/raid1/www/Hosts/bankrupt/TCR_Public/161109.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, November 9, 2016, Vol. 20, No. 313
Headlines
1910 PARTNERS: Court Allows AOAO's $567K Attorney's Fees Claim
2654 HIGHWAY 169: Disclosures OK'd; Plan Hearing on Dec. 8
2747 CAMELBACK: Wins Bid for Judgment vs. Individuals Over DCA
ACE CASH: Moody's Affirms 'Ca' Corp. Family Rating, Outlook Stable
ACP-OFFENBACHERS: U.S. Trustee Forms 5-Member Committee
ACTIVE POWER: Liquidity Concerns Raises Going Concern Doubt
AIR SUB: Disclosures Conditionally OK'd; Hearing on Dec. 7
ALL PHASE STEEL: Order Lifting Stay for PAC Group Affirmed
ALLIQUA BIOMEDICAL: Covenant Problems Raise Going Concern Doubt
ALLY FINANCIAL: Joined BancAnalysts Association Conference
ALPHA NATURAL: Seeks $25 Million Reimbursement
ARCHANGEL DIAMOND: Supreme Court Won't Hear Appeal in Lukoil Rift
B6USA: Court Enjoins Stephen M. Hite from Operating as BaySix Group
BERNARD L. MADOFF: Picard Has $32.1M Deal with Cohmad
BILL BARRETT: Incurs $26.2 Million Net Loss in Third Quarter
BIOSERV CORPORATION: U.S. Trustee Forms 2-Member Committee
BISHOP OF STOCKTON: Disclosures OK'd; Plan Hearing on Dec. 20
BJORNER ENTERPRISES: To Get Pro Rata Dividend of 100% in 3 Years
BPS US: Nov. 10 Meeting Set to Form Creditors' Panel
BROWN PUBLISHING: Ex-CEO Urged 2nd Cir. to Reinstate Suit v. K&L
C&J ENERGY: Wins Approval of Senior Executive Incentive Plan
CALIFORNIA RESOURCES: Posts $546 Million Net Income for Q3
CALVERY SERVICES: U.S. Trustee Fails to Appoint Committee
CARDIFF INTERNATIONAL: KLJ & Associates Casts Going Concern Doubt
CAROLINE WYLY: Has SEC Deal on $101M Securities Fraud Judgment
CENTRAL LAUNDRY: To Create $60,000 Payment Fund For Unsecureds
CHATEAU DE LUMIERE: Hires Feasibility and Interest Rate Expert
CHEDDAR'S RESTAURANT: S&P Assigns 'B' CCR; Outlook Stable
CHICAGO CITY: Moody's Affirms 'Ba1' Rating on $7.8BB GO Debt
CHICAGO EDUCATION BOARD: Fitch Rates ULTGO Bonds 'B+'
COBALT INT'L: S&P Lowers CCR to 'CC' on Proposed Exchange Offer
CUSHMAN & WAKEFIELD: S&P Affirms 'B+' Issuer Rating
DIRECTBUY HOLDINGS: Nov. 14 Meeting Set to Form Creditors' Panel
DOOR TO DOOR: Case Summary & 20 Largest Unsecured Creditors
EARTHLINK HOLDINGS: S&P Puts 'B' CCR on CreditWatch Positive
EASTMAN KODAK: S&P Affirms 'B-' Rating on 1st Lien Sec. Facilities
ECLIPSE RESOURCES: Announces Third Quarter 2016 Financial Results
EL PATO: Seeks to Employ Sader Law Firm as Attorneys
ELBIT IMAGING: Unit Signs New LOI with BIG Shopping Centers
ELECTRONIC CIGARETTES: Calm Waters Holds 74.2% Stake as of Nov. 1
EMECO HOLDINGS: Seeks U.S. Recognition of Australian Proceeding
ENERGY FUTURE: Supreme Court Declines to Hear Noteholders' Appeal
ERG INTERMEDIATE: Akin Gump Representing Scott Y. Wood & HVI Cat
EXELIXIS INC: Incurs $11.3 Million Net Loss in Third Quarter
FARMER'S MECHANICAL: U.S. Trustee Unable to Appoint Committee
FILIP TECHNOLOGIES: UST Balks at Proposed Releases in Sale Order
FLOYD ELMER MCCLUNG: Disclosures OK'd; Plan Hearing on Dec. 20
FRONTIER COMMUNICATIONS: Moody's Lowers CFR to B1; Outlook Neg.
GASTAR EXPLORATION: Incurs $3.79 Million Net Loss in Third Quarter
GAWKER MEDIA: Asks Court to Toss $100M Claim by Atty. Huon
GEMMA CALLISTE: Unsecureds To Recoup 100% Under J. Malachi's Plan
GENCO SHIPPING: Liquidity Problems Raise Going Concern Doubt
GENERAL NUTRITION: Moody's Affirms Ba3 CFR; Outlook Negative
GREENEDEN US: Moody's Lowers CFR to B3; Outlook Stable
GREENEDEN US: S&P Lowers CCR to 'B-', Off CreditWatch Negative
GRIFFITH STERNBERG: Seeks to Hire Davidson Fink as Attorney
HAVEN CHICAGO: Case Summary & 12 Unsecured Creditors
HAVEN REAL ESTATE: Case Summary & 10 Unsecured Creditors
HUNTWICKE CAPITAL: Unit Inks Share Agreement with Phalanx Partners
HURLEY MEDICAL: Moody's Affirms Ba1 Rating on $91.4MM Debt
IMX ACQUISITION: Court Approves Replacement DIP Loan from Tannor
INTERPACE DIAGNOSTICS: Extends Secured Note Due Date Until Nov. 20
INTERPACE DIAGNOSTICS: Signs Employment Agreement with CEO
ION GEOPHYSICAL: Posts $1.91 Million Net Income for Third Quarter
J.J. BAKER: U.S. Trustee Unable to Appoint Committee
JAMES DEWAYNE MANNING: Unsecureds May Get $2,500 Under Plan
JYR'S EL MAGUEY: Seeks to Hire Sader Law Firm as Attorneys
KENNY LEIGH: Disclosures Conditionally OK'd; Hearing on Dec. 7
LAREDO PETROLEUM: S&P Raises Rating on Sr. Unsec. Notes to 'B'
LATTICE SEMICONDUCTOR: S&P Puts 'B' Rating on Watch Developing
LEARNING ENHANCEMENT: Case Summary & 17 Unsecured Creditors
LEGACY RESERVES: Reports Third Quarter 2016 Results
LONESTAR GENERATION: S&P Lowers Rating on $675MM Loan to 'B'
LSB INDUSTRIES: Exploring Strategic Alternatives
LSB INDUSTRIES: Jack Golsen, et al,. Hold 10.8% Stake as of Nov. 3
LSB INDUSTRIES: Posts $133.6 Million Net Income for Third Quarter
LUCAS ENERGY: Amends 6 Million Shares Resale Prospectus with SEC
MASON TEMPLE: Case Summary & 14 Unsecured Creditors
MCCLATCHY CO: Incurs $9.80 Million Net Loss in Third Quarter
MESOBLAST LIMITED: Had $60.3 Million in Cash as of Sept. 30
MISSION NEWENERGY: BDO Audit Expresses Going Concern Doubt
MONAKER GROUP: Monaco Investment, et al., Own 32.2% of Stock
MUNHYEON RO: Disclosures OK'd; Plan Confirmation Hearing on Dec. 1
NAVIDEA BIOPHARMACEUTICALS: Reports 2016 Q3 Financial Results
NEW ENGLAND COMPOUNDING: Shareholder Seeks Probation
ORBITAL ATK: Moody's Affirms Ba2 CFR & Changes Outlook to Negative
PENGROWTH ENERGY: In Talks with Lenders Over Covenant Amendments
PULMATRIX INC: Funding Problems Raises Going Concern Doubt
PURPLE TOOTH: Asks for Access to IRS Cash Collateral
RATAMESS CHIROPRACTIC: U.S. Trustee Unable to Appoint Committee
ROMEO'S PIZZA: Seeks to Use Cash Collateral for 90 Days
SCRIPSAMERICA INC: U.S. Trustee Forms 2-Member Committee
SECTOR111 LLC: Proposes to Hire Lobel Weiland as Counsel
SHONEY LLC: Seeks to Employ Gary Cruickshank as Counsel
SLEEP DOCTOR: Taps David & Wierenga as Special Counsel
SOLYMAN YASHOUAFAR: U.S. Trustee Forms 3-Member Committee
STEALTH SOFTWARE: Case Summary & 10 Unsecured Creditors
STONEMOR PARTNERS: Moody's Lowers CFR to B3; Outlook Stable
THERAPEUTICSMD INC: Reports Third Quarter 2016 Financial Results
TLA TANNING: Proposes Howard P. Slomka as Counsel
TRANS ENERGY: Satisfies One Condition in EQT Merger Agreement
UCI INT'L: Willkie, Morris Represent Ad Hoc Group of Noteholders
ULTRA PETROLEUM: CorEnergy Infrastructure Files Proofs of Claim
VERMILLION INC: Promotes Fred Ferrara to Chief Operating Officer
WINDSTREAM HOLDINGS: S&P Affirms 'B+' CCR; Outlook Stable
WINDSTREAM SERVICES: Fitch Affirms 'BB-' LT Issuer Default Rating
WINERY AT ELK: Seeks to Employ Meridian Law Firm as Counsel
[*] NJ Supreme Court Censures Lawyer
*********
1910 PARTNERS: Court Allows AOAO's $567K Attorney's Fees Claim
--------------------------------------------------------------
Judge Lloyd King of the United States Bankruptcy Court for the
District of Hawaii allowed the Association of Apartment Owner's of
Canterbury Place's request for the allowance of postpetition
attorneys' fees of $567,936.25 pursuant to Section 503(b)(4) of the
Bankruptcy Code and to be paid pursuant to Section 1129(a)(9)(A) as
an administrative claim in the bankruptcy case of 1910 Partners.
The AOAO filed a Motion to Enforce Confirmed Second Amended Plan of
Reorganization of March 4, 2016, and Dismiss the Notice of Appeal
Filed on June 22, 2016, or in the Alternative, Enforce the Terms of
the Confirmed Second Amended Plan of Reorganization.
Judge King ruled that the Debtor's Plan was substantially
consummated by the revesting of the Assets of the Plan, the
refinancing of the Pacific Guardian Life note and mortgage, and the
payment(s) of $18,000.00 per month to the AOAO. Judge King said
the Confirmed Plan provides for the full payment of allowed
Administrative Claims, which provide:
"2.1. Administrative Expense Claims. Subject to the provisions
of sections 330(a), 331 and 503(b) of the Bankruptcy Code, each
Allowed Administrative Expense Claim shall be paid by the Debtor or
the Reorganized Debtor, as the case may be, in full, in Cash, the
later of (i) the Effective Date, (ii) the due date thereof in
accordance with its terms, (iii) the date upon which such
Administrative Claim becomes an Allowed Claim, (iv) for any
liability incurred in the ordinary course of business, the date
upon which such liability is payable in the ordinary course of such
Debtor's business, consistent with past practices or (v) such other
date as may be agreed by the parties."
Upon confirmation, on or about March 4, 2016, 1910 was to pay the
administrative claims, as provided by the Confirmed Plan, and pay
the administrative claim pursuant to Section 1129(a)(9)(A) on the
Effective Date of the Plan, March 21, 2016. As an alternative to
the full payment of the AOAO's administrative claim, as provided by
the Confirmed Plan, 1910 could have arranged for a deposit, Rule
8007(a)(1)(B), Fed. R. Bankr. P., or created a reserve of the
amount owed, to the AOAO.
Judge King held that if 1910 did not want to pay the AOAO, the full
amount of the AOAO's administrative expense claim on the effective
date, March 21, 2016 or create a reserve pursuant to the Confirmed
Plan, 1910 could have moved for a supersedeas or appeal bond
pursuant to Rule 8007(a)(1)(B), Fed R. Bankr. P. or seek a stay of
the enforcement of the payment, pursuant to Rule 8007(a)(1)(A),
Fed. R. Bankr. P. 1910 did nothing after its filing of a Notice of
Appeal.
Judge King pointed out that under the Bankruptcy Code, the Rules
and the Confirmed Plan, and the award of $567,936.25 pursuant to
Sections 503(b)(4) and 1129(a)(9)(A), 1910 could have:
(1) pursuant to Section 2.1 of the Confirmed Plan, paid the full
amount of the Section 503(b)(4) $567,936.25 claim to AOAO
immediately, since the Effective Date was March 21, 2016;
(2) pursuant to Section 6.2 of the Confirmed Plan, 1910 could
have created a reserve for the $567,936.25, in the form provided
for by Section 6.2 of the Plan and by directions of the Court;
(3) pursuant to Rule 8007(a)(1)(A), Fed. R. Bankr. P., 1910
could have sought a stay of the enforcement of the Confirmed Plan;
(4) pursuant to Rule 8007(a)(1)(B), Fed. R. Bankr. P., 1910
could have proffered a supersedeas or appeal bond equal to 125% of
the Court's award of $567,936.25 or $709,245.31.
1910 did not exercise its legal options, 1910 simply filed its
Notice of Appeal and did nothing further until the AOAO filed this
Motion on June 29, 2016, Judge King noted.
A full-text copy of the Findings of Fact and Conclusions of Law
dated October 13, 2016, is available at https://is.gd/aKo6Vx from
Leagle.com.
1910 Partners, Debtor, is represented by Chuck C. Choi, Esq. --
Wagner Choi & Verbrugge, Allison A. Ito, Esq. -- Wagner Choi &
Verbrugge & Neil J. Verbrugge, Esq. -- Wagner Choi & Verbrugge.
Office of the U.S. Trustee., U.S. Trustee, is represented by Terri
Didion, Office of the United States Trustee.
About 1910 Partners
1910 Partners, a Hawaii limited partnership but based in Las
Vegas,
Nevada, filed for Chapter 11 bankruptcy (Bankr. D. Hawaii Case No.
15-00009) on January 5, 2015, in Honolulu. Judge Lloyd King
presides over the case. Chuck C. Choi, Esq., at Wagner Choi &
Verbrugge, serves as the Debtor's counsel. 1910 Partners
estimated
$1 million to $10 million in both assets and liabilities. The
petition was signed by Bruce Stark, authorized representative.
A list of 1910 Partners' 15 largest unsecured creditors is
available for free at http://bankrupt.com/misc/hib15-00009.pdf
This is the Debtor's second voluntary Chapter 11 bankruptcy case.
It first filed for Chapter 11 (Bankr. D. Hawaii Case No. 09-01682)
on July 24, 2009. Bankruptcy Judge Robert J. Faris presided over
the 2009 case. Chuck C. Choi, Esq., at Wagner Choi & Verbrugge,
also served as counsel in the 2009 case. A copy of the 2009
petition, including a list of its 18 largest unsecured creditors,
is available for free at http://bankrupt.com/misc/hib09-01682.pdf
The 2009 petition was signed by Bruce Stark, authorized
representative of the Company.
2654 HIGHWAY 169: Disclosures OK'd; Plan Hearing on Dec. 8
----------------------------------------------------------
The Hon. Robert E. Nugent of the U.S. Bankruptcy Court for the
District of Kansas has approved 2654 Highway 169, LLC's first
amended disclosure statement referring to the Debtor's plan of
reorganization dated Oct. 26, 2016.
The hearing to consider confirmation of the Plan will be held on
Dec. 8, 2016, at 10:30 a.m.
The last day for serving written acceptances or rejections of the
Plan is Nov. 28, 2016, by 4:00 p.m.
Nov. 28, 2016, is fixed as the last day for filing objections to
confirmation of the Plan.
No later than Dec.r 6, 2016, the plan proponent will certify to the
Court a signed ballot summary indicating the amount and number of
allowed claims of each class accepting or rejecting the Plan and
the amount of the allowed interest of each class accepting or
rejecting the Plan.
Class 3 consists of the claim of Montgomery County, Kansas, in the
amount of $493,728.10, plus interest and any additional taxes
accrued but not paid since the filing of the case. The Class 3
claim of the County was filed as proof of claim number 1,
reflecting the entire balance as being secured by the Debtor's
property. The Class 3 Claim is secured by a statutory lien against
the property. The treatment provided to Wells Fargo Bank, N.A., in
satisfaction of the Class 2 Claim will inure to the benefit of the
Class 3 Claim. The County will retain all of its rights to
continue assessing taxes from and after the Effective Date. In the
event that closing does not occur on or before March 31, 2017, the
County will have immediate relief from stay to foreclose any tax
liens to the extent the Class 3 Claim is not timely paid, in which
event the confirmation of this Plan will not have any further
effect on the County's rights under Kansas law. The Class 3 Claim
is impaired.
The funds currently held on deposit by the Debtor are in excess of
$500,000. These funds will be used to pay all administrative
expenses and make the payments required to the Class 4 Claims.
Additionally, in the unlikely event that the property does not sell
(by private contract or otherwise) for a sufficient amount to pay
the Class 2 Claim in full, a portion of the funds held on deposit
may be utilized to pay attorney's fees and costs as may constitute
a monetary obligation of the Debtor (the balance of the Class 2
Claim being a non-recourse obligation). The sale of the property
is likely to produce sufficient proceeds to satisfy all of the
Class 2 and Class 3 Claims.
The First Amended Disclosure Statement is available at:
http://bankrupt.com/misc/kab16-10644-122.pdf
About 2654 Highway 169, LLC.
2654 Highway 169, LLC, commenced a case under Chapter 11 of the
Bankruptcy Code (Bankr. D. Kan. Case No. 16-10644) on April 13,
2016. The Company disclosed estimated assets of $10 million to $50
million and estimated debts of $10 million to $50 million. The
petition was signed by Andrew Lewis, managing member. The case is
assigned to Hon. Robert E. Nugent.
David P. Eron, Esq., at Eron Law, P.A., serves as the Debtor's
bankruptcy counsel.
2747 CAMELBACK: Wins Bid for Judgment vs. Individuals Over DCA
--------------------------------------------------------------
In the adversary case captioned 2747 CAMELBACK, LLC, Plaintiff, v.
SINGLE-FAMILY RESIDENTIAL NEIGHBORHOOD PRESERVATION, INC. d/b/a/
CAMELBACK 24TH STREET SINGLE FAMILY COALITION; ET. AL., Defendants,
Adversary Proceeding No. 16-03065-hdh (Bankr. N.D. Tex.), Judge
Harlin Dewayne Hale of the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division, granted 2747
Camelback, LLC's Motion for Final Default Judgment against the
Defaulting Defendants and ordered Protection Under Servicemembers
Civil Relief Act and its Final Judgment Quieting Title and
Permanent Injunction entered in this Adversary Proceeding.
By the Complaint, the Debtor generally seeks a quiet title judgment
regarding the Development Cooperation Agreement. The DCA was
entered into in October, 2006, between the prior owner of the
Property, 2725 Office Investors, LLC, and eight individuals
referred to in the DCA as the "Party of the Second Part." The DCA
states that, in exchange for the support of the Party of the Second
Part (citizens who were active in local neighborhood interests and
causes) in assisting the prior owner of the Property in obtaining
approval of a rezoning application, the prior owner would
voluntarily agree to certain deed restrictions being recorded
against the Property, which would restrict what could be built on
the Property. The substance of those deed restrictions is detailed
in the DCA itself; thus, the DCA can be construed as restricting
what can be built on the Property by reference to future,
contemplated deed restrictions.
The Complaint seeks declarations that the DCA does not constitute a
covenant running with the land, declarations that the DCA is
invalid or unenforceable against the Debtor, the Estate, or the
Property, a finding that the DCA is avoidable under Arizona law and
the Bankruptcy Code, and other relief against the person or persons
who recorded the DCA. The fraudulent transfer avoidance of the DCA
is moot and has been orally withdrawn by Debtor as a result of the
Court granting judgment on the declaratory judgment claims.
The Complaint seeks relief in rem as well as against any of the
Defaulting Defendants. This Court has in rem jurisdiction over the
Property. Accordingly, the Court may enter the requested final
default judgment against the Property in rem. The same applies to
any Doe Defendants: "[a] bankruptcy court's in rem jurisdiction
permits it to determine all claims that anyone, whether named in
the action or not, has to the property or thing in question. The
proceeding is one against the world."
Judge Hale ruled that the Servicemembers Civil Relief Act applies
to this Adversary Proceeding. In that respect, several of the
Defaulting Defendants are artificial entities and are obviously not
in military service, the judge said. With respect to other
Defaulting Defendants, affidavits on file demonstrate that the
Debtor was able to ascertain that a number of them are not in
military service, the judge pointed out.
The Court is satisfied that a bond or escrow funds of $10,000 per
each Unknown Status Defaulting Defendant is appropriate, for a
total of $150,000. The Debtor must deposit $150,000.00 into the
trust funds account of Munsch Hardt Kopf & Harr, P.C., who will
hold the funds for two years after the entry of the final judgment
in this Adversary Proceeding. At that time, any funds remaining
and not released to any Unknown Status Defaulting Defendant will be
released. Prior to that time, any Unknown Status Defaulting
Defendant may make a claim against said funds in such amounts and
by such procedure as may otherwise be appropriate, and nothing in
the Court's final judgment prejudices any rights, claims,
arguments, defenses, or issues regarding the same.
Because the Debtor is entitled to a quiet title judgment holding
that the DCA is not binding on the Debtor, the Estate, or the
Property, and because of the circumstances by which the DCA was
recorded years after the fact and years during which it was kept
secret, the Debtor is entitled to a final injunction prohibiting
any person or entity from asserting against the Debtor, the Estate,
or the Property any right or claim based on the DCA, Judge Hale
ruled. Of course, if that right or claim exists independent of the
DCA, such as through a zoning ordinance, then the Court's
injunction would not apply, the judge said.
A full-text copy of the Findings of Fact and Conclusions of Law
dated October 21, 2016 is available at https://is.gd/0D2Goo from
Leagle.com.
2747 Camelback, LLC, Debtor, is represented by Thomas Daniel
Berghman, Esq. -- tberghman@munsch.com --Munsch Hardt Kopf & Harr
PC, Edward A. Clarkson, III, Esq. -- eclarkson@munsch.com -- Munsch
Hardt Kopf & Harr, P.C., Davor Rukavina, Esq. --
drukavina@munsch.com -- Munsch, Hardt, Kopf & Harr & Julian Preston
Vasek, Esq. -- JVasek@FranklinHayward.com -- Franklin Hayward LLP.
About 2747 Camelback
2747 Camelback, LLC, based in Dallas, Texas, owns real property and
improvements located at 2747 E. Camelback Road, 2725 E. Camelback
Road, and 2735 E. Camelback Road. Phoenix, Arizona 85016.
The Debtor filed a Chapter 11 petition (Bankr. N.D. Tex. Case No.
16-31846) on May 4, 2016. The Hon. Harlin DeWayne Hale presides
over the case. Davor Rukavina, Esq., at Munsch Hardt Kopf & Harr,
P.C., in Dallas, Texas, serves as counsel to the Debtor.
In its petition, the Debtor estimated $10 million to $50 million
in both assets and debts. The petition was signed by Scott
Ellington, authorized signatory.
ACE CASH: Moody's Affirms 'Ca' Corp. Family Rating, Outlook Stable
------------------------------------------------------------------
Moody's Investors Service affirmed Ace Cash Express, Inc.'s
corporate family and senior secured ratings at Ca with a stable
outlook. The rating action follows Ace's announcement that its
note exchange offer announced on Sept. 27, has been terminated.
Issuer: Ace Cash Express, Inc.
These ratings have been affirmed:
Long-term corporate family rating, Ca
Long-term local currency senior secured debt rating, Ca
Outlook, Remains Stable
RATINGS RATIONALE
The affirmation of Ace's ratings at Ca follows the company's
announcement on Nov. 4, that its note exchange offer was terminated
because the minimum participation condition under the exchange
offer was not satisfied. Moody's believes that Ace continues to
have a high risk of a distressed exchange given its unsustainable
capital structure. As is the case with its payday peers, Ace's
risk of default is further exacerbated by its transition to
underwriting-based lending to comply with the CFPB's new proposed
rules for payday, high-cost installment, and single-payment auto
title loans, announced in June 2016. Ace's current senior note
maturities in 2019 would closely follow the expected enactment and
subsequent implementation of the CFPB's final rules, and there will
be significant uncertainty regarding its success in transitioning
to the new underwriting-based lending.
A rating downgrade is unlikely given the current debt rating of Ca.
Should a potential restructuring or a substantial debt repurchase
be consummated, Ace's ratings could be upgraded to reflect the
company's new capital structure with lower amounts of debt and
possibly extended debt maturities.
The principal methodology used in these ratings was Finance
Companies published in October 2015.
ACP-OFFENBACHERS: U.S. Trustee Forms 5-Member Committee
-------------------------------------------------------
Judy A. Robbins, U.S. Trustee for Region 4, on Nov. 3 appointed
five creditors of ACP-Offenbachers, LLC t/a Offenbachers to serve
on the official committee of unsecured creditors.
The committee members are:
(1) Anne C. Mattson
Group Credit Manager
Tropitone Furniture Co., Inc.
5 Marconi
Irvine, CA 92618
(2) Steven Loewenthal
Senior Corporate Credit Manager
Minson Corporation
1 Minson Way
Montebello, CA 90640
(3) Jocelyn G. Chavez
Credit Manager
Treasure Garden
13401 Brooks Drive
Baldwin Park, CA 91706
(4) Blair Fernau, Manager
Manager
Aerospace Investors, LLC
7200 Wisconsin Avenue
Bethesda, MD 20814
(5) Stephen E. Ifeduba
Senior Corporate/Litigation Counsel
Washington Prime Group, Inc.
180 E. Broad Street
Columbus, OH 43215
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 ACP-Offenbachers, LLC
ACP-Offenbachers, LLC t/a Offenbachers filed a Chapter 11 petition
(Bankr. D. Md. Case No. 16-24106) on Oct. 24, 2016. The petition
was signed by Boyd Lipham, chief executive officer. The Debtor is
represented by Joel I. Sher, Esq., at Shapiro Sher Guinot &
Sandler. The case is assigned to David E. Rice. The Debtor
estimated assets and liabilities at $1 million to $10 million at
the time of the filing.
ACTIVE POWER: Liquidity Concerns Raises Going Concern Doubt
-----------------------------------------------------------
Active Power, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.33 million on $10.19 million of total revenue for the three
months ended September 30, 2016, compared to a net loss of $1.74
million on $14.91 million of total revenue for the same period in
2015.
For the nine months ended September 30, 2016, the Company incurred
a net loss of $7.22 million on $26.58 million of total revenue,
compared to a net loss of $3.55 million on $44.90 million of total
revenue for the same period a year ago.
As of September 30, 2016, the company had $23.06 million in total
assets, $15.95 million in total liabilities and a total
stockholders' equity of $7.11 million.
The Company currently do not expect to able to meet its liquidity
needs over the next 12 months. The Company's current projections
show that it has risk of not generating sufficient cash flow to
support operations within the next 12 months. As of September 30,
2016, the Company had limited financial resources and was using
significant cash in its operations. These factors raise
substantial doubt about its ability to continue as a going concern.
The Company's ability to achieve profitability and positive cash
flow would be dependent on higher bookings and revenue than it has
been able to achieve to date.
As the result of this uncertainty regarding the Company's ability
to continue as a going concern, on September 29, 2016 as part of a
strategic decision the Company entered into an asset purchase
agreement with Langley Holdings plc, a United Kingdom public
limited company ("Langley"), and Piller USA, Inc., a wholly owned
subsidiary of Langley. If the acquisition is completed, Piller USA
will acquire substantially all of the assets of Active Power for
the purchase price of $1.00 in cash and the assumption of
substantially all of Active Power's liabilities. Such liabilities
include all lease obligations in excess of $3.3 million. The
obligations are in addition to the $16.0 million of balance sheet
liabilities, of Active Power, and Active Power will retain (i)
certain patent rights, (ii) its tax assets, and (iii) cash in an
amount equal to the excess, if any, of the net assets of Active
Power acquired by Piller USA over $5.0 million. The Company
expects that the closing under this asset purchase agreement will
occur during the fourth quarter of 2016. If the acquisition is
completed as expected, Active Power would incur a loss on disposal
of approximately $5.0 million in the fourth quarter of 2016.
A copy of the Form 10-Q is available at:
https://is.gd/R1MkFK
Active Power, Inc. designs, manufactures, sells and services
flywheel-based uninterruptible power supply (UPS) products that use
kinetic energy to provide short-term power as a cleaner alternative
to electro-chemical battery-based energy storage. The Company also
designs, manufactures, sells and services modular infrastructure
solutions (MIS) that integrate critical power components into a
pre-packaged, purpose built enclosure. The Company's UPS products
and solutions deliver continuous conditioned power during
short-term power disturbances and outages, such as voltage sags and
surges, and provide ride-through power in the event of a utility
failure, supporting operations until utility power is restored or a
longer term alternative power source, such as a diesel generator,
is started. Its flywheel-based UPS products are sold under the
brand name, CleanSource UPS. The Company's MIS products include
CleanSource PowerHouse and modular IT.
AIR SUB: Disclosures Conditionally OK'd; Hearing on Dec. 7
----------------------------------------------------------
The Hon. Mildred Caban Flores of the U.S. Bankruptcy Court for the
District of Puerto Rico has conditionally approved Air Sub Corp, et
al.'s disclosure statement dated Oct. 25, 2016, referring to the
Debtors' plan of reorganization.
A hearing for the consideration of the final approval of the
Disclosure Statement and the confirmation of the Plan and of
objections as may be made to either will be held on Dec. 7, 2016,
at 9:00 a.m.
Any objection to the final approval of the Disclosure Statement and
the confirmation of the Plan will be filed on or before 14 days
prior to the date of the hearing on confirmation of the Plan.
Acceptances or rejections of the Plan may be filed in writing by
the holders of all claims on or before 14 days prior to the date of
the hearing on confirmation of the Plan.
The Debtors will file with the Court a statement setting forth
compliance with each requirement in U.S.C. Section 1129, the list
of acceptances and rejections and the computation of the same,
within seven working days before the hearing on confirmation.
Air Sub Corp filed for Chapter 11 bankruptcy protection (Bankr.
D.P.R. Case No. 16-01709) on March 2, 2016, estimating its assets
at up to $50,000 and liabilities at between $500,001 and $1
million. Nilda M. Gonzalez Cordero, Esq., at Gonzalez Cordero Law
Offices serves as the Debtor's bankruptcy counsel.
N & N Sub Corp. Filed for Chapter 11 bankruptcy protection (Bankr.
D.P.R. Case No. 16-02596) on April 1, 2016, estimating its assets
at up to $50,000 and its liabilities at between $100,001 and
$500,000.
Subway Senorial Parana Corp. filed for Chapter 11 bankruptcy
protection (Bankr. D.P.R. Case No. 16-02597) on April 1, 2016,
estimating its assets at up to $50,000 and its liabilities at
between $100,001 and $500,000.
Nilda M. Gonzalez Cordero, Esq., at Gonzalez Cordero Law Offices
serves as the Debtors' bankruptcy counsel.
ALL PHASE STEEL: Order Lifting Stay for PAC Group Affirmed
----------------------------------------------------------
Judge Jeffrey Alker Meyer of the United States District Court for
the District of Connecticut affirmed the decision of the bankruptcy
court granting unsecured creditor PAC Group, LLC's motion for
relief from stay imposed in the bankruptcy case of All Phase Steel
Works, LLC, to assert its right of setoff pursuant to 11 U.S.C.
Section 553(a).
This bankruptcy appeal involves the right of setoff for a general
contractor who has been called upon to pay the debts of a breaching
subcontractor against remaining amounts owed by that general
contractor to the subcontractor.
All Phase fabricates and installs steel for commercial construction
projects, and PAC is the general contractor for two such projects:
the Central Connecticut State University Dining Facility project
(CCSU project) and the Mandell Jewish Community Center Project (JCC
project). PAC hired All Phase as its steel subcontractor for both
projects, and All Phase, in turn, hired its own sub-subcontractors
to provide labor and/or materials for each project. The relevant
portions of both contracts are identical: All Phase was obligated
to pay its sub-subcontractors or suppliers no later than 30 days
after it received payment from PAC for the work of those
sub-subcontractors or suppliers. The contracts further granted PAC
a right of setoff in the event that All Phase failed to pay its
sub-subcontractors.
All Phase advances three arguments in support of this appeal: (1)
PAC did not prove its right to setoff as a matter of Connecticut
law; (2) PAC did not prove that it met the "additional
restrictions" of a pre-petition claim and mutuality; and (3) setoff
would be inconsistent with the provisions and purposes of the
Bankruptcy Act as a whole.
According to Judge Meyer, he affirms the bankruptcy court's
decisions because all of the requirements for setoff have been
established here: (1) PAC was entitled to setoff as a matter of
Connecticut law; (2) PAC established that its claim was
pre-petition and that there was mutuality; and (3) setoff is not
inconsistent with the Bankruptcy Act.
A full-text copy of the Ruling dated October 24, 2016 is available
at https://is.gd/sDBUxv from Leagle.com.
The appeals case is ALL PHASE STEEL WORKS, LLC, Appellant, v. PAC
GROUP, LLC, Appellee, relating to IN RE: ALL PHASE STEEL WORKS,
LLC, Debtor, No. 3:16-cv-00844 (JAM)(D. Conn.).
All Phase Steel Works, LLC, Appellant, is represented by James M.
Nugent, Esq. -- Harlow, Adams & Friedman, P.C..
PAC Group, LLC, Appellee, is represented by Eric M. Grant, Esq. --
Yamin & Grant, Jaclyn Lee Koachman, Esq. -- Yamin & Grant & Melissa
A. Scozzafava, Esq. -- Yamin & Grant.
About All Phase Steel Works
All Phase Steel Works, LLC, filed a chapter 11 petition (Bankr. D.
Conn. Case No. 16-50257) on Feb. 23, 2016. The petition was
signed
by Paul J. Pinto, member/manager. The Debtor is represented by
James M. Nugent, Esq., at Harlow, Adams & Friedman, P.C. The case
is assigned to Judge Julie A. Manning. The Debtor disclosed total
assets at $2.65 million and total liabilities at $4.08 million at
the time of the filing.
ALLIQUA BIOMEDICAL: Covenant Problems Raise Going Concern Doubt
---------------------------------------------------------------
Alliqua BioMedical, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, disclosing a
net loss of $8.59 million on $4.87 million of revenue for the three
months ended September 30, 2016, compared to a net loss of $7.13
million on $4.18 million of revenue for the same period in 2015.
For the nine months ended September 30, 2016, the Company listed a
net loss of $11.10 million on $13.30 million of revenue, compared
to a net loss of $21.78 million on $8.23 million of revenue for the
same period in the prior year.
The Company's balance sheet at September 30, 2016, showed total
assets of $72.66 million, total liabilities of $24.02 million and
stockholders' equity of $48.64 million.
As of September 30, 2016, the Company had a cash balance of $10.7
million. The Company has experienced recurring losses since its
inception. The Company incurred a net loss of $11.1 million and
used $14.0 million in cash from operations for the nine months
ended September 30, 2016, and had an accumulated deficit of $107.2
million as of September 30, 2016. As of September 30, 2016, the
Company was in default of a covenant pertaining to trailing
twelve-month revenue under its credit agreement as a result of the
Company's failure to achieve $22,250,000 of gross revenue for the
twelve-month period ended September 30, 2016. As of September 30,
2016, the Company had an outstanding principal amount of
approximately $13.8 million under this credit agreement. Under an
agreement dated November 1, 2016, the lender agreed to forbear from
exercising any rights and remedies related to the default until
November 30, 2016, but has reserved the rights, commencing November
30, 2016, to pursue any rights and remedies available to it,
including, but not limited to, declaring all or any portion of the
outstanding principal amount to be immediately due and payable. In
addition, the lender has a lien on substantially all of the
Company's assets and as a result of the default, may seek to
foreclose on some or substantially all of the Company's assets
after the expiration of the forbearance. Such action could hinder
the Company's ability to recover the carrying value of some or all
of its intangible assets including goodwill that aggregated
approximately $52 million at September 30, 2016. These factors
raise substantial doubt as to the Company's ability to continue as
a going concern. The ability of the Company to continue as a going
concern is dependent upon the Company's successful efforts to raise
sufficient capital and attain profitable operations.
A full-text copy of the Company's Form 10-Q is available at:
https://is.gd/LIzE2G
Alliqua BioMedical, Inc., is a provider of advanced wound care
solutions. The Company's businesses include advanced wound care
and contract manufacturing. The Company operates through its
subsidiaries, such as AquaMed Technologies, Inc. and Choice
Therapeutics, Inc. The Company is engaged in developing a suite of
advanced wound care solutions that will enable surgeons, clinicians
and wound care practitioners to address the challenges in chronic
and acute wounds.
ALLY FINANCIAL: Joined BancAnalysts Association Conference
----------------------------------------------------------
Members of management of Ally Financial Inc. presented at the
BancAnalysts Association of Boston Conference on Thursday, Nov. 3,
2016. The presentation is available for free at:
https://is.gd/YIrWXM
About Ally Financial
Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/--
is one of the world's largest automotive financial services
companies. The Company offers a full suite of automotive
financing products and services in key markets around the world.
Ally's other business units include mortgage operations and
commercial finance, and the company's subsidiary, Ally Bank,
offers online retail banking products. Ally operates as a bank
holding company.
GMAC obtained a $17 billion bailout from the U.S. government in
exchange for a 56.3 percent stake. Private equity firm Cerberus
Capital Management LP keeps 14.9 percent, while General Motors Co.
owns 6.7 percent.
Ally reported net income of $1.28 billion on $4.86 billion of total
net revenue for the year ended Dec. 31, 2015, compared to net
income of $1.15 billion on $4.65 billion of total net revenue for
the year ended Dec. 31, 2014.
As of Sept. 30, 2016, Ally Financial had $157.4 billion in total
assets, $143.8 billion in total liabilities and $13.63 billion in
total equity.
* * *
As reported by the TCR on Dec. 16, 2013, Standard & Poor's Ratings
Services said it raised its issuer credit rating on Ally Financial
Inc. to 'BB' from 'B+'. "The upgrade reflects the company's
release from potential legal and financial liabilities stemming
from its ownership of ResCap," said Standard & Poor's credit
analyst Tom Connell.
In the April 3, 2014, edition of the TCR, Fitch Ratings has
upgraded Ally Financial Inc.'s long-term Issuer Default Rating
(IDR) and senior unsecured debt rating to 'BB+' from 'BB'.
The rating upgrade reflects increased clarity around Ally's
ownership structure given Ally's recent announcement that it has
launched an initial public offering those shares of its common
stock held by the U.S. Treasury (the Treasury).
As reported by the TCR on July 16, 2014, Moody's Investors Service
affirmed the 'Ba3' corporate family and 'B1' senior unsecured
ratings of Ally Financial, Inc. and revised the outlook for the
ratings to positive from stable. Moody's affirmed Ally's ratings
and revised its rating outlook to positive based on the company's
progress toward sustained improvements in profitability and
repayment of government assistance received during the financial
crisis.
ALPHA NATURAL: Seeks $25 Million Reimbursement
----------------------------------------------
William Gorta, writing for Bankruptcy Law360, reported that Alpha
Natural Resources Inc. asked U.S. Bankruptcy Judge Kevin Huennekens
to approve a settlement as part of its previously approved Chapter
11 reorganization that gives it $25 million from a distribution
reserve fund as reimbursement for liabilities paid on behalf of
Contura Energy Inc., which was formed by Alpha's first-lien
lenders.
Alpha Natural Resources sold its "core" coal mines in Pennsylvania,
West Virginia, Virginia and Wyoming to Contura.
As reported by the Troubled Company Reporter, the Company announced
in July 2016 that the sale to Contura includes the Company's two
Powder River Basin mine complexes in Wyoming, the Nicholas, McClure
and Toms Creek mine complexes in West Virginia and Virginia, all of
the Company's Pennsylvania coal operations and certain reserves,
the Company's interest in the Dominion Terminal Associates coal
export terminal in Newport News, Virginia and certain other assets,
including working capital.
Alpha Natural Resources said, "In addition to operating as an
independent, competitive entity in the U.S. and international coal
markets, Contura Energy will provide specified contingent credit
support for reorganized Alpha in the aggregate amount of $35
million, from the effective date of emergence through September
2018, subject to the terms and conditions of the Global Settlement
Term Sheet filed with the Court. Over the course of the next ten
years, Contura has agreed to also make contributions of up to $100
million into certain restricted cash accounts to help fund the
ongoing reclamation activities of reorganized Alpha, in addition to
other support to be provided."
About Alpha Natural Resources
Headquartered in Bristol, Virginia, Alpha Natural --
http://www.alphanr.com/-- is a coal supplier, ranked second
largest among publicly traded U.S. coal producers as measured by
2014 consolidated revenues of $4.3 billion. As of August 2015,
Alpha had 8,000 full time employees across many different states,
with UMWA representing 1,000 of the employees.
Alpha Natural Resources, Inc. (Bankr. E.D. Va. Case No. 15-33896)
and its affiliates filed separate Chapter 11 bankruptcy petitions
on Aug. 3, 2015, listing $9.9 billion in total assets as of
June 30, 2015, and $7.3 billion in total liabilities as of June
30, 2015.
The petitions were signed by Richard H. Verheij, executive vice
president, general counsel and corporate secretary.
Judge Kevin R. Huennekens presides over the cases.
David G. Heiman, Esq., Carl E. Black, Esq., and Thomas A. Wilson,
Esq., at Jones Day serve as the Debtors' general counsel. Tyler
P. Brown, Esq., J.R. Smith, Esq., Henry P. (Toby) Long, III, Esq.,
and Justin F. Paget, Esq., serve as the Debtors' local counsel.
Rothschild Group is the Debtors' financial advisor. Alvarez &
Marshal Holdings, LLC, is the Debtors' investment banker.
Kurtzman Carson Consultants, LLC, is the Debtors' claims and
noticing agent.
The U.S. Trustee for Region 4 appointed seven creditors of Alpha
Natural Resources Inc. to serve on the official committee of
unsecured creditors. Dennis F. Dunne, Esq., Evan R. Fleck, Esq.,
and Eric K. Stodola, Esq., at Milbank, Tweed, Hadley & McCloy LLP;
and William A. Gray, Esq., W. Ashley Burgess, Esq., and Roy M.
Terry, Jr., Esq. at Sands Anderson PC, represent the Committee.
Alpha Natural Resources on July 7, 2016, said its plan of
reorganization for the company and some of its wholly owned
subsidiaries has been confirmed by the Bankruptcy Court. On July
26, Alpha Natural Resources and its affiliates emerged from Chapter
11
bankruptcy protection. The reorganized company is a smaller,
privately held company operating 18 mines and eight preparation
plants in West Virginia and Kentucky.
ARCHANGEL DIAMOND: Supreme Court Won't Hear Appeal in Lukoil Rift
-----------------------------------------------------------------
William Gorta, writing for Bankruptcy Law360, reported that the
U.S. Supreme Court, without comment, declined on Nov. 7, 2016, to
hear the appeal of the Archangel Diamond Corp. Liquidating Trust,
which was trying to revive its civil RICO suit against OAO Lukoil,
which lower courts held should be tried in Russia. Archangel was
appealing a unanimous decision in the 10th Circuit that upheld a
dismissal from the district court in Colorado that dismissed
Archangel's claims of breach of contract and racketeering for lack
of personal jurisdiction and forum non conveniens.
In 1993, Archangel entered into an agreement with State Enterprise
Arkhangelgeology, a Russian state corporation, regarding a
potential license to explore and develop diamond mining operations
in the Archangelsk region of Russia. Archangel provided funding,
and AGE bid on and won the license. Then, in 1994, Archangel and
AGE agreed that Archangel would provide additional funds and that
the license would be transferred to their joint venture company.
However, the license was never transferred and remained with AGE.
In 1995, AGE was privatized and became Arkhangelskgeoldobycha
(AGD), and the license was transferred to AGD.
In 1996, diamonds worth an estimated $5 billion were discovered
within the license region. For the next several years, Archangel
alleges, AGD alternated between promising to transfer the license
and refusing to do so, causing Archangel to lose its investment
and, ultimately, to become insolvent. In 1997, Archangel moved its
principal place of business to Colorado, though it remained a
Canadian company. In 1998, Lukoil acquired a controlling stake in
AGD, and in 2000 or 2001, Lukoil acquired the remaining interest in
AGD; thus, AGD is now a wholly owned subsidiary of Lukoil.
In August 1998, Archangel initiated arbitration proceedings against
AGD and Lukoil. Pursuant to their agreement, the arbitration took
place in Stockholm, Sweden. In this first arbitration, the
arbitrators concluded that they had jurisdiction to hear
Archangel's claims only against AGD, but not those asserted against
Lukoil. In July 1999, while the arbitration with AGD was still
pending, AGD and Archangel agreed that AGD would transfer the
license to their joint venture, resolving the dispute. However,
AGD did not honor the 1999 agreement and did not transfer the
license. When AGD failed to honor the agreement, Archangel
reactivated the Stockholm arbitration, but the arbitrators this
time concluded that they lacked jurisdiction to arbitrate the
dispute even as to AGD.
In November 2001, Archangel sued AGD and Lukoil in Colorado state
court. The complaint alleged breach of contract and a variety of
torts, including fraud and intentional interference with
contractual obligations. AGD and Lukoil then removed the case to
federal district court in Colorado. The district court remanded
the case, concluding that it lacked subject-matter jurisdiction, as
all of the claims were state law claims.
In 2002, the state trial court dismissed the case against both AGD
and Lukoil based on lack of personal jurisdiction and forum non
conveniens. Later that year, Archangel -- which was running out of
money -- moved its principal place of business back to Canada. In
2004, the Colorado Court of Appeals affirmed the dismissal.
Archangel Diamond Corp. v. Arkhangelskgeoldobycha , 94 P.3d 1208,
1210 (Colo. Ct. App. 2004). The court did not rule on forum non
conveniens, concluding that the trial court should not have
proceeded to consider the issue after concluding the dismissal was
appropriate for lack of jurisdiction.
In 2005, the Colorado Supreme Court affirmed the dismissal as to
AGD, reversed as to Lukoil, and remanded (leaving Lukoil as the
sole defendant). Archangel Diamond Corp. v. Lukoil , 123 P.3d
1187, 1190, 1200–01 (Colo. 2005)(concluding that Archangel had
failed to show personal jurisdiction over AGD, but had shown
general personal jurisdiction over Lukoil). The Colorado Supreme
Court therefore remanded to the state intermediate appellate court
with instructions to consider any other remaining issues relating
to Lukoil.
On remand, the Colorado Court of Appeals reversed the trial court's
previous dismissal on forum non conveniens grounds, which it had
not addressed
before, and remanded to the trial court for further proceedings.
Archangel Diamond Corp. v. Arkhangelskgeoldobycha, No. 02-CA-2368,
2006 WL 1768313, at *1 (Colo. Ct. App. June 29, 2006)
(unpublished).
With the case again before the trial court, Lukoil and AGD
requested an evidentiary hearing on the issue of personal
jurisdiction and renewed their motion to dismiss. The court
granted their motion to hold an evidentiary hearing, and the
parties engaged in jurisdictional discovery.
In 2008 and early 2009, the case was informally stayed while the
parties discussed settlement and conducted discovery. By June 2009,
Archangel had fallen into bankruptcy due to the expense of the
litigation. In November 2009, Archangel filed an amended
complaint, which added claims under RICO, 18 U.S.C. Sec. 1961 et
seq., and the Colorado Organized Crime Control Act ("COCCA"), Colo.
Rev. Stat. Sec. 18-17-104. Archangel then removed the case to
federal district court in Colorado.
On Lukoil's motion and over the objection of Archangel, the
district court referred the matter to the bankruptcy court,
concluding that the matter was related to Archangel's bankruptcy
proceedings. Lukoil then moved the bankruptcy court to abstain
from hearing the matter, and the bankruptcy court concluded that it
should abstain.
The bankruptcy court remanded the case to the Colorado state trial
court. The state trial court again dismissed the action. It
concluded that, even considering the new allegations in the amended
complaint, the court lacked personal jurisdiction over AGD and
Lukoil. Archangel again appealed; the Colorado Court of Appeals
affirmed, and the Colorado Supreme Court denied certiorari.
While these state-court appeals were still pending, Archangel filed
the civil action in federal district court. To establish the
court's jurisdiction, Archangel alleged that Lukoil had a wide
variety of jurisdictional contacts with Colorado and the United
States as a whole. These included communications directed at
Archangel, and general business contacts. The district court
analyzed personal jurisdiction under the Colorado long-arm statute
and under Federal Rule of Civil Procedure 4(k)(2). Then, the court
considered forum non conveniens in the alternative. The court
dismissed the case, holding in favor of Lukoil on both
jurisdictional and forum non conveniens grounds. The court
concluded that, while Archangel's choice of forum was owed
substantial deference, dismissal based on forum non conveniens was
nevertheless appropriate.
Early this year, a three-judge panel of the Tenth Circuit upheld
the decision. It held, "While Archangel raises legitimate
practical concerns about its ability to litigate in Russia and the
importance of enforcing RICO and COCCA in United States courts,
neither of these concerns is dispositive nor convincing. The
district court carefully explained its rationale for rejecting
Archangel's forum non conveniens arguments, and it applied the
analysis reasonably. We therefore conclude that the district court
did not abuse its discretion. Because we affirm the district
court's dismissal on forum non conveniens grounds, we do not reach
the issue of personal jurisdiction. The ruling of the district
court dismissing the case on forum non conveniens grounds is
affirmed."
Archangel is represented in the case by:
Bruce S. Marks, Esq., Managing Director
Marks & Sokolov, LLC
1835 Market St, 17th Fl
Philadelphia, PA 19103
Tel: (215) 569-8901
Fax: (215) 569-8912
E-mail: marks@mslegal.com
Mobile USA: +1 (215) 939-0423
Mobile Russia: +7 (926) 834-3796
Fax: +1 (215) 790-3219
- and -
Chad M. McShane, Esq.
Robinson Waters & O'Dorisio, P.C.
1099 18th Street, Suite 2600
Denver, CO 80202
Phone: 303.297.2600
Tel: cmcshane@rwolaw.com
Lukoil is represented in the case by:
Frederick J. Baumann, Esq.
Douglas B. Tumminello, Esq.
Lewis Roca Rothgerber LLP
1200 Seventeenth Street, Suite 3000
Denver, CO 80202
Tel: 303.628.9542
Fax: 303.623.9222
E-mail: fbaumann@lrrc.com
dtumminello@lrrc.com
- and -
Michael K. Swan, Esq.
Akin Gump Strauss Hauer & Feld, L.L.P.
1111 Louisiana Street, 44th Floor
Houston, TX 77002-5200
Tel: 713.220.5862
Fax: 713.236.0822
E-mail: mswan@akingump.com
About Archangel Diamond
Archangel Diamond Corporation engaged in the exploration and
development of diamond properties in the Russian Federation. It
principally owns interests in the Verkhotina Diamond project
located in the Arkhangel'sk region in northwest Russia.
One of Archangel's attorneys and two other creditors filed an
involuntary Chapter 7 bankruptcy petition (Bankr. D. Colo. Case No.
09-22621) against Archangel on June 26, 2009. Archangel consented
to relief and converted the case to Chapter 11 on September 3,
2009. On December 21, 2010, Archangel went out of business as per
its Chapter 11 liquidation filing under bankruptcy.
B6USA: Court Enjoins Stephen M. Hite from Operating as BaySix Group
-------------------------------------------------------------------
In the adversary case captioned USA, INC., Plaintiff, v. STEPHEN M.
HITE, JR. CHAPTER 11, Defendant, Adv. Pro. No. 16-00149-5-JNC
(Bankr. E.D.N.C.), Judge Joseph N. Callaway of the Uited States
Bankruptcy Court for the Eastern District of North Carolina,
Raleigh Division, allowed the Plaintiff's motion for preliminary
injunction and denied the motion of the defendant, Stephen M. Hite,
Jr., for Preliminary Injunction and Temporary Restraining Order.
In this case, both parties seek injunctive relief against the
other. Citing customer confusion and arguing superior prior right,
in the Cross-Motions both parties seek the exclusive right to
continue using, conducting business under, and operating a website
with a the name or trademark "baysix" and any similar terms or
spellings, and thereby also prohibit the other party from such
activity.
The court finds, among other things, that the public interest
weighs in favor of allowing B6USA's motion for preliminary
injunction and denying Mr. Hite's cross-motion. Judge Callaway
held, "There is also a public interest that arises in the context
of a bankruptcy case that is separate from the trademark issues:
protection of the property of the estate to enable fair and
equitable treatment of creditors and to preserve the ability of the
debtor to reorganize. If Mr. Hite had clearly shown and established
that the name "BaySix" and the business opportunities arising
therefrom are not property of the estate, the court might view this
matter differently, but absent compelling evidence -- or any
evidence for that matter -- to that effect, the public's interest
here weighs in favor of protecting the bankruptcy estate until a
full adjudication on the merits can occur. Were the court to find
otherwise, Mr. Hite could usurp all of the debtor's business
opportunities and the debtor would have no ability to reorganize."
Accordingly, the defendant is restrained and enjoined from the
following:
(1) doing business as BaySix Group or any other similar name, or
operating any entity that does business under such a name;
(2) operating any website with a domain name of baysixusa.com;
and
(3) holding himself out to customers, vendors, or suppliers of
B6USA or to the general public as having any affiliation with the
debtor, B6USA, or as representing a successor entity to the
debtor.
The bankruptcy case is IN RE: B6USA, INC. Debtor, Case No.
16-04666-5-JNC (Bankr. E.D.N.C.).
A full-text copy of the Memorandum Opinion dated October 13, 2016
is available at https://is.gd/5Oew5N from Leagle.com.
B6usa, Inc., Debtor, is represented by Travis Sasser, Esq. --
tsasser@carybklaw.com -- Sasser Law Office.
BERNARD L. MADOFF: Picard Has $32.1M Deal with Cohmad
-----------------------------------------------------
Martin O'Sullivan, writing for Bankruptcy Law360, reported that
Irving Picard, the court-appointed trustee for Bernard L. Madoff's
fraudulent investment firm, asked U.S. Bankruptcy Judge Stuart M.
Bernstein on Nov. 4 to approve a $32.1 million clawback settlement
with Cohmad Securities Corp. and won approval to dismiss an $8
million clawback suit against a former basketball team franchise
owner.
Picard urged Judge Bernstein to approve the $32.1 million deal with
investment firm Cohmad, the estate of its deceased founder and his
surviving family. Picard accused the firm of funneling huge sums
into Madoff's defunct brokerage.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of
New
York granted the application of the Securities Investor Protection
Corporation for a decree adjudicating that the customers of BLMIS
are in need of the protection afforded by the Securities Investor
Protection Act of 1970. The District Court's Protective Order (i)
appointed Irving H. Picard, Esq., as trustee for the liquidation
of
BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and
(iii) removed the SIPA Liquidation proceeding to the Bankruptcy
Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr.
Picard has retained AlixPartners LLP as claims agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport
Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno,
and Steven Morganstern -- assert US$64 million in claims against
Mr. Madoff based on the balances contained in the last statements
they got from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later
transferred to Manhattan. In June 2009, Judge Lifland approved
the
consolidation of the Madoff SIPA proceedings and the bankruptcy
case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims. As of Oct. 28,
2016, the SIPA Trustee has recovered more than $11.4 billion and
has distributed $9.467 billion, which includes more than $836.6
million in committed advances from the Securities Investor
Protection Corporation (SIPC).
BILL BARRETT: Incurs $26.2 Million Net Loss in Third Quarter
------------------------------------------------------------
Bill Barrett Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $26.18 million on $50.48 million of total operating and other
revenues for the three months ended Sept. 30, 2016, compared to a
net loss of $410.3 million on $49.67 million of total operating and
other revenues for the three months ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $121.1 million on $127.2 million of total operating and
other revenues compared to a net loss of $466.6 million on $161.3
million of total operating and other revenues for the same period
during the prior year.
As of Sept. 30, 2016, Bill Barrett had $1.33 billion in total
assets, $826.4 million in total liabilities and $509.2 million in
total stockholders' equity.
Chief Executive Officer and President Scot Woodall commented, "Our
team has done an excellent job of maintaining positive financial
and operational momentum in a challenging environment, which
translated into solid results for the third quarter. Production
sales volumes were near the upper end of guidance and EBITDA was
better than expected as DJ Basin oil price differentials improved
and we are seeing continued improvement in costs across the
spectrum. Our XRL development program resumed in September and we
have spud six wells with plans to spud up to 15 gross XRL wells by
the end of the year. This results in an increasing production
profile as the wells begin contributing to production during 2017.
We are seeing consistent results across our acreage and our
operations team has incorporated several new concepts that we
believe will translate into improved well performance. The XRL
drilling program generates attractive economic returns in the
current commodity price environment and we are pursuing further
capital efficiency measures designed to improve well costs and
enhance economic returns. We continue to efficiently invest our
capital and expect cash flow to be in excess of capital
expenditures based on current internal projections. Our liquidity
remains strong with a significant cash position, an undrawn credit
facility and a solid hedge position."
At Sept. 30, 2016, the principal debt balance was $718.8 million,
while cash and cash equivalents were $174.3 million, resulting in
net debt (principal balance of debt outstanding less the cash and
cash equivalents balance) of $544.5 million. Cash and cash
equivalents were reduced subsequent to the end of the quarter as
the Company made regularly scheduled interest payments of
approximately $26 million related to its Senior Notes due 2019 and
2022.
The Company's semi-annual borrowing base review was completed in
October 2016 with the lenders setting a borrowing base of $300
million, a 10% reduction due to the sale of non-core assets and the
effect of a lower derivative position. There were no changes to
the terms or conditions of the credit facility and there are no
borrowings outstanding. The revolving credit facility has $274
million in available capacity, after taking into account a $26
million letter of credit.
The Company closed the sale of certain non-core assets located in
the Uinta Basin on July 14, 2016, for net cash proceeds of
approximately $30 million. The proceeds from the sale were used
for general corporate purposes and to enhance the Company's
liquidity position.
Capital expenditures for the third quarter of 2016 totaled $8.1
million as the Company did not operate a drilling rig for much of
the quarter and no wells were completed. The DJ Basin XRL drilling
program resumed during September and 3 XRL wells spud prior to the
end of the quarter. Capex for the third quarter consisted of $4.6
million for drilling, $1.4 million for leaseholds, and $2.1 million
for infrastructure and corporate assets.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/YJWY7T
About Bill Barrett
Bill Barrett Corporation is an independent energy company that
develops, acquires and explores for oil and natural gas resources.
All of the Company's assets and operations are located in the Rocky
Mountain region of the United States.
Bill Barrett reported a net loss of $488 million in 2015 following
net income of $15.08 million in 2014.
* * *
As reported by the TCR on June 10, 2016, Moody's Investors Service
affirmed Bill Barrett Corporation's (Bill Barrett) Caa2 Corporate
Family Rating (CFR) and revised the Probability of Default Rating
(PDR) to 'Caa2-PD/LD' from 'Caa2-PD.' "Bill Barrett's debt for
equity exchange achieved some reduction in its overall debt burden,
but the company's cash flow and leverage metrics continue to remain
challenged as its hedges roll off in 2017," commented Amol Joshi,
Moody's vice president.
As reported by the TCR on July 13, 2016, S&P Global Ratings raised
the corporate credit rating on Denver-based oil and gas exploration
and production company Bill Barrett Corp. to 'B-' from 'SD'. The
rating outlook is negative. "The upgrade reflects our reassessment
of the company's corporate credit rating following the
debt-for-equity exchange of its 7.625% senior unsecured notes due
2019, and also reflects our expectation that there will be no
further distressed exchanges over the next 12 months," said S&P
Global Ratings credit analyst Kevin Kwok.
BIOSERV CORPORATION: U.S. Trustee Forms 2-Member Committee
----------------------------------------------------------
Acting U.S. Trustee Tiffany L. Carroll on Nov. 3 appointed two
creditors of Bioserv Corporation to serve on the official committee
of unsecured creditors.
The committee members are:
(1) Daniel J. Littlefield
Modality Solutions LLC
1238 Mossy Oak Drive
League City, TX 77573
Tel: (281) 797-7614
(2) Beth Berterlsen-Putirka
BB Consulting Services, Inc
6540 Lusk Boulevard
Suite C-136B
San Diego, CA 92121
Tel: (619) 253-4322
Star Point Advantage, Inc., which was previously appointed to serve
on the Committee, will no longer serve as a member.
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.
Headquartered in San Diego, California, Bioserv Corporation field
for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No.
14-08651) on Oct. 31, 2014, estimating its assets at between
$500,000 and $1 million and its liabilities at between$1 million
and $10 million. The petition was signed by Albert Hansen, CEO.
Judge Margaret M. Mann presides over the case.
Benjamin Carson, Esq., at Benjamin Carson Law Office serves as the
Debtor's bankruptcy counsel.
BISHOP OF STOCKTON: Disclosures OK'd; Plan Hearing on Dec. 20
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of California
has approved The Roman Catholic Bishop of Stockton's disclosure
statement regarding the Debtor's plan of reorganization dated Oct.
26, 2016.
A hearing to consider the confirmation of the Plan will be held on
Dec. 20, 2016, at 1:30 p.m., Pacific Time. Objections to the Plan
must be filed by Dec. 6, 2016, at 4:00 p.m., Pacific Time.
The deadline for plan solicitation commencement/service of
solicitation packages and the deadline to give notice of the terms
of the insurance settlement agreement and participating party
agreement is Nov. 8, 2016.
The deadline to vote on the Plan is Dec. 6, 2016, at 4:00 p.m.,
Pacific Time. Dec. 6, 2016, is also the deadline to object to
insurance settlement agreement and participating party agreement.
The Debtor must file a ballot report with the Court by Dec. 13,
2016.
Any creditor that challenges the allowance of their claim for
voting purposes is directed to file and serve a motion for a court
order temporarily allowing the claim in a different amount for
purposes of voting to accept or reject the Plan by Nov. 22, 2016.
As reported by the Troubled Company Reporter on Nov. 2, 2016, the
Debtor filed with the Court a disclosure statement regarding the
Debtor's plan of reorganization dated Oct. 26, 2016. Under the
Plan, Class 6 General Unsecured Claims are impaired. Class 6 -
General Unsecured Claims includes every unsecured Claim against the
Debtor (including, but not limited to, every claim arising from the
rejection of an executory contract and every claim which is the
undersecured portion of any secured claim), which is not (1) an
unclassified claim or (2) classified in any other class under the
Plan. Every creditor holding a Class 6 Claim, as and when the
Class 6 Claim is or becomes an allowed General Unsecured Claim,
will be paid in cash 50% of the allowed General Unsecured Claim,
without regard to any penalty claims, on the later of the Effective
Date or the claim payment date in full satisfaction, settlement and
release of the claim.
About Diocese of Stockton
The Diocese of Stockton, California was established on Feb. 21,
1962, by Pope John XXIII from the territory formerly located in
the Archdiocese of San Francisco and the Diocese of Sacramento.
The Diocese, comprising the six counties of San Joaquin,
Stanislaus, Calaveras, Tuolumne, Alpine, and Mono, currently
serves approximately 250,000 Catholics in 35 parishes.
As a religious organization, The Roman Catholic Bishop of
Stockton ("RCB") has no significant ongoing for-profit business
activities. Revenue for the RCB principally comes from the annual
ministry appeal, fees for services provided to non-RCB entities,
donations, grants, and RCB ministry revenue.
When the Diocese was created, most, if not all, of the property of
the Parishes (excluding the pre- and/or elementary (K-8) schools)
was held in the name of the RCB. The RCB also held the property
for the cemeteries in the Diocese as well as some of the real
property to be used for future parishes.
Several Roman Catholic dioceses in the U.S. have filed for
bankruptcy to settle claims from current and former parishioners
who say they were sexually molested by priests.
In Stockton's case, the RCB filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Cal. Case No. 14-20371) in Sacramento on Jan. 15,
2014. Judge Christopher M. Klein oversees the case. Attorneys at
Felderstein Fitzgerald Willoughby & Pascuzzi LLP serve as counsel
to the Debtor.
Stockton scheduled total assets of more than $7.2 million against
debt totaling $11.85 million. The schedules also show that the
diocese has $1.6 million in secured debt. Creditors of the
diocese assert $367,290 in unsecured priority claims and $9.88
million in unsecured non-priority claims.
BJORNER ENTERPRISES: To Get Pro Rata Dividend of 100% in 3 Years
----------------------------------------------------------------
Bjorner Enterprises, Inc., filed with the U.S. Bankruptcy Court for
the Northern District of California a disclosure statement for the
Debtor's plan of reorganization dated Sept. 30, 2016.
Under the Plan, holders of Class 5 General Unsecured Claims are to
be paid a pro rata dividend of 100% of the amount of the allowed
claims, with interest at the legal rate from the Petition Date.
Dividends on allowed Class 5 Claims are to be paid in semiannual
installments commencing six months from the Effective Date. In
addition, all payments on allowed Class 5 Claims will be due in
full no later than three years from the Effective Date. The Debtor
estimates that general unsecured creditors are owed a total of
$50,500. This class is impaired.
The Disclosure Statement is available at:
http://bankrupt.com/misc/canb16-10637-38.pdf
The Plan was filed by the Debtor's counsel;
John H. MacConaghy, Esq.
Jean Barnier, Esq.
MACCONAGHY & BARNIER, PLC
645 First St. West, Suite D
Sonoma, CA 95476
Tel: (707) 935-3205
Fax: (707) 935-7051
E-mail: macclaw@macbarlaw.com
About Bjorner Enterprises
Bjorner Enterprises, Inc., is a longstanding California corporation
organized in 1976 and wholly owned by John Bjorner. It was
formerly involved in diversified business activities including the
operation of an electrical supply business, the operation of a
chain of natural foods retail stores, and the ownership of
investment real estate. As of the filing of the petition for
relief, all of these business activities were terminated with the
exception of the ownership of a luxury estate parcel located at
2535 Madrona Avenue, St. Helena, California. In conjunction with
an adjacent parcel known as 2509 Madrona Ave owned by Mr. Bjorner
personally, the Madrona Property generates substantial income as a
vacation rental.
The Debtor 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.
BPS US: Nov. 10 Meeting Set to Form Creditors' Panel
----------------------------------------------------
T. Patrick Tinker, Assistant United States Trustee for Region 3,
will hold an organizational meeting on Nov. 10, 2016, at 10:30 a.m.
in the bankruptcy case of BPS US Holdings, Inc.
The meeting will be held at:
U.S. Trustee Office
844 King Street, Suite 3209
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 Performance Sports
Exeter, N.H.-based Performance Sports Group Ltd. (NYSE: PSG) (TSX:
PSG) -- http://www.PerformanceSportsGroup.com/-- is a developer
and manufacturer of ice hockey, roller hockey, lacrosse, baseball
and softball sports equipment, as well as related apparel and
soccer apparel. Its products are marketed under the BAUER,
MISSION, MAVERIK, CASCADE, INARIA, COMBAT and EASTON brand names
and are distributed by sales representatives and independent
distributors throughout the world. In addition, the Company
distributes its hockey products through its Burlington,
Massachusetts and Bloomington, Minnesota Own The Moment Hockey
Experience retail stores.
On Oct. 31, 2016, Performance Sports Group Ltd. and certain of its
affiliates have filed voluntary petitions under Chapter 11 of the
Bankruptcy Code in the District of Delaware and commenced
proceedings under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice.
The U.S. Debtors are: BPS US Holdings Inc.; Bauer Hockey, Inc.;
Easton Baseball/Softball Inc.; Bauer Hockey Retail Inc.; Bauer
Performance Sports Uniforms Inc.; Performance Lacrosse Group Inc.;
BPS Diamond Sports Inc.; and PSG Innovation Inc.
The Canadian Debtors are: Performance Sports Group Ltd.; KBAU
Holdings Canada, Inc.; Bauer Hockey Retail Corp.; Easton Baseball /
Softball Corp.; PSG Innovation Corp. Bauer Hockey Corp.; BPS Canada
Intermediate Corp.; BPS Diamond Sports Corp.; Bauer Performance
Sports Uniforms Corp.; and Performance Lacrosse Group Corp.
The Debtors have hired Paul, Weiss, Rifkind, Wharton & Garrison LLP
as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel;
Stikeman Elliott LLP as Canadian legal counsel; Centerview LLP as
investment banker to the special committee; Alvarez & Marsal North
America, LLC, as restructuring advisor; Joele Frank, Wilkinson,
Brimmer, Katcher as communications & relations advisor; KPMG LLP as
auditors; Ernst & Young LLP as CCAA monitor; and Prime Clerk LLC
as
notice, claims, solicitation and balloting agent.
BROWN PUBLISHING: Ex-CEO Urged 2nd Cir. to Reinstate Suit v. K&L
----------------------------------------------------------------
Pete Brush, writing for Bankruptcy Law360, reported that CEO Roy
Brown of Brown Publishing Co. appeared to draw the sympathy of
Judge Deborah Ann Livingston on Nov. 4 when he told the U.S. Court
of Appeals for the Second Circuit that judicial exhaustion was not
a proper reason to dismiss his fraud suit claiming his former K&L
Gates bankruptcy counsel tipped an asset sale toward banks they
also represented. According to the report, Mr. Brown says former
K&L Gates lawyers Edward M. Fox and Eric T. Moser betrayed him as
he sought to bid for control for the Company.
As reported by the Troubled Company Reporter, Roy E. Brown, former
CEO, shareholder, and director of each of the debtors, and other
insiders of the Debtors formed Brown Media Corporation to acquire
the assets and serve as stalking horse bidder. BMC offered a
stalking horse bid of $15.3 million cash plus additional
consideration. The auction commenced July 19, 2010 and lasted into
the early morning hours of July 20. With the exception of certain
assets of the Debtors located in Van Wert, Ada and Putnam, Ohio
that were sold to Delphos Herald, Inc., BMC was the successful
bidder with respect to substantially all of the Debtors's remaining
assets after making the highest and best offer for $22.4 million
cash plus additional consideration. PNC Bank, N.A., a secured
creditor of the Debtors, was the next successful bidder after BMC.
BMC, however, lost financing and failed to close on the sale. The
insiders had obtained a commitment from Guggenheim Corporate
Funding, LLC and/or one of its affiliates for financing.
Subsequently, the Court approved the asset purchase agreements for
the sale of the Debtors' assets to PNC's assignee, Ohio Community
Media LLC, and to ISIS Ventures Partners LLC pursuant to orders
dated Sept. 3, 2010. ISIS formed Dan's Papers Holdings LLC to
purchase the assets of one of the Debtors, Dan's Papers, for
$1,750,000. PNC agreed to pay $21,750,000 for substantially all of
the Debtors remaining assets. The total purchase price tendered
for the Debtors' assets, including cash and debt forgiveness, was
about $27.09 million.
On June 16, 2011, the Court entered an order confirming the
Debtors' chapter 11 plan which provided that any remaining assets
of the Debtors' bankruptcy estate that were not sold pursuant to
the Auction Sale, including all claims and causes of action, would
vest in a trust.
According to a Bloomberg News report, the creditors' committee
argued that there were
fraudulent transfers made in a 2007 refinancing. The committee
agreed to settle because the $38 million in unsecured claims would
be diluted by the first-lien lenders' $45 million in deficiency
claims and the $24 million in deficiency claims owing to the
second-lien lenders. The disclosure statement predicted that
unsecured creditors would recover about 0.7%, the report noted.
According to a February 2014 report by the Troubled Company
Reporter, K&L Gates LLP took an appeal from the orders of the
United States Bankruptcy Court, Eastern District of New York
(Eisenberg, J.), entered on April 29, 2013 and July 8, 2013, that
disqualified KLG as counsel to (1) the Brown Publishing Company and
Brown Media Holdings Company; and (2) the Brown Publishing Company
Liquidating Trust; and that ordered KLG to disgorge $100,000 of
previously approved and paid fees. The Bankruptcy Court
disqualified KLG based on its conclusions that (1) an implied
pre-petition attorney-client relationship existed between KLG and
certain of the Debtors' managers and (2) KLG's 2010 Statement
pursuant to Federal Rule of Bankruptcy Procedure failed to
adequately inform the Court of its relationship with those
managers, certain creditors of the Debtors, and other parties in
interest.
In a Feb. 18, 2014 Memorandum of Decision and Order available at
http://is.gd/ZzojLkfrom Leagle.com, District Judge Arthur D.
Spatt held that the appeal is granted, in part, and denied, in
part.
"[T]he Court finds that Brown's delay in bringing the
Disqualification Motion constituted a waiver of his right to
contest the alleged conflict of interest between KLG and the Brown
Insiders. The Court further finds that the Bankruptcy Court (1)
properly found that KLG failed to provide sufficient detail in its
Rule 2014 Statement with respect to Fox's prior relationships with
PNC and Wilmington and (2) improperly considered Fox's prior
relationships with Levy and Carlson," Judge Spatt said.
"At this juncture of the litigation, the Court declines to uphold
the disqualification of KLG in the first instance on the basis of
its failure to sufficiently disclose Fox's prior relationships
with PNC and Wilmington. . . .
"On remand, the Bankruptcy Court should consider in the first
instance whether disqualification remains appropriate on the basis
of KLG's failure to disclose Fox's relationship with PNC and
Wilmington.
"[I]t is hereby ORDERED, that Brown's appeal is granted in part,
denied in part, and remanded to the Bankruptcy Court for further
findings consistent with this Order, namely whether
disqualification remains appropriate on the basis of KLG's failure
to disclose Fox's relationship with PNC and Wilmington. The Clerk
of the Court is directed to close this case."
About Brown Publishing
The Brown Publishing Company, Brown Media Holdings Company and
their subsidiaries filed for Chapter 11 bankruptcy (Bankr.
E.D.N.Y. Lead Case No. 10-73295) on April 30, 2010, and May 1,
2010. Brown Publishing disclosed $65,009,164 in assets and
$102,947,175 as of the Chapter 11 filing.
BPC is a privately held community news and information
corporation, organized under the laws of the State of Ohio that,
prior to the sale of its assets, had been one of the largest
newspaper publishers in Ohio, and also operated publications in
Illinois, South Carolina, Texas and Utah. On Sept. 3, 2010, the
Debtors completed the sale of substantially all of their assets.
Brown Publishing sold most of its assets to Ohio Community Media
LLC, which was formed by the Company's lenders, for about
$21.8 million. Brown Publishing's New York newspaper group, Dan's
Papers Inc., was sold to Dan's Papers Holdings LLC for about
$1.8 million.
Edward M. Fox, Esq., and Eric T. Moser, Esq., at K&L Gates LLP,
serve as counsel for the Debtors. The Debtors also tapped Epiq
Bankruptcy Solutions, LLC, as claims and noticing agent; Thomas C.
Carlson as chief restructuring officer; CBIZ MHM, LLC as
accountants; and Mesirow Financial Consulting, LLC, as financial
advisors.
The U.S. Trustee for Region 2, appointed seven members to the
official committee of unsecured creditors in the Debtors' case.
Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the
Committee in the Debtor's case. Argus Management Corporation serves
as financial advisors for the Official Committee.
C&J ENERGY: Wins Approval of Senior Executive Incentive Plan
------------------------------------------------------------
The Hon. David R. Jones authorized C&J Energy Services Ltd. to
implement a senior executive incentive plan. The Court said any
payment actually made by the Debtors to or on behalf of any Senior
Executive pursuant to the SEIP as approved shall be final and shall
not be subject to disgorgement.
In seeking approval of the Plan, the Debtors explained that they
intend to honor commitments made to certain employees and approval
of an incentive compensation program for the senior executive team
as well as five statutory insiders that the Debtors, out of an
abundance of caution and in an effort to avoid disputes on this
point, moved from the Non-Insider Compensation Program to this
program. The program, implemented prepetition by the Compensation
Committee of the Debtors' Board of Directors is known as the Senior
Executive Incentive Plan, and is: (a) consistent with the Debtors'
historical compensation philosophy and practices, but reduced and
tailored to the Debtors' current status; (b) generally consistent
with what the Debtors' peer companies are offering; (c) designed to
continue driving the Debtors' operational excellence to maximize
value for the benefit of all stakeholders; and (d) compliant with
the Bankruptcy Code.
The Debtors further explained that after filing a Motion seeking
authorization and approval of the Non-Insider Compensation Program,
the Debtors discovered that five proposed participants in that
program, none of whom are senior executive officers of the Company
or have the functional and operational responsibilities of an
"insider," may nonetheless qualify as a statutory insider under the
Bankruptcy Code because of a title they were given (e.g.,
"secretary") with one of the subsidiary Debtors or their role as
directors for certain of the Debtors or their subsidiaries. In an
effort to avoid disputes on this point, the Debtors removed those
five individuals from the Non-Insider Compensation Program prior to
presenting it for approval to the Court. Instead, they are included
as participants in the SEIP.
The Debtors noted that, as a result of the challenges across the
industry, and prior to the implementation of the SEIP, the Debtors
initiated significant cost cutting efforts enterprise wide,
including, the elimination of any cash bonus for 2015, a minimum 10
percent pay reduction in March 2016, and the elimination of any
long term equity awards in 2016. The SEIP, the Debtors explained,
was designed and purposed to help rectify that significant
weakening of the their compensation structure, while also enhancing
the incentive elements of that structure by incorporating specific,
objective targets. The Compensation Committee worked with
management to develop targets on key metrics (financial and safety
metrics) that would be challenging but achievable. As in past
years, the Compensation Committee worked with their external,
independent compensation consultants, Pearl Meyer Partners, to
determine appropriate levels of compensation opportunity. All told,
the SEIP creates compensation opportunities for the Debtors' Senior
Executives that at least approach those otherwise available in the
marketplace, and appropriately incentivize them to deliver strong
performance.
Pearl Meyer developed specific incentive awards under the SEIP
based on performance goals that align the Senior Executives'
interests with two key objectives, financial performance (EBITDA)
and safety (TRIR). The company's EBITDA target aligns the Senior
Executives' interests with the overall financial success of the
company. The Debtors also established a target based on TRIR --
total recordable injury rate -- a common industry metric for safety
in oil and gas operations. This target ensures that the Senior
Executives are committed to ensuring the safety of all of the
Debtors' operations, which minimizes the Debtors' potential
liabilities and enables the Debtors to maintain their customer
relationships and expand their business opportunities.
Pearl Meyer may be reached at:
Pearl Meyer & Partners LLC
570 Lexington Avenue, 7th Floor
New York, NY 10022
Tel: (212) 644-2300
Fax: (212) 644-2320
The Senior Executives' quarterly award opportunities depend on
whether or not the Debtors meet their EBITDA and TRIR targets. If
the Debtors fail to meet their "Threshold" targets, the Senior
Executives do not earn any incentive compensation. If the Debtors
meet their "Target" targets, they can earn 100% of their incentive
opportunities and, if the Debtors materially exceed their Quarterly
Performance and/or Cumulative Performance Goals, meeting or
exceeding the "Maximum" targets, the Senior Executives can earn the
"Maximum," which is set at 150%.
A copy of the Court's Order approving the Bonus Plan as well as the
revised Performance Metrics is available at:
http://bankrupt.com/misc/txsb16-33590-0705.pdf
Alex Wolf, writing for Bankruptcy Law360, reported that the Plan
proposes to pay up to $6.4 million in incentive bonuses for a group
of senior executives at C&J Energy.
The Senior Executives holding the following positions are included
in the SEIP:
-- Chief Executive Officer,
-- Chief Operating Officer,
-- Chief Financial Officer,
-- Chief Administrative Officer and President - Research &
Technology,
-- President - Corporate Operational Development,
-- President - Drilling & Completion Services,
-- President - Well Services,
-- Chief Strategy Officer, and
-- Executive Vice President, General Counsel and Chief Risk &
Compliance Officer.
About C&J Energy
C&J Energy Services -- http://www.cjenergy.com/-- is a provider of
well construction, well completions, well support and other
complementary oilfield services to oil and gas exploration and
production companies. As one of the largest completion and
production services companies in North America, C&J offers a full,
vertically integrated suite of services involved in the entire
life
cycle of the well, including directional drilling, cementing,
hydraulic fracturing, cased-hole wireline, coiled tubing, rig
services, fluids management services and other special well site
services. C&J operates in most of the major oil and natural gas
producing regions of the continental United States and Western
Canada.
C&J Energy Services Ltd. and 14 of its subsidiaries each filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Tex. Lead Case No. 16-33590) on July 20, 2016. The Debtors'
cases are pending before Judge David R. Jones.
The law firms Loeb & Loeb LLP, Kirkland & Ellis LLP serve as the
Debtors' counsel. Fried, Frank, Harris, Shriver & Jacobson LLP
acts as special corporate and tax counsel to the Debtors.
Investment bank Evercore is the Debtors' financial advisor, and
AlixPartners is the Debtors' restructuring advisor. Ernst & Young
Inc. is the proposed information officer for the Canadian
proceedings. Donlin, Recano & Company, Inc. serves as the claims,
noticing and balloting agent.
U.S. Trustee Judy A. Robbins appointed five creditors to serve on
the official committee of unsecured creditors in the Chapter 11
case of CJ Holding Co., et al. The Committee hired Greenberg
Traurig, LLP as counsel for the Committee, Conway MacKenzie, Inc.,
to serve as its financial advisor, Carl Marks Advisory Group LLC
as
investment banker.
CALIFORNIA RESOURCES: Posts $546 Million Net Income for Q3
----------------------------------------------------------
California Resources Corporation filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net income of $546 million on $456 million of total revenues for
the three months ended Sept. 30, 2016, compared to a net loss of
$104 million on $626 million of total revenues for the three months
ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported net
income of $356 million on $1.09 billion of total revenues compared
to a net loss of $272 million on $1.83 billion of total revenues
for the same period during the prior year.
As of Sept. 30, 2016, California Resources had $6.33 billion in
total assets, $6.82 billion in total liabilities and a total
deficit of $493 million.
"Given the state of the commodity markets, we will continue to
evaluate opportunities to strengthen our balance sheet to
competitively position the company for the longer term. As a
result, we may from time to time seek to further reduce our
outstanding debt using cash from asset sales or other
monetizations, exchanging debt for other debt or equity securities
or engaging in joint ventures and other activities. Such
activities, if any, will depend on available funds, prevailing
market conditions, our liquidity requirements, contractual
restrictions in our credit facilities, perceived credit risk by
counterparties and other factors. The amounts involved may be
material. However, we can give no assurances that any of these
efforts will be successful or adequately strengthen our balance
sheet," the Company stated in the report.
Todd Stevens, president and chief executive officer, said, "In the
third quarter, we began to ramp up our field activities, while
continuing to keep our investments within our cash flow.
Importantly, our teams safely re-initiated our capital investment
programs while maintaining our cost reductions and drilling
efficiencies. We anticipate our increased drilling activity in the
remainder of 2016 and 2017 has the potential to position CRC for an
inflection point in our business.
"Our debt position was reduced by a net $625 million in the third
quarter as a result of our tender for our unsecured bonds. This
brings our total debt reduction to approximately $1.5 billion from
peak levels after the spin. Based on the improving price outlook,
we are building multi-year planning scenarios to develop our
extensive inventory, supported by our low-decline base production,
that we believe can further improve our leverage metrics
organically. We continually evaluate options for additional
deleveraging in this dynamic market to reach our target leverage
goals."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/hK14Dt
About California Resources
California Resources Corporation is an independent oil and natural
gas exploration and production company operating properties
exclusively within the State of California. The Company was
incorporated in Delaware as a wholly-owned subsidiary of Occidental
on April 23, 2014, and remained a wholly-owned subsidiary of
Occidental until the Spin-off. On Nov. 30, 2014, Occidental
distributed shares of the Company's common stock on a pro rata
basis to Occidental stockholders and the Company became an
independent, publicly traded company, referred to in the annual
report as the Spin-off. Occidental retained approximately 18.5% of
the Company's outstanding shares of common stock which it has
stated it intends to divest on March 24, 2016.
The Company reported a net loss of $3.55 billion in 2015, following
a net loss of $1.43 billion in 2014.
* * *
In September 2016, S&P Global Ratings raised its corporate credit
rating on California Resources to 'CCC+' from 'SD'. "We raised the
corporate credit rating on CRC to reflect our reassessment of its
credit profile following the tender for its senior unsecured
notes," said S&P Global Ratings credit analyst Paul Harvey. "The
rating reflects our expectation that debt leverage will remain at
what we consider unsustainable levels over the next 24 months
despite the net-debt reduction of about $625 million from the
tender," he added.
In August 2016, Moody's Investors Service downgraded California
Resources' Corporate Family Rating to 'Caa2' from 'Caa1' and
Probability of Default Rating to 'Caa2-PD' from 'Caa1-PD'.
CALVERY SERVICES: U.S. Trustee Fails to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on Nov. 1 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Calvery Services Corp.
Calvery Services Corp. filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 16-07075) on Aug. 17, 2016. The
petition was signed by William Quinones, president. The Debtor is
represented by James W. Elliott, Esq., at McIntyre Thanasides
Bringgold Elliott Grimaldi & Guito, P.A.
The Debtor estimated assets at $100,001 to $500,000 and liabilities
at $500,001 to $1 million at the time of the filing.
CARDIFF INTERNATIONAL: KLJ & Associates Casts Going Concern Doubt
-----------------------------------------------------------------
Cardiff International, Inc., filed with the U.S. Securities and
Exchange Commission its annual report on Form 10-K, disclosing a
net loss of $3.94 million on $1.39 million of total revenue for the
year ended December 31, 2015, compared with net loss $13.13 million
on $890,401 of total revenue for the year ended in 2014.
KLJ & Associates, LLP, states that the Company has suffered net
losses and has had negative cash flows from operating activities
during the years ended December 31, 2015 and 2014, which raises
substantial doubt about the Company's ability to continue as a
going concern.
At December 31, 2015, the Company had total assets of $1.21
million, total liabilities of $1.82 million, and $610,489 in total
stockholders' deficit.
A full-text copy of the Form 10-K is available at:
http://bit.ly/2fyDW0G
Fort Lauderdale, Fla.-based Cardiff International, Inc., is a
holding company engaged in providing an equity exit strategy for
business owners. The Company is a small cap holding company, which
provides a platform to collaborate with entrepreneurs. The Company
provides investors the ability to invest in its subsidiaries.
CAROLINE WYLY: Has SEC Deal on $101M Securities Fraud Judgment
--------------------------------------------------------------
Alex Wolf, writing for Bankruptcy Law360, reported that the U.S.
Securities and Exchange Commission and Chapter 11 debtor Caroline
"Dee" Wyly, the widow of deceased business tycoon Charles Wyly,
have reached an accord to satisfy a $101 million securities fraud
judgment against Charles Wyly's estate, asking a Texas bankruptcy
court to amend a previous order allowing for the repatriation of
foreign assets. The report says SEC and Caroline Wyly filed a
joint motion asking that the court modify a July order.
According to a report by the Troubled Company Reporter on Oct. 6,
2016, the SEC objected to the Third Amended Plan filed by Caroline
Wyly, complaining that there is no assurance that the Plan can or
will be funded and it purports to release the liability of and
permanently enjoin actions against non-debtors. The SEC said the
Plan fails the feasibility test since it cannot be implemented
without repatriated funds. The SEC is unconvinced that the Isle of
Man trustees will repatriate the necessary funds from the offshore
trusts. Moreover, the Plan purports to discharge the Debtor in
contravention of Section 1141(d)(2) of the Bankruptcy Code and to
enjoin the SEC from pursuing, among other things, actions against
non-debtor third parties. The SEC asked the Court to deny
confirmation of the Plan.
The Troubled Company Reporter, citing Reuters, reported on Oct. 3,
2016, that Sam Wyly, Caroline Wyly's brother-in-law, has agreed to
pay $198.1 million to resolve claims by federal securities
regulators that he engaged in a long-running securities fraud to
hide trades in companies he controlled using offshore trusts.
Under the settlement, Mr. Wyly and his family agreed to take steps
to have offshore trusts in the Isle of Man make payments to
satisfy
a judgment that the S.E.C. obtained in 2015, the report related.
The S.E.C. will cooperate with ensuring that Mr. Wyly receives a
credit against his federal income tax liabilities of nearly $181
million, the report further related.
About Caroline Wyly
Caroline Wyly is the widow of business tycoon Charles Wyly. She
and her brother-in-law Sam Wyly sought Chapter 11 bankruptcy
protection as leverage to settle a looming tax bill and a $329
million claim from the Securities and Exchange Commission. Her
bankruptcy is In re Caroline D. Wyly, 14-35074, in U.S. Bankruptcy
Court, Northern District Texas (Dallas).
About Sam Wyly
Sam Wyly is a lifelong entrepreneur and author. His first book,
1,000 Dollars & An Idea, is a biography that tells his story of
creating and building companies, including University Computing,
Michaels Arts & Crafts, Sterling Software, and Bonanza Steakhouse.
His second book, Texas Got It Right!, co-authored with his son,
Andrew, was gifted to roughly 450,000 students and teachers,
thought leaders, and readers, and continues to be a best-seller in
its Amazon category.
Samuel Wyly filed for Chapter 11 bankruptcy protection (Bankr.
N.D. Tex. Case No. 14-35043) on Oct. 19, 2014, weeks after a judge
ordered him to pay several hundred million dollars in a civil
fraud case. In September 2014, a federal judge ordered Mr. Wyly
and the estate of his deceased brother to pay more than $300
million in sanctions after they were found guilty of committing
civil fraud to hide stock sales and nab millions of dollars in
profits.
CENTRAL LAUNDRY: To Create $60,000 Payment Fund For Unsecureds
--------------------------------------------------------------
Central Laundry, Inc., filed with the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania a disclosure statement dated Oct.
30, 2016, referring to the Debtor's plan of reorganization.
Under the Plan, allowed Class VII - General Unsecured Claims will
be paid a proportional amount of their allowed claim on a pro rata
basis of the total amount of each claimant's allowed claim to
the total general unsecured claim pool. The Reorganized Debtor
will create a payment fund in the total amount of $60,000 by
contributing a sum of $1000 per month for a period of 60 months to
the unsecured creditors claim fund. The disbursing agent will make
distributions on a pro rata basis to the allowed unsecured claims
on a semi-annual basis with the first distribution being made 180
days following confirmation, and semi-annually thereafter.
Creditors in this class are impaired.
Funding for the Plan payments to creditors will be generated
through regular business revenues, the collection of a note
receivable in the amount of $534,000 from Bellmawr Laundry, LLC,
which will be paid upon the sale of its interest in the commercial
real estate located at 281 Benigno Boulevard in Bellmawr New
Jersey, and a new capital contribution in the amount not less than
$400,000 being provided by George Rengepes and James Rengepes to
the Reorganized Debtor in consideration of their receipt of the new
stock interests in the Reorganized entity. The new value capital
contribution is being made to assure that the Reorganized Debtor
has sufficient cash resources to fund the necessary anticipated
payments to Chapter 11 administrative creditors on the Effective
Date, to meet on going operational costs and the plan payment
funding requirements. These contributions will be made in exchange
for new equity interest holdings in the Reorganized Debtor.
The Debtor projects the Plan will require significant funds on the
Plan Effective Date to enable the Debtor to meet the statutorily
required initial plan funding requirements and to fund the
cash payments to M & T Bank and T.D. Bank. The anticipated cash
contributions which will be required by the principals of the
Reorganized Debtor entity will constitute a new value contribution
of money or money's worth reasonably equivalent in view of all the
circumstances of this particular case sufficient to support a
determination by the Court that the Plan as proposed is fair and
equitable and the funding contributions act as an appropriate and
necessary consideration to the absolute priority distribution
provisions.
The Disclosure Statement is available at:
http://bankrupt.com/misc/paeb16-10666-181.pdf
The Plan was filed by the Debtor's counsel:
Paul J. Winterhalter, Esq.
PAUL J. WINTERHALTER, P.C.
1717 Arch Street, Suite 4110
Philadelphia, PA 19103
Tel: (215) 564-4119
E-mail: pwinterhalter@pjw-law.com
About Central Laundry
Central Laundry, Inc., sometimes know and trading as Olympic Linen,
is duly organized, formed, and existing under the laws of the
Commonwealth of Pennsylvania with its current principal place of
business and executive offices located at 615 Industrial Park
Drive, Lansdowne, Pennsylvania. The Debtor's primary business
involves operating a commercial laundry and linen service for the
restaurant and hospitality industry.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. E.D.
Penn. Case No. 16-10666) on Feb. 1, 2016, estimating its assets and
liabilities at up to $50,000 each.
Paul J. Winterhalter, Esq., at the Law Offices Of Paul J.
Winterhalter, P.C., serves as the Debtor's bankruptcy counsel.
CHATEAU DE LUMIERE: Hires Feasibility and Interest Rate Expert
--------------------------------------------------------------
Chateau de Lumiere LLC asks the Bankruptcy Court to approve the
employment of Heath Schneider of 5 Star Mortgage as feasibility and
interest rate expert in connection with the Chapter 11 case, nunc
pro tunc to Sept. 16, 2016.
As Debtor's feasibility and interest rate expert, it is anticipated
that Schneider will provide various professional services in the
Chapter 11 case, including but not limited to producing an expert
report and providing testimony before the Court in connection with
confirmation of Debtor's plan.
Schneider has agreed to provide his Services at the rate of $450
per hour for any testimony provided, and for all tasks performed
under the Agreement, including analysis, calculations, conclusions,
preparation of reports, and necessary travel time.
Schneider assures the Court that his firm has no connections with
the creditors, any other party in interest, their respective
attorneys and accountants, the United States Trustee or any person
employed in the office of the United States Trustee.
Heath Schneider can be contacted at:
Heath Schneider
5 STAR MORTGAGE
8965 S. Pecos Rd., Suite 10A
Henderson, NV 89074
Tel: (702) 947-7827
Fax: (702) 991-7243
E-mail:HEATHLOAN@GMAIL.COM
About Chateau de Lumiere
Headquartered in Henderson, Nevada, Chateau de Lumiere LLC filed
for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No.
15-14104) on July 16, 2015, estimating assets and liabilities
between $1 million and $10 million each. The petition was signed
by Andrew Cartwright, manager. Judge August B. Landis presides
over the case. Talitha B. Gray Kozlowski, Esq., at Garman Turner
Gordon LLP, serves as the Debtor's bankruptcy counsel.
CHEDDAR'S RESTAURANT: S&P Assigns 'B' CCR; Outlook Stable
---------------------------------------------------------
S&P Global Ratings said that it assigned its 'B' corporate credit
rating to casual restaurant operator Cheddar's Restaurant Holding
Corp. The outlook is stable.
At the same time, S&P assigned a 'B' issue-level rating to the
company's proposed $335 million first-lien term loan facility with
a recovery rating of '3', indicating S&P's expectation for
meaningful recovery for lenders in the event of a payment default.
S&P's recovery expectations are in the lower half of the 50%-70%
range. The senior secured credit facility also consists of a $35
million revolving credit facility due in 2021 (not rated by S&P
Global Ratings).
Proceeds from the proposed $335 million term loan will be used to
fund the purchase of franchised restaurants operated by the Greer
family for a purchase consideration (including transaction
expenses) of $219 million and to retire existing debt of
$116 million.
The rating on Irving, Texas-based Cheddar's Restaurant Holding
Corp. reflects the company's small total system-wide restaurant
count of about 165, geographic concentration in Texas, lack of
pricing flexibility given its lower-income customer base, and a
more highly leveraged balance sheet following the acquisition. The
ratings also incorporate S&P's expectation of modest integration
risk as management is buying 44 comparatively better operated
restaurants from its largest franchisee, Greer. S&P believes the
Greer family will continue to be involved on the board of directors
and oversee a smooth transition. S&P expects the company to slow
growth pace over the next few years to allow absorbing the
Cheddar's units from Greer.
After the Greer acquisition, Cheddar's EBITDA base nearly doubles,
but it remains one of the smallest players in the competitive
casual-dining industry, which has experienced weakness and falling
traffic given recent lower grocery costs and shifting consumer
preferences to eating at home.
S&P believes that Cheddar's size makes it more vulnerable to cost
increases. However, S&P expects the risk from exposure to food
cost volatility to stay at a minimum given that it hedges a
significant portion of its overall food costs. That said, the
company historically drives traffic due to its low price points
compared to those of peers. S&P estimates that management will
continue to choose high-traffic stand-alone locations near
higher-priced direct competitors for small market share gains
driven by low menu price points. As a result, in S&P's view, the
company's average unit volume compares favorably to that of its
peers.
Key assumptions in S&P's base-case forecast for 2017 include:
-- U.S. GDP growth of about 2.4% in 2017, with consumer
spending growth of about 2.6%;
-- S&P expects low-single-digit percent revenue expansion in
2017 driven by minimal same-store sales growth and the
addition of about three new restaurants;
-- Flat gross margin in 2017, driven by softening of commodity
costs, minimal menu price increases, and better inventory
control;
-- Adjusted EBITDA margin expansion of more than 100 bps to
16.4% in 2017 from new marketing and brand awareness
initiatives, and investments in kitchen operation technology
and support; and
-- Annual positive free operating cash flow generation of about
$20 million in 2017, despite higher interest expense and
rent costs following the Greer acquisition.
S&P notes that Cheddar's experienced modest weakness in
same-store-sales in the first half of 2016 due to traffic declines.
However, S&P expects it to stabilize by the end of 2016 given its
expectation that the low price point of its large-portion menu will
continue to attract millennials.
S&P also recognizes that Cheddar's adjusted EBITDA margins declined
to 12.7% in 2014 after the company pursued an aggressive store
growth strategy in the 2012-2013 period. That increased costs,
especially labor, which accounts for a major portion of its cost
base. Since then, under its new CEO, the company shifted its
strategy and slowed store openings, enhancing store productivity,
and made investments in kitchen transformation initiatives to
restore margins. This has resulted in improved adjusted EBITDA
margins over the past year to 13.3%.
Based on the proposed transaction and S&P's base-case forecast, it
expects leverage to moderately decline to the mid- to high-5x area
in 2017 and 2018 (from pro forma leverage of high 5x in 2016)
driven by EBITDA growth as debt reduction remains modest due to the
presence of the private equity sponsors. EBITDA interest coverage
is expected to weaken to 2.7x from 3.9x in 2017 post transaction,
and S&P's forecast assumes that it will remain below 3x for the
next 12-36 months.
S&P assesses the company's liquidity as adequate to cover its needs
over the next 12-18 months. S&P's assessment of the company's
liquidity profile incorporates these expectations and assumptions:
-- S&P expects sources of liquidity over the next 12 months to
exceed uses by more than 1.2x.
-- S&P would expect net sources to remain positive, even if
EBITDA declines by 15%.
-- S&P thinks the company has the ability to absorb high-
impact, low-probability events with limited need for
refinancing. A generally satisfactory standing in the
credit markets.
-- S&P do not anticipate borrowings under the revolving credit
facility over the next 12 months given its cash flow
forecast.
-- The Cheddar's liquidity profile is bolstered by a light
maturity schedule until the revolving credit facility
matures in 2021, followed by the term loan in 2023. The new
revolving and term loan credit facilities are subject to a
maximum leverage ratio of 6.5x with no stepdowns. S&P
estimates at least a 20% EBITDA cushion in 2017.
Principal liquidity sources:
-- Cash on balance sheet of $7.9 million at the end of the
third quarter of 2016;
-- Funds from operations (FFO) of about $50 million; and
-- Full availability under the new $35 million revolving credit
facility maturing in 2021.
Principal liquidity uses:
-- Capital spending expected to be stable at about $25 million
in 2016 and 2017, comprising remodel (kitchen
transformation) and maintenance capital spending of $16
million and growth capital spending of $10 million as the
company focuses on integration of the Greer units rather
than new store growth.
-- Modest term-loan amortization of $3.35 million per year.
The rating outlook is stable. S&P expects Cheddar's operating
performance will continue to improve from modest positive
same-store sales and manageable restaurant growth with the new
units, reaching a low- to mid-single-digit percentage increase over
the coming year. S&P believes the company will maintain sufficient
access to the revolving credit facility for operating needs despite
increased interest and rent expenses resulting from the proposed
acquisition and forecast minimal asset integration risks.
S&P could consider a downgrade if liquidity becomes constrained or
if operating performance and credit measures deteriorate such that
leverage increases to over 6.0x and EBITDA interest coverage
declines below 2x. Events that could cause a downgrade include a
sharp deterioration in operating performance, consistent same store
sales of negative 3% or more that cause EBITDA margin deterioration
of more than 300 bps, or significant changes in financial policy
that leads to large debt financed dividend to company's private
equity sponsors.
An upgrade is unlikely over the next 12 months, given the company's
ownership by financial sponsors and execution risk associated with
the Greer restaurant purchases. Still, S&P could raise the ratings
if the company meaningfully builds scale while pursuing a prudent
growth strategy, resulting in revenue increase of 6% and EBITDA
margin expansion of 180 basis points or more, resulting in debt to
EBITDA ratio sustained below 5x.
CHICAGO CITY: Moody's Affirms 'Ba1' Rating on $7.8BB GO Debt
------------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 rating on
$7.8 billion of the City of Chicago's general obligation (GO) debt,
$540 million of sales tax debt, and $263 million of motor fuel tax
debt. The outlook remains negative.
The Ba1 rating on Chicago's GO debt balances the city's large,
diverse and expanding economic base with a very weak balance sheet
arising from high and growing unfunded pension liabilities. The
rating acknowledges the benefit of significant tax hikes that will
fund increased pension contributions and reduce the risk of plan
asset depletion. However, the city's unfunded pension liabilities
will continue to grow, albeit at a slower rate. The fiscal stress
of Chicago Public Schools (CPS, B3 negative) also poses some long
term risks to the city. Sustained fiscal stress at CPS could
pressure Chicago's credit profile in various ways, from
constraining the city's practical ability to raise revenue for city
obligations to raising the city's borrowing costs. Chicago's
liquidity is likely to remain strong in the near term as revenue
enhancements meet rising pension costs for at least the next
several years.
The Ba1 ratings on Chicago's sales tax and motor fuel tax debt
reflect the absence of legal segregation of pledged revenue from
the city's general operations. This lack of separation caps the
ratings at the city's GO rating, despite healthy debt service
coverage by pledged revenue.
Rating Outlook
The negative outlook incorporates the potential contagion arising
from the significant fiscal stress of CPS. Further, although the
significant tax increases adopted by the city will support higher
pension contributions, high and growing pension debt remains a key
credit challenge.
Factors that Could Lead to an Upgrade
Rapid economic and revenue growth or further budgetary
adjustments that accommodate pension contributions sufficient
to arrest growth in unfunded pension liabilities
Operational stability and improved liquidity at CPS
Change in legal provisions governing the sales tax and motor
fuel tax bonds that completely segregate pledged revenue from
the city's general operations (sales tax and motor fuel tax
ratings)
Factors that Could Lead to a Downgrade
Slow-down in economic and labor market expansion
Continued growth in long-term liabilities that weakens the
city's balance sheet and financial flexibility
Contagion from CPS that weakens the city's economic outlook,
financial prospects or market access
A reduction or delay in the State of Illinois' (Baa2
negative) appropriation of Chicago's motor fuel tax
distributions (motor fuel tax rating).
Legal Security
Chicago's GO bonds are secured by a pledge to levy a tax unlimited
as to rate and amount to pay debt service. Chicago's sales tax
revenue bonds are secured by a senior lien on receipts of the
city's local home rule sales tax and the city's share of the state
sales tax. Chicago's motor fuel tax revenue bonds are secured by a
senior lien on 75% of the city's annual allocation of state motor
fuel taxes, plus other pledged city revenue primarily consisting of
dock licensing fees collected from tour boats operating on the
Chicago River.
Obligor Profile
The City of Chicago, with a current estimated population of 2.7
million, is the largest city in the State of Illinois and the third
most populous city in the US.
Methodology
The principal methodology used in the general obligation rating was
US Local Government General Obligation Debt published in January
2014. The principal methodology used in the special tax rating was
US Public Finance Special Tax Methodology published in January
2014.
CHICAGO EDUCATION BOARD: Fitch Rates ULTGO Bonds 'B+'
-----------------------------------------------------
Fitch Ratings has assigned a 'B+' rating to the following Chicago
Board of Education, IL (CBOE) unlimited tax general obligation
bonds (ULTGOs):
-- $46.4 million ULTGO refunding bonds (dedicated revenues)
series 2016C;
-- $94.8 million ULTGO refunding bonds (dedicated revenues)
series 2016D;
-- $141.2 million ULTGO bonds (dedicated revenues) series
2016E;
-- $122.0 million ULTGO bonds (dedicated revenues) taxable
series 2016F;
-- $21.9 million ULTGO bonds (dedicated revenues) series 2016G.
Fitch has also affirmed the 'B+' rating on the following CBOE
obligations:
-- Long-Term Issuer Default Rating (IDR);
-- Approximately $7.1 billion of outstanding ULTGO bonds.
The Rating Outlook is Negative.
The bonds are scheduled to sell via negotiation the week of Nov.
14. Proceeds will refund various series of outstanding bonds,
finance reimbursement of previously paid swap termination payments,
finance capital improvements, fund capitalized interest and pay the
costs of issuance of the bonds.
SECURITY
The bonds are unlimited tax general obligation bonds payable from
dedicated CBOE revenues. The bonds are payable in the first
instance from unrestricted general state aid and are also general
obligations of the CBOE, payable from unlimited ad valorem taxes
levied against all taxable property in the city of Chicago.
KEY RATING DRIVERS
The 'B+' rating reflects CPS's chronic structural imbalance, slim
reserves and weak liquidity position which are exacerbated by
rising long-term liability costs, an historically acrimonious labor
relationship and the lack of an independent ability to raise
revenues.
Economic Resource Base
The Chicago Board of Education provides preK-12 education to over
390,000 students within the city of Chicago. Its taxing
jurisdiction is coterminous with the city of Chicago. The Chicago
Public Schools (CPS) manages the school system which is composed of
673 school facilities. Chicago serves as the economic and cultural
center for the Midwestern region of the United States. The city's
population totaled 2.7 million in 2014, down 6% from the 2000
census, but still accounts for 21% of the state's population.
Socioeconomic indicators are mixed with elevated individual poverty
rates, average per capita income levels, but strong educational
attainment levels. CPS derives about a third of its revenues from
the state of Illinois (rated 'BBB+'/ Negative Watch). State-wide
economic growth through the current expansion has lagged that of
the U.S. as a whole.
Revenue Framework: 'bbb' factor assessment
Fitch expects natural revenue growth, absent new revenue action, to
keep pace with inflation. CPS has no independent legal ability to
raise revenues.
Expenditure Framework: 'bbb' factor assessment
Fitch expects the natural pace of expenditure growth to exceed that
of revenues, necessitating ongoing budget management. CPS has made
significant cuts in recent years, and Fitch believes that the
practical ability to cut spending throughout the economic cycle is
limited.
Long-Term Liability Burden: 'a' factor assessment
The long-term liability burden is elevated, but still in the
moderate range, relative to the resource base.
Operating Performance: '< bb' factor assessment
Financial operations are strained, structurally imbalanced and
reliant upon year-round cash flow borrowing. Fitch expects
budgetary imbalance to persist despite the district's
intention to rein in spending and its expectations that state aid
will grow. Reserve levels are narrow despite low expected revenue
volatility and given limited budgetary flexibility Fitch believes
financial operations are poorly positioned to absorb even a mild
economic downturn without further impairing liquidity.
RATING SENSITIVITIES
Structural Imbalance: A lack of progress towards resolving
CPS's large structural imbalance would put further negative
pressure on the rating.
Market Access: Reliable market access is important to near-term
stability. Fitch will monitor the district's ability to access
external financing for both liquidity and capital purposes.
CREDIT PROFILE
Chicago acts as the economic engine for the Midwestern region of
the U.S. The city's residents are afforded abundant employment
opportunities within this deep and diverse regional economy. The
city also benefits from an extensive infrastructure network,
including a vast rail system, which supports continued growth. The
employment base is represented by all major sectors with
concentrations in the wholesale trade, professional and business
services and financial sectors. Socioeconomic indicators are mixed
as is typical for an urbanized area, with average per capita income
and educational levels, but also elevated individual poverty
rates.
CPS relies on state funding for a significant amount of support.
Illinois is a large, wealthy state with a diverse economy centered
on the Chicago metropolitan area. The state's operating
performance, both during the most recent recession and in this
subsequent period of economic growth, has been very weak. The
state's extended budget stalemate has continued into a second
fiscal year and has resulted in a marked deterioration in the
state's finances during this time of economic recovery.
Revenue Framework
Property taxes provided 46% and state aid 32% of general fund
revenues in fiscal 2015.
Growth prospects for revenues are slow, without taking into account
potential revenue-raising measures. Actual revenues are budgeted to
rise significantly in the current fiscal 2017 as the result of both
local and state policy action. The city of Chicago approved a $250
million increase in property taxes (equivalent to 4.5% of general
fund spending) beginning in fiscal 2017 to be used for pension
payments. State aid is budgeted to rise by $317 million including
$102 million in state poverty grants. The remaining $215 million
represents a state pension contribution which has not yet received
state approval. This represents a fairly large budgetary
vulnerability as the governor has stated that his support is
contingent upon the passage of a comprehensive pension reform
plan.
Independent legal ability to raise revenues is limited, like many
school districts in the U.S. Annual growth in the property tax levy
is limited by the Property Tax Extension Limitation Law to the
lesser of 5% or the rate of inflation.
Expenditure Framework
The district devoted 50% of fiscal 2015 governmental fund spending
to instruction, 15% to general support services, 10% to pensions,
8% to debt service and 6% to capital outlay.
Fitch expects the natural pace of spending growth to be above
natural revenue growth, given rising pension contributions and
labor costs. Management has actively managed expenditure growth,
with a series of substantial cuts over the past several years
including administrative cutbacks, school closures and layoffs.
CPS's practical ability to make future expenditure cuts is
limited. While politically difficult, such cuts could include those
for efficiency, programs, and labor costs. Further cuts may become
necessary in the near term, particularly if the entire amount of
budgeted state aid is not realized. Carrying costs for debt service
and actuarially-determined pension contributions are currently
moderate at 19% of governmental spending in fiscal 2015; however,
increasing pension and debt service costs will likely raise
carrying costs to elevated levels over the next several years.
Long-Term Liability Burden
The long-term liability burden is elevated but still moderate
relative to the resource base. The net pension liability plus
overall debt represents about 25% of personal income. Overlapping
debt accounts for almost half of the long-term liability burden,
with net pension liability representing a third and direct debt
approximately 20%. Amortization of direct debt is slow with 25% of
debt scheduled for retirement in 10 years. Fitch anticipates that
the long-term liability burden will remain solidly within the
'a' category
Pension benefits for teachers are provided through the Public
School Teachers' Pension and Retirement Fund of Chicago
(CTPF), a cost-sharing multi-employer defined benefit plan in which
CPS is the major contributor. Under GASB 68 reporting, the plan
reported a 51.6% asset to liability ratio as of June 30, 2015.
Fitch estimates the ratio to be slightly lower at about 48% when
adjusted to reflect a 7% return assumption. The weak ratios stem
from several years of pension payment holidays and poor investment
returns. The district dramatically increased pension funding in
fiscal 2014 to comply with a state law requiring payments
sufficient to reach a 90% funding level by 2059.
Pension benefits for other personnel are provided through the
Municipal Employees' Annuity and Benefit Fund of Chicago
(MEABF), a cost-sharing multi-employer defined benefit plan, whose
major contributor is the city of Chicago. The MEABF plan also has a
weak asset to liability ratio of 20.3%, or an estimated 19% when
adjusted by Fitch to reflect a 7% return assumption. CPS does not
directly contribute to the plan and its proportionate share of the
net pension liability is $0
Other post-employment benefits (OPEB) are similarly underfunded but
annual payments are statutorily capped at $65 million. The OPEB
liability represents an additional 1.4% of personal income.
Operating Performance
Financial resilience is the key credit concern, as CPS's
narrow and declining reserves provide insufficient cushion against
a potential revenue stress. The fiscal 2016 budget included a $185
million appropriation of general fund balance, but preliminary
fiscal 2016 results show a larger draw of $367 million. The
negative budgetary variance was largely due to a $480 million state
aid payment for pensions that was budgeted but not realized. The
fiscal 2017 budget includes an additional $81 million use of fund
balance which will bring reserves close to zero. The lack of an
adequate financial cushion leaves CPS ill-prepared to withstand
even a moderate economic downturn.
The fact that CPS still struggles with structural budgetary balance
is particularly concerning this far into an economic recovery. Much
of the imbalance stems from the shift in fiscal 2014 from statutory
to actuarially-based pension payments, which presented a dramatic
rise in spending without a corresponding revenue increase. Recent
budgets have also relied upon unsustainable practices including
appropriated reserves, scoop and toss restructurings for budgetary
relief and optimistic budgeting of revenues. The fiscal 2017 budget
represents a measure of improvement, incorporating a mixture of
expenditure controls and increased revenues; however, budgeted
expenditures still exceed revenues by $81 million and receipt of
the budgeted $215 million state payment for pensions remains
speculative.
The district has closed $95 million of its identified $300 million
budget gap and expects to cover the increased costs associated with
a new labor contract (discussed below) with TIF surplus in fiscal
2017.
Liquidity is extremely weak, with 12 days of cash on hand at the
end of fiscal 2015. CPS' cash position declined dramatically
from $1.1 billion at the close of fiscal 2013 to $150 million at
the end of fiscal 2015. The decline was exaggerated by the use of
cash to pay for capital projects that were subsequently reimbursed
by issuance of long-term bonds and the acceleration of vendor
payments that were partially reimbursed in fiscal 2015.
CPS remains highly dependent upon market access for short-term
borrowing. The district's reliance on external sources of
liquidity is increasing. Cash flow borrowing will rise from $1.065
billion in fiscal 2016 to $1.55 billion in fiscal 2017. The
district's updated cash flow forecast for fiscal 2017 and the
first two months of fiscal 2018 shows August 2016 as the only point
when end-of-month cash is positive net of cash flow borrowing. The
cash flow forecasts include the $1.55 billion of borrowing; a $475
million line of credit is in place with the remainder under
negotiation.
Current Developments
The teachers' contract was recently settled on terms less
favorable than the district budgeted for, but more favorable than
the previous contract. The contract covers fiscal years 2016
through 2019 and avoids retroactive payments for fiscal 2016. The
district was not able to achieve the proposed elimination of the
district's practice of paying 7% of the teachers' 9%
pension contribution (pension pickup) for existing teachers, but
the contract does eliminate this benefit for new employees with an
offsetting increase in starting base salary. Wage increases are 0%
for fiscals 2016 and 2017, 2% for fiscal 2018 and 2.5% for fiscal
2019. There are no step or lane increases for fiscal 2016 but these
resume for fiscals 2017-19. Some savings are derived from heath
care plan design changes.
The current-year cost of the new teachers' contract is
approximately $55 million more than the original fiscal 2017 budget
of approximately $5.5 billion. CPS anticipates funding the
incremental labor contract cost with a one-time revenue source:
supplemental TIF surplus funds from the city.
COBALT INT'L: S&P Lowers CCR to 'CC' on Proposed Exchange Offer
---------------------------------------------------------------
S&P Global Ratings lowered its unsolicited corporate credit rating
on U.S.-based oil and gas exploration and production (E&P) company
Cobalt International Energy Inc. to 'CC' from 'CCC-'. The outlook
is negative.
The unsolicited issue-level ratings on the company's convertible
senior notes remain 'C'. The recovery rating on this debt remains
'6', indicating S&P's expectation of negligible (0% to 10%)
recovery in the event of a payment default.
"The downgrade follows Cobalt International's announcement that it
has agreed to a possible exchange transaction involving the
company's 2.625% convertible senior notes due 2019 and 3.125%
convertible senior notes due 2024 at below par," said S&P Global
Ratings credit analyst Kevin Kwok.
The exchange will consist of $500 million in new first- and
second-lien notes and 30 million shares of common stock. The
company has not yet disclosed the exact amount of the existing
notes to be exchanged but stated that the transaction will
represent a discount to the principal amount of the notes.
S&P views the proposed transaction as a distressed exchange because
investors will receive less than what was promised on the original
securities. Additionally, S&P views the offer as distressed,
rather than purely opportunistic, based on S&P's view that there is
a realistic possibility of conventional default over the near to
medium term given the company's deteriorating liquidity position.
The outlook is negative, reflecting the potential that S&P could
lower ratings if the company completes an exchange offer or similar
restructuring that S&P classifies as distressed.
CUSHMAN & WAKEFIELD: S&P Affirms 'B+' Issuer Rating
---------------------------------------------------
S&P Global Ratings said it revised its recovery rating on Cushman &
Wakefield's first lien debt to '3', indicating S&P's expectation
for meaningful recovery (50%-70%, lower half of the range) from
'4'. At the same time, S&P affirms its 'B+' issuer rating on C&W
and its stable outlook. S&P also affirms its 'B+' issue rating on
the company's first lien debt and its 'B-'issue rating on the
company's second lien debt.
"The reduction in the refinancing of second lien debt with first
lien debt decreases the amount of first lien debt we expect in a
default scenario," said S&P Global Ratings analyst Diogenes Mejia.
This raises S&P's recovery expectations for the first lien debt. As
a result, S&P revises its recovery rating to '3', indicating our
expectation for meaningful recovery (50%-70%, lower half of the
range) from '4'.
The stable rating outlook reflects S&P Global Ratings' expectation
that Cushman & Wakefield (C&W) will focus on the integration of
recent acquisitions during the remainder of 2016 and during 2017.
S&P expects C&W's central focus on extracting operational synergies
to foster stabilization of the firm's long-term business strategy,
though S&P also expects the company to remain highly leveraged at
5x to 6x debt to adjusted EBITDA.
S&P could lower the rating on C&W within the next 12 months if
integration issues endanger the firm's reputation in its primary
geographic markets or hamper its earnings growth. If leverage
significantly increases and remains above 6.0x debt to adjusted
EBITDA, S&P would also likely lower the rating. Additionally, if
operational or financial reporting challenges arise, S&P may
consider lowering the rating.
Given the limited operating history of the new entity and S&P's
projection for the firm's leverage, it views an upgrade in the next
12 months as unlikely. However, if C&W reduces leverage to less
than 5x debt to EBITDA, while maintaining steady recurring revenue
sources, S&P would consider revising the outlook to positive before
subsequently raising the rating. Additionally, if there is
significant evidence that the integration has been successfully
implemented, resulting in improving profit margins and lower than
5x debt to EBITDA, S&P may consider raising the rating.
DIRECTBUY HOLDINGS: Nov. 14 Meeting Set to Form Creditors' Panel
----------------------------------------------------------------
T. Patrick Tinker, Assistant United States Trustee for Region 3,
will hold an organizational meeting on Nov. 14, 2016, at 10:00 a.m.
in the bankruptcy case of DirectBuy Holdings, Inc.
The meeting will be held at:
Delaware State Bar Assoc.
405 King Street, Suite 100
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 DirectBuy Holdings
DirectBuy Holdings, Inc., United Consumers Club, Incorporated,
DirectBuy, Inc., Beta Finance Company, Inc., UCC Distribution,
Inc., U.C.C. Trading Corporation, National Management Corporation,
and UCC of Canada, Inc., each filed chapter 11 petitions (Bankr. D.
Del. Lead Case No. 16-12435) on November 1, 2016. The Debtors are
represented by Marion M. Quirk, Esq., Nicholas J. Brannick, Esq.,
Michael D. Sirota, Esq., Ilana Volkov, Esq., Felice R. Yudkin,
Esq., at Cole Schotz P.C. The Debtors' corporate headquarters is
located at 8450 Broadway, Merrilville, IN 46410.
DOOR TO DOOR: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Door to Door Storage, Inc.
20425 72nd Ave. S.
Kent, WA 98032
Case No.: 16-15618
Chapter 11 Petition Date: November 7, 2016
Court: United States Bankruptcy Court
Western District of Washington (Seattle)
Judge: Hon. Christopher M. Alston
Debtor's Counsel: Armand J Kornfeld, Esq.
BUSH KORNFELD LLP
601 Union St Ste 5000
Seattle, WA 98101
Tel: 206-292-2110
E-mail: jkornfeld@bskd.com
- and -
Christine M Tobin-Presser, Esq.
BUSH KORNFELD LLP
601 Union St Ste 5000
Seattle, WA 98101
Tel: 206-292-2110
E-mail: ctobin@bskd.com
- and -
Aimee S Willig, Esq.
BUSH KORNFELD LLP
601 Union St Ste 5000
Seattle, WA 98101
Tel: 206-292-2110
E-mail: awillig@bskd.com
Total Assets: $4.08 million
Total Liabilities: $5.65 million
The petition was signed by Tracey F. Kelly, president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/wawb16-15618.pdf
EARTHLINK HOLDINGS: S&P Puts 'B' CCR on CreditWatch Positive
------------------------------------------------------------
S&P Global Ratings said it placed its 'B' corporate credit rating
on Atlanta-based EarthLink Holdings Corp. on CreditWatch with
positive implications.
In addition, S&P placed the 'B+' issue-level rating on the
company's 7.375% senior secured notes on CreditWatch with positive
implications. The'2' recovery rating indicates S&P's expectation
for substantial (70%-90%, at the lower half of the range) recovery
in the event of payment default.
S&P also placed the 'CCC+' issue-level rating on the company's
8.875% senior unsecured notes on CreditWatch with positive
implications. The'6' recovery rating indicates S&P's expectation
for negligible (0%-10%) recovery in the event of payment default.
"The CreditWatch placement follows the company's announcement that
it will be acquired by Windstream Holdings Inc. for approximately
$1.1 billion in an all-stock transaction, including the assumption
of debt," said S&P Global Ratings credit analyst Scott Tan.
S&P expects the transaction to close in the first half of 2017.
S&P expects to resolve the CreditWatch placement when the
transaction closes, at which time S&P will withdraw its ratings on
EarthLink.
EASTMAN KODAK: S&P Affirms 'B-' Rating on 1st Lien Sec. Facilities
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issue rating on Rochester,
N.Y.-based commercial imaging solutions provider Eastman Kodak
Co.'s first-lien secured credit facilities and revised the recovery
rating to '4' from '3' as a result of Kodak's announced intention
to repay all second-lien debt with proceeds from the issuance of
$200 million of convertible preferred stock. The '4' recovery
rating indicates S&P's expectation for average (30%-50%, at the
lower end of the range) recovery in the event of default.
The corporate credit rating on Kodak and all issue-level ratings on
its debt are unchanged.
S&P believes that the new preferred stock has limited ability to
absorb losses in the event of a future business decline and
therefore treat it as debt in S&P's calculation of credit metrics.
The stable outlook on Kodak reflects S&P Global Ratings'
expectation that Kodak's significant cash balance will provide
credit support as it reduces expenses and transitions its business
away from consumer printing and film products. Kodak is focusing
instead on stabilizing the print systems segment--through growth of
advanced offset printing plate products--and investing in more
promising businesses focused on packaging and functional printing.
RECOVERY ANALYSIS
Key analytical factors:
-- S&P is revising its recovery rating on Kodak's first-lien
secured debt to '4' from '3'.
-- S&P's downgrade primarily reflects significantly lower
mandatory interest payments post-refinancing. S&P believes
that Kodak's lower fixed cost base would enable the firm's
business to deteriorate further before triggering a payment
default.
-- S&P's simulated default scenario contemplates a default
occurring in 2017, primarily due to declining revenue in
Kodak's core business, coupled with the inability to gain
meaningful scale in the digital printing segment.
-- S&P valued the company on a going-concern basis, using a
4.0x multiple of S&P's projected emergence-level EBITDA.
-- The valuation multiple reflects limited long-run prospects
for growth in Kodak's core offset printing market and
significant uncertainty around the firm's transition to
more promising packaging and functional printing markets.
Simulated default assumptions:
-- Simulated year of default: 2017
-- EBITDA at emergence: About $65 million
-- EBITDA multiple: 4x
Simplified waterfall:
-- Net enterprise value (after 7% administrative costs):
About $250 million
-- Priority claims: About $90 million
-- Collateral value available to secured creditors: About
$155 million
-- Secured first-lien term loan: About $415 million
-- Recovery expectations: 30%-50% (lower half of the range)
All debt amounts include six months of prepetition interest.
RATINGS LIST
Ratings Affirmed
Eastman Kodak Co.
Corporate Credit Rating B-/Stable/--
2nd Lien Senior Secured CCC
Recovery Rating 6
Ratings Affirmed; Recovery ratings changed
Eastman Kodak Co.
To From
1st Lien Senior Secured B- B-
Recovery Rating 4L 3H
ECLIPSE RESOURCES: Announces Third Quarter 2016 Financial Results
-----------------------------------------------------------------
Eclipse Resources Corporation reported a net loss of $26.80 million
on $54.47 million of total revenues for the three months ended
Sept. 30, 2016, compared to a net loss of $81.46 million on $71.17
million of total revenues for the three months ended
Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $140.5 million on $151.15 million of total revenues
compared to a net loss of $157.5 million on $189.43 million of
total revenues for the same period during the prior year.
As of Sept. 30, 2016, Eclipse Resources had $1.20 billion in total
assets, $593.7 million in total liabilities and $609.3 million in
total stockholders' equity.
Benjamin W. Hulburt, chairman, president and CEO, commented on the
Company's third quarter 2016 results, "The team's continuously
outstanding execution and innovation has allowed us to yet again
exceed the high end of our production guidance while delivering
unit operating costs below our previously estimated guidance range
for the quarter. During the third quarter, a team of Eclipse
Resources and Halliburton personnel set a Halliburton record for
the number of stages completed in a month by a single crew in the
Northeast region. This record was set and then broken by the same
crew in two consecutive months. Additionally, this week we learned
we set their record for the total amount of proppant pumped in a
month by a single crew in the Northeast, pumping over 82 million
pounds of proppant in October. We have transferred some lessons
learned from our ground breaking Purple Hayes "Super-Lateral" well
which continues to exceed our type well expectations to date.
During the quarter, we completed 12 of our DUC wells using what we
refer to as our "Generation 3" completion design that incorporates
tighter spacing, increased proppant loading and 100% slickwater.
Due to record setting efficiencies in our completion operations, we
have been able to effectively neutralize well cost inflation
keeping our well costs within budget and maintaining leading edge
cost metrics.
"To date, our wells turned to sales using the "Generation 3"
completion design have exhibited higher initial flowing tubing
pressures as compared to Generation 1 and 2 completions employed
previously. These wells are being produced using our managed
pressure drawdown method and have demonstrated flat production with
very encouraging pressure declines similar to what we’ve seen on
our Purple-Hayes well.
"We are continuing to drill on our Utica Shale dry gas acreage in
eastern Monroe County, Ohio where we are currently drilling a 7
well pad. Additionally, we are currently completing our first
"Generation 3" completion in the dry gas window on a five well pad
with average lateral extensions of 10,891 feet in which we are
successfully placing proppant concentrations of 2,600 to 3,000
pounds per foot using 100% slickwater. We expect to begin putting
these exciting test wells to sales starting late in the fourth
quarter.
"With the commencement of our Utica Access capacity in mid-October,
we can now transport up to 205,000 MMBtu per day of our gas to the
"TCO" pool. With this capacity now in place, we have seen an
immediate uplift to our realized natural gas prices and expect to
realize a differential of ($0.30) to ($0.35) per Mcf on natural gas
sales during the fourth quarter of 2016. Based on forward basis
pricing, this capacity could allow for an estimated basis uplift of
approximately $1.08 per MMBtu3 for 2017 relative to selling natural
gas at Dominion South Point. This valuable natural gas firm
transport capacity coupled with our recently added ability to
access capacity on the Mariner East I pipeline for a portion of our
ethane should enable us to achieve a higher overall realized price
per unit moving forward.
"We have taken advantage of the recent price improvement in natural
gas markets to finish out our 2017 gas hedging program, which now
covers approximately 80% of our currently expected natural gas
production of 2017, and to commence our 2018 natural gas hedging
program which now totals 140,000 MMBtu per day. We expect to
continue to opportunistically add to our 2018 hedge portfolio as
prices allow, while attempting to retain upside participation if
the natural gas price increases."
As of Sept. 30, 2016, the Company's liquidity was $272 million
consisting of $178 million in cash and cash equivalents and
available borrowing capacity under the Company's revolving credit
facility of $94 million (after giving effect to outstanding letters
of credit issued by the Company of $31 million).
Subsequent to the end of the third quarter of 2016, the Company
completed its semi-annual borrowing base redetermination process
with the lending group under its revolving credit facility.
Through that process, the lending group determined that the
Company's borrowing base will remain at $125 million. The next
borrowing base redetermination under the revolving credit facility
is scheduled to occur in the spring of 2017 under the terms of the
Company's credit agreement.
Matthew R. DeNezza, executive vice president and chief financial
officer, commented, "With the closing of our equity offering early
in the quarter and the recent completion of our borrowing base
redetermination, we continue to maintain a strong liquidity
position based on a sizable, quarter end cash position of $178
million and an undrawn revolver with availability of over $90
million after giving effect to our currently outstanding letters of
credit. We believe this liquidity position as well as our
continued cash flow outperformance will create the foundation used
to generate a robust growth profile as we move out of this year and
into next."
A full-text copy of the press release is available for free at:
https://is.gd/LZzV4J
About Eclipse Resources
Eclipse Resources Corporation is an independent exploration and
production company engaged in the acquisition and development of
oil and natural gas properties in the Appalachian Basin. As of
Dec. 31, 2015, the Company had assembled an acreage position
approximating 220,000 net acres in Eastern Ohio.
The Company reported a net loss of $971 million in 2015, a net loss
of $183 million in 2014 and a net loss of $43.5 million in 2013.
As of June 30, 2016, Eclipse had $1.10 billion in total assets,
$590 million in total liabilities and $510 million in total
stockholders' equity.
EL PATO: Seeks to Employ Sader Law Firm as Attorneys
----------------------------------------------------
El Pato, Inc., seeks authorization from the U.S. Bankruptcy Court
for the Western District of Missouri to employ Bradley D.
McCormack, Esq., and Michael J. Wambolt, Esq., of The Sader Law
Firm as attorneys.
The Debtor requires the Firm to:
(a) advise the Debtor with respect to its rights and
obligations as Debtor-In-Possession and regarding other matters of
bankruptcy law;
(b) prepare and file any petition, schedules, motions,
statement of affairs, plan of reorganization, or other pleadings
and documents that may be required in the proceeding;
(c) represent the Debtor at the meeting of creditors, plan of
reorganization, disclosure statement, confirmation and related
hearings, and any adjourned hearings thereof;
(d) represent the Debtor in adversary proceedings and other
contested bankruptcy matters; and,
(e) represent the Debtor in the above matters, and any other
matters that may arise in connection with the Debtor's
reorganization proceeding and its business operations.
The Firm will be paid at these hourly rates:
Bradley D. McCormack $305.00
Michael J. Wambolt $295.00
Paralegal $105.00
The Firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In preparation of the Chapter 11 filing, the Debtor's owner, the
Manuel Jaime Revocable Trust, paid a retainer of $5,000 with an
additional $2,500 to go towards the filing fee and associated
costs. The Firm deposited the $7,500 into its Trust account. The
Firm paid itself from the Trust account prior to the filing of the
case in the amount of $1,552 for fees and $1,717 for filing fees.
The Firm will continue to bill on an hourly rate in the Chapter 11
case. The payment from the Debtor's owner was designated as a
capital contribution.
Bradley D. McCormack, Esq., employee of the Firm, assured the Court
that the Firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
The Firm can be reached at:
Bradley D. McCormack, Esq.
2345 Grand Boulevard, Suite 2150
Kansas City, MO 64108
Tel.: 816-561-1818
Direct Dial: 816-595-1802
Fax: 816-561-0818
Email: bmccormack@saderlawfirm.com
El Pato, Inc., filed a Chapter 11 petition (Bankr. W.D. Mo. Case
No. 16-42920) on October 21, 2016, and is represented by Bradley D.
McCormack, Esq., at The Sader Law Firm, LLC.
ELBIT IMAGING: Unit Signs New LOI with BIG Shopping Centers
-----------------------------------------------------------
Elbit Imaging Ltd. disclosed, in furtherance to its announcement
dated on Oct. 26, 2016, that Plaza Centers N.V., an indirect
subsidiary (45%) of the Company, has signed a new non-binding
Letter of Intent with BIG Shopping Centers Ltd., a public company
listed in the Tel Aviv Stock Exchange and included in the TA 100
Index (the top 100 companies traded on the TASE), regarding a
possible forward sale of Belgrade Plaza shopping and entertainment
center in Belgrade, Serbia.
The LOI binds the Purchaser to a strict timeline for committing a
comprehensive Due Diligence and finalizing a detailed binding
agreement which determines that the transaction should be concluded
by the end of the year. Should the transaction proceed to a signed
share purchase agreement, following the due diligence process,
Plaza will receive up to EUR28 million from the Purchaser upon the
signing of the agreement as a first installment, and will be due
further payments during the first year of operation, subject to
certain targets and milestones fulfillment. The Purchaser will
provide a guarantee to secure such further payments.
The final agreed value of Belgrade Plaza will be calculated based
on a cap rate of 8.25% and the sustainable NOI after 12 months of
operation (estimated NOI by the Company at that time stage is
approximately EUR7.5 million per year). Plaza has a line of credit
from a financing bank for the development of Belgrade Plaza in a
maximum amount of EUR42 million.
While it is expected that the disposal of Belgrade Plaza will be
finalized in the fourth quarter of this year, at this stage there
is no certainty that the transaction will be completed.
The Company will update regarding any new developments.
About Elbit Imaging
Tel-Aviv, Israel-based Elbit Imaging Ltd. (TASE, NASDAQ: EMITF)
holds investments in real estate and medical companies. The
Company, through its subsidiaries, also develops shopping and
entertainment centers in Central Europe and invests in and manages
hotels.
Elbit Imaging reported a loss of NIS 186.15 million on NIS 1.47
million of revenues for the year ended Dec. 31, 2015, compared to
profit of NIS 1 billion on NIS 461,000 of revenues for the year
ended Dec. 31, 2014. As of Dec. 31, 2015, Elbit Imaging had NIS
778.25 million in total assets, NIS 758.96 million in total
liabilities and NIS 19.28 million in shareholders' equity.
Since February 2013, Elbit has intensively endeavored to come to
an arrangement with its creditors. Elbit has said it has been
hanging by a thread for more than five months. It has encountered
cash flow difficulties and this burdens its day to day activities,
and it certainly cannot make the necessary investments to improve
its assets. In light of the arrangement proceedings, and
according to the demands of most of the bondholders, as well as an
agreement that was signed on March 19, 2013, between Elbit and the
Trustees of six out of eight series of bonds, Elbit is prohibited,
inter alia, from paying off its debts to the financial creditors
-- and as a result a petition to liquidate Elbit was filed, and
Bank Hapoalim has declared its debts immediately payable,
threatening to realize pledges that were given to the Bank on
material assets of the Company -- and Elbit undertook not to sell
material assets of the Company and not to perform any transaction
that is not during its ordinary course of business without giving
an advance notice to the trustees.
Accountant Rony Elroy has been appointed as expert for examining
the debt arrangement in the Company.
In July 2013, Elbit Imaging's controlling shareholders, Europe-
Israel MMS Ltd. and Mr. Mordechay Zisser, notified the Company
that the Tel Aviv District Court has appointed Adv. Giroa Erdinast
as a receiver with regards to the ordinary shares of the Company
held by Europe Israel securing Europe Israel's obligations under
its loan agreement with Bank Hapoalim B.M. The judgment stated
that the Receiver is not authorized to sell the Company's shares
at this stage. Following a request of Europe-Israel, the Court
also delayed any action to be taken with regards to the sale of
those shares for a period of 60 days. Europe Israel and
Mr. Zisser have also notified the Company that they utterly reject
the Bank's claims and intend to appeal the Court's ruling.
ELECTRONIC CIGARETTES: Calm Waters Holds 74.2% Stake as of Nov. 1
-----------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Calm Waters Partnership and Richard S. Strong disclosed
that as of Nov. 1, 2016, they beneficially own 440,916,502 shares
of common stock of Electronic Cigarettes International Group, Ltd.,
which represents 74.2 percent of the shares outstanding.
On Nov. 1, 2016, Calm Waters was entitled to receive 312,942 shares
of Common Stock at $0.09 per share in lieu of $28,164.75 of cash
interest due under the convertible notes. The shares were issued
on Nov. 1, 2016. As a result of these issuances, Calm Waters and
Mr. Strong had beneficial ownership of an aggregate of 440,916,502
shares of Common Stock.
A full-text copy of the regulatory filing is available at:
https://is.gd/BYLjRV
About Electronic Cigarettes
Electronic Cigarettes International Group, Ltd. is an independent
marketer and distributor of vaping products and E-cigarettes. The
Company's objective is to become a leader in the rapidly growing,
global E-cigarette segment of the broader nicotine related products
industry which include traditional tobacco. E-cigarettes are
battery-powered products that simulate tobacco smoking through
inhalation of nicotine vapor without the fire, flame, tobacco, tar,
carbon monoxide, ash, stub, smell and other chemicals found in
traditional combustible cigarettes. The global E-cigarette market
is expected to grow to $51 billion, or a 4% share of the worldwide
tobacco market, by 2030. The growth is forecast to come at the
expense of traditional tobacco, not from new smokers entering the
category. Numerous research studies and publications have
recognized that E-cigarettes are a preferred method for smokers to
quit, and the most effective.
The Company's balance sheet at June 30, 2016, showed $83.27 million
in total assets, $147.46 million in total liabilities, and a
stockholders' deficit of $64.19 million.
Electronics Cigarettes reported a net loss of $44.2 million in 2015
following a net loss of $389 million in 2014.
Rehmann Robson LLC, in Grand Rapids, Michigan, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company has reported
significant operating losses and cash flow deficits and has
accumulated a net capital deficit. These and other factors raise
substantial doubt about the Company's ability to continue as a
going concern.
EMECO HOLDINGS: Seeks U.S. Recognition of Australian Proceeding
---------------------------------------------------------------
Emeco Holdings Limited, a rental provider of heavy mining
equipment, has sought U.S. Chapter 15 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 16-13080), blaming the slowdown in the global
mining industry which resulted in the decline of its revenues.
Emeco Holdings' board of directors authorized Ian Matthew Testrow,
managing director and chief executive officer, to commence the
Chapter 15 proceeding by written resolution.
Concurrently with the Chapter 15 petition, Emeco seeks recognition
in the United States of a scheme of arrangement pursuant to the
Corporations Act 2001 (Commonwealth of Australia) currently pending
before the Federal Court of Australia, New South Wales District
Registry, in Sydney, Australia.
Emeco asserted that it is eligible to be a debtor under Chapter 15
of the Bankruptcy Code because it has property in the United States
in the form of the Client Trust Account placed in a bank located in
New York City, prior to the filing of the Petition.
"If the Restructuring as contemplated by the Scheme and other
Restructuring Documents is not given full force and effect in the
United States, there is a risk that dissident Scheme Creditors
could bring proceedings in the U.S. against Emeco Holdings, Emeco
P/L, the Guarantors and/or other parties protected by the Scheme
and the Restructuring Documents based upon the Indenture's consent
to jurisdiction in New York clause," Mr. Testrow maintained.
Similar to Chapter 11, a creditors' scheme of arrangement's purpose
is to provide a mechanism for overcoming the impossibility or
impracticability of obtaining the individual consent of every
member of the class or classes of creditors intended to be bound by
the proposed arrangement. A scheme of arrangement requires
approval by the creditors that represent a majority in number of
creditors of the affected class and whose debts or claims against
the debtor company aggregate at least 75% of the total amount of
the debts and claims of that class of creditors.
Headquartered in Perth, Western Australia, Emeco claims to have
maintained a strong competitive position in the mining equipment
rental sector since 1972. Emeco currently has more than 250
employees and owns over 400 pieces of earth moving equipment.
As of Oct. 31, 2016, Emeco's capital structure included a principal
amount of approximately US$282.7 million and accrued but unpaid
interest in the amount of approximately US$3.5 million under the
Emeco Notes issued by Emeco Pty Limited, the Debtor's Australian
subsidiary. Emeco P/L is also the borrower under an asset-backed
loan facility of up to A$75 million that includes a bank guarantee
sub-facility of up to A$14 million. Emeco has certain finance
lease liabilities of roughly $7.4 million as of Oct. 31, 2016.
"The prolonged weakness in the global commodity markets in recent
years has had an impact on Emeco's profitability, cash flow, and
ability to service its debt load," Mr. Testrow said in a
declaration filed with the U.S. Court. "Emeco's current debt
levels and cash interest obligations restrict Emeco's ability to
properly invest in its fleet going forward, resulting in
significantly increased risk to Emeco's operating and financial
performance and a deteriorated equipment fleet upon the maturity of
the existing Emeco Notes," he added.
According to Mr. Testrow, after several months of considering a
wide range of restructuring alternatives and engaging in
negotiations with its stakeholders, Emeco entered into a binding
restructuring agreement on Sept. 23, 2016, with, among others, an
ad-hoc group of holders of Emeco's 9.875% Senior Secured Notes due
2019 issued by Emeco P/L and guaranteed by certain of Emeco
Holdings' other subsidiaries.
The RSA provides for a comprehensive restructuring that includes an
exchange of the approximately USD$282.7 million in principal amount
outstanding of Emeco Notes for new debt and equity in reorganized
Emeco Holdings as well as strategic mergers with two mining rental
competitors based in Australia -- Orionstone Holdings Pty Ltd and
Andy's Earthmovers (Asia Pacific) Pty Ltd.
The RSA requires the exchange of the Emeco Notes to be implemented
through a scheme of arrangement under Part 5.1 of the Corporations
Act.
Scheme of Arrangement
Pursuant to the proposed terms of the Scheme, the claims of the
beneficial holders of the Emeco Notes will be released and
discharged in exchange for a proportionate share of: (a)
approximately 54% of the ordinary shares in reorganized Emeco
Holdings and approximately A$473 million of new 9.25% secured notes
due 2021 if the Noteholder elects such treatment; or (b) a cash
payment equal to 50% of the principal amount of the Noteholder's
Emeco Notes if a Noteholder fails to make an election for the
foregoing treatment or if the Noteholder fails to provide the
necessary information to receive the Tranche B Notes and New
Shares.
To fund the cash payments, Emeco Holdings and Emeco P/L have agreed
to enter into an agreement with certain parties whereby the Scheme
funders will fund the Cash Payments of up to US$80 million in
exchange for repayment in a combination of Tranche B Notes and New
Shares.
The Restructuring will allow existing shareholders to retain
approximately 25% of the equity in reorganized Emeco Holdings.
Current equity holders will also have the right to subscribe and
participate in a partially underwritten (to 50%) A$20 million
offering of up to 10% of the New Shares.
Any other unsecured claims against Emeco Holdings will not be
subject to any compromise and, if the Scheme becomes effective, are
expected to be paid in full by Emeco Holdings in the ordinary
course of its business.
On Oct. 31, 2016, to effectuate the restructuring of the Emeco
Notes contemplated by the RSA, Emeco Holdings filed an application
seeking, inter alia, approval of the Scheme with the Australian
Court.
On Nov. 2, 2016, the Australian Court held a hearing to consider
the application and ordered, among other things, that a meeting of
the Scheme Creditors will be convened and held on Dec. 13, 2016
(Australian Eastern Time) and a second hearing willl be held on
Dec. 15, 2016, for the Australian Court to consider the results of
the Scheme Meeting and, if it considers appropriate, enter an order
approving the Scheme.
The Sanction Order becomes effective once it is registered with the
Australian Securities and Investment Commission (the Australian
companies regulator), which is expected to occur on or around Dec.
16, 2016 (Australian Eastern Time).
The Scheme is anticipated to be fully implemented on or around Jan.
5, 2017 (Australian Eastern Time).
ENERGY FUTURE: Supreme Court Declines to Hear Noteholders' Appeal
-----------------------------------------------------------------
Matt Chiappardi, writing for Bankruptcy Law360, reported that the
U.S. Supreme Court has declined to review a decision by the U.S.
Court of Appeals for the Third Circuit that allowed Energy Future
Holdings Corp. to refinance $4 billion in first-lien debt via
tender offer early in its $42 billion case, allowing to stand a
deal that some noteholders argued violated fair creditor treatment
rules.
The decision came in a brief order simply denying the writ of
certiorari from Delaware Trust Co., indenture trustee to a group of
first-lien EFH notes, the report said.
Delaware Trust filed a petition for certiorari on Aug. 2.
As reported by the Troubled Company Reporter, Delaware Trust
asserted that the settlement involved a tender offer that is
impermissible in bankruptcy and that the settlement violates core
principles of the bankruptcy process. The Third Circuit, however,
found that the settlement was consistent with bankruptcy law.
One set of the Debtors' First Lien Notes represents a principal
amount of $500 million with an interest rate of 6-7/8%, due in
2017. The other set of Notes represents a principal amount of
approximately $3.5 billion with an interest rate of 10%, due in
2020.
Each indenture contains a provision providing for a "make-whole"
premium, which would "compensate noteholders for the loss of
future
interest resulting from an early refinancing." Thus, the
make-whole premium would require the Debtors to make additional
payments to the First Lien Noteholders if the Notes were redeemed
before their final maturity.
The Debtors sought to restructure this debt in 2012 and began
negotiating with creditors, including some of the First Lien
Noteholders. Following almost two years of negotiation, the
Debtors and several large creditors -- most notably Pacific
Investment Management Company, Western Asset Management Company
and
Fidelity Investments -- agreed to a Restructuring Support
Agreement, initially intended to accomplish a "global
restructuring" of the Debtors' entities and debt. Although the
idea of a global restructuring was eventually abandoned, under the
RSA, these entities agreed to refinance the First Lien Notes,
release any claim to a make-whole premium, and provide additional
financing.
Because the RSA did not resolve all of their financial problems,
the Debtors filed for bankruptcy in Delaware. One week after
filing their bankruptcy petition, the Debtors initiated what the
parties have labeled a "tender offer" directed to the First Lien
Noteholders that embodied certain terms set forth in the RSA. The
goal of this offer was to settle disputes with all First Lien
Noteholders.
The offer was to remain open for 31 days, and offered each First
Lien Noteholder 105% of the Notes' principal amount and 101% of
the
accrued interest in exchange for the release of any potential
claim
to the make-whole premium. The offer contained a "step down"
procedure, reducing the principal premium from 5% to 3.25% after
14
days. The offer notified the First Lien Noteholders that the offer
was subject to Bankruptcy Court approval and that Debtors intended
to initiate litigation to disallow the make-whole premium claims.
Under the make-whole provision, due to the lower interest rate and
earlier redemption date, the 6-7/8% Noteholders' make-whole
premium
would have been smaller than that of the 10% Noteholders. Thus,
under the terms of the offer, holders of the 6-7/8% Notes would
receive a greater percentage of a possible recovery for the
make-whole premium than the 10% Noteholders.
Ultimately, 97% of the 6-7/8% Noteholders accepted the offer,
while
only 34% of the 10% Noteholders did so. Noteholders who declined
the offer retained their full claim and the right to litigate and
obtain full value for their make-whole premium.
Nine days after initiating the offer, the Debtors filed a motion
for approval of the settlement pursuant to 11 U.S.C. Sec. 363(b)
and Fed. R. Bankr. P. 9019.
The Trustee, on behalf of the non-settling First Lien Noteholders,
objected to Debtors' request for approval of the settlement.
Following a hearing at which it heard testimony about the benefits
of the settlement, including that the offer would save the estate
over ten million dollars each month in interest payments, the
Bankruptcy Court approved the settlement, holding that there were
no "incidents of discriminatory treatment" in the Debtors'
approach
to settlement and that the plan was a proper use of estate assets.
The District Court affirmed the Bankruptcy Court's approval order.
The appellate case is In Re: ENERGY FUTURE HOLDINGS CORP., ET AL.,
Debtors DELAWARE TRUST COMPANY f/k/a CSC Trust Company Delaware,
as
Indenture Trustee, Appellant, No. 15-1591 (3rd Cir.).
A full-text copy of the Third Circuit's May 4, 2016 opinion is
available at https://is.gd/mF9RDg from Leagle.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).
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.
On Oct. 4, those entities emerged from Chapter 11 as a standalone
company -- known as TCEH Corp. -- effected through a tax-free
spinoff from EFH Corp.
ERG INTERMEDIATE: Akin Gump Representing Scott Y. Wood & HVI Cat
----------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
Akin Gump Strauss Hauer & Feld LLP filed with the U.S. Bankruptcy
Court for the Northern District of Texas a verified statement,
stating that it represents Scott Y. Wood and HVI Cat Canyon, Inc.,
in the Chapter 11 cases of ERG Intermediate Holdings, LLC, et al.
Akin Gump assures the Court that it does not represent any entities
in connection with the Chapter 11 cases other than Wood and HVI.
The creditors represented by Akin Gump are:
A. Scott Y. Wood
Three Allen Center
333 Clay Street, Suite 4400
Houston, TX 77002
B. HVI Cat Caynon Inc.
2617 E. Clark Ave.
Santa Maria, CA 93455-5815
Akin Gump has been employed to provide legal representation to Wood
and HVI. Akin Gump has represented the interest of HVI and Wood in
connection with the restructuring of the Debtors since on July 16,
2015, and June 1, 2016, respectively.
Upon information and belief, Akin Gump nor any of its respective
employees or members assert any claims against the Debtors, or hold
interests of the Debtors.
Akin Gump can be reached at:
AKIN GUMP STRAUSS HAUER & FELD LLP
Charles R. Gibbs, Esq.
Ashley R. Beane, Esq.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Tel: (214) 969-2800
Fax: (214) 969-4343
E-mail: cgibbs@akingump.com
abeane@akingump.com
About ERG Resources
ERG Resources, LLC, is a privately owned oil & gas producer that
was formed in 1996. Since 2010, ERG Resources and ERG Operating
Co. have been primarily engaged in the exploration and production
of crude oil and natural gas in the Cat Canyon Field in Santa
Barbara County, California. ERG Resources owns 19,027 gross lease
acreage in the Cat Canyon Field. ERG Resources also owns and
operates oil & gas leases representing 683 gross acres of leasehold
located in Liberty County, Texas. The Company's
corporate headquarters is located in Houston, Texas. Scott Y.
Wood, through two of his affiliates, owns 100% of the membership
units in ERG Intermediate Holdings LLC, the parent company.
ERG Intermediate Holdings, ERG Resources and three affiliates
sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No.
15-31858) on April 30, 2015, in Dallas, Texas.
The Debtors tapped Jones Day as counsel; DLA Piper as co-counsel;
AP Services, LLC, to provide a CRO; and Epiq Bankruptcy Solutions,
LLC. The Debtors also obtained approval to retain the law firm of
Gibbs and Bruns to prosecute the Nabors Lawsuit on a contingency
fee basis.
ERG Intermediate estimated $100 million to $500 million in assets
and debt.
The U.S. Trustee overseeing the Chapter 11 case of ERG
Intermediate Holdings LLC appointed five creditors, led by Baker
Petrolite Corporation, to serve on the official committee of
unsecured creditors. The Committee has tapped Pachulski Stang
Ziehl & Jones LLP as counsel.
CLMG Corp., serves as Administrative Agent under the First Amended
Joint Chapter 11 Plan of Reorganization. Attorneys for CLMG are:
WHITE & CASE LLP
Craig H. Averch, Esq.
Roberto J. Kampfner, Esq.
555 South Flower Street, Suite 2700
Los Angeles, CA 90071
Telephone: (213) 620-7700
Facsimile: (213) 452-2329
E-mail: caverch@whitecase.com
rkampfner@whitecase.com
- and -
Thomas E Lauria, Esq.
Southeast Financial Center, Suite 4900
200 South Biscayne Blvd.
Miami, FL 33131
Telephone: (305) 371-2700
Facsimile: (305) 358-5744
E-mail: tlauria@whitecase.com
EXELIXIS INC: Incurs $11.3 Million Net Loss in Third Quarter
------------------------------------------------------------
Exelixis, Inc. filed with the Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of $11.28
million on $62.19 million of total revenues for the three months
ended Sept. 30, 2016, compared to a net loss of $45.54 million on
$9.85 million of total revenues for the three months ended Sept.
30, 2015.
For the nine months ended Sept. 30, 2016, Exelixis reported a net
loss of $105.3 million on $113.9 million of total revenues compared
to a net loss of $120.2 million on $27.23 million of total revenues
for the same period during the prior year.
As of Sept. 30, 2016, Exelixis had $548.5 million in total assets,
$516.5 million in total liabilities and $32.02 million in total
stockholders' equity.
"The third quarter of 2016 was an important inflection point for
Exelixis. We recorded our first full quarter of CABOMETYX sales
and also made significant progress on our path towards becoming a
profitable, fully integrated, commercial biopharmaceutical
company," said Michael M. Morrissey, Ph.D., president and chief
executive officer of Exelixis. "Feedback from prescribers, as well
as performance to date, suggest that clinicians treating advanced
renal cell carcinoma see CABOMETYX as a differentiated therapy and
are increasingly incorporating it into their practice. While we
continued to execute on the U.S. CABOMETYX launch and pursue
important clinical trials like CABOSUN that have the potential to
further advance our business, we also demonstrated sound fiscal
discipline, resulting in a significantly decreased net loss and
cash burn. As we close out the year, we remain committed to
maximizing our opportunity to improve the treatment of cancer while
building a strong and nimble company."
On Aug. 9, 2016, and Aug. 19, 2016, respectively, Exelixis entered
into separate, privately negotiated exchange transactions with
certain holders of the 4.25% Convertible Senior Subordinated Notes
due 2019, or the 2019 Notes. Under the terms of the associated
exchange agreements, the holders agreed to convert an aggregate
principal amount of $239.4 million of 2019 Notes held by them in
exchange for an aggregate of 45,064,456 shares of Exelixis common
stock and an aggregate cash payment of approximately $2.4 million.
Following completion of the exchange transactions, on Aug. 24,
2016, Exelixis provided public notice of the redemption of the
final $48.1 million of the 2019 Notes, representing all remaining
notes outstanding. Following a required redemption period, holders
of the remaining 2019 Notes had the option to convert their notes
into shares of Exelixis common stock, plus cash in lieu of any
fractional share, at a conversion rate of 188.2353 shares of common
stock per $1,000 principal amount of their notes at any time before
close of business on Oct. 31, 2016. During the required redemption
period, $47.5 million of the 2019 Notes were converted into shares
of Exelixis common stock and the remaining $0.6 million of the 2019
Notes outstanding on Nov. 2, 2016, were redeemed in cash for 100%
of the principal amount thereof, plus accrued and unpaid interest
to, but excluding such date.
The Company is refining its guidance that operating expenses for
the full year 2016 will be approximately $245 million, including
approximately $25 million of non-cash items primarily related to
stock-based compensation expense.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/lfml1M
About Exelixis Inc.
Headquartered in South San Francisco, California, Exelixis, Inc.,
develops innovative therapies for cancer and other serious
diseases. Through its drug discovery and development activities,
Exelixis is building a portfolio of novel compounds that it
believes has the potential to be high-quality, differentiated
pharmaceutical products.
Exelixis reported a net loss of $170 million on $37.2 million of
total revenues for the year ended Dec. 31, 2015, compared to a net
loss of $269 million on $25.1 million of total revenues for the
year ended Dec. 31, 2014.
* * *
This concludes the Troubled Company Reporter's coverage of
Exelixis Inc. until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
FARMER'S MECHANICAL: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------------
The Office of the U.S. Trustee on Nov. 3 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Farmer's Mechanical Services,
LLC.
About Farmer's Mechanical Services
Farmer's Mechanical Services, LLC, sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 16-11740) on
Oct. 12, 2016.
At the time of the filing, the Debtor estimated assets and
liabilities of less than $100,000.
Thomas H. Allen, Esq., and Philip J. Giles, Esq., at Allen Barnes &
Jones, PLC, serve as the Debtor's bankruptcy counsel.
FILIP TECHNOLOGIES: UST Balks at Proposed Releases in Sale Order
----------------------------------------------------------------
The United States Trustee tells the Delaware Bankruptcy Court that
it does not oppose a straightforward sale of Filip Technologies,
Inc.'s assets approved upon a proper factual record. The proposed
order approving the sale, however, includes extraordinary and
impermissible relief, including non-consensual releases for a
multitude of non-debtors. The Court should not permit those
overreaching in a sale order.
The U.S. Trustee tells the Court that the Proposed Sale Order
provides non-consensual third-party releases to the Debtors, the
Debtors' CEO and Chairman of the Board, the DIP Lender and its
affiliates, the Purchaser, and "any and all of each such party's
(as applicable) officers, directors, respective employees,
representatives, financial advisors, attorneys, or agents, acting
in such capacity, or any of their successors and assigns," from all
of the Debtors' creditors and equity holders, among others. None
of the parties have consented to these releases. Those
non-consensual releases would not be permissible even in the
context of a confirmed plan, and should not be granted in the
context of a sale order.
The U.S. Trustee reminds the Court that there is no provision in
the Bankruptcy Code that permits a debtor to obtain a discharge
simply upon the sale of substantially all of their assets. Even if
the Debtors in this case were to confirm a plan after the sale,
that plan would be a liquidating plan. As such, the Debtors would
not be entitled to a discharge.
Section 1141(d)(3) of the Bankruptcy Code, according to the U.S.
Trustee, states:
"The confirmation of a plan does not discharge a debtor if --
(A) the plan provides for the liquidation of all or
substantially all of the property of the estate;
(B) the debtor does not engage in business after
consummation of the plan; and
(C) the debtor would be denied a discharge under
Section 727(a) of this title if the case were
a case under chapter 7 of this title.
Section 727(a)(1) provides: "The court shall grant the debtor a
discharge, unless the debtor is not an individual . . .".
The U.S. Trustee says, "Here, the Debtors are not individuals, they
will have liquidated substantially all of the property of their
estates, and they will not engage in any business. Thus, the
Debtors would not be entitled to a discharge even if they are
otherwise able to confirm a chapter 11 plan of liquidation.
The Debtors are trying to obtain through a sale order that which it
could not do even in a fully consensual, confirmed plan, the U.S.
Trustee says.
As reported by the Troubled Company Reporter Oct. 28, 2016,
Delaware Bankruptcy Judge Kevin Gross has entered an order
approving guidelines that will govern the planned auction and sale
of Filip Technologies' assets. Judge Gross approved the Debtors'
selection of Aricent Holdings Luxembourg S.a.r.l. as stalking horse
bidder. He said a $50,000 expense reimbursement will be provided
to Aricent. However, if the purchase price is less than $475,000,
Aricent will be entitled to an expense reimbursement equal to
10.52631% of the purchase price. If the stalking horse sale
agreement is terminated, the Debtor is obligated to pay the expense
reimbursement.
Competing bids were due Nov. 4 and if qualified bids were received,
an auction was to take place on Nov. 7 at the offices of the
counsel for the Debtors' DIP Lender, Morris Nichols Arsht & Tunnell
LLP in Wilmington. The Court is slated hold a hearing to approve
the successful bid Nov. 8 at 2:00 p.m.
Sarah Chaney, writing for The Wall Street Journal, reported that
Aricent, a digital design and engineering firm, will acquire
Filip's intellectual property, databases and proprietary software
for $475,000 in cash plus liabilities.
Vince Sullivan, writing for Bankruptcy Law360, reported that the
Office of the United States Trustee objected to the bid
protections
for the stalking horse bidder.
The Debtors seek to have the sale actually close by November 10,
2016, 36 days after the Petition Date.
As reported by the TCR, Filip Technologies on Oct. 26, 2016,
delivered to the Bankruptcy Court a plan of liquidation. AT&T
Capital Services, Inc., the Debtor's DIP lender, and AT&T Services,
Inc. are co-proponents of the Plan.
The DIP Lender has agreed to provide the Debtors cash advances and
other extensions of
credit in a maximum principal amount not to exceed $1.24 million.
The Plan provides that, in order to facilitate Distributions to
junior creditors, the DIP Lender has agreed to impair its
recoveries. Specifically, the DIP Lender will receive Cash in
accordance with a DIP Recovery Waterfall on account of the DIP
Claims. The DIP Recovery Waterfall provides that on the Plan
Effective Date, the Debtors shall fund the Reserves from the
Available Cash.
After funding the Reserves, if the Holders of Class 3 General
Unsecured Claims vote to accept the Plan, the DIP Lender will fund
$10,000 for distribution to General Unsecured Creditors. If
Holders of Unsecured Claims vote to reject the Plan, the GUC
Contribution will equal $0.
Immediately after funding the reserves and the GUC Distribution,
if
applicable, the Reserves and GUC Distribution will become
Liquidating Trust Assets. Remaining Available Cash -- or, if
after
the Effective Date, proceeds of Liquidating Trust Assets (other
than the Reserves and GUC Distribution) -- shall be distributed as
follows:
a. To the DIP Lender to repay Post-Petition DIP Advances.
b. Next, to the DIP Lender to repay the Roll-Up Claim.
c. The remaining Available Cash shall be distributed as
follows:
-- Until the DIP Lender is paid in full on account of its
Other DIP Claims:
(A) 50% to the DIP Lender on account of the Other DIP
Claims; and
(B) 50% to the Liquidating Trust as a Liquidating Trust
Asset
-- Thereafter, remaining Available Cash shall be a
Liquidating Trust Asset.
For Class 3 General Unsecured Claims, the Plan provides that:
"Each
Holder of an Allowed Unsecured Claim in Class 3 shall receive a
Pro
Rata share of the Class 3 Liquidating Trust Interests following
the
payment or reserve for Administrative Claims, Priority Tax Claims,
Priority Claims, and Secured Claims. Unsecured Claims are subject
to all statutory, equitable, and contractual subordination claims,
rights, and grounds available to the Debtors, the Estates, and
pursuant to this Plan, the Liquidating Trustee, which
subordination
claims, rights, and grounds are fully enforceable prior to, on,
and
after the Effective Date. The DIP Lender will contribute the GUC
Distribution if Holders of Unsecured Claims vote to accept the
Plan. If Holders of Unsecured Claims reject the Plan the GUC
Contribution shall equal $0. Holders of Unsecured Claims shall
also
be entitled to receive a Pro Rata share of the Class 4 Liquidating
Trust Interests distributed to Holders of Class 4 AT&T Unsecured
Claims. For the avoidance of doubt Holders of Class 4 AT&T
Unsecured Claims shall not be entitled to receive Class 3
Liquidating Trust Interests."
"Class 3 Liquidating Trust Interests" means Liquidating Trust
Interests following the payment or reserve for Administrative
Claims, Priority Tax Claims, Priority Claims, and Secured Claims
entitling Holders to a Distribution of their Pro Rata share up to
$50,000. Class 3 Liquidating Trust Interest shall be senior in
right of Distribution to Class 4 Liquidating Trust Interests.
Class 3 General Unsecured Claims is an Impaired Class and Holders
of Unsecured Claims are entitled to vote to accept or reject the
Plan.
Any prepetition claim by AT&T under the parties' contracts is
grouped in Class 4 AT&T Unsecured Claims. According to the Plan,
each Holder of an Allowed AT&T Unsecured Claim in Class 4 shall,
along with Holders of Class 3 Unsecured Claims, receive a Pro Rata
share of the Class 4 Liquidating Trust Interests.
"Class 4 Liquidating Trust Interests" means Liquidating Trust
Interests entitling its Holders to their Pro Rata share of
Liquidating Trust Assets in excess of Distributions to Holders of
Class 3 Liquidating Trust Interests. For the avoidance of doubt,
Class 4 Liquidating Trust Interests shall be junior and
subordinated in right of Distribution to Class 3 Liquidating Trust
Interests.
For the avoidance of doubt, the $240,000 advanced by AT&T to the
Debtors under the parties' Maintenance Agreement and Supplemental
Maintenance Agreement will be included in the AT&T Unsecured
Claim.
The Plan Proponents expect to name Roy Messing, Senior Managing
Director of Ankura Consulting Group, LLC, or a successor, as
Liquidating Trustee.
A copy of the Plan of Liquidation is available at:
http://bankrupt.com/misc/deb16-12192-0083.pdf
About Filip Technologies
Filip Technologies, Inc., a start-up company which was formed in
2013, currently employs eight individuals and operates in the
United States and Spain.
Each of the Debtors filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. D. Del. Case 16-12192) on Oct. 5,
2016.
The cases have been assigned to Judge Kevin Gross.
The Debtors owe $480,000 to AT&T and $2.6 million to trade
vendors, as disclosed in court papers.
The Debtors have engaged Moore & Van Allen, PLLC, as general
counsel; Bielli & Klauder, LLC, as local counsel; Ankura Consulting
Group, LLC, as restructuring advisor; and Braekhaus Dege
Advokatfirma DA, as special Norway counsel.
The U.S. Trustee has not appointed a statutory committee of
unsecured creditors.
FLOYD ELMER MCCLUNG: Disclosures OK'd; Plan Hearing on Dec. 20
--------------------------------------------------------------
The Hon. Roger L. Efremsky of the U.S. Bankruptcy Court for the
Northern District of California has approved Floyd Elmer McClung,
III's disclosures in combined plan and disclosure statement dated
Oct. 28, 2016.
The hearing on confirmation of the Plan will occur on Dec. 20,
2016, at 1:30 p.m.
Dec. 13, 2016, is the last day for filing and serving written
objections to confirmation of the Plan.
No later than Nov. 15, 2016, the Debtor will serve the
Plan/Disclosure Statement, a copy of the court order approving the
Disclosure Statement, and a ballot conforming to Official Form 14
on creditors, equity security holders, and other parties in
interest, and the U.S. Trustee.
Dec. 13, 2016, is the last day for submitting written ballots
accepting or rejecting the Plan.
The Debtor will file and serve a summary of ballots no later than
Dec. 16, 2016.
As reported by the Troubled Company Reporter on Oct. 14, 2016, the
Debtor filed a Chapter 11 plan that says unsecured creditors owed
$918,753 will receive a pro rata share of a fund totaling $114,861,
created by the Debtor's payment of $1,914.35 per month for a period
of 60 months. The class is impaired and entitled to vote on the
Plan. The Debtor says that unsecured creditors are slated to have
a 12.5% recovery under the Plan.
Floyd Elmer McClung, III, filed a Chapter 11 petition (Bankr. N.D.
Cal. Case No. 16-41298) on May 11, 2016. Scott J. Sagaria, Esq.,
Joseph Angelo, Esq., and Scott M. Johnson, Esq., at Sagaria Law,
P.C., serve as the Debtor's bankruptcy counsel.
FRONTIER COMMUNICATIONS: Moody's Lowers CFR to B1; Outlook Neg.
---------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Frontier Communications Corp. to B1 from Ba3 and changed
the outlook to negative based on the company's persistently weak
fundamentals. The downgrade follows disappointing 3Q results,
particularly within its recently acquired California, Texas and
Florida (CTF) markets. The CTF markets experienced sharp
subscriber losses for the second consecutive quarter and an 8%
sequential decline in quarterly EBITDA. Moody's has also
downgraded Frontier's probability of default rating (PDR) to B1-PD
from Ba3-PD, its unsecured rating to B1 from Ba3 and its secured
rating to Ba3 from Ba2. Frontier's speculative grade liquidity
(SGL) rating has been downgraded to SGL-2 from SGL-1 reflecting
potential pressure on its covenants from declining EBITDA.
Frontier's prior Ba3 rating was prospective and incorporated
Moody's expectation of improved leverage and cash flow as the
company achieved its planned merger synergies. The prior rating
was also predicated on Frontier reducing debt with excess cash
flow. These views have now changed and Moody's expects continued
revenue, EBITDA and cash flow weakness.
Despite a higher synergy estimate, now estimated to be
approximately $1.4 billion, Moody's believes that leverage will
remain above Frontier's limit of 4.25x (Moody's adjusted) for its
prior Ba3 rating for an extended period. Moody's estimates
Frontier's leverage will be approximately 4.5x (Moody's adjusted)
at year end 2016. Further, full realization of the company's costs
savings initiatives could take up to three years. As Moody's has
signaled prior, Frontier's narrow equity cushion suggests the
company has low leverage tolerance, which limits the timeframe over
which Frontier's credit metrics can exceed Moody's targets.
The negative outlook reflects the risk that Frontier may not be
able to reverse the unfavorable operating trends among its CTF
markets and that EBITDA could continue to decline.
Ratings Rationale
Frontier's B1 CFR reflects its large scale of operations, its
predictable cash flows and high margins. These factors are offset
by an aggressive financial policy that includes a high dividend
payout and frequent debt-financed acquisitions, declining revenues
within its legacy business and acquired markets and the risk that
the company may not have the discipline to continue to adequately
invest in network modernization.
Moody's believes Frontier will maintain good liquidity over the
next twelve months with $331 million of cash on hand at 9/30/2016
and an undrawn $750 million revolver. Due to declining EBITDA,
covenant leverage may approach its 4.5x net leverage limit over the
next 12-18 months, which, if it occurs at a faster rate than
Moody's currently anticipates, could result in a loss of borrowing
ability under the revolver. Moody's expects the company will
maintain a modest cushion on this leverage covenant over the next
few quarters. Frontier has no additional debt due in 2016 and
around $500 million due in 2017. Moody's expects Frontier to have
the capacity to address these maturities with a combination of cash
on hand coupled with revolver capacity. Overall, Frontier has a
favorable maturity profile with modest annual maturities until
2020.
Frontier's common dividend consumes approximately $500 million in
cash annually. A dividend cut would improve Frontier's liquidity
and its ability to repay debt. Moody's believes that a dividend
cut represents an opportunity for Frontier to offset its
operational weakness, reduce debt and maintain a strong liquidity
position in advance of the large annual maturities that begin in
2020.
Moody's could lower Frontier's ratings if leverage is sustained
above 4.75x (Moody's adjusted) or if free cash flow turns negative,
on a sustained basis. Also, the ratings could be lowered if the
company's liquidity deteriorates, if the company engages in
shareholder friendly activities or if capital spending is reduced
below the level required to sustain the company's market position.
Given the company's weak fundamentals and the negative outlook, a
ratings upgrade is very unlikely at this point. Moody's could
stabilize Frontier's outlook if the company achieves stability
among its customer base that can be sustained over several quarters
and maintains or improves its liquidity.
Downgrades:
Issuer: Frontier Communications Corporation
Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from
SGL-1
Corporate Family Rating, Downgraded to B1 from Ba3
Senior Secured Bank Credit Facility, Downgraded to Ba3 (LGD3)
from Ba2 (LGD3)
Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD4)
from Ba3 (LGD4)
Outlook Actions:
Issuer: Frontier Communications Corporation
Outlook, Changed To Negative From Stable
Issuer: New Communications Holdings Inc. (Assumed by Frontier
Communications Corporation)
Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD4)
from Ba3 (LGD4)
Frontier is an Incumbent Local Exchange Carrier headquartered in
Norwalk, CT and the fourth largest wireline telecommunications
company in the US. In April of 2016, Frontier finalized the
acquisition of Verizon's wireline assets in California, Texas and
Florida. Pro forma for this transaction, Frontier will
approximately double in size and generate approximately
$10 billion in annual revenues.
GASTAR EXPLORATION: Incurs $3.79 Million Net Loss in Third Quarter
------------------------------------------------------------------
Gastar Exploration Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common stockholders of $3.79 million on $13 million
of total revenues for the three months ended Sept. 30, 2016,
compared to a net loss attributable to common stockholders of
$191.8 million on $28.38 million of total revenues for the three
months ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss attributable to common stockholders of $95.37 million on
$39.96 million of total revenues compared to a net loss
attributable to common stockholders of $312.8 million on $84.68
million of total revenues for the same period during the prior
year.
As of Sept. 30, 2016, Gastar Exploration had $300.0 million in
total assets, $461.0 million in total liabilities and a total
stockholders' deficit of $161.1 million.
On Oct. 20, 2016, Gastar announced it had executed a definitive
agreement with an investor to jointly develop up to 60 Gastar
operated drilling program wells in 20 well tranches in the STACK
Play in Kingfisher County, Oklahoma. The Drilling Program targets
the Meramec and Osage formations within the Mississippi Lime on a
contract area within three townships covering approximately 18,000
undeveloped net mineral acres under leases held by Gastar. The
Company will be the operator of all wells jointly developed.
Gastar also announced on Oct. 20, 2016, that it had entered into a
purchase and sale agreement to divest certain non-core leasehold
interests primarily in northeast Canadian County, Oklahoma for
approximately $71.0 million (of which up to $10.0 million is
contingent upon the satisfaction of certain conditions), subject to
certain adjustments. The transaction is expected to close on or
before Nov. 18, 2016, with a property sale effective date of Aug.
1, 2016. Assuming completion of this divestment, pro forma
Mid-Continent area net acreage at Sept. 30, 2016, would be
approximately 81,400 net surface acres, including Development
Agreement acreage, with approximately 1,000 net STACK locations
identified.
J. Russell Porter, Gastar's president and CEO, commented, "As
commodity prices have improved throughout the year, we have focused
on enhancing liquidity and positioning the Company to resume a more
active drilling program. Through asset sales of non-core acreage,
which we expect to close this month, and our successful equity
offering last May, we will have raised in excess of $100 million
this year in net available capital to help fund the delineation and
development of our core acreage in the heart of the STACK Play.
Our objectives are to add substantial value to our core acreage by
de-risking the various STACK formations across our acreage through
drilling, which should grow production and reserves as well as
reduce future lease renewal costs by increasing the percentage of
our acreage that is held by production ("HBP")."
"In order to meet these objectives, we have entered into a
Development Agreement whereby the investor earns only an interest
in the well bores drilled, with Gastar retaining both the right to
offset formation locations and to book offsetting proved
undeveloped locations at its full original working interest. The
drilling of up to 60 wells will substantially increase our HBP
acreage across the various STACK formations. Specifically, if a
Drilling Program well location is prospective for all five STACK
zones, we currently project it could hold as many as five
additional Meramec, four Osage, four Woodford, four Oswego and two
Hunton well locations."
"We have already drilled the first five wells of the initial 20
well tranche and by year end we could have up to seven Drilling
Program wells drilled and completed. We also plan to increase our
operated drilling activity outside the Drilling Program area to
test the STACK formations. We have one Osage test well and one
Oswego test well in early stages of flow back, in addition to our
two earlier Meramec formation test wells drilled," said Porter.
"We currently have two rigs operating on our Mid-Continent acreage
under the Development Agreement. We have now drilled and completed
a third operated Meramec well, the Ingle 29-1H, which began initial
flow back in October 2016. In addition to our three completed
Meramec wells, we have two Meramec wells awaiting completion and
two Meramec wells currently being drilled. In September 2016, we
brought on production our first operated Osage formation test well,
the McGee 29 1-H, and our first Oswego formation test well, the
Tomahawk 7-1H. It is too early in the flow back process to
determine ultimate production performance for these wells."
At Sept. 30, 2016, Gastar had approximately $46.7 million in
available cash and cash equivalents, $99.6 million in borrowings
outstanding and $370,000 in letters of credit issued under its
revolving credit facility.
"We were in compliance with all financial covenants under the
revolving credit facility at September 30, 2016. As previously
announced, Gastar entered into an amendment to its revolving credit
facility effective October 14, 2016. Under the amendment, the
Company’s borrowing base was reaffirmed at $100.0 million, which
is the current amount outstanding under the facility. The
revolving credit facility's debt balance is to be reduced by 20% of
any future net sales proceeds from the sale of the Company’s
South STACK Acreage. The next borrowing base redetermination is
scheduled for November 2016.
"Upon closing of the sale of the South STACK Acreage, we expect our
liquidity to support our cash requirements for the remainder of
2016 and through 2017, subject to our ability to extend maturities
or refinance our long-term debt by the fourth quarter of 2017, as
described below. In light of our approaching maturities of our
revolving credit facility in November 2017 and our senior secured
notes in May 2018, we are continuing to analyze and engage in
discussions regarding various alternatives to either extend our
debt maturities, reduce the level of our long-term debt or
otherwise reduce our future debt service obligations. On a pro
forma basis, as of September 30, 2016, and after payment of 20% of
the net sales proceeds from the sale of the South STACK Acreage to
reduce revolving credit facility debt, Gastar would have a cash
position of approximately $102.4 million."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/GPRg5P
About Gastar Exploration
Houston, Texas-based Gastar Exploration Inc. --
http://www.gastar.com/-- is an independent energy company engaged
in the exploration, development and production of oil, condensate,
natural gas and natural gas liquids in the United States. Gastar's
principal business activities include the identification,
acquisition, and subsequent exploration and development of oil and
natural gas properties with an emphasis on unconventional reserves,
such as shale resource plays.
Gastar Exploration reported a net loss attributable to common
stockholders of $473.98 million for the year ended Dec. 31, 2015,
compared to net income attributable to common stockholders of
$36.52 million for the year ended Dec. 31, 2014.
* * *
As reported by the TCR on March 15, 2016, Standard & Poor's Ratings
Services lowered its corporate credit rating on Gastar Exploration
to 'CCC-' from 'CCC+'. The downgrade follows Gastar's announcement
that it had just $29 million of cash on hand and a fully drawn
revolver. The company's borrowing base current stands at $180
million, but will be reduced to $100 million at the earlier of the
close of the Appalachian asset sale or April 10, 2016. Proceeds
from the Appalachian asset sale are expected to be $80 million.
In June 2016, Moody's Investors Service downgraded the Corporate
Family Rating of Gastar to 'Caa3' from 'Caa1'. The rating outlook
was changed to 'negative' from 'stable'. The downgrade of Gastar's
CFR to Caa3 reflects the company's weakened liquidity and reduced
size following the sale of its Appalachian assets in April 2016.
GAWKER MEDIA: Asks Court to Toss $100M Claim by Atty. Huon
----------------------------------------------------------
Kat Greene, writing for Bankruptcy Law360, reported that former
Gawker Media chief Nick Denton on Nov. 4, 2016, struck back at an
Illinois lawyer's two claims for $100 million each over stories
about the lawyer's trial in which he was acquitted of sexual
assault charges, saying a district court already heard those claims
and dismissed them. Attorney Meanith Huon had filed two claims
against Denton's estate for the sum, saying it's what he's owed for
alleged defamation by Denton and Gawker for stories published on
Gawker's site for women, Jezebel.com, court records show.
About Gawker Media
Founded in 2002 by Nick Denton, Gawker Media is privately held
online media company operating seven distinct media brands with
corresponding websites under the names Gawker, Deadspin,
Lifehacker, Gizmodo, Kotaku, Jalopnik, and Jezebel. The Company's
various Websites cover, among other things, news and commentary on
current events, politics, pop culture, sports, cars, fashion,
productivity, technology and video games.
Gawker sought bankruptcy protection after being ordered to pay
$140.1 million in connection with an invasion of privacy lawsuit
arising from publication of a report and commentary and
accompanying sex video involving Terry Gene Bollea.
New York-based Gawker Media, LLC -- fdba Gawker Sales, LLC, Gawker
Entertainment, LLC, Gawker Technology, LLC and Blogwire, Inc. --
filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No.
16-11700) on June 10, 2016. The Hon. Stuart M. Bernstein presides
over the Debtors' cases.
Affiliates Gawker Media Group, Inc. and Budapest, Hungary-based
Kinja, Kft. filed separate Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 16-11719 and 16-11718) on June 12, 2016. The cases are
jointly administered.
Gregg M. Galardi, Esq., David B. Hennes, Esq. and Michael S.
Winograd, Esq., at Ropes & Gray LLP serve as counsel to the
Debtors. William Holden at Opportune LLP serves as Gawkers' chief
restructuring officer. Houlihan Lokey Capital, Inc. serves as the
Debtors' investment banker. Prime Clerk LLC serves as claims,
balloting and administrative agent.
The Debtors estimated $50 million to $100 million in assets and
$100 million to $500 million in liabilities.
Mr. Denton filed for personal bankruptcy on August 1, 2016, to
protect himself from the legal judgment awarded to Hulk Hogan in an
invasion-of-privacy lawsuit.
The U.S. trustee for Region 2 on June 24, 2016, appointed three
creditors of Gawker Media LLC and its affiliates to serve on the
official committee of unsecured creditors. The committee members
are Terry Gene Bollea, popularly known as Hulk Hogan, Shiva
Ayyadurai, and Ashley A. Terrill. The Committee retained Simpson
Thacher & Bartlett LLP, in New York, as counsel.
Counsel to US VC Partners LP, as Prepetition Second Lien Lender,
are David Heller, Esq., and Keith A. Simon, Esq., at Latham &
Watkins LLP.
Counsel to Cerberus Business Finance, LLC, as DIP Lender, are Adam
C. Harris, Esq., at Schulte Roth & Zabel LLP.
GEMMA CALLISTE: Unsecureds To Recoup 100% Under J. Malachi's Plan
-----------------------------------------------------------------
Creditor John Malachi filed with the U.S. Bankruptcy Court for the
District of Columbia an amended disclosure statement referring to
the plan of reorganization for Gemma Calliste and Earl Calliste.
Class 23 General Unsecured Claims -- estimated at $14,007.74 -- are
unimpaired under the Plan and will be paid in full from the Sale
Proceeds on the Effective Date. The holders are expected to
recover 100%.
The Amended Disclosure Statement is available at:
http://bankrupt.com/misc/dcb10-00685-259.pdf
As reported by the Troubled Company Reporter on Oct. 21, 2016, Mr.
Malachi filed with the Court a Chapter 11 plan and accompanying
disclosure statement for the Debtor. Mr. Malachi's Plan
contemplates the sale of real properties owned by the Debtor with
the exception of the Debtor's Homestead at 710 19th St. NE, in
Washington, D.C.
Headquartered in Bowie, Maryland, Gemma Calliste filed for Chapter
11 bankruptcy protection (Bankr. D.C. Case No. 10-00685) on July
13, 2010, estimating its assets at between $500,001 and $1,000,000
and debts at between $1,000,001 and $10,000,000. The petition was
signed by the Debtor.
Judge S. Martin Teel, Jr., presides over the case.
Jeffrey M. Sherman, Esq., at Jackson & Campbell serves as the
Debtor's bankruptcy counsel.
GENCO SHIPPING: Liquidity Problems Raise Going Concern Doubt
------------------------------------------------------------
Genco Shipping & Trading Limited filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, disclosing a
net loss of $27.51 million on $38.89 million of total revenues for
the three months ended September 30, 2016, compared to a net loss
of $73.80 million on $49.99 million of total revenues for the same
period in 2015.
For the nine months ended September 30, 2016, the Company listed a
net loss of $192.65 million on $91.70 million of total revenues,
compared to a net loss of $204.87 million on $119.00 million of
total revenues for the same period in the prior year.
The Company's balance sheet at September 30, 2016, showed total
assets of $1.49 billion, total liabilities of $565.32 million and
stockholders' equity of $928.14 million.
Persistent weak drybulk industry conditions and historically low
charter rates have negatively impacted the Company's results of
operations, cash flows, and liquidity and may continue to do so in
the future. The negative impact on the Company's liquidity,
together with a continued decline in vessel values, presents
difficulties for remaining in compliance with its credit facility
covenants relating to minimum cash, leverage ratios, and collateral
maintenance, which could potentially result in defaults and
acceleration of the repayment of its outstanding indebtedness.
These factors, as well as recurring losses from operations and
negative working capital, raise substantial doubt about the
Company's ability to continue as a going concern. The Company's
ability to continue as a going concern is contingent upon, among
other things, its ability to: (i) develop and successfully
implement a plan to address these factors, which may include
refinancing the Company's existing credit agreements, or obtaining
further waivers or modifications to its credit agreements from its
lenders, or raising additional capital through selling assets
(including vessels), reducing or delaying capital expenditures, or
pursuing other options that may be available to the Company which
may include pursuing strategic opportunities and equity or debt
offerings or potentially seeking protection in a Chapter 11
proceeding; (ii) return to profitability, (iii) generate sufficient
cash flow from operations, (iv) remain in compliance with its
credit facility covenants, as the same may be modified, and (v)
obtain financing sources to meet the Company's future obligations.
The realization of the Company's assets and the satisfaction of its
liabilities are subject to uncertainty.
A full-text copy of the Company's Form 10-Q is available at:
https://is.gd/niIj2k
About Genco Shipping & Trading
New York-based Genco Shipping & Trading Limited (NYSE: GNK)
transports iron ore, coal, grain, steel products and other drybulk
cargoes along worldwide shipping routes. Excluding Baltic Trading
Limited's fleet, Genco Shipping owns a fleet of 53 drybulk vessels,
consisting of nine Capesize, eight Panamax, 17 Supramax, six
Handymax and 13 Handysize vessels, with an aggregate carrying
capacity of approximately 3,810,000 dwt. In addition, Genco
Shipping's subsidiary Baltic Trading Limited currently owns a fleet
of 13 drybulk vessels, consisting of four Capesize, four Supramax,
and five Handysize vessels.
Genco Shipping & Trading sought bankruptcy protection (Bankr.
S.D.N.Y. Lead Case No. 14-11108) on April 21, 2014, to implement a
prepackaged financial restructuring that is expected to reduce the
Company's total debt by $1.2 billion and enhance its financial
flexibility. The company's subsidiaries other than Baltic Trading
Limited (and related entities) also sought bankruptcy protection.
Genco, owned and controlled by Peter Georgiopoulos, disclosed
assets of $2.448 billion and debt of $1.475 billion as of Feb. 28,
2014.
Adam C. Rogoff, Esq., and Anupama Yerramalli, Esq., at Kramer Levin
Naftalis & Frankel LLP serve as the Debtors' bankruptcy
counsel. Blackstone Advisory Partners, L.P., is the financial
advisor. GCG Inc. is the claims and notice agent.
Wilmington Trust, N.A., in its capacity as successor administrative
and collateral agent under a 2007 credit agreement, is represented
by Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed
Hadley & McCloy LLP.
Credit Agricole Corporate & Investment Bank, as agent and security
trustee under an August 2010 Loan Agreement; Deutsche Bank
Luxembourg S.A., as agent, and Deutsche Bank AG Fillale
Deutschlandgeschaft, as security agent and bookrunner under
theAugust 2010 Loan Agreement, are represented by Alan Kornberg,
Esq., Sarah Harnett, Esq., and Elizabeth McColm, Esq., at Paul
Weiss Rifkind Wharton & Garrison LLP. Paul Weiss also represents
the Pre-Petition $100 Million and $253 Million Credit Facilities.
The Bank of New York Mellon, the indenture trustee for Genco's
5.00% Convertible Senior Notes due Aug. 15, 2014, and the
informal group of 5.00% Convertible Senior Notes due August 15,
2014, are represented by Michael Stamer, Esq., and Sarah Link
Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP. Akin Gump
also represents the Informal Convertible Noteholder Group.
Kirkland & Ellis LLP's Christopher J. Marcus, Esq., Paul M. Basta,
Esq., Eric F. Leon, Esq., represent for Och-Ziff Management LP.
Brown Rudnick LLP's William R. Baldiga, Esq., represents an Ad Hoc
Consortium of Equity Holders.
Orrick, Herrington & Sutcliffe LLP's Douglas S. Mintz, Esq.,
Washington, DC, represents Deutsche Bank as Pre-Petition Lender,
and Credit Agricole, Corporate Investment Bank, as Post-Petition
Bankruptcy Lender.
Dechert LLP's Allan S. Brilliant, Esq., represents the Entities
Managed by Aurelius Capital Management, LP.
The U.S. Trustee has appointed an Official Committee of Equity
Security Holders. The Equity Committee members are Aurelius
Capital Partners, LP; Mohawk Capital LLC; and OZ Domestic Partners,
LP. It is represented by Steven M. Bierman, Esq.,
Benjamin R. Nagin, Esq., Michael G. Burke, Esq., James F. Conlan,
Esq., and Larry J. Nyhan, Esq., at Sidley Austin LLP.
Genco had filed a motion to disband the Equity Committee,
complaining that it is unnecessary and wasteful of the estates'
resources.
On July 2, 2014, the Company emerged from Chapter 11 of the
Bankruptcy Code pursuant to the terms of a reorganization plan that
was approved by the bankruptcy court and declared effective as of
July 9, 2014.
GENERAL NUTRITION: Moody's Affirms Ba3 CFR; Outlook Negative
------------------------------------------------------------
Moody's Investors Service revised General Nutrition Centers, Inc.'s
rating outlook to negative from stable and affirmed the company's
ratings, including the Ba3 Corporate Family Rating, Ba3-PD
Probability of Default Rating, and Ba2 ratings on the secured
credit facilities. GNC's SGL-1 Speculative Grade Liquidity rating
was also affirmed.
"The outlook change to negative reflects GNC's challenge to improve
its market positioning following a period of sales declines.
Although its current business realignment may be necessary for its
long term growth, its changes to pricing and promotional cadence
provide increased risk if not executed successfully" says Moody's
Vice President, Christina Boni. Debt/EBITDA at 4.3x as of Sept. 30,
2016, and interest coverage (EBIT to interest) of 3.0x are expected
to weaken as the company works through the transition and stabilize
its share. Nonetheless, Moody's recognizes GNC's robust free cash
flow generation and its ability to navigate weak operating trends
as the company works to regain customer traffic.
Outlook Actions:
Issuer: General Nutrition Centers, Inc.
Outlook, Changed To Negative from Stable
Affirmations:
Issuer: General Nutrition Centers, Inc.
Corporate Family Rating at Ba3
Probability of Default Rating at Ba3-PD
Senior Secured Bank Credit Facilities at Ba2(LGD3)
Speculative Grade Liquidity Rating at SGL-1
RATINGS RATIONALE
GNC's Ba3 Corporate Family Rating is supported by the company's
well-known brand name in its target markets along with our
favorable view of the vitamin, mineral, and nutritional supplement
category due to positive demographic trends in the United States.
Nonetheless, Moody's expects GNC's operating performance will
remain pressured as the company focuses on improving its market
positioning following a period of sales declines. GNC is focusing
on realigning its pricing and promotional cadence to improve its
customer traffic. The rating also reflects GNC's relatively solid
credit metrics, as it continues to provide a more compelling
price/value equation to its customers. Moody's anticipates modest
deterioration as the company works through a transition in its
business and stabilizes its share in the vitamin segment.
Other key credit concerns include GNC's sizable concentration in
sports nutrition, which is a much more limited product segment with
a relatively smaller target market than the VMS product category.
Also considered is the potential risk arising from adverse
publicity and product liability claims with regard to certain
products sold by GNC, particularly diet products and herbs, two
faddish product categories that are more exposed to such product
liability risks and earnings volatility.
The SGL-1 speculative-grade liquidity rating reflects GNC's very
good liquidity supported by its internal sources of cash, projected
free cash flow, and its $300 million revolving credit facility
expiring in September 2018. GNC had approximately $37 million of
cash as of September 30, 2016 and Moody's projects free cash flow
over the next 12 months will exceed $200 million. The company has
no material debt maturities until September 2018, the expiration of
its revolver. Moody's also expects cushion within the 4.25x
maximum senior secured debt to EBITDA revolver covenant. There are
no financial maintenance covenants in the term loan.
The negative outlook incorporates our view that GNC's operating
performance is at risk given the significant initiatives undertaken
despite benefitting from its highly regarded brand and positive
demographic trends. The negative outlook also reflects our concern
that GNC will be challenged to maintain credit metrics at levels
appropriate for its Ba3 rating.
GNC's ratings could be upgraded over time if the company
demonstrates stable growth while maintaining strong operating
margins in the mid-teens. An upgrade would require that GNC
continue to adhere to a financial policy that would support
debt/EBITDA sustained below 3.5x.
Ratings could be downgraded if the company were to see a material
decline in sales trends or if operating margins were to erode,
either through a weakening competitive profile or material
product-related risks. Ratings could also be lowered if the
company's financial policies were to become aggressive, such as
maintaining higher leverage due to increased shareholder friendly
activities, or if liquidity were to materially erode.
Quantitatively, a ratings downgrade could occur if it appears that
debt/EBITDA will rise above 4.5x or EBIT/Interest fall near 2.5x on
a sustained basis.
The principal methodology used in these ratings was "Retail
Industry" published in October 2015.
General Nutrition Centers, Inc., headquartered in Pittsburgh, PA,
manufactures and retails vitamins, minerals, nutritional
supplements domestically and internationally. About 75% of its
revenue is generated by over 3,500 company owned stores and
website. It also has nearly 3,200 franchise locations in the U.S.
and over 50 countries that generate about 15% of its revenue, and
over 2,300 stores within-a-stores with Rite Aid. Total revenues
are about $2.6 billion.
GREENEDEN US: Moody's Lowers CFR to B3; Outlook Stable
------------------------------------------------------
Moody's Investors Service downgraded Greeneden U.S. Holdings II,
LLC's Corporate Family Rating to B3 from B2 and Probability of
Default Rating to B3-PD from B2-PD. Moody's also confirmed the
ratings of the company's existing first lien credit facility at B2
based on the expectation that this debt will be repaid upon closing
of the company's anticipated debt refinancing. The rating action
concludes Moody's review of the company's ratings for downgrade
initiated on Sept. 1, 2016, following the announcement of Genesys'
plans to purchase Interactive Intelligence Group Inc. for
approximately $1.4 billion in a largely debt financed transaction.
Moody's assigned a B2 rating to the company's proposed first lien
credit facility, comprised of a $150 million revolver, a $1.55
billion dollar denominated term loan, and a $550 million
euro-denominated term loan. Moody's expects Genesys to issue an
additional $700 million of unsecured debt to complete the funding
of the transaction in the near term. Moody's will withdraw the
ratings on the company's existing first lien credit facility upon
completion of the planned financing. The ratings outlook is
stable.
These rating actions were taken:
Downgrades:
Issuer: Greeneden U.S. Holdings II, LLC
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Corporate Family Rating, Downgraded to B3 from B2
Assignments:
Issuer: Greeneden U.S. Holdings II, LLC
Senior Secured Bank Credit Facility (Local Currency), Assigned
B2 (LGD3)
Senior Secured Bank Credit Facility (Foreign Currency), Assigned
B2 (LGD3)
Outlook Actions:
Issuer: Greeneden U.S. Holdings II, LLC
Outlook, Changed To Stable From Rating Under Review
Confirmations:
Issuer: Greeneden U.S. Holdings II, LLC
Senior Secured Bank Credit Facility (Local Currency), Confirmed
at B2 (LGD 3)
Senior Secured Bank Credit Facility (Foreign Currency),
Confirmed at B2 (LGD 3)
RATINGS RATIONALE
The pending ININ acquisition will improve Genesys' scale and
product capabilities, but will nearly triple the debt in its
capital structure. Genesys will have elevated pro forma leverage
of over 10x (based on reported EBITDA before synergies) immediately
following the acquisition. The B3 CFR reflects Moody's expectation
that the combined entity will delever to approximately 7x by the
end of 2017, primarily through EBITDA growth, as the integration of
ININ yields significant synergies in the form of headcount
reductions and cost savings related to the relocation of staff to
lower cost regions. However, the scale of the ININ acquisition and
the considerable restructuring initiatives which the combined
entity has planned could create business disruptions and debt
reduction could be constrained by implementation costs as well as
the competitive nature of the contact center software market. The
risks associated with Genesys' credit profile are partially offset
by the company's strong market position as well as its longstanding
customer relationships and sizable base of recurring revenue which
contributes to cash flow predictability.
Genesys' adequate liquidity will be supported by a pro forma cash
balance of approximately $150 million at year end 2016.
Additionally, while one time integration costs associated with the
ININ transaction could weigh on free cash flow generation over the
near term, Moody's expects that Genesys will generate normalized
annual free cash flow of nearly 5% of total debt over the next
12-18 months. The company's liquidity is also bolstered by an
undrawn $150 million revolving credit facility due in 2021.
The stable outlook reflects Moody's expectations that Genesys pro
forma revenues will increase at a mid-single digit pace over the
next 12-18 months driven in part by a replacement cycle of legacy
voice-based contact center solutions with digital offerings as well
as continued growth in cloud-based offerings for mid-market
clients. Pro forma total debt/EBITDA is expected to decline
towards the 7x level during this period, primarily driven by strong
EBITDA growth as Genesys realizes cost synergies through the
integration of ININ.
FACTORS THAT COULD LEAD TO AN UPGRADE
The ratings could be upgraded if Genesys successfully integrates
ININ, reduces debt/EBITDA (Moody's adjusted) to below 6x and
sustains annual free cash flow to debt above 5%.
FACTORS THAT COULD LEAD TO A DOWNGRADE
The ratings could be downgraded if revenue contracts materially
from current levels and the company begins to generate free cash
flow deficits leading to expectations for diminished liquidity.
The principal methodology used in these ratings was Software
Industry published in December 2015.
Genesys is a provider of customer experience and contact center
solutions through both cloud services and software licensing,
including digital channel management, call routing, interactive
voice response, and enterprise workload management, primarily
serving the 100 seat and larger contact center market. Genesys is
owned by private equity firms including Permira, Technology
Crossover Ventures, and Hellman & Friedman LLC.
GREENEDEN US: S&P Lowers CCR to 'B-', Off CreditWatch Negative
--------------------------------------------------------------
S&P Global Ratings said that it lowered its corporate credit rating
to 'B-' from 'B' on Daly City, Calif.-based Greeneden US Holdings
LLC and removed all ratings from CreditWatch with negative
implications, where S&P had placed them on Sept. 6, 2016, following
the announcement of the acquisition. The outlook is stable.
At the same time, S&P assigned its 'B-' issue-level rating and '3'
recovery rating to the company's proposed $150 million revolving
credit facility due 2021, $1.55 billion term loan B due 2023, and
$550 million euro equivalent term loan B due 2023. The '3'
recovery rating indicates S&P's expectation for meaningful recovery
(50%-70%; at the lower end of the range) in the event of payment
default.
S&P also assigned its 'CCC' issue-level rating to the company's
expected $700 million senior unsecured notes due 2024 based on a
'6' recovery rating. The '6' recovery rating indicates S&P's
expectation for negligible recovery (0%-10%) in the event of
payment default.
Ratings on the pre-existing debt are unchanged and will be
withdrawn once the transaction closes.
The rating action reflects significantly higher leverage at Genesys
following the transaction. New debt will fund the acquisition,
refinance Genesys and Interactive's existing debt, and fund a
partial return of equity to Genesys's private equity sponsors
including Permira. Following the transaction, Permira and other
original sponsors will own 51% of the company while Hellman &
Friedman will own 48%. Leverage will increase to more than 12x
from the low-5x area at June 30, 2016 prior to any of the expected
cost savings or synergies. While S&P expects the combined company
will significantly reduce expenses and improve operating margins
over the next two years, under S&P's current base case leverage
will remain very high relative to other rated software companies in
the 'B' category. Key credit risks include the intense competition
in the contact center solutions market, the threat of more
significant competition from cloud based software-as-a-service
(SAAS) providers, the potential for business disruption following
the acquisition and cost cutting plan, and a relatively narrow
focus on the contact center market. Substantial synergies with
Interactive, the company's high maintenance renewal rates, which
have resulted in a growing recurring revenue base, and
technological leadership in its core market partially offset these
risks.
S&P's business risk profile assessment for Genesys of fair reflects
the company's position as one of the larger providers, along with
Avaya and Cisco, of cloud-based and on-premise contact center
software. S&P expects that the acquisition of Interactive
Intelligence will significantly improve Genesys's competitive
position in the mid-market (100 to 250 operator seats per client)
and strengthen its cloud offerings and overall competitive
positioning within the call center software market. Additionally,
the deal improves Genesys's scale increasing annual revenue by more
than 40% and improves customer diversity with very little customer
overlap.
After making several acquisitions in 2013, Genesys began providing
cloud-based and cloud-hosted contact center solutions to midmarket
and smaller enterprises. Both of these areas are growing faster
than Genesys's core high-end (over 250 seats) on-premises solutions
market. Nevertheless, about 70% of its revenue prior to acquiring
Interactive has come from customers with more than 1,000 installed
seats.
On closing of the transaction, leverage will be very high at 12.7x.
However, the company has a plan in place to reduce costs and
realize synergies primarily through elimination of redundant
headcount and moving certain job functions to lower cost regions.
In all, S&P expects Genesys to take more than $100 million in costs
out of the business which should enable the company to gradually
delever below 10x by the end of 2017, declining further to around
8x in 2018, by which time S&P expects the cost savings will be
fully captured. Excluding costs to achieve the synergies of more
than $100 million in 2017, S&P projects Genesys will generate free
operating cash flow (FOCF) around 2% of debt which should grow to
the low- to mid-single digits in 2018. Genesys will have $150
million in cash on the balance sheet post-transaction, some of
which will be used to pay out unvested restricted stock units
(RSUs) at Interactive Intelligence of about $60 million that had
not vested prior to the acquisition. These costs reduce S&P's
adjusted EBITDA and increase debt.
S&P's base case assumes:
-- U.S. GDP growth of 1.5% in 2016 and 2.4% in 2017.
-- Eurozone GDP growth of 1.6% in 2016 and 1.4% in 2017.
-- Asia-Pacific GDP growth of 5.4% in 2016 and 5.4% in 2017.
-- S&P expects global technology spending to increase in the
low-single-digit percentages in 2016, slightly below S&P's
global GDP growth forecast of 3.6%. Considering enterprise
spending priorities and limited IT budgets, S&P expects
companies offering solutions related to cloud services, data
management, mobility, and security will again experience
more favorable operating performance relative to companies
in certain mature markets, including printing, PCs, and
traditional outsourcing.
-- S&P expects software sector revenues to grow in the low- to
mid-single digit percentages in 2016, with data management
software and cloud delivery-enabled providers leading growth
and mature, on-premises systems management software
providers lagging. Security is likely to be a growth area
for software, although the pace of growth will vary between
applications, with identity management and mobile security
outpacing traditional endpoint protection.
-- Significant topline growth in 2017 at Genesys due to the
acquisition of nteractive Intelligence which adds about
$400 million in annual sales for pro forma combined 2017
revenues of about $1.5 billion. On an organic basis, mid-
single-digit growth in revenues in 2017 for the combined
company. This is slightly above GDP growth in the U.S. and
EMEA based on faster growth at Interactive Intelligence
which is focused in the middle market contact center market,
a faster growing segment the contact center space. Growth
at Genesys will be in line with GDP growth in the low-single
digits.
-- EBITDA margin will decline in 2017 about 300 basis points
(bps) due to the acquisition of Interactive Intelligence
which has much lower EBITDA margins than Genesys (about 10%
compared to the Mid-20% range for Genesys). EBITDA margin
improves about 500 bps in fiscal 2018 as the company
completes the integration. Capital expenditure around 3% of
revenue in line with historical capex and management
guidance.
-- No shareholder returns are assumed (neither dividends nor
share buybacks).
-- $1.444 billion to acquire Interactive Intelligence in 2016;
more modest mergers and acquisitions of less than $100
million assumed thereafter in line with Genesys's historical
acquisition spending.
Based on these assumptions, S&P arrives at these credit measures:
-- Debt to EBITDA in the mid-9x area as of Dec. 31, 2017 which
decreases below 8x as of Dec. 31, 2018 as the company
completes cost savings initiatives;
-- FOCF to debt of 2% as of Dec. 31, 2017, excluding
restructuring payments, growing to around 5% in 2018; and
-- EBITDA interest coverage of 1.8x as of Dec. 31, 2017,
increasing above 2x in 2018.
In S&P's view, Gensys has adequate liquidity. S&P believes
coverage of uses will be about 1.3x in 2016 and that net sources
will be positive in the near term, even with a 15% decline in
EBITDA.
Principal Liquidity Sources:
-- Cash balance of $150 million post transaction;
-- Full availability under its $150 million revolving credit
facility due 2021; and
-- Cash flow from operations of about $150 million in 2017
(excluding about $120 million restructuring payments ahead
of significant savings).
Principal Liquidity Uses:
-- Annual capital expenditures of $20 million to $30 million
(around 3% of revenues);
-- Mandatory annual debt amortization of $21 million over the
next two years; and
-- Payments for restricted stock units related to the
Interactive Intelligence acquisition of about $35 million
over the next two years.
The revolver will have one springing financial maintenance covenant
that will be tested when the revolver is drawn more than 35%: a
maximum senior leverage test of 7x. S&P estimates that EBITDA
cushion on the test will be above 30% over the coming 12 months.
The outlook is stable, reflecting S&P's expectation that Genesys
will maintain its solid competitive position within growing call
center software markets and integrate its acquisition of
Interactive Intelligence, such that it maintains adequate liquidity
over the coming 12-18 months and gradually reduces leverage from
very high levels.
S&P could lower the rating over the next year if operating
performance deteriorates following the transaction or acquisition
integration pressures mount such that available liquidity falls
below $100 million.
An upgrade over the next year is unlikely given the high current
leverage. Longer term, S&P could raise the rating if Genesys can
sustain leverage below the mid-7x area while growing organically
and improving EBITDA margins.
GRIFFITH STERNBERG: Seeks to Hire Davidson Fink as Attorney
-----------------------------------------------------------
Griffith Sternberg, LLC, asks the Bankruptcy Court for entry of an
order appointing Davidson Fink, LLP, as attorney.
David L. Rasmussen assures the Court that his firm has no
connections with the creditors, any other party in interest, their
respective attorneys and accountants, the United States Trustee or
any person employed in the office of the United States Trustee.
The Firm can be contacted at:
David L. Rasmussen, Esq.
DAVIDSON FINK, LLP
28 E. Main Street, Suite 1700
Rochester, NY 14621
Tel: (585) 756-5952
E-mail: drasmussen@davidsonfink.com
Griffith Sternberg, LLC, filed for Chapter 11 bankruptcy protection
(Bankr. W.D.N.Y. Case No. 16-21029) on Sept. 13, 2016, estimating
assets and liabilities between $50,001 to $100,000. The petition
was signed by Denice A. Hamm, managing member. David L. Rasmussen,
Esq., at Davidson Fink, LLP, serves as the Debtor's bankruptcy
counsel.
HAVEN CHICAGO: Case Summary & 12 Unsecured Creditors
----------------------------------------------------
Debtor: Haven Chicago LP
12824 S Misty Harbour Lane
Palos Park, IL 60464
Case No.: 16-35506
Chapter 11 Petition Date: November 7, 2016
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Hon. Jack B. Schmetterer
Debtor's Counsel: Richard G Larsen, Esq.
SPRINGER BROWN, LLC
300 South County Farm Road, Suite I
Wheaton, IL 60187
Tel: 630-510-0000
Fax: 630-510-0004
E-mail: rlarsen@springerbrown.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Albert Adriani, manager.
A copy of the Debtor's list of 12 unsecured creditors is available
for free at http://bankrupt.com/misc/ilnb16-35506.pdf
HAVEN REAL ESTATE: Case Summary & 10 Unsecured Creditors
--------------------------------------------------------
Debtor: Haven Real Estate Focus Fund LP
12824 Misty Harbour Lane
Palos Park, IL 60464
Case No.: 16-35511
Chapter 11 Petition Date: November 7, 2016
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Hon. Pamela S. Hollis
Debtor's Counsel: Richard G Larsen, Esq.
SPRINGER BROWN, LLC
300 South County Farm Road, Suite I
Wheaton, IL 60187
Tel: 630-510-0000
Fax: 630-510-0004
E-mail: rlarsen@springerbrown.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Albert Adriani, manager.
A copy of the Debtor's list of 10 unsecured creditors is available
for free at http://bankrupt.com/misc/ilnb16-35511.pdf
HUNTWICKE CAPITAL: Unit Inks Share Agreement with Phalanx Partners
------------------------------------------------------------------
Magnolia Lane Financial Group, a wholly owned subsidiary of
Huntwicke Capital Group, Inc., entered into a Share Agreement with
Phalanx Partners, LLC, whereby Magnolia Lane issued 96,199 shares
of the Company's common stock to Phalanx Partners, LLC, in exchange
for all the interest in Huntwicke Securities LLC and Huntwicke
Advisors, LLC. Phalanx Partners, LLC. is owned and managed by the
Company's president.
On Oct. 31, 2016, Magnolia Lane entered into a Share Agreement with
WS Advantage LP whereby Magnolia Lane issued 125,000 shares of the
Company's common stock to WS Advantage LP in exchange for all of WS
Advantage LP's interest in Riversky Realty LLC, which owns the
property located at 17/19 Main Street, Topfield, MA. WS Advantage
LP is owned and managed by the Company's president.
About Huntwicke Capital
Huntwicke Capital Group Inc., formerly known as Magnolia Lane
Income Fund, was incorporated in the state of Delaware on May 12,
2009. The Company was formed to commence business as a stock agent
in the wool trade.
On May 13, 2013, the Company entered into a stock purchase
agreement with Ian Raleigh and Michael Raleigh and Magnolia Lane
Financial, Inc., whereby the Purchaser purchased from the Sellers,
10,000,000 shares of common stock, par value $0.0001 per share, of
the Company, representing approximately 69.57% of the issued and
outstanding shares of the Company. As a result, the Purchaser
became the majority shareholder of the Company.
Magnolia Lane reported a net loss of $197,969 for the year ended
April 30, 2016, compared to a net loss of $187,294 for the year
ended April 31, 2015.
As of July 31, 2016, Magnolia Lane had $3.58 million in total
assets, $2.01 million in total liabilities and $1.56 million in
total equity.
Liggett & Webb, P.A., in Boynton Beach, Florida, issued a "going
concern" qualification on the consolidated financial statements for
the year ended April 30, 2016, citing that the Company has used
cash in operations of $22,835 and an accumulated deficit of
$707,094 at April 30, 2016. These matters raise substantial doubt
about the Company's ability to continue as a going concern.
HURLEY MEDICAL: Moody's Affirms Ba1 Rating on $91.4MM Debt
----------------------------------------------------------
Moody's Investors Service affirms the Ba1 rating on Hurley Medical
Center's (MI) outstanding debt issued through the City of Flint
Hospital Building Authority of approximately $91.4 million. The
rating outlook is stable. The affirmation of the Ba1 reflects good
financial performance achieved in recent years following the
increase in utilization from a newly insured population covered
under Medicaid expansion. Improved margins and management's
conservative capital spending also contribute to a strengthened
liquidity position and good direct-debt coverage metrics. The
rating is constrained by the presence of two larger systems,
location in a challenging service area, some contraints on
partnering given Hurley's governmental ownership, reliance on state
subsidies given role as an important safety net provider and the
magnitude of an underfunded defined benefit pension plan, although
funding is well in excess of annual requirements.
Rating Outlook
The stable outlook reflects Moody's expectation that financial
performance will remain strong, although below the historically
high levels seen 2016, and adequate to support strategic capital
needs, pension funding levels, and the maintenance of a built-up
liquidity position.
Factors that Could Lead to an Upgrade
Sustainability of very good operating margins
Continued strengthening of liquidity and debt coverage ratios
Factors that Could Lead to a Downgrade
Reversion to weaker levels of operating performance
Failure to maintain improved liquidity position
Material increase in pension contributions
Legal Security
The bonds are secured by a pledge of net revenues of the obligated
group, as defined in the bond documents. Hurley is the only member
of the obligated group. While Hurley is component unit of the City
of Flint, MI, the bonds are not secured by the full faith and
credit of the City of Flint. Debt service reserve funds (DSRF) are
in place.
Obligor Profile
Hurley is a 443-licensed bed tertiary care teaching facility
located in Flint, MI. Hurley is a component unit of the City of
Flint. The hospital provides clinical training for medical and
nursing students and residents and maintains academic affiliations
with Michigan State University and the University of Michigan -
Flint. Hurley only employs a small number of physicians, all of
whom are specialists.
Methodology
The principal methodology used in this rating was Not-For-Profit
Healthcare Rating Methodology published in November 2015.
IMX ACQUISITION: Court Approves Replacement DIP Loan from Tannor
----------------------------------------------------------------
Delaware Bankruptcy Judge Brendan L. Shannon on Nov. 7, 2016,
issued a second interim order authorizing IMX Acquisition Corp.,
Implant Sciences, and their debtor-affiliates to enter into a
replacement DIP financing with Tannor Partners Credit Fund LP.
Tannor has committed to provide up to $8 million in DIP financing.
The Court order permits the Debtors to use up to $5.7 million on an
interim basis.
When they filed the bankruptcy petition, as reported by the
Troubled Company Reporter, the Debtors sought authorization to
obtain postpetition financing from DIP SPV I, L.P., in the amount
of $5.7 million, and use cash collateral.
A copy of the Court's Order -- and the DIP agreement with Tannor --
is available at:
http://bankrupt.com/misc/deb16-12238-0179.pdf
Vince Sullivan, writing for Bankruptcy Law360, reported that the
Debtors received court approval at a hearing on Nov. 4 on the loan
from Tanner following a debtor-in-possession financing auction held
late Thursday, with better terms than its original facility.
According to the report, during a hearing in Wilmington, attorneys
for Implant Sciences said that a competing DIP offer came in almost
as soon as the Chapter 11 case began in October, spurring
negotiations with its original proposed lenders. The original $5.7
million DIP loan was bumped up to $8 million, and at an auction on
Nov. 3, Tanner provided the best terms.
According to the Law360 report, Tannor emerged late Thursday, Nov.
3, as the winning bidder, offering lower closing costs than the
original DIP lenders, DIP SPV I LP. Implant Sciences had already
made an interim draw on the original facility of $1.5 million and
received final approval of up $5.7 million on Friday. The company
will seek approval of the additional $2.3 million at a later date.
Implant Sciences is seeking to sell its assets pursuant to a
stalking horse asset purchase agreement entered into with L-3
Communications Corp.
The Debtors were fending off a challenge by the Official Committee
of Equity Security Holders to their original bid to obtain DIP
financing from DIP SPV I LP. In a court filing on Nov. 3, the
Debtors explained, "It is beyond dispute that the Debtors require
debtor-in-possession financing to fund operations and bridge to a
sale of their assets. The funds available under the current DIP
Facility are crucial to the Debtors' ability to maintain their
businesses and to avoid immediate and irreparable harm to their
estates, employees, customers, and creditors. Moreover, the DIP
Facility provides the Debtors with the necessary liquidity to meet
their obligations under the
proposed asset purchase agreement with L-3 Communications
Corporation, which will pay off all creditors and leave a surplus
for the Debtors and the equity holders. In other words, the DIP
Facility is a bridge to $117.5 million in cash sale proceeds and a
solvent debtor."
The Debtors said in that filing "the Equity Committee does not
dispute the necessity of a DIP. Instead, it objects to the terms
of the DIP Facility, a third-party new money facility, by hinting
at a potential alternative, failing to note that the Debtors had
not, as of the date of the Equity Committee's objection, received
any alternative financing proposals. This includes Tannor, who the
Debtors understands engaged in discussions with the DIP Lender
following the first day hearing, but had not made any financing
proposal to the Debtors until the date of this Reply."
According to the Debtors, "Tannor's discussions with the DIP Lender
led to the proposed amendment that the Equity Committee described
in its objection, which proposed an upsizing of the facility at a
greater cost to these estates than what the DIP Lender has agreed
to."
The Debtors also noted in the court filing that, "At 11:48 a.m.
Eastern Time, shortly prior to the filing of this Reply [Nov. 3],
the Debtors received a DIP financing proposal from Tannor. The
Debtors will review and consider the Tannor proposal in a manner
consistent with the their fiduciary duties."
According to the Law360 report, the Tannor DIP facility offered
reduced closing costs and fees that total about $686,000, whereas
the original DIP proposal had costs of $880,000 once it was upsized
to $8 million.
The report noted that the equity committee offered its support of
the DIP, but has issues with the budget provided for the
committee's investigations of prepetition liens held by lenders, as
well as the length of its investigation period. The committee did
not file an objection or ask the court to extend either budget or
the time period for investigation, but explained that it had a
complicated job ahead of it.
Committee attorney William R. Baldiga of Brown Rudnick LLP said
that the $50,000 provided by Implant Sciences likely won't be
enough to pay for the investigation into the validity of the liens
held by the prepetition lenders. The committee is likely to seek
additional funding at a later date once the scope of the
investigation becomes more clear.
"We'll accept that budget with the understanding we intend to do
whatever type of investigation we think needs to be done," Mr.
Baldiga said, according to Law360. "We can make any administrative
claims later on if we have to, and we know how to do that."
According to the Law360 report, the potential issues surrounding
the liens stem from the insolvency of secured lender Platinum
Partners Value Arbitrage Fund LP, which has begun court proceedings
in the Cayman Islands and a related Chapter 15 case in the Southern
District of New York. Those proceedings bring an automatic stay of
litigation for Platinum, which could hinder the equity committee's
investigation.
The report also said Barbra R. Parlin of Holland & Knight LLP
represents the liquidators of Platinum in the Cayman Island
insolvency proceedings, and told the court on Friday that the
second-lien lenders are not part of those cases and thus not
subject to the stay of litigation. Ms. Parlin said that the equity
committee's work should be simple since the second-priority liens
have been on the books for about eight years.
"The lending relationship between these public companies has played
out in the public eye for eight years now," Ms. Parlin said, adding
that she has been able to find all the facility documents and
amendments through public access portals, according to the report.
The report noted that Judge Shannon said that he will be available
in the future to discuss any extension of the investigation period,
but said that the committee should begin to use the 60 days it is
automatically granted upon formation to start looking into the
liens.
The Tannor facility requires the Debtors to obtain approval of the
sale by Dec. 19 and close the sale by Feb. 2, 2017.
Tannor may be reached at:
Robert Tannor
Tannor Partners Credit Fund
150 Grand Street, Suite 401
White Plains, NY 10601
E-mail: rtannor@tannorpartners.com
Tannor is represented in the case by:
Andrew M. Felner, Esq.
Sheppard Mullin Richter & Hampton, LP
30 Rockefeller Plaza
New York, NY 10112
Fax: 212-655-1718
E-mail: Afelner@sheppardmullin.com
About IMX Acquisition
IMX Acquisition Corp., also known as Ion Metrics Inc., and its
affiliates, comprise a leading designer and manufacturer of
systems
and sensors that detect trace amounts of explosives and drugs.
Their products, which include handheld and desktop detection
devices, are used in a variety of security, safety, and defense
industries, including aviation, transportation, and customs and
border protection. The Debtors have sold more than 5,000 of their
detection products to customers such as the United States
Transportation Security Administration, the Canadian Air
Transportation Security Authority, and major airports in the
European Union.
IMX Acquisition Corp. sought Chapter 11 protection (Bankr. D. Del.
Case No. 16-12238) on Oct. 10, 2016. The case is assigned to Judge
Brendan Linehan Shannon.
The Debtor estimated assets and liabilities in the range of $100
million to $500 million.
The Debtor tapped Paul V. Shalhoub, Esq. and Debra C. McElligott,
Esq. and Jennifer J. Hardy, Esq. at Willkie Farr & Gallagher, LLP
as counsel.
The petition was signed by William J. McGann, president.
Andrew Vara, acting U.S. trustee for Region 3, on Oct. 24, 2016,
appointed Harold Coe and four others to serve on the official
committee of equity security holders in the Chapter 11 cases of IMX
Acquisition.
Proposed Co-Counsel to the Official Committee of Equity Security
Holders:
William R. Baldiga, Esq.
Gerard T. Cicero, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, NY 10036
Tel: (212) 209-4800
E-mail: wbaldiga@brownrudnick.com
gicero@brownrudnick.com
- and -
Sunni P. Beville, Esq.
BROWN RUDNICK LLP
One Financial Center
Boston, MA 02111
Tel: (617) 856-8200
E-mail: sbeville@brownrudnick.com
- and -
Mark Minuti, Esq.
SAUL EWING LLP
1201 North Market Street, Suite 2300
P.O. Box 1266
Wilmington, DE 19899
Tel: (302) 421-6840
E-mail: mminuti@saul.com
INTERPACE DIAGNOSTICS: Extends Secured Note Due Date Until Nov. 20
------------------------------------------------------------------
Effective Oct. 31, 2016, Interpace Diagnostics Group, Inc.,
Interpace Diagnostics, LLC, a subsidiary of the Company, and
RedPath Equityholder Representative, LLC, entered into a Fourth
Amendment To Non-Negotiable Subordinated Secured Promissory Note to
extend until Nov. 20, 2016, subject to the terms of the Fourth
Amendment, the due date for the first quarterly payment of
principal under that certain Non-Negotiable Subordinated Secured
Promissory Note, dated as of Oct. 31, 2014, by the Company and
Interpace LLC, in favor of the Equityholder Representative, on
behalf of the former equity holders of RedPath Integrated
Pathology, Inc.
The Note, which was entered into in connection with the Company's
acquisition of RedPath on Oct. 31, 2014, is for the principal
amount of $10.67 million, is interest-free and was to be paid in
eight equal consecutive quarterly installments beginning Nov. 1,
2016. The interest rate will be 5.0% in the event of a default
under the Note, which include the failure to make any payment of
principal due under the Note within ten business days after the
date such payment is due (subject to certain exceptions), the
making of an assignment for the benefit of creditors generally and
suffering proceedings under any law related to bankruptcy,
insolvency, liquidation and such proceeding is not dismissed or
stayed within 60 days. The obligations of the Company under the
Note are guaranteed by the Company and its subsidiaries pursuant to
a Guarantee and Collateral Agreement pursuant to which the Company
and its subsidiaries also granted a security interest in
substantially all of their respective assets, including
intellectual property, to secure their obligations to the
Equityholder Representative.
Pursuant to the Fourth Amendment, the Company is required to make
eight installment payments of principal, with each payment equal to
$1,333,750, together with accrued and unpaid interest, if any. The
first payment is due on Nov. 20, 2016, and subsequent payments are
to be made on the first day of each fiscal quarter, beginning on
Jan. 1, 2017. If not paid sooner, all principal and accrued
interest will be due and payable on Oct. 1, 2018.
Commerce Health Ventures, L.P., an affiliate of NewSpring Capital,
was a stockholder of RedPath and serves as the Equityholder
Representative. In connection with the Company's acquisition of
RedPath, the Company entered into a Contingent Consideration
Agreement with the Equityholder Representative, the Company issued
the Note, and the Company assumed a liability for a January 2013
settlement agreement entered into by RedPath with the Department of
Justice. From Oct. 30, 2015, to Sept. 13, 2016, Kapila Ratnam, a
partner at NewSpring Capital, served as a director of the Company.
Additional information regarding these transactions can be found in
the Company's filings with the U.S. Securities and Exchange
Commission, a copy of which is available for free at:
https://is.gd/dq2a24
About Interpace Diagnostics
Headquartered in Parsippany, New Jersey, Interpace Diagnostics
Group, Inc., is focused on developing and commercializing molecular
diagnostic tests principally focused on early detection of high
potential progressors to cancer and leveraging the latest
technology and personalized medicine for patient diagnosis and
management. The Company currently has four commercialized
molecular tests: PancraGen, a pancreatic cyst molecular test that
can aid in pancreatic cyst diagnosis and pancreatic cancer risk
assessment utilizing our proprietary PathFinder platform; ThyGenX,
which assesses thyroid nodules for risk of malignancy, ThyraMIR,
which assesses thyroid nodules risk of malignancy utilizing a
proprietary gene expression assay.
As of June 30, 2016, Interpace had $53.5 million in total assets,
$47.5 million in total liabilities and $5.99 million in total
stockholders' equity.
Interpace reported a net loss of $11.35 million in 2015 following a
net loss of $16.07 million in 2014.
BDO USA, LLP, in Woodbridge, New Jersey, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company has suffered recurring
losses from continuing operations that raise substantial doubt
about its ability to continue as a going concern.
INTERPACE DIAGNOSTICS: Signs Employment Agreement with CEO
----------------------------------------------------------
Interpace Diagnostics Group, Inc. and Jack E. Stover, president and
chief executive officer of the Company, entered into an employment
agreement, which was effective as of Oct. 28, 2016. Under the
Employment Agreement, Mr. Stover is to receive an annual base
salary of $300,000 and is eligible to receive an annual performance
bonus with a target of 50% of his base salary, based on the
attainment of certain quarterly performance targets with respect to
the following components: EBITDA, Revenue, Operational Performance
and Cash Management. Pursuant to the Employment Agreement, the
Company and Mr. Stover agreed that the performance targets for the
first two quarters of 2016 were met at 100% of target or $75,000.
Mr. Stover is entitled to receive payment of this amount, as a
partial payment of his 2016 performance bonus, on Oct. 31, 2016.
In addition, upon the occurrence of a "Transaction", Mr. Stover,
provided he remains employed through the closing of such
Transaction, would receive a bonus equal to 3% of the net
transaction proceeds received in connection with that Transaction.
Under the Employment Agreement, a "Transaction" includes, subject
to certain exceptions, (i) any merger by the Company into another
corporation or corporations which results in the stockholders of
the Company immediately prior to that transaction owning less than
51% of the surviving corporation; (ii) any acquisition (by
purchase, lease or otherwise) of all or substantially all of the
assets of the Company by any person, corporation or other entity or
group thereof acting jointly; (iii) the acquisition of beneficial
ownership of voting securities of the Company or rights to acquire
voting securities of the Company by any other person, corporation
or other entity or group thereof acting jointly, in such amount or
amounts as would permit such person, corporation or other entity or
group thereof acting jointly to elect a majority of the members of
the Board, as then constituted; (iv) the acquisition of beneficial
ownership, directly or indirectly, of voting securities and rights
to acquire voting securities having voting power equal to 51% or
more of the combined voting power of the Company's then outstanding
voting securities by any person, corporation or other entity or
group thereof acting jointly; or (v) a public or private offering
of securities of the Company.
Under the Employment Agreement, in the event of a termination by
the Company without "Cause" or a resignation by Mr. Stover for
"Good Reason" (as such terms are defined in the Employment
Agreement), Mr. Stover would be entitled to receive monthly
payments of $25,000 for nine months following such termination and,
provided that Mr. Stover timely elected COBRA continuation
coverage, the Company would pay his applicable COBRA premium for 12
months following such termination. Those payments and benefits
would be subject to an effective release of claims and would cease
upon breach by Mr. Stover of any applicable restrictive covenants.
About Interpace Diagnostics
Headquartered in Parsippany, New Jersey, Interpace Diagnostics
Group, Inc., is focused on developing and commercializing molecular
diagnostic tests principally focused on early detection of high
potential progressors to cancer and leveraging the latest
technology and personalized medicine for patient diagnosis and
management. The Company currently has four commercialized
molecular tests: PancraGen, a pancreatic cyst molecular test that
can aid in pancreatic cyst diagnosis and pancreatic cancer risk
assessment utilizing our proprietary PathFinder platform; ThyGenX,
which assesses thyroid nodules for risk of malignancy, ThyraMIR,
which assesses thyroid nodules risk of malignancy utilizing a
proprietary gene expression assay.
As of June 30, 2016, Interpace had $53.5 million in total assets,
$47.5 million in total liabilities and $5.99 million in total
stockholders' equity.
Interpace reported a net loss of $11.35 million in 2015 following a
net loss of $16.07 million in 2014.
BDO USA, LLP, in Woodbridge, New Jersey, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company has suffered recurring
losses from continuing operations that raise substantial doubt
about its ability to continue as a going concern.
ION GEOPHYSICAL: Posts $1.91 Million Net Income for Third Quarter
-----------------------------------------------------------------
ION Geophysical Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $1.91 million on $78.62 million of total net revenues for the
three months ended Sept. 30, 2016, compared to a net loss of $20.15
million on $66.67 million of total net revenues for the three
months ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $58.38 million on $137.4 million of total net revenues
compared to a net loss of $19.90 million on $144.0 million of total
net revenues for the same period during the prior year.
As of Sept. 30, 2016, Ion Geophysical had $359.7 million in total
assets, $299.2 million in total liabilities and $60.47 million in
total equity.
Brian Hanson, ION's president and chief executive officer,
commented, "As we stated in our second quarter earnings call, we
expected higher revenues and positive cash generation in the back
half of 2016, both of which are reflected in our third quarter
results. Our revenues for the third quarter exceeded our total
revenues for the first half of the year, driven in part by our
Ocean Bottom Services (OBS) crew going back to work and by a
sizable increase in multi-client data library sales spread across
our geographically diverse portfolio.
"Our $12 million of income from operations during the quarter
represents the first time since second quarter 2014 that we have
been profitable at the operating income line. This indicates that
the $95 million of annual savings from our cost reduction
initiatives has rightsized our business to reflect current market
conditions.
"With a significant improvement in our third quarter Adjusted
EBITDA, our year-to-date Adjusted EBITDA became positive. Also,
during the quarter we generated positive net cash flows, a
significant improvement over the cash we consumed a year ago. We
expect this momentum to carry into the fourth quarter, driven in
part by normal year-end spending on data libraries by our
customers.
"During the third quarter, we successfully completed our OBS survey
offshore Nigeria. Our overall performance on this survey exceeded
our own expectations, especially given that our crew and vessels
had been stacked for almost a year, a strong testament to the
dedication and experience of our OBS crew and management. At the
completion of the project, we cold-stacked our crew and vessels
while we actively pursue tenders for longer-term work in the
region. We are starting to see signs of recovery in the OBS market
and believe we are well positioned for our crew to go back to work
in the near-term."
At Sept. 30, 2016, the Company's total liquidity was $78.4 million,
consisting of cash and cash equivalents of $62.5 million and $15.9
million remaining availability on its maximum $40.0 million
revolving credit facility. While the Company had borrowings of
only $15.0 million under its revolving credit facility at Sept. 30,
2016, the remaining available amount has been temporarily reduced
due to a decline in the eligible receivables that collateralize the
facility.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/QcgPGK
About ION Geophysical
Headquartered in Delaware, ION Geophysical is a global,
technology-focused company that provides geoscience technology,
services and solutions to the global oil and gas industry. The
Company's offerings are designed to allow oil and gas exploration
and production companies to obtain higher resolution images of the
Earth's subsurface during E&P operations to reduce their risk in
exploration and reservoir development.
ION Geophysical reported a net loss of $25.15 million in 2015, a
net loss of $127.5 million in 2014 and a net loss of $246.51
million in 2013.
* * *
As reported by the TCR on Oct. 10, 2016, S&P Global Ratings raised
the corporate credit rating on ION Geophysical Corp. to 'CCC+' from
'SD'. The rating action follows ION's partial exchange of its
8.125% notes maturing in 2018 for new 9.125% second-lien notes
maturing in 2021.
In May 2016, Moody's Investors Service affirmed ION Geophysical
Corporation's Caa2 Corporate Family Rating, and affirmed and
appended its Probability of Default Rating (PDR) at Caa2-PD/LD.
J.J. BAKER: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
An official committee of unsecured creditors has not yet been
appointed in the Chapter 11 case of J.J. Baker, LLC as of November
2, according to a court docket.
J.J. Baker, LLC filed a chapter 11 petition (Bankr. W.D. Mo. Case
No. 16-60866) on Aug. 29, 2016, disclosing under $1 million in both
assets and liabilities. The Debtor is represented by Mariann
Morgan, Esq., at Checkett & Pauly, P.C.
JAMES DEWAYNE MANNING: Unsecureds May Get $2,500 Under Plan
-----------------------------------------------------------
James Dewayne Manning and Kelly A. Manning filed with the U.S.
Bankruptcy Court for the Northern District of Alabama a disclosure
statement for the Debtors' Chapter 11 plan dated Oct. 31, 2016.
Allowed Class 3 - Unsecured Claims will be paid the greater of: the
remainder of the disposable income of the Debtors after the payment
of all administrative, tax and secured claims; or $2,500 paid by
the Debtors at the completion of the Plan to the disbursing agent
to be distributed pro rata to allowed unsecured claims. This
payment will be made by the Disbursing Agent.
The Debtors have made $1,500 per month, payroll deductions totaling
$6,155 to date. On the Effective Date, the plan payments will
change to $3,148.93. The new payment will be the level payment of
the Debtors' from the date of confirmation until completion of the
Plan.
The Disclosure Statement is available at:
http://bankrupt.com/misc/alnb16-81059-137.pdf
The Plan was filed by the Debtor's counsel:
Stuart M. Maples Maples Law Firm, PC
200 Clinton Avenue West, Suite 1000
Huntsville, AL 35801
Tel: (256) 489-9779
Fax: (256) 489-9720
E-mail: smaples@mapleslawfirmpc.com
James Dewayne Manning and Kelly A. Manning filed for Chapter 11
bankruptcy protection (Bankr. D. Ala. Case No. 16-81059).
On April 16, 2016, the Debtors filed a voluntary petition under
Chapter 13 of the Bankruptcy Code before the U.S. Bankruptcy Court
for the Northern District of Alabama. The Chapter 13 case was
converted to a Chapter 11 case on Sept. 23, 2016.
Mr. Manning had been employed by Stryker for eight months prior to
the filing of the Voluntary Petition. Prior to Stryker, he was a
distributor for K&M, which was acquired by Stryker. His
compensation is now based on commissions. The commission structure
was changed starting in 2016.
As reported by the Troubled Company Reporter on Oct. 4, 2016, the
Hon. Clifton R. Jessup, Jr., of the U.S. Bankruptcy Court for the
Northern District of Alabama entered an order on Sept. 23, 2016,
approving the bankruptcy administrator's application to appoint
Kevin D. Heard as examiner.
JYR'S EL MAGUEY: Seeks to Hire Sader Law Firm as Attorneys
----------------------------------------------------------
JYR's El Maguey Corporation seeks authorization from the U.S.
Bankruptcy Court for the Western District of Missouri to employ
Bradley D. McCormack and Michael J. Wambolt of The Sader Law Firm
as attorneys.
The Debtor requires the Firm to:
(a) advise the Debtor with respect to its rights and
obligations as Debtor-In-Possession and regarding other matters of
bankruptcy law;
(b) prepare and file any petition, schedules, motions,
statement of affairs, plan of reorganization, or other pleadings
and documents that may be required in the proceeding;
(c) represent the Debtor at the meeting of creditors, plan of
reorganization, disclosure statement, confirmation and related
hearings, and any adjourned hearings thereof;
(d) represent the Debtor in adversary proceedings and other
contested bankruptcy matters; and,
(e) represent the Debtor in the above matters, and any other
matters that may arise in connection with the Debtor's
reorganization proceeding and its business operations.
The Firm will be paid at these hourly rates:
Bradley D. McCormack $305.00
Michael J. Wambolt $295.00
Paralegal $105.00
The Firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In preparation of the Chapter 11 filing, Debtor's owner, the Manuel
Jaime Revocable Trust, paid a retainer of $20,000.00. The Debtor
paid $2,000 to go towards the filing fee and associated costs. The
Firm deposited the $22,500 into its Trust account. The Firm paid
itself from the Trust account prior to the filing of the case in
the amount of $3,755.50 for fees and $1,717 for filing fees. The
Firm will continue to bill on an hourly rate in the Chapter 11
case. The payment from the Debtor's owner was designated as a
capital contribution.
Bradley D. McCormack, Esq., an employee of the Firm, assured the
Court that the Firm is a “disinterested person” as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
The Firm can be reached at:
Bradley D. McCormack, Esq.
2345 Grand Boulevard, Suite 2150
Kansas City, MO 64108
Tel.: 816-561-1818
Direct Dial: 816-595-1802
Fax: 816-561-0818
Email: bmccormack@saderlawfirm.com
JYR's El Maguey Corporation filed a Chapter 11 petition (Bankr.
W.D. Mo. Case No. 16-42918) on October 21, 2016, and is represented
by Bradley D. McCormack, Esq., at The Sader Law Firm, LLC.
KENNY LEIGH: Disclosures Conditionally OK'd; Hearing on Dec. 7
--------------------------------------------------------------
The Hon. Paul M. Glenn of the U.S. Bankruptcy Court for the Middle
District of Florida has conditionally approved Kenny Leigh, PA's
disclosure statement dated Oct. 26, 2016, referring to the Debtor's
plan of reorganization dated Oct. 26, 2016.
Dec. 7, 2016, is fixed for the hearing on final approval of the
Disclosure Statement and for the hearing on confirmation of the
plan. The hearing will be held at 11:00 a.m.
Any objections to Disclosure or Confirmation must be filed and
served seven days before the Confirmation Hearing.
Creditors and other parties-in-interest will file with the Court
their ballots accepting or rejecting the Plan no later than 10 days
before the Confirmation Hearing.
All applications for allowance of costs of administration must be
filed 14 before the Confirmation Hearing.
Kenny Leigh, PA, filed a Chapter 11 petition (Bankr. M.D. Fla. Case
No. 16-03208) on Aug. 23, 2016. Kenny Leigh provides legal
services to clients, primarily in the areas of family law and
custody. The bankruptcy petition was signed by Daniel K. Leigh,
Jr., CEO. The Debtor is represented by Donald M. DuFresne, Esq.
The Debtor disclosed total assets at $1.06 million and total
liabilities at $921,905.
LAREDO PETROLEUM: S&P Raises Rating on Sr. Unsec. Notes to 'B'
--------------------------------------------------------------
S&P Global Ratings raised its issue-level rating on Tulsa,
Okla.–based oil and gas exploration and production company Laredo
Petroleum Inc.'s senior unsecured notes to 'B' from 'B-', and
revised the recovery rating to '4' from '5'. The '4' recovery
rating indicates S&P's expectation of average (30%-50%; lower half
of the range) recovery for creditors in the event of a payment
default.
On Oct. 24, 2016, the lenders reaffirmed the $815 million borrowing
base and commitment on Laredo's reserve-based loan (RBL) facility.
RECOVERY ANALYSIS
-- S&P's analysis incorporates Laredo's reaffirmed $815 million
borrowing base and elected commitment on the RBL facility.
-- S&P's simulated default scenario for Laredo contemplates a
sustained period of weak crude oil and North American
natural gas prices, consistent with past defaults in this
sector.
-- S&P based its valuation on a company-provided PV-10 report,
using mid-year 2016 proven reserves evaluated at S&P's
recovery price deck assumptions of $50 per barrel for West
Texas Intermediate (WTI) crude oil, $3.00 per million
British thermal unit for Henry Hub natural gas, and national
gas liquids at the company's historical 12-month realization
to WTI.
Simulated default assumptions:
-- Simulated year of default: 2019
Simplified waterfall:
-- Net estimated valuation (after 5% administrative costs):
$1.275 billion
-- Valuation split in % (obligors/nonobligors): 100/0
-- Collateral value available to first-priority secured
creditors: $1.275 billion
-- Secured first-lien debt claims: $838 million
-- Recovery expectations: Not applicable
-- Value available to repay senior unsecured claims:
$438 million
-- Senior unsecured debt claims: $1.342 billion
-- Recovery expectations: 30% to 50% (lower half of the range)
Note: All debt amounts include six months of prepetition interest.
RATINGS LIST
Laredo Petroleum Inc.
Corporate credit rating B/Stable/--
Issue-Level Ratings Raised; Recovery Rating Revised
To From
Laredo Petroleum Inc.
Senior unsecd notes B B-
Recovery rating 4L 5H
LATTICE SEMICONDUCTOR: S&P Puts 'B' Rating on Watch Developing
--------------------------------------------------------------
S&P Global Ratings said it placed its 'B' rating on Hillsboro,
Ore.-based Lattice Semiconductor Corp., as well as the 'B' rating
on the company's senior secured debt, on CreditWatch with
developing implications. The CreditWatch listing means S&P could
affirm, raise, or lower the ratings following the close of the
transaction.
"The CreditWatch placement follows the announcement that private
equity firm Canyon Bridge has agreed to acquire Lattice
Semiconductor for $1.3 billion," said S&P Global Ratings credit
analyst Minesh Shilotri.
S&P expects the proposed transaction to go through a regulatory
review process and close in early 2017.
S&P will monitor developments related to the transaction, and will
resolve the CreditWatch listing when the transaction closes and S&P
has additional clarity on the company's future capital structure.
This is likely to occur in early 2017.
LEARNING ENHANCEMENT: Case Summary & 17 Unsecured Creditors
-----------------------------------------------------------
Debtor: Learning Enhancement Corporation
PO Box 408022
Chicago, IL 60640
Case No.: 16-35537
Chapter 11 Petition Date: November 7, 2016
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Judge: Hon. Jack B. Schmetterer
Debtor's Counsel: Matthew E. McClintock, Esq.
GOLDSTEIN & MCCLINTOCK LLLP
208 South LaSalle Street Suite 1750
Chicago, IL 60604
Tel: 3123377700
E-mail: mattm@restructuringshop.com
mattm@goldmclaw.com
- and -
Sean P Williams, Esq.
GOLDSTEIN & MCCLINTOCK LLLP
208 S. LaSalle Street, Suite 1750
Chicago, IL 60604
Tel: (312) 219-6735
Fax: (312) 277-2305
E-mail: seanw@restructuringshop.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Roger Stark, CEO.
A copy of the Debtor's list of 17 unsecured creditors is available
for free at http://bankrupt.com/misc/ilnb16-35537.pdf
LEGACY RESERVES: Reports Third Quarter 2016 Results
---------------------------------------------------
Legacy Reserves LP announced third quarter results for 2016
including the following Q3 highlights:
* Reduced lease operating expenses, excluding ad valorem taxes,
to $40.1 million representing a 3% decrease compared to Q2
2016 and a 17% decrease compared to Q4 2015
* Closed an additional $8.0 million of asset sales, bringing
the Company's year-to-date as of September 30, 2016 total
divestitures to $95.5 million
* Closed on $6.6 million of acquisitions of Permian acreage
with horizontal potential and infrastructure assets to
improve the Company's operational efficiencies in its
development program
* Further reduced debt outstanding by $17 million
Operational Update
Through Q3 2016, the Company has spent $18.5 million of its $37
million 2016 capital budget representing a year to date spend of
50% of the budgeted total. Approximately 17% was spent on
recompletions and workovers in the Company's East Texas region. The
majority of the balance was deployed in the Permian on workovers
and on horizontal development under the Company's development
agreement with an affiliate of TPG Special Situations Partners
under which the Company operates all wells and fund 5% of the
parties' development capital. Since September 2015, the Company
has drilled and completed 13 horizontal wells under the program: 6
in Lea County, NM, 1 in Southern Reagan County, TX and 6 in Howard
County, TX. In addition, the Company is currently in process with
another 8 wells under the program which it expects will be online
sometime in late 2016 and early 2017.
Through Q3 2016, the Company has closed 23 divestitures generating
net proceeds of $95.5 million.
In October, the Company completed two additional divestments of
properties for approximately $0.6 million, bringing its
year-to-date total to $96.1 million. The Company does not
anticipate any additional significant asset sales under this
initiative.
Capital Structure Update
As announced on Oct. 25, 2016, the Company recently drew $60
million of new second lien term loans under a second lien term loan
credit facility with GSO Capital Partners L.P. providing for term
loans up to an aggregate principal amount of $300 million. Proceeds
(net of transaction fees and expenses) from such draw were utilized
to repay borrowings under the Company's revolving credit facility.
The Company may use the remaining $240 million balance within
twelve months of closing for general corporate purposes and for the
repayment of outstanding indebtedness. The second lien term loan
will be issued with an upfront fee of 2% and bear interest at a
rate of 12.00% per annum with a maturity date, subject to certain
conditions, of Aug. 31, 2021.
Given the Company's recently redetermined borrowing base of $600
million, outstanding borrowings of $448 million and $1.4 million of
outstanding letters of credit, the Company currently has $150.6
million of availability under its revolving credit facility.
Near-Term Outlook and Commentary
Paul T. Horne, chairman, president and chief executive officer of
Legacy's general partner commented, "Legacy has continued to take
steps to improve our positioning in this difficult downturn. Our
development program with TSSP continues to deliver strong
asset-level results. Despite our minimal capital spend this year,
our employees have been engineering, operating and supporting a
$180 million gross capital program. Their remarkable execution and
ability to drive down costs have sustained us and the work being
done today should bear fruit tomorrow. With the new addition of
GSO's second lien term loan, we look forward to finding and taking
additional steps to take to enhance equity value."
Additional Information for Holders of Legacy Units
Although Legacy has suspended distributions to both the 8% Series A
and Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual
Preferred Units, such distributions continue to accrue. Pursuant to
the terms of Legacy's partnership agreement, Legacy is required to
pay or set aside for payment all accrued but unpaid distributions
with respect to the Preferred Units prior to or contemporaneously
with making any distribution with respect to Legacy's units.
Accruals of distributions on the Preferred Units are treated for
tax purposes as guaranteed payments for the use of capital that
will generally be taxable to the holders of such Preferred Units as
ordinary income even in the absence of contemporaneous
distributions.
In addition, Legacy's unitholders, just like unitholders of other
master limited partnerships, are allocated taxable income
irrespective of cash distributions paid. Because Legacy's
unitholders are treated as partners that are allocated a share of
Legacy’s taxable income irrespective of the amount of cash, if
any, distributed by Legacy, unitholders will be required to pay
federal income taxes and, in some cases, state and local income
taxes on their share of Legacy's taxable income, including its
taxable income associated with cancellation of debt or a
disposition of property by Legacy, even if they receive no cash
distributions from Legacy. As of Jan. 21, 2016, Legacy has
suspended all cash distributions to unitholders and holders of the
Preferred Units. Legacy may engage in transactions to de-lever the
Partnership and manage its liquidity that may result in the
allocation of income and gain to its unitholders without a
corresponding cash distribution. For example, during the nine
month period ended Sept. 30, 2016, Legacy closed 23 divestitures
generating net proceeds of $95.5 million, and Legacy may sell
additional assets and use the proceeds to repay existing debt or
fund capital expenditure, in which case Legacy's unitholders may be
allocated taxable income and gain resulting from the sale, all or a
portion of which may be subject to recapture rules and taxed as
ordinary income rather than capital gain, without receiving a cash
distribution. Further, Legacy may pursue other opportunities to
reduce its existing debt, such as debt exchanges, debt repurchases,
or modifications that would result in COD income being allocated to
its unitholders as ordinary taxable income. The ultimate effect of
any income allocations will depend on the unitholder's individual
tax position with respect to its units, including the availability
of any current or suspended passive losses that may offset some
portion of the COD income allocable to a unitholder. Unitholders
are encouraged to consult their tax advisors with respect to the
consequences of potential transactions that may result in income
and gain to unitholders.
Additionally, if Legacy's unitholders, just like unitholders of
other master limited partnerships, sell any of their units, they
will recognize gain or loss equal to the difference between the
amount realized and their tax basis in those units. Prior
distributions to unitholders that in the aggregate exceeded the
cumulative net taxable income they were allocated for a unit
decreased the tax basis in that unit, and will, in effect, become
taxable income to Legacy's unitholders if the unit is sold at a
price greater than their tax basis in that unit, even if the price
received is less than original cost. A substantial portion of the
amount realized, whether or not representing gain, may be ordinary
income to Legacy's unitholders due to the potential recapture
items, including depreciation, depletion and intangible drilling.
A full-text copy of the press release is available for free at:
https://is.gd/MF1jL5
About Legacy Reserves
Headquartered in Midland, Texas, Legacy Reserves is focused on the
acquisition and development of oil and natural gas properties
primarily located in the Permian Basin, East Texas, Rocky Mountain
and Mid-Continent regions of the United States. The Company's
primary business objective has been to generate stable cash flows
to allow it to make cash distributions to its unitholders and to
support and increase quarterly cash distributions per unit over
time through a combination of acquisitions of new properties and
development of its existing oil and natural gas properties.
Legacy Reserves incurred a net loss attributable to unitholders of
$720.54 million in 2015, a net loss attributable to unitholders of
$295.33 million in 2014 and a net loss attributable to unitholders
of $35.27 million in 2013.
As of Sept. 30, 2016, Legacy Reserves had $1.39 billion in total
assets, $1.51 billion in total liabilities and a total partners'
deficit of $118.95 million.
* * *
As of Sept. 30, 2016, S&P Global Ratings said that it lowered its
corporate credit rating on Legacy Reserves L.P. to 'CCC' from
'B-'.
The rating outlook is negative. The downgrade reflects S&P's
expectation that the borrowing base on Legacy's revolving credit
facility could be lowered substantially at its redetermination in
October.
Legacy Reserves carries a Caa3 corporate family rating from Moody's
Investors Service.
LONESTAR GENERATION: S&P Lowers Rating on $675MM Loan to 'B'
------------------------------------------------------------
S&P Global Ratings said it lowered its rating on Lonestar
Generation LLC's $675 million senior secured term loan B and
$50 million senior secured revolving credit facility to 'B' from
'B+'. The recovery rating is unchanged at '2', indicating
substantial (70%-90%, lower end of the range) recovery under a
default scenario. The outlook is stable.
"We expect that the plants will continue to meet our expectations
operationally, that power prices will not fall below our revised
expectations, and that the project can meet its adjusted projected
financial measures," said S&P Global Ratings credit analyst
Kimberly Yarborough. "We expect a minimum DSCR of about 1.08x at
the time of refinancing in 2021, with nearer term DSCRs expected to
be between 1.5x and 2x."
A downgrade could occur if weaker commodity prices result in
further cash flow erosion, requiring the project to use its
liquidity line or debt service reserve to meet obligations. A
downgrade could also occur if operational issues emerge or if
margins from the Mexican merchant market fall below S&P's
expectations. S&P could also lower ratings if DSCRs go below 1x
and/or debt pay-down lags, and we expect refinancing leverage
levels to be above $350 per kilowatt.
While unlikely at this time, an upgrade could occur if operational
performance through the forecast period enables significant
deleveraging of the portfolio and there is visibility into merchant
pricing that will likely support DSCRs above 1.5x on a sustained
basis. A recovery in ERCOT could also lead to improved measures.
LSB INDUSTRIES: Exploring Strategic Alternatives
------------------------------------------------
LSB Industries, Inc., announced that its Board of Directors has
initiated a process to explore and evaluate potential strategic
alternatives for the Company, which may include a sale of the
Company, a merger with another party, or another strategic
transaction involving some or all of the assets of the Company. LSB
has retained Morgan Stanley & Co. LLC as its financial advisor to
assist with the strategic review process. The Company stated that
there can be no assurance that this strategic review process will
result in a transaction. LSB has not set a timetable for
completion of the review process, and it does not intend to comment
further regarding the strategic review process unless a specific
transaction is approved by its Board of Directors and signed, the
strategic review process is concluded, or it is otherwise
determined that further disclosure is appropriate or required by
law.
About LSB Industries, Inc.
LSB Industries, Inc. and its subsidiaries are involved in
manufacturing and marketing operations. The Companies are
primarily engaged in the manufacture and sale of chemical products
and the manufacture and sale of water source and geothermal heat
pumps and air handling products.
LSB reported a net loss attributable to common stockholders of
$38.03 million in 2015, net income attributable to common
stockholders of $19.33 million in 2014 and net income attributable
to common stockholders of $54.66 million in 2013.
As of Sept. 30, 2016, LSB had $1.38 billion in total assets,
$727.61 million in total liabilities and $137.98 million in
redeemable preferred stock, and $520 million in total stockholders'
equity.
* * *
In October 2016, Moody's Investors Service downgraded LSB
Industries, Inc.'s corporate family rating to B3 from B1 due to the
combined impacts of deterioration in industry conditions that are
expected to persist for longer than previously expected and
operational challenges at its facilities.
As reported by the TCR on Oct. 17, 2016, S&P Global Ratings lowered
its rating on Oklahoma City-based LSB Industries Inc. to 'CCC' from
'B-'. "Despite using the climate control business sale proceeds to
repay some debt, the company's metrics have weakened due to plant
operational issues and a depressed pricing environment, which have
led to depressed EBITDA expectations," said S&P Global Ratings
credit analyst Allison Schroeder.
LSB INDUSTRIES: Jack Golsen, et al,. Hold 10.8% Stake as of Nov. 3
------------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, these reporting persons disclosed beneficial ownership
of LSB Industries, Inc.'s common stock as of Nov. 3, 2016:
Shares Percentage
Beneficially of
Name Owned Shares
---- ------------- ------------
Jack E. Golsen 2,809,716 9.7%
Barry H. Golsen 2,705,754 9.4%
Golsen Family, L.L.C. 148,725 0.5%
SBL, L.L.C. 2,413,287 8.4%
Golsen Petroleum Corporation 417,288 1.5%
As of Nov. 3, 2016, the Reporting Persons may be deemed to
beneficially own an aggregate of 3,102,183 shares of Common Stock,
representing approximately 10.8% of the issued and outstanding
shares of the Company's Common Stock.
A full-text copy of the regulatory filing is available at:
https://is.gd/BCgQZI
About LSB Industries, Inc.
LSB Industries, Inc. and its subsidiaries are involved in
manufacturing and marketing operations. The Companies are
primarily engaged in the manufacture and sale of chemical products
and the manufacture and sale of water source and geothermal heat
pumps and air handling products.
LSB reported a net loss attributable to common stockholders of
$38.03 million in 2015, net income attributable to common
stockholders of $19.33 million in 2014 and net income attributable
to common stockholders of $54.66 million in 2013.
As of Sept. 30, 2016, LSB had $1.38 billion in total assets,
$727.61 million in total liabilities and $137.98 million in
redeemable preferred stock, and $520 million in total stockholders'
equity.
* * *
In October 2016, Moody's Investors Service downgraded LSB
Industries, Inc.'s corporate family rating to B3 from B1 due to the
combined impacts of deterioration in industry conditions that are
expected to persist for longer than previously expected and
operational challenges at its facilities.
As reported by the TCR on Oct. 17, 2016, S&P Global Ratings lowered
its rating on Oklahoma City-based LSB Industries Inc. to 'CCC' from
'B-'. "Despite using the climate control business sale proceeds to
repay some debt, the company's metrics have weakened due to plant
operational issues and a depressed pricing environment, which have
led to depressed EBITDA expectations," said S&P Global Ratings
credit analyst Allison Schroeder.
LSB INDUSTRIES: Posts $133.6 Million Net Income for Third Quarter
-----------------------------------------------------------------
LSB Industries, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $133.6 million on $80.26 million of net sales for the three
months ended Sept. 30, 2016, compared to a net loss of $33.76
million on $88.56 million of net sales for the three months ended
Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported net
income of $133.70 million on $289.2 million of net sales compared
to a net loss of $26.69 million on $347.7 million of net sales for
the same period during the prior year.
As of Sept. 30, 2016, LSB had $1.38 billion in total assets, $727.6
million in total liabilities and $137.98 million in redeemable
preferred stock, and $520 million in total stockholders' equity.
"As we previously announced, our third quarter 2016 results were
impacted by a combination of planned and unplanned maintenance
activities at our three primary chemical facilities and the
softening environment for our agricultural products," stated Daniel
Greenwell, LSB's president and CEO.
"Although our results for the third quarter were not what we had
initially anticipated heading in to the period, we utilized the
downtime at our three facilities to conduct additional inspections,
repairs and upgrades that we expect to improve facility performance
going forward. More specifically, we are expecting that our
ammonia plants at our three facilities will operate at an average
on-stream rate of 95% in 2017 as a result of the work we've done
over the past year. During the quarter we surpassed our initial
goal of reducing SG&A by identifying approximately $6 million in
savings annually, which we should benefit from for the full year of
2017. Finally, as we discussed at the end of the second quarter,
we deployed proceeds from the July 2016 sale of our Climate Control
Business to enhance our capital structure, reducing our total debt
by $100 million, and redeeming $80 million of preferred stock
(inclusive of accrued dividends). We anticipate that this
strengthening of our balance sheet will lower our annual interest
expense by approximately $7 million, reduce our dividends on
preferred stock by $10 million annually and add to our overall
financial flexibility. Collectively, we expect these plant
improvements and cost reduction actions to yield meaningful
improvement in revenue and EBITDA in 2017 translating into greater
value for our shareholders."
"Our El Dorado Facility's new ammonia plant was down for the second
half of July due to a lightning strike, and then after returning to
service, we took it down at other points during the quarter for
repairs and upgrades aimed at improving safety and reliability.
Our Cherokee and Pryor Facilities both underwent scheduled
Turnarounds in the quarter during which we also identified
opportunities to improve our existing preventative maintenance
programs, which we expect to enhance future performance of these
operations. In short, while our third quarter results were below
our forecast headed into the period, we believe that we have made
investments that will deliver favorable returns in 2017."
"With respect to our markets, the soft selling price environment
for our agricultural products persisted during the period, and we
expect modest change, other than perhaps short-term seasonal
uplifts, for the next several quarters. We believe that the
primary factor weighing on pricing is the additional ammonia and
upgraded product capacity expected to come online over the next few
quarters at several of our competitors' facilities. Ultimately, we
expect the domestic market and the market for exports to absorb
this incremental production and for pricing to reflect that;
however, in the near-term it remains an overhang."
"The outlook for our industrial end markets remains consistent with
recent quarters, as continued modest, gradual improvement of the
U.S. economy is supporting steady demand for the nitric acid and
ammonia we produce. Demand for our mining products, predominantly
low density ammonium nitrate (LDAN) and ammonium nitrate (AN)
solution, is likely to remain low for the foreseeable future due to
a combination of regulatory headwinds and soft pricing. While LDAN
will remain an important market for us, albeit smaller than in past
years, we continue to work on shifting some of our capacity at El
Dorado previously used to make LDAN towards high density ammonium
nitrate (HDAN) for agricultural use in order to fully leverage our
new ammonia plant at that facility."
As of Sept. 30, 2016, the Company's total cash was $183 million,
including approximately $107 million segregated for the redemption
of Senior Secured Notes.
Total long-term debt, including the current portion was $519.6
million at Sept. 30, 2016, compared to $520.4 million at Dec. 31,
2015. In July 2016, the Company received net cash proceeds of
approximately $349 million from the sale of the Climate Control
Business (an additional $7 million of proceeds was received in
October 2016). In September 2016, holders of our Senior Secured
Notes agreed to allow us to redeem a portion of the Series E
Redeemable Preferred and to redeem a portion of the Senior Secured
Notes and all of the 12% Senior Secured Notes. In September 2016,
we used $80 million to redeem a portion of the Series E Redeemable
Preferred (including accumulated dividends and participation rights
value). The aggregate liquidation value of the Series E Redeemable
Preferred was $156.4 million, inclusive of accrued dividends at
Sept. 30, 2016, of $16.6 million.
In October 2016, the Company used approximately $107 million to
redeem $50 million of the 7.75% Senior Secured Notes and all $50
million of the 12% Senior Secured Notes (including accrued interest
and the redemption prices). Currently, the Company has $375
million of Senior Secured Notes at 8.5% and approximately $57
million of other debt outstanding. The Company expects annual
interest going forward, on the current level of debt to be
approximately $35 million.
The Company's Working Capital Revolver Loan was undrawn at
Sept. 30, 2016. Borrowing availability, which is tied to eligible
accounts receivable and inventories, was approximately $23 million
at Sept. 30, 2016. In addition to normal low seasonal demand for
nitrogen fertilizer products in the third quarter, several of our
chemical facilities had planned and unplanned downtime during the
quarter. The normal low seasonal demand combined with planned and
unplanned downtime resulted in lower eligible collateral, such as
accounts receivable and inventory, for the Company's borrowing base
availability during the quarter. Interest expense, net of
capitalized interest, for the third quarter of 2016 was $13.3
million compared to $0.9 million for the same period in 2015. The
capitalization of interest related to investments in the El Dorado
ammonia plant ceased when the plant went into service in May 2016,
resulting in an increase in interest expense during the quarter.
Capital additions were approximately $12 million in the third
quarter of 2016. Planned capital additions for the remainder of
2016, in the aggregate, are estimated to be approximately $14
million. For the full year of 2017, maintenance capital additions
related to maintaining and enhancing safety and reliability at our
facilities is expected to be between $30 million and $35 million.
With the finalization of the El Dorado expansion and the sale of
the Climate Control Business, the Company expects consolidated
depreciation and amortization to be $70 million to $75 million in
2017.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/J8MhN9
About LSB Industries, Inc.
LSB Industries, Inc. and its subsidiaries are involved in
manufacturing and marketing operations. The Companies are
primarily engaged in the manufacture and sale of chemical products
and the manufacture and sale of water source and geothermal heat
pumps and air handling products.
LSB reported a net loss attributable to common stockholders of
$38.03 million in 2015, net income attributable to common
stockholders of $19.33 million in 2014 and net income attributable
to common stockholders of $54.66 million in 2013.
* * *
In October 2016, Moody's Investors Service downgraded LSB's
corporate family rating to 'B3' from 'B1' due to the combined
impacts of deterioration in industry conditions that are expected
to persist for longer than previously expected and operational
challenges at its facilities.
In October 2016, S&P Global Ratings lowered its rating on Oklahoma
City-based LSB to 'CCC' from 'B-'. "Despite using the climate
control business sale proceeds to repay some debt, the company's
metrics have weakened due to plant operational issues and a
depressed pricing environment, which have led to depressed EBITDA
expectations," said S&P Global Ratings credit analyst Allison
Schroeder.
LUCAS ENERGY: Amends 6 Million Shares Resale Prospectus with SEC
----------------------------------------------------------------
Lucas Energy, Inc. filed with the Securities and Exchange
Commission an amended Form S-3 registration statement relating to
the resale at various times, by Discover Growth Fund of up to
6,000,000 shares of Common Stock, par value $0.001 per share,
consisting of (i) 1,618,462 shares of Common Stock issuable upon
conversion of Series C redeemable convertible preferred stock at a
conversion price equal to $3.25 per share and (ii) 3,381,538
additional shares of Common Stock that the Company may issue, at
its sole discretion in lieu of cash, as conversion premiums or in
payment of dividends on such Series C Preferred Stock.
The Company will not receive any of the proceeds from the sale of
the Shares by the Selling Stockholder.
The Company hase 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 Nov. 2 , 2016, the Company's common stock closed
at $ 1.04 per share.
A full-text copy of the Form S-3 prospectus is available at:
https://is.gd/ml8vml
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 $14.7 million in total
assets, $12.9 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.
MASON TEMPLE: Case Summary & 14 Unsecured Creditors
---------------------------------------------------
Debtor: Mason Temple Church of God in Christ, Inc.
6098 N. 35th Street
Milwaukee, WI 53209
Case No.: 16-30931
Chapter 11 Petition Date: November 7, 2016
Court: United States Bankruptcy Court
Eastern District of Wisconsin (Milwaukee)
Judge: Hon. Michael G. Halfenger
Debtor's Counsel: Derek H. Goodman, Esq.
THE LAW OFFICES OF JONATHAN GOODMAN
788 N. Jefferson Street Suite 707
Milwaukee, WI 53202
Tel: 414-276-6760
Fax: 414-287-1199
E-mail: derek@jgoodmanlaw.com
- and -
Jonathan V. Goodman, Esq.
THE LAW OFFICES OF JONATHAN V. GOODMAN
Suite 707
788 North Jefferson Street
Milwaukee, WI 53202-3739
Tel: 414-276-6760
Fax: 414-287-1199
E-mail: jgoodman@ameritech.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Osie Tatum, Jr., pastor and trustee.
A copy of the Debtor's list of 14 unsecured creditors is available
for free at http://bankrupt.com/misc/wieb16-30931.pdf
MCCLATCHY CO: Incurs $9.80 Million Net Loss in Third Quarter
------------------------------------------------------------
The McClatchy Company filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $9.80 million on $234.7 million of net revenues for the quarter
ended Sept. 25, 2016, compared to a net loss of $1.14 million on
$251.21 million of net revenues for the quarter ended Sept. 27,
2015.
For the nine months ended Sept. 25, 2016, the Company reported a
net loss of $37.27 million on $714.9 million of net revenues
compared to a net loss of $309.0 million on $770.7 million of net
revenues for the nine months ended Sept. 27, 2015.
As of Sept. 25, 2016, McClathcy Co had $1.83 billion in total
assets, $1.68 billion in total liabilities and $155.5 million in
stockholders' equity.
The Company's cash and cash equivalents were $23.2 million as of
Sept. 25, 2016, compared to $19.6 million as of Sept. 27, 2015, and
$9.3 million as of Dec. 27, 2015.
"We expect that most of our cash and cash equivalents, and our cash
generated from operations, for the foreseeable future will be used
to repay debt, pay income taxes, fund our capital expenditures,
invest in new revenue initiatives, digital investments and
enterprise-wide operating systems, make required contributions to
the Pension Plan, repurchase stock, and other corporate uses as
determined by management and our Board of Directors. As of
September 25, 2016, we had approximately $906.5 million in total
aggregate principal amounts of debt outstanding, consisting of
$34.7 million of our 5.750% notes due in 2017 (also see Note 4),
$506.4 million of our 9.00% Notes due 2022 and $365.4 million of
our notes maturing in 2027 and 2029. We expect to continue to
opportunistically repurchase our debt from time to time if market
conditions are favorable and we also expect that we will refinance
a significant portion of this debt prior to the scheduled maturity
of such debt. However, we may not be able to do so on terms
favorable to us or at all. We may also be required to use cash on
hand or cash from operations to meet these obligations. We believe
that our cash from operations is sufficient to satisfy our
liquidity needs over the next 12 months, while maintaining adequate
cash and cash equivalents."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/8btgfp
About The McClatchy Company
Sacramento, Cal.-based The McClatchy Company (NYSE: MNI)
-- http://www.mcclatchy.com/-- is a media company that provides
both print and digital news and advertising services. Its
operations include 30 daily newspapers, community newspapers,
websites, mobile news and advertising, niche publications, direct
marketing and direct mail services. Its owned newspapers include,
among others, the (Fort Worth) Star-Telegram, The Sacramento Bee,
The Kansas City Star, the Miami Herald, The Charlotte Observer,
and The (Raleigh) News & Observer. The Company holds interest in
digital assets which include CareerBuilder, LLC, Classified
Ventures, LLC, HomeFinder, LLC, and Wanderful Media.
McClatchy reported a net loss of $300 million on $1.05 billion of
net revenues for the year ended Dec. 27, 2015, compared to net
income of $374 million on $1.14 billion of net revenues for the
year ended Dec. 28, 2014.
* * *
McClatchy carries a 'Caa1' corporate family rating from Moody's
Investors Service. In May 2011, Moody's changed the rating
outlook from stable to positive following the company's
announcement that it closed on the sale of land in Miami for
$236 million. The outlook change reflects Moody's expectation
that McClatchy will utilize the net proceeds to reduce debt,
including its underfunded pension position, which will reduce
leverage by approximately half a turn and lower required
contributions to the pension plan over the next few years.
As reported by the TCR on April 2, 2014, Standard & Poor's Ratings
Services affirmed all ratings on U.S. newspaper company The
McClatchy Co., including the 'B-' corporate credit rating, and
revised the rating outlook to stable from positive. The outlook
revision to stable reflects S&P's expectation that the
timeframe for a potential upgrade lies beyond the next 12 months,
and could also depend on the company realizing value from its
digital minority interests.
MESOBLAST LIMITED: Had $60.3 Million in Cash as of Sept. 30
-----------------------------------------------------------
Mesoblast Limited filed with the Securities and Exchange Commission
a quarterly report for entities subject to Listing Rule 4.7B for
the period ended Sept. 30, 2016.
At the beginning of the quarter, the Company had US$80.93 millin in
cash and cash equivalents.
For the current quarter, Mesoblast reported net cash used in
operating activities of US$20.82 million, net cash used in
investing activities of US$290,000 and net cash used in financing
activities of US$55,000.
At the end of the quarter, the Company had US$60.35 million in cash
and cash equivalents.
A full-text copy of the Quarterly Report is available for free at:
https://is.gd/0O6nry
About Mesoblast Ltd.
Melbourne, Australia-based Mesoblast Limited (ASX:MSB; Nasdaq:MESO)
is a global leader in developing innovative cell-based medicines.
The Company has leveraged its proprietary technology platform,
which is based on specialized cells known as mesenchymal lineage
adult stem cells, to establish a broad portfolio of late-stage
product candidates. Mesoblast's allogeneic, 'off-the-shelf' cell
product candidates target advanced stages of diseases with high,
unmet medical needs including cardiovascular diseases,
immune-mediated and inflammatory disorders, orthopedic disorders,
and oncologic/hematologic conditions.
As of June 30, 2016, Mesoblast had $684.0 million in total
assets, $155.9 million in total liabilities and $528.2 million in
total equity.
Mesoblast reported a loss before income tax of $90.82 million for
the year ended June 30, 2016, compared to a loss before income
tax of $96.24 million for the year ended June 30, 2015.
PricewaterhouseCoopers, in Melbourne, Australia, issued a "going
concern" qualification on the consolidated financial statements
for the year ended June 30, 2016, citing that the Company has
suffered recurring losses from operations that raise substantial
doubt about its ability to continue as a going concern.
MISSION NEWENERGY: BDO Audit Expresses Going Concern Doubt
----------------------------------------------------------
Mission NewEnergy Limited filed with the U.S. Securities and
Exchange Commission its annual report on Form 20-F, disclosing a
net loss of $2.33 million on $41,960 of total revenue for the
fiscal year ended June 30, 2016, compared with net income $28.36
million on $7.27 million of total revenue for the fiscal year ended
June 30, 2015.
BDO Audit (WA) Pty. Ltd. issued a "going concern" qualification on
the consolidated financial statements for the fiscal year ended
June 30, 2016, stating that the consolidated entity has suffered
recurring losses from operations that raises substantial doubt
about its ability to continue as a going concern.
At June 30, 2016, the Company had total assets of $6.17 million,
total liabilities of $1.40 million, all current, and $4.76 million
in total stockholders' equity.
A full-text copy of the Form 20-F is available at:
http://bit.ly/2e5vGDS
Mission NewEnergy Limited is an Australia-based renewable energy
company. The Company operates a biodiesel plant in Malaysia. The
Company's segments include Biodiesel Refining and Corporate. The
Company owns an interest in a biodiesel refinery in Malaysia, which
has a nameplate capacity of approximately 250,000 tons per year.
The Company's subsidiaries include Mission Biofuels Sdn Bhd and M2
Capital Sdn Bhd.
MONAKER GROUP: Monaco Investment, et al., Own 32.2% of Stock
------------------------------------------------------------
In a Schedule 13D filed with the Securities and Exchange
Commission, Monaco Investment Partners II, LP, the Donald P. Monaco
Insurance Trust and Donald P. Monaco disclosed that as of Oct. 28,
2016, they beneficially own in aggregate 3,762,066 shares of Common
Stock; 1,075,000 shares of Series A Preferred Stock; and
109,112,066 total voting shares, representing 32.2% of the
outstanding Common Stock; 57.5% of the outstanding Series A
Preferred Stock; and 55.5% of the outstanding total voting shares.
As of Oct. 28, 2016, MI Partners beneficially owns in aggregate
1,855,754 shares of Common Stock; 575,000 shares of Series A
Preferred Stock; and 58,205,754 total voting shares, representing
17.4% of the outstanding Common Stock; 30.8% of the outstanding
Series A Preferred Stock; and 29.6% of the outstanding total voting
shares.
As of Oct. 28, 2016, the Trust beneficially owns in aggregate
1,906,292 shares of Common Stock; 500,000 shares of Series A
Preferred Stock; and 50,906,292 total voting shares, representing
18.1% of the outstanding Common Stock; 26.7% of the outstanding
Series A Preferred Stock; and 25.9% of the outstanding total voting
shares.
Mr. Monaco may be deemed to have shared power with MI Partners and
the Trust, to vote and dispose of the securities reported in this
Schedule 13D beneficially owned by MI Partners and the Trust,
respectively.
A full-text copy of the regulatory filing is available at:
https://is.gd/NO4xfP
About Monaker Group
Monaker Group, Inc., formerly known as Next 1 Interactive, Inc., is
a digital media marketing company focusing on lifestyle enrichment
for consumers in the travel, home and employment sectors. Core to
its marketing services are key elements including proprietary
video-centered technology and established partnerships that enhance
its reach. Video is quickly becoming consumer's preferred method
of searching and educating themselves prior to purchases.
Monaker's video creation technology and film libraries combine to
create lifestyle video offerings that can be shared both to its
customers and through trusted distribution systems of its major
partners. The end result is better engagement with consumers who
gain in-depth information on related products and services helping
to both inform and fulfill purchases. Unlike traditional marketing
companies that simply charge for advertising creation, Monaker
holds licenses and/or expertise in the travel, real estate and
employment sectors allowing it to capture fees at the point of
purchase while the majority of transactions are handled by
Monaker's partners. This should allow the company to capture
greater revenues while eliminating much of the typical overhead
associated with fulfillment. Monaker core holdings include
Maupintour, NameYourFee.com, RealBiz Media Group - helping it to
deliver marketing solutions to consumers at home, work and play.
Monaker Group reported a net loss of $4.55 million on $544,700 of
total revenues for the year ended Feb. 29, 2016, compared to a net
loss of $2.98 million on $1.09 million of total revenues for the
year ended Feb. 28, 2015.
LBB & Associates Ltd., LLP, in Houston, Texas, in its report on the
consolidated financial statements for the year ended Feb. 29, 2016,
raised substantial doubt about the Company's ability to continue as
a going concern.
MUNHYEON RO: Disclosures OK'd; Plan Confirmation Hearing on Dec. 1
------------------------------------------------------------------
The Hon. Stephen L. Johnson of the U.S. Bankruptcy Court for the
Northern District of California has approved Munhyeon Ro and Jeong
Hee Ro's disclosure statement aspects of combined plan and
disclosure statement dated Oct. 20, 2016.
The hearing on confirmation of the Debtors' Combined Plan and
Disclosure Statement dated Oct. 20, 2016 is set for Dec. 1, 2016,
at 1:30 p.m.
Objections to the confirmation, if any, must be filed by Nov. 23,
2016.
The deadline to vote to accept or reject the Plan will be Nov. 23,
2016.
The Plan was filed by the Debtor's counsel:
Lars T. Fuller, Esq.
Sam Taherian, Esq.
THE FULLER LAW FIRM, P.C.
60 No. Keeble Avenue
San Jose, CA 95126
Tel: (408)295-5595
Fax: (408) 295-9852
E-mail: Fullerlawfirmecf@aol.com
Munhyeon Ro and Jeong Hee Ro filed for Chapter 11 bankruptcy
protection (Bankr. N.D. Cal. Case No. 16-51961) on July 2, 2016.
Lars T. Fuller, Esq., at The Fuller Law Firm serves as the Debtor's
bankruptcy counsel.
NAVIDEA BIOPHARMACEUTICALS: Reports 2016 Q3 Financial Results
-------------------------------------------------------------
Navidea Biopharmaceuticals reported a net loss of $59,536 on $8.49
million of total revenue for the three months ended Sept. 30, 2016,
compared to a net loss of $8.07 million on $3.97 million of total
revenue for the three months ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $10.42 million on $18.61 million of total revenue
compared to a net loss of $25.05 million on $8.95 million of total
revenue for the same period during the prior year.
As of Sept. 30, 2016, Navidea had $11.18 million in total assets,
$74.96 million in total liabilities and a total stockholders'
deficit of $63.77 million.
"We ended the third quarter with a clear plan for Navidea's future.
With our previously announced Letter of Intent with Cardinal
Health, Inc., we believe that we have successfully identified an
arrangement to extinguish the CRG (Capital Royalty Partners II L.P)
debt and to focus Navidea on several attractive development efforts
outside of lymphatic mapping, lymph node biopsy and the diagnosis
of metastatic spread to lymph nodes for the staging of cancer in
North America. The contemplated transaction with Cardinal Health,
as well as the impending launch of Lymphoseek in Europe by our
partner SpePharm AG (Norgine BV), should provide additional income
for many years to come," said Dr. Michael Goldberg, Navidea
president and CEO. "Our focus moving forward will be on expansion
and development of Manocept-based diagnostic markets initially in
rheumatoid arthritis and cardiovascular disease, as well as
developing our immunotherapeutic platform with a strong preclinical
pipeline for cancer, autoimmune, inflammatory and infectious
diseases."
"We are pleased with our financial performance despite the
significant disruption in our organization caused by the ongoing
litigation with CRG. Our results demonstrate our commitment to our
commercial efforts and controlling our operating expenses," said
Jed Latkin, interim chief operating officer and chief financial
officer at Navidea.
A full-text copy of the press release is available at:
https://is.gd/yEXMqN
About Navidea
Navidea Biopharmaceuticals, Inc. is a biopharmaceutical company
focused on the development and commercialization of precision
immunodiagnostic agents and immunotherapeutics. Navidea is
developing multiple precision-targeted products based on our
Manocept platform to help identify the sites and pathways of
undetected disease and enable better diagnostic accuracy, clinical
decision-making, targeted treatment and, ultimately, patient care.
As of June 30, 2016, Navidea had $8.68 million in total assets,
$72.58 million in total liabilities and a $63.90 million total
stockholders' deficit.
Navidea reported a net loss of $27.56 million in 2015, a net loss
of $35.72 million in 2014 and a net loss of $42.69 million in 2013.
NEW ENGLAND COMPOUNDING: Shareholder Seeks Probation
----------------------------------------------------
Brandon Lowrey, writing for Bankruptcy Law360, reported that Carla
R. Conigliaro, a majority shareholder in the now-bankrupt New
England Compounding Center and her husband, Douglas A. Conigliaro
-- who admitted to making illegal cash withdrawals following a
deadly meningitis outbreak in 2012 caused by fungus-tainted steroid
injections the company distributed -- have urged a Massachusetts
federal judge to keep them out of prison. The Conigliaros were
charged in December 2014 with making hundreds of withdrawals at
three separate banks that were structured to avoid federal currency
transaction reporting requirements.
About New England Compounding Pharmacy
New England Compounding Pharmacy Inc., filed a Chapter 11 petition
(Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012,
after a meningitis outbreak linked to an injectable steroid,
methylprednisolone acetate ("MPA"), manufactured by NECC, killed
39 people and sickened 656 in 19 states, though no illnesses have
been reported in Massachusetts. The Debtor owns and operates the
New England Compounding Center is located in Framingham, Mass. In
October 2012, the company recalled all its products, not just
those associated with the outbreak.
Paul D. Moore, Esq., at Duane Morris LLP, in Boston, has been
appointed as Chapter 11 Trustee of NECC. He is represented by
Jeffrey D. Sternklar, Esq., at DUANE MORRIS LLP.
An Official Committee of Unsecured Creditors appointed in the case
has been represented by BROWN RUDNICK LLP's William R. Baldiga,
Esq., Rebecca L. Fordon, Esq., Jessica L. Conte, Esq., and
David J. Molton, Esq.
ORBITAL ATK: Moody's Affirms Ba2 CFR & Changes Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service has changed the rating outlook of Orbital
ATK, Inc. to negative from stable. All other ratings, including
the Corporate Family Rating of Ba2, have been affirmed.
RATING RATIONALE
The outlook changes reflects increasing uncertainty as OA's
financial statement filing delay continues, that began in August,
2016 when the second quarter 2016 results were due. OA has since
obtained another bank facility covenant waiver that extends
financial reporting requirements of the credit through Feb. 14,
2017. The waiver sustained revolver borrowing access at least
through that time.
OA will need to restate prior financials, likely as far back as
fiscal year 2013. As well, OA indicates that the third quarter
2016 financials will be delayed.
Moody's notes that based on terms of one of OA's bond indentures,
the company could be given notice of failure to meet the financial
reporting covenant as soon as mid-November. After which time OA
would have 60 days to provide financial statements. As well,
bondholders may decide not to provide notice of non-compliance in
mid-November. A liquidity risk is developing as a financial
reporting delay continues.
The accounting issue behind the delay/restatement relates to a
forward loss provision wherein a pre-tax charge of $350 million is
expected, retained earnings down $220 million. While a substantial
amount, OA reported $2 billion of book equity in April. The
accounting problem has been described as relating to a single
contract ($2.3 billion, 10-year small caliber ammunition contract
with the US Army).
OA held $60 million in cash at July 3, 2016. In Moody's view, the
company's cash is likely not much higher with OA's focus on using
free cash flow for stock repurchases. The revolver ($1 billion, of
which about $125 million was borrowed and $130 million was utilized
by letters of credit at April 2016), is part of a broader facility
that includes OA's term loan. With a low cash balance, OA is
expected to draw under its revolver intra-quarter for operational
liquidity.
The Ba2 CFR anticipates that OA should conclude its financial
restatement work and provide the corrected and past due financials
by 2016 year-end. Moreover, contract bookings and operational
results, aside from news of the the forward loss charge, have been
good in 2016. Moody's expects debt/EBITDA at the mid-3x level with
EBIT/interest at mid-4x and retained cash flow to debt at about 20%
for OA in 2017.
Progress on cost reduction initiatives following the combination
with Orbital Sciences Corporation and spin-off of Vista Outdoor
Inc. in February 2015 improved profits, which lowered debt to
EBITDA as expected. OA's contract execution track record, product
diversity and healthy R&D spending rate with emphasis on new
product development favors its future as a prime within
aerospace/defense.
The rating will be under pressure and exposed to risk of
downgrade -- potentially multiple notch -- if the financial
reporting delay is expected to continue beyond mid-January, or if
further liquidity pressures develop. Expectation of debt/EBITDA
above 4x, weaker free cash flow for a sustained period of time,
backlog erosion or further material charges to income particularly
from negative contract developments could also pressure the rating
down.
Upward rating momentum would depend on expectation of backlog
gains, of mid-single digit percentage or better revenue growth,
EBITDA margin at 15% or higher, debt/EBITDA at or below 3x,
FCF/debt above 10% and good liquidity.
Outlook Actions:
Issuer: Orbital ATK, Inc.
Outlook, Changed To Negative From Stable
Affirmations:
Issuer: Orbital ATK, Inc.
Probability of Default Rating, Affirmed Ba2-PD
Speculative Grade Liquidity Rating, Affirmed SGL-3
Corporate Family Rating, Affirmed Ba2
Senior Secured Bank Credit Facility, Affirmed Baa3 (LGD2)
Senior Unsecured Regular Bond/Debentures, Affirmed Ba3 (LGD5)
The principal methodology used in these ratings was Global
Aerospace and Defense Industry published in April 2014.
Orbital ATK, Inc., headquartered in Dulles, Virginia, designs,
builds and delivers space, defense and aviation-related systems as
a prime contractor and as a merchant supplier. The company's three
business segments are: flight systems, defense systems, and space
systems. The company has estimated its revenues for 2016 at $4.45
billion to $4.5 billion.
PENGROWTH ENERGY: In Talks with Lenders Over Covenant Amendments
----------------------------------------------------------------
Pengrowth Energy Corporation on Nov. 2, 2016, disclosed that it
delivered strong, consistent operating results highlighted by
stable production, continued cost reductions, minimal capital
expenditures, and increased Lindbergh reserves.
Pengrowth's focus on all cost structures was demonstrated again in
the third quarter, where operating expenses are now expected to
come in approximately $72 million below original guidance (a
further reduction of $7 million since the second quarter), which is
trending towards the lower end of updated lower guidance. Year to
date cash general and administrative (G&A) expenses fell by $18.6
million compared to 2015, continuing the trend from the second
quarter, while year to date transportation expenses declined $10.4
million year over year.
The Company's production performance continues to deliver
exceptional results given a capital program focused only on asset
maintenance with no active drilling program, allowing the Company
to build cash reserves. After accounting for the impact of
divested properties and scheduled turnaround activities,
Pengrowth's production has remained essentially unchanged from year
end 2015, demonstrating the low decline nature of Pengrowth's asset
base.
"Our relentless focus on both our cost structures and asset
performance continues to deliver significant and sustainable
results for the organization," said Derek Evans, President and
Chief Executive Officer of Pengrowth. "We are in discussions with
our note holders and bank lenders to negotiate additional financial
flexibility for the Company as we work to reduce our debt
position."
Key Developments:
-- Year to date, Pengrowth has successfully reduced its total
debt by approximately $203 million and, year over year, total debt
has been reduced by approximately $416 million.
-- Exited the quarter with $139.5 million of cash on hand and
expect to have $200 million of cash on hand by the end of the
year.
-- The Company is in discussions with lenders of its syndicated
bank facility and with the holders of its senior term notes to seek
additional financial flexibility under the terms of the unsecured
notes and credit facilities.
-- Achieved further improvements in operating expenses, with
full year anticipated operating expenses being $72 million below
original guidance, a $7 million improvement from the second quarter
and trending to the lower end of guidance.
-- Continued improvements in year to date cash G&A and
transportation expenses, with both down $18.6 million and $10.4
million, respectively, compared to the same period of 2015.
-- Realized a total of $104.4 million of hedging gains in the
quarter, including $41.6 million from the monetization of the 2018
and 2019 commodity hedge contracts.
-- Increased funds flow from operations by approximately 38
percent from the previous quarter to $122.7 million or $0.22 per
share, including the monetization of the 2018 and 2019 commodity
hedge contracts for $41.6 million.
-- Subsequent to quarter end, On October 6, 2016, Pengrowth
announced an update to its reserves and resources at the Lindbergh
thermal project, highlighted by a 43 percent and 21 percent
increase to Proved and Proved plus Probable reserves, respectively,
since December 31, 2015. The update also included a 63 percent
increase in the net present value of the Lindbergh reserves and
resources, using a 10 percent discount rate, based on GLJ's October
1, 2016 price forecast and equating to a value of $4.66 per share.
Operating Results:
Pengrowth delivered average daily production of 55,137 barrel of
oil equivalent (boe) per day in the third quarter, a decline of
approximately three percent from the second quarter mainly due to
production interruptions from planned maintenance at Carson Creek
and unplanned maintenance at the Lindbergh thermal project.
Production for the first nine months of the year averaged 57,966
boe per day, which represents production on the high end of
corporate guidance of 56,000 to 58,000 boe per day. Production
performance in 2016, after taking account of asset sales,
maintenance and turnaround activities, has remained essentially
unchanged from year end 2015, underlying the stability in corporate
production has been the low decline nature of the asset base
coupled with the optimization efforts of Pengrowth's operations
teams.
Lindbergh third quarter production averaged 15,190 barrels per day
(bbl per day) at an average steam oil ratio (SOR) of 2.46.
Production in the quarter was two percent below second quarter
production due to an unscheduled maintenance outage that required
the complete shutdown of the facility for two days in September and
extending for one day into October and a higher frequency of pump
changes in the quarter, as the pumps reach their end of life. The
net impact of these interruptions resulted in approximately 450 bbl
per day of lost production during the quarter and has reduced the
average annual production outlook from Lindbergh to approximately
15,600 bbl per day for the year.
Financial Resources and Liquidity
Pengrowth was in compliance with all financial covenants under its
senior unsecured notes and credit facilities as at September 30,
2016. The Company anticipates it will remain in compliance with
such covenants for the remainder of 2016 and into the middle of
2017. However, absent an improvement in oil and natural gas
prices, Pengrowth may not remain in compliance with certain
financial covenants in its senior unsecured notes and credit
facilities during the second half of 2017. Pengrowth is
proactively in discussions with the lenders of its syndicated bank
facility and with the holders of its senior term notes in an effort
to seek covenant amendments to provide the Company with additional
financial flexibility as it works to reduce its debt position. If
the Company is unable to obtain a waiver or relaxation of its debt
covenants and is not able to remain in compliance with them, the
senior unsecured notes and credit facilities may become due on
demand and the undrawn portion of the credit facility may no longer
be available to the Company.
The Company's cash position at the end of the third quarter
increased by $85.4 million to a total of $139.5 million of cash on
hand. The Company has no scheduled debt maturities prior to the
approximate $127 million of convertible debentures which are due on
March 31, 2017 and expects to have $200 million of cash on the
balance sheet at the end of the year.
Pengrowth's $1.0 billion committed revolving credit facility
remained undrawn at the end of the third quarter, resulting in the
Company's total debt being essentially unchanged from the second
quarter 2016, other than pursuant to the impacts of foreign
exchange movements on its US dollar denominated term debt. The
majority of Pengrowth's long term debt and interest payments are
denominated in U.S. dollars and, as such, are subject to
fluctuations in the exchange rate between the Canadian and U.S.
dollars. Total debt amounted to Cdn $1.65 billion as at September
30, 2016 compared to Cdn $1.63 billion at June 30, 2016.
Asset Monetization
The Company continues to evaluate asset sale opportunities. While
the asset sale market remains somewhat challenged given the current
commodity price environment, Pengrowth will continue with its
marketing efforts on the assets it has historically had in the
market, and all other monetization opportunities, including risk
management contract monetization, will be pursued. The Company
remains confident in its ability to complete additional
transactions to further advance its debt reduction objectives.
Risk Management
Pengrowth has realized a total of $308.5 million ($19.42 per boe)
from its commodity risk management program for the first nine
months ended September 30, 2016. For the fourth quarter, Pengrowth
remains well hedged with 23,000 bbl per day of crude oil hedged at
Cdn $83.27 per bbl and 128 million cubic feet (MMcf) per day of
natural gas hedged at Cdn $3.30 per Mcf.
As of September 30, 2016, Pengrowth had 18,500 bbl per day of
expected 2017 crude oil hedged, using WTI fixed price contracts at
an average price of Cdn $65.54 per bbl and 105 MMcf per day of
expected 2017 natural gas hedged using an AECO fixed price of Cdn
$3.37 per Mcf. Subsequent to the end of the quarter, the Company
further monetized a portion of its 2017 commodity risk management
contracts for proceeds of $9.6 million. Following these
monetizations, the Company had 15,000 bbl per day of oil hedged at
an average price of Cdn $62.54 per bbl and 105 MMcf per day of
natural gas hedged at an average price of Cdn $3.37 per Mcf. The
remaining commodity and foreign exchange hedges in place as at
October 31, 2016, had unrealized mark to market value of
approximately $108 million.
Outlook
The continued strong corporate production performance despite
minimal capital spending in 2016 demonstrates the quality and
resilience of Pengrowth's producing assets. This stable base will
backstop the further development of our deep inventory of thermal
and natural gas opportunities as the business climate improves.
The Company is in discussions with lenders of its syndicated bank
facility and with the holders of its senior term notes in an effort
to gain additional financial flexibility during this challenging
environment and looks forward to updating shareholders regarding
these discussions in the future.
About Pengrowth
Pengrowth Energy Corporation is an intermediate Canadian producer
of oil and natural gas, headquartered in Calgary, Alberta.
Pengrowth's assets include the Lindbergh thermal oil, Cardium light
oil, Swan Hills light oil and the Groundbirch and Bernadet Montney
gas projects. Pengrowth's shares trade on both the Toronto Stock
Exchange under the symbol "PGF" and on the New York Stock Exchange
under the symbol "PGH".
PULMATRIX INC: Funding Problems Raises Going Concern Doubt
----------------------------------------------------------
Pulmatrix, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net loss
of $3.16 million on $61,000 of revenues for the three months ended
September 30, 2016, compared to a net loss of $4.93 million on
$651,000 of revenues for the same period in 2015.
The Company's balance sheet at September 30, 2016, showed total
assets of $25.48 million, total liabilities of $8.01 million and
stockholders' equity of $17.47 million.
At September 30, 2016, the Company had unrestricted cash and cash
equivalents of $7,313, an accumulated deficit of $146,116 and
working capital of $4,230. The Company will be required to raise
additional capital within the next year to continue the development
and commercialization of current product candidates and to continue
to fund operations at the current cash expenditure levels.
The Company's ability to continue as a going concern is dependent
upon its ability to obtain additional equity or debt financing and,
ultimately, to generate revenue. Those factors raise substantial
doubt about the Company's ability to continue as a going concern.
A full-text copy of the Company's Form 10-Q is available at:
https://is.gd/krZf0T
Pulmatrix, Inc., is a clinical stage biopharmaceutical company
developing inhaled therapies to address serious pulmonary disease.
The Company’s product pipeline is focused on advancing treatments
for rare diseases, including PUR1900, an inhaled anti-fungal for
patients with lung disease, including cystic fibrosis. In addition,
the Company focuses on pulmonary diseases through collaboration
with partners, including PUR0200, a generic in clinical development
for chronic obstructive pulmonary disease.
PURPLE TOOTH: Asks for Access to IRS Cash Collateral
----------------------------------------------------
Purple Tooth Society, LLC, filed with the U.S. Bankruptcy Court for
the Eastern District of California a motion to use cash collateral
of the Internal Revenue Service for November and December
The Debtor's largest creditor is the Internal Revenue Service, who
is owed payroll taxes in the approximate amount of $750,000 for
various tax years. Multiple tax liens have been filed by the IRS
and in the past six-to-eight months, the Debtor, and or its
representatives, have been in regular contact with the IRS. During
the course of these contacts, the Debtor and the IRS agreed that as
to an alternative to the business being shut down pursuant to the
collection of back taxes owed to the IRS, a Chapter 11 case could
be filed. This case is therefore commenced in an effort to
promptly propose a Chapter 11 plan of reorganization that would pay
the outstanding taxes consistent with the provisions of 11 U.S.C.
Section 1129(a)(9)(C).
The Debtor requires an order authorizing the use of post-petition
cash on an emergency basis arising from restaurant sales in the
amount of $11,500 in payroll due and payable on Nov. 5, 2016, and
$6,500 in food purchases, also on Nov. 5, 2016. The Debtor
requests that in addition to the order authoring the expenditures
on Nov. 5 that the Court authorize expenditures for the month of
November 2016 and December 2016 pursuant to the monthly expense
report. All expenses detailed in the monthly expense report are
ordinary and necessary expenses required to operate the Valentien
Restaurant.
The Debtor's counsel prepared and forwarded a proposed stipulation
for use of cash collateral over the past few weeks attempting to
obtain the consent of the IRS to the use of cash collateral prior
to filing. However, absent a case number, the IRS would not assign
the case to a representative with authority to enter into a cash
collateral stipulation.
The Debtor will agree to the following as a condition to the use of
the cash collateral:
a. Use of cash collateral may be renewed upon subsequent
stipulation with the IRS.
b. The Debtor will submit an updated budget with supporting
documentation to counsel for the IRS on or before January 1, 2017
c. A replacement lien on the Debtor's post petition cash
receipts will be ordered as a condition to the use of cash
collateral.
d. The Debtor will submit periodic detailing the amount of
existing original and replacement collateral on a quarterly basis.
e. The IRS may examine the Debtor's books and records upon one
week notice.
f. The Debtor will make monthly adequate protection payments to
the IRS of $4,000. The first payment will be received on or before
Nov. 30, 2016 and be payable on or before the last day of each
month thereafter.
g. All payments will be made payable to the "United States
Treasury," and state in the memo line the Debtor's name and case
number, and be directed to such address as directed by the IRS.
h. All payments made will be deemed paid on the date received.
i. All amounts paid pursuant will be credited against the
prepetition secured tax liabilities of the Debtor or to
postpetition interest thereon, at the IRS' discretion.
j. As further adequate protection, the IRS will receive a
replacement lien secured with first priority lien on all
post-petition cash, and all other property acquired by the Debtor
up to the full extent of the value of its pre-petition lien(s). The
lien will be in addition to any other liens of the IRS against the
assets and property of the Debtor as of the petition date.
k. The replacement liens are valid, perfected and enforceable
and will not be subject to dispute, avoidance, or subordination and
those replacement liens need not be subject to additional
recording. The IRS is authorized to file a certified copy of the
cash collateral order and any other necessary and related
documents.
l. The Debtor must remain postpetition current on all filing
requirements and pay all postpetition taxes as they come due, this
includes timely making federal payroll tax deposits and estimated
income tax payments.
m. To the extent the Debtor fails to timely pay any postpetition
tax, the IRS is granted relief from stay, upon filing a declaration
and lodging an order, to file a notice of federal tax lien with the
appropriate recording offices for the delinquent postpetition
period.
n. If the Debtor fails to make any payment of tax to the IRS
required under an order approving use of cash collateral, within 10
days of the due date of such provision, then the United States may
declare the Debtor is in material default
o. If the IRS declares the Debtor is in default of the Debtor's
obligations under an order approving the use of cash collateral,
the IRS must serve written notice of default to the Debtor, and any
attorney for the Debtor.
p. The obligations and replacement liens will continue in full
force and effect in the event of a dismissal of the case.
A full-text copy of the Debtor's Motion is available for free at:
http://bankrupt.com/misc/caeb16-14004_3_Cash_M_Purple_Tooth.pdf
About Purple Tooth Society
Purple Tooth Society, LLC, is a California limited liability
company and operates a Bakersfield restaurant known as Valentien
Restaurant and Wine Bar, located at 3310 Truxtun Ave #160,
Bakersfield, CA.
Purple Tooth Society filed a voluntary chapter 11 bankruptcy
petition (Bankr. E.D. Cal. Case No. 16-14004) on Nov. 2, 2016.
Attorney for the Debtor
D. MAX GARDNER, ESQ.
1925 'G' Street
Bakersfield, CA 93301
Tel: 661-888-4335
Fax: 661-591-4186
E-mail: dmgardner@dmaxlaw.com
RATAMESS CHIROPRACTIC: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------------
The Office of the U.S. Trustee on November 2 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Ratamess Chiropractic Clinic,
P.C.
Ratamess Chiropractic Clinic, PC, filed for Chapter 11 bankruptcy
protection (Bankr. D. S.C. Case No. 16-04993) on Sept. 30, 2016.
ROMEO'S PIZZA: Seeks to Use Cash Collateral for 90 Days
-------------------------------------------------------
Romeo's Pizza Express, Inc., filed with the U.S. Bankruptcy Court
for the Southern District of Florida an emergency motion to use
cash collateral.
At the time the case was filed, the Debtor had no accounts
receivable, $585 cash on hand, and $209 in an account at Regions
Bank.
Despite the creditors listed below having filed UCC-1 statements
claiming security interests in the Debtor's cash and accounts, no
creditor has a perfected lien interest in the Debtor's cash or bank
account under Article 9 of the Uniform Commercial Code, as adopted
by the Florida Statutes.
Creditor, PNC Bank, National Association ("PNC") may claim a
secured lien interest in, inter alia, the Debtor's deposit accounts
and cash by virtue of the filing of a UCC-1 Financing Statement on
Feb. 4, 2013. PNC is owed approximately $113,000, and PNC's UCC-1
was filed first in time.
If valid, PNC's security interest covers all of the Debtor's
rights, title and interest in the Debtor's cash and deposit
accounts.
If valid, said security interest renders the Debtor's cash and
deposit accounts collateral under 11 U.S.C. Sec. 363 and requires
the Debtor to adequately protect PNC's interest. The attached
budget provides for adequate protection payments to PNC in the
amount of the regular monthly payment on the debt, in the event
that adequate protection is required.
However, the Debtor contends that neither PNC, nor any other
creditor has a valid security interest in the Debtor's cash or
deposit account because no creditor has perfected an interest in
the Debtor's cash or deposit account.
Creditor, Direct Capital Corporation may claim a secured lien
interest in, inter alia, the Debtor's "accounts" by virtue of the
UCC-1 Financing Statements filed on November 26, 2013 and December
10, 2013 by Corporation Service Company, as Representative.
However, the UCC-1s do not specifically mention "deposit accounts"
or "cash", and the Debtor has no accounts receivable. Direct
Capital has taken no steps to perfect a lien interest in the
Debtors cash or deposit accounts. Further, Direct Capital's lien
interest is inferior to PNC's, so even if the Court were to find
that the UCC-1s created a valid security interest in the Debtor's
cash or deposit accounts, there is no collateral to which the lien
could attach above and beyond PNC's interest. Therefore, the Debtor
asserts that Direct Capital does not have a valid interest in its
cash or deposit accounts.
An unknown creditor, represented by Corporation Service Company
("CSC") may claim a secured lien interest in, inter alia, the
Debtor's cash accounts and accounts receivable by virtue of the
filing of a UCC-1 Financing Statement on May 6, 2016. However, the
Debtor does not owe CSC any money, cannot ascertain the name of the
creditor upon whose behalf the UCC-1 was filed, and disputes the
validity of the UCC-1. Further, the unknown creditor has taken no
steps to prefect an interest in the Debtor's cash or deposit
accounts, and if such an unperfected interest were deemed valid,
would fall in line behind PNC and Direct Capital. Therefore, the
Debtor asserts that CSC, or the creditor for whose benefit this
UCC-1 was filed, does not have a valid interest in its cash
accounts or receivables.
The Debtor avers that the use of and access to these funds is
essential to the Debtor's on-going business operations.
At hearing on the motion, the Debtor will seek, at a minimum,
interim relief:
* Proposing the free and unencumbered use of its cash collateral
until such time as PNC, Direct Capital, or CSC demonstrates the
existence of a perfected secured lien interest in cash collateral.
* Thereafter, to the extent the Court is inclined to constrain
the use of cash collateral, approving the proposed budget on an
interim basis for 90 days following the hearing on this motion.
The proposed 90-day budget for the period ended Jan. 31, 2016,
projects income of $285,000 per month and total expenses of
$175,702 per month. A full-text copy of the Budget is available
for free at:
http://bankrupt.com/misc/flsb16-24817_13_Budget_Romeos_Pizza.pdf
Romeo's Pizza Express, Inc., filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code on Nov. 1, 2016. Romeo's
Pizza filed a Chapter 11 petition (Bankr. S.D. Fla. Case No.
6-24817).
Attorneys for the Debtor:
MARKARIAN FRANK & HAYES
Malinda L. Hayes, ESQ.
2925 PGA Blvd., #204
Palm Beach Gardens, FL 33410
Tel: (561) 626-4700
Fax: (561) 627-9479
SCRIPSAMERICA INC: U.S. Trustee Forms 2-Member Committee
--------------------------------------------------------
Andrew R. Vara, Acting U.S. Trustee for Region 3, on Nov. 3
appointed two creditors of ScripsAmerica, Inc., to serve on the
official committee of unsecured creditors.
The committee members are:
(1) Ironridge Global Partners, LLC
Attn: John C. Kirkland
5330 Yacht Haven Grande, Suite 206
P.O. Box 6278, St. Thomas, VI 00804
Tel: (340) 693-6009
Fax: (340) 693-6009
(2) Robert Schneiderman
843 Persimmon Lane
Langhorne, PA 19047
Tel: (215) 741-7006
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 ScripsAmerica, Inc.
ScripsAmerica, Inc., filed a Chapter 11 petition (Bankr. D. Del.
Case No.: 16-11991) on Sept. 7, 2016, and is represented by
Joseph J. McMahon, Jr., Esq., in Wilmington, Delaware.
At the time of filing, the Debtor had $600,000 in total assets as
of Sept. 6, 2016, and $4.65 million in total debts as of Sept. 6,
2016.
The petition was signed by Jeffrey J. Andrews, chief financial
officer.
A copy of the Debtor's list of 14 unsecured creditors is available
for free at http://bankrupt.com/misc/deb16-11991.pdf
SECTOR111 LLC: Proposes to Hire Lobel Weiland as Counsel
--------------------------------------------------------
Sector111, LLC, asks the Bankruptcy Court for authorization to hire
Lobel Weiland Golden Friedman LLP as its reorganization counsel
effective as of the Petition Date.
The Debtor requires the services of the Firm to:
1. Advise the Debtor regarding its powers and duties as a
debtor-in-possession in the continued management and operation of
its affairs;
2. Advise the Debtor with respect to the requirements and
provisions of the Bankruptcy Code, Federal Rules of Bankruptcy
Procedure, Local Bankruptcy Rules, U.S. Trustee Guidelines and
other applicable requirements which may affect the Debtor;
3. Assist the Debtor in preparing and filing its Schedules and
Statement of Financial Affairs, complying with and fulfilling U.S.
Trustee requirements, and preparing other documents as may be
required after the initiation of a chapter 11 petition;
4. Attend meetings and negotiating with creditors and other
parties-in interest;
5. Represent the Debtor in connection with proceedings relating
to the sale of its assets;
6. Prepare all motions, applications, answers, orders, reports,
and papers on behalf of the Debtor that are necessary to the
administration of this chapter 11 case;
7. Assist the Debtor in the preparation of a disclosure statement
and formulation of a chapter 11 plan of reorganization;
8. Represent the Debtor in any proceeding or hearing in the
Bankruptcy Court in any action where the rights of the estate or
the Debtor may be litigated, or affected; and
9. Perform other and further services as typically may be
rendered by counsel for a debtor in a chapter 11 case.
The Firm will undertake representation of the Debtor at hourly
rates ranging from $750 to $250, depending on the experience and
expertise of the attorney or paralegal performing the work. The
majority of the work will be performed by Alan J. Friedman, Beth E.
Gaschen and Lori Gauthier at their respective current hourly rates
of $750, $550 and $250.
Prepetition, the Firm received a retainer from the Debtor in the
amount of $42,500, all of which was applied to prepetition
services. Accordingly, there is no current retainer on hand.
Beth A. Gaschen, a partner at the Firm, assures the Court that his
firm has no connections with the creditors, any other party in
interest, their respective attorneys and accountants, the United
States Trustee or any person employed in the office of the United
States Trustee.
The Firm can be reached at:
Alan J. Friedman, Esq.
Beth E. Gaschen, Esq.
LOBEL WEILAND GOLDEN FRIEDMAN LLP
650 Town Center Drive, suite 950
Costa Mesa, CA 92626
Telephone: (714) 966-1000
Facsimile: (714) 966-1002
E-mail: afriedman@lwgfllp.com
bgaschen@lwgfllp.com
About Sector111
Sector111, LLC, is engaged in wholesale and retail distribution of
after-market and performance automotive parts specific to the Lotus
and Alfa Romeo sports cars, including wheels, suspension, brakes,
exhausts, and racing accessories. In addition, it is involved in
the manufacturing and distribution of specialty performance
vehicles for on-track use such as the Drakan Spyder. The Debtor is
also a licensed dealer for Ariel Motorcars in California,
specifically for the Ariel Atom and the Ariel Nomad.
Based in Murrieta, California, Sector111, LLC, sought Chapter 11
protection (Bankr. C.D. Cal. Case No. 16-19532) on Oct. 27, 2016.
The Hon. Wayne E. Johnson presides over the case. The Debtor is
represented by Alan J. Friedman, Esq. and Beth E. Gaschen, Esq., at
Lobel Weiland Golden Friedman LLP. In its petition, the Debtor
listed total assets of $509,237 and total liabilities of $1.27
million. The petition was signed by Shinoo Mapleton,
president/CEO.
SHONEY LLC: Seeks to Employ Gary Cruickshank as Counsel
-------------------------------------------------------
Shoney LLC seeks authorization from the U.S. Bankruptcy Court for
the District of Massachusetts to employ Gary W. Cruickshank as
counsel.
The Debtor requires Gary Cruickshank to:
(a) assist and advise the Debtor in the formulation and
presentation of a Plan of Reorganization and Disclosure Statement;
(b) advise the Debtor as to its duties and responsibilities as
Debtor-in-Possession; and,
(c) perform such other legal services as may be required
during the course of the Chapter 11 case.
Mr. Cruickshank will be paid at an hourly rate of $400.00 and
paraprofessionals of his staff an hourly rate of $125.00.
Prior to the filing of the case, Mr. Cruickshank received funds in
the amount of $6,717.00. $2,000 of the said funds will be placed
in a separate escrow account as a security retainer for the
services to be rendered during the course of the case. The balance
of $4,717.00 will be applied to the Chapter 11 filing fee and
pre-petition services of $3,000.00.
Mr. Cruickshank 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.
Gary Cruickshank can be reached at:
Gary Cruickshank, Esq.
GARY CRUICKSHANK
21 Custom House Street, Suite 920
Boston, MA 02110
Tel.: (617) 330-1960
Email: gwc@cruickshank-law.com
Shoney, LLC, filed a Chapter 11 petition (Bankr. D. Mass. Case No.
16-13905) on October 12, 2016, and is represented by Gary W.
Cruickshank, Esq.
SLEEP DOCTOR: Taps David & Wierenga as Special Counsel
------------------------------------------------------
Sleep Doctor, LLC, seeks authorization from the U.S. Bankruptcy
Court for the Western District of Michigan to employ David &
Wierenga, PC, as special counsel.
The Debtor requires David & Wierenga to (a) provide advice and
recommendations regarding Corporate Matters; and (b) provide
services, assistance, and other activities that are required and
mutually agreed upon.
David & Wierenga professionals will be paid at these hourly rates:
Ronald E. David, Esq. $300.00
Raquel Johnson, Esq. $80.00
David & Wierenga will also be reimbursed for expenses incurred,
including, among other things, and without limitation, telephone
and telecopier toll and other charges, mail and express mail
charges, special or hand delivery charges, document processing,
photocopying charges, travel expenses, expenses for "working
meals," computerized research, and certain non-ordinary overhead
expenses, such as secretarial and other overtime.
David & Wierenga provided services to the Debtor prior to the
bankruptcy proceeding, resulting in a balance of fees owed to David
& Wierenga in the amount of $0.00. David & Wierenga has forgiven
and waived any amounts the Debtor previously owed for pre-petition
services.
Ronald E. David, Esq., President of David & Wierenga, 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.
David & Wierenga can be reached at:
Ronald E. David, Esq.
DAVID & WIERENGA, PC
99 Monroe Ave, NW, Suite 1210
Grand Rapids, MI 49503
Tel: 616.454.3883
Fax: 616.454.3988
About Sleep Doctor
Sleep Doctor, LLC, is a mattress retailer throughout Western
Michigan with 13 store locations. The majority of stores are
located in West Michigan and Debtor's headquarters are in Kent
County. Debtor employs approximately 49 people to market and sell
it products.
Sleep Doctor, LLC filed a Chapter 11 petition (Bankr. W.D. Mich.
Case No. 09-05102), on April 29, 2009. The petition was signed by
Roger A. Wardell, managing member. The case is assigned to Judge
James D. Gregg.
At the time of filing, the Debtor estimated assets at $500,001 to
$1,000,000 and liabilities at $1,000,001 to $10,000,000.
A list of the Company's 20 largest unsecured creditors is available
for free at: http://bankrupt.com/misc/miwb09-05102.pdf
No trustee or examiner has been appointed in the Debtor's Chapter
11 case and no Committees have been appointed.
SOLYMAN YASHOUAFAR: U.S. Trustee Forms 3-Member Committee
---------------------------------------------------------
The Office of the U.S. Trustee on November 2 appointed three
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 cases of Solyman Yashouafar and Massoud Aaron
Yashouafar.
The committee members are:
(1) DMARC 2007-CD5 Garden Street LLC
c/o Timothy Carl Aires
Aires Law Firm
6 Hughes, Suite 205
Irvine, CA 92618
Tel: (949) 718-2020
Fax: 949-718-2021
Email: tca@arlawyers.com
(2) Van Nuys Plywood, LLC
c/o Danny Pakrivan
3131 Antelo Road
Los Angeles, CA 90077
Tel: (310) 889-6050
E-mail: yanoa@yahoo.com
(3) Mehrdad Taghdiri
c/o Vincent James John Romeo, Esq.
VJJR Attorney at Law
3692 Poker Hand Court
Las Vegas, NV 89129
Tel: (702) 530-9242
Fax: 888-636-2928
Email: vincent.james.john.romeo@lvvjjr.com
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About The Yashouafars
Solyman Yashouafar and Massoud Aaron Yashouafar sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. C. D. Calif. Case
Nos. 16-12255 and 16-12408) on August 3, 2016. The petitions were
filed pro se.
STEALTH SOFTWARE: Case Summary & 10 Unsecured Creditors
-------------------------------------------------------
Debtor: Stealth Software, LLC
18940 N. Pima Rd.
Suite D-165
Scottsdale, AZ 85255
Case No.: 16-12787
Chapter 11 Petition Date: November 7, 2016
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Hon. Eddward P. Ballinger Jr.
Debtor's Counsel: Joseph E. Cotterman, Esq.
ANDANTE LAW GROUP, PLLC
4110 North Scottsdale Road, Suite 330
Scottsdale, AZ 85251
Tel: 480-421-9449
Fax: 480-522-1515
E-mail: joe@andantelaw.com
Total Assets: $575,724
Total Liabilities: $1.40 million
The petition was signed by Gerard Warrens, chief executive
officer.
A copy of the Debtor's list of 10 unsecured creditors is available
for free at http://bankrupt.com/misc/azb16-12787.pdf
STONEMOR PARTNERS: Moody's Lowers CFR to B3; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service downgraded StoneMor Partners L.P.'s
Corporate Family rating to B3 from B2, Probability of Default
rating to B3-PD from B2-PD and senior unsecured rating to Caa1 from
B3. The Speculative Grade Liquidity rating was affirmed at SGL-3.
The rating outlook remains stable.
On Oct. 28, StoneMor announced it would reduce its 3rd quarter cash
distribution to limited partnership interest holders to around $10
million, a reduction of about 50% versus the 2015 3rd quarter
distribution.
Downgrades:
Issuer: StoneMor Partners LP
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Corporate Family Rating, Downgraded to B3 from B2
Senior Unsecured Regular Bond/Debentures, Downgraded to Caa1
(LGD5) from B3 (LGD5)
Outlook Actions:
Issuer: StoneMor Partners LP
Outlook, Remains Stable
Affirmations:
Issuer: StoneMor Partners LP
Speculative Grade Liquidity Rating, Affirmed SGL-3
RATINGS RATIONALE
The downgrade of StoneMor's CFR to B3 from B2 reflects concern that
recent disappointing operating performance could be slow to
improve, an expectation for breakeven to modestly positive free
cash flow (before distributions), and significant reliance on the
company's revolving credit facility for liquidity. Without a
recovery in free cash flow (before distributions), StoneMor will
need to continue to rely upon its revolver to make growth
investments and finance limited partner distributions. Sales of
pre-need and at-need cemetery contracts have been pressured by
recent changes in its compensation plan for cemetery salespersons,
which led to a reduction in the size of StoneMor's sales force,
driving Moody's anticipation of flat operating and financial
performance in 2017. Moody's anticipates debt to EBITDA over 10
times on a GAAP basis, which is very high for the B3 rating
category, but debt to accrual EBITDA (pro forma for acquisitions,
reflecting Moody's standard adjustments and adding deferred
revenues less deferred expenses) of around 4 times. The rating is
supported by a national portfolio of cemetery properties, a solid
backlog of pre-need cemetery sales and selected assets (cash,
receivables and merchandise trust assets) which cover selected
liabilities (current liabilities, debt and merchandise liabilities)
over 1.3 times as of June 30, 2016.
All financial metrics cited reflect Moody's standard adjustments.
The Caa1 rating on the senior unsecured notes due 2021 reflects the
B3-PD PDR and an LGD assessment of LGD5, reflecting its junior
position in Moody's hierarchy of claims at default relative to the
$210 million senior secured revolving credit facility (unrated) due
2021.
Though StoneMor's liquidity profile is adequate over the next year,
the company will need to rely on its revolver since cash on hand is
expected to remain around $10 million and free cash flow (before
distributions) is expected to be breakeven to modestly positive.
External liquidity is provided by around $40 million of
availability expected under the company's revolving credit
facility. StoneMor could also relieve liquidity pressure by
reducing or eliminating its quarterly limited partner
distributions, delaying growth capital expenditures or foregoing
acquisitions. Moody's notes additional liquidity is provided by
American Infrastructure MLP Funds ("AIM"), a private investment
firm, and the controlling shareholder of StoneMor's general
partner, which has made a $50 million capital commitment to
purchase additional limited partnership interests to fund growth
investments.
The stable ratings outlook reflects Moody's expectation that
StoneMor will maintain adequate liquidity, but that cemetery
contract sales could remain pressured.
The ratings could be upgraded if a sustained improvement in
operating and financial performance results in expectations for
free cash flow (before distributions) to debt around 5% and
improved liquidity.
The ratings could be lowered if operating or financial performance
is worse than expected, or if liquidity deteriorates.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
StoneMor is a provider of funeral and cemetery products and
services in the United States. As of June 30, 2016, StoneMor
operated 307 cemeteries and 104 funeral homes in the US and Puerto
Rico. The company owns 276 of these cemeteries and operates the
remaining 31 under long-term management agreements with non-profit
cemetery corporations that own the cemeteries. Moody's expects
GAAP revenues of over $300 million in 2017.
THERAPEUTICSMD INC: Reports Third Quarter 2016 Financial Results
----------------------------------------------------------------
TherapeuticsMD, Inc. reported a net loss of $25.01 million on $5.35
million of net revenues for the three months ended Sept. 30, 2016,
compared to a net loss of $19.47 million on $5.19 million of net
revenues for the same period in 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $67.03 million on $14.86 million of net revenues
compared to a net loss of $67.59 million on $14.51 million of net
revenues for the same period during the prior year.
As of Sept. 30, 2016, TherapeuticsMD had $158.8 million in total
assets, $12.46 million in total liabilities and $146.4 million in
total stockholders' equity.
At Sept. 30, 2016, cash on hand was approximately $147.5 million,
compared with approximately $64.7 million at Dec. 31, 2015.
Third Quarter and Recent Developments
* Announced acceptance of a New Drug Application by the U.S.
Food and Drug Administration for TX-004HR (conditionally-
approved trade name Yuvvexy), the Company's investigational
applicator-free estradiol vaginal softgel capsule for the
treatment of moderate-to-severe vaginal pain during sexual
intercourse (dyspareunia), a symptom of vulvar and vaginal
atrophy (VVA) due to menopause. The NDA is supported by the
complete TX-004HR clinical program, including positive phase 3
results with all three doses of TX-004HR (4 mcg, 10 mcg and 25
mcg) that were evaluated in the Rejoice Trial. The FDA's
Prescription Drug User Fee Act (PDUFA) target action date for
the NDA is May 7, 2017.
* Anticipate topline results in the fourth quarter of 2016 for
the ongoing Replenish Trial, a phase 3 clinical trial of the
Company's TX-001HR product candidate, which, if approved,
would be the first and only FDA-approved bio-identical
combination of estradiol and progesterone for the treatment of
moderate-to-severe vasomotor symptoms due to menopause.
* Net revenue from the Company's prescription prenatal vitamin
business increased 7 percent to approximately $5.5 million for
the third quarter of 2016, compared with approximately $5.2
million for the third quarter of 2015.
* Net loss was approximately $25.0 million for the third quarter
of 2016, compared with approximately $19.5 million for the
third quarter of 2015.
* Ended the quarter with approximately $147.5 million in cash
and no debt.
* Supported nine presentations at annual meetings of the
International Menopause Society (IMS) and North American
Menopause Society (NAMS), including reports on the positive
results from the TX-004HR clinical development program and new
data that further identify women's perceptions of VVA and
available treatment options.
* Grew the Company's intellectual property portfolio to a
current total of 149 patent filings, including 82
international filings, with 17 issued U.S. patents.
* Strengthened relationships with medical, pharmacy, patient and
industry organizations internationally.
"We are making excellent progress this year advancing our pipeline
and enhancing our commercial capabilities focused on women's
health. During the quarter, we successfully completed the
submission of our NDA for TX-004HR as a novel treatment for
moderate to severe dyspareunia, a symptom of VVA due to menopause,
and we continued ongoing pre-commercialization activities for this
important product," said TherapeuticsMD CEO Robert G. Finizio. "We
now eagerly await the topline data from our Replenish Trial for
TX-001HR in the fourth quarter of 2016, our second novel hormone
therapy program, which, if approved, would be the first and only
FDA-approved bio-identical combination of estradiol and
progesterone for the treatment of moderate-to-severe vasomotor
symptoms due to menopause."
A full-text copy of the press release is available for free at:
https://is.gd/D7IC0P
About TherapeuticsMD
Boca Raton, Florida-based TherapeuticsMD, Inc. (OTC QB: TXMD) is a
women's healthcare product company focused on creating and
commercializing products targeted exclusively for women. The
Company currently manufactures and distributes branded and generic
prescription prenatal vitamins as well as over-the-counter
vitamins and cosmetics. The Company is currently focused on
conducting the clinical trials necessary for regulatory approval
and commercialization of advanced hormone therapy pharmaceutical
products designed to alleviate the symptoms of and reduce the
health risks resulting from menopause-related hormone
deficiencies.
For the year ended Dec. 31, 2015, the Company reported a net loss
of $85.07 million on $20.1 million of net revenues compared to a
net loss of $54.2 million on $15.0 million of net revenues for the
year ended Dec. 31, 2014.
TLA TANNING: Proposes Howard P. Slomka as Counsel
-------------------------------------------------
TLA Tanning Corp. asks the Bankruptcy Court for authorization to
hire Howard P. Slomka and the Slomka Law Firm P.C. as bankruptcy
counsel.
The Debtor will require these professional services from the firm
including:
a) Preparation of pleadings and applications;
b) Conduct of examinations and hearings and filing all relevant
responses;
c) Advising Applicant of its rights, duties and obligations as a
debtor-in-possession;
d) Consulting with Applicant and representing Applicant with
respect to a Chapter 11 plan;
e) Pertol111ing those legal services incidental and necessary to
the day-to-day operations of Applicant's business, including, but
not limited to, institution and prosecution of necessary legal
proceedings, and general business and c011Jorate legal advice and
assistance;
f) Taking any and all other action incident to the proper
preservation and administration of Applicant's estate and
business.
The Debtor will employ The Slomka Law Firm, PC, at the firm's
ordinary rates for comparable work, plus reasonable expenses,
subject to review by the Court, during the pendency of this
bankruptcy case. The firm has stated present fee rates of $300 per
hour for attorneys and $150 per hour for legal assistants.
On Aug. 25, 2016, Debtor delivered $7,000 to Law Firm's trust
account. The Law Firm has deposited the entire retainer amount
into its trust account, but paid bankruptcy filing fees of $1,717
from the sum, as well as prepetition preparation fees of $1,500 to
the law firm, leaving a balance of $3,783 in trust.
Howard P. Slomka, Esq., assures the Court that his firm has no
connections with the creditors, any other party in interest, their
respective attorneys and accountants, the United States Trustee or
any person employed in the office of the United States Trustee.
The Firm can be contacted at:
Howard P. Slomka
SLOMKA LAW FIRM P.C.
1069 Spring Street NW Suite 200
Atlanta, GA 30309
Tel: (678) 732-0001
Buford, Ga.-based TLA Tanning Corp. filed for Chapter 11 bankruptcy
protection (Bankr. N.D. Ga. Case No. 16-64819) on Aug. 25, 2016,
estimating assets and liabilities between $100,001 to $500,000. The
petition was signed by Todd B. Amerman, president.
TRANS ENERGY: Satisfies One Condition in EQT Merger Agreement
-------------------------------------------------------------
An amendment no. 2 to the tender offer Statement on Schedule TO had
been filed with the Securities and Exchange Commission to amend and
supplement the Schedule TO relating to the offer of WV Merger Sub,
Inc., a Nevada corporation (the "Purchaser") and a wholly owned
subsidiary of EQT Corporation, a Pennsylvania corporation, to
purchase all outstanding shares of common stock, par value $0.001
per share, of Trans Energy, Inc., a Nevada corporation, at a price
of $3.58 per Share, net to the seller in cash, without interest,
less any required withholding tax, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated Oct. 27,
2016, and in the related Letter of Transmittal.
On Nov. 3, 2016, EQT completed its previously announced acquisition
of certain properties from Republic Energy Ventures, LLC, Republic
Partners VI, LP, Republic Partners VII, LLC, Republic Partners
VIII, LLC and Republic Energy Operating, LLC. Upon the closing of
the Republic Transaction, the condition to the Offer relating to
the consummation of the Republic Transaction has been satisfied.
Subject to the satisfaction of the remaining conditions, including
the Minimum Tender Condition, the Offer and withdrawal rights will
expire at 12:00 midnight, New York City time, at the end of Monday,
Nov. 28, 2016, unless the Offer is extended or earlier terminated.
About Trans Energy
St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG)
-- http://www.transenergyinc.com/-- is an independent energy
company engaged in the acquisition, exploration, development,
exploitation and production of oil and natural gas. Its
operations are presently focused in the State of West Virginia.
Trans Energy reported a net loss of $19.6 million on $12.4 million
of total operating revenues for the year ended Dec. 31, 2015,
compared to a net loss of $12.5 million on $27.2 million of total
operating revenues for the year ended Dec. 31, 2014.
As of June 30, 2016, Trans Energy had $79.3 million in total
assets, $143.4 million in total liabilities and a total
stockholders' deficit of $64.1 million.
Maloney + Novotny LLC, in Cleveland, Ohio, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company has generated
significant losses from operations and has a working capital
deficit of $116,998,273 at Dec. 31, 2015, which together raises
substantial doubt about the Company's ability to continue as a
going concern.
UCI INT'L: Willkie, Morris Represent Ad Hoc Group of Noteholders
----------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
Willkie Farr & Gallagher LLP and Morris Nichols Arsht & Tunnell LLP
in connection with its representation in the Chapter 11 cases of
UCI International, LLC, et al., of an ad hoc group of unaffiliated
noteholders of the 8.625% senior unsecured notes issued by UCI
International, LLC, pursuant to that certain indenture, dated as of
Jan. 26, 2011, filed with the U.S. Bankruptcy Court for the
District of Delaware a supplemental verified statement.
On Jan. 13, 2016, the Noteholders retained Willkie to represent an
ad hoc group to represent it in connection with potential
restructuring discussions with UCI. The Ad Hoc Group presently is
comprised of (a) BlackRock Financial Management Inc., BlackRock
Advisors, LLC and BlackRock Institutional Trust Company, N.A.,
acting as investment advisor or manager of funds and accounts
managed and controlled by it and (b) certain funds/accounts managed
by Credit Suisse Asset Management, LLC.
On June 17, 2016, a verified statement under Bankruptcy Rule 2019
was filed on behalf of the Ad Hoc Group by the Firms.
On June 17, 2016, the Firms filed a notice of appearance on behalf
of the Ad Hoc Group.
The Noteholders or affiliates 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. In accordance with
Bankruptcy Rule 2019, and based upon the information provided to
the Firms by each Noteholder, the address, nature and principal
amount of each of these disclosable economic interests, as of the
date of this Supplemental Verified Statement, are available at:
http://bankrupt.com/misc/UCIINTERNATIONAL_rule2019.pdf
In accordance with Bankruptcy Rule 2019, the Firms hereby file this
Supplemental Verified Statement to disclose certain changes among
holdings of disclosable economic interests of the Ad Hoc Group.
Upon information and belief after due inquiry, the Firms do not
hold any claim against, or interests in, the Debtors or their
estates, except for administrative expense claims for fees and
expenses connection with the court order authorizing and approving
(i) (a) entry into a backstop commitment agreement and (b) payment
of the backstop fees and expenses and (ii) granting related relief
entered on Oct. 14, 2016.
Each member of the Ad Hoc Group has consented to the Firm's
representation of the Ad Hoc Group in the above-captioned matter.
The Firms do not represent or purport to represent any other
entities with respect to the Debtors' bankruptcy cases. In
addition, each noteholder does not purport to act, represent, or
speak on behalf of any other entities in connection with the
Debtors' bankruptcy cases.
The Ad Hoc Group of Noteholders is represented by:
Paul V. Shalhoub, Esq.
Matthew A. Feldman, Esq.
Daniel I. Forman, Esq.
WILLKIE FARR & GALLAGHER LLP
787 Seventh Avenue
New York, New York 10019
Tel: (212) 728-8000
Fax: (212) 728-8111
E-mail: pshalhoub@willkie.com
mfeldman@willkie.com
dforman@willkie.com
-- and --
Eric D. Schwartz, Esq.
Robert J. Dehney, Esq.
Matthew B. Harvey, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market Street, 16th Floor
Wilmington, Delaware 19801
Tel: (302) 658-9200
Fax: (302) 658-3989
E-mail: eschwartz@mnat.com
rdehney@mnat.com
mharvey@mnat.com
About UCI International
UCI International, LLC, headquartered in Lake Forest, IL, designs,
manufactures, and distributes vehicle replacement parts, including
a broad range of filtration, fuel delivery systems, and cooling
systems products in the automotive, trucking, marine, mining,
construction, agricultural, and industrial vehicles markets.
UCI and its affiliates sought Chapter 11 protection (Bankr. D.
Del.
Lead Case No. 16-11355) on June 1, 2016. The Debtors are
represented by lawyers at Sidley Austin LLP. Alvarez & Marsal
provides the company with financial advice and Moelis & Company LLC
is the Debtors' investment banker. Garden City Group serves as the
Debtors' Claims Agent. Wilmington Trust is the Indenture Trustee
for a $400-million issue of 8.625% Senior Notes Due 2019.
The United States Trustee appointed an Official Committee of
Unsecured Creditors, which has retained Morrison & Foerster LLP as
proposed counsel, and Cole Schotz PC as Delaware co-counsel. Zolfo
Cooper LLC has been retained as bankruptcy consultant and financial
advisor for the Committee.
ULTRA PETROLEUM: CorEnergy Infrastructure Files Proofs of Claim
---------------------------------------------------------------
CorEnergy Infrastructure Trust, Inc., on Nov. 2, 2016, announced
financial results for the third quarter ended Sept. 30, 2016.
Recent Developments
-- Delivered Net Income of $0.68 per common share (diluted),
NAREIT Funds from Operations (NAREIT FFO)1 of $1.01 per share
(diluted), Funds from Operations (FFO)1 of $0.96 per share
(diluted) and Adjusted Funds from Operations (AFFO)1 of $0.98 per
share (diluted)
-- Declared common stock dividend of $0.75 per share ($3.00
annualized) for the third quarter
-- All tenants continue to make timely rent payments
-- Restructured the Four Wood Financing Note and expects to
convert a portion to a preferred equity interest
-- Nathan Poundstone joins CorEnergy team as incoming Chief
Accounting Officer
Third Quarter 2016 Performance Summary
Results for the third quarter of 2016 were approximately flat
sequentially and include Total Revenue of $22.1 million. Net
Income for the third quarter was $8.2 million, or $0.68 per common
share (diluted). AFFO for the third quarter was $13.0 million, or
$0.98 per share (diluted). Management uses AFFO as a measure of
long-term sustainable operational performance.
Nathan Poundstone joins CorEnergy Management Team
Nathan Poundstone recently joined the CorEnergy management team and
will serve as Chief Accounting Officer following the filing of the
third quarter Form 10-Q. Prior to joining CorEnergy,
Mr. Poundstone was a Vice President and Chief Accounting Officer of
CVR Energy, a publicly traded holding company focused on the
petroleum refining and nitrogen fertilizer manufacturing
industries. This company included two consolidated publicly traded
master limited partnerships, CVR Refining LP and CVR Partners LP.
Prior to that, Mr. Poundstone served in various audit and
professional practice roles as a senior manager with KPMG, LLP. He
holds a Bachelor of Arts Degree in Accounting from the University
of Northern Iowa and is a Certified Public Accountant.
Becky Sandring will utilize her real estate investment trust tax
and structuring expertise on business development initiatives as a
Senior Vice President of CorEnergy.
"We are excited to have Nate join the CorEnergy team. He brings
with him an extensive background in the energy-focused accounting
field and we look forward to having him streamline and enhance our
accounting and disclosure process," said CorEnergy CEO Dave
Schulte. "We are also pleased to have Becky focus her efforts on
business development, highlighting her ability to implement
specialized accounting practices on infrastructure assets."
Portfolio Update
Pinedale Liquids Gathering System: During the third quarter,
CorEnergy filed proofs of claim with the bankruptcy court handling
the Ultra Petroleum bankruptcies. Additionally, the Company filed
a motion to dismiss our tenant, Ultra Wyoming LGS from the
bankruptcy process, to which UPL filed a response. Since that
time, UPL published financial projections which CorEnergy believes
are based on uninterrupted access to the Pinedale LGS, and stated
that losing access to the Pinedale LGS upon rejection of the lease
would cost hundreds of millions of dollars in foregone revenue.
Since UPL has nonetheless threatened to reject the lease and
construct access to a replacement system, CorEnergy and Ultra LGS
have agreed to a non-binding mediation. December 15th has been set
as the new deadline for Ultra LGS to accept or reject the Pinedale
LGS Lease.
Grand Isle Gathering System: In September, Energy XXI Ltd, the
parent company of the tenant of the GIGS, received approval of its
Supplement to the Third Amended Disclosure Statement. The deadline
to object to the Reorganization Plan and assumed contracts and
leases was October 31, 2016 and the deadline for voting on the Plan
of Reorganization was November 1, 2016. The confirmation hearing
is scheduled to begin on November 7, 2016. The bankruptcy court
extended EXXI's exclusivity period to November 14, 2016.
Four Wood Financing Note: CorEnergy restructured its financing note
with SWD Enterprises and expects to convert a portion of the loan
into an ownership interest in the borrower in the form of a
preferred equity interest. AFFO will not increase until Four Wood
generates sustainable operating margins and the reserve for
collection has been removed.
Dividend Declaration
Common Stock: A third quarter common stock cash dividend of $0.75
($3.00 annualized) was declared on October 26, 2016, payable on
November 30, 2016. CorEnergy maintains a quarterly common stock
dividend payment cycle of February, May, August and November.
Preferred Stock: For the Company's 7.375% Series A Cumulative
Redeemable Preferred Stock, a cash dividend of $0.4609375 per
depositary share was declared for the third quarter, payable on
November 30, 2016. The preferred dividends, which equate to an
annual payment of $1.84375 per depositary share, are paid on or
about the last day of February, May, August and November.
Outlook
CorEnergy intends to continue paying dividends based on rents
received, pending the outcomes of the bankruptcy processes. With
the parent company of our GIGS tenant and the tenant of the
Pinedale LGS currently reorganizing pursuant to Chapter 11
bankruptcy proceedings, we refer investors to the risk factors in
our 10-Q filings as to the potential risks associated with
unexpired leases. We expect the significant bankruptcy milestones
for EXXI and UPL will have occurred and been disclosed to the
public prior to any of the new acquisition opportunities we are
currently analyzing being ready for funding and execution.
About CorEnergy Infrastructure Trust, Inc.
CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) --
http://www.corenergy.reit-- is a real estate investment trust
(REIT) that owns essential midstream and downstream energy assets,
such as pipelines, storage terminals, and transmission and
distribution assets. It seeks long-term contracted revenue from
operators of its assets, primarily under triple net participating
leases.
About Ultra Petroleum
Houston, Texas-based Ultra Petroleum Corp. (OTC Pink Marketplace:
"UPLMQ") is an independent oil and gas company engaged in the
development, production, operation, exploration and acquisition of
oil and natural gas properties.
On April 29, 2016, Ultra Petroleum Corp. and seven subsidiary
companies filed petitions (Bankr. S.D. Tex.) seeking relief under
chapter 11 of the United States Bankruptcy Code. The Debtors'
cases have been assigned to Judge Marvin Isgur. These cases are
being jointly administered for procedural purposes, with all
pleadings filed in these cases will be maintained on the case
docket for Ultra Petroleum Corp. Case No. 16-32202.
Ultra Petroleum disclosed total assets of $1.28 billion and total
liabilities of $3.91 billion as of March 31, 2016. James H.M.
Sprayregen, P.C., David R. Seligman, P.C., Michael B. Slade, Esq.,
Christopher T. Greco, Esq., and Gregory F. Pesce, Esq., at Kirkland
& Ellis LLP; and Patricia B. Tomasco, Esq., Matthew D. Cavenaugh,
Esq., and Jennifer F. Wertz, Esq., at Jackson Walker, L.L.P., serve
as co-counsel to the Debtors. Rothschild Inc. serves as the
Debtors' investment banker; Petrie Partners serves as their
investment banker; and Epiq Bankruptcy Solutions, LLC, serves as
claims and noticing agent.
The Office of the U.S. Trustee has appointed seven creditors of
Ultra Petroleum Corp. to serve on an Official Committee of
Unsecured Creditors. The Committee tapped Weil, Gotshal & Manges
LLP as its legal counsel; Opportune LLP as advisor; and PJT
Partners LP as its financial advisor.
VERMILLION INC: Promotes Fred Ferrara to Chief Operating Officer
----------------------------------------------------------------
The Board of Directors of Vermillion, Inc., approved the promotion
of Fred Ferrara, the Company's chief information officer, to chief
operating officer.
Mr. Ferrara, age 49, has served as the Company's chief information
officer since April 2015. Prior to joining the Company, Mr.
Ferrara spent 24 years designing industry-specific systems in
information technology, including application and database
development, with the previous 17 years solely dedicated to
diagnostics companies. He served in numerous leadership roles in
information technology and operations, and he served in senior
leadership capacities for diagnostic service organizations such as
Laboratory Corporation of America and DIANON Systems. In August
2014, Mr. Ferrara founded Key Mobile Systems, working as an
independent information systems consultant in the healthcare and
mobile application markets. From August 2006 to August 2014, Mr.
Ferrara served as Chief Information Officer and Senior Vice
President of Aurora Diagnostics, LLC, an anatomic pathology
services company.
Mr. Ferrara does not have any direct or indirect material interest
in any transaction or proposed transaction required to be reported
under Item 404(a) of Regulation S-K.
In connection with his promotion, Mr. Ferrara was granted an equity
award under the Company's Amended and Restated 2010 Stock Incentive
Plan comprised of options to purchase 50,000 shares of Company
common stock, 25% of which options cliff vest on April 1 of each of
2017, 2018, 2019 and 2020. Also, in connection with Mr. Ferrara's
promotion, Mr. Ferrara's base salary was increased from $296,640 to
$310,000 per annum, effective as of Nov. 1, 2016. Mr. Ferrara's
employment agreement with the Company, as described in the Current
Report on Form 8-K filed by the Company on April 6, 2015, was not
amended in connection with his promotion.
About Vermillion
Vermillion, Inc., is dedicated to the discovery, development and
commercialization of novel high-value diagnostic tests that help
physicians diagnose, treat and improve outcomes for patients.
Vermillion, along with its prestigious scientific collaborators,
has diagnostic programs in oncology, hematology, cardiology and
women's health.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 09-11091) on March 30, 2009. Vermillion's legal
advisor in connection with its successful reorganization efforts
wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged
from bankruptcy in January 2010. The Plan called for the Company
to pay all claims in full and equity holders to retain control of
the Company.
Vermillion reported a net loss of $19.1 million on $2.17 million of
total revenue for the year ended Dec. 31, 2015, compared to a net
loss of $19.2 million on $2.52 million of total revenue for the
year ended Dec. 31, 2014.
As of June 30, 2016, the Company had $13.89 million in total
assets, $4.39 million in total liabilities and $9.50 million in
total stockholders' equity.
WINDSTREAM HOLDINGS: S&P Affirms 'B+' CCR; Outlook Stable
---------------------------------------------------------
S&P Global Ratings said it affirmed its 'B+' corporate credit
rating on Little Rock, Ark.-based Windstream Holdings Inc. The
outlook is stable.
At the same time, S&P affirmed its 'BB' issue-level rating on the
senior secured debt at Windstream Services LLC. The '1' recovery
rating on this debt indicates S&P's expectation for very high
(90%-100%) recovery of principal in the event of a payment default.
S&P also affirmed the 'B+' issue level rating the company's senior
unsecured debt. The recovery rating on this debt is '4', which
indicates S&P's expectation for average (30%-50%, at the lower half
of the range) recovery of principal in the event of a payment
default.
"The rating affirmation reflects our view that, despite the modest
improvement in leverage pro forma the acquisition, we view the
combined business less favorably given EarthLink's competitive
local exchange carrier (CLEC) and declining consumer dial-up
Internet business," said S&P Global Ratings credit analyst Scott
Tan.
Additionally, EarthLink's adjusted EBITDA margins are very low, in
the low-20% area.
The rating outlook is stable and reflects S&P's expectation that
leverage for the combined business will remain around 5x with
modest levels of discretionary cash flow over the next 12 months
despite S&P's expectation for revenue declines and some margin
pressure.
WINDSTREAM SERVICES: Fitch Affirms 'BB-' LT Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB-' Long-Term Issuer Default
Ratings (IDRs) of Windstream Services, LLC and its subsidiary
Windstream Holdings of the Midwest, Inc. The Rating Outlook is
Stable. The rating action affects approximately $4.9 billion of
debt outstanding as of June 30, 2016.
KEY RATING DRIVERS
Merger with EarthLink: Windstream has reached an agreement to merge
with EarthLink Holdings Corp. (EarthLink) in an all-stock
transaction with a total value, including debt, of approximately
$1.1 billion. Windstream anticipates refinancing EarthLink's
approximately $436 million of outstanding debt. Fitch expects
EarthLink to become a guarantor on Windstream's credit facilities
and senior unsecured notes. The transaction is expected to close in
the first half of 2017 (1H17), following customary shareholder and
regulatory approvals.
Windstream anticipates realizing more than $125 million of annual
run-rate synergies three years after the close of the merger, of
which $110 million consists of operating cost savings and $15
million in capital spending savings. In each of the first two years
following the merger, Windstream expects to realize $50 million in
synergies, with the remaining $25 million to be realized by the end
of year three. In its base case assumptions for Windstream, Fitch
has assumed moderately lower cost savings in each of the three
years following the merger. Windstream also expects to benefit from
net operating loss carryforwards (NOLs) which are estimated to have
a net present value of approximately $95 million at the close of
the transaction.
Fitch believes there are strategic benefits to the transaction,
with both companies focused on growing their enterprise services
business. The combined network of the company will consist of
approximately 145,000 route miles of fiber, positioning the company
as one of the largest network providers in the U.S.
Fitch believes there are potential execution risks with respect to
achieving the operating cost and capital expenditure synergies
following the close of the merger. Initial savings are expected to
be realized from reduced selling, general and administrative
savings as corporate overheads and other public company cost
savings arise. Over time, the company is expected to realize the
benefits of lower network access costs as on-network opportunities
lower third-party network access costs. Finally, over time, cost
savings are expected to be realized by IT and billing system cost
savings.
In Fitch's view, the transaction is beneficial to Windstream's
credit profile, as the transaction reduces Windstream's leverage
modestly following the close of the transaction, with further
potential improvements arising as synergies are realized. Synergies
are also expected to contribute to an improving free cash flow
(FCF) profile in 2017 and beyond.
Near-Term Pressures: In the first nine months of 2016, Windstream
experienced a decline of less than 3% in adjusted service revenue
(adjusted for disposed businesses). Since the beginning of the
year, sequential revenues have been relatively stable in the
consumer and small/medium business segment, and the enterprise
segment. The company has experienced some pressure in the wholesale
segment, as well as the small/medium business competitive local
exchange carrier segment. Fitch's base case (excluding the
EarthLink acquisition) assumes EBITDAR returns to growth in 2018
and revenue growth turns positive in 2019.
Revenue Mix Changes: Windstream derives approximately two-thirds of
its revenues from enterprise services, consumer high-speed internet
services and its carrier customers (core and wholesale), which all
have growing or stable prospects in the long term. Certain legacy
revenues remain pressured, but Windstream's revenues should
stabilize gradually as legacy revenues dwindle in the mix.
Leverage Metrics: Fitch expects total adjusted debt/EBITDAR to be
approximately 5.4x in 2016 and 5.1x in 2017. Fitch's estimates
include the debt reduction associated with the June 2016
monetization of Windstream's remaining 19.6% stake in
Communications Sales & Leasing (CSAL) via two debt-for-equity
exchanges. The disposition of shares retired approximately $672
million in debt. In calculating total adjusted debt, Fitch applies
an 8x multiple to the sum of the annual rental payment to CSAL plus
other rental expenses.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- In 2016, service revenues will approximate the mid-point of
Windstream's guidance of $5.275 billion to $5.425 billion.
In 2017, Fitch has assumed revenues decline in the 1% to 2%
range, with revenues flat in 2018.
-- 2016 and 2017 EBITDA margins, including the annual rental
payment as an operating expense, are in the 23% to 24%
range.
-- In 2016, capital spending per company guidance and including
$200 million for Project Excel ranges from $1 billion to
$1.05 billion. Cash taxes are not expected to be material.
Capital intensity in 2017 is expected to be in the 15% to
16% range, and includes Connect America Fund II spending,
for Windstream on a stand-alone basis, and a partial-year
amount for EarthLink at the low end of its 2016 capital
expenditure guidance (no guidance has been provided for
2017).
-- The EarthLink acquisition closes July 1, 2017, and that
EarthLink's revenues and EBITDA continued to be pressured in
2017, then return to stability in 2018. Fitch assumes
Windstream will benefit from synergies post-acquisition, and
has moderately reduced the amount of operating cost
synergies from the $110 million anticipated by Windstream
and to be achieved over a three-year period. The cost to
achieve synergies is estimated by Windstream to total $125
million, and Fitch has assumed approximately $75 million in
2017 and $50 million in 2018.
RATING SENSITIVITIES
Positive Trigger: A positive action could occur if total adjusted
debt/EBITDAR, which will be used as the primary metric, is
sustainable under 5.2x-5.3x. Additionally, revenues and EBITDA
would need to stabilize or demonstrate a return to growth on a
sustained basis. Fitch would need to see progress on execution of
the integration of the two companies prior to taking a positive
rating action.
Negative Trigger: A negative rating action could occur if total
adjusted debt/EBITDAR is 5.7x-5.8x or higher for a sustained
period, or if competitive and business conditions were such that
the company no longer makes progress toward revenue and EBITDA
stability.
LIQUIDITY
The rating is supported by the liquidity provided by Windstream's
$1.25 billion revolving credit facility (RCF). At June 30, 2016,
approximately $1.1 billion was available. The revolver availability
was supplemented with $61 million in cash at the end of 3Q16.
The $1.25 billion senior secured RCF is in place until April 2020.
Principal financial covenants in Windstream's secured credit
facilities require a minimum interest coverage ratio of 2.75x and a
maximum leverage ratio of 4.5x. The dividend is limited to the sum
of excess FCF and net cash equity issuance proceeds subject to pro
forma leverage of 4.5x or less.
In March 2016, Windstream entered into an incremental secured term
loan approximating $600 million, and in September 2016, increased
the amount to $747 million. In 2016, the company used proceeds from
its senior secured facilities to repay its 2017 senior unsecured
debt maturity, which totalled $904 million at year-end 2015. There
are no major maturities in 2017 and 2018.
In June 2016, Windstream engaged in two debt-for-equity exchanges
of its stake in CSAL, which reduced its revolver borrowings by $672
million
In 2016, Fitch expects post-dividend FCF to range from negative
$200 million to negative $250 million, including expected spending
of $200 million in 2016 on Windstream's Project Excel. In 2017,
Fitch expects capital spending to return to normal levels on the
completion of Project Excel, and Fitch expects Windstream to return
to positive FCF in 2017, including the effect of the merger with
EarthLink.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings:
Windstream Services, LLC
-- Long-Term IDR at 'BB-';
-- $1.25 billion senior secured RCF due 2020 at 'BB+/RR1';
-- $575 million senior secured credit facility, Tranche B5 due
2019 at 'BB+/RR1';
-- $747 million senior secured credit facility, Tranche B6 due
2021 at 'BB+/RR1';
-- Senior unsecured notes at 'BB-/RR4'.
Windstream Holdings of the Midwest, Inc.
-- Long-Term IDR at 'BB-';
-- $100 million secured notes due 2028 at 'BB-/RR4'.
The Rating Outlook is Stable.
The 'BB-/RR4' rating on Windstream Services, LLC's senior unsecured
7.875% notes due Nov. 1, 2017 was previously withdrawn as the notes
have been repaid.
WINERY AT ELK: Seeks to Employ Meridian Law Firm as Counsel
-----------------------------------------------------------
The Winery at Elk Manor, LLC, seeks authorization from the U.S.
Bankruptcy Court for the District of Maryland to employ Meridian
Law, LLC as counsel.
Meridian will perform all legal services required by the Debtor in
the case, except those performed by any special counsel whose
retention is approved by the Court.
Meridian will be paid at an hourly rate of $325, plus reasonable
and customary disbursements.
Prior to the October 20, 2016 petition date, the Debtor retained
Meridian to provide legal services in connection with the filing
and prosecution of its Chapter 11 case.
Aryeh E. Stein, Esq., principal of Meridian, 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.
Meridian can be reached at:
Aryeh E. Stein, Esq.
600 Reisterstown Road, Suite 700
Baltimore, MD 21208
Tel.: (443) 326-6011
Email: astein@meridianlawfirm.com
About The Winery at Elk Manor
The Winery at Elk Manor, LLC filed a Chapter 11 petition (Bankr. D.
Md. Case No.: 16-23963) on October 20, 2016 and is represented by
Aryeh E. Stein, Esq., in Baltimore, Maryland.
At the time of filing, the Debtor had $1 million to $10 million in
estimated assets and $1 million to $10 million in estimated
liabilities.
The petition was signed by Gretchen J. Tusha, managing member.
A copy of the Debtor's list of 15 unsecured creditors is available
for free at http://bankrupt.com/misc/mdb16-23963.pdf
[*] NJ Supreme Court Censures Lawyer
------------------------------------
Bill Wichert, writing for Bankruptcy Law360, reported that the New
Jersey Supreme Court on Friday censured Francis P. Crotty, Esq., an
attorney, for falsely claiming that he was licensed to practice law
in New York in connection with two bankruptcy-related matters,
including by using a law firm's outdated letterhead to mislead a
federal court. The Supreme Court issued an order to censure Mr.
Crotty based on the recommendation of the court's Disciplinary
Review Board, which found that the discipline was appropriate
despite Crotty's otherwise unblemished 40-year career and his
history of military and community service.
*********
Monday's edition of the TCR delivers a list of indicative prices
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then-ending.
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