquisition of Dell EMC's content division. The
outlook is stable.
At the same time, S&P Global Ratings affirmed its 'BB' issue-level
rating, with a '5' recovery rating, on the company's senior
unsecured debt. A '5' recovery rating indicates S&P's expectation
for modest (10%-30%; at the lower end of the range) recovery in the
event of default. S&P Global Ratings also affirmed its 'BBB'
issue-level rating on Open Text's senior secured debt. The '1'
recovery rating on the debt is unchanged, reflecting S&P's
expectation for substantial (90%-100%) recovery in default.
"The EMC transaction is consistent with our view of the company's
strategy to grow by acquisition, adding some well-positioned, but
mature content management capabilities to Open Text's suite of
products," said S&P Global Ratings credit analyst Donald Marleau.
S&P views the proposed US$1 billion acquisition term loan as
predominantly a backstop facility, such that S&P expects Open Text
to implement a good balance of funding to maintain S&P's current
issue-level and recovery ratings. Although unlikely, S&P could
lower its issue-level ratings and revise S&P's recovery ratings on
Open Text's secured and unsecured debt if the company finances most
of this acquisition with a permanent tranche of secured debt, which
would represent an unexpected shift in financial policies.
"The affirmation reflects our view that higher debt leverage from
successive acquisitions, including the EMC content acquisition, is
counterbalanced by solid free cash flow that should ensure adjusted
debt leverage returns to 2.5x-3.0x within a year of closing," Mr.
Marleau added.
Even after incorporating recently acquired revenue of about
US$900 million, Open Text has modest scale and limited scope
relative to its much larger and more diversified peers.
The stable outlook reflects S&P Global Ratings' expectation that
Open Text's leverage could increase above 3.0x to complete the EMC
content acquisition, but will improve to 2.5x-3.0x in 12-18 months
with debt reduction. S&P expects that the company's acquisitive
strategy will boost revenues significantly amid modest organic
revenue growth, which S&P believes also increases earnings risk as
it integrates new products and transitions customers.
S&P could lower the ratings on Open Text if debt-financed
acquisitions keep adjusted debt-to-EBITDA above 3x, or if earnings
weaken because of the interplay of difficulties integrating an
ambitious series of acquisitions, as well as customer attrition and
market share losses amid product repositioning.
S&P could raise the ratings on Open Text if the company continues
to expand into the broader EIM market while developing an
integrated set of product suites that resonates with customers,
materially improving the company's market position and scale. S&P
would also expect Open Text to achieve a sustained mid-single-digit
organic growth rate while maintaining adjusted debt-to-EBITDA below
3x.
PACIFIC WEBWORKS: Unsecureds To Recoup 80% Under Plan
-----------------------------------------------------
Pacific WebWorks, Inc., filed with the U.S. Bankruptcy Court for
the District of Utah a motion for court order approving the
Debtor's disclosure statement with respect to the Debtor's plan of
liquidation.
Under the Plan, Class 2 General Unsecured Claims is impaired. The
holders of allowed Class 2 Claims are entitled to vote to accept or
reject the Plan. In general, the Liquidating Trustee will pay
Holders of Class 2 Claims in full satisfaction of their claims: (i)
80% of the amount of their Allowed General Unsecured Claims, in
cash, on the initial distribution date; and (ii) subsequent
distribution(s) of a pro rata share of the unsecured distribution
amount. The Debtor is optimistic, but uncertain, that it will be
able to pay all holders of Allowed Class 2 Claims in full. The
Debtor's Schedule E (as amended) lists a total of $175,453.67 in
General Unsecured Claims.
The estate will have sufficient cash to meet all cash funding
obligations under the Plan required to be made on the Effective
Date and the initial distribution date.
The Disclosure Statement is available at:
http://bankrupt.com/misc/utb16-21223-130.pdf
About Pacific WebWorks
Pacific WebWorks, Inc., previously known as Asphalt Associates, was
an application service provider and software development company.
Pacific WebWorks sought Chapter 11 protection (Bankr. D. Utah Case
No. 16-21223) on Feb. 23, 2016, to pursue an orderly liquidation of
its assets. It estimated assets and debt of $1 million to $10
million.
The Debtor tapped George B. Hofmann of Cohne Kinghorne as counsel.
The Debtor also engaged Rocky Mountain Advisory as an independent
contractor to provide management services, and appointed Gil Miller
as chief restructuring officer.
PARKLAND FUEL: S&P Assigns 'BB-' Rating on C$300MM Sr. Notes
------------------------------------------------------------
S&P Global Ratings said it assigned its 'BB-' issue-level rating
and '4' recovery rating to Parkland Fuel Corp.'s C$300 million
5.75% senior unsecured notes due 2024. The '4' recovery rating
reflects S&P's expectation for average (30%-50%; high end of range)
recovery in the event of default. The new debt will be held in
escrow until Parkland completes the acquisition of its portion of
CST Brands Inc.'s Canadian assets, likely in late 2016 or early
2017.
S&P's 'BB-' long-term corporate credit rating and stable outlook on
Parkland are unchanged along with S&P's 'BB-' issue-level rating
and '3' recovery rating on the company's unsecured debt
outstanding. That said, S&P will likely lower its recovery ratings
on Parkland's existing unsecured debt to '4' from '3' if the
company finances the acquisition as proposed, because S&P believes
the addition of more than C$500 million of secured debt from a new
C$700 million revolving credit facility would weaken noteholders'
prospects for recovery in the event of default.
The transaction funding is proceeding in line with S&P's
expectations, with the company having completed a bought deal for
C$230 million of equity, along with these new notes and a new,
fully underwritten secured credit facility.
RATINGS LIST
Parkland Fuel Corp.
Corporate credit rating BB-/Stable/--
Rating Assigned
Parkland Fuel Corp.
C$300 mil. senior unsecured notes
due 2024 BB-
Recovery rating 4H
PEABODY CORP: Illinois Self-Bonding Stipulation Approved
--------------------------------------------------------
Peabody Energy Corporation said the Bankruptcy Court for the
Eastern District of Missouri approved the so-called Illinois
Self-Bonding Stipulation on September 15, 2016, and entered an
order regarding the same on September 16.
On May 18, 2016, the Bankruptcy Court approved the Debtors' $800
million debtor-in-possession financing facility on a final basis,
as may be further modified or amended. Pursuant to the DIP Order,
the Debtors obtained the consent of their prepetition senior
lenders and postpetition lenders to provide a carve out in the
maximum amount of $200 million, which is carved out from the
Lenders' collateral consistent with the DIP Order. The purpose of
the Bonding carve out is to support a letter of credit and/or a
superpriority claim in the Chapter 11 Cases for those states that
make a demand for a surety bond, letter of credit, or other
financial assurance pursuant to applicable state law as additional
financial assurance supporting the Debtors' self-bonded reclamation
obligations.
On July 26, 2016, the Debtors filed three motions with the
Bankruptcy Court seeking approval of certain settlements entered
into with the applicable regulatory agencies in Wyoming, New Mexico
and Indiana. The Bankruptcy Court approved the Wyoming, New Mexico
and Indiana stipulations on August 17, 2016 and entered orders
regarding the same on August 18, 2016.
On August 22, 2016, the Debtors filed a motion with the Bankruptcy
Court seeking approval of a settlement entered into with the
Illinois Department of Natural Resources. During the pendency of
these Chapter 11 Cases, the Illinois Settlement provides the state
with a portion of the Bonding Carve Out in the form of a Bonding
Facility Letter of Credit and a Bonding Superpriority Claim that
together equal approximately 17.5% of the Debtors' prepetition
reclamation bond amount with the state of Illinois in addition to
resolving various disputes between and among the Debtors and the
state of Illinois regarding the Debtors' compliance with the
state's applicable self-bonding regulations.
As reported by the Troubled Company Reporter, the Environmental Law
and Policy Center (ELPC) filed with the U.S. Bankruptcy Court an
objection to the approval of the Illinois Self-Bonding
Stipulation.
As of the Petition Date, the Debtors had, in the aggregate,
approximately $92.2 million of self-bonding obligations for
reclamation in connection with their Illinois mining operations.
The Illinois Settlement resolves disputes between the debtors that
are party to the Illinois Settlement -- Illinois Mine Debtors --
and the IDNR over (a) the Illinois Mine Debtors' ability to qualify
for self-bonding under Illinois law during the pendency of the
Chapter 11 Cases and (b) IDNR's ability to require the Illinois
Mine Debtors to post additional collateral or alternative bonds to
satisfy the Illinois Mine Debtors' reclamation obligations in
Illinois. The Illinois Settlement, among other things:
(i) grants the IDNR a Bonding Superpriority Claim in the
amount of approximately $12.9 million in order to secure the
Illinois Mine Debtors' reclamation obligations in Illinois during
the pendency of the Chapter 11 Cases;
(ii) requires the Illinois Mine Debtors to cause to be issued a
Bonding Facility Letter of Credit (or provide a third party
commercial surety bond or deposit cash) in the amount of $3.2
million to secure their reclamation obligations in Illinois;
(iii) prohibits IDNR from seeking additional collateral or
taking other adverse action respecting the Illinois Mine Debtors'
mining permits on account of the Illinois Mine Debtors' ability to
comply with reclamation bonding obligations;
(iv) requires the Illinois Mine Debtors to use their reasonable
best efforts to reduce the Illinois Reclamation Bond Amount by $20
million;
(v) requires all reclamation activities of the Illinois Mine
Debtors to be monitored by an independent consultant retained at
the Illinois Mine Debtors' expense; and
(vi) provides for quarterly reclamation activity status
meetings between the IDNR and the Illinois Mine Debtors.
About Peabody Energy Corporation
Headquartered in St. Louis, Missouri, Peabody Energy Corporation
claims to be the world's largest private-sector coal company. As
of Dec. 31, 2014, the Company owned interests in 26 active coal
mining operations located in the United States (U.S.) and
Australia. The Company has a majority interest in 25 of those
mining operations and a 50% equity interest in the Middlemount
Mine
in Australia. In addition to its mining operations, the Company
markets and brokers coal from other coal producers, both as
principal and agent, and trade coal and freight-related contracts
through trading and business offices in Australia, China, Germany,
India, Indonesia, Singapore, the United Kingdom and the U.S.
Peabody posted a net loss of $1.988 billion for 2015, wider from
the net loss of $777 million in 2014 and the $513 million net loss
in 2013.
At Dec. 31, 2015, the Company had total assets of $11.02 billion
against $10.1 billion in total liabilities, and stockholders'
equity of $919 million.
On April 13, 2016, Peabody Energy Corp. and 153 affiliates filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code. The 154 cases are pending joint
administration before the Honorable Judge Barry S. Schermer under
Case No. 16-42529 in the U.S. Bankruptcy Court for the Eastern
District of Missouri.
As of the Petition Date, PEC has approximately $4.3 billion in
outstanding secured debt obligations and $4.5 billion in
outstanding unsecured debt obligations.
The Debtors tapped Jones Day as general counsel; Armstrong,
Teasdale LLP as local counsel; Lazard Freres & Co. LLC and
investment banker Lazard PTY Limited as investment banker; FTI
Consulting, Inc., as financial advisors; and Kurtzman Carson
Consultants, LLC, as claims, ballot and noticing agent.
The Office of the U.S. Trustee on April 29 appointed seven
creditors of Peabody Energy Corp. to serve on the official
committee of unsecured creditors. The Committee retained Morrison
& Foerster LLP as counsel, Spencer Fane LLP as local counsel,
Curtis, Mallet-Prevost, Colt & Mosle LLP as conflicts counsel,
Blackacre LLC as its independent expert, and Berkeley Research
Group, LLC, as financial advisor.
PEAK WEB: Hires Isler Northwest as Accountant
---------------------------------------------
Peak Web LLC, seeks authority from the U.S. Bankruptcy Court for
the District of Oregon to employ Isler Northwest LLC as accountants
to the Debtor.
Peak Web requires Isler Northwest to:
a. perform the audit of the Debtor's 401(k) Plan; and
b. prepare the Accountant's Report and other related documents
and filings required by the U.S. Department of Labor.
Isler Northwest will be paid at these hourly rates:
Stephanie Marcella $335
Cherie Studer $210
Amanda Taylor $170
Dustin Hollabaugh $160
Charles Clarke $140
Theresa Joyce $140
Isler Northwest will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Stephanie Marcella, member of Isler Northwest LLC, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Isler Northwest can be reached at:
Stephanie Marcella
ISLER NORTHWEST LLC
1300 SW 5th Ave, Suite 2900
Portland, OR 97201
Tel: (503) 224-5321
About Peak Web
Headquartered in Oregon, Peak Web, LLC, doing business as Peak
Hosting, is a managed-service company that provides the servers,
storage, network, datacenter, and staff for some of the largest
online businesses. Peak's operations and engineering teams
currently support 26 customers in industries spanning online and
mobile gaming, finance, real estate, consulting, and big data
companies. Peak has 50% of its data center pre-built and ready for
new customers. This equates to about 100 racks of space, which can
accommodate approximately 2,000 additional servers for the
expansion of new and existing customers.
Peak Web sought Chapter 11 creditor protection (Bankr. D. Ore. Case
No. 16-32311) on June 13, 2016. The petition was signed by Jeffrey
E. Papen as CEO. The case is assigned to Judge Peter C.
McKittrick.
The Debtor estimated assets in the range of $100 million to $500
million and liabilities of up to $100 million. The Debtor has
engaged Tonkon Torp LLP as counsel, Cascade Capital Group, LLC as
consultant and Susman Godfrey LLP and Ropers Majeski Kohn Bentley
PC as its litigation counsel.
The Official Committee of Unsecured Creditors of Peak Web LLC
retained Ball Janik LLP as counsel.
PHOTOMEDEX INC: Amends Purchase Agreement With Pharma Cosmetics
---------------------------------------------------------------
PhotoMedex, Inc., and its subsidiary PhotoMedex Technology, Inc.,
entered into a First Amendment to the Asset Purchase Agreement
between the Company and PTECH, and Pharma Cosmetics Laboratories
Ltd., an Israeli corporation, and its subsidiary Pharma Cosmetics
Inc., a Delaware corporation, under which PHARMA is to acquire
PTECH's Neova skincare business. This transaction was previously
reported on a Current Report filed on Form 8-K on Aug. 30, 2016.
The First APA Amendment provides that PHARMA will hold in trust the
sum of $50,000 until such time as the Company and PTECH obtain a
signed Worldwide Ttrademark Co-existence Agreement and Consent to
Assignment from Singer-Kosmetik GmbH, a German company formed under
the laws of Germany, regarding the use by both Singer and the
Transferred Business of their respective trademarks.
Also on Sept. 15, 2016, the Company and PTECH entered into a First
Amendment to the Transition Services Agreement between the Company,
PTECH and PHARMA, under which the Company and PTECH will continue
to provide PHARMA with certain accounting, benefit, payroll,
regulatory, IT support and other services for periods ranging from
approximately three to up to nine months following the closing.
During those periods, PHARMA will arrange to transition the
services it receives to its own personnel. PHARMA was also to have
the right to continue occupying certain portions of PHMD's Willow
Grove, Pennsylvania facility and the Orangeburg, New York facility
of PHMD's Radiancy, Inc. subsidiary for a period of time. As a
result of the First TSA Amendment, PHARMA will not have the right
to occupy portions of the Pennsylvania facility.
About PhotoMedex
PhotoMedex, Inc., is a global health products and services company
providing integrated disease management and aesthetic solutions to
dermatologists, professional aestheticians, ophthalmologists,
optometrists, consumers and patients. The Company provides
proprietary products and services that address skin conditions
including psoriasis, vitiligo, acne, actinic keratosis, photo
damage and unwanted hair, as well as fixed-site laser vision
correction services at our LasikPlus(R) vision centers.
PhotoMedex and its subsidiaries has entered into a second
amended and restated forbearance agreement with the lenders that
are parties to the credit agreement dated May 12, 2014, and with JP
Morgan Chase, as administrative agent for the Lenders pursuant to
which the Lender have agreed to forbear from exercising their
rights and remedies with respect to certain events of default from
Aug. 25, 2014, until April 1, 2016, or earlier if an event of
default occurs, according to a document filed with the Securities
and Exchange Commission in March 2015.
Photomedex reported a net loss of $34.6 million on $75.9 million of
revenues for the year ended Dec. 31, 2015, compared to a net loss
of $121 million on $133 million of revenues for the year ended Dec.
31, 2014.
As of June 30, 2016, Photomedex had $28.2 million in total assets,
$22.6 million in total liabilities and $5.56 million in total
stockholders' equity.
PHOTOMEDEX INC: Closes Asset Purchase Agreement with PHARMA
-----------------------------------------------------------
PhotoMedex, Inc. and its subsidiary PhotoMedex Technology, Inc.
completed the disposition of PTECH's Neova skincare business
to Pharma Cosmetics Laboratories Ltd. On Sept. 16, 2016, pursuant
to the terms of the Asset Purchase Agreement, PHARMA acquired all
of the assets related to and associated with the Transferred
Business, including but not limited to intellectual property,
product inventory, accounts receivable and payable, and other
tangible and intangible assets connected with the conduct of that
Transferred Business. In exchange for these assets, the Company
received a net payment from PHARMA of $1.5 million, subject to a
post-closing working capital adjustment, pursuant to which the
amount paid to the Company at closing will be adjusted up or down
by an amount equal to the difference between the defined actual
working capital and the target net working capital of $200,000.
Target working capital is defined as the net Accounts Receivable
less trade Accounts Payable related to the Transferred Business as
of the closing date.
An additional $250,000 was placed into an escrow fund held by U.S.
Bank National Association as Escrow Agent. The funds will remain
in escrow for one year following the closing of the transaction.
Also, PHARMA has withheld $50,000 at closing pending the Company's
obtaining certain agreements.
About PhotoMedex
PhotoMedex, Inc., is a global health products and services company
providing integrated disease management and aesthetic solutions to
dermatologists, professional aestheticians, ophthalmologists,
optometrists, consumers and patients. The Company provides
proprietary products and services that address skin conditions
including psoriasis, vitiligo, acne, actinic keratosis, photo
damage and unwanted hair, as well as fixed-site laser vision
correction services at our LasikPlus(R) vision centers.
PhotoMedex and its subsidiaries has entered into a second
amended and restated forbearance agreement with the lenders that
are parties to the credit agreement dated May 12, 2014, and with JP
Morgan Chase, as administrative agent for the Lenders pursuant to
which the Lender have agreed to forbear from exercising their
rights and remedies with respect to certain events of default from
Aug. 25, 2014, until April 1, 2016, or earlier if an event of
default occurs, according to a document filed with the Securities
and Exchange Commission in March 2015.
Photomedex reported a net loss of $34.6 million on $75.9 million of
revenues for the year ended Dec. 31, 2015, compared to a net loss
of $121 million on $133 million of revenues for the year ended Dec.
31, 2014.
As of June 30, 2016, Photomedex had $28.2 million in total assets,
$22.6 million in total liabilities and $5.56 million in total
stockholders' equity.
PICKENPACK HOLDING: Chapter 15 Case Summary
-------------------------------------------
Chapter 15 Debtors:
Pickenpack Holding Germany GmbH 16-12681
Lner Rennbahn 9
Lneburg 21339
Germany
Pickenpack Europe GmbH 16-12682
Pickenpack Production Luneburg GmbH 16-12683
TST The Seafood Traders GmbH 16-12684
Type of Business: Processor and trader of deep-frozen fish
products
Authorized Representative: Friedrich von Kaltenborn-Stachau
Chapter 15 Petition Date: September 22, 2016
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. James L. Garrity Jr.
Chapter 15 Petitioner's Counsel: Lynn P. Harrison, III, Esq.
Turner P. Smith, Esq.
Peter J. Buenger, Esq.
CURTIS, MALLET-PREVOST, COLT &
MOSLE, LLP
101 Park Avenue
New York, NY 10178-0061
Tel: (212) 696-6028
Fax: (212) 697-1559
E-mail: lharrison@curtis.com
tsmith@curtis.com
pbuenger@curtis.com
Estimated Assets: Not Indicated
Estimated Debts: Not Indicated
PICKENPACK HOLDING: Seeks U.S. Recognition of German Proceedings
----------------------------------------------------------------
Friedrich von Kaltenborn-Stachau, in his capacity as insolvency
administrator of Pickenpack Holding Germany GmbH, has filed a
voluntary petition under Chapter 15 of the Bankruptcy Code in the
U.S. Bankruptcy Court for the Southern District of New York.
The Petitioner seeks recognition in the United States of
insolvency proceedings of Pickenpack Holding and subsidiaries
Pickenpack Europe GmbH, Pickenpack Production Luneburg GmbH, and
TST The Seafood Traders GmbH pending in Germany.
The Chapter 15 case was commenced primarily to establish standing
to assert certain claims in the courts of the United States, to
facilitate the German Proceeding, and to protect the Pickenpack
Entities's rights and claims in the United States.
Although the Pickenpack Entities do not have a place of business in
the United States, they said they have property consisting of a
retainer held in a client trust account with Curtis, in New York,
and intangible property in the form of claims and causes of
action.
"The Petitioner believes that the German Proceeding, with the
assistance of this Court, offers the best means of liquidating the
Company and achieving a global, equitable resolution of the
Company's liabilities," said Lynn P. Harrison, III, Esq., at
Curtis, Mallet-Prevost, Colt & Mosle LLP, one of the Petitioner's
attorneys.
In December last year, the Pickenpack Entities filed an insolvency
proceeding with the Local Court of Luneburg, Germany, under the
Insolvency Statute of Oct. 5, 1994, as last amended by Article 19
of the Act of Dec. 20, 2011, citing illiquidity and huge amount of
debt. The German Court issued an order opening the German
Proceedings over the assets of the Pickenpack Entities on March 1,
2016, and appointing von Kaltenborn-Stachau as the Insolvency
Administrator.
Prior to the German Proceedings, the Pickenpack Entities were one
of the leading producers of deep-frozen fish and seafood products
(imported from the U.S., Russia or China) for the "private label
market" in Germany and Europe. Due to the lack of currency hedging
between the U.S. dollar and Euro, the business generated losses,
von Kaltenborn-Stachau said.
In 2013, the management of the Pickenpack Entities made efforts to
restructure in order to reduce costs and expenses. Part of this
restructuring process was the relocation of production capacity
from Luneburg to Riepe which resulted in the reduction of headcount
by 140 employees. Athough material savings in costs and expenses
were achieved, the restructuring was not sustainable, added von
Kaltenborn-Stachau.
Shortly after his appointment, the Petitioner brought in Ernst &
Young GmbH to solicit potential purchasers for the Pickenpack
Entities. E&Y subsequently contacted more than 100 potential
interested parties of which seven investors submitted offers.
Because of the lack of customer approval and insufficient offer
amounts, these offers did not result in a sale of the assets,
according to court papers.
Based on a determination that the ongoing costs required to
continue the business and operations outweighed the costs of a
closure, the Petitioner decided, with the consent of the creditors'
committees for each of the Pickenpack Entities, on the closure of
the business and operations for each of the Pickenpack Entities.
In June 2016, the Petitioner closed down operations for PP
Production and PP Europe in Luneburg and sold all assets of TST to
Trident, which continues to operate TST in Riepe.
Founded in 1906, the Pickenpack Entities were established as a
fishery company devoted to the catching, processing and selling of
fish. In the 1950s, the business was changed from a fishery to the
processing and trading of deep-frozen fish products and eventually
established a processing factory in Luneburg, Germany in 1975. In
2013, the business was expanded by the addition of TST, which was
acquired by PP Holding from Leuchtturm Beteiligungs- und Holding
Germany GmbH. TST's most significant asset was a food factory in
Riepe, Germany.
The Pickenpack Entities business consisted of processing facilities
in Luneburg, Germany (run by PP Production) and Riepe, Germany (run
by TST) producing approximately 75,000 tons of deep-frozen fish per
year in the aggregate. Customers were located within the European
Union, with the majority of the customers being Germany's major
retail companies and conglomerates.
PIONEER BREAKER: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Pioneer Breaker & Control Supply, Co.
2216-B Rutland Dr.
Austin, TX 78758
Case No.: 16-11095
Chapter 11 Petition Date: September 21, 2016
Court: United States Bankruptcy Court
Western District of Texas (Austin)
Judge: Hon. Tony M. Davis
Debtor's Counsel: William T. Peckham, Esq.
LAW OFFICE OF WILLIAM T. PECKHAM
1104 Nueces Street, Suite 104
Austin, TX 78701-2106
Tel: (512)472-8126
Fax: 512-47801790
E-mail: wpeckham@peckhamlawaustin.com
Total Assets: $501,000
Total Debts: $1.58 million
The petition was signed by Elod Tamas Toldy, president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/txwb16-11095.pdf
PIONEER ENERGY: Presented at Johnson Rice Energy Conference
-----------------------------------------------------------
From time to time, senior management of Pioneer Energy Services
meets with groups of investors and business analysts. The Company
prepared slides in connection with management's participation in
those meetings and participation in the Johnson Rice & Company 2016
Energy Conference held on Sept. 21, 2016. The slides provide an
update on the Company's operations and certain recent developments,
which among others, include the following:
* Drilling
-- August quarter-to-date utilization was 36%
-- Current utilization is 39% which does not include one rig
currently mobilizing to Appalachia and one rig mobilizing
in Colombia. Both rigs are expected to begin work in
September.
* Well Servicing
-- August quarter-to-date utilization was 41% as compared to
40% in the prior quarter
-- September month-to-date utilization is 44%
* Coiled Tubing
-- August quarter-to-date utilization was 18% as compared to
20% in the prior quarter
-- September month-to-date utilization is 31%
The slides are available for free at https://is.gd/WQiVhd
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 million in 2015
following a net loss of $38 million in 2014.
As of March 31, 2016, Pioneer Energy had $787 million in total
assets, $471 million in total liabilities and $315 million in total
shareholders' equity.
* * *
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.
PITNEY BOWES: Fitch Affirms 'BB' Preferred Stock Ratings
--------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating (IDR) of
Pitney Bowes Inc. and its subsidiary Pitney Bowes International
Holdings, Inc. (PBIH) at 'BBB-' and revised the Rating Outlook to
Negative from Stable.
Fitch has also assigned a 'BBB-' rating to Pitney Bowes Inc.'s
(PBI) $600 million of 3.375% senior unsecured notes due 2021. Net
offering proceeds are to be used to repay $300 million of existing
6.125% preferred stock callable in October 2016 and for general
corporate purposes including potential debt repayment.
The Negative Outlook reflects PBI's gross leverage exceeding
Fitch's negative rating threshold of 4.0x. Fitch would likely
stabilize the Outlook if the company reduces leverage below 4.0x
either through debt repayment or EBITDA growth. Although Fitch
views actions taken by the company including divesting
underperforming assets and consequent debt reduction as positive,
continued headwinds in mailing and software contribute to the
Negative Outlook.
Fitch believes the ongoing secular issues will challenge the
company's ability to maintain a credit profile indicative of an
investment grade rating. If these issues continue over the
near-term, Fitch will likely reconsider the current 4.0x maximum
total leverage threshold for the current rating, which would
increase negative rating pressure.
KEY RATING DRIVERS
Market Leadership: The ratings are supported by PBI's significant
and entrenched market position in the core U.S. Mailing business,
the necessity of mail equipment and services to conduct business
across all industries, and the diversity of the company's customer
base, from both an industry and size perspective.
Top Line Declines: Fitch continues to be concerned with overall
top-line declines, driven by weakness in its small and medium-sized
business (SMB) segment, although the declines have been moderating.
In constant currency revenue, SMB ended the 2015 fiscal year down
5%, driven by continuing declines in installed meters and weakness
in international markets. The Enterprise business was flat, as
lower service revenue in production mail was partially offset by
increased volumes in presort services. Digital commerce solutions
increased 9%, driven by the acquisition of Borderfree, Inc. and
higher volume of packages shipped from the U.K. Within Digital
commerce, software revenues declined 10% on a reported basis in
2015 due to sales execution issues.
Cyclical Pressures Compound Secular: Fitch believes secular
pressures accelerate PBI's challenges, as customers could look to
digital mailing as a cost-reduction mechanism, and choose to keep
existing equipment. The acceleration of digital substitution for
physical transaction mail results in reduced need for PBI's mailing
equipment. Although the majority of PBI's revenue is not directly
tied to mail volume, Fitch believes continued mail volume declines
will drive reduced equipment needs, whether in terms of size,
number or functionality.
Transition Underway: Fitch views PBI's initiatives to position
itself more as a digital services company positively, and they
continue to show traction. For FY 2015, Digital Commerce Solutions
constituted 21% of total revenue, up from 14% in FY 2014. However,
in the near term, these initiatives will be challenged to offset
the declines in the high-margin North American mailing segment.
While these initiatives could cannibalize existing physical
business, Fitch believes such a strategy is unavoidable, given
ongoing digital substitution.
Conservative Financial Policy: Although PBI has stated its
commitment to investment grade metrics, they have not publicly
defined metrics. Fitch believes that various actions taken over the
last few years demonstrate PBI's commitment. PBI has reduced its
total debt (including preferred securities) from $4.5 billion in
2011 to $3.4 billion at June 30, 2016. Unadjusted pro forma gross
total leverage has declined from 4.7x in 2011 to approximately 4.3x
and core leverage has gone from 4.3x to approximately 3.9x pro
forma for the issuance (assuming the remaining $300 million of net
proceeds is used for debt repayment after the preferred stock is
repaid).
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for PBI include:
-- flat to low single digit top line improvement on a constant
currency basis;
-- Minimal margin improvement as a majority of the company's
expected cost savings have been realized;
-- No material change to stated dividend;
-- $215 million of share repurchases in 2016;
-- Majority of maturities are refinanced.
RATING SENSITIVITIES
Positive: Given the secular challenges facing the company, Fitch
does not expect positive rating momentum in the near term.
Sustainable revenue growth driven by the company's various product
initiatives coupled with a commitment to continue reducing absolute
levels of debt may drive positive rating momentum.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- Lack of traction in the company's digital initiatives and
other growth businesses amid ongoing declines in the
traditional physical business;
-- A change in the company's strategy indicating a willingness
to operate above 4.0x;
-- Indications of a more aggressive financial policy.
LIQUIDITY
PBI's liquidity position at June 30, 2016 was solid, consisting of
$676 million of cash on hand and an undrawn $1 billion revolving
credit facility maturing in January 2020, which backstops the
company's $1 billion commercial paper program. Liquidity is further
supported by the company's annual FCF generation.
Fitch calculates FY 2015 FCF at $180 million. Fitch's current base
case projections estimate annual FCF at $150 million-$250 million
for the rating horizon. Fitch's FCF calculation deducts PBI's
common and preferred dividend payments and does not add back cash
flows associated with restructuring payments, and tax payments
related to sales of leveraged lease assets. PBI faces material
annual maturities over the next several years. However, Fitch
recognizes that the company can address a significant portion of
its maturities organically with its pre-dividend FCF generation and
accessing the capital markets.
FULL LIST OF RATING ACTIONS
Fitch has assigned the ratings for Pitney Bowes Inc. as follows:
-- $600 million senior unsecured notes due 2021 'BBB-';
Fitch has affirmed the ratings as follows:
Pitney Bowes
-- IDR at 'BBB-';
-- Senior Unsecured revolving credit facility at 'BBB-';
-- Senior unsecured term loan at 'BBB-';
-- Senior unsecured notes at 'BBB-';
-- Short-term IDR at 'F3';
-- Commercial paper at 'F3'.
PBIH
-- Long-term IDR at 'BBB-';
-- Preferred stock at 'BB'.
The Rating Outlook is Negative.
PLAZA LAS AMERICAS: Hires Jose Calderon as Attorney
---------------------------------------------------
Plaza Las Americas Taco Maker Corp., seeks authority from the U.S.
Bankruptcy Court for the District of Puerto Rico to employ Jose R.
Fuentes Calderon, Esq. as attorney to the Debtor.
Plaza Las Americas requires Mr. Calderon to:
a. advise the Debtor with respect to its duties, powers and
responsibilities in the bankruptcy case under the laws of
the United States and Puerto Rico in which the Debtor in
Possession conducts its operations, does business, or is
involved in litigation;
b. advise the Debtor in connection with a determination
whether a reorganization is feasible and, if not, helping
debtor in the orderly liquidation of its assets;
c. assist the Debtor with respect to negotiations with
creditors for the purpose of arranging the orderly
liquidation of assets or for proposing a viable plan of
reorganization;
d. prepare on behalf of the Debtor the necessary complaints,
answers, orders, reports, memoranda of law and any other
legal papers or documents;
e. appear before the Bankruptcy Court, or any court in which
the Debtor asserts a claim interest or defense directly or
indirectly related to the bankruptcy case;
f. perform such other legal services for the Debtor as may be
required in the bankruptcy proceedings or in connection
with the operation and involvement with the Debtor's
business, including but not limited to notarial services;
and
g. employ other professional services, if necessary.
Mr. Calderon will be paid at the hourly rate of $175, and a
retainer in the amount of $2,000.
Mr. Calderon will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Jose R. Fuentes Calderon, Esq., assured the Court that the firm is
a "disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtors and their/its estates.
Mr. Calderon can be reached at:
Jose R. Fuentes Calderon, Esq.
PO Box 2419
Isabela, PR 00662
Tel: (787) 608-5967
E-mail: jfuentes@fuenteslawpr.com
About Plaza Las Americas
Plaza Las Americas Taco Maker, Corp., filed a Chapter 11 bankruptcy
petition (Bankr. D.P.R. Case No. 16-03638) on May 5, 2016,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by Jesus Santiago Malavet, Esq., of Santiago
Malavet and Santiago Law Office.
No official committee of unsecured creditors has been appointed in
the case.
PLY GEM: S&PP Raises CCR to 'B+', Outlook Stable
------------------------------------------------
S&P Global Ratings said it raised its corporate credit rating on
Ply Gem Industries to 'B+' from 'B'. The outlook is stable.
S&P also raised its issue-level rating on Ply Gem's $430 million
term loan due 2021 to 'BB' (two notches higher than the corporate
credit rating) from 'B+' and revised the recovery rating to '1'
from '2' on the term loan. The '1' recovery rating indicates S&P's
expectation of very high (90% to 100%) recovery in the event of a
payment default.
At the same time, S&P raised its issue-level rating on Ply Gem's
$650 million senior unsecured notes due 2022 to 'B' (one notch
lower than the corporate credit rating) from 'CCC+'. S&P is
revising the recovery rating on the notes to '5' from '6',
indicating its expectation of modest (10% to 30%, upper end of the
range) recovery for noteholders in the event of a payment default.
"The stable outlook reflects our view that Ply Gem will experience
sales growth and margin improvement in 2016 due to pricing, mix,
and positive trends in new home construction and repair and remodel
activity," said S&P Global Ratings credit analyst Pablo Garces.
"We expect adjusted leverage will remain at or below 4.5x over the
next 12 months, with adjusted EBITDA in the $240 million to $260
million range."
S&P could lower the rating if Ply Gem's leverage approached 5x or
if liquidity became constrained to the point S&P would consider
less than adequate over the next 12 months. Such events could
occur due to an unexpected contraction in new home construction,
pricing weakness, or commodity cost spikes. S&P could envision a
downgrade if such events eroded EBITDA margins by more than 100
basis points compared with our current assumption over the next 12
months, causing leverage to increase toward 5x. While S&P
considers it less likely, a negative action could take place if Ply
Gem or its owners took on a more aggressive financial policy, such
as increasing debt leverage to 5x to fund an acquisition or to pay
a dividend.
While S&P views an upgrade as unlikely over the next 12 months, it
could raise the rating if Ply Gem's sales and EBITDA exceeded S&P's
baseline scenario, causing leverage to fall to less than 4x and if
S&P believed its owners were committed to maintaining leverage at
such levels over the next 12 months. Such events would likely need
to coincide with Ply Gem's private equity's ownership being reduced
to less than 40% in order for S&P to consider a further upgrade.
PRO-FIT DEVELOPMENT: Hires Weiss as Certified Public Accountant
---------------------------------------------------------------
Pro-Fit Development, Inc., seeks authority from the U.S. Bankruptcy
Court for the Middle District of Florida to employ Frank C. Weiss,
CPA, PA as certified public accountant to the Debtor.
Pro-Fit Development requires Weiss to:
a. prepare and file tax returns and conduct tax research;
b. perform normal accounting and other accounting services as
required by the Debtor;
c. prepare court ordered reports, including the monthly and
quarterly operating reports required by the U.S. Trustee;
and
d. assist with the preparation of documents necessary for the
Debtor's plan of reorganization.
Weiss will be paid at these hourly rates:
Frank C. Weiss $150
Staff $65
Weiss will be paid a retainer in the amount of $3,000.
Weiss will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Frank C. Weiss, CPA, member of the firm Frank C. Weiss, CPA, PA,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Weiss can be reached at:
Frank C. Weiss
FRANK C. WEISS, CPA, PA
3233 East Bay Dr., Suite 102
Largo, FL 33771
Tel: (727) 523-8762
About Pro-Fit Development
Pro-Fit Development, Inc. filed a chapter 11 petition (Bankr. M.D.
Fla. Case No. 16-06717) on Aug. 4, 2016. The Debtor listed total
assets of $1.53 million and total liabilities of $1.41 million. The
Debtor is represented by Buddy D. Ford, Esq., Jonathan A. Semach,
Esq., and J. Ryan Yant, Esq., at Buddy D. Ford, P.A.
The case is assigned to Judge Rodney K. May.
No official committee of unsecured creditors has been appointed in
the case.
RALSTON, NE: S&P Lowers Rating on 2011/2012 GO Arena Bonds to BB
----------------------------------------------------------------
S&P Global Ratings lowered its underlying rating (SPUR) on Ralston,
Neb.'s series 2011A, 2011B, 2012A, and 2012B general obligation
(GO) arena bonds seven notches to 'BB' from 'A+'. S&P also placed
the rating on CreditWatch with negative implications pending
receipt of documents surrounding the city's issuance of privately
placed cash flow notes.
"The rating action reflects our view of the city's ongoing
structural imbalance that is likely to persist and reflects a
materially weaker financial position stemming from its
underperforming arena," said S&P Global Ratings credit analyst
Blake Yocom. It also reflects the need to cash flow borrow to
cover arena expenditures and without it, the city's short-term
financial and liquidity position would be worse. The city's
liquidity is very weak, coupled with what S&P views as weak
management conditions. Furthermore, Ralston is overleveraged,
reflected in a high overall debt burden as a percentage of market
value. The city's high debt burden will likely continue to
pressure its finances and taxing flexibility.
"Should the fiscal 2016 audit show persistent financial
deterioration, compounded with the budgetary stress caused by the
arena and the city's impaired overall liquidity position with
potentially reduced market access, there could be additional
downward rating actions," added Mr. Yocom.
The CreditWatch reflects S&P's view that there is at least a
one-in-two likelihood of a rating change within the next 90 days.
Failure to provide requested information in connection to the
city's privately placed cash flow notes will likely lead to
additional negative rating action. After receipt of the documents,
S&P will assess for any potential effect on the city's liquidity.
The city's full faith and credit unlimited ad valorem tax GO pledge
secures the outstanding bonds. Ralston used 2011 and 2012 bond
proceeds to construct an ice arena for recreational ice sports,
spectator hockey games, collegiate basketball, and other public
indoor sporting events and performances. Voters authorized $29
million for the arena and related projects in May 2011 with more
than 80% approval. The city expected that revenues from the
project would be sufficient to cover the debt service on the bonds
and that it would not need to levy taxes. However, arena revenues
have fallen short and the city began to increase property and other
taxes, albeit modestly, in 2015.
S&P considers Ralston's economy adequate. The city, with an
estimated population of 6,202, is in Douglas County in the
Omaha-Council Bluffs metropolitan area. It is completely
surrounded by the city of Omaha.
RINCON ISLAND: Hires Claro Group to Help in DIP Loan Talks
----------------------------------------------------------
Rincon Island Limited Partnership seeks authority from the U.S.
Bankruptcy Court for the Northern District of Texas to employ Claro
Group, LLC and Richard S. Schmidt as special purpose fiduciary to
negotiate a DIP Financing for the Debtor.
Rincon Island requires Claro Group and Mr. Schmidt to:
a. assist the Debtor in the negotiation of a debtor-in-
possession loan between the Debtor and its affiliates;
b. provide objective and independent analysis in connection
with the loan; and
c. provide additional support personnel if needed by the
Debtor.
Claro Group will be paid at these hourly rates:
Richard S. Schmidt $450
Other Members $90-$495
Claro Group will be paid a retainer in the amount of $20,000.
Claro Group will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Richard S. Schmidt, member of Claro Group, LLC, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Claro Group can be reached at:
Richard S. Schmidt
CLARO GROUP, LLC
1221 McKinney Street, Suite 2850
Houston, TX 77010
Tel: (713) 454-7730
Fax: (713) 236-0033
About Rincon Island Limited Partnership
Rincon Island Limited Partnership filed a Chapter 11 petition
(Bankr. N.D. Tex. Case No. 16-33174), on August 8, 2016. The
petition was signed by Susan M. Whalen, SVP and general counsel of
general partner. The case is assigned to Judge Harlin DeWayne Hale.
The Debtor's counsel is David A. Zdunkewicz, Esq. at Andrews Kurth,
LLP.
At the time of filing, the Debtor estimated assets at $50 million
to $100 million and liabilities at $100 million to $500 million.
No official committee of unsecured creditors has been appointed in
the case.
RMS TITANIC: Creditors' Panel Hires Storch Amini as Attorney
------------------------------------------------------------
The Official Committee of Unsecured Creditors of RMS Titanic, Inc.,
et al., seeks authorization from the U.S. Bankruptcy Court for the
Middle District of Florida to retain Storch Amini & Munves PC as
attorneys to the Committee, nunc pro tunc to September 2, 2016.
The Committee requires Storch Amini to:
a. render legal advice regarding the Committee's organization,
duties, and powers in the bankruptcy case;
b. assist the Committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of
the Debtors, the operation of the Debtor's business and the
desirability of continuing the same, the potential sale of
the Debtor's assets, and any other matter relevant to the
case or the formulation and analysis of any Chapter 11
plan;
c. attend meetings of the Committee and meetings with the
Debtors, the Official Committee of Equity Security Holders,
and their respective attorneys and other professionals;
d. represent the Committee in hearings before the bankruptcy
Court and in related proceedings, as requested by the
Committee;
e. assist the Committee in preparing all necessary motions,
applications, objections, reports, and other pleadings in
connection with the administration of the case; and
f. provide other legal assistance as the Committee may deem
necessary and appropriate.
Storch Amini will be paid at these hourly rates:
Avery Samet $550
Jeffrey Chubak $500
Associates $330-$500
Paralegals $110-$135
Storch Amini will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Storch Amini previously represented plaintiffs in a breach of
fiduciary duty class action by holders of RMS Titanic, Inc. common
equity against RMS Titanic Inc., its former President, CEO, and
Director, Arnie Geller, and its former CFA and Diretor, Gerald
Couture, captioned Shuttle v. Geller, Case No. 03-cv-2515 (M.D.
Fla., Tama Div.). The litigation ended on 2006.
Storch Amini also previously represented defendants Bill Willard,
Catherine Nichols, and Michelle Turman in a defamation action
captioned RMS Titanic, Inc. v. Willard, Index No. 124108-2001 (Sup.
Ct. N.Y. Co.). The litigation ended on 2003.
Jeffrey Chubak, member of the law firm of Storch Amini & Munves PC,
assured the Court that the firm is not prohibited by Bankruptcy
Rule 5002, and it is not related to any U.S. Bankruptcy Judge for
the Middle District of Florida or to the Office of the U.S.
Trustee.
Storch Amini can be reached at:
Avery Samet, Esq.
Jeffrey Chubak, Esq.
STORCH AMINI & MUNVES PC
140 East 45th Street, 25th Floor
New York, NY 10017
Tel: (212) 490-4100
About RMS Titanic
RMS Titanic, Inc., a wholly owned subsidiary of Premier
Exhibitions, Inc., is the only company permitted by law to recover
objects from the wreck of Titanic. The Company was granted
Salvor-In-Possession rights to the wreck of Titanic by the United
States District Court for the Eastern District of Virginia, Norfolk
Division in 1994 and has conducted eight research and recovery
expeditions to Titanic recovering approximately 5,000 artifacts.
In the summer of 2010, RMS Titanic, Inc. conducted a
ground-breaking expedition to Titanic 25 years after its discovery,
to undertake innovative 3D video recording, data gathering and
other technical measures so as to virtually raise Titanic,
preserving the legacy of the ship for all time.
About Premier Exhibitions
Premier Exhibitions, Inc. (Nasdaq: PRXI), located in Atlanta,
Georgia, is a foremost presenter of museum quality exhibitions
throughout the world. Premier is a recognized leader in developing
and displaying unique exhibitions for education and entertainment
including Titanic: The Artifact Exhibition, BODIES...The
Exhibition, Tutankhamun: The Golden King and the Great Pharaohs,
Pompeii The Exhibition, Extreme Dinosaurs and Real Pirates in
partnership with National Geographic. The success of Premier
Exhibitions, Inc. lies in its ability to produce, manage, and
market exhibitions. Additional information about Premier
Exhibitions, Inc. is available at the Company's Web site
http://www.PremierExhibitions.com/RMS Titanic and seven of its
subsidiaries filed voluntary petitions for reorganization under
Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for
the Middle District of Florida (Bankr. M.D. Fla. Proposed Lead Case
No. 16-02230) on June 14, 2016. Former Chief Financial Officer and
Chief Operating Officer Michael J. Little signed the petitions.
The Debtors estimated both assets and liabilities in the range of
$10 million to $50 million.
The Chapter 11 cases are assigned to Judge Paul M. Glenn.
Guy Gebhardt, acting U.S. trustee for Region 21, on August 24
appointed three creditors to serve on the official committee of
unsecured creditors of RMS Titanic, Inc., and its affiliates. The
Committee hired Storch Amini & Munves PC to serve as attorneys.
Thames Markey & Heekin, P.A. to act as counsel.
RMS TITANIC: Creditors' Panel Hires Thames Markey as Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors of RMS Titanic, Inc.,
et al., seeks authorization from the U.S. Bankruptcy Court for the
Middle District of Florida to retain Thames Markey & Heekin, P.A.
as counsel to the Committee, effective as of September 1, 2016.
The Committee requires Thames Markey to:
a. advise the Committee with respect to its rights, powers and
duties in the bankruptcy case;
b. assist and advise the Committee in its consultations with
the Debtors regarding the administration of the bankruptcy
case;
c. assist the Committee in analyzing the claims of the
Debtor's secured and unsecured creditors;
d. assist with the Committee's investigation of the acts,
conduct, assets, liabilities, and financial condition of
the Debtors and of the operation of their business;
e. investigate and pursue the substantive consolidation of the
Debtor's estates;
f. pursue avoidance actions which the Debtors refuse to
pursue;
g. assist the Committee in its analysis of, and negotiations
with, the Debtors or any third party concerning matters
related to, the terms of a Chapter 11 Plan of the Debtors;
h. assist and advise the Committee with respect to its
communications with the general creditor body regarding
significant matters in the bankruptcy case;
i. represent the Committee at all hearings and other
proceedings;
j. review and analyze all applications, orders, statements of
operations, and schedules filed with the bankruptcy Court
and advise the Committee as to their propriety;
k. assist the Committee in preparing the pleadings and
applications as may be necessary in furtherance of the
Committee's interests and objectives; and
l. perform such other legal services as may be required and
are deemed to be in the interests of the Committee in
accordance with the Committee's powers and duties under the
Bankruptcy Code.
Thames Markey will be paid at these hourly rates:
Richard R. Thames, Attorney $465
Bradley R. Markey, Attorney $370
Robert A. Heekin, Attorney $335
Lauren W. Box, Attorney $265
Loretta A. Talbert, Attorney $245
Amy K. Bishop, Paralegal $165
Thames Markey will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Richard R. Thames, member of the law firm of Thames Markey &
Heekin, P.A., assured the Court that the firm has no known
connection with the Debtor, its creditors or any other party in
interest, their respective attorneys and accountants, the U.S.
Trustee or any person employed in Office of the the U.S. Trustee.
Thames Markey can be reached at:
Richard R. Thames, Esq.
Robert A. Heekin, Jr., Esq.
THAMES MARKEY & HEEKIN, P.A.
50 N. Laura Street, Suite 1600
Jacksonville, FL 32202
Tel: (904) 358-4000
Fax: (904) 358-4001
E-mail: rrt@tmhlaw.net
rah@tmhlaw.net
About RMS Titanic
RMS Titanic, Inc., a wholly owned subsidiary of Premier
Exhibitions, Inc., is the only company permitted by law to recover
objects from the wreck of Titanic. The Company was granted
Salvor-In-Possession rights to the wreck of Titanic by the United
States District Court for the Eastern District of Virginia, Norfolk
Division in 1994 and has conducted eight research and recovery
expeditions to Titanic recovering approximately 5,000 artifacts.
In the summer of 2010, RMS Titanic, Inc. conducted a
ground-breaking expedition to Titanic 25 years after its discovery,
to undertake innovative 3D video recording, data gathering and
other technical measures so as to virtually raise Titanic,
preserving the legacy of the ship for all time.
About Premier Exhibitions
Premier Exhibitions, Inc. (Nasdaq: PRXI), located in Atlanta,
Georgia, is a foremost presenter of museum quality exhibitions
throughout the world. Premier is a recognized leader in developing
and displaying unique exhibitions for education and entertainment
including Titanic: The Artifact Exhibition, BODIES...The
Exhibition, Tutankhamun: The Golden King and the Great Pharaohs,
Pompeii The Exhibition, Extreme Dinosaurs and Real Pirates in
partnership with National Geographic. The success of Premier
Exhibitions, Inc. lies in its ability to produce, manage, and
market exhibitions. Additional information about Premier
Exhibitions, Inc. is available at the Company's Web site
http://www.PremierExhibitions.com/RMS Titanic and seven of its
subsidiaries filed voluntary petitions for reorganization under
Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for
the Middle District of Florida (Bankr. M.D. Fla. Proposed Lead Case
No. 16-02230) on June 14, 2016. Former Chief Financial Officer and
Chief Operating Officer Michael J. Little signed the petitions.
The Debtors estimated both assets and liabilities in the range of
$10 million to $50 million.
The Chapter 11 cases are assigned to Judge Paul M. Glenn.
Guy Gebhardt, acting U.S. trustee for Region 21, on August 24
appointed three creditors to serve on the official committee of
unsecured creditors of RMS Titanic, Inc., and its affiliates. The
Committee hired Storch Amini & Munves PC to serve as attorneys.
Thames Markey & Heekin, P.A. to act as counsel.
ROSARIO MENDOZA: To Pay Nationstar Mortgage Claim in 30 Years
-------------------------------------------------------------
Rosario Mendoza filed with the Bankruptcy Court in Nevada an
Amended Disclosure Statement and Amended Plan of Reorganization.
Under the Plan, secured creditors are classified into Class 1.
Unsecured creditors are classified in two separate classes, which
include Classes 2 (Priority Unsecured Creditors) and 3 (General
Unsecured Creditors). As of the date of the Disclosure Statement,
the Debtor has no Priority or General Unsecured Creditors.
Class 1 consists of the Secured Claim of Nationstar Mortgage, LLC
against the Debtor's property located at 5136 Santo Avenue, Las
Vegas, NV 89108, which is secured by a lien against the Debtor's
residential property. The holder of the allowed Class 1 Secured
Claim shall be impaired and paid in accordance with its election to
be treated as fully secured under Section 1111(b) of the Bankruptcy
Code. The Debtor shall make monthly payments of $636.10 at 0.00%
interest over 30 years until the total claim of $228,994.50 is paid
in full.
The Debtor is represented in the case by:
Gina M. Corena, Esq.
Law Offices of Gina M. Corena, Esq.
400 S. 4TH Street Suite 500
Las Vegas, NV 89101
A copy of the Debtor's Amended Disclosure Statement dated Sept. 8,
2016, is available at:
http://bankrupt.com/misc/nvb14-17697-0127.pdf
Rosario Mendoza filed a Chapter 11 petition (Bankr. D. Nev. Case
No. 14-17697) on November 19, 2014. The Debtor is a retired
individual who owns a rental property in Las Vegas, Nevada. The
downturn in the economy has caused the Debtor to be upside down in
his receivables versus his mortgage payments.
RP CROWN: Moody's Hikes Corporate Family Rating to B2
-----------------------------------------------------
Moody's Investors Service upgraded RP Crown Parent, LLC's Corporate
Family Rating (CFR) to B2 from Caa1 and assigned a B1 rating to its
$1.325 billion of first lien credit facilities. The ratings have a
stable outlook. The proceeds from the credit facilities and other
debt offering along with $580 million of new equity from funds
managed by the Blackstone Group and the existing financial sponsor
New Mountain Capital will be used to refinance existing debt and
pay transaction fees and expenses. Moody's will withdraw the
ratings for RP Crown's existing credit facilities upon the
repayment of the existing debt. These rating actions conclude the
review of RP Crown's ratings that was initiated on August 25, 2016
upon the announcement of the plans to inject equity. RP Crown is
the parent company of JDA Software Group, Inc. (JDA) and its
products are offered under JDA's suite of Supply Chain Management
software offerings.
RATINGS RATIONALE
Moody's analyst Raj Joshi said, "The infusion of equity will
address the challenges of operating with unsustainable debt levels,
approaching debt maturities and weak liquidity." Moody's upgraded
RP Crown's CFR by two notches to B2 to reflect the reduction in
total debt to EBITDA (Moody's adjusted) by 2x to 6.8x, from about
$500 million of debt reduction. The company has reported growth in
software license revenues year-over-year for the last three
quarters after annual declines since JDA's merger with RedPrairie
in 2012. Moody's believes that RP Crown's revenue growth is
sustainable and is driven by improving sales productivity after
several quarters of investments in rebuilding its sales
organization. The interest expense reduction of over $65 million
will provide the flexibility to invest in growth initiatives.
Moody's expects RP Crown's revenues to grow by about 3% to 4% over
the next 12 to 18 months and it should produce free cash flow of
about 8% of adjusted debt in 2017 driven by revenue growth, lower
interest expense and declining restructuring costs. Moody's expects
RP Crown's leverage to decline to below 6x by the end of 2017.
The B2 CFR additionally reflects RP Crown's high leverage and its
highly competitive Supply Chain Management (SCM) software market.
The rating is supported by the company's large installed base of
software maintenance revenues, its well-regarded products in its
focus markets, and good operating scale.
The stable ratings outlook reflects Moody's expectations for
declining leverage from revenue and EBITDA growth over the next 12
to 18 months. Moody's expects RP Crown to maintain good liquidity.
Given RP Crown's high leverage and high financial risk tolerance
under its financial sponsors, a ratings upgrade is not expected
over the next 12 to 18 months. Moody's could upgrade the ratings
over time if RP Crown's earnings growth accelerates and it could
sustain total debt to EBITDA (Moody's adjusted) below 5.5x and
generates free cash flow in the high single digit percentages of
total debt. Moody's said, “We could downgrade RP Crown's ratings
if declining earnings or increase in debt to finance acquisitions
or shareholder distributions cause total debt to EBITDA to exceed
6.5x (Moody's adjusted) and free cash flow is expected to remain in
the low single digit percentages of total adjusted debt.”
Moody's has taken the following rating actions:
Issuer: RP Crown Parent, LLC
-- Corporate Family Rating -- Upgraded to B2, from Caa1 Under
Review for Upgrade
-- Probability of Default Rating -- Upgraded to B2-PD, from
Caa1-PD Under Review for Upgrade
-- $125 million new Senior Secured First Lien Revolving Credit
Facility due 2021—Assigned, B1 (LGD3)
-- $1.2 billion new Senior Secured First Lien Term Loan B due
2023 -- Assigned, B1 (LGD3)
The following ratings will be withdrawn at the close of the
refinancing:
-- $100 million Senior Secured First Lien Revolving Credit
Facility due 2017 -- B3 (LGD3), Under Review for Upgrade
-- $1,452 million outstanding Senior Secured First Lien Term
Loan due 2018 -- B3 (LGD3), Under Review for Upgrade
-- $650 million Senior Secured Second Lien Term Loan due 2019
–
- Caa3 (LGD 5), Under Review for Upgrade
Outlook action:
Issuer: RP Crown Parent, LLC
-- Outlook -- Changed to Stable, from Rating Under Review
RP Crown, an indirect subsidiary of Red Prairie Holding, Inc, is a
vendor of supply chain management and retail software and solutions
the JDA Software brand.
The principal methodology used in these ratings was Software
Industry published in December 2015.
RR DONNELLEY: Moody's Cuts Corporate Family Rating to B1
--------------------------------------------------------
Moody's Investors Service downgraded RR Donnelley & Sons Company's
corporate family rating to B1 from Ba3 and probability of default
rating to B1-PD from Ba3-PD as part of an action related to the
company's pending spin transaction in which the company's new
revolving term loan, a 5-year $800 million senior secured credit
facility, was rated Ba1. As part of the same rating action, Moody's
also downgraded RRD's existing revolving credit facility to Ba1
from Baa3 (upon completion of the spin transaction, the Ba1 rating
for the existing credit facility will be withdrawn; refer to
Moody's policies concerning ratings withdrawals), downgraded the
senior unsecured notes rating to B2 from B1, and changed the
company's rating outlook to stable from developing. Moody's also
upgraded RRD's speculative grade liquidity rating to SGL-2 (good)
from SGL-3 (adequate).
Moody's ratings anticipate the spin transaction closing, which
requires satisfaction of customary pre-conditions (including
financing) such as receiving final clearance from the SEC and the
Canadian regulators. Moody's ratings are also contingent upon
Moody's review of final documentation.
The following summarizes today's rating action and RRD's ratings:
Issuer: RR Donnelley & Sons Company
-- Corporate Family Rating, Downgraded to B1 from Ba3
-- Probability of Default Rating, Downgraded to B1-PD from Ba3-
PD
-- Outlook, Changed to Stable from Developing
-- Speculative Grade Liquidity Rating, Upgraded to SGL-2 from
SGL-3
-- Senior Secured Bank Revolving Credit Facility (new),
Assigned Ba1 (LGD2)
-- Senior Secured Bank Revolving Credit Facility (existing),
Downgraded to Ba1 (LGD2) from Baa3 (LGD2) (to be withdrawn
in due course)
-- Senior Unsecured Notes, Downgraded to B2 (LGD4) from B1
(LGD5)
While the spin transaction contains positive elements stemming, for
example, from debt reduction from the 2017 sale of retained equity
interests in the two spincos and proportionately higher post-spin
free cash flow as RRD trims its outsized dividend, given the
ongoing secular decline of print and related activities and the
company's more narrow business model subsequent to the spin, the
ratings downgrades result from Moody's assessment that RRD's
leverage of Debt-to-EBITDA is likely to remain in a 3.5x to 4.0x
range through 2017.
The new revolving term loan replaces a larger, $1.5 billion
facility, with the reduction reflecting much reduced liquidity
requirements as the company spins LSC Communications, Inc. (LSC,
Ba3 stable), a retail-centric print/publishing services and office
products company, and Donnelley Financial Solutions, Inc. (DFS, B1
stable), a financial communications and data service company. After
spinning-out about 48% of its EBITDA base, RRD continues as a short
run printing company also offering design, logistics, and supply
chain management services.
RATINGS RATIONALE
RRD's B1 CFR is driven primarily by Moody's expectations that
leverage of Debt-to-EBITDA, after application of proceeds from the
sale of the retained equity interest in the two Spincos, will be
maintained in the mid-to-high 3x range through 2018. Moody's said,
“Additionally, we expect the company will use its free cash flow
to reduce debt and leverage, even if ongoing secular pressures
stemming from digital communication's continuing erosion of legacy
print businesses results in only modest or even negative growth.”
The rating is constrained by a lack of forward visibility of
activity levels and ongoing secular pressures that adversely affect
growth prospects, matters which are exacerbated by the company's
opaque financial reporting. While there is no acquisition activity
in Moody's forecast, RRD's historic acquisitiveness and related
growth strategy also weighs against the rating.
Moody's assesses RRD's liquidity as good (SGL-2) based on
expectations of positive free cash flow and access to ample third
party liquidity. During the remaining short, pre-spin window,
Moody's expects modest free cash flow and notes that additional
drawings under RRD's existing credit facility are limited to about
$700 million as a result of 30 June 2016 covenant compliance
matters.
Post the spin transaction, the company will generate $150 million
to $200 million of annual free cash flow, and have access to a
mostly undrawn, five-year, $800 million revolving credit facility.
Financial covenant cushions are presumed to be at least 25%, with
near term maturities being partially addressed via proceeds from
the company's "spin" transaction, including the sale within a year,
of the approximately 19% retained equity interests in each of the
two Spinco entities.
RRD has indicated that the new credit agreement is expected to
contain a $60 million dividend limit if credit agreement-defined
leverage exceeds 2.25:1:00. For covenant compliance purposes RRD's
June 30 Leverage Ratio is about 3.1x (which compares to about 3.4x
on an as-reported basis and about 3.9x on a Moody's adjusted
basis), suggesting that the dividend restriction is likely to be
effective immediately upon closing.
Rating Outlook
The stable outlook is predicated on expectations of strong free
cash flow generation and a focus on de-levering, with leverage of
Debt/EBITDA maintained in the mid-to-high 3x range (after
application of proceeds from the sale of the retained equity
interest in the two Spincos) through 2017/2018.
Factors that Could Lead to an Upgrade
The rating could be upgraded were Moody's to anticipate: i)
leverage of Debt/EBITDA being sustained below ~3.25x, along with
ii) maintenance of solid liquidity arrangements; and iii) solid
operating fundamentals with positive organic growth and no worse
than stable margins.
Factors that Could Lead to a Downgrade
The rating could be downgraded were Moody's to anticipate: i)
leverage of Debt/EBITDA being sustained above ~4x, or ii) were
liquidity arrangements to deteriorate; or iii) business'
fundamentals to deteriorate, evidenced by, for example, either
margin compression or accelerating revenue declines.
The principal methodology used in these ratings was Global
Publishing Industry published in December 2011.
Headquartered in Chicago, Illinois, RR Donnelley & Sons Company
(RRD), is short run printing company also offering design,
logistics, and supply chain management services with annual sales
of about $6.3 billion.
SCRIPSAMERICA INC: Hires Bolognese as Special Litigation Counsel
----------------------------------------------------------------
ScripsAmerica, Inc., seeks authority from the U.S. Bankruptcy Court
for the District of Delaware to employ Bolognese & Associates, LLC
as special litigation counsel to the Debtor, nunc pro tunc to
September 7, 2016.
ScripsAmerica, Inc. requires Bolognese to:
a. investigate potential estate claims and causes of action
not arising under chapter 5 of the Bankruptcy Code and
counsel the Debtor with respect to same;
b. prosecute of estate claims and causes of action not arising
under chapter 5 of the Bankruptcy Code; and
c. assist the Debtor in litigations not related to the
bankruptcy case, if requested.
Bolognese will be paid at these hourly rates:
Anthony J. Bolognese $675
Paraprofessionals $175
Bolognese will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Prior to the Debtor's bankruptcy filing, the law firm of Ciardi
Ciardi & Astin transmitted $5,000 to Bolognese as a fixed fee for
its attendance at a pre-petition, initial client meeting and its
preliminary review of possible causes of action.
The Debtor has asked both Bolognese and Ciardi, to investigate
certain potential claims and causes of action and, if warranted,
prosecute the same. Those potential claims and causes of action
which are not claims and causes of action under chapter 5 of the
Bankruptcy Code will be prosecuted on a contingency fee basis, with
both firms splitting a 33 1/3% contingency fee of gross recoveries
on such potential claims and causes of action, regardless of
whether such recoveries are obtained by arbitration award,
judgment, mediation, negotiation, or settlement, on the following
terms: Ciardi will be entitled to 33 1/3% of the contingency fee,
and the Bolognese Firm will be entitled to 66 2/3% of the
contingency fee, if the gross recoveries for all such potential
claims and causes of action is less than $5,000,000. If gross
recoveries exceed $5,000,000, Ciardi and Bolognese will split
contingency fee amounts on the portion of recoveries in excess of
$5,000,000 equally (50% and 50%). In addition to the foregoing
contingency compensation, Bolognese will be paid a flat fee of
$25,000 for services rendered in connection with investigating the
potential claims and causes of action, payable in four monthly
installments of $6,250 upon application to the bankruptcy Court.
Anthony J. Bolognese, principal in the law firm of Bolognese &
Associates, LLC, assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtor and its estates.
Bolognese can be reached at:
Anthony J. Bolognese, Esq.
BOLOGNESE & ASSOCIATES, LLC
Two Penn Center Plaza
1500 J.F.K. Boulevard, Suite 320
Philadelphia, PA 19102
Tel: (215) 814-6750
About ScripsAmerica, Inc.
ScripsAmerica, Inc., is engaged in (i) selling and compounding
non-sterile topical and transdermal pain creams through Main Avenue
Pharmacy Inc.; (ii) providing wholesale services to independent
pharmacies and other medical providers through P.I.M.D.
International LLC; (iii) providing pharmacy dispensing services for
individual doctors through DispenseDoc Inc.; and (iv) providing
billing and administrative services through Pharmacy
Administration.
ScripsAmerica, Inc., based in Clifton, NJ, filed a Chapter 11
petition (Bankr. D. Del. Case No. 16-11991) on September 7, 2016.
Daniel K. Astin, Esq., at the law firm of Ciardi Ciardi & Astin,
serves as bankruptcy counsel. The petition was signed by Brian
Ettinger, CEO and Chairman of the Board of Directors.
No official committee of unsecured creditors has been appointed in
the case.
SCRIPSAMERICA INC: Hires Ciardi as Bankruptcy Counsel
-----------------------------------------------------
ScripsAmerica, Inc., seeks authority from the U.S. Bankruptcy Court
for the District of Delaware to employ Ciardi Ciardi & Astin as
bankruptcy counsel to the Debtor, nunc pro tunc to September 7,
2016.
ScripsAmerica, Inc. requires Ciardi to:
a. assist and counsel to the Debtor in the reorganization or
liquidation of the assets of the estate as is appropriate
under the circumstances;
b. review and defend of actions brought against the Debtor or
the estate;
c. prepare documents necessary to administer the estate;
d. handle discovery-related matters, including (i) issuing and
responding to written discovery and (ii) preparing
for/attending depositions;
e. correspondence and conference with creditors of the estate,
the Court, the Office of the United States Trustee and
parties in interest; and
f. assist the Debtor in carrying out its duties in the
administration of the estate.
Ciardi will be paid at these hourly rates:
Daniel K. Astin $595
Joseph J. McMahon, Jr. $495
Albert A. Ciardi III $485
Nicole M. Nigrelli $445
Paraprofessionals $95-$205
Prior to the Petition Date, Ciardi received from the Debtor a
retainer in the amount of $100,000 on September 2, 2016 for
post-petition services in connection with the chapter 11 case.
Additionally, Ciardi received two pre-petition prepayments for
pre-petition services or expenses -- one on August 29, 2016 in the
amount of $20,000, and the other on September 2, 2016 in the amount
of $50,000. As of the Petition Date, Ciardi holds the $100,000
retainer.
Ciardi will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Daniel K. Astin, member of the law firm of Ciardi Ciardi & Astin,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Ciardi can be reached at:
Daniel K. Astin, Esq.
CIARDI CIARDI & ASTIN
1204 N King Street
Wilmington, DE 19801
Tel: (302) 658-1100
Fax: (302) 658-1300
About ScripsAmerica, Inc.
ScripsAmerica, Inc., is engaged in (i) selling and compounding
non-sterile topical and transdermal pain creams through Main Avenue
Pharmacy Inc.; (ii) providing wholesale services to independent
pharmacies and other medical providers through P.I.M.D.
International LLC; (iii) providing pharmacy dispensing services for
individual doctors through DispenseDoc Inc.; and (iv) providing
billing and administrative services through Pharmacy
Administration.
ScripsAmerica, Inc., based in Clifton, NJ, filed a Chapter 11
petition (Bankr. D. Del. Case No. 16-11991) on September 7, 2016.
Daniel K. Astin, Esq., at the law firm of Ciardi Ciardi & Astin,
serves as bankruptcy counsel. The petition was signed by Brian
Ettinger, CEO and Chairman of the Board of Directors.
No official committee of unsecured creditors has been appointed in
the case.
SETAI 3509: Hires Brown Harris as Leasing Broker
------------------------------------------------
Setai 3509, LLC and Setai 1908, LLC seek authorization from the
U.S. Bankruptcy Court for the Southern District of Florida to
employ Jeff Miller of Brown Harris Stevens Miami, LLC as leasing
broker.
The Debtors are holding companies for single units at a high-end
condominium building in Miami Beach, Florida. Setai 3509 owns the
unit located at 101 20th Street, Suite 3509, Miami Beach, FL 33139
and Setai 1908 owns the unit located at 101 20th Street, Suite
1908, Miami Beach, FL 33139.
The Debtors hired Mr. Miller to list the Condominium Units for
rent.
The Debtors have agreed to pay Miller and Brown Harris the greater
of a 6% commission or $1,000 on any procured rental and to pay a 6%
commission in the event one of the procured tenants purchases the
one of the Condominium Units.
Jeff Miller, a real estate agent with Brown Harris, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Brown Harris can be reached at:
Jeff Miller
BROWN HARRIS STEVENS MIAMI, LLC
1129 5th Street
Miami, FL 33139
Tel: (305) 726-0100
Fax: (305) 726-0101
About Setai 3509, LLC
Setai 3509, LLC and Setai 1908, LLC, based in Miami Beach, Fla.,
filed a Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 16-20114
and 16-20115) on July 21, 2016. Judge Laurel M. Isicoff presides
over Setai 3509's case, while Judge Robert A. Mark presides over
Setai 1908's case. Michael S. Hoffman, Esq., at Hoffman Larin &
Agnetti, P.A., serves as bankruptcy counsel.
The Debtors each estimated $1 million to $10 million in assets.
Setai 3509 estimated $10 million to $50 million in liabilities,
while Setai 1908 estimated $1 million to $10 million in
liabilities. The petitions were signed by Eric Grabois, authorized
agent.
SIGA TECHNOLOGIES: Plans to Issue $35.2MM in Common Shares
----------------------------------------------------------
SIGA Technologies, Inc., which emerged from Chapter 11 bankruptcy
protection early this year, filed with the Securities and Exchange
Commission AMENDMENT NO. 2 TO FORM S-1 REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933.
SIGA seeks to register:
-- Subscription Rights to purchase Common Stock, par value
$0.0001 per share; and
-- Common Stock, par value $0.0001 per share, in the proposed
maximum aggregate offering price of $35,284,792.
According to the Amendment: "The registrant hereby amends this
Registration Statement on such date or dates as may be necessary to
delay its effective date until the registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this
Registration Statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine."
A copy of Amendment No. 2 is available at https://is.gd/RX0tUa
About SIGA Technologies
Publicly held SIGA Technologies, Inc., with headquarters in
Madison
Avenue, New York, is a biotech/pharmaceutical company that
specializes in the development and commercialization of solutions
for serious unmet medical needs and biothreats. SIGA's lead
product is Tecovirimat, also known as ST-246, an orally
administered antiviral drug that targets orthopoxviruses.
SIGA sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case
No. 14-12623) on Sept. 16, 2014, in Manhattan. The case was
assigned to Judge Sean H. Lane.
The Debtor tapped Weil, Gotshal & Manges LLP, as counsel, and
Prime Clerk LLC as claims agent.
A Statutory Creditors' Committee was represented by Martin J.
Bienenstock, Esq., Scott K. Rutsky, Esq., and Ehud Barak, Esq., at
Proskauer Rose LLP. The Committee retained Guggenheim Securities,
LLC, as its financial advisor and investment banker.
Chapter 11 Bankruptcy
SIGA commenced the chapter 11 case to preserve and to ensure its
ability to satisfy its commitments under a contract with the U.S.
Biomedical Advanced Research and Development Authority and to
preserve its operations, which likely would have been jeopardized
by the enforcement of a judgment stemming from the litigation with
PharmAthene, Inc.
On January 15, 2015, the Delaware Court of Chancery entered its
Final Order and Judgment awarding PharmAthene approximately $195
million, including pre-judgment interest up to January 15, 2015.
On January 16, 2015, the Company filed a notice of appeal of the
Outstanding Judgment with the Delaware Supreme Court and, on
January 30, 2015, PharmAthene filed a notice of cross appeal. On
October 7, 2015, the Delaware Supreme Court heard oral argument, en
banc. On December 23, 2015 the Delaware Supreme Court affirmed the
Outstanding Judgment.
The salient terms of SIGA's Plan were:
-- Prepetition unsecured claims (other than PharmAthene's
claim) will be paid in cash in full.
-- Upon the effective date of the Plan, ownership of existing
shares of the Company's common stock shall remain unaltered by the
Plan; however, existing shares will be subject to potential future
cancellation (without receipt of any consideration) in the event
that PharmAthene's claim is satisfied through the issuance of
newly
issued shares of SIGA stock -- option (ii).
-- Once the Delaware Supreme Court enters final judgment on
the December 23 ruling (which was expected to occur on or about
March 22, 2016), the Company will have 120 days (subject to a
possible 90 day extension) to select one of the following options
to satisfy PharmAthene's claim under the Plan: (i) payment in full
in cash of the Company's obligation under the Delaware Court of
Chancery Final Order and Judgment, which is estimated to be
approximately $205 million as of December 31, 2015; (ii) delivery
to PharmAthene of 100% of newly-issued stock of SIGA, with all
existing shares of the Company's common stock being cancelled with
no distribution to existing shareholders on account thereof; or
(iii) such other treatment as is mutually agreed upon by the
Company and PharmAthene.
-- The 120 day period can be extended for a maximum of 90
additional days in exchange for payment by the Company of $20
million to PharmAthene to be applied to payments to be made under
option (i) set forth above (if selected), and otherwise
nonrefundable.
-- PharmAthene shall be paid $5 million on the effective date
of the Plan to be applied to payments to be made under option (i)
set forth above (if selected), and otherwise nonrefundable.
-- the Plan requires the Company to comply with certain
affirmative and negative covenants from the date the Plan becomes
effective until the covenants are terminated as provided under the
Plan, and if the Company breaches any covenant, PharmAthene is
entitled to exercise certain remedies provided in the Plan.
The Bankruptcy Court for the Southern District of New York entered
an order confirming the Debtor's Third Amended Chapter 11 Plan,
dated April 7, 2016, and, as a result, SIGA emerged from chapter
11. The Plan was confirmed amid a challenge by current
shareholders.
Substantial Doubt
SIGA Technologies, Inc. filed with the Securities and Exchange
Commission its Form 10-Q report for the quarterly period ended June
30, 2016. SIGA said that, "as of June 30, 2016, the accrued
obligation under the Delaware Court of Chancery Final Order and
Judgment, including post-judgment and Plan-specified interest, is
estimated to be approximately $204 million. In addition, as of June
30, 2016, the Company has a net capital deficiency of $304 million.
These factors raise substantial doubt about the Company's ability
to continue as a going concern."
SIGA had total assets of $201.67 million, total liabilities of
$505.74 million and stockholders' deficit of $304.07 million at
June 30, 2016.
SKYLINE CORP: Shareholders Elect Eight Directors
------------------------------------------------
Skyline Corporation held its annual meeting of shareholders on
Sept. 19, 2016, at which the shareholders:
(1) elected Arthur J. Decio, John C. Firth, Richard W. Florea,
Jerry Hammes, William H. Lawson, David T. Link, John W.
Rosenthal Sr. and Samuel S. Thompson as directors;
(2) ratified the appointment of Crowe Horwath LLP as
independent accounting firm for fiscal year 2017; and
(3) approved, on an advisory basis, the compensation of the
Company's named executive officers for fiscal year 2016.
Following the meeting, the Board of Directors elected the following
persons as Officers of the Corporation to serve at the pleasure of
the Board of Directors until the next annual meeting of the Board
of Directors or until their successors are elected and qualify:
Richard W. Florea President and Chief Executive
Officer
Jon S. Pilarski Vice President, Finance &
Treasurer,
Chief Financial Officer
Jeffrey A. Newport Senior Vice President of
Operations
Terrence M. Decio Vice President, Marketing & Sales
Martin R. Fransted Controller & Secretary
Robert C. Davis Vice President, Manufacturing
About Skyline Corp
Skyline Corporation was originally incorporated in Indiana in 1959,
as successor to a business founded in 1951. Skyline Corporation
and its consolidated subsidiaries designs, produces and markets
manufactured housing, modular housing and park models to
independent dealers and manufactured housing communities located
throughout the United States and Canada. Manufactured housing is
built to standards established by the U.S. Department of Housing
and Urban Development, modular homes are built according to state,
provincial or local building codes, and park models are built
according to specifications established by the American National
Standards Institute.
For the year ended May 31, 2015, the Company reported a net loss of
$10.41 million compared to a net loss of $11.9 million for the
year ended May 31, 2014.
As of May 31, 2016, Skyline had $55.0 million in total assets,
$29.8 million in total liabilities and $25.1 million in total
shareholders' equity.
Crowe Horwath LLP, in Fort Wayne, Indiana, issued a "going concern"
qualification on the consolidated financial statements for the year
ended May 31, 2015, citing that the Company has incurred recurring
operating losses and negative cash flows from operating activities.
The Company has a line of credit in place, however prospective
debt covenant violations may limit the Company's ability to access
these funds which would impact its liquidity. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
SMS SYSTEMS: S&P Assigns 'B' CCR & Rates $300MM Sec. Loans 'B+'
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Charlotte, N.C.-based SMS Systems Maintenance Services Inc. The
outlook is stable.
At the same time, S&P assigned its 'B+' issue-level rating and '2'
recovery rating to the company's $40 million revolving credit
facility due 2022 and its $260 million first-lien term loan due
2023. The '2' recovery rating indicates S&P's expectation for
significant (70%-90%; at the lower end of the range) recovery in
the event of payment default.
S&P also assigned its 'CCC+' issue-level rating and '6' recovery
rating to the company's $115 million second-lien term loan due
2024. The '6' recovery rating indicates S&P's expectation for
negligible (0%-10%) recovery in the event of a payment default.
"The rating on SMS reflects our view of its business risk,
characterized by its small scale within the server maintenance
market, a competitive marketplace dominated by service packages
provided by much larger original equipment manufacturers, modest
organic growth, and modest customer concentration with top 25
customers representing 40% of revenues," said S&P Global Ratings
credit analyst Dee J. Banson. "Its highly recurring revenue model
and good operating margins partly offset these factors."
The stable outlook reflects S&P's belief that SMS will continue to
be competitive in the third-party server maintenance market and
generate moderate top-line and EBITDA growth, with annual free cash
flow of $25 million or more.
S&P could lower the rating on SMS if disruptions in business
operations or customer losses result in leverage sustained above
the low-7x area or free cash flow to debt sustained below 5%.
The company's niche market position, acquisitive growth strategy,
and ownership structure that we believe will preclude substantial
deleveraging limit the possibility of an upgrade over the near
term. Over the longer term, S&P would consider an upgrade if the
company were to maintain positive operating performance while
committing to and maintaining leverage below 5x on a sustained
basis.
SPECTRUM BRANDS: S&P Rates New EUR375MM Sr. Notes 'BB-'
-------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating to
Middleton, Wis.-based Spectrum Brands Inc.'s proposed EUR375
million senior unsecured notes due 2026. S&P expects proceeds from
the leverage neutral transaction, which includes the proposed notes
and about $100 million of cash and borrowings under the company's
revolving credit facility, will be used to satisfy the cash tender
offer announced for the $520 million 6.375% senior unsecured notes
due 2020. The recovery rating on the proposed notes is '4',
indicating that creditors could expect average (30% to 50%, in the
lower half of the range) recovery in the event of a payment
default. The proposed notes will be guaranteed on a senior
unsecured basis by Spectrum Brands' domestic subsidiaries and its
immediate parent holding company (SB/RH Holdings LLC). S&P's
ratings assume the transaction closes substantially on the terms
provided to S&P. Debt outstanding pro forma for the proposed
transaction is about $4 billion.
All of S&P's existing ratings on the company, including S&P's
'BB-' corporate credit rating, are unchanged. The outlook is
stable.
S&P's ratings on Spectrum Brands incorporate the company's good
product diversity, its modest scale, operating leverage, and
profitability; and its position as a provider of lower-priced
products, which possess less pricing power than premium priced
competition; however, they tend to perform relatively well in
sluggish economic environments. S&P's ratings also recognize the
company's participation in highly competitive, low-growth product
categories and its susceptibility to input cost volatility,
moderate currency volatility, and some seasonality. The company's
home and garden and auto care businesses are susceptible to the
effects of extreme weather conditions.
RATINGS LIST
Spectrum Brands Inc.
Corporate credit rating BB-/Stable/--
New Ratings
Spectrum Brands Inc.
Senior secured
EUR375 mil. notes due 2026 BB-
Recovery rating 4L
ST. ELIZABETH COLLEGE: S&P Rates 2016 Revenue Bonds 'BB'
--------------------------------------------------------
S&P Global Ratings assigned its 'BB' long-term rating to New Jersey
Educational Facilities Authority's series 2016 revenue bonds,
issued for the College of Saint Elizabeth (CSE or the college).
The outlook is stable.
"We assessed CSE's enterprise profile as vulnerable, characterized
by large enrollment decreases, a limited demand profile with
variable applications, and weak matriculation," said S&P Global
Ratings analyst Shivani Singh. Given the college's small full-time
equivalent (FTE) enrollment of less than 1,000 and a highly
competitive landscape, it is particularly susceptible to market and
industry pressures. Small enrollment changes, both positive and
negative, can have a big impact on the college's performance,
resulting in greater volatility than schools with larger enrollment
levels.
Preliminary fall 2016 enrollment presented by management increased
across all student categories largely due to a shift to
co-educational status for the college's traditional undergraduate
program for the first time starting in fall 2016. S&P would view
continued enrollment stability favorably. S&P assessed CSE's
financial profile as adequate, with sufficient available resources
relative to debt, a modest debt burden, and essentially break-even
operations in fiscal 2015 and likely to continue in the foreseeable
future. Combined, S&P believes these credit factors lead to an
indicative stand-alone credit profile of 'bb' and a final rating of
'BB'.
Securing the bonds is a general obligation of the college. The
college will grant the New Jersey Educational Facilities Authority
a first-lien and security interest in the five college-owned
buildings and the leasehold interest with the Sisters of Charity.
The stable outlook reflects S&P's expectation that, in the next 12
months, enrollment will at least be stable, operating margins will
be close to break-even, and available resources will be maintained
at about current levels.
S&P could consider a negative rating action if enrollment decreases
continue and GAAP operating performance and available resources
weaken from fiscal 2015 levels.
S&P could consider a positive rating action if enrollment in
traditional degree programs increases, the college posts consistent
GAAP operating surpluses and maintains available resources around
current levels.
CSE, founded in 1899 as a liberal arts college for women, is an
independent, not-for-profit, four-year college sponsored by the
Sisters of Charity of Saint Elizabeth. As of fall 2015, it served
1,247 students (867 FTE) through 19 undergraduate program
offerings, 10 masters, and two doctoral degrees in the arts and
sciences. The college became fully coeducational in fall 2016. It
has been continuously accredited by the Middle States Commission on
Higher Education since 1921 and also has program-specific
accreditations.
ST. JAMES NURSING: Hires Berry as Feasibility Expert Witness
------------------------------------------------------------
St. James Nursing and Physical Rehabilitation Center, Inc., et al.,
seek authority from the U.S. Bankruptcy Court for the Eastern
District of Michigan to employ Berry Advisors, LLC as feasibility
expert witness to the Debtors, nunc pro tunc to September 5, 2016.
St. James Nursing requires Berry to:
a. assess feasibility issues and options concerning the
Debtors' Plan and any objections thereto;
b. provide deposition testimony and in-court testimony
regarding feasibility of the Plan, if necessary; and
c. provide any other services that the Debtors and Berry
mutually deem necessary and appropriate.
Berry will be paid at these hourly rates:
Managing Director/Partner $350
Executive Director $275
Senior Vice President $225
Analyst $175
Paraprofessional $50
Berry will be paid a retainer in the amount of $25,000.
Berry will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Kevin Berry, member of Berry Advisors, LLC, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their/its estates.
Berry can be reached at:
Kevin Berry
BERRY ADVISORS, LLC
621 Kirts Blvd., Suite 203
Troy, MI 48084
Tel: (248) 535-1101
About St. James Nursing
St. James Nursing & Physical Rehabilitation Center Inc. filed a
Chapter 11 bankruptcy petition (Bankr. E.D. Mich. Case No.
16-42333) on February 22, 2016. The petition was signed by Bradley
Mali, president. The Debtor estimated assets of $0 to $50,000 and
debts of $1 million to $10 million. The Debtor is represented by
Michael E. Baum, Esq., at Schafer and Weiner, PLLC. The case is
assigned to Judge Phillip J. Shefferly.
No official committee of unsecured creditors has been appointed in
the case.
STAFFING GROUP: Recurring Losses Raises Going Concern Doubt
-----------------------------------------------------------
The Staffing Group, Ltd., filed its quarterly report on Form 10-Q,
disclosing a net loss of $701,517 on $1.60 million of net revenues
for the three months ended June 30, 2016, compared with a net loss
of $40,473 on $nil of net revenues for the same period in the prior
year.
The Company's balance sheet at June 30, 2016, showed $3.42 million
in total assets, $3.35 million in total liabilities, and a
stockholders' equity of $71,371.
As of June 30, 2016, the Company had a stockholders' deficit of
$71,371 and a working capital deficit of $2,002,678. For the six
months ended June 30, 2016, the Company had a net loss of $785,791.
The Company's stockholders' deficiency is primarily due to, among
other reasons, funding its historical costs. The Company's
principal sources of liquidity include cash from operations and
proceeds from debt and equity financings. As of June 30, 2016, the
Company had $84,133 in cash.
The Company is funding its operations primarily through the sale of
equity, convertible notes payable and shareholder loans. In the
event the Company experiences liquidity and capital resources
constraints because of greater than anticipated sales growth or
acquisition needs, the Company may need to raise additional capital
in the form of equity and/or debt financing including refinancing
its current debt. Issuances of additional shares will result in
dilution to its existing shareholders. There is no assurance that
the Company will achieve any additional sales of its equity
securities or arrange for debt or other financing to fund any
potential acquisition needs or increased growth. If such
additional capital is not available on terms acceptable to the
Company, or at all, then the Company may need to curtail its
operations and/or take additional measures to conserve and manage
its liquidity and capital resources, any of which would have a
material adverse effect on its business, results of operations and
financial condition. The ability to successfully resolve these
factors raise substantial doubt about the Company's ability to
continue as a going concern.
A copy of the Form 10-Q is available at:
http://bit.ly/2d2IFCn
About The Staffing Group, Ltd.
The Staffing Group, Ltd., is engaged in the business of providing
temporary staffing solutions. The Company provides general
laborers to construction, light industrial, refuse, retail and
hospitality businesses, and recruits, hires, trains and manages
skilled workers. The Company operates approximately one staffing
location in Montgomery, Alabama through its subsidiary, Staff Fund
I, LLC. Staff Fund I, LLC, is focused in the blue collar staffing
industry.
STAG INDUSTRIAL: Fitch Assigns 'BB+' Preferred Stock Rating
-----------------------------------------------------------
Fitch Ratings has assigned a 'BBB' rating to STAG Industrial
Operating Partnership, L.P's $100 million unsecured notes issued
through a private placement on Dec. 15, 2015. The notes mature on
January 5, 2023 and bear interest at a fixed rate of 3.98%. STAG
Industrial Operating Partnership, L.P is a wholly-owned operating
subsidiary of STAG Industrial, Inc. (STAG or the company).
The Rating Outlook is Stable.
KEY RATING DRIVERS
The rating reflects STAG's credit strengths, which include strong
leverage and fixed charge coverage metrics for the rating,
excellent liquidity, a sizable unencumbered asset pool and
improving access to unsecured debt capital. Fitch expects STAG to
operate through the cycle with metrics that are appropriate for the
'BBB' rating, including leverage sustaining in the low-to-mid 5.0x
range and fixed charge coverage in the mid-to-high 3.0x range.
The Stable Outlook reflects Fitch's expectation that STAG will
maintain credit metrics over the rating horizon (typically one to
two years) that are consistent with the 'BBB' rating, as well as
our outlook for positive near- to medium-term industrial property
fundamentals.
Strategy, Growth Pressuring SSNOI
Fitch expects STAG's same store net operating income (SSNOI) will
decline at a low single digit rate through 2017 as occupancy losses
offset solidly positive leasing spreads. STAG's strategy of
acquiring 100% occupied single-tenant industrial buildings is the
principal driver for its recent SSNOI declines. As the company
grows larger and its acquisitions season, the law of large numbers
essentially pulls STAG's portfolio occupancy rate closer to market
(roughly 93% to 95%). Fitch expects the company's SSNOI performance
to be uneven, and generally negative, until the company grows to a
size where a majority of its portfolio has seasoned, which
typically occurs after five years of ownership. However, STAG is
generally compensated for this occupancy loss through higher
going-in yields for acquisitions.
STAG's cash SSNOI declined by .4% during the third quarter of 2015
(3Q'15), in comparison to a decline of .6% in 3Q'14. The company's
annualized cash SSNOI change has also been negative since 2013,
with the cash SSNOI decline of 2.3% in 2014 and 2.2% in 2013.
Positively, STAG retained 90.4% of its expiring leased square
footage in 3Q'15, resulting in an year-to-date tenant retention
rate of 73.8%.
Low Leverage
Fitch projects the company will sustain leverage of approximately
5.0x during the next three years on an annualized basis that
includes a full-year's impact of earnings from projected
acquisitions. STAG's leverage was 5.0x based on an annualized run
rate of recurring operating EBITDA for the quarter ending Sept. 30,
2015, which is strong for the 'BBB' rating. This compares with 5.3x
on an annualized basis for the quarter ending Sept. 30, 2014. In
addition, adjusting 3Q'15 earnings for the impact of partial period
acquisitions would reduce STAG's leverage to 4.9x.
Improving Capital Access
STAG's issuances of senior unsecured notes in July 2014, December
2014 and February 2015 and now in December 2015, have been
important milestones in the company's transition to a predominantly
unsecured borrowing strategy, evidencing broader access to
unsecured debt capital. The company also completed a $600 million
refinancing of its unsecured revolving credit facility and term
loans in December 2014. Prior to the company's inaugural private
unsecured notes placement, STAG's unsecured borrowings were limited
to three bank term loans, as well as drawdowns under the company's
unsecured revolver. However, STAG's unsecured debt capital access
remains somewhat less established pending an inaugural public
unsecured bond offering and further private placement issuance.
Strong Fixed Charge Coverage
Fitch expects the company's fixed charge coverage to sustain in the
mid-to-high 3.0x's through 2017. The low interest rate environment
and higher capitalization rates for properties in secondary markets
should allow STAG to continue deploying capital on a strong spread
investing basis. STAG's fixed charge coverage was 3.5x for the
quarter ended Sept. 30, 2015 and 3.4x for both year-ended Dec. 31,
2014 and 2013.
Sufficient Liquidity
STAG maintains sufficient liquidity of $12.5 million in cash and
$272 million remaining under its $450 million revolving credit
facility. The company completed a $600 million refinancing of its
unsecured bank debt in December 2014. The refinancing reduced its
cost of fully committed unsecured bank debt to Libor + 1.41% from
Libor + 1.66% and increased the weighted average term to 5.9 years
from 3.8 years. STAG also increased its unsecured revolving credit
facility capacity to $450 million from $300 million in September
2015. The revolver has an accordian feature that would increase the
facility size to $800 million, subject to lender approval. The
company has minimal debt maturities over the next several years.
STAG's unencumbered assets, defined as unencumbered NOI (as
calculated in accordance with the company's unsecured loan
agreements) divided by a stressed capitalization rate of 10%,
covered its unsecured debt by 2.7x in 3Q'15, which is strong for
the 'BBB' rating. The company's substantial unencumbered asset pool
is a source of contingent liquidity that enhances STAG's credit
profile.
Straightforward Business Model
STAG has not made investments in ground-up development or
unconsolidated joint venture partnerships. The absence of these
items helps simplify the company's business model, improve
financial reporting transparency and reduce potential contingent
liquidity claims, which Fitch views positively.
While the company may selectively pursue the acquisition of
completed build-to-suit (BTS) development projects in the future,
Fitch anticipates only a moderate amount of such activity by STAG
on an ongoing basis. Fitch views the acquisition of completed BTS
projects developed by third parties as less risky than the
speculative development undertaken by some of STAG's industrial
REIT peers.
Secondary Market Locations
STAG's growth strategy centers on the acquisition of single tenant
industrial properties (warehouse/distribution and manufacturing
assets). Its emphasis on relative value has predominantly led the
company to acquire properties in secondary U.S. markets (based on
size parameters defined below) through third party purchases and
structured sale-leasebacks. Such transactions typically range in
price from $5 million to $50 million and have higher going-in
yields, stronger internal rates of return, and less competition
from institutional buyers.
As of Sept. 30, 2015, the company's portfolio was primarily in
secondary markets (64.8% of annualized base revenue), followed by
primary markets (20.3%) and tertiary markets (14.9%). STAG defines
primary markets as the 29 largest industrial metropolitan areas,
which each have approximately 200 million or more in net rentable
square footage. It defines secondary industrial markets as the
markets which each have net rentable square footage ranging from
approximately 25 million to approximately 200 million and tertiary
markets as markets with less than 25 million square feet of net
rentable square footage.
The company has minimal exposure to the major 'core' U.S.
industrial and logistics markets, which include Chicago, Los
Angeles/Inland Empire, Dallas - Fort Worth, Atlanta and New
York/Northern New Jersey. Fitch views this as a credit negative,
all else equal, given superior liquidity characteristics for
industrial assets in 'core' markets in terms of financing capacity
and transaction volumes.
Differentiated Strategy within Fragmented Market
STAG's owns less than 1% of the company-estimated $250 billion of
single-tenant industrial assets in its markets, providing external
growth opportunities in the company's target asset profile. The
company focuses on the binary nature of the cash flow of
individual, single-tenant, industrial properties and the
opportunity for cash flow growth across markets, industries,
segments and property sizes. STAG's differentiated business model
thoughtfully considers leasing, asset management, credit and
capital market funding, which Fitch views favorably.
Preferred Stock Notching
The two-notch differential between STAG's IDR and preferred stock
rating is consistent with Fitch's criteria for a U.S. REIT with an
IDR of 'BBB'. These preferred securities are deeply subordinated
and have loss absorption elements that would likely result in poor
recoveries in the event of a corporate default.
KEY ASSUMPTIONS
Fitch's base case rating assumptions for STAG include the
following:
-- SSNOI declines within a range of 1%-2% in 2015, 2016 and
2017;
-- Acquisitions of $400 million, $550 million and $700 million
in 2015, 2016 and 2017, respectively at cap rates of 8%;
-- Dispositions of $50 million per year through 2017 at 10% cap
rates;
-- STAG funds its near-to-medium term external growth with
roughly 60% equity and 40% debt financing;
-- Adjusted funds from operations (AFFO) payout ratio around
95%-100%.
RATING SENSITIVITIES
Although positive rating momentum is unlikely in the near-to-medium
term, the following factors may have a positive impact on STAG's
ratings:
-- Leverage calculated on an annualized basis adjusted for
acquisitions sustaining below 5.0x (leverage was 4.9x as of
Sept. 30, 2015 after giving effect to partial period
acquisitions);
-- Further development of STAG's unsecured debt capital access;
-- Fixed charge coverage sustaining above 4.0x (coverage was
3.5x as of Sept. 30, 2015).
The following factors may have a negative impact on the company's
ratings and/or Outlook:
-- Indications that STAG's property portfolio is not competing
effectively within its markets, which could include below
market leasing velocity and rent growth and weak SSNOI
growth for seasoned acquisitions;
-- Fitch's expectation for leverage sustaining above 5.5x;
-- Fixed charge coverage sustaining below 3.0x;
-- Unencumbered assets to net unsecured debt falling below
2.5x;
FULL LIST OF RATING ACTIONS
Fitch currently rates STAG as follows:
STAG Industrial, Inc.
-- Issuer Default Rating (IDR) 'BBB';
-- Preferred stock 'BB+'.
STAG Industrial Operating Partnership, L.P.
-- IDR 'BBB';
-- Senior unsecured revolving credit facility 'BBB';
-- Senior unsecured term loans'BBB';
-- Senior unsecured notes 'BBB'.
STEAK N SHAKE: S&P Lowers CCR to 'B-', Outlook Stable
-----------------------------------------------------
S&P Global Ratings said that it lowered its corporate credit rating
on the Indianapolis-based Steak n Shake Inc. to 'B-' from 'B'. The
outlook is stable.
S&P assigned its 'B+' issue-level rating to the company's senior
secured revolving credit facility. The recovery rating assigned to
the revolving credit facility is '1', indicating S&P's expectation
for very high (90% to 100%) recovery for lenders in the event of a
payment default or bankruptcy.
S&P assigned a 'B-' issue-level rating to the company's senior
secured note offering. The recovery rating is '4', indicating
S&P's expectation for average recovery in the event of default, at
the higher end of the 30% to 50% range.
The downgrade reflects weakened credit metrics, including adjusted
leverage in the mid- to high-5x range, and a more aggressive
financial policy following the proposed $400 million note issuance.
The company anticipates using the note issuance proceeds and
balance sheet cash to refinance the existing
$204 million in term loan debt and to fund a $230 million dividend
to Biglari Holdings (not rated), the public holding and parent
company for Steak n Shake. Following the note issuance, S&P
expects limited deleveraging and forecast adjusted leverage will
remain in the mid- to high-5x range for the next 12 to 18 months.
"Our assessment of the Steak n Shake's business risk considers the
company's niche in the limited-service hamburger segment of the
quick-service restaurant (QSR) industry. We believe the company's
position as a geographically-concentrated, smaller operator limits
its ability to compete with significantly larger, better
capitalized QSRs. Furthermore, our assessment considers that 70%
of restaurants are owned and operated by Steak n Shake, resulting
in lower margins and more potential earnings volatility versus
highly franchised peers. We also believe the company's business
model exposes operating performance to commodity prices given its
limited ability to pass higher costs to the consumer and the
relatively small franchisee base. However, successful franchise
growth over the long term could mitigate these risks in our
opinion. Despite weak performance in the second quarter of 2016,
we think the company will leverage its value-pricing model to drive
customer traffic and expect a modest improvement in 2016
performance," S&P said. Considering this, S&P's base-case forecast
scenario assumes:
-- U.S. economic growth of about 2% in 2016 followed by GDP
growth of 2.3% in 2017 with consumer spending growth of
about 3% in both years;
-- Projected same restaurant sales growth of about 3% in 2016
followed by growth of about 2% in 2017 and thereafter with
the company's value menu offerings driving growth;
-- Estimated annual restaurant growth about 30 units, with
growth primarily in the company's franchise base. Operating
costs decline modestly, as percentage of sales, on improved
operating leverage, cost saving initiatives, and reduced
franchise investment spending partially offset by the
effects of inflation;
-- Low- to mid-double-digit capital spending annually to fund
general restaurant maintenance, restaurant growth
initiatives, and franchise growth plans; and
-- Modest free operating cash flow with cash generation used
partially for debt repayment but primarily for distributions
to Biglari Holdings Inc., as the parent entity.
S&P's forecast scenario would lead to these credit ratios:
-- Adjusted debt to EBITDA of 5.8x for fiscal 2016 and 5.6x for
fiscal 2017; and
-- Funds from operations (FFO) to debt of 9% in 2016 and 8%
2017.
S&P forecasts adjusted leverage will remain in the mid- to high-5x
for the next 12 to 18 months, a significant deterioration from the
mid-4x range prior to the proposed $400 million note
recapitalization. S&P views the increase in leverage as a change
in the company's financial policy and see an increase in the
company's financial risk. Moreover, S&P expects limited future
deleveraging and expect most of the company's free operating cash
flow generation used for distributions to Biglari Holdings Inc.
Steak n Shake is a wholly owned subsidiary of Biglari Holdings
Inc., a public company. Currently, Steak n Shake accounts for more
than 95% of sales and almost all of Biglari's EBITDA. Biglari
Holdings has no significant debt. As such, credit measures have
been generally comparable for both entities and S&P views the
credit profiles for the two entities as synonymous. Biglari's
strategy has been to reinvest cash generated by its operating
subsidiaries into acquisitions of other businesses. S&P believes
the company will maintain leverage in the mid- to high-5x range.
The stable outlook on Steak n Shake incorporates S&P's expectation
that performance will continue to improve modestly in the coming 12
to 18 months because of positive same-store sales, unit expansion,
and modest margin gains. However, S&P sees the deleveraging
potential as limited and it expects adjusted leverage to remain in
the mid- to high-5x range.
S&P would lower the rating if significantly weak operating
performance and/or an increase in operating costs result in
negative free operating cash flow, leading S&P to believe the
company's liquidity was diminishing and the capital structure was
trending towards an unsustainable level. This could happen for
example if same-restaurant sales were consistently negative and
profit margins eroded by more than 200 bps, resulting in an EBITDA
decline in excess of 15% or more. Under this scenario, adjusted
interest coverage would be 2x, and liquidity would erode because of
negative free operating cash flow.
Although an upgrade is unlikely over the next year given S&P's view
of the company's financial policy and its limited near-term
operational upside, S&P could raise our rating on a successful and
rapid franchise expansion, favorable commodity price (especially
for beef), better-than-expected restaurant cost management and a
sustained mid-single-digit same-restaurant sales growth resulting
in mid-single-digit increase in sales growth, margins expanding by
150 bps, and EBITDA growth of 20% or more. Under this scenario,
adjusted debt leverage would decline to below 5x on a sustained
basis. Moreover, lower leverage would be supported by a financial
policy to maintain leverage to those indicated levels on a
sustained basis.
SUNEDISON INC: BlackRock Said to Bid for YieldCo
------------------------------------------------
Jodi Xu Klein and Brian Eckhouse, writing for Bloomberg News,
reported that BlackRock Inc. said it is assessing the value of
SunEdison Inc.'s yieldco, TerraForm Power, according to two people
who asked not to be named because the discussion is confidential.
According to the report, BlackRock owned 5.3 percent of TerraForm
Power's Class A shares as of June 30, 2016. The fund joins other
investors, including Brookfield Asset Management Inc. and Appaloosa
Management, LP, which are planning a joint offer for the yieldcos,
which own wind and solar assets, some of which are operated by
SunEdison, the report related. Golden Concord Holdings Ltd., a
Chinese clean-energy group, has also expressed interest for the
yieldcos, the report further related.
The Troubled Company Reporter, citing Reuters, previously reported
that the "yieldcos" said they were exploring strategic
alternatives, including a sale of their entire business.
According to the report, the two companies said they are also
considering replacing SunEdison with a new sponsor, by negotiating
new sponsorship arrangements or by assuming SunEdison's existing
sponsorship agreements.
Some of the strategic alternatives for TerraForm Global and
TerraForm Power may require stockholder approval, while some may
require approval of the U.S. Bankruptcy Court for the Southern
District of New York, the companies said, the report related.
About SunEdison, Inc.
SunEdison, Inc. (OTC PINK: SUNEQ), 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 $20.7 billion and total debt
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, Rothschild
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. The Debtors
employed
PricewaterhouseCoopers LLP as financial advisors; and KPMG LLP as
their auditor and tax consultant.
An official committee of unsecured creditors has been appointed in
the case. The committee tapped Weil, Gotshal & Manges LLP as its
general bankruptcy counsel and Morrison & Foerster LLP as special
counsel.
TALLAHASSEE INDOOR: US Trustee Fails to Appoint Creditors' Panel
----------------------------------------------------------------
The U.S. Trustee informs the U.S. Bankruptcy Court for the Northern
District of Florida that a committee of unsecured creditors has not
been appointed in the Chapter 11 case of Tallahassee Indoor
Shooting Range LLC due to insufficient response to the U.S. Trustee
communication/contact for service on the committee.
Tallahassee Indoor Shooting Range LLC filed for Chapter 11
bankruptcy protection (Bankr. N.D. Fla. Case No. 16-40407) on Aug.
26, 2016, estimating its assets at up to $50,000 and liabilities at
between $500,001 and $1 million. Robert C. Bruner, Esq., serves as
the Debtor's bankruptcy counsel.
TGHI INC: Gets Court Approval of Prepackaged Liquidating Plan
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the prepackaged Chapter 11 plan of liquidation of TGHI,
Inc. and its affiliated debtors.
The court gave the thumbs-up to the plan after finding that it
complied with the requirements for confirmation under the
Bankruptcy Code.
In the same filing, the court also gave approval to the disclosure
statement, which explains the companies' liquidating plan.
The Prepackaged Plan of Liquidation lets TGHI's general unsecured
creditors recover 11% to 13% of their allowed claims. The general
unsecured creditors are owed $8.32 million, according to court
filings.
Pursuant to a Transaction Support Agreement dated May 21, 2015,
signed with majority of the lenders under the Debtors' $185
million
prepetition secured term loan facility, Holdings agreed to release
100% of the stock of operating company Targus Group International,
Inc. ("TGII") in favor of the $185 Million Facility Lenders.
The Prepetition $185 Million Facility Requisite Majority
Lenders agreed to, among other things:
(i) fund $500,000 for the administration of these bankruptcy
cases through confirmation and $200,000 for the post-
confirmation wind-down and administration of the Debtors'
estates -- the Funded Amount; and
(ii) facilitate (and cause the Prepetition $185 Million
Facility Lenders to ensure through subordination) the
payment of the Transaction Consideration to Holdings.
The parties later entered into an amendment to the Transaction
Support Agreement, pursuant to which the parties agreed to
liquidate and settle the amount of the Transaction Consideration
at:
(i) $750,000 to be funded to Holdings after the consummation
of a publicly-noticed asset foreclosure sale process --
whereby the Prepetition $185 Million Facility Lenders
submitted the highest bid and became the new owners of
certain of the assets of TGII, and
(ii) any unused portion of the $700,000 Funded Amount.
As part of the Amendment, the Prepetition $185 Million Facility
Lenders agreed to waive and release all of their claims against
Holdings on account of Holding's guarantee of the Prepetition $185
Million Facility, and as a result, the Prepetition $185 Million
Facility Lenders have no remaining claims against the Debtors in
the Chapter 11 Cases.
Holders of general unsecured claims against Parent, estimated
at $52,733,223, will each receive a pro rata share of assets of
Parent available for distribution -- Distributable Parent Assets
-- if any. However, there are no projected Distributable Parent
Assets. The class is deemed to reject the Plan and will have a 0%
recovery.
Pursuant to the Transaction Support Agreement, the Plan has the
support of (i) 100% of the Prepetition $20 Million Facility
Lenders, (ii) a majority of the holders of the Holdings PIK Notes,
which notes represent all of the unsecured claims against
Holdings,
and (iii) pursuant to the direction of a majority of the holders
of
the Holdings PIK Notes, the Administrative Agent for the Holdings
PIK Notes.
A copy of the Plan Order is available for free at
https://is.gd/pl3G5e
About TGHI, Inc.
TGHI, Inc. and Parent THI, Inc. filed petitions under Chapter 11 of
the Bankruptcy Code (Bankr. S.D.N.Y. Case Nos. 16-10300 and
16-10301, respectively) on Feb. 9, 2016, to effectuate a wind down
and dissolution of their estates.
The Debtors were the former direct or indirect holding companies of
Targus Group International, Inc. and its operating subsidiaries --
which are now unaffiliated with the Debtors and are not "Debtors"
in the Chapter 11 Cases -- and were a leading global supplier of
carrying cases and accessory products for the mobile lifestyle.
TGHI, Inc. estimated assets in the range of $1 million to $10
million and liabilities of $10 million to $50 million. Parent THI,
Inc. estimated assets of $0 to $50,000 and liabilities of $50
million to $100 million.
Judge Michael E. Wiles is assigned to the case.
The Debtors have engaged Klestadt Winters Jureller Southard &
Stevens, LLP as counsel and Kurtzman Carson Consultants LLC as
claims, noticing agent and administrative agent.
TOWERSTREAM CORP: Inks Exchange Agreements with Stockholders
------------------------------------------------------------
As previously disclosed in its Registration Statement on Form S-1
(File No. 212995) declared effective on Sept. 16, 2016, in order to
obtain consent to the public offering described in that
Registration Statement, Towerstream Corporation entered into
separate exchange agreements, dated Sept. 14, 2016, with each of
the accredited investors who invested in the Company's registered
direct offering of 750,000 shares of common stock and simultaneous
private placement of 750,000 warrants on June 20, 2016, and private
placement of 892,857 shares of Series B Convertible Preferred Stock
and 223,214 warrants on July 7, 2016. Under the terms of the
Exchange Agreements, each investor exchanged its respective June
Warrants and July Warrants (an aggregate of 973,214 Warrants),
without the payment of any exercise price therefore, and
relinquished any and all other rights it may have under the
Warrants, for an aggregate of 680,000 shares of the Company's newly
designated Series C Convertible Preferred Stock.
The Company granted the holders of the Series C Convertible
Preferred Stock piggyback registration rights pursuant to the terms
of registration rights agreements entered into on Sept. 14, 2014.
The Company registered the shares of common stock underlying the
Series C Convertible Preferred Stock for resale in a registration
statement on Form S-1 (File Number 333- 212995) that was declared
effective on Sept. 16, 2016.
As contemplated by the Exchange Agreements and as approved by the
Company' Board of Directors, the Company filed with the Secretary
of State of the State of Delaware a Certificate of Designation of
Preferences, Rights and Limitations of Series C Convertible
Preferred Stock, on Sept. 14, 2016. Pursuant to the Series C
Certificate of Designations, the Company designated 680,000 shares
of its blank check preferred stock as Series C Convertible
Preferred Stock. Each share of Series C Convertible Preferred
Stock has a stated value of $0.001 per share. In the event of a
liquidation, dissolution or winding up of the Company, each share
of Series C Convertible Preferred Stock will be entitled to a per
share preferential payment equal to the stated value. Each share
of Series C Convertible Preferred Stock is convertible into one
share of Common Stock. The conversion ratio is subject to
adjustment in the event of stock splits, stock dividends,
combination of shares and similar recapitalization transactions.
The Company is prohibited from effecting the conversion of the
Series C Preferred Stock to the extent that, as a result of such
conversion, the holder beneficially owns more than 9.99%, in the
aggregate, of the issued and outstanding shares of the Company's
common stock calculated immediately after giving effect to the
issuance of shares of common stock upon the conversion of the
Series C Convertible Preferred Stock. Each share of Series C
Convertible Preferred Stock entitles the holder to vote on all
matters voted on by holders of Common Stock. With respect to any
such vote, each share of Series C Convertible Preferred Stock
entitles the holder to cast such number of votes equal to the
number of shares of Common Stock such shares of Series C
Convertible Preferred Stock are convertible into at such time, but
not in excess of the Beneficial Ownership Limitation.
About Towerstream Corporation
Towerstream Corporation (NASDAQ:TWER) is a leading Fixed-Wireless
Fiber Alternative company delivering high-speed Internet access to
businesses. The Company offers broadband services in 12 urban
markets including New York City, Boston, Los Angeles, Chicago,
Philadelphia, the San Francisco Bay area, Miami, Seattle,
Dallas-Fort Worth, Houston, Las Vegas-Reno, and the greater
Providence area.
As of June 30, 2016, Towerstream had $36.5 million in total
assets, $42.95 million in total liabilities and a total
stockholders' deficit of $6.47 million.
The Company reported a net loss of $40.5 million in 2015, a net
loss of $27.6 million in 2014 and a net loss of $24.8 million in
2013.
TPC GROUP: S&P Lowers CCR to 'CCC+'; Outlook Negative
-----------------------------------------------------
S&P Global Ratings said that it lowered its corporate credit rating
on Texas-based TPC Group Inc. to 'CCC+' from 'B-'. The outlook is
negative.
S&P also lowered its issue-level rating on the company's first-lien
secured debt to 'CCC+' from 'B-'. S&P's recovery rating on the
debt remains '4,' indicating its expectation of average (lower half
of the 30%-50% range) recovery in the event of payment default.
Trailing-12-month leverage has not improved in recent quarters, as
was S&P's expectation. TPC has faced pricing pressures related to
a challenging operating environment and lower product prices,
resulting in higher-than-anticipated debt leverage. S&P continues
to categorize TPC's financial risk profile as highly leveraged. As
of June 30, 2016, adjusted debt to EBITDA was about 9.8x. S&P
anticipates leverage will remain unsustainable over the next 12
months.
S&P continues to characterize TPC's business risk profile as weak.
That reflects its narrow product range of commodity compounds,
limited customer and geographic diversity (its top 10 customers
represent about half of revenues and nearly all earnings are
derived in the U.S.), cyclicality in its key markets, and modest
EBITDA margins. Other risk factors include the volatility S&P
anticipates in pricing as a result of volatility in crude-oil
prices. These are partially offset by the company's favorable
competitive position as one of the largest merchant processors of
crude butadiene and an increasing emphasis on value addition. These
factors are driving reasons that the company's business risk
position has remained at the current level.
TPC aggregates and processes crude C4 to produce commodity
chemicals, including butadiene and butene-1. Butadiene, the
company's main product, is an input in U.S. synthetic rubber
production, mostly consumed by the cyclical domestic tire industry.
In recent years, the company expanded its product range to include
gasoline additives and more value-added products. Other chemicals
produced by TPC have applications in plastic resins, fuels, lube
additives, and other industrial applications, many of which have
commodity-like characteristics.
S&P considers TPC's liquidity to be adequate and expect cash
sources to exceed cash uses by at least 1.2x until the company's
ABL becomes current. The $250 million ABL contains a springing
minimum fixed-charge coverage covenant of 1x that applies if
availability drops below $20 million. Based on S&P's scenario
forecasts, it expects that availability under the ABL will remain
above $20 million, and therefore the company should not be subject
to the springing covenant in the next few quarters.
Principal liquidity sources include:
-- Moderate availability under the $250 million ABL revolving
credit facility.
-- Cash funds from operations (FFO) of $10 million-$20 million
over the next two years.
Principal liquidity uses include:
-- Annual capital spending of approximately $45 million-$
55 million.
-- No acquisitions.
The outlook is negative. S&P don't expect fundamental improvement
to the company's core businesses over the next year as the
operating environment remains depressed. At the current rating,
S&P expects that debt to EBITDA (on a weighted average of
historical and projected numbers) will remain at unsustainable
levels over the next 12 months. S&P assumes that management and
the company's owners will support credit quality and, therefore,
S&P has not factored into its analysis any distributions to
shareholders or significant debt-funded capital spending.
S&P could lower ratings again if the company's leverage increases
further over the next 12 months, which could be prompted by
debt-funded acquisitions or if earnings weaken because of erosion
in margins. Similarly, S&P could lower ratings further if
liquidity falls to less than adequate or weaker, or if the company
is unable to refinance or extend its ABL maturity due in 2017. S&P
could also lower ratings should the company face any problems
pertaining to covenant compliance. Lastly, S&P could lower ratings
if it no longer deems management or financial-sponsor ownership to
be supportive of improvement in credit metrics.
S&P could revise the outlook to stable if the company refinances
its ABL in a timely manner. Although less likely, S&P could raise
ratings by one notch if the company improves leverage, either
through management actions or changes in operating performance,
such that debt to EBITDA improves to the mid-single digit range
over the next year. S&P would have to believe such improvement is
sustainable. S&P expects the company to at least maintain current
liquidity for either upside situation. S&P would also expect
improvement in the sector outlook.
RECOVERY ANALYSIS
Key analytical factors:
-- S&P completed a review of the recovery analysis for TPC
Group Inc. and affirmed the recovery rating at '4',
indicating S&P's expectation for average recovery (lower
half of the 30%-50% range) in the event of payment default.
-- S&P revised the rating on the company's first-lien notes to
'CCC+' from 'B-,' consistent with the lower corporate credit
rating. S&P continues to value the company on a going-
concern basis using a 5x multiple of S&P's projected
emergence EBITDA.
Simulated default assumptions:
-- Year of default: 2018
-- EBITDA at emergence: $90 million
-- Implied enterprise value multiple: 5x
Simplified waterfall:
-- Net enterprise valuation (after 5% administrative costs):
$425 million
-- Priority claims: $150 million
-- Collateral available for secured creditors: $275 million
-- First-lien claims: $865 million
-- First-lien notes recovery expectation: 30%-50%
* All debt amounts include six months of prepetition interest.
Collateral value equals asset pledge from obligors after priority
claims plus equity pledge from nonobligors after nonobligor debt.
TRIMEDYNE INC: Reports $123-K Net Loss for June 30 Quarter
----------------------------------------------------------
Trimedyne, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $123,000 on $1.11 million of net revenues
for the three months ended June 30, 2016, compared with a net loss
of $97,000 on $1.48 million of net revenues for the same period in
the prior year.
For the nine months ended June 30, 2016, the Company listed a net
income of $469,000 on $3.78 million of net revenues, compared to a
net loss of $466,000 on $4.03 million of net revenues for the same
period in the prior year.
The Company's balance sheet at June 30, 2016, showed $3.30 million
in total assets, $701,000 in total liabilities, and a stockholders'
equity of $2.60 million.
At June 30, 2016, the Company had working capital of $1,614,000
compared to $1,969,000 at the end of the fiscal year ended
September 30, 2015. Cash decreased by $126,000 to $239,000 from
$365,000 at September 30, 2015.
As of June 30, 2016, the Company had cash on hand of $239,000. The
Company intends to fund operations with cash on hand and from
operations; however, additional working capital in the next 12
months may be required based upon its current expenditure rate.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
The Company will attempt to lower its overhead costs on less
profitable segments, raise additional debt and/or equity capital,
sell some of its assets including utilization of current inventory,
outsource some of its manufacturing processes and/or reduce its
costs by eliminating certain personnel in order to reduce its cash
consumption levels to a supportable level. There can be no
assurances that the Company will be successful in those efforts.
If the Company is unsuccessful in its efforts, it may be forced to
reduce or curtail certain operational segments.
A copy of the Form 10-Q is available at:
http://bit.ly/2cpxa9D
About Trimedyne, Inc.
Trimedyne, Inc., is engaged in the development, manufacturing and
marketing of 80 and 30 watt Holmium cold pulsed lasers (Lasers).
The Company's segments include Product, and Service and Rental. It
also offers a range of disposable and reusable, fiber optic laser
energy delivery devices (Fibers, Needles and Switch Tips) for use
in an array of medical applications.
TRIN POLYMERS: Hires Wardrop & Wardrop as Counsel
-------------------------------------------------
Trin Polymers, LLC, seeks authority from the U.S. Bankruptcy Court
for the Western District of Michigan to employ Wardrop & Wardrop,
P.C. as counsel to the Debtor.
Trin Polymers requires Wardrop & Wardrop to represent the Debtor in
the chapter 11 case.
Wardrop & Wardrop will be paid at these hourly rates:
Partners $375
Associates $250
Paralegal $100
Wardrop & Wardrop will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Robert F. Wardrop, partner in the law fim of Wardrop & Wardrop,
P.C. assured the Court that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code
and does not represent any interest adverse to the Debtor and its
estates.
Wardrop & Wardrop can be reached at:
Robert F. Wardrop II, Esq.
Denise D. Twinney, Esq.
300 Ottawa Avenue, NW, Suite 150
Grand Rapids, MI 49503
Tel: (616) 459-1225
E-mail: robb@wardroplaw.com
denise@wardroplaw.com
About Trin Polymers, LLC
Trin Polymers LLC, sought protection under Chapter 11 (Bankr. W.D.
Mich. Case No. 16-16-03615) on July 11, 2016. The petition was
signed by Mike B. Mike III, managing member.
The Debtor is represented by Robert F. Wardrop, II, Esq., at
Wardrop & Wardrop, P.C. The case is assigned to Judge John T.
Gregg.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and liabilities.
No official committee of unsecured creditors has been appointed in
the case.
TRINITY 83: Hires Cohen & Krol as Attorney
------------------------------------------
Trinity 83 Development, LLC, seeks authority from the U.S.
Bankruptcy Court for the Northern District of Illinois to employ
Cohen & Krol as attorney to the Debtor.
Trinity 83 requires Cohen & Krol to:
a. give the Debtor legal advice with respect to its powers and
duties as Debtor-in-Possession in the continued operation
of its business and management of its property;
b. prepare on behalf of the Debtor as Debtor-in-Possession
necessary applications, answers, orders, reports and other
legal papers; and
c. perform all other legal services for the Debtor as Debtor-
in-Possession which may be necessary herein.
Cohen & Krol will be paid a retainer in the amount of $15,000.
Cohen & Krol will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Joseph E. Cohen and Gina B. Krol, members of Cohen & Krol, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Cohen & Krol can be reached at:
Joseph E. Cohen, Esq.
Gina B. Krol, Esq.
COHEN & KROL
105 West Madison Street, Suite 1100
Chicago, IL 60602
Tel: (312) 368-0300
About Trinity 83 Development LLC.
Trinity 83 Development LLC filed a chapter 11 petition (Bankr. N.S.
Ill. Case No. 16-24652) on Aug. 1, 2016. The petition was signed by
Donald L. Santacarina, member. The Debtor is represented by Gina B.
Krol, Esq., at Cohen & Krol. The case is assigned to Judge Deborah
L. Thorne. The Debtor disclosed total assets at $2.41 million and
total debts at $2.13 million at the time of the filing.
No official committee of unsecured creditors has been appointed in
the case.
US TELEPACIFIC: S&P Assigns 'B' Rating on Sr. Sec. Notes Due 2021
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Los Angeles-based competitive local exchange
carrier U.S. TelePacific Holdings Corp.'s senior secured notes due
2021. The '3' recovery rating indicates S&P's expectation for
meaningful (50%-70%; lower half of the range) recovery of principal
in the event of payment default.
The company will use proceeds from the notes offering to partly
finance its acquisition of DSCI Corp., which closed on Sept. 19,
2016. DSCI is a network services business that provides hosted
communications, managed IT, and connectivity solutions.
As a result of the transaction, S&P expects that adjusted debt to
EBITDA will increase modestly to around the mid-6x from the low-6x
area as of June 30, 2016, although the increase in leverage is not
sufficient for S&P to revise its financial risk assessment or the
'B' corporate credit rating on TelePacific.
RATINGS LIST
U.S. TelePacific Holdings Corp.
Corporate Credit Rating B/Stable/--
New Rating
U.S. TelePacific Holdings Corp.
Senior Secured Notes due 2021 B
Recovery Rating 3L
W&T OFFSHORE: S&P Raises CCR to 'CCC' After Unsec. Note Exchange
----------------------------------------------------------------
S&P Global Ratings raised the corporate credit rating on
Houston-based oil and gas exploration and production (E&P) company
W&T Offshore Inc. to 'CCC' from 'SD'. At the same time, S&P raised
the issue-level rating on the company's 8.5% senior unsecured notes
due 2019 to 'CC' from 'D'. The recovery rating on the debt remains
'6', reflecting S&P's expectation of negligible (0% to 10%)
recovery to creditors in the event of a payment default.
The issue-level and recovery ratings on the company's remaining
debt issues are unchanged.
"We raised the corporate credit rating on W&T Offshore following
the exchange of its 8.5% senior unsecured notes due 2019, and our
reassessment of the company's capital structure and credit
profile," said S&P Global Ratings credit analyst Kevin Kwok. "The
rating reflects our expectation that debt leverage will remain at
what we consider unsustainable levels over the next 24 months and
that the company could face a liquidity shortfall in the next 12
months, due to declining production and cash flows, higher costs,
or a potential reduction in the company's borrowing base," he
added.
There is also a possibility that Bureau of Ocean Energy Management
(BOEM) could require the company to provide additional financial
security on certain federal offshore oil and gas leases. The
outstanding orders total $260.8 million, but the company expects to
obtain amendments that will adjust this amount as it has
successfully done through private negotiations in the past.
S&P raised the issue-level rating on the 8.5% senior unsecured
notes due 2019 to 'CC' from 'D', reflecting S&P's opinion that
there will be no further distressed exchanges on these notes.
S&P has revised its assessment of W&T Offshore's liquidity to less
than adequate from adequate, reflecting limited covenant headroom,
S&P's opinion that the company has limited ability to absorb a
high-impact low-probability event without refinancing, its
less-than-satisfactory standing in the credit markets, and
less-than-prudent risk management. S&P also believes there could
be a reduction in the company's borrowing base during the spring
redetermination, or an increase in BOEM-mandated security
requirements causing a potential shortfall in 2017.
The negative rating outlook on W&T Offshore reflects the
possibility that S&P could lower the rating if it believed the
company would be unable to meet its financial or other
obligations.
S&P could lower the rating if liquidity deteriorated such that it
expected a material deficit, or if S&P no longer expected the
company to be able to meet its obligations. This would most likely
occur if the company's proved reserves declined, potentially
leading to a reduction in the borrowing base at the
spring redetermination. S&P could also lower the rating if the
company was unable to continue amending the BOEM orders through
private negotiations and was forced to provide $260.8 million in
financial securities, or if it announced additional distressed
exchanges.
S&P could revise the outlook to stable if the company were able to
improve liquidity, which would most likely occur if it were able to
grow reserves to maintain or increase the current borrowing base to
fund capital expenditures over the next few years, likely in
conjunction with an oil price recovery.
WARREN RESOURCES: Wins Plan Confirmation, Eyes Sept. 30 Ch.11 Exit
------------------------------------------------------------------
The Bankruptcy Court for the Southern District of Texas on
September 14, 2016, entered an order approving the Plan of
Reorganization of Warren Resources, Inc. and Its Affiliated
Debtors. A copy of the Confirmation Order is available at
https://is.gd/Qwx0Qu
The Debtors anticipate emerging from Chapter 11 bankruptcy
proceedings on the date when all remaining conditions to
effectiveness to the Plan are satisfied. Currently, the Debtors
expect all conditions precedent to the Plan to have been satisfied
on or about September 30, 2016. Although the Debtors anticipate
that the Effective Date will occur on or prior to September 30,
2016, the Debtors can make no assurances as to when or whether the
Plan will become effective.
Under the Plan:
* the lenders under the Company's first-lien credit agreement
-- Plan Sponsor -- will become lenders under a new first-lien
credit facility and will obtain 82.5% of the post-restructuring
common equity of the Company -- Sponsor Equity -- subject to
dilution under a new management incentive program, the exercise of
warrants and a Supplemental Equity Distribution;
* the lenders under the Company's second-lien credit facility,
the holders of the Company's unsecured notes and, at the option of
the Plan Sponsor, a holder of another claim (if allowed) will be
entitled to share pro rata in 17.5% of the post-restructuring
common equity of the Company, which is subject to dilution under a
new management incentive program and the exercise of warrants, , as
described below);
* the lenders under the Company's second-lien credit facility
will be entitled to receive 7.55% of the post-restructuring common
equity of the Company; to the extent the pro rata share of the
General Equity Pool received by such lenders is less than such
amount, such lenders will be entitled to receive a supplemental
distribution of common equity to bring their holdings of the
post-restructuring common equity of the Company up to 7.55% --
Supplemental Equity Distribution -- and the Sponsor Equity will be
diluted by an amount equal to the Supplemental Equity Distribution.
The Supplemental Equity Distribution is subject to dilution under
a new management incentive program and the exercise of warrants;
and
* the reorganized Company will, pursuant to a warrant
agreement, issue to the lenders under the Company's second-lien
credit facility five-year warrants to purchase up to 5% of the
post-restructuring common equity of the Company (subject to
dilution under a new management incentive plan).
Upon the Effective Date, if any amounts have been borrowed under
the DIP Facility, the Debtors shall, at the Plan Sponsor's option
repay such borrowings in full, refinance the DIP Facility, or roll
such borrowings into the New First Lien Facility.
As of September 14, 2016, the Company had 85,253,929 shares of
common stock, par value $0.0001 per share, issued and outstanding.
As required by the Plan, on the Effective Date, all shares of the
Company's common stock and preferred stock, as well as all
unexercised incentive stock options, non-qualified stock options,
stock appreciation rights, or other unexercised options, warrants
or rights to acquire or receive an equity interest in the Company,
in each case, outstanding immediately prior to effectiveness of the
Plan, will be cancelled and will permanently cease to exist.
As of August 31, 2016, the Company's total assets were
approximately $185.5 million, and it had total liabilities of
approximately $564.1 million. This financial information has not
been audited or reviewed by the Company's independent registered
public accounting firm and may be subject to future reconciliation
or adjustments. This information should not be viewed as indicative
of future results.
The Company cautions that trading in its securities during the
pendency of the Chapter 11 Cases is highly speculative and poses
substantial risks. As discussed above, the Plan has been approved
by the Bankruptcy Court, and pursuant to the Plan, the Company's
common stock and preferred stock, as well as all unexercised
incentive stock options, non-qualified stock options, stock
appreciation rights, or other unexercised options, warrants or
rights to acquire or receive an equity interest in the Company, in
each case, outstanding immediately prior to effectiveness of the
Plan, will be cancelled and cease to exist on the Effective Date,
and the holders of the Company's common stock or preferred stock
will not receive any distribution in respect thereof. Even though
the Company's common stock continues to be quoted on the OTC Pink
Marketplace, under the Plan, it has no underlying value, and the
Company's stockholders should not view the trading activity of the
Company's common stock on the OTC Pink Marketplace or any other
market or trading platform as being indicative of any value they
would receive in respect of the Company's common stock in
connection with the Chapter 11 Cases.
About Warren Resources, Inc.
Warren Resources Inc., is an independent energy company engaged in
the exploration, development and production of domestic onshore
crude oil and natural gas reserves. It is primarily focused on
the
development of its waterflood oil recovery properties in the
Wilmington field within the Los Angeles Basin of California, its
position in the Marcellus Shale gas in northeastern Pennsylvania
and its coalbed methane, or CBM, natural gas properties located in
Wyoming.
Warren Resources, Inc., Warren E&P, Inc., Warren Resources of
California, Inc., Warren Marcellus LLC, Warren Energy Services,
LLC, and Warren Management Corp. each filed a voluntary petition
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead
Case No. 16-32760) on June 2, 2016. The Debtors listed total
assets of $230 million and total debt of $545 million.
The Debtors hired Andrews Kurth LLP as counsel, Jefferies LLC
as investment banker, Deloitte Transactions and Business Analytics
LLP as restructuring advisor and Epiq Bankruptcy Solutions, LLC as
claims, balloting and noticing agent.
Judge Marvin Isgur has been assigned the cases.
An official committee of unsecured creditors has not been
appointed in these cases by the Office of the United States
Trustee.
WD WOLVERINE: S&P Assigns 'B' CCR & Rates 1st Lien Loans 'B'
------------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Lakeland, Fla.-based pharmacy benefit management servicer WD
Wolverine Holdings LLC. The rating outlook is stable.
At the same time, S&P assigned its 'B' issue-level rating to WD
Wolverine Holdings LLC's proposed first-lien credit facility and
assigned a 'CCC+' issue-level rating to the company's second-lien
credit facility. The recovery rating on the first-lien debt is
'3', indicating S&P's expectations for meaningful (50%-70%; at the
high end of the range) recovery in the event of payment default.
The recovery rating on the second-lien debt is '6', indicating
S&P's expectations for negligible (0%-10%) recovery in the event of
payment default.
"WD Wolverine Holdings LLC is an integrated pharmacy benefit
manager (PBM) that contracts primarily with small to midsize
self-insured employers, unions, municipals, and providers in the
U.S.," said S&P Global Ratings credit analyst James Uko. WD
Wolverine Holdings LLC currently maintains a network of
approximately 67,000 retail pharmacies and wholly owned mail and
specialty pharmacies nationwide. The company covers 1 million
lives and processes 6 million prescriptions annually.
The PBM industry is highly fragmented, with approximately 60% of
the market dominated by three competitors (Express Scripts, Optum
Rx, which is owned by UnitedHealthcare, and CVS Caremark.). The
next largest competitor holds approximately 6% of the market.
Consolidation and market dynamics among the larger competitors have
created opportunities for smaller companies such as WD Wolverine
Holdings LLC to contract with underserved clients and health plan
providers that wish to remain independent of ownership from larger
insurance providers with PBM capabilities. Thus, despite WD
Wolverine Holdings' limited market share (less than 1%) and
negotiating leverage, it can still continue to successfully compete
for small to midsize clients via higher more customized service
levels.
S&P's rating outlook on WD Wolverine Holdings LLC is stable,
indicating S&P's expectation that the company will generate
double-digit organic revenue growth, sustain margins in the
high-single-digit to low-double-digit range, and produce positive
cash flow growth. Given the company's financial sponsor ownership
and the leverage layered onto the capital structure due to the
recapitalization, S&P believes leverage will remain over 5x for the
next few years as it expects the financial sponsors to favor
shareholder returns over permanent debt reduction.
S&P could consider a lower rating if the company experiences major
contract losses as a result of higher competition from larger PBMs
or consolidation from larger health plans with in-house PBM
capabilities. This would result in depressed margins and negative
cash flows. S&P believe the magnitude of the deterioration
necessary to trigger a lower rating would be a margin decline of
more than 400 basis points.
S&P could consider raising the rating if the company appears likely
to sustain debt to EBITDA below 5x. This could occur if the
company achieved an approximately 400-basis-point improvement in
margin by developing greater negotiation and pricing ability. S&P
find this scenario unlikely given the company's growth trajectory,
its scale, and its financial sponsor ownership, which S&P believes
will favor the use of internal cash flows for shareholder returns
rather than permanent debt reduction.
WEST LANE PROPERTIES: Hires Mark Hannon as Counsel
--------------------------------------------------
West Lane Properties, Inc., seeks authority from the U.S.
Bankruptcy Court for the Eastern District of California to employ
Mark J. Hannon, Esq. as counsel to the Debtor.
West Lane Properties requires Mr. Hannon to:
a. prepare and file the Schedules, Statements of Financial
Affairs and other related forms;
b. represent the Debtor in possession at all future meetings
of creditors, hearings, pretrial conferences, and trial in
case of any litigation arising in connection with the
bankruptcy case;
c. prepare, file and present to the bankruptcy court any
pleading requesting or opposing relief;
d. prepare, file and present to the bankruptcy court of a
disclosure statement and plan of reorganization under
Chapter 11 of the Bankruptcy Code;
e. review claims made by creditors and interested parties,
including preparation and prosecution of any objections to
claims as appropriate;
f. prepare and present of a final accounting and motion for
final decree closing the bankruptcy case;
g. prepare, file and prosecute any litigation against the
Debtor's secured lenders and others if deemed appropriate;
and
h. perform all other legal services to the Debtor which may be
necessary herein.
Mr. Hannon will be paid at the hourly rate of $345, and a retainer
in the amount of $10,000.
Mr. Hannon will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mark J. Hannon, Esq., assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtor and its estates.
Mr. Hannon can be reached at:
Mark J. Hannon, Esq.
1114 W Fremont St.
Stockton, CA 95203-2622
Tel: (209) 942-2229
E-mail: markjhannon@yahoo.com
About West Lane Properties
West Lane Properties Inc., based in Stockton, CA, filed a Chapter
11 petition (Bankr. E.D. Cal. Case No. 16-25217), on August 9,
2016. Hon. Michael S. McManus presides over the case. Mark J.
Hannon, Esq. serves as bankruptcy counsel.
In its petition, the Debtor estimated $1 million in assets and
$818,172in liabilities. The petition was signed by Hoc C. Ma,
president.
No official committee of unsecured creditors has been appointed in
the case.
WEST VIRGINIA HIGH: Taps Arnett Carbis as Accountants
-----------------------------------------------------
West Virginia High Technology Consortium Foundation and HT
Foundation Holdings, Inc. ask for permission from the U.S.
Bankruptcy Court for the Northern District of West Virginia to
employ Arnett Carbis Toothman, LLP as accountants, nunc pro tunc to
August 4, 2016.
The Debtors require Arnett Carbis to:
(a) prepare the Debtor's Form 990s (both state and federal
returns) for the year ending March 31, 2016; and
(b) complete an audit of the Debtor's financial statements for
the year ending March 31, 2016.
With respect to compensation of Arnett Carbis, the Agreements
provide that the Debtors will compensate Arnett Carbis at:
-- $39,600 for the Debtors forms 990 and audits; and
-- $1,000 for each form 990 completed for the Debtors'
subsidiaries.
Arnett Carbis will be paid at these hourly rates effective
October 1, 2016:
Ron Show, manager $225
Kayla Conneway, manager $185
Tom Aman, partner $310
Mike Deery, senior manager $250
Stacie Miller, manager $185
Bill Phillips, partner $310
Sharon Smith, supervisor $140
Leanna Parsons, supervisor $140
Joye Menendez $75
Arnett Carbis will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Ronald Show, manager of Arnett Carbis, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtor and its estate.
Arnett Carbis can be reached at:
Ronald Show
ARNETT CARBIS TOOTHMAN, LLP
101 Washington Street, East
P. O. Box 2629
Charleston, WV 25329
Tel: (304) 346-0441
Fax: (304) 346-8333
About West Virginia High Technology
Consortium Foundation
West Virginia Hight Technology Consortium Foundation and HT
Foundation Holdings, Inc., filed chapter 11 petitions (Bankr. N.D.
W.Va. Case Nos. 16-00806 and 16-00807) on Aug. 4, 2016. The Hon.
Patrick M. Flatley presides over the case. David B. Salzman, Esq.,
at Campbell & Levine, LLC serves as bankruptcy counsel.
In its petition, the Debtors estimated $10 million to $50 million
in both assets and liabilities. The petitions were signed by James
L. Estep, president and CEO.
YELLOW CAB AFFILIATION: Hearing on Committee's Plan Outline Oct. 5
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Yellow Cab
Affiliation, Inc., will appear before the Honorable Carol A. Doyle
on Oct. 5, 2016 at 10:00 a.m., at Courtroom 742, in the Everett
McKinley Dirksen Building, 219 South Dearborn Street, Chicago,
Illinois 60604, to seek approval of the disclosure statement
explaining its proposed Chapter 11 plan of liquidation for Yellow
Cab.
The Committee asks the Court to approve the disclosure statement
proposed in support of the Chapter 11 Plan of Liquidation and
authorize solicitation of ballots for or against the Committee's
Plan with these proposed dates:
(a) Proposed Confirmation Hearing Date: On or the week of Nov. 9,
2016; and
(b) Proposed Objection and Voting Deadlines: 4:00 pm, on Nov. 4,
2016, or at least five days before the Confirmation Hearing Date.
The Creditors Committee of Yellow Cab on Aug. 30, 2016, filed with
the U.S. Bankruptcy Court for the Northern District of Illinois its
latest Chapter 11 plan of liquidation. The liquidating plan
provides for the sale of the operating assets of the Debtor to the
highest bidder under an asset purchase agreement. Under the plan,
unsecured creditors asserting $5.46 million in claims will receive
a beneficial interest in the creditor trust. A copy of the
disclosure statement is available for free at https://is.gd/RULgb2
About Yellow Cab Affiliation
Chicago, Illinois-based Yellow Cab Affiliation, Inc., filed for
Chapter 11 protection (Bankr. N.D. Ill. Case No. 15-09539) on
March
18, 2015. The petition was signed by Michael Levine, president.
Bankruptcy Judge Hon. Carol A. Doyle presides over the case.
Matthew T. Gensburg, Esq., and Martin S Kedziora, Esq., at
Greenberg Traurig, LLP, and Bruce Zirinksky represent the Debtor
in
its restructuring effort.
The Debtor estimated assets at $1 million to $10 million and debt
of $10 million to $50 million.
YRC WORLDWIDE: Analyst Presentation Held
----------------------------------------
YRC Worldwide Inc. held an analyst presentation on Sept. 21, 2016.
A copy of the materials used at the presentation is available for
free at https://is.gd/hhDVhg
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that offers
its customers a wide range of transportation services. These
services include global, national and regional transportation as
well as logistics.
YRC Worldwide reported net income attributable to common
shareholders of $700,000 on $4.83 billion of operating revenue for
the year ended Dec. 31, 2015, compared to a net loss attributable
to common shareholders of $85.8 million on $5.06 billion of
operating revenue for the year ended Dec. 31, 2014.
As of June 30, 2016, YRC had $1.88 billion in total assets, $2.24
billion in total liabilities and $359.8 million total stockholders'
deficit.
* * *
As reported by the TCR on Feb. 18, 2014, Moody's Investors Service
had upgraded the Corporate Family Rating for YRC Worldwide from
'Caa3' to 'B3', following the successful closing of its
refinancing transactions.
In the Aug. 11, 2015, TCR report, Standard & Poor's Ratings
Services said that it has raised its corporate credit rating on
Overland, Kan.-based less-than-truckload (LTL) trucking company
YRC Worldwide to 'B-' from 'CCC+'.
"The upgrade reflects YRC's earnings growth and improved liquidity
position, along with our belief that gradual improvement in the
company's operating performance will result in credit measures
that are commensurate with the rating," said Standard & Poor's
credit analyst Michael Durand.
ZEST HOLDINGS: S&P Retains 'B' CCR on Proposed $70MM Add-On
-----------------------------------------------------------
S&P Global Ratings said its ratings on Zest Holdings LLC are
unchanged following the company's proposed $70 million add-on to
the first-lien loan. S&P revised the recovery rating on the senior
secured debt to '4' from '3'. The recovery rating of '4' indicates
S&P's expectation for average recovery (30%-50%; upper half of the
range) on these obligations in the event of a payment default.
S&P expects the company to use proceeds to redeem the second-lien
term loan.
S&P's 'B' corporate credit rating on Zest reflects S&P's assessment
of the company's business risk as weak and the financial risk
profile as highly leveraged. The outlook is stable.
S&P's assessment of a weak business risk profile reflects
significant product concentration (namely, its Locator product
offering), which has a patent expiring in October 2018, the
elective nature of procedures incorporating the Locator product,
and a relatively small addressable market. S&P's business risk
assessment also incorporates the company's leading position in
removable overdenture attachment systems, high loyalty among dental
practitioners, low manufacturing costs, and the low percentage of
overall cost in the dental procedure, all leading to very strong
EBITDA margins. The highly leveraged financial risk profile
reflects adjusted debt leverage of about 5.5x to 6.0x.
RATINGS LIST
Zest Holdings LLC
Corporate Credit Rating B/Stable/--
Recovery Rating Revised
To From
Zest Holdings LLC
Senior Secured B B
Recovery Rating 4H 3H
*********
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.
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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
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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
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The Sunday TCR delivers securitization rating news from the week
then-ending.
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Point your Web browser to http://TCRresources.bankrupt.com/and use
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*********
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
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Copyright 2016. All rights reserved. ISSN: 1520-9474.
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