/raid1/www/Hosts/bankrupt/TCR_Public/161115.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, November 15, 2016, Vol. 20, No. 319
Headlines
111 CHERRY STREET: Employs Trenk DiPasquale as Attorney
137 WEST: Taps Trenk DiPasquale as Attorney
22ND CENTURY: Incurs $2.67 Million Net Loss in Third Quarter
ACHAOGEN INC: Incurs $11 Million Net Loss in Third Quarter
ACI WORLDWIDE: S&P Lowers CCR to 'BB-' Over Weak Liquidity
ACTIVECARE INC: Adopts 2016 Incentive Stock Option Plan
ACTIVECARE INC: Appoints Two New Board Members
ACTIVECARE INC: Effects a 1-for-500 Reverse Stock Split
ALLIANCE ONE: Incurs $15.6 Million Net Loss in Second Quarter
AMERICAN APPAREL: Case Summary & 30 Top Unsecured Creditors
AMERICAN APPAREL: Files for Ch. 11 as Turnaround Strategy Flopped
AMPLIPHI BIOSCIENCES: Recurring Losses Raise Going Concern Doubt
ANTHONY LAWRENCE: Plan Filing Period Extended to April 17
APACHE FINANCE: Moody's Keeps Ba1 Backed Subordinate Shelf Rating
APRICUS BIOSCIENCES: Incurs $1.29 Million Net Loss in 3rd Quarter
ARTHUR MANNING: Plan Confirmation Hearing Set for Dec. 13
ASPEN GROUP: Extends CEO's Term by Three Years
ASTORIA FINANCIAL: Moody's Places Ba2 Rating on Review for Upgrade
AYTU BIOSCIENCE: Had $5.72M Net Loss in First Fiscal Quarter 2017
B&B REAL ESTATE: Newtek & MCTCB To Be Paid in Full Under Plan
BAY CIRCLE: Hires RG Real Estate as Broker
BEAZER HOMES: Danny Shepherd Named to the Board of Directors
BERNARD GLIEBERMAN: Court Okays BR North's Disclosure Statement
BINDER MACHINERY: Hires Phoenix Capital as Investment Banker
BIONITROGEN HOLDINGS: Has Until Dec. 16 to File Plan
BIOSCRIP INC: S&P Cuts Rating to 'CCC', Sees Default in 6 Mos.
BONANZA CREEK: Covenant Violations Raise Going Concern Doubt
BURCON NUTRASCIENCE: 1st CLARISOY Production Facility Commissioned
C & D PRODUCE: Court Extends Plan Filing Period to Jan. 16
C & D PROPERTIES: IRS To Be Paid $125 Per Quarter in 1 Year
C&C CAPITAL: Has Until Feb. 21 to File Chapter 11 Plan
CAAZ VENTURES: Capital Fund Does Not Consent to Cash Use
CADIZ INC: Incurs $5.17 Million Net Loss in Third Quarter
CAR CHARGING: Files Preliminary Prospectus with SEC
CARLOS ANTIGUA: Unsecured Creditors to be Paid 100% Over 5 Years
CHC GROUP: Files Chapter 11 Plan of Reorganization
CHF-DEKALB II: S&P Lowers Rating on 2011 Revenue Bonds to 'BB'
COBALT INTERNATIONAL: To Consummate Debt Exchange Transaction
COCRYSTAL PHARMA: Incurs $1.88 Million Net Loss in Third Quarter
COLUCCI TILE: Court Extends Plan Filing Period to Feb. 8
COMBIMATRIX CORP: Incurs $856K Net Loss in Third Quarter
COMPCARE MEDICAL: PCO Files 2nd Interim Report
COMSTOCK RESOURCES: Reports 3rd Quarter 2016 Financial Results
CONCORDIA INTERNATIONAL: S&P Lowers CCR to 'B-'; Outlook Neg.
CONSTELLATION BRANDS: Moody's Ba1 CR on Review For Upgrade
CONTROL COMMUNICATIONS: Allowed to File Plan Until Dec. 23
COSMOPOLITAN HOTEL: DBRS Assigns BB Rating on Class E Notes
CREW ENERGY: S&P Affirms 'B' CCR; Outlook Stable
CTI BIOPHARMA: Incurs $29.2 Million Net Loss in Third Quarter
CUI GLOBAL: Reports $507,000 Net Loss for Third Quarter
CUMULUS MEDIA: Posts $46.3 Million Net Income for Third Quarter
CYTOSORBENTS CORP: Incurs $2.68 Million Net Loss in Third Quarter
D & C ENTERPRISES: Unsecureds To Get $500 for 84 Mos. at 0%
DAKOTA PLAINS: Forbearance Period Extended Until January 2017
DAKOTA PLAINS: James Thornton Quits as Chief Financial Officer
DAKOTA PLAINS: Posts $16.1 Million Net Income for Third Quarter
DEVAL CORPORATION: Case Summary & 20 Largest Unsecured Creditors
DEXTERA SURGICAL: Reports Fiscal 2017 First Quarter Results
DIAMONDHEAD CASINO: Incurs $377K Net Loss in Third Quarter
DOMINICA LLC: Hires Suffolk as Real Estate Broker
DOOR TO DOOR: Can Get $1 -Mil. DIP Loan, Use Cash on Interim Basis
DUER WAGNER: Hires Bonds Ellis as Bankruptcy Counsel
ELBIT IMAGING: 2014 Restructuring Plan of Subsidiary Revised
ENDLESS POSSIBILITIES: Unsecureds To Get $75,000 in 10 Years
ENERGY FUTURE: Parties Seek Dismissal of Chapter 11 Cases
ENERGY XXI: Enters Into Plan Support Agreement with Creditors
ENVISION HEALTHCARE: S&P Rates Proposed $750MM Sr. Notes 'B'
EQUINOX HOLDINGS: Moody's B2 CFR Unchanged Amid Debt Issuance
ERICKSON INC: Moody's Assigns Default Rating After Ch.11 Filing
ERICKSON INC: Nov. 18 Meeting Set to Form Creditors' Panel
ESTERLITA TAPANG: Unsecured Creditors to be Paid 2% Under Plan
EVO PAYMENTS: $690MM in New Loans Get B-Level Rating from S&P
EVO PAYMENTS: Gets Moody's B2 Corp. Rtng Amid $845MM in New Loans
FIDELITY NATIONAL: Fitch Affirms 'BB+' Senior Unsecured Debt Rating
FIELDPOINT PETROLEUM: Completes First Tranche of Funding
FOUNDATION HEALTHCARE: Appoints Justin Bynum as CFO
FPL ENERGY: Fitch Affirms 'BB' Debt Rating on $365MM Opco Notes
FUNCTION(X) INC: Seeks to Settle Dispute with Debenture Holders
GENIUS BRANDS: Effects Reverse Common Stock Split
GENIUS BRANDS: To Effect a 1-for-3 Stock Split
GIGA-TRONICS INC: Incurs $396,000 Net Loss in Second Quarter
GLOBAL AMENITIES: Taps Sfiris as Financial Services Provider
GOLFSMITH INT'L: CPO Recommends Transfer of the Customers' PII
HALCON RESOURCES: Moody's Assigns B3 Rating After Ch.11 Exit
HEAT BIOLOGICS: Recurring Losses Raise Going Concern Doubt
HECK INDUSTRIES: Investar To Be Paid $600K of BP Claim Proceeds
HIG HOLDINGS: S&P Affirms 'B' CCR & Rates $273.5MM Facilities 'B'
HIGGINBOTHAM INSURANCE: Moody's Keeps B3 Rating on Term Loan Hike
HILTON GRAND: S&P Assigns 'BB+' CCR; Outlook Stable
HOUSTON BLUEBONNET: Hires Ellison Firm as Special Counsel
HOUSTON BLUEBONNET: Hires Snelling Firm as Special Counsel
ICTS INTERNATIONAL: Reports $3.3-Mil. Net Loss in June 30 Quarter
ILLINOIS POWER: Has Insufficient Cash to Satisfy Maturing Debt
ILLINOIS POWER: Launches Restructuring Transaction
INMAR INC: Moody's B2 Rating Unchanged Amid $125MM Term Loan Hike
INMAR INC: S&P Affirms 'B' CCR; Outlook Stable
INT'L SHIPHOLDING: Liberty Global Objects to RSA with SEACOR
INTERPACE DIAGNOSTICS: Heartland Holds 8.7% Stake as of Oct. 31
ION GEOPHYSICAL: James Lapeyre Reports 10% Stake as of Nov. 3
ION MEDIA: Moody's Says B1 CFR Unchanged Amid Term Loan Add-On
ION MEDIA: S&P Affirms 'B+' CCR; Outlook Stable
IPS STRUCTURAL: Moody's Assigns B3 Rating Amid $420MM in New Loans
ISIGN SOLUTIONS: Obtains $900,000 Loans from Investors
ITT EDUCATIONAL: Former Lender Moves to Seize $8.8M
JO-JO HOLDINGS: Nov. 18 Meeting Set to Form Creditors' Panel
JOHN R. FRIEDENBERG: Disclosure Statement Hearing on Dec. 13
JOHN SILAS: Disclosure Statement Hearing on Jan. 10
JOSE DIEGO ESPINOZA: Disclosures Okayed, Plan Hearing on Dec. 6
JOSE JAIMES VERA: Unsecured Creditors To Get 0.90% Under Plan
JOSEPH HEATH: Mitchells Buying Alexandria Property for $601,000
JPE HOME: Unsecureds To Recover 25% Under Plan
K4M CONSTRUCTION: Dec. 1 Plan Confirmation Hearing
KATE SPADE: S&P Raises CCR to 'BB-'; Outlook Stable
KEY ENERGY: Hires Alvarez & Marsal as Financial Advisors
KEY ENERGY: Hires Epiq as Administrative Agent
KEY ENERGY: Hires PJT Partners as Investment Banker
KEY ENERGY: Hires Sidley Austin as Counsel
KEY ENERGY: Taps Young Conaway as Bankruptcy Co-counsel
KLEEN ENERGY: Fitch Affirms 'BB' Ratings on $358MM in Term Loans
KLX INC: S&P Affirms 'B+' CCR; Outlook Remains Negative
LAKEWOOD DEVELOPMENT: Hires Krigel & Krigel as Bankr. Counsel
LAW-DEN NURSING: Patient Care Ombudsman Files 2nd Report
LBJ HEALTHCARE: Mattresses Needed Replacements, PCO Says
LEARFIELD COMMS: Moody's Assigns B2 Corp. Rating Amid Atairos Deal
LEARFIELD COMMS: S&P Assigns 'B' Credit Rating Over Atairos Deal
LIBERTY INTERACTIVE: Fitch Affirms 'BB' LT Issuer Default Rating
LIGHTNING BOLT LEASING: Disclosure Statement Hearing on Dec. 20
LINN ENERGY: Creditors' Panel Hires Gardere as Local Counsel
LONG-DEI LIU: PCO Files Third Interim Report
MADDYBRAND INC: Hires James M. Joyce as Bankr. Counsel
MARACAS CLUB: DOJ Watchdog Seeks Ch. 11 Trustee Appointment
MARY STREET: Seeks to Employ Trenk DiPasquale as Attorney
MCDONALD BUILDING: Hires ROI as Commercial Real Estate Broker
MENCO PACIFIC: Hires Kallman & Thompson as Accountants
MERRIMACK PHARMACEUTICALS: Incurs $30.3 Million Net Loss in Q3
METABOLIX INC: Signs Separation Agreement with Former CEO
MGM RESORTS: Posts $535.6 Million Net Income for Third Quarter
MIAMI TEES: Unsecureds To Recover 17.25% Under Plan
MIDCONTINENT COMMS: $535MM in New Loans Get "BB+" from S&P
MIGUEL ANGEL RODRIGUEZ: Unsecured Creditors to be Paid 3.6%
MIRAMAR LABS: Recurring Losses Raise Going Concern Doubt
MMM HOLDINGS: S&P Affirms 'B-' Rating Amid Term Loan Extension
MOBILESMITH INC: Incurs $1.57 Million Net Loss in Third Quarter
MORAN FOODS: Moody's Assigns B2 Corporate Rating Amid Onex Deal
MORGANS HOTEL: Extends Merger Termination Date to Nov. 30
MORGANS HOTEL: Incurs $13.2 Million Net Loss in Third Quarter
MOUNTAIN PROVINCE: Appoints Karen Goracke to Board of Directors
MOUNTAINEER GAS: Fitch Affirms 'BB+' LT Issuer Default Rating
MUSCLEPHARM CORP: Incurs $1.44 Million Net Loss in Third Quarter
NEONODE INC: Incurs $2.16 Million Net Loss in Third Quarter
NEWALTA CORPORATION: DBRS Cuts Issuer Rating to 'CCC'
NORTH GATEWAY CORE: Hires Henry & Horne as Expert Witness
NORTH WASATCH: DOJ Watchdog Seeks Ch. 7 Conversion, Ch. 11 Trustee
NUVERRA ENVIRONMENTAL: Incurs $38.4 Million Net Loss in Q3
OLMOS EQUIPMENT: Hires Greg Murray as Accountant
OLMOS EQUIPMENT: Hires Williams Crow as Accountant
ONEMAIN HOLDINGS: Fitch Affirms 'B-' LT Issuer Default Ratings
OTS CAPITAL: Case Summary & 20 Largest Unsecured Creditors
OUT OF THIS WORLD: Names Carmen Conde Torres as Counsel
OUTSIDE PLANET: Hires Adams Law as Counsel
OUTSIDE PLANT: Hires Buechler & Garber as Counsel
PARADISE TRANSITIONAL: Hires Medley & Associates as Counsel
PARAGON OFFSHORE: Dean Taylor Named as President & CEO
PCI MANUFACTURING: Selling Texas Property at Auction on Dec. 14
PERPETUAL ENERGY: S&P Assigns 'CCC', Sees Need for External Funds
PHILADELPHIA ENERGY: Moody's Cuts Rating to B3 Over Weak Margins
PICO HOLDINGS: FT Covers RPN's Struggle For Value Creation
PLUG POWER: Announces 2016 Third Quarter Results
POST EAST: Hires Chappo as Mortgage Broker
PRO CONSTRUCTION: Hires Ernest DeMarco as Accountant
PROFESSIONAL PROVIDER: Hires Van Horn as Counsel
PYKKONEN CAPITAL: Plan Confirmation Hearing on Dec. 6
QUINTESS LLC: Creditors' Panel Hires Brown Rudnick as Co-counsel
QUOTIENT LIMITED: May Issue Add'l 1.1M Shares Under Incentive Plan
RALPH ROBERTS: Court DirectsTurnover of Profit from Property Sale
RAY MARVIN GOTTLIEB: Former Wife Files Plan of Liquidation
RAY MARVIN GOTTLIEB: Judgment Creditor Seeks Ch. 11 Trustee
RED DOOR LOUNGE: Court Converts Bankruptcy Case to Ch. 7
RESOLUTE ENERGY: Incurs $18.9 Million Net Loss in Third Quarter
RESOLUTE ENERGY: Offering $750 Million Worth of Securities
ROCKWELL MEDICAL: Incurs $4.56 Million Net Loss in Third Quarter
RONALD MARINO: Nov. 22 Deadline to File Confirmation Objections
SABLE NATURAL: Case Summary & 20 Largest Unsecured Creditors
SAILING EMPORIUM: Wants to Use Cash Collateral Until Jan. 31
SAWTELLE PARTNERS: Approval of Peter Mastan as Trustee Sought
SKYPORT GLOBAL: 5th Circ. Affirms $137K Sanction vs. Attorneys
SMART MOTION: Richard Voell to Get $2,000 Per Month Under Plan
SMITH ACQUISITION: S&P Assigns 'B' CCR for Supervalue Spinoff
SMITH FARM: Case Summary & 9 Unsecured Creditors
SOCIEDAD EL PARAISO: Disclosures OK'd; Plan Hearing on Dec. 14
SOTERA WIRELESS: Creditors' Panel Hires Sullivan Hill as Counsel
SOTERA WIRELESS: Hires Foley & Lardner as Counsel
SPECTRUM HEALTHCARE: DOJ Watchdog Names Nancy Shaffer as PCO
STARCO VENTURES: Ch. 11 Trustee Hires Jacob as Real Estate Agent
STEVEN LEYDIG: Has Until Nov. 18 To File Plan, Disclosure Statement
SUNEDISON INC: Brookfield in Deal Talks for TerraForm Yieldcos
TATOES LLC: Cash Use on Final Basis Until January 2017 OK
TAYLOR EQUIPMENT: Case Summary & 7 Unsecured Creditors
TEMPLE UNIVERSITY: Fitch Affirms BB+ Rating on 2 Cl. of Bonds
TENAFLY GOURMET: Hires Shin & Jung as Bankruptcy Counsel
TIDEWATER INC: Obtains Covenant Waiver Extension Until January 27
TRIDENT HOLDING: S&P Affirms 'B-' Corporate Credit Rating
TRIDENT USA: Moody's Affirms B3 CFR & Revises Outlook to Stable
TRINITY RIVER: Hires T2 Land as Ordinary Course Professionals
TUSCANY ENERGY: Given Until Dec. 30 to Solicit Acceptances to Plan
UD DISSOLUTION: Hires Morris James as Special Counsel
ULTRA PETROLEUM: Unit Agrees to Assume Pinedale Liquids Lease
UNCAS LLC: Hires Chappo as Mortgage Broker
UNI-PIXEL INC: May Issue Add'l 1.6M Shares Under Incentive Plan
USG CORP: S&P Raises CCR to 'BB+' & Removes from CreditWatch Pos.
UTSTARCOM HOLDINGS: Chief Financial Officer Resigns
UTSTARCOM HOLDINGS: Gu, et al., Own 13.7% of Shares as of Oct. 31
UTSTARCOM HOLDINGS: Guoping Gu Quits From Board of Directors
UTSTARCOM HOLDINGS: Incurs $1.83 Million Net Loss in Third Quarter
VALEANT PHARMACEUTICALS: Reports Q3 2016 Financial Results
WALDEN REAL ESTATE: Hires DurretteCrump as Counsel
WATCO COS: S&P Revises Outlook to Negative After SkyKnight Deal
WELLFLEX ENERGY: Nov. 30 Hearing on Liquidation Plan Confirmation
WESTMORELAND COAL: Files Copy of Investor Presentation with SEC
WILLIAM COLE: Wells Fargo Opposes Approval of Plan Outline
WILLIAM MERLO: Unsecureds To Get Pro Rata Distribution of 25%
WILLIAM S. MERRELL: Disclosures OK'd; Plan Hearing on Dec. 7
WYNN RESORTS: S&P Cuts Corp. Rating to 'BB-' Over Macau Property
XEROX BUSINESS: Moody's Assigns B2 Rating on Unsecured Bond Issue
YRC WORLDWIDE: Presented at Stephens Fall Conference
*********
111 CHERRY STREET: Employs Trenk DiPasquale as Attorney
-------------------------------------------------------
111 Cherry Street, Inc., seeks authorization from the U.S.
Bankruptcy Court for the District of New Jersey to employ Trenk,
DiPasquale, Della Fera & Sodono, P.C. as attorney.
The Debtor requires Trenk DiPasquale to:
(a) advise the Debtor with respect to the power, duties and
responsibilities in the continued management of the financial
affairs as a debtor, including the rights and remedies of the
debtor-in-possession with respect to its assets and with respect to
the claims of creditors;
(b) advise the Debtor with respect to preparing and obtaining
approval of a Disclosure Statement and Plan of Reorganization;
(c) prepare on behalf of the Debtor, as necessary,
applications, motions, complaints, answers, orders, reports and
other pleadings and documents;
(d) appear before the Court and other officials and tribunals,
if necessary, and protect the interests of the Debtor in federal,
state and foreign jurisdictions and administrative proceedings;
(e) negotiate and prepare the documents relating to the use,
reorganization and disposition of assets, as requested by the
Debtor;
(f) negotiate and formulate a Disclosure Statement and Plan of
Reorganization;
(g) advise the Debtor concerning the administration of its
estate as a debtor-in-possession; and,
(h) perform such other legal services for the Debtor, as may
be necessary and appropriate.
Trenk DiPasquale will be paid at these hourly rates:
Richard D. Trenk (Director) $610
Irena Goldstein (Director) $460
Robert S. Roglieri (Associate) $240
Partners $375 - $610
Associates $225 - $370
Law Clerks $195
Paralegals and Support Staff $145 - $210
Richard D. Trenk, Esq., attorney-at-law of Trenk DiPasquale,
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.
Trenk DiPasquale can be reached at:
Richard D. Trenk, Esq.
TRENK, DIPASQUALE, DELLA FERA & SODONO, P.C.
347 Mount Pleasant Ave # 300
West Orange, NJ 07052
Tel.: 973-323-8660
Fax: 973-243-8677
Email: rtrenk@trenklawfirm.com
Headquartered in New Jersey, HarMac Corp., et al., are engaged in
the rental business owning four residential rooming houses
(specifically for low income individuals) with 69 units and a
commercial office building located in Union County. The units
consist of studios and shared living spaces, and most rents are
subsidized.
HarMac Corp., Mary Street Housing, LLC, 111 Cherry Street, Inc.,
137 West 5th Associates, LLC and 301 3rd Street, LLC, each filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
D.N.J. Lead Case No. 16-29568) on Oct. 13, 2016. The Chapter 11
cases are jointly administered. The Chapter 11 cases are assigned
to Judge Vincent F. Papalia.
The Debtors are represented by Robert S. Roglieri, Esq., and
Richard D. Trenk, Esq., at Trenk, Dipasquale, Dellafera & Sodona,
P.C., in West Orange, New Jersey.
137 WEST: Taps Trenk DiPasquale as Attorney
-------------------------------------------
137 West 5th Associates, LLC, seeks authorization from the U.S.
Bankruptcy Court for the District of New Jersey to employ Trenk,
DiPasquale, Della Fera & Sodono, P.C. as attorney.
The Debtor requires Trenk DiPasquale to:
(a) advise the Debtor with respect to the power, duties and
responsibilities in the continued management of the financial
affairs as a debtor, including the rights and remedies of the
debtor-in-possession with respect to its assets and with respect to
the claims of creditors;
(b) advise the Debtor with respect to preparing and obtaining
approval of a Disclosure Statement and Plan of Reorganization;
(c) prepare on behalf of the Debtor, as necessary,
applications, motions, complaints, answers, orders, reports and
other pleadings and documents;
(d) appear before the Court and other officials and tribunals,
if necessary, and protect the interests of the Debtor in federal,
state and foreign jurisdictions and administrative proceedings;
(e) negotiate and prepare the documents relating to the use,
reorganization and disposition of assets, as requested by the
Debtor;
(f) negotiate and formulate a Disclosure Statement and Plan of
Reorganization;
(g) advise the Debtor concerning the administration of its
estate as a debtor-in-possession; and,
(h) perform such other legal services for the Debtor, as may
be necessary and appropriate.
Trenk DiPasquale will be paid at these hourly rates:
Richard D. Trenk (Director) $610
Irena Goldstein (Director) $460
Robert S. Roglieri (Associate) $240
Partners $375 - $610
Associates $225 - $370
Law Clerks $195
Paralegals and Support Staff $145 - $210
Richard D. Trenk, Esq., attorney-at-law of Trenk DiPasquale,
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.
Trenk DiPasquale can be reached at:
Richard D. Trenk, Esq.
TRENK, DIPASQUALE, DELLA FERA & SODONO, P.C.
347 Mount Pleasant Ave # 300
West Orange, NJ 07052
Tel.: 973-323-8660
Fax: 973-243-8677
Email: rtrenk@trenklawfirm.com
Headquartered in New Jersey, HarMac Corp., et al., are engaged in
the rental business owning four residential rooming houses
(specifically for low income individuals) with 69 units and a
commercial office building located in Union County. The units
consist of studios and shared living spaces, and most rents are
subsidized.
HarMac Corp., Mary Street Housing, LLC, 111 Cherry Street, Inc.,
137 West 5th Associates, LLC and 301 3rd Street, LLC, each filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
D.N.J. Lead Case No. 16-29568) on Oct. 13, 2016. The Chapter 11
cases are jointly administered. The Chapter 11 cases are assigned
to Judge Vincent F. Papalia.
The Debtors are represented by Robert S. Roglieri, Esq., and
Richard D. Trenk, Esq., at Trenk, Dipasquale, Dellafera & Sodona,
P.C., in West Orange, New Jersey.
22ND CENTURY: Incurs $2.67 Million Net Loss in Third Quarter
------------------------------------------------------------
22nd Century Group, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.67 million on $3.09 million of net sale of products for the
three months ended Sept. 30, 2016, compared to a net loss of $2.76
million on $2.66 million of net sale of products for the three
months ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $8.83 million on $8.94 million of net sale of products
compared to a net loss of $8.16 million on $5.59 million of net
sale of products for the same period a year ago.
As of Sept. 30, 2016, 22nd Century had $19.56 million in total
assets, $3.39 million in total liabilities and $16.16 million in
total shareholders' equity.
As of Sept. 30, 2016, the Company had positive working capital of
approximately $5.68 million compared to positive working capital of
approximately $3.99 million at Dec. 31, 2015, an increase of
approximately $1.69 million. The increase in the Company's working
capital position was mainly a result of the net proceeds received
from registered direct offerings in February and July of 2016 in
the aggregate amount of approximately $9.77 million, offset by cash
used in the Company's operating activities of approximately $7.98
million.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/lJtayK
About 22nd Century
Clarence, New York-based 22nd Century Group, Inc., through its
wholly-owned subsidiary, 22nd Century Ltd, is a plant
biotechnology company using technology that allows for the level
of nicotine and other nicotinic alkaloids (e.g., nornicotine,
anatabine and anabasine) in tobacco plants to be decreased or
increased through genetic engineering and plant breeding.
22nd Century reported a net loss of $11.03 million on $8.52 million
of revenue for the year ended Dec. 31, 2015, compared to a net loss
of $15.59 million on $528,991 of revenue for the year ended Dec.
31, 2014.
ACHAOGEN INC: Incurs $11 Million Net Loss in Third Quarter
----------------------------------------------------------
Achaogen, Inc. filed with the Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of $11.03
million on $16.04 million of contract revenue for the three months
ended Sept. 30, 2016, compared to a net loss of $8.76 million on
$4.47 million of contract revenue for the three months ended Sept.
30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $41.50 million on $31.03 million of contract revenue
compared to a net loss of $15.82 million on $21.39 million of
contract revenue for nine months ended Sept. 30, 2015.
As of Sept. 30, 2016, Achaogen had $80.66 million in total assets,
$49.64 million in total liabilities and $31.01 million in total
stockholders' equity.
"The Company has incurred losses and negative cash flows from
operations every year since its inception. As of September 30,
2016, the Company had unrestricted cash, cash equivalents and
short-term investments of approximately $61.1 million and an
accumulated deficit of approximately $217.5 million. Management
expects to continue to incur additional substantial losses for the
foreseeable future as a result of the Company's research and
development activities, and the amounts of unrestricted cash, cash
equivalents and short-term investments held at September 30, 2016
are sufficient to fund our current planned operations at least
through the beginning of the second quarter of 2017 without
securing additional funding sources. Management is currently
evaluating different options for the raising of additional funds
through equity or debt financing arrangements, government contracts
and/or third party collaboration funding, however, there can be no
assurance that such funding sources will be available at terms
acceptable to the Company or at all. If the Company is unable to
raise additional funding to meet its working capital needs, it will
be forced to delay or reduce the scope of its research programs
and/or limit or cease its operations. The lack of financial
resources to fund projected negative cash flows and the resultant
need to raise substantial additional funding in the near term in
order to sustain operations raise substantial doubt as to the
Company's ability to continue as a going concern," the Company
stated in the report.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/duhBko
About Achaogen
Achaogen, Inc. is a clinical-stage biopharmaceutical company
passionately committed to the discovery, development, and
commercialization of novel antibacterials to treat multi-drug
resistant gram-negative infections. The Company is developing
plazomicin, its lead product candidate, for the treatment of
serious bacterial infections due to MDR Enterobacteriaceae,
including carbapenem-resistant Enterobacteriaceae. In 2013, the
Centers for Disease Control and Prevention identified CRE as a
"nightmare bacteria" and an immediate public health threat that
requires "urgent and aggressive action."
Achaogen reported a net loss of $27.09 million in 2015, a net loss
of $20.17 million in 2014 and a net loss of $13.11 million in
2013.
The Company's independent accounting firm Ernst & Young LLP, in
Redwood City, California, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2015, citing that the Company's recurring losses from operations
and its need for additional capital raise substantial doubt about
its ability to continue as a going concern.
ACI WORLDWIDE: S&P Lowers CCR to 'BB-' Over Weak Liquidity
----------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on Naples,
Fla.-based ACI Worldwide Inc. to 'BB-' from 'BB'. The outlook is
negative.
At the same time, S&P lowered its issue-level rating on the
company's $300 million senior unsecured notes to 'BB-' from 'BB'.
The '3' recovery rating remains unchanged, indicating S&P's
expectation for meaningful (50%-70%; upper half the range) recovery
in a default scenario.
"The rating action reflects our view of ACI's weak operating
performance in recent quarters, which has led to less-than-adequate
liquidity," said S&P Global Ratings credit analyst Andrew Chang.
The negative outlook on ACI reflects S&P's view that it could lower
its rating on the company over the next 12 months given the thin
covenant headroom coupled with operating performance that could
remain volatile over the next few quarters.
ACTIVECARE INC: Adopts 2016 Incentive Stock Option Plan
-------------------------------------------------------
The Board of Directors of ActiveCare, Inc., approved, authorized
and adopted the 2016 Incentive Stock Option Plan and certain forms
of ancillary agreements to be used in connection with the issuance
of stock or options pursuant to the Plan effective Nov. 1, 2016.
The Company will be seeking stockholder approval of the 2016 Plan
so that compensation attributable to grants under the 2016 Plan may
qualify for an exemption from the $1 million deduction limit under
Section 162(m) of the Internal Revenue Code of 1986. The purpose
of awards under the 2016 Plan is to attract and retain talented
employees and the services of select non-employees, further align
employee and stockholder interests and closely link employee
compensation with Company performance. Eligible participants under
the 2016 Plan will be such full or part-time officers and other
employees, directors, consultants and key persons of the Company
and any Company subsidiary who are selected from time to time by
the Board or committee of the Board authorized to administer the
2016 Plan, as applicable, in its sole discretion.
The Plan provides for the issuance of up to 188,625,000 shares of
common stock of the Company through the grant of non-qualified
options, incentive options and restricted stock to directors,
officers, consultants, attorneys, advisors and employees. The
Board believes that those shares should be sufficient to cover
grants through at least the end of the fiscal year 2018.
It is intended for the 2016 Plan to be administered by the
Company's newly formed Compensation Committee, which will be
implemented upon the effectiveness of the Company's currently
outstanding registration statement on Form S-1. The Compensation
Committee will consist of at least two independent, non-employee
and outside directors. In the absence of such a Committee, the
Board will administer the 2016 Plan.
Options are subject to the following conditions:
(i) The Committee determines the strike price of Incentive
Options at the time the Incentive Options are granted. The
assigned strike price must be no less than 100% of the Fair
Market Value (as defined in the Plan) of the Company's
Common Stock. In the event that the recipient is a Ten
Percent Owner (as defined in the Plan), the strike price
must be no less than 110% of the Fair Market Value of the
Company.
(ii) The strike price of each Non-qualified Option will be at
least 100% of the Fair Market Value of such share of the
Company's Common Stock on the date the Non-qualified Option
is granted.
(iii) The Committee fixes the term of Options, provided that
Options may not be exercisable more than ten years from the
date the Option is granted, and provided further that
Incentive Options granted to a Ten Percent Owner may not be
exercisable more than five years from the date the
Incentive Option is granted.
(iv) The Committee may designate the vesting period of Options
and may accelerate at any time the exercisability or
vesting of all or any portion of any Option granted.
(v) Options are not transferable and Options are exercisable
only by the Options' recipient, except upon the recipient's
death.
(vi) To the extent required for "incentive stock option"
treatment under Section 422 of the Internal revenue Code of
1986, as amended (the "Code"), the aggregate Fair Market
Value (determined as of the grant date) of the shares with
respect to which Incentive Stock Options granted under the
Plan and any other plan of the Company or its parent and
any Subsidiary that become exercisable for the first time
by an optionee during any calendar year shall not exceed
$150,000 or such other limit as may be in effect from time
to time under Section 422 of the Code. To the extent that
any Stock Option exceeds this limit, it shall constitute a
Non-Qualified Stock Option.
(vii) Beginning on the date that the Company becomes subject to
Section 162(m) of the Code, Options with respect to no more
than 13,203,750 Shares will be granted to any one
individual in any calendar year period and no more than
15,000,000 Shares will be granted to any one individual in
any calendar year period.
(viii) Shares may be issued up to such maximum number pursuant to
any type or types of Award, and no more than 54,312,000
shares may be issued pursuant to Incentive Stock Options.
Awards of Restricted Stock are subject to the following
conditions:
(i) The Committee grants Restricted Stock Options and
determines the restrictions on each Restricted Stock Award
(as defined in the Plan). Upon the grant of a Restricted
Stock Award and the payment of any applicable purchase
price, grantee is considered the record owner of the
Restricted Stock and entitled to vote the Restricted Stock
if such Restricted Stock is entitled to voting rights.
(ii) Restricted Stock may not be delivered to the grantee until
the Restricted Stock has vested.
(iii) Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as
provided in the Plan or in the Award Agreement (as defined
in the 2016 Plan).
About ActiveCare
South West Valley City, Utah-based ActiveCare, Inc., develops and
markets products for monitoring the health of and providing
assistance to mobile and homebound seniors and the chronically
ill.
ActiveCare is organized into three business. The Stains and
Reagents segment is engaged in the business of manufacturing and
marketing medical diagnostic stains, solutions and related
equipment to hospitals and medical testing labs. The CareServices
segment is engaged in the business of developing, distributing and
marketing mobile health monitoring and concierge services to
distributors and customers. The Chronic Illness Monitoring segment
is primarily engaged in the monitoring of diabetic patients on a
real time basis.
ActiveCare reported a net loss of $12.8 million on $6.59 million of
chronic illness monitoring revenues for the year ended
Sept. 30, 2015, compared with a net loss of $16.4 million on $6.10
million of chronic illness monitoring revenues for the year ended
Sept. 30, 2014.
As of June 30, 2016, ActiveCare had $1.91 million in total assets,
$21.01 million in total liabilities and a total stockholders'
deficit of $19.10 million.
Tanner LLC, in Salt Lake City, Utah, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Sept. 30, 2015, citing that the Company has recurring losses,
negative cash flows from operating activities, negative working
capital, negative total equity, and certain debt that is in
default. These conditions, among others, raise substantial doubt
about its ability to continue as a going concern.
ACTIVECARE INC: Appoints Two New Board Members
----------------------------------------------
The size of the Board of Directors of ActiveCare Inc. has been
increased by appointing Chad Olsen and David Hall as members of
the Board, pending effectiveness of a registration statement. Upon
such effectiveness, Mr. Olsen and Mr. Hall will serve until the
next annual election of directors and until their successors are
duly elected and shall qualify. It is intended for Mr. Olsen to
act as chair of the Company's newly established audit committee and
for Mr. Hall to act as chair of the Company's newly formed
Governance and Nominating Committee.
Additionally, upon the effectiveness of the Registration Statement,
the Board has appointed current Board member Robert Welgos to serve
as chair of the Compensation Committee.
There is no arrangement or understanding between Mr. Olsen or Mr.
Hall and any other person pursuant to which they were selected as a
directors. There have been no transactions and are no currently
proposed transactions in which the Company was or is to be a
participant and the amount involved exceeds the lesser of $120,000
or 1% of the average of the Company's total assets at year-end for
the last two completed fiscal years, and in which Mr. Olsen or Mr.
Hall had or will have a direct or indirect material interest.
As new members of the Board, Mr. Olsen and Mr. Hall will be
entitled to receive the same compensation provided to the Company's
other non-employee directors. Those directors receive $2,500 a
month for their service in such capacity.
The Board has determined that Mr. Olsen and Mr. Hall qualify as
independent directors under the rules of The Nasdaq Stock Market.
Below is a description of Mr. Olsen's and Mr. Hall's professional
work experience.
Chad Olsen, age 45, Director
Since May 2016, Mr. Olsen has served as the chief financial officer
and chief operating officer of Search Group Partners, Inc., a
premier recruiting firm that offers professional talent acquisition
and consulting services to both local and nation-wide searches with
its headquarters located in Salt Lake City, Utah. Previously, he
provided accounting and consulting services as the founder and
president of Acreal, LLC from May 2014 to May 2016. Prior to
Acreal, he served for four years as Chief Financial Officer for
Track Group, Inc. from January 2010 to May 2014, which provided
electronic monitoring services as a lower-cost alternative to
incarceration. Previous to his appointment as CFO, he served as
Track Group's corporate controller from September 2001 to January
2010. Additionally, he served as Track Group's corporate secretary
from January 2010 to November 2011. From 1997 to 2001, Mr. Olsen
worked at Kartchner and Purser, P.C., a certified public accounting
firm in performing tax, auditing, and business advisory services.
From 1992 to 1996, Mr. Olsen worked in the banking industry with
Universal Community Credit Union where he supervised teller and
member services employees.
Mr. Olsen received a Bachelor of Science Degree in Accounting from
Brigham Young University.
David Hall, age 48, Director
Mr. Hall is the founder and president of HSA Health Insurance
Company (a.k.a HSA Heath Plan), a health insurance company that
offers HSA based health plans exclusively to the fully insured
group market and the self-funded group market. Prior to HSA Heath
Plan, in 2003 Mr. Hall co-founded HealthEquity, Inc. (NASDAQ: HQY),
a leader in the Consumer Directed Healthcare space HealthEquity
with over $4 billion of assets under management and over 2.2
million HSAs. Prior to co-founding HealthEquity, Mr. Hall worked
with Peppers & Rogers Group, a firm specializing in Customer
Relationship Management strategy from May 2000 through January
2003. In addition to these business ventures, Mr. Hall served as
President from May 1999 to May 2000 of TimeMarker, Inc., a company
that helped other businesses leverage the Internet to sell their
time-perishable inventory using a proprietary wireless exchange
platform. Prior to this, he worked for Ernst and Young in their
Strategic Advisory Services group from May 1997 through May 1999.
Mr. Hall received a master of business administration from Brigham
Young University and a bachelor's in English from Weber State
University.
Pending the effectiveness of the Company's Registration Statement,
the Board has established a standing Audit Committee to be
comprised of independent directors and adopted the Audit Committee
Charter. The Audit Committee assists the board in fulfilling its
oversight responsibility relating to the integrity of the Company's
financial statements, the Company's compliance with legal and
regulatory requirements and the qualifications and independence of
the Company's independent registered public accountants. The Audit
Committee is to be comprised of three independent members,
including Director Nominees, Chad Olsen (Chair), David Hall, and
current Board member Robert Welgos. The Board has determined that
Mr. Olsen qualifies as an "audit committee financial expert" as
defined by the Securities and Exchange Commission. A copy of the
Audit Committee Charter will be posted on our corporate website at
www.activecare.com upon effectiveness of the Registration
Statement.
Additionally, pending the effectiveness of the Registration
Statement, the Company's Board has established a standing
Compensation Committee and Nominating and Corporate Governance
Committee. Each committee will be comprised of three independent
members, including Director Nominees, Mr. Chad Olsen (chair Audit
Committee), Mr. David Hall (chair of Nominating and Corporate
Governance Committee) and current Board member Mr. Robert Welgos
(chair of Compensation Committee). A copy of the Compensation
Committee Charter and Corporate Governance and the Nominating
Committee Charter, upon effectiveness of the Registration
Statement, will be posted on our corporate website at
www.activecare.com.
About ActiveCare
South West Valley City, Utah-based ActiveCare, Inc., develops and
markets products for monitoring the health of and providing
assistance to mobile and homebound seniors and the chronically
ill.
ActiveCare is organized into three business. The Stains and
Reagents segment is engaged in the business of manufacturing and
marketing medical diagnostic stains, solutions and related
equipment to hospitals and medical testing labs. The CareServices
segment is engaged in the business of developing, distributing and
marketing mobile health monitoring and concierge services to
distributors and customers. The Chronic Illness Monitoring segment
is primarily engaged in the monitoring of diabetic patients on a
real time basis.
ActiveCare reported a net loss of $12.8 million on $6.59 million of
chronic illness monitoring revenues for the year ended
Sept. 30, 2015, compared with a net loss of $16.4 million on $6.10
million of chronic illness monitoring revenues for the year ended
Sept. 30, 2014.
As of June 30, 2016, ActiveCare had $1.91 million in total assets,
$21.01 million in total liabilities and a total stockholders'
deficit of $19.10 million.
Tanner LLC, in Salt Lake City, Utah, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Sept. 30, 2015, citing that the Company has recurring losses,
negative cash flows from operating activities, negative working
capital, negative total equity, and certain debt that is in
default. These conditions, among others, raise substantial doubt
about its ability to continue as a going concern.
ACTIVECARE INC: Effects a 1-for-500 Reverse Stock Split
-------------------------------------------------------
ActiveCare, Inc., filed with the State of Delaware a Certificate of
Amendment to Certificate of Incorporation to effectuate a 1-for-500
reverse stock split effective Nov. 1, 2016.
The Reverse Split is being implemented by the Company in
preparation for a proposed application to up-list the Company's
common stock on the NASDAQ Capital Market. The Reverse Split is
intended to fulfill the stock price requirements for listing on
NASDAQ since the requirements include, among other things, that the
Company's common stock must maintain a minimum closing price per
share of $4.00 or higher. Assuming the Company is able to meet
NASDAQ's requirements, the Company intends to file the proposed
up-list application with NASDAQ in the coming weeks after meeting
the minimum closing price requirement. However, there is no
assurance that the Company's application to up-list the Company's
common stock on NASDAQ will be approved.
The Company is currently awaiting notice from the Financial
Industry Regulatory Authority ("FINRA") that the Reverse Split has
been approved and the date upon which the Reverse Split will take
effect on the OTC Marketplace.
The Reverse Split has no impact on shareholders' proportionate
equity interests or voting rights in the Company or the par value
of the Company's common stock, which remains unchanged.
About ActiveCare
South West Valley City, Utah-based ActiveCare, Inc., develops and
markets products for monitoring the health of and providing
assistance to mobile and homebound seniors and the chronically
ill.
ActiveCare is organized into three business. The Stains and
Reagents segment is engaged in the business of manufacturing and
marketing medical diagnostic stains, solutions and related
equipment to hospitals and medical testing labs. The CareServices
segment is engaged in the business of developing, distributing and
marketing mobile health monitoring and concierge services to
distributors and customers. The Chronic Illness Monitoring segment
is primarily engaged in the monitoring of diabetic patients on a
real time basis.
ActiveCare reported a net loss of $12.8 million on $6.59 million of
chronic illness monitoring revenues for the year ended
Sept. 30, 2015, compared with a net loss of $16.4 million on $6.10
million of chronic illness monitoring revenues for the year ended
Sept. 30, 2014.
As of June 30, 2016, ActiveCare had $1.91 million in total assets,
$21.01 million in total liabilities and a total stockholders'
deficit of $19.10 million.
Tanner LLC, in Salt Lake City, Utah, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Sept. 30, 2015, citing that the Company has recurring losses,
negative cash flows from operating activities, negative working
capital, negative total equity, and certain debt that is in
default. These conditions, among others, raise substantial doubt
about its ability to continue as a going concern.
ALLIANCE ONE: Incurs $15.6 Million Net Loss in Second Quarter
-------------------------------------------------------------
Alliance One International, Inc., filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss of $15.61 million on $389.4 million of sales and other
operating revenues for the three months ended Sept. 30, 2016,
compared to a net loss of $21.12 million on $414.9 million of sales
and other operating revenues for the same period in 2015.
For the six months ended Sept. 30, 2016, the Company reported a net
loss of $47.15 million on $650.5 million of sales and other
operating revenues compared to a net loss of $47.08 million on
$681.1 million of sales and other operating revenues for the six
months ended Sept. 30, 2015.
As of Sept. 30, 2016, Alliance One had $1.99 billion in total
assets, $1.77 billion in total liabilities and $226.4 million in
total equity.
"Our liquidity requirements are affected by various factors
including crop seasonality, foreign currency and interest rates,
green tobacco prices, customer mix, crop size and quality. Working
capital at Sept. 30, 2016 improved $21.3 million when compared to
the prior year, driven by trade receivables that decreased $50.2
million to $196.0 million and a $19.4 million inventory reduction
to $944.0 million. The improvement is even greater when
considering that this year's results include our Zimbabwe
subsidiary's accounts receivable and inventory while last year's
balances do not. Additionally, our uncommitted inventory continues
to decrease. On October 14, 2016, the $210.3 million revolver was
refinanced with a new $60.0 million asset-based ("ABL") revolver
and $275.0 million of 8.5% senior secured 1st lien notes. The new
capital structure eliminates financial maintenance covenants that
were challenging due to changes in crop timing from year to year.
We will continue to monitor and adjust funding sources as needed to
enhance and drive various business opportunities that maintain
flexibility and meet cost expectations," the Company disclosed in
the report.
Pieter Sikkel, chief executive officer and president, said, "Our
results for the six months ended September 30, 2016 include
increased full service volumes and improved factory efficiencies,
due in part to our restructuring and efficiency improvement
program. Offsetting some of our improvements were the challenges
created by El Nino related wet weather in southern Brazil this year
that has reduced gross profit by approximately $24.0 million versus
last year. For the full year we expect approximately a $30.0
million negative impact to gross profit and approximately a $5.0
million negative impact to equity in net income (loss) of investee
companies from our Brazilian joint venture.
"The August 2016 report of the Food and Agriculture Organization of
the United Nations highlights a return of La Nina weather patterns,
which is characterized by drier weather in the tobacco growing
areas of south Brazil. We anticipate the drier weather will result
in a much larger 2017 crop for which plantings are currently
underway and will be sold during our fiscal year ended March 31,
2018. The Virginia flue cured 2015 Brazilian crop was
approximately 570 million kilos and the 2016 crop was approximately
410 million kilos. The 2017 crop is anticipated to be
approximately 600 million kilos.
"Working capital improved $21.3 million when compared to the same
period end last year, driven by trade receivables that decreased
$50.2 million to $196.0 million and a $19.4 million inventory
reduction to $944.0 million as of September 30, 2016. The
improvement is even greater when considering that this year's
results include our Zimbabwe subsidiary's accounts receivable and
inventory while last year's balances do not. Additionally, our
uncommitted inventory continues to decrease and is just above our
$50.0-$150.0 million stated range with the expectation to further
decrease to inside the range by fiscal yearend. We anticipate that
working capital should be significantly reduced by yearend when
compared to the prior year. Additionally, revenue is anticipated
to improve for the full year with adjusted EBITDA in a range of
approximately $170.0-$185.0 million and adjusted leverage between
4.9x-5.4x, driven by operational improvements in certain origins,
inventory sales and partially offset by El Nino impacts in Brazil.
Further, we intend to repurchase $25.0-$50.0 million per year of
our more expensive debt.
Mr. Sikkel, concluded, "We continue to work with our customers to
meet their dynamic requirements and are encouraging supply chain
simplification strategies focused on increased utilization of our
assets while driving reversal of manufacturers' more expensive
partial vertical integration strategies. Further, our
sustainability programs that are essential to our Company, our
customers and local communities where we operate, continue to
differentiate our company and provide further growth opportunities.
Our global team is motivated, and focused on strategy and plan
execution that will improve our operations and enhance our position
as the preferred global supplier. We believe our balanced strategy
is well measured and should improve shareholder value."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/MGp2UM
About Alliance One
Alliance One International is principally engaged in purchasing,
processing, storing, and selling leaf tobacco. The Company
purchases tobacco primarily in the United States, Africa, Europe,
South America and Asia for sale to customers primarily in the
United States, Europe and Asia.
Alliance One reported a net loss of $31.5 million on $261 million
of sales and other operating revenues for the three months ended
June 30, 2016, compared to a net loss of $25.95 million on $266.28
million of sales and other operating revenues for the three months
ended June 30, 2015.
* * *
As reported by the TCR on June 7, 2016, Moody's Investors Service
affirmed Alliance One International, Inc.'s 'Caa2' Corporate
Family Rating and revised the rating outlook to positive from
negative. Alliance One's 'Caa2' Corporate Family Rating reflects
Moody's expectation that credit metrics and liquidity will remain
weak over the next 12 to 18 months.
The TCR reported on Aug. 2, 2016, S&P Global Ratings lowered its
corporate credit rating on Morrisville, N.C.-based Alliance One
International Inc. (AOI) to 'CCC' from 'CCC+'. The rating outlook
is negative.
AMERICAN APPAREL: Case Summary & 30 Top Unsecured Creditors
-----------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
American Apparel, LLC 16-12551
aka American Apparel, Inc.
aka Endeavor Acquisition Corp.
aka Viva Radio
aka American Apparel
747 Warehouse Street
Los Angeles, CA 90021
American Apparel (USA), LLC 16-12552
American Apparel Retail, Inc. 16-12553
American Apparel Dyeing & Finishing, Inc. 16-12554
KCL Knitting, LLC 16-12555
Fresh Air Freight, Inc. 16-12556
Type of Business: Apparel manufacturer
Chapter 11 Petition Date: November 14, 2016
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Debtors' Counsel: Laura Davis Jones, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 N. Market Street, 17th Floor
Wilmington, DE 19801
Tel: 302 652-4100
Fax: 302-652-4400
E-mail: ljones@pszjlaw.com
- and -
James E. O'Neill, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
PO Box 8705
Wilmington, DE 19899-8705
Tel: 302-652-4100
Fax: 302-652-4400
E-mail: joneill@pszjlaw.com
Debtors'
Co-Counsel: Erin N. Brady, Esq.
JONES DAY
555 South Flower Street, 50th Floor
Los Angeles, CA 90071
Tel: 213.489.3939
Fax: 213.243.2539
E-mail: enbrady@jonesday.com
- and -
Scott J. Greenberg, Esq.
Michael J. Cohen, Esq.
JONES DAY
250 Vesey Street
New York, NY 10281
Tel: 212.326.3939
Fax: 212.755.7306
E-mail: sgreenberg@jonesday.com
mcohen@jonesday.com
Debtors'
Financial
Advisors: BERKELEY RESEARCH GROUP, LLC
Debtors'
Investment
Banker: HOULIHAN LOKEY
Debtors'
Claims &
Noticing
Agent: PRIME CLERK, LLC
Estimated Assets: $100 million to $500 million
Estimated Debt: $100 million to $500 million
The petitions were signed by Bennett L. Nussbaum, chief financial
officer.
Debtors' List of 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Standard General L.P. Guaranty of UK $15,188,143
767 5th Avenue, 12th Floor Term Loan
New York, NY 10153
Attn: Gail D. Steiner
Tel: 212-257-4721
Fax: 212-257-4709
FTI Consulting, Inc. Professional $2,032,233
200 State Street, 2nd Floor Services
Boston, MA 02109
Tel: 617-897-1500
Fax: 617-897-1510
Litigation Trustee GUC Support $1,250,000
c/o Klehr Harrison Harvey Payment
Branzburg LLP
919 Market Street, Suite 1000
Wilmington, DE 19801-3062
Attn: Richard M. Beck
Tel: 302-426-1189
Fax: 302-426-9193
Email: rbeck@klehr.com
E & C Fashion, Inc. Trade Debt $1,140,699
3600 E. Olympic Blvd.
Los Angeles, CA 90023
Tel: 323-262-0098
Fax: 323-262-0010
Moelis & Company LLC Professional $644,997
399 Park Avenue, 5th Floor Services
New York, NY 10022
Tel: 212-883-3800
Fax: 212-880-4260
Garden City Group, LLC Professional $475,660
1985 Marcus Avenue, Suite 200 Services
Lake Success, NY 11042
Attn: Angela Ferrante
Tel: 800-327-3664
Email: Angela.Ferrante@
gardencitygroup.com
Flintfox Consulting Group, Inc. IT Professional $435,062
723 South Casino Center Blvd. Services
2nd. Floor
Las Vegas, NV 89101
Attn: James Green
Tel: 949-310-6271
Email: jgreen@flintfox.com
Media Math Inc. Trade Debt $351,693
4 World Trade Center
150 Greenwich Street, 45th Floor
New York, NY10007
Attn: Richard J. Schaeling
Tel: 646-840-4200
Email: ar@mediamath.com
FEDEX Parcel Freight $335,043
942 South Shady Grove Road,
Memphis, TN 38120
Tel: 901-818-7500
Fax: 901-395-2000
GNH Textiles Trade Debt $326,295
1988 Camfield Ave.
Commerce, CA 90040
Tel: 310-567-0678
Fax: 323-726-9626
Google, Inc. Trade Debt $325,929
1600 Amphitheatre Parkway
Mountain View, CA 94043
Attn: David Curtin
Tel: 650-253-7752
Email: davidcurtin@google.com
Andari Trade Debt $264,237
9626 Telstar Avenue
El Monte, CA 91731
Tel: 626-575-2759
Fax: 626-575-3629
Email: wei.wang@andari.com
YK Textile Trade Debt $264,165
2715 E 12th St.
Los Angeles, CA 90023
Attn: Mohammad Yousuf Shaikh
Tel: 310-965-9776
Fax: 310-965-9775
Email: yktextile@yahoo.com
United Fabricare Supply Inc. 1237 Trade Debt $229,828
W. Walnut St.
Compton, CA 90220
Tel: 310-886-3790
Fax: 310-537-2096
Hitex Dyeing & Finishing Inc. Trade Debt $206,751
355 Vineland Avenue
City of Industry, CA 91746
Tel: 626-363-0160
Fax: 626-363-0161
MARSH USA Inc. Insurance $205,775
Email: Richard.M.Lizdenis@marsh.com
Neo Tex. Inc. Trade Debt $176,406
Email: yarn@neotexusa.com
Daeshin U.S.A. Trade Debt $176,324
Prime Business Credit, Inc./ Trade Debt $172,250
JS Apparel, Inc.
Fabritex, Inc. Trade Debt $142,587
Pacific Continental Textile Trade Debt $142,395
Teamkit Far East Ltd. Trade Debt $131,366
Color Graphics Trade Debt $121,420
Email: Support@colorgraphics.com
Denik LLC Trade Debt $119,852
Email: frisby@shopdenik.com
Safety Building Cleaning Corp. Trade Debt $114,060
Email: sherzfeld@safetyfacility
services.com
Tri-Star Dyeing & Finishing Inc. Trade Debt $109,183
Email: Rk777@tristar-df.com
Adobe Systems Incorporated Software $98,543
Email: boly@adobe.com
Transform, Inc. Supplemental $93,961
Email: info@transforminc.com Staffing
UPS Mail Innovations Freight $93,841
Email: info@ups-mi.com
Accountemps Supplemental $86,431
Email: venus.despas@roberthalf.com Staffing
AMERICAN APPAREL: Files for Ch. 11 as Turnaround Strategy Flopped
-----------------------------------------------------------------
American Apparel LLC, along with five of its affiliates, has once
again sought bankruptcy protection citing the failure of their
prior turnaround strategy. The bankruptcy filing comes just nine
months after emerging from their 2015 Chapter 11 cases.
According to the Debtors, many of the operational and
personnel-related initiatives that they implemented as part of
their prior pre-arranged plan of reorganization proved unsuccessful
due to unfavorable market conditions. The Debtors said they were
not able to optimize their product acquisition and merchandising
process, failed to improve e-commerce, experienced delays
implementing improvements in quality control, did not have a
unified and consistent marketing plan.
The collapse of these and other aspects of the turnaround plan led
to a further decline in revenue and, in the face of mounting
losses, members of the Debtors' senior management began to leave,
including Hassan Natha, the Company's CFO and Ms. Paula Schneider,
the CEO, court documents say.
Since emergence, the Debtors have experienced a 32.7%
year-over-year decline in sales and a $40 million decline in EBITDA
versus last year. Additionally, they were unable to secure the $40
million additional new capital contemplated by their Prior Plan.
In the months leading up to the filing of the Chapter 11 cases, the
Debtors were borrowing more than $2 million each week just to keep
the Company afloat, according to court documents.
"The Debtors now file these Cases to complete the open and
competitive sale process begun several months ago in order to sell
substantially all of their assets and business lines with Gildan
acting as the Stalking Horse as to the Purchased Assets," related
Mark Weinsten, chief restructuring officer.
With dwindling cash resources and sustained poor sales performance,
the Debtors engaged Houlihan Lokey Capital Inc. and in August,
Houlihan began to solicit bids for the sale of all or a portion of
the Debtors' business. After a robust three-month marketing
process, the Debtors selected the bid submitted by Gildan
Activewear SRL as the stalking horse bid for the sale of their
assets. The Stalking Horse APA allows the Debtors to continue
pursuing a sale of substantially all of their assets while at the
same time locking in a purchase price of $66 million for their
intellectual property.
The Debtors intend to maintain their current operations while the
sale process is ongoing with the goal of selling part or all of
their businesses as a going concern and thereafter intend to
discontinue operations, liquidate any remaining unsold assets and
wind up their estates.
In order to fund their working capital needs and keep their
operations running through a sale process, subject to Court
approval, the Debtors have secured a $30 million postpetition
senior secured superpriority debtor-in-possession credit facility
from Encina Business Credit, LLC, as administrative agent and
collateral agent, and the lender or lender parties thereto from
time to time.
Concurrently with the filing of the petitions, the Debtors filed
various first day motions seeking permission to, among other
things, pay employee obligations, prohibit utility companies from
discontinuing services, obtain post-petition financing and use
existing cash management system. A full-text copy of Mark
Weinsten's declaration in support of the First Day Motions is
available for free at:
http://bankrupt.com/misc/24_AMERICAN_Affidavit.pdf
"The Debtors have narrowly tailored the First Day Pleadings to meet
their goals of: (a) continuing their operations in chapter 11 with
as little disruption and loss of productivity as possible until
such time as the sale process is complete; (b) maintaining the
confidence and support of their key customer and employee
constituencies during the sale process and subsequent wind down of
remaining operations; and (c) establishing procedures for the
efficient administration of these Cases," said Mr. Weinsten.
Payment to Litigation Trust
Vince Sullivan, writing for Bankruptcy Law360, reported that U.S.
Bankruptcy Judge Brendan L. Shannon on Nov. 8, 2016, directed
American Apparel to make an overdue payment to a litigation trust
created under its previously confirmed Chapter 11 reorganization
plan and to remit fee claims from its financial advisers. During a
hearing in Wilmington, Judge Shannon said that media reports of an
impending liquidity crisis for the company did not influence his
decision to deal with the pending bankruptcy case before him.
About American Apparel
American Apparel is one of the largest apparel manufacturers in
North America. It has three active manufacturing facilities, one
distribution facility and, until recently, approximately 193 retail
stores in the United States and 18 other countries worldwide.
American Apparel operates a manufacturing, distribution and retail
business focused on branded fashion apparel.
In 2015, the Company generated more than $497 million in net sales.
In fiscal year 2015 (which ended Dec. 31, 2015), 68.57% of the
Company's revenue was generated by the Debtors inside the United
States, and the remaining 31.43% of revenue was generated largely
by foreign affiliates abroad.
As of the bankruptcy filing, the Debtors estimated assets and
liabilities in the range of $100 million to $500 million each. As
of the Petition Date, the Debtors had outstanding debt in the
aggregate principal amount of approximately $215 million under
their prepetition credit facility. Additionally, the Debtors have
guaranteed one of its United Kingdom subsidiaries' obligations
under a $15 million unsecured note due Oct. 15, 2020, court
document shows.
The Chapter 11 cases are pending in the U.S. Bankruptcy Court for
the District of Delaware. The Debtors have requested that their
cases be jointly administered under Case No. 16-12551.
The Debtors have hired Pachulski Stang Ziehl & Jones LLP as
counsel, Jones Day as co-counsel, Berkeley Research Group, LLC as
financial advisors, Houlihan Lokey as investment banker and Prime
Clerk LLC as claims and noticing agent.
AMPLIPHI BIOSCIENCES: Recurring Losses Raise Going Concern Doubt
----------------------------------------------------------------
AmpliPhi Biosciences Corporation filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, disclosing a
net loss of $2.37 million on $29,000 of revenue for the three
months ended September 30, 2016, compared to a net loss of $5.44
million on $143,000 of revenue for the same period in 2015.
The Company's balance sheet at September 30, 2016, showed total
assets of $26.04 million, total liabilities of $7.81 million, and a
stockholders' equity of $18.23 million.
The Company has incurred net losses since its inception, has
negative operating cash flows and has an accumulated deficit of
$371.9 million as of September 30, 2016, $56.4 million of which has
been accumulated since January of 2011, when the Company began its
focus on bacteriophage development. As of September 30, 2016, the
Company had cash and cash equivalents of $4.0 million. Management
believes that the Company's existing resources will be sufficient
to fund the Company's planned operations through the end of 2016.
These circumstances raise substantial doubt about the Company's
ability to continue as a going concern.
The Company's ability to raise additional funds will depend, in
part, on the success of the Company's preclinical studies and
clinical trials and other product development activities,
regulatory events, the Company’s ability to identify and enter
into in-licensing or other strategic arrangements, and other events
or conditions that may affect the value or prospects of the
Company, as well as factors related to financial, economic, and
market conditions, many of which are beyond the Company’s
control. The Company cannot be certain that sufficient funds will
be available to it when required or on acceptable terms, if at all.
If adequate funds are not available on a timely basis or on
acceptable terms, the Company may be required to defer, reduce or
eliminate significant planned expenditures, restructure, curtail or
eliminate some or all of its development programs or other
operations, dispose of technology or assets, pursue an acquisition
of the Company by a third party at a price that may result in a
loss on investment for its stockholders, enter into arrangements
that may require the Company to relinquish rights to certain of its
product candidates technologies or potential markets, file for
bankruptcy or cease operations altogether. Any of these events
could have a material adverse effect on the Company's business,
financial condition and results of operations and result in a loss
of investment by its stockholders.
A full-text copy of the Company's Form 10-Q is available at:
http://bit.ly/2f7QkQk
About AmpliPhi
AmpliPhi Biosciences Corp. is a biotechnology company focused on
the discovery, development and commercialization of novel phage
therapeutics. Its principal offices occupy approximately 1,000
square feet of leased office space pursuant to a month-to-month
sublease, located at 3579 Valley Centre Drive, Suite 100, San
Diego, California. It also leases approximately 700 square feet of
lab space in Richmond, Virginia, approximately 5,000 square feet of
lab space in Brookvale, Australia, and approximately 6,000 square
feet of lab and office space in Ljubljana, Slovenia.
ANTHONY LAWRENCE: Plan Filing Period Extended to April 17
---------------------------------------------------------
Judge Elizabeth S. Stong of the U.S. Bankruptcy Court for the
Eastern District of New York extended Anthony Lawrence of New York,
Inc.'s exclusive periods to file a plan of reorganization and
solicit acceptances to the plan, through April 17, 2017 and June
15, 2017, respectively.
The Debtor previously sought the extension of its exclusivity
periods, contending that it had been required to focus on its
litigation with its former counsel, Anthony Pagano, Esq. instead of
devoting its time to implement and move forward with confirmation
of a plan of reorganization. The Debtor further contended that it
was still focused on the litigation since there was no resolution
as of yet, and it was absolutely critical that the Debtor get the
litigation resolved prior to filing a plan of reorganization to
know what funds the Debtor might have to formulate a plan of
reorganization.
The Debtor submitted that it had also been focusing on its
operations, and the Debtor was confident that it could reorganize
and formulate a successful chapter 11 plan once the litigation with
Mr. Pagano had been resolved and brought to a conclusion.
About Anthony Lawrence of New York, Inc.
Headquartered in Long Island City, New Yok, Anthony Lawrence of New
York, Inc., filed for Chapter 11 bankruptcy protection (Bankr.
E.D.N.Y. Case No. 15-44702) on Oct. 15, 2015, estimating its assets
at up to $50,000 and its liabilities at between $1 million and $10
million. The petition was signed by Joseph J. Calagna, president.
Judge Elizabeth S. Stong presides over the case. James P Pagano,
Esq., who has an office in New York, serves as the Debtor's
bankruptcy counsel.
APACHE FINANCE: Moody's Keeps Ba1 Backed Subordinate Shelf Rating
-----------------------------------------------------------------
Moody's Investors Service changed the rating outlook for Apache
Corporation and its guaranteed subsidiaries to stable from
negative. Moody's affirmed Apache's and its guaranteed
subsidiaries' Baa3 senior unsecured ratings and its P-3 commercial
paper rating.
"Apache's demonstrated commitment to limit capital investment to
within cash flow and maintain a sizable cash balance led to our
changing its rating outlook to stable," commented Pete Speer,
Moody's Senior Vice President. "Ongoing operational improvements
and rising commodity prices will improve its credit metrics in
2017, while the company works to lower its organic reserves
replacement costs to generate more competitive returns and stem
production declines."
Outlook Actions:
Issuer: Apache Corporation
Outlook, Changed To Stable From Negative
Issuer: Apache Finance Canada Corporation
Outlook, Changed To Stable From Negative
Issuer: Apache Finance Canada II Corporation
Outlook, Changed To Stable From Negative
Affirmations:
Issuer: Apache Corporation
Senior Unsecured Commercial Paper, Affirmed P-3
Senior Unsecured Regular Bond/Debenture, Affirmed Baa3
Issuer: Apache Finance Canada Corporation
Backed Senior Unsecured Regular Bond/Debenture, Affirmed Baa3
Issuer: Apache Finance Canada II Corporation
Backed Subordinare Shelf, Affirmed (P)Ba1
Backed Senior Unsecured Shelf, Affirmed (P)Baa3
RATINGS RATIONALE
Apache's Baa3 senior unsecured rating and Prime-3 short-term rating
incorporate Moody's expectation of gradually improving cash flow
generation and cash flow based credit metrics in 2017. The Baa3
rating is supported by Apache's large and diversified asset base,
aggressive reductions in capital spending which has limited
anticipated negative free cash flow in 2016 and 2017, and
manageable debt maturities through 2020. The company's asset
portfolio benefits from the ownership of producing properties in
the North Sea and Egypt that generate meaningful cash flow even in
a low oil price environment, adding diversification to its high
quality large acreage positions in multiple basins in North
America, including the Permian Basin. The company also has
stronger asset value coverage of debt than most Baa3 peers. The
rating is restrained by the company's historically higher finding
and development costs (F&D) and correspondingly weaker investment
returns than peers.
Apache's rating outlook is stable reflecting Moody's expectation
that the company's financial leverage metrics will improve in 2017
in line with the company's improving operational performance and
Moody's commodity price estimates, and that the company will avoid
negative free cash flow and maintain its sizable cash balance.
Apache's P-3 short-term liquidity rating is supported by its
excellent liquidity profile reflecting its cash and available
borrowing capacity under its committed revolving credit facility.
At September 30, 2016, the company had $1.2 billion of cash, no
commercial paper (CP) outstanding and full availability under its
$3.5 billion committed revolving credit facility that matures in
June 2020. The company's $3.5 billion commercial paper program is
fully backed by the revolving credit facility. The credit facility
has a financial covenant restricting debt-to-capitalization to a
maximum of 60%, for which the company has ample headroom that
Moody's expect to continue through 2017. Apache has no secured debt
so its assets are unencumbered providing it with the flexibility to
sell oil and gas properties to raise cash.
In order for Apache's rating to be considered for an upgrade, the
company will have to achieve modest production and reserves growth
funded within cash flow and at competitive returns compared to
peers. Moody's expects oil prices to remain in a range of $40 to
$60 per barrel for the medium term with significant volatility both
within and outside that band. The rating could be upgraded if
Apache can sustain RCF/Debt above 25% and an LFCR approaching 1.5x
at the low end of that commodity price range.
Apache's ratings could be downgraded if RCF/debt falls below 15% on
a sustained basis.
The principal methodology used in these ratings was "Global
Independent Exploration and Production Industry" published in
December 2011.
Apache Corporation is headquartered in Houston, Texas and is
amongst the largest independent exploration and production (E&P)
companies in the world. The company operates in multiple basins
across the US, including large positions in the Permian and
Anadarko Basins. Core international operating areas include
Canada, Egypt and the North Sea.
APRICUS BIOSCIENCES: Incurs $1.29 Million Net Loss in 3rd Quarter
-----------------------------------------------------------------
Apricus Biosciences, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.29 million on $4.31 million of total revenue for the three
months ended Sept. 30, 2016, compared with a net loss of $5.03
million on $1.27 million of total revenue for the same period a
year ago.
For the nine months ended Sept. 30, 2016, the Company reported
$7.13 million on $5.40 million of total revenue compared to a net
loss of $16.69 million on $2.21 million of total revenue for the
nine months ended Sept. 30, 2015.
As of Sept. 30, 2016, Apricus had $8.41 million in total assets,
$15.94 million in total liabilities and a total stockholders'
deficit of $7.53 million.
"In the third quarter, we focused our efforts on advancing the
regulatory and commercial success of Vitaros through our partners.
Since July, our partners have launched Vitaros in five additional
countries in Europe, and received an additional five marketing
authorizations for Vitaros in Europe, Latin America and the Middle
East. Further, the transfer of commercial rights to Ferring in
certain countries in Europe and Asia was completed," stated Richard
W. Pascoe, chief executive officer. "Looking forward, our focus
continues to be increasing Vitaros ex-U.S. revenue and obtaining
the regulatory approval of Vitaros in the United States. Our Type B
meeting with the FDA, which is scheduled for November 17, 2016,
remains on schedule. The purpose of this meeting is to confirm our
strategy for addressing the deficiencies contained in the original
2008 Complete Response letter. We will incorporate any FDA
feedback into the final resubmission, which we expect to occur in
the fourth quarter."
2016 Financial Outlook
Early in the second quarter of 2016, Apricus reduced its staff,
including the executive team, by approximately 30%, decreased the
size of the Board by one member and reduced the Board's cash
compensation. Apricus plans to continue to reduce operating
expenses (excluding non-cash stock-based compensation expense and
depreciation expense), with a goal of achieving reductions of
approximately 30% in 2016 and 60% in 2017 as compared to 2015
operating expenses (excluding non-cash stock-based compensation
expense and depreciation expense).
In 2016, Apricus expects to continue to generate cash from
milestone or licensing payments and royalty revenues from its
partners' sales of Vitaros. Apricus will also continue to pursue
out-licensing opportunities for Vitaros in Asia. Apricus'
expenditures will include minimal costs for the preparatory Phase
2b clinical development of RayVa, as well as costs for activities
associated with supporting the regulatory approval of Vitaros in
the U.S. and the commercialization of Vitaros in Europe.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/ol1eU6
About Apricus Biosciences
Apricus Biosciences, Inc., is a Nevada corporation that was
initially formed in 1987. The Company has operated in the
pharmaceutical industry since 1995. The Company's current focus is
on the development and commercialization of innovative products and
product candidates in the areas of urology and rheumatology. The
Company's proprietary drug delivery technology is a permeation
enhancer called NexACT.
Apricus reported a net loss of $19.02 million in 2015, a net loss
of $21.8 million in 2014 and a net loss of $16.9 million in 2013.
BDO USA, LLP, in La Jolla, California, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company has negative working
capital and has suffered recurring losses and negative cash flows
from operations that raise substantial doubt about its ability to
continue as a going concern.
ARTHUR MANNING: Plan Confirmation Hearing Set for Dec. 13
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York is
set to hold a hearing on December 13, at 10:00 a.m., to consider
confirmation of the Chapter 11 plan of reorganization of Arthur and
Deirdre Manning.
The hearing will take place at Courtroom 701, One Bowling Green,
New York, New York.
Creditors have until December 6 to file their objections to the
restructuring plan. The deadline for creditors to cast their votes
is November 30.
Under the Debtors' latest plan, Class 3 general unsecured creditors
will get approximately 16 to 18 cents on the dollar, with
semi-annual payments to commence on the twentieth month.
As of October 27, the total estimated amount of Class 3 general
unsecured claims is $1,039,933.
The plan will be funded by cash on hand estimated at $75,000, the
Debtors' projected disposable income, and the exit loan.
Galina Datskovsky, a family friend of the Debtors, will provide an
unsecured loan, which will be disbursed in full on the effective
date of the plan, with a principal amount of $50,000.
The Debtors propose to complete payments under the plan by November
30, 2021, according to the Debtors' disclosure statement filed on
October 27.
A copy of the disclosure statement is available for free at
https://is.gd/5YBihn
The Debtors are represented by:
Janice B. Grubin, Esq.
LeClairRyan, A Professional corporation
885 Third Avenue, 16th Floor
New York, NY 10005
Tel: (212) 634-5016
Fax: (212) 634-5062
About The Mannings
Arthur G. Manning and Deirdre M. Manning sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
11-15109) on November 1, 2011.
ASPEN GROUP: Extends CEO's Term by Three Years
----------------------------------------------
Aspen Group, Inc., entered into a three-year Employment Agreement
with Michael Mathews, the Company's chief executive officer,
replacing his prior employment agreement which expired May 16,
2016.
In accordance with his Employment Agreement, Mr. Mathews receives
an annual base salary of $325,000 and will also be entitled to a
cash and equity bonus if certain EBITDA milestones are met. The
cash portion of the Target Bonus will only be earned if the Company
has a certain cash balance to pay the Target Bonus. This provision
is structured to exclude borrowings under the Company's Line of
Credit Agreement which are designed to meet the minimum cash
requirement. Mr. Mathews may also receive a discretionary bonus at
the discretion of the Company's Board of Directors.
About Aspen Group
Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in
1987 as the International School of Information Management. On
Sept. 30, 2004, it was acquired by Higher Education Management
Group, Inc., and changed its name to Aspen University Inc. On
May 13, 2011, the Company formed in Colorado a subsidiary, Aspen
University Marketing, LLC, which is currently inactive. On
March 13, 2012, the Company was recapitalized in a reverse merger.
Aspen's mission is to become an institution of choice for adult
learners by offering cost-effective, comprehensive, and relevant
online education. Approximately 88 percent of the Company's
degree-seeking students (as of June 30, 2012) were enrolled in
graduate degree programs (Master or Doctorate degree program).
Since 1993, the Company has been nationally accredited by the
Distance Education and Training Council, a national accrediting
agency recognized by the U.S. Department of Education.
Aspen Group reported a net loss of $2.24 million on $8.45 million
of revenues for the year ended April 30, 2016, compared to a net
loss of $4.26 million on $5.22 million of revenues for the year
ended April 30, 2015.
As of July 31, 2016, Aspen had $4.93 million in total assets, $3.64
million in total liabilities and $1.28 million in total
stockholders' equity.
ASTORIA FINANCIAL: Moody's Places Ba2 Rating on Review for Upgrade
------------------------------------------------------------------
Moody's Investors Service says that it is continuing to review for
upgrade the ratings of Astoria Financial Corporation and its lead
bank subsidiary, Astoria Bank (collectively Astoria). Astoria's
review was initiated on 29 October 2015 following the announcement
that New York Community Bancorp, Inc. (NYCB, issuer Baa2) agreed to
acquire Astoria in a stock and cash transaction. The review
continues pending the completion of the acquisition of Astoria by
NYCB. On 9 November 2016, NYCB announced that it does not expect to
complete the merger with Astoria by the end of 2016.
The ratings of Astoria Financial Corporation on review for upgrade
include its senior unsecured and issuer ratings of Baa3 and its
preferred stock non-cumulative rating of Ba2(hyb). The ratings and
assessments of Astoria Bank on review for upgrade include its long-
and short-term bank deposit ratings of A3 and Prime-2,
respectively, its issuer rating of Baa3, its baseline credit
assessment (BCA) and adjusted BCA of baa2, and its long-term
Counterparty Risk (CR) Assessment of Baa1(cr).
NYCB's ratings and assessments remain unchanged, with a stable
outlook.
RATINGS RATIONALE
The review for upgrade of Astoria's ratings was driven by the
announcement that Astoria will be acquired by NYCB, a higher-rated
institution. Moody's said it expects to complete its review of
Astoria's ratings once there is substantial certainty of the
closing of the transaction, including the receipt of all regulatory
approvals.
After the acquisition is completed, Moody's expects Astoria's
holding company and bank to be merged into NYCB's holding company
and bank, respectively. As such, Moody's expects to upgrade
Astoria's ratings to match those of NYCB at that time.
Moody's said that Astoria's baa2 standalone BCA is based on the
bank's conservative underwriting history and superior asset quality
metrics through the last crisis and in recent years. The company
also has comparatively high capital ratios. However, these
strengths are partially offset by the bank's inferior profitability
driven by protracted low interest rates and a shrinking balance
sheet, the latter driven by a decline in Astoria's residential
mortgage portfolio - primarily non-conforming jumbo hybrid
adjustable-rate mortgages (ARMs) - its primary business. This
portfolio will continue to decline as a meaningful increase in
interest rates is unlikely. Low interest rates make the bank's
jumbo hybrid ARMs less attractive than 30-year fixed-rate
mortgages. Moreover, execution risk remains as the company is
building its commercial banking franchise, especially in
multifamily lending.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE
Moody's expects to upgrade Astoria's ratings, as well as the BCA,
adjusted BCA and long-term CR Assessment, immediately following the
closing of the acquisition by NYCB.
If the acquisition does not close, then downward movement on the
standalone BCA would occur if Astoria's profitability or liquidity
metrics weaken further or if we believe that rapid growth in the
multifamily portfolio will lead to greater asset risk. Currently,
we believe its multifamily underwriting is sufficiently sound.
The principal methodology used in these ratings/analysis was Banks
published in January 2016.
Astoria Financial Corporation, a bank holding company headquartered
in Lake Success, New York, reported $14.8 billion in total assets
as of 30 September 2016.
AYTU BIOSCIENCE: Had $5.72M Net Loss in First Fiscal Quarter 2017
-----------------------------------------------------------------
Aytu Biosciences, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $5.72 million on $697,980 of total revenue for the three months
ended Sept. 30, 2016, compared to a net loss of $2.27 million on
$487,385 of total revenue for the three months ended Sept. 30,
2015.
As of Sept. 30, 2016, Aytu had $20.20 million in total assets,
$13.01 million in total liabilities and $7.18 million in total
stockholders' equity.
"It continues to be an exciting time at Aytu, as we are now in full
swing with the Natesto launch, and this potentially game-changing
product is already performing ahead of our expectations," stated
Josh Disbrow, chairman and chief executive officer of Aytu
BioScience, Inc. "Additionally, we've continued to see very nice
uptake for Primsol and ProstaScint, contributing to an impressive
42% increase in net product sales compared to our previous quarter.
Our commercial team is continuing to focus exclusively on growing
revenue for these products, with the expectation that Natesto will
become the primary value driver for Aytu due to its differentiated
product profile and the unique timing of our entry into the $2.4
billion testosterone replacement therapy market."
After growing revenue nearly 10-fold during its 2016 fiscal year,
product sales continued to increase quarter to quarter, bolstered
in part by early sales of Natesto. Product revenue for the fiscal
first quarter 2017 was $698,000, up 42% from $490,000 during the
fiscal fourth quarter 2016. Sales for the fiscal first quarter
2017 consisted primarily of ProstaScint and Natesto customer orders
along with Primsol and initial ex-U.S. MiOXSYS sales. Natesto
orders are reflective primarily of early reorders from wholesale
customers who had already stocked Natesto units prior to Aytu's
commencement of promotion in July 2016. Aytu expects to begin
recognizing increased sales revenue for Natesto that more
accurately reflects prescriber demand during the third or fourth
fiscal quarter 2017 as wholesaler inventory levels from previous
purchases have been depleted. Aytu anticipates sales revenue to
continue increasing as Natesto prescriptions continue to increase.
As of September 30th, Aytu had $2.8 million in cash, cash
equivalents and restricted cash, which did not include $8.6 million
in gross proceeds ($7.7 million net proceeds) from the Company's
November 2016 registered offering of common stock and warrants.
Proceeds from the offering will fully fund the final upfront
payment due to Acerus Pharmaceuticals for the Natesto license and
will support the continuing Natesto launch and commercialization of
ProstaScint and Primsol. Proceeds will also fund the planned
MiOXSYS FDA clinical study and provide operating capital for
general corporate purposes.
Josh Disbrow concluded with, "Aytu had an exceptional first quarter
as our focus remains on growing revenue, primarily through
execution of the Natesto launch plan which is successfully
underway. We also plan to advance MiOXSYS toward FDA clearance and
U.S. commercialization, while continuing to grow ProstaScint,
Primsol, and MiOXSYS both inside and outside the U.S."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/qUd5ZA
About Alliance One
Alliance One International is principally engaged in purchasing,
processing, storing, and selling leaf tobacco. The Company
purchases tobacco primarily in the United States, Africa, Europe,
South America and Asia for sale to customers primarily in the
United States, Europe and Asia.
Alliance One reported a net loss of $31.5 million on $261 million
of sales and other operating revenues for the three months ended
June 30, 2016, compared to a net loss of $25.95 million on $266.28
million of sales and other operating revenues for the three months
ended June 30, 2015.
* * *
As reported by the TCR on June 7, 2016, Moody's Investors Service
affirmed Alliance One International, Inc.'s 'Caa2' Corporate
Family Rating and revised the rating outlook to positive from
negative. Alliance One's 'Caa2' Corporate Family Rating reflects
Moody's expectation that credit metrics and liquidity will remain
weak over the next 12 to 18 months.
The TCR reported on Aug. 2, 2016, S&P Global Ratings lowered its
corporate credit rating on Morrisville, N.C.-based Alliance One
International Inc. (AOI) to 'CCC' from 'CCC+'. The rating outlook
is negative.
B&B REAL ESTATE: Newtek & MCTCB To Be Paid in Full Under Plan
-------------------------------------------------------------
B & B Real Estate General Partnership filed with the U.S.
Bankruptcy Court for the Middle District of Pennsylvania a
disclosure statement referring to the Debtor's plan of
reorganization.
The Debtor has two secured claims. The secured claimants are
Newtek, which has a secured claims of $1,616,713.59 and a loan
arrearage of $98,883.49 and the MCTCB, which has a secured claim of
$386,440.25. These claims are classified as Class 4 Secured Claims
and are only impaired with regard to timing of payment since, the
Debtor is proposing to pay these claims, in full. Payment of these
claims will start 30 days after the effective date of the Plan and
will continue until the arrearages are paid, in full. It is
proposed that Newtek's arrarage claim will be paid within 36 months
of the Effective Date of the Plan and the MCTCB's claim will be
paid within 96 months of the effective date of the Plan. It is
proposed that the Debtor pay the claims on a dollar for dollar
basis and on a monthly basis until the claims are paid in full.
In addition, the Debtor has been able to lease the 4,000 square
foot space which had been vacant for several years. The Debtor
proposes that the proceeds from the lease will be paid to Newtek in
order to augment payment of its arrearage. Payment of the lease
proceeds to Newtek is appropriate because it has a lien on these
proceeds.
The Debtor has no unsecured claims. In this regard, Holly R.
Corcoran, CPA, waived her claim that she had against the Debtor and
the Debtor is not aware of any other unsecured claims. If any
allowed, unsecured claims are discovered, the Debtor proposes to
pay them in full, immediately after the payment of all claims of a
higher class of claims. Class 6 Unsecured Claims would be impaired
only with regard to timing of payment.
Since the filing of this Chapter 11 case, the Debtor has made all
post-petition loan payments/adequate protection payments to Newtek.
The Debtor has also been able to pay all of its other monthly
obligations. This has been possible because of the reorganization
of the related entity, B & B Fitness and Barbell, Inc. The
reorganization of that entity has enabled it to make its monthly
lease payments to the Debtor. In turn, Debtor has been able to pay
all of its monthly obligations. Currently, the Debtor has only two
pre-petition claims:
a. Newtek $1,616,713.57 (arrearage of $98,883.49) and
b. MCTCB $386,440.25 (arrearage of $386,440.25).
Prior to the filing of the bankruptcy, the Debtor had been charging
its principal tenant, B & B Fitness and Barbell, Inc., a monthly
lease amount which was based upon the Debtor's financial
obligations, only. However, it is the Debtor's intention to
increase the monthly lease obligation in order to ensure that the
lease amount is commensurate with similar leases in the industry.
This graduated increase in the monthly lease obligation will be
used to pay the arrearages due to Debtor's two creditors. The
increases will be:
a. $2,000 per month increase the First Year, starting 30
days from the Effective Date of the Plan;
b. $3,000 per month increase the Second Year;
c. $4,000 per month increase the Third Year and;
d. $5,000 per month increase the Fourth Year and each year
thereafter, until the arrearages are paid, in full.
As a result, the Debtor will pay to each creditor, $1,000 per month
the First Year, $1,500 per month the Second Year, $2,000 per month
the Third Year and $5,000 per month to the MCTCB (Newtek's
arrearage will be paid in full by the end of the third year) during
the Fourth Year and each year thereafter until its claim is paid,
in full. Thus, Newtek's arrearage will be paid,in full, within 36
months of the Effective Date of the Plan and MCTCB's arrearage will
be paid, in full, within 96 months of the Effective Date of the
Plan.
The Debtor also agrees that if the payment strategy is not
accomplished within eight years of the Effective Date of this
Chapter 11 Plan then, the Debtor will convert the case to Chapter 7
for liquidation and resolution by the Chapter 7 Trustee.
The Disclosure Statement is available at:
http://bankrupt.com/misc/pamb16-02183-41.pdf
About B & B Real Estate
B & B Real Estate General Partnership is a Pennsylvania partnership
which is principally involved in the development and leasing of its
real estate. At the time of the filing of its Chapter 11
bankruptcy, the Debtor owned a single parcel of real estate located
at 117 Rose Street, Scotrun, Monroe County, Pennsylvania. The
parcel of land is 2.54 acres and includes a commercial building
which is primarily used for a gym and fitness center.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. M.D. PA.
Case No. 16-02183) on May 23, 2016. The Hon. Robert N. Opel II
presides over the case. Law Office of Philip W. Stock represents
the Debtor as counsel.
In its petition, the Debtor estimated $1.51 million in assets and
$2.01 million in liabilities. The petition was signed by Robert C.
Bishop, general partner.
BAY CIRCLE: Hires RG Real Estate as Broker
------------------------------------------
Bay Circle Properties, LLC and its debtor-affiliates seek
permission from the U.S. Bankruptcy Court for the Northern District
of Georgia to employ RG Real Estate, Inc., as real estate broker.
The Debtor currently has one tenant occupying the 6600 building and
the 6610 building is vacant. The Property includes 2 office
warehouse buildings on approximately 10 acres of land and located
at 6600 and 6610 Bay Circle, Norcross, Gwinnett County, Georgia
(the "Property").
The Debtor requires RGRE to market the Property for lease and for
sale and to maximize its exposure to the market.
The Debtor have agreed to pay RGRE the proposed compensation as
provided in the Listing Agreement:
i. For leases of 36 months or longer: a procurement fee equal
to the first full month's rent plus 4% of the remaining aggregate
rent throughout the remainder of the lease term. In the event of a
cooperating brokered transaction, a procurement fee equal to one
month's rent plus 4% of the remaining aggregate rent to procuring
broker and one-half of the first full month's rent plus 2% of the
remaining aggregate rent to listing Broker. Commissions to be paid
half upon lease execution and half upon tenant's occupancy.
ii. For leases shorter than 36 months: a procurement fee
determined by dividing the lease term by 36 months and then
multiplying said amount by the first full month's rent. All other
commission terms remain applicable in case of cooperating broker
involvement.
iii. For Sales: a commission in an amount equal to 5% of the
gross sales price for the Property with no cooperating broker and
in the event the transaction includes a cooperating broker, a
commission in an amount equal to 6% of the gross sales price for
the Property shall be due upon closing.
Ryan L. Goldstein, president of RG Real Estate, assured the Court
that the firm does not represent any interest adverse to the Debtor
and its estates.
RGRE may be reached at:
Ryan L. Goldstein
RG Real Estate
4800 Ashford Dunwoody Rd., Suite 140
Atlanta, GA
Phone: 770-393-2006
Fax: 770-393-2007
Cellphone: 404-964-8814
E-mail: rgoldstein@rg-re.com
About Bay Circle Properties
Bay Circle Properties, LLC, DCT Systems Group, LLC, Sugarloaf
Centre, LLC, Nilhan Developers, LLC, and NRCT, LLC, own 16
different real properties including significant undeveloped
acreage. The properties also include office/warehouse buildings,
retail shopping centers and free standing single tenant buildings.
They filed Chapter 11 bankruptcy petitions (Bankr. N.D. Ga. Case
Nos. 15-58440 to 15-58444) on May 4, 2015. The Chapter 11 cases
are jointly administered. The petitions were signed by Chuck
Thakkar, manager. In its petition, Bay Circle estimated $1 million
to $10 million in both assets and liabilities. The Debtors are
represented by John A. Christy, Esq., J. Carole Thompson Hord,
Esq., and Jonathan A. Akins, Esq., at Schreeder, Wheeler & Flint,
LLP.
No trustee has been appointed and the Debtors are operating their
businesses as debtors-in-possession.
BEAZER HOMES: Danny Shepherd Named to the Board of Directors
------------------------------------------------------------
Beazer Homes USA, Inc. announced that Danny R. Shepherd has been
elected to its Board of Directors effectively immediately. Mr.
Shepherd brings to the Board over 40 years of experience in the
building materials industry. He will also serve on the
Compensation and Audit Committees of the Board of Directors. Mr.
Shepherd's election is part of the Company's normal Board of
Directors succession process in connection with the retirement of
Larry T. Solari at the end of his term in February 2017. Mr.
Solari has served on the Company's Board of Directors since the
Company's initial public offering in 1994.
Over the course of nearly 30 years at Vulcan Materials Company, the
nation's largest producer of construction aggregates, Mr. Shepherd
served in various management positions, including as Vice Chairman
at the time of his retirement in 2015.
Mr. Shepherd is a member of the Board of Directors of GCP Applied
Technologies (NYSE: GCP) and is active in a number of civic
organizations. Mr. Shepherd holds a Bachelor of Science degree
from the Georgia Institute of Technology.
Allan Merrill, president and chief executive officer said, "We are
very pleased that Danny Shepherd is joining our Board. He will
succeed one of our original directors, Larry Solari who is
retiring. On behalf of the Company I want to thank Larry for his
many years of service. His knowledge of our industry and his focus
on safety and continuous operational improvement will be missed."
About Beazer Homes USA
Headquartered in Atlanta, Beazer Homes is a geographically
diversified homebuilder with active operations in 13 states within
three geographic regions in the United States. The Company's homes
meet or exceed the benchmark for energy-efficient home construction
as established by ENERGY STAR and are designed with Choice Plans to
meet the personal preferences and lifestyles of its buyers. In
addition, the Company is committed to providing a range of
preferred lender choices to facilitate transparent competition
between lenders and enhanced customer service. The Company's
active operations are in the following states: Arizona, California
Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North
Carolina, South Carolina, Tennessee, Texas and Virginia. Beazer
Homes is listed on the New York Stock Exchange under the ticker
symbol "BZH."
As of June 30, 2016, the Company had $2.31 billion in total assets,
$1.67 billion in total liabilities and $641 million in total
stockholders' equity.
Beazer Homes reported net income of $344.09 million for the fiscal
year ended Sept. 30, 2015, following net income of $34.38 million
for the year ended Sept. 30, 2014.
Beazer carries a 'B-' issuer credit rating, with "negative"
outlook, from Standard & Poor's.
In September 2015, Fitch Ratings affirmed the ratings of Beazer,
including the company's Issuer Default Rating (IDR), at 'B-'.
Beazer's 'B-' IDR reflects the company's execution of its business
model in the current moderately recovering housing environment,
land policies, and geographic diversity.
In June 2015, Moody's Investors Service upgraded Beazer Homes USA,
Inc.'s Corporate Family Rating to 'B3' from 'Caa1'. The upgrade of
Beazer's Corporate Family Rating to B3 from Caa1 reflects projected
improvement in profitability and in key credit
metrics as the company executes on its "2B-10" strategy plan while
benefiting from the continued growth in the homebuilding industry.
Further, homebuilding debt-to-capitalization is expected to
decrease to 67% by the end of fiscal 2015 that ends on September
30, 2015 from 86% as of March 31, 2015 after the expected
elimination of substantially all of the valuation allowance of
about $426 million in deferred tax assets in the fourth quarter of
fiscal 2015.
* * *
This concludes the Troubled Company Reporter's coverage of Beazer
Homes USA until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
BERNARD GLIEBERMAN: Court Okays BR North's Disclosure Statement
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan will
consider approval of the Chapter 11 plan of reorganization proposed
by a creditor of Bernard Sloane Glieberman at a hearing on January
10, 2017.
The hearing will be held at 10:30 a.m., at Room 1875, 211 West Fort
Street, Detroit, Michigan.
BR North 223 LLC, a creditor of Mr. Glieberman, had earlier
received preliminary approval to its disclosure statement, allowing
the company to start soliciting votes on the restructuring plan it
proposed for Mr. Glieberman.
The October 27 order set a January 3 deadline for creditors to cast
their votes and file their objections to final approval of the
disclosure statement and confirmation of the plan.
BR North is represented by:
Paul A. Wilhelm, Esq.
Clark Hill, PLC
500 Woodward Avenue, Suite 3500
Detroit, MI 48226
About Bernard Sloane Glieberman
Bernard Sloane Glieberman sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 15-55996) on November
2, 2015. The case is assigned to Judge Marci B. McIvor.
BINDER MACHINERY: Hires Phoenix Capital as Investment Banker
------------------------------------------------------------
Binder Machinery Co., LLC and its debtor-affiliates seek permission
from the U.S. Bankruptcy Court for the District of New Jersey to
employ Phoenix Capital Resources as financial advisor and
investment banker for the Debtors.
The Debtors require the services of an experienced financial
advisor and investment banker to assist with a sale (the "Proposed
Sale") of their assets pursuant to section 363 of the Bankruptcy
Code as well as financial matters related to these Chapter 11 cases
and desire to employ Phoenix as their financial advisor and
investment banker.
The Debtors require Phoenix to:
-- provide services related to the proposed sale:
a. assist with a sale of the Debtors' assets under section
363 of the Bankruptcy Code, and as appropriate, coordinate with the
Debtors’ other financial and legal professionals;
b. participate and testify in any bankruptcy court
proceeding on the Debtors' behalf in connection with the Proposed
Sale;
c. participate in meetings with the Debtors' stakeholders,
official constituencies and other interested parties, as
necessary;
d. advise and assist in developing management presentations
describing the Debtors' and the opportunities the Debtors' may
provide to prospective purchasers;
e. assist with the development of materials to market the
Debtors' assets, including a potential buyers list and documents
for the data room;
f. assist with the development of a potential strategic and
financial buyers list;
g. assist with preparation for and coordination of due
diligence visits by potential purchasers;
h. assist the Debtors in its evaluation of indications of
interest and the negotiation of appropriate documentation;
i. advise in connection with any proposed asset sale or
restructuring of existing indebtedness;
j. advise and assist the Debtors' with the accumulation of
data and preparation of various schedules, account analyses and
reconciliations, as necessary; and
-- provide the following financial advisory services:
a. serve as the Debtors' Financial Advisor during the
above-captioned bankruptcy cases;
b. assist the Company in the preparation, monitoring and
periodic refinement of cash flow forecasts and scorecards that
measure actual to forecasted performance;
c. assist the Company in communicating with the DIP Lender;
d. assist the Company in interfacing with pre-petition senior
and subordinated lenders, and other constituents, including any
Committee of Unsecured Creditors that may be formed and its counsel
and financial advisor, if any;
e. assist the Company in preparing the Statement of Financial
Affairs, Schedules, Monthly Operating Reports, and other
documentation and reports required in conjunction with the
Company's bankruptcy filing, and provide testimony if so
requested;
f. assist the Company with daily cash management activities,
including maximizing and forecasting collections and availability,
and assisting the Company with prioritizing disbursements within
the Company's availability constraints and subject to its DIP Loan
Agreement; and
g. render general restructuring advisory services.
The Debtors have agreed to pay Phoenix the proposed compensation
and expense reimbursements as provided in the Engagement Letter:
a. Financial Advisory Services hourly rates:
Michael E. Jacoby $625
Mark Karbiner $425
Senior Managing Directors $495-$695
Senior Advisors $400-$650
Managing Directors $395-$525
Senior Directors $350-$450
Directors $320-$375
Vice Presidents & Sr. Associates $250-$350
Analysts/Associates $150-$275
Admin Staff $75-$150
b. Investment Banking Services
i. For the Investment Banking Services, the Company shall pay
Phoenix an initial, non-refundable fee of twenty thousand dollars
($20,000), which shall be due upon signing this Agreement (the
"Initial Fee").
ii. In addition, the Company shall pay Phoenix for Investment
Banking Services a Base Transaction Fee, in accordance with the
budget approved as part of any financing order entered in these
Cases, which shall be calculated as follows: a) for the period
ending on October 30, 2016, in the amount of $70,000, plus b) for
each week thereafter, commencing with the week ending on November
6, 2016, in the amount of $15,000 per week or such portion of a
week on a pro rata basis through the date (x) Callidus, as DIP
Lender, delivers a written Notice of Default to the Company or (y)
the sale process is suspended for any reason with the consent of
Callidus, as DIP Lender, at which time the Investment Banking
Services shall be terminated (the "IB Termination Date"). The Base
Transaction Fee shall be payable by the Company to Phoenix and
shall be included as part of the Professional Fee Carve-Out
specifically allocated for the benefit of Phoenix in accordance
with the terms of any financing order entered in the Company's
Chapter 11 Cases.
iii. In addition, upon the closing of a Transaction, the
Company agrees to pay Phoenix a transaction fee, in the form of
federal funds via wire transfer or ACH transfer, at the time of the
closing equal to the greater of: a) $275,000, or b) one and three
quarters percent of a Transaction Value up to $20,000,000, plus;
two and three quarters percent of a Transaction Value between
$20,000,001 and $25,000,000; plus five percent of a Transaction
Value between $25,000,001 and $30,000,000; plus six percent of a
Transaction Value greater than $30,000,001 (the "Transaction Fee").
It is understood that if the proceeds of any such Transaction are
to be funded in more than one stage, Phoenix shall be entitled to
its applicable compensation hereunder upon the closing date of each
stage. If the only Transaction involves a Credit Bid by Callidus,
then Phoenix shall only be entitled to a Transaction Fee in the
amount of $275,000. The amount of the Transaction Fee shall be less
the amount of the Base Transaction Fee, which has been previously
earned.
c. Liquidation Services
i. In the event the IB Termination Date occurs, Phoenix will
provide liquidation services to the Company, and the hourly fees
under the Financial Advisory Services and the Base Transaction Fee
under Investment Banking Services will no longer accrue. Phoenix
shall be entitled to receive $15,000 per week for providing
Liquidation Services (the "Weekly Liquidation Services Fee"), and
any Weekly Liquidation Services Fee earned by Phoenix shall be
included and allocated solely for the benefit of Phoenix in the
Post- Carve-Out Trigger Notice Cap as provided for in any financing
order.
ii. For a period of 11 months following an IB Termination Date,
in the event that there is a sale or credit bid involving any
unsold portion of the Company's assets or Callidus' collateral,
with an entity or with any affiliate or employee of, or investor
in, such entity, or any affiliate of any of the foregoing with whom
Phoenix attempted contact during the term of this Agreement (a
"Pre-Termination Party"), then Phoenix shall be entitled to a
Liquidation Fee equal to 1.375% of the Transaction Value associated
with the sale of any such asset (the "Liquidation Fee"). Any
Liquidation Fee shall be a cost of sale and paid from the proceeds
thereof at closing prior to a distribution to any secured
creditors.
Michael E. Jacoby, senior managing partner of Phoenix Capital
Resources, 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.
Phoenix may be reached at:
Michael E. Jacoby
Phoenix Capital Resources
110 Commons Courts
Chadds Ford, PA 19317
Phone: 610.358.4700
Fax: 610.358.9377
About Binder Machinery
Headquartered in South Plainfield, New Jersey, Binder Machinery Co,
LLC, is a seller of heavy construction machinery including
aggregate equipment, paving machines, cranes, telehandlers and
purpose-built material handlers. Komatsu, Wirtgen, Hamm, Vogele,
Sennebogen, SANY, Kinshofer, and Chicago Pneumatic are among the
manufacturers for whom Binder and Rocbin Investment Corp., its
subsidiary, provide distributor services.
The Company was founded in 1957 by the late Walter Binder. It
employs 87 individuals and enjoys a customer base of approximately
4,000 construction contractors.
Binder Machinery Co, LLC, sought Chapter 11 protection (Bankr.
D.N.J. Case No. 16-28015) on Sept. 20, 2016. Judge Kathryn C.
Ferguson is assigned to the case.
The Debtor estimated assets and liabilities in the range of $10
million to $50 million.
The Debtor tapped Anne Marie Aaronson, Esq., and Catherine G.
Pappas, Esq., at Dilworth Paxson, LLP, as counsel.
The petition was signed by Robert C. Binder, manager, chief
executive officer.
BIONITROGEN HOLDINGS: Has Until Dec. 16 to File Plan
----------------------------------------------------
Judge Robert A. Mark of the U.S. Bankruptcy Court for the Southern
District of Florida extended Bionitrogen Holdings, Corp., et al.'s
exclusive periods to file a plan of reorganization and solicit
acceptances to the plan, through Dec. 16, 2016 and Feb. 14, 2017,
respectively.
The Debtors previously sought the extension of their exclusivity
periods, saying they have continued to pursue all viable
reorganization opportunities, including a financial sponsor or
acquirer to provide the necessary funding associated with
confirming a plan of reorganization and exiting these chapter 11
cases. The Debtors further said that since the entry of the Third
Extension Order, the Debtors reorganization efforts have taken a
significantly different albeit beneficial turn. The Debtors added
that they have made progress towards locating a strategic investor
or acquirer of its publicly traded end user manufactured product,
and have obtained a new strategic partner for engineering and
technology support.
The Debtors contended that they still require additional time to
finalize a deal and specific terms of a plan, exploring various
investment opportunities with sophisticated strategic and financial
investors who have scientific and technical expertise with the
Debtors' intellectual property, that is the primary asset in these
cases.
The Debtors told the Court that the agreements, once finalized will
allow the Debtors to rather easily obtain the necessary financing
to acquire the manufacturing plant components that Graham Copley
has been evaluating since the entry of the Third Order extending
their exclusive periods to Nov. 1, 2016, and Dec. 31, 2016,
respectively, and eventually, for the Debtors to successfully
emerge from these Chapter 11 cases.
About Bionitrogen Holdings, Corp.
BioNitrogen Holdings Corp. (OTC PINK: BION) –
http://www.BioNitrogen.com/-- is a cleantech company that utilizes
patented technology to build environmentally friendly plants that
convert biomass into urea fertilizer.
Miami, Florida-based BioNitrogen Holdings, Corp., formerly known as
Hidenet Securities Architectures, Inc., doing business as
BioNitrogen Corp. and its affiliates filed for Chapter 11
protection (Bankr. S.D. Fla. Case Nos. 15-29505 to 15-29515) on
Nov. 3, 2015. The petition was signed by Carlos A. Contreras,
chairman and chief executive officer.
Bankruptcy Judges Robert A. Mark, Laurel M. Isicoff and Jay Cristol
preside over the cases. Jacqueline Calderin, Esq., at Ehrenstein
Charbonneau Calderin represents the Debtors in their restructuring
effort. BioNitrogen Holdings disclosed that the value of its
assets are "unknown" and its liabilities total $3.5 million.
BioNitrogen Florida Holdings and BioNitrogen Plant FL Taylor
estimated assets between $0 and $50,000, and debts at $1 million to
$10 million.
BIOSCRIP INC: S&P Cuts Rating to 'CCC', Sees Default in 6 Mos.
--------------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on home
infusion services provider BioScrip Inc. to 'CCC' from 'CCC+' and
revised the outlook to developing from stable.
At the same time, S&P lowered its issue-level rating on the
company's senior secured term loan and revolver to 'CCC+' from
'B-'. S&P's recovery rating on this debt remains '2', indicating
its expectation for substantial (70% to 90%; at the lower end of
the range) recovery in the event of a payment default. S&P also
lowered its issue-level on the company's senior unsecured notes to
'CC' from 'CCC-'. The recovery rating on the notes remains '6',
reflecting S&P's expectation for negligible (0% to 10%) recovery on
this debt in the event of default
"The downgrade reflects our belief that the company could face a
liquidity event within 12 months if it is unable to rapidly improve
profitability; moreover, given the company's lowered guidance, its
meaningful EBITDA shortfall in the third quarter, and its pattern
of falling short of its expectations, our confidence in the
company's ability to execute on its cost-cutting and other
strategic initiatives is limited," said credit analyst Elan Nat.
The developing outlook reflects the possibility for either a
downgrade or an upgrade, depending on the company's ability to
execute on operational improvements over the coming quarters and
avoid a liquidity event.
S&P could lower the rating if the company is unable to improve
profitability over the next two quarters, leading S&P to believe
that a payment default is likely within 6 months. Under such a
scenario S&P expects adjusted EBITDA generation to remain near
current levels during that timeframe.
S&P would consider a one-notch upgrade, if the company demonstrates
an ability to approach EBITDA/Interest coverage of 1x, which would
likely enable the company to negotiate needed waivers from its
lenders. Although leverage would likely remain very high and S&P
would continue to view the capital structure as unsustainable
without continued improvements, S&P thinks risk of payment default
would extend beyond 12 months.
BONANZA CREEK: Covenant Violations Raise Going Concern Doubt
------------------------------------------------------------
Bonanza Creek Energy, Inc., filed with the U.S. Securities and
Exchange Commission its quarterly report on Form 10-Q, disclosing a
net loss of $34.90 million on $49.32 million of oil & gas sales for
the three months ended September 30, 2016, compared to a net loss
of $112.30 million on $72.15 million of oil & gas sales for the
same period in 2015.
The Company's balance sheet at September 30, 2016, showed total
assets of $1.22 billion, total liabilities of $1.14 billion, and a
stockholders' equity of $84.76 million.
Since the first quarter of 2016, the Company's liquidity outlook
has deteriorated due to the Company's inability to sell assets
given current market conditions and counterparty concerns about the
Company's liquidity and current capital structure, borrowing base
reductions that have occurred during 2016, continuation of
depressed commodity prices and the inability to access the debt and
capital markets. In addition, the Company's senior secured
revolving credit agreement is subject to scheduled redeterminations
of its borrowing base, semi-annually, as early as April and October
of each year, based primarily on reserve report values using lender
commodity price expectations at such time as well as other factors
within the discretion of the lenders that are party to the
revolving credit facility.
As a result of these and other factors, the Company's ability to
comply with financial covenants and ratios in its revolving credit
facility and indentures has been affected by continued low
commodity prices. Absent a waiver, amendment or forbearance
agreement, failure to meet these covenants and ratios would result
in an Event of Default and, to the extent the applicable lenders so
elect, an acceleration of the Company's existing indebtedness,
causing such debt of $229.3 million, as of September 30, 2016, to
be immediately due and payable. Based on the Company's financial
results through the third quarter of 2016, it is no longer in
compliance with its minimum interest coverage ratio requirement.
If a waiver, amendment or forbearance agreement is not obtained,
the applicable credit facility lenders could give notice of
acceleration as a result of this non-compliance. The Company does
not currently have adequate liquidity to repay all of its
outstanding debt in full if such debt were accelerated;
Because the revolving credit facility borrowing base was
redetermined in May 2016 to $200.0 million, the Company was
overdrawn by $88.0 million and has been making mandatory monthly
repayments of approximately $14.7 million. The borrowing base was
further reduced on October 31, 2016 to $150.0 million, which is
less than the current amount drawn. Under the terms of the credit
agreement, the Company has a 20-day period from the date of
redetermination to inform the bank group of its intended method to
cure its deficiency. Depending on its election to cure the
deficiency, the Company may not have sufficient cash on hand to be
able to make the mandatory repayments associated with curing the
deficiency at the time they are due;
If the Company is unable to obtain a waiver from or otherwise reach
an agreement with the lenders under the revolving credit facility
and the indebtedness under the revolving credit facility is
accelerated, then an Event of Default under the Company's 6.75%
Senior Notes due 2021 and 5.75% Senior Notes due 2023 would occur.
If an Event of Default occurs, the trustee or the holders of at
least 25% in aggregate principal amount of the then outstanding
notes, may declare the entire principal under the Senior Notes to
be due and payable immediately. The Company made the October 15,
2016 interest payment of $17.0 million, which included per diem
default interest, on its 6.75% Senior Notes to the indenture
trustee within the 30-day grace period allowed under the governing
indenture. The revolving credit facility and Senior Notes have
cross default clauses.
If lenders, and subsequently noteholders, accelerate the Company's
outstanding indebtedness ($1.0 billion as of September 30, 2016),
it will become immediately due and payable. In the event of
acceleration, the Company does not have sufficient liquidity to
repay those amounts and would have to seek relief through a Chapter
11 Bankruptcy proceeding. Due to covenant violations, the Company
classified the revolving credit facility and Senior Notes as
current liabilities as of September 30, 2016. These significant
risks and uncertainties 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:
http://bit.ly/2fQam5A
Bonanza Creek is an independent energy company engaged in the
acquisition, exploration, development and production of onshore oil
and associated liquids-rich natural gas in the United States.
Bonanza Creek Energy, Inc., was incorporated in Delaware on Dec. 2,
2010, and went public in December 2011.
BURCON NUTRASCIENCE: 1st CLARISOY Production Facility Commissioned
------------------------------------------------------------------
Burcon NutraScience Corporation announced that Archer Daniels
Midland Company, Burcon's license and production partner for
CLARISOY soy protein, notified Burcon that ADM has successfully
commissioned the first large-scale CLARISOY production facility.
The CLARISOY soy protein technology was developed by Burcon and
licensed, exclusively, to ADM to manufacture, market and sell
CLARISOY soy proteins.
Unique to any other proteins on the market, ADM's CLARISOY line of
soy proteins are the only vegetable-based proteins that offer
exceptionally high solubility, clean flavor and complete protein
nutrition for low pH and neutral pH beverage systems. This product
line is well-positioned to help beverage manufacturers meet the
ever-growing demand of health and wellness-minded consumers for
great-tasting, nutritionally enhanced beverages with natural
ingredients and clean labels.
CLARISOY can be used to increase nutritional content in a variety
of applications, from coffee creamers, smoothies and powdered
beverage mixes, to yogurts and frozen desserts. For example,
CLARISOY 150 serves as an ideal replacement for sodium caseinate, a
protein found in milk, in coffee creamers and whiteners, creating
substantial cost savings as well as providing vegan alternatives
for product developers. CLARISOY 170 and 180 are specifically
designed for neutral pH products, such as meal replacement
beverages, yogurts and ice creams, and can increase the protein
percentage to levels that were previously unachievable using soy
protein while at the same time reducing costs and allowing for
vegan and lactose-free labels.
"Today's announcement marks the culmination of years of effort,"
said Johann Tergesen, Burcon's president and chief operating
officer, adding, "developing and launching such an innovative and
timely line of plant-based proteins, as ADM is doing with CLARISOY,
has required commitment and dedication from both of our teams.
Burcon could not have chosen a better partner than ADM to enhance
the value of our CLARISOY soy protein technology and bring CLARISOY
to wellness-minded consumers around the globe."
About Burcon NutraScience
Headquartered in Vancouver, Canada, Burcon NutraScience
Corporation has developed a portfolio of composition, application,
and process patents originating from its core protein extraction
and purification technology. The Company's patented processes
utilize inexpensive oilseed meals and other plant-based sources
for the production of purified plant proteins that exhibit certain
nutritional, functional and nutraceutical profiles.
Burcon NutraScience reported a net loss of C$6.56 million on
C$106,390 of revenue for the year ended March 31, 2016, compared to
a net loss of C$6.57 million on C$105,387 of revenue for the year
ended March 31, 2015.
As of June 30,2016, Burcon had C$5.12 million in total assets,
C$2.45 million in total liabilities and C$2.67 million in
shareholders' equity.
In its Annual Report on Form 20-F for the fiscal year ended March
31, 2016, the Company said that as at March 31, 2016, it had
minimal revenues from its technology, had an accumulated deficit of
$77,550,164 (2015 - $70,980,388). During the year ended
March 31, 2016, the Company incurred a loss of $6,569,776 (2015 -
$6,579,424; 2014 - $5,961,545) and had negative cash flow from
operations of $4,883,575 (2015 - $4,819,743; 2014 - $4,952,221).
The Company has relied on equity financings, private placements,
rights offerings and other equity transactions to provide the
financing necessary to undertake its research and development
activities. As at March 31, 2016, the Company had cash and cash
equivalents of $2,479,862 (2015 - $2,400,965) and short-term
investments of $nil (2015 - $1,266,600). These conditions indicate
existence of a material uncertainty that casts substantial doubt
about the ability of the Company to meet its obligations as they
become due and, accordingly, its ability to continue as a going
concern.
The Company said its ability to continue as a going concern is
dependent upon the Company raising additional capital. On May 12,
2016, the Company completed a convertible note financing for
$2,000,000, with net proceeds of approximately $1,934,000.
Although the Company expects to receive royalty revenues from its
license and production agreement (Soy Agreement) with Archer
Daniels Midland Company from the sales of CLARISOY(TM), the amount
of royalty revenues cannot be ascertained at this time. Burcon
expects the amount of royalty revenues from the sales of
CLARISOY(TM) will not reach its full potential until such time
production is expanded to one or more full-scale commercial
facilities.
C & D PRODUCE: Court Extends Plan Filing Period to Jan. 16
----------------------------------------------------------
Judge Paul G. Hyman, Jr. of the U.S. Bankruptcy Court for the
Southern District of Florida extended C & D Produce Outlet, Inc.
and C & D Produce Outlet - South, Inc.'s exclusive periods to file
a plan of reorganization and solicit acceptances to the plan, to
January 16, 2017 and March 17, 2017, respectively.
The Debtors sought the extension of their exclusivity periods,
telling the Court that they wanted to sell the real property and/or
business operations of both C&D Produce Outlet - South, Inc.,
located at 3133 Lake Worth Road, Lake Worth, Florida, and C&D
Produce, Inc., located at 8915 North Military Trail, Palm Beach
Gardens, Florida. The Debtors said that the sale would aid in
funding an effective Plan of Reorganization. The Debtors requested
the extension of their exclusivity deadline to allow the sale of
the properties to take place.
About C & D Produce Outlet, Inc.
C & D Produce Outlet, Inc., and C & D Produce Outlet - South, Inc.,
filed separate chapter 11 petitions (Bankr. S.D. Fla. Case Nos.
16-15760 and 16-15764) on April 21, 2016. The petitions were
signed by Carol Saldana, the Debtors' president. The Debtors are
represented by Craig I. Kelley, Esq., at Kelley & Fulton, P.L. The
Debtors tapped Mary P. Rodgers, CPA, of Ackerman Rodgers CPA, PLLC,
as accountant. At the time of the filing, C & D Produce Outlet,
Inc. estimated assets at $0 to $50,000 and liabilities at $100,000
to $500,000; C & D Produce Outlet - South, Inc. estimated assets at
$0 to $50,000 and liabilities at $500,000 to $1 million.
C & D PROPERTIES: IRS To Be Paid $125 Per Quarter in 1 Year
-----------------------------------------------------------
C & D Properties of Missouri LLC filed with the U.S. Bankruptcy
Court for the Western District of Missouri an amended disclosure
statement referring to the Debtor's plan of reorganization.
Class 2 consists of the $500 priority claim of the IRS. This
amount will be paid off in the first year of the plan with
quarterly payments of $125. Class 2 is impaired and will vote on
the Plan.
The Class 4 General Unsecured Claim of Midwest Regional Bank
results from the separation of its mortgage into secured and
unsecured portions. This amount is estimated at $145,875. The
relationship between the Debtor and this creditor is controlled by
the joint stipulation filed between the parties. Class 4 is
impaired and will vote on the Plan.
The plan payments will be funded from the income earned by D & C
Enterprises.
The Amended Disclosure Statement is available at:
http://bankrupt.com/misc/mowb16-40525-70.pdf
About C & D Properties
C & D Properties of Missouri LLC is a Missouri LLC that owns a
building located at 1102 E 23rd St in Independence, Missouri. This
building houses an animal hospital that performs veterinary
services. The name of the animal hospital is D & C Enterprises,
and this entity operates publicly under the dba name of Cedar Ridge
Animal Hospital. D & C Enterprises has also filed a Chapter 11
case.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Mo. Case No. 16-40525) on March 2, 2016. The
petition was signed by Dr. Cassie Cure, president. The Debtor is
represented by George J. Thomas, Esq. at Phillips & Thomas LLC.
The Debtor estimated assets and liabilities at $100,001 to $500,000
at the time of the filing.
C&C CAPITAL: Has Until Feb. 21 to File Chapter 11 Plan
------------------------------------------------------
Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern
District of Florida extended C&C Capital Trading Corp.'s exclusive
period to file a chapter 11 plan and disclosure statement to
February 21, 2017.
The Debtor previously sought the extension of its exclusivity
period, contending that it was still gathering information on the
formulation of its plan and disclosure statement, especially given
the recent efforts by the Debtor to obtain necessary discovery from
Abreu II, LLC – an entity claiming to hold a purchase contract
for the Debtor's property interests.
Judge Cristol ordered the Debtor and Abreu II to mutually exchange
their production and responses to other’s discovery requests
already served and subject of their respective motions on or before
December 9, 2016. He gave the parties through January 6, 2016 to
resolve any disputes relating to such discovery responses. Judge
Cristol held that after January 6, 2016, to the extent the Debtor
and Abreu have not resolved their discovery response disputes the
Court will hear any further response disputes between them on an
expedited basis.
Abreu II is scheduled to sit for its 2004 Examination on January
27, 2017 at 9:00 a.m. The Debtor's 2004 Examination is scheduled
on the same date, and will begin on or before 1:00 p.m.
About C&C Capital Trading Corp.
C & C Capital Trading Corp. filed for Chapter 11 bankruptcy
protection (Bankr. S.D. Fla. Case No. 16-17485) on May 25, 2016.
The petition was signed by the company's President, Maximo Corzo.
The Debtor's counsel is James B. Miller, Esq., James B. Miller,
P.A., 19 West Flagler St. #416, Miami, FL 33130. At the time of
filing, the Debtor had $500,000 to $1 million in estimated assets
and $100,000 to $500,000 in estimated liabilities.
CAAZ VENTURES: Capital Fund Does Not Consent to Cash Use
--------------------------------------------------------
Capital Fund I, LLC and Capital Fund II, LLC, collectively known as
Capital Fund, inform the U.S. Bankruptcy Court for the District of
Arizona that they do not consent to Caaz Ventures, LLC's use of
their Cash Collateral.
Capital Fund claims a security interest on the real property
located at 7922 N. Paseo Del Norte, Tucson, AZ 8570, including
without limitation, rents, property income, issues and profits
generated from said real property by virtue of a Deed of Trust.
Capital Fund argues that there has been no substantiation that
Debtor is complying with its Counsel's record assurance that
"moneys received as rent will be placed in the DIP account and not
used by Debtor" because the Debtor has failed/refused to file
Operating Reports for the months of September or October, 2016. In
addition, Capital Fund believes that rent is being collected month
after month by the Debtor's member, Jesus David Aguilar.
Capital Fund I, LLC and Capital Fund II, LLC are represented by:
Cynthia L. Johnson, Esq.
Law Office of Cynthia L. Johnson
11640 East Caron Street
Scottsdale, AZ 85259
Phone: (480) 381-7929
Fax: (480) 614-9414
Email: cynthia@jsk-law.com
About Caaz Ventures, LLC
Caaz Ventures, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 16-05033) on May 5, 2016.
The Petition was signed by Jesus David Aguilar, Managing Member.
The Debtor is represented by Daniel J. Rylander, Esq., at Daniel J.
Rylander, P.C. At the time of filing, the Debtor had both assets
and liabilities estimated at $100,000 to $500,000.
The Office of the U.S. Trustee disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Caaz Ventures, LLC.
CADIZ INC: Incurs $5.17 Million Net Loss in Third Quarter
---------------------------------------------------------
Cadiz Inc. filed with the Securities and Exchange Commission its
quarterly report on Form 10-Q disclosing a net loss and
comprehensive loss applicable to common stock of $5.17 million on
$120,000 of revenues for the three months ended Sept. 30, 2016,
compared to a net loss and comprehensive loss applicable to common
stock of $5.96 million on $227,000 of revenues for the three months
ended Sept. 30, 2015.
Cadiz Inc. reported a net loss and comprehensive loss applicable to
common stock of $19.61 million on $303,000 of revenues compared to
a net loss and comprehensive loss applicable to common stock of
$16.79 million on $283,000 of revenues for the nine months ended
Sept. 30, 2015.
As of Sept. 30, 2016, Cadiz Inc. had $59.01 million in total
assets, $129.2 million in total liabilities and a total
stockholders' deficit of $70.22 million.
The Company had a working capital deficit of $39.7 million at Sept.
30, 2016, and used cash in operations of $6.4 million for the nine
months ended Sept. 30, 2016.
Cash requirements during the nine months ended Sept. 30, 2016,
primarily reflect certain administrative and litigation costs
related to the Company's water project development efforts.
Currently, the Company's sole focus is the development of its land
and water assets.
In April 2016, the Company issued approximately $10 million in
aggregate principal and accrued interest of its 7.00% Convertible
Senior Notes due 2020. The proceeds from the issuance of the 2020
Notes, approximately $8 million before fees, provides the Company
with sufficient funds to meet its expected working capital needs
through the end of February 2017.
The Company has a first mortgage debt obligation of $43.1 million
coming due in September 2017. Based on the Company's current and
anticipated uses of cash resources, the Company will also require
additional working capital during 2017. The Company is evaluating
the amount of cash needed, and the manner in which such cash will
be raised. The Company has engaged an investment bank and is
currently pursuing a refinancing, extension, or extinguishment of
the first mortgage. The Company may meet any future cash
requirements through a variety of means, including equity or debt
placements, or through the sale or other disposition of assets.
"Limitations on the Company's liquidity and ability to raise
capital may adversely affect it. Sufficient liquidity is critical
to meet its resource development activities. Although the Company
currently expects its sources of capital to be sufficient to meet
its liquidity needs through the end of February 2017, if the
Company cannot raise needed funds or refinance its current $43.1
million debt obligation prior to maturity in September 2017, it
might default on its debt obligations, and, accordingly, there
would be substantial doubt about the Company's ability to continue
as a going concern."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/Ohvzee
About Cadiz
Cadiz Inc. is a land and water resource development company with
45,000 acres of land in three areas of eastern San Bernardino
County, California. Virtually all of this land is underlain by
high-quality, naturally recharging groundwater resources, and is
situated in proximity to the Colorado River and the Colorado River
Aqueduct, a major source of imported water for Southern California.
The Company's properties are suitable for various uses, including
large-scale agricultural development, groundwater storage and water
supply projects. The Company's main objective is to realize the
highest and best use of its land and water resources in an
environmentally responsible way.
Cadiz Inc. reported a net loss and comprehensive loss of $24.01
million in 2015, a net loss and comprehensive loss of $18.88
million in 2014 and a net loss and comprehensive loss of $22.67
million in 2013.
CAR CHARGING: Files Preliminary Prospectus with SEC
---------------------------------------------------
Car Charging Group, Inc. filed with the Securities and Exchange
Commission a Form S-1 registration statement relating to a firm
commitment public offering of an undetermined amount of shares of
common stock, $0.001 par value per share, and warrants to purchase
[_] shares of common stock, of the Company.
The Company anticipates that the public offering price of its
shares of common stock will be between $____ and $____
per share and $0.01 per warrant. The warrants are exercisable
immediately, have an exercise price of $_____ per share and expire
five years from the date of issuance.
The Company's common stock is presently quoted on the OTC Pink
Current Information Marketplace under the symbol "CCGI". The
Company intends to apply to have its common stock and warrants
listed on The NASDAQ Capital Market under the symbols "CCGI" and
"CCGIW," respectively. No assurance can be given that our
application will be approved. On Nov. 3, 2016, the last reported
sale price for the Company's common stock on the OTC Pink Current
Information Marketplace was $0.29 per share. There is no
established public trading market for the warrants. No assurance
can be given that a trading market will develop for the warrants.
A full-text copy of the prospectus is available for free at:
https://is.gd/RxRwj1
About Car Charging
Miami Beach, Florida-based Car Charging Group, Inc., is a leading
owner, operator, and provider of electric vehicle charging
equipment and networked EV charging services. The Company offers
both residential and commercial EV charging equipment, enabling EV
drivers to easily recharge at various location types.
As of June 30, 2016, Car Charging had $2.43 million in total
assets, $20.68 million in total liabilities, $825,000 in series B
convertible preferred stock, and a $19.07 million total
stockholders' deficiency.
Car Charging reported a net loss attributable to common
shareholders of $9.58 million in 2015 compared to a net loss
attributable to common shareholders of $22.71 million in 2014.
Marcum LLP, in New York, NY, issued a "going concern" qualification
on the consolidated financial statements for the year ended Dec.
31, 2015, noting that the Company has incurred net losses since
inception and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
CARLOS ANTIGUA: Unsecured Creditors to be Paid 100% Over 5 Years
----------------------------------------------------------------
General unsecured creditors will receive full payment of their
claims, according to a Chapter 11 plan of reorganization filed by
Carlos Antigua in the U.S. Bankruptcy Court in Massachusetts.
Under the restructuring plan, Class 2 general unsecured creditors
will be paid 100% of their claims within five years of confirmation
of the plan.
The plan will be funded from income earned by the Debtor as a
factory worker and the rental income he earns from a property
located at 199 Boxford Street, Lawrence, Massachusetts, according
to the disclosure statement explaining the plan.
The disclosure statement is available for free at
https://is.gd/FJcVvX
The Debtor is represented by:
John Ullian, Esq.
The Law Firm of Ullian & Associates, P.C.
220 Forbes Road, Suite 106
Braintree, MA 02184
Phone: (781) 848-5980
About Carlos Antigua
Carlos Antigua works in a factor operated by TE Subcom, LLC. The
Debtor sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Mass. Case No. 16-40066) on January 21, 2016.
CHC GROUP: Files Chapter 11 Plan of Reorganization
--------------------------------------------------
CHC Group disclosed that on Nov. 11, 2016, the Company filed a
proposed chapter 11 plan of reorganization (the "Plan") and related
Disclosure Statement with the United States Bankruptcy Court for
the Northern District of Texas.
Under the terms of the Plan, a comprehensive recapitalization of
CHC will be completed that will provide $300 million in new capital
from the Company's existing creditors, as well as terms for
restructured aircraft leases and the option for additional asset
based financing commitments of $150 million from The Milestone
Aviation Group Limited and its affiliates. The Company intends to
seek confirmation of the plan in early 2017 and is on track to
emerge from the court-supervised process shortly thereafter.
The Plan is supported by: The Milestone Aviation Group Limited and
certain of its affiliates; holders of approximately 67.56% of the
outstanding principal amount of the Company's 9.25% Senior Secured
Notes due 2020; the Official Committee of Unsecured Creditors; and
holders of approximately 73.56% of the outstanding principal amount
of the Company's 9.375% Senior Notes due 2021.
Karl Fessenden, President and Chief Executive Officer:
"We are continuing to make important progress as we enter the final
phase of our financial restructuring. We are confident that this
Plan, together with our strong and competitive operating model,
will significantly enhance our financial flexibility and establish
a sustainable capital structure that enables CHC to invest in and
grow the business over the long-term. We appreciate the support of
our lenders, which we believe reflects their confidence in CHC's
future. We look forward to emerging as a stronger company
positioned for long-term success. As always, we remain committed
to maintaining our position as a world class helicopter service
provider and continuing to set the standard for safety, customer
service and value across the industry."
Mr. Fessenden added, "We thank our employees for maintaining our
high quality of customer service and commitment to safety during
this process, as well as our loyal customers, suppliers and other
stakeholders for their support as we take the final steps in our
financial restructuring."
The Disclosure Statement filed on Nov. 11 contains historical
information regarding CHC, a description of proposed distributions
to creditors, an analysis of the Plan's feasibility, as well as
many of the technical matters required for the solicitation
process, such as descriptions of who will be eligible to vote on
the Plan and the voting process itself. The Company will seek
approval of the Disclosure Statement at a hearing scheduled for
December 20, 2016, and intends to solicit creditors' votes on the
Plan once the court grants such approval.
About CHC Group Ltd.
Headquartered in Irving, Texas, CHC Group Ltd. is a global
commercial helicopter services company primarily servicing the
offshore oil and gas industry. CHC maintains bases on six
continents with major operations in the North Sea, Brazil,
Australia, and several locations across Africa, Eastern Europe, and
South East Asia. CHC maintains a fleet of 230 medium and heavy
helicopters, 67 of which are owned by it and the remainder are
leased from various third-party lessors.
CHC Group Ltd. and 42 of its wholly-owned subsidiaries each filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Case No. 16-31854) on May 5, 2016. As of
Jan. 31, 2016, CHG had $2.16 billion in total assets and $2.19
billion in total liabilities.
The Debtors hired Weil, Gotshal & Manges LLP as counsel, Debevoise
& Plimpton LLP as special aircraft counsel, PJT Partners LP as
investment banker, Seabury Corporate Advisors LLC as financial
advisor, CDG Group, LLC, as restructuring advisor, and Kurtzman
Carson Consultants LLC as claims and noticing agent.
The Office of the U.S. Trustee on May 13, 2016, appointed five
creditors of CHC Group Ltd. to serve on the official committee of
unsecured creditors.
The Creditors Committee's attorneys are Marcus A. Helt, Esq., and
Mark C. Moore, at Gardere Wynne Sewell LLP, and Douglas H. Mannal,
Esq., Gregory A. Horowitz, Esq., and Anupama Yerramalli, Esq., at
Kramer Levin Naftalis & Frankel LLP.
CHF-DEKALB II: S&P Lowers Rating on 2011 Revenue Bonds to 'BB'
--------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'BB' from 'BBB'
on Illinois Finance Authority's series 2011 student housing revenue
bonds, issued for CHF-DeKalb II L.L.C., Ala., a not-for-profit
corporation organized for the sole purpose of constructing student
housing for the Northern Illinois University (NIU) Project. The
outlook is stable.
"The downgrade reflects the significant multiyear enrollment
declines at NIU that have negatively affected the occupancy of the
project, now barely sufficient debt service coverage for the
project as per our calculation, and weak financial performance at
the university combined with several internal control deficiencies
in its audit that have persisted in the past few years," said S&P
Global Ratings credit analyst Gauri Gupta.
The rating reflects the high connectivity between NIU and the
project, as demonstrated by:
-- NIU's management of the project and the dining facility,
which includes a "first fill" priority for this project as
per the management agreement and guaranteed 95% occupancy
for the project;
-- NIU's guarantee to use its legally available funds in the
event of insufficient revenues to make debt service
payments;
-- Oversight, and active role in marketing the new housing as
part of its own housing stock; and
-- The project's on-campus location and NIU's eventual
ownership of the project once the bonds are repaid.
The rating also reflects S&P's assessment of:
-- Adequate DSC of 1.35x for fiscal 2015 and projected 1.3x for
fiscal 2016, though much weaker at less than 1.0x when using
S&P Global Ratings' calculation;
-- The bonds' adequate security features, including a debt
service reserve fund, a 1.2x annual DSC covenant, a 1.2x
additional bonds test, capital reserves, and business
interruption insurance requirements; and
-- The project's assumed break-even (1.0x) occupancy levels of
66.25%, which S&P considers manageable, as well as a
relatively flat debt service schedule.
S&P believes these factors partly offset the above credit
strengths:
-- Occupancy level of below 95% threshold for fall 2016 and 96%
for fall 2015, which are also below historical occupancy;
-- NIU's declining undergraduate enrollment, down 20% since
fall 2010, with a fall 2016 full-time-equivalent (FTE)
enrollment of 15,712; and
-- Budgetary stress at the state level, which may lead to
additional delayed payments of appropriated funding,
continued operating deficits, and deterioration of available
cash and investments.
The stable outlook reflects S&P's expectation that, during the next
year, the project will meet its occupancy and DSC despite a
projected decline in enrollment. S&P also believes the university
will take all actions allowable and necessary to support the
project and its "first fill" obligation under the management
agreement.
S&P could consider a negative rating action during the outlook
period if the project's targeted operating revenue declines
further, pressuring DSC or if the university should have to step
into make debt service payments on behalf of the project. In
addition, S&P might consider lowering the rating if NIU continues
to experience declines in undergraduate enrollment that could
negatively affect the project's housing occupancy, or deterioration
of the university's financial profile that weakens the funds
available to support the project per the management agreement
S&P do not expect to raise the rating during the one-year outlook
time frame given the volatile state funding environment and the
consistent declines in undergraduate enrollment.
COBALT INTERNATIONAL: To Consummate Debt Exchange Transaction
-------------------------------------------------------------
Cobalt International Energy, Inc., agreed to consummate a debt
exchange and financing transaction with certain holders (the
"Participating Ad Hoc Group") of the Company's outstanding 2.625%
Convertible Senior Notes due 2019 and 3.125% Convertible Senior
Notes due 2024. The Transaction will consist of (i) the issuance
and sale by the Company of $500 million of new first lien senior
secured notes to Noteholders comprising the Participating Ad Hoc
Group and (ii) the issuance of second lien senior secured notes and
30 million shares of common stock by the Company to Noteholders
comprising the Participating Ad Hoc Group in exchange for Notes
held by the Participating Ad Hoc Group at exchange rates
representing a discount to the principal amount of Notes being
exchanged. Management believes the Transaction provides financial
flexibility, strengthens the Company's balance sheet and best
positions the Company to successfully monetize its Angolan assets
for the benefit of all stakeholders. The Company has agreed for a
period of time to work exclusively with the Participating Ad Hoc
Group to consummate the Transaction. The consummation of the
Transaction is subject to the negotiation and execution of mutually
satisfactory definitive documents and other customary conditions.
During the month of September 2016, the Company began discussions
with certain holders of the 2019 Notes and 2024 Notes to engage in
discussions with the Company regarding a potential debt exchange,
financing or other transaction involving the Notes (any one or more
of the foregoing, a "Possible Transaction"). The Company executed
various confidentiality agreements with (i) the Participating Ad
Hoc Group and (ii) an alternate group of Noteholders to facilitate
discussions concerning such Possible Transaction.
Pursuant to the Confidentiality Agreements, the Company agreed to
publicly disclose any material non-public information disclosed to
the Noteholders upon the occurrence of certain events set forth in
the Confidentiality Agreements. The Company has agreed to
consummate the Transaction with the Participating Ad Hoc Group. The
Company has terminated all discussions with the Alternate Ad Hoc
Group regarding any Possible Transaction. A copy of a diligence
presentation regarding the Company that was presented to the
Alternate Ad Hoc Group is available for free at:
https://is.gd/A1g8k1
About Cobalt
Cobalt International Energy, Inc. is an independent exploration and
production company with operations currently focused in the
deepwater U.S. Gulf of Mexico. In January 2016, the Company
achieved initial production of oil and gas from the Heidelberg
field. The Company's exploration efforts in the U.S. Gulf of
Mexico have resulted in four oil and gas discoveries including the
North Platte, Shenandoah, Anchor, and Heidelberg fields, each of
which are in various stages of appraisal and development. The
Company also has a non-operated interest in the Diaba Block
offshore Gabon.
The Company reported a net loss of $694.42 million in 2015, a net
loss of $510.76 million in 2014 and a net loss of $589.02 million
in 2013.
As of Sept. 30, 2016, Cobalt had $3.68 billion in total assets,
$2.70 billion in total liabilities and $983.83 million in total
stockholders' equity.
* * *
As reported by the TCR on Nov. 9, 2016, 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 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.
COCRYSTAL PHARMA: Incurs $1.88 Million Net Loss in Third Quarter
----------------------------------------------------------------
Cocrystal Pharma, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
and comprehensive loss of $1.88 million on $0 of grant revenues for
the three months ended Sept. 30, 2016, compared to a net loss and
comprehensive loss of $508,000 on $24,000 of grant revenues for the
three months ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss and comprehensive loss of $9.12 million on $0 of grant
revenues compared to a net loss and comprehensive loss of $19.67
million on $78,000 of grant revenues for the same period a year
ago.
As of Sept. 30, 2016, Cocrystal Pharma had $220.90 million in total
assets, $53.07 million in total liabilities and $167.82 million in
total stockholders' equity.
As of Sept. 30, 2016, the Company had an accumulated deficit of
$71.7 million. During the three and nine month periods ended Sept.
30, 2016, the Company had losses from operations of $1.9 million
and $11.4 million, respectively. Cash used in operating activities
was approximately $12.4 million for the nine months ended Sept. 30,
2016. The Company has not yet established an ongoing source of
revenue sufficient to cover its operating costs. The ability of the
Company to continue as a going concern is dependent on the Company
obtaining adequate capital to fund operating losses until it
becomes profitable. The Company can give no assurances that any
additional capital that it is able to obtain, if any, will be
sufficient to meet its needs, or that any such financing will be
obtainable on acceptable terms. If the Company is unable to obtain
adequate capital, it could be forced to cease operations or
substantially curtail its drug development activities. These
conditions raise substantial doubt as to the Company's ability to
continue as a going concern. The Company expects to continue to
incur substantial operating losses and negative cash flows from
operations over the next several years during its pre-clinical and
clinical development phases.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/O8N9rq
About Cocrystal Pharma
Cocrystal Pharma, Inc., formerly known as Biozone Pharmaceuticals,
Inc., is a pharmaceutical company with a mission to discover novel
antiviral therapeutics as treatments for serious and/or chronic
viral diseases. Cocrystal Pharma employs unique technologies and
Nobel Prize winning expertise to create first- and best-in-class
antiviral drugs. These technologies and the Company's market-
focused approach to drug discovery are designed to efficiently
deliver small molecule therapeutics that are safe, effective and
convenient to administer.
The Company's primary business going forward is to develop novel
medicines for use in the treatment of human viral diseases.
Cocrystal has been developing novel technologies and approaches to
create first-in-class and best-in-class antiviral drug candidates
since its initial funding in 2008. Subsequent funding was
provided to Cocrystal Discovery, Inc., by Teva Pharmaceuticals
Industries, Ltd., or Teva, in 2011. The Company's focus is to
pursue the development and commercialization of broad-spectrum
antiviral drug candidates that will transform the treatment and
prophylaxis of viral diseases in humans. By concentrating the
Company's research and development efforts on viral replication
inhibitors, the Company plans to leverage its infrastructure and
expertise in these areas.
Cocrystal Pharma reported a net loss of $50.1 million on $78,000
of grant revenues for the year ended Dec. 31, 2015, compared to a
net loss of $99,000 on $9,000 of grant revenues for the year ended
Dec. 31, 2014.
COLUCCI TILE: Court Extends Plan Filing Period to Feb. 8
--------------------------------------------------------
Judge Gregory L. Taddonio of the U.S. Bankruptcy Court for the
Western District of Pennsylvania extended Colucci Tile and Marble,
Inc.'s exclusive period to file a chapter 11 plan and disclosure
statement to February 8, 2017.
The Debtor previously asked the Court to extend its exclusive
period to file a chapter 11 plan and disclosure statement to
December 12, 2016.
The Debtor told the Court that although it had met all operating
requirements since filing for protection under Chapter 11, the
Debtor and its counsel needed additional time to present a viable
Plan of Reorganization. The Debtor further told the Court that it
wished to move forward and believed that it would be able to
successfully reorganize under Chapter 11.
About Colucci Tile and Marble, Inc.
Colucci Tile and Marble, Inc., sought protection under Chapter 11
of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 16-21389) on April
12, 2016. The petition was signed by Carl J. Hilbert, president.
The case is assigned to Judge Gregory L. Taddonio. At the time of
the filing, the Debtor estimated its assets at $100,000 to
$500,000, and debts at $1 million to $10 million.
COMBIMATRIX CORP: Incurs $856K Net Loss in Third Quarter
--------------------------------------------------------
Combimatrix Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $856,000 on $3.24 million of total revenues for the three months
ended Sept. 30, 2016, compared to a net loss of $1.68 million on
$2.52 million of total revenues for the same period in 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $3.58 million on $9.32 million of total revenues
compared to a net loss of $5.06 million on $7.40 million of total
revenues for the nine months ended Sept. 30, 2015.
As of Sept. 30, 2016, Combimatrix had $8.88 million in total
assets, $1.95 million in total liabilities and $6.93 million in
total stockholders' equity.
"We have a history of incurring net losses and net operating cash
flow deficits. We are also deploying new technologies and continue
to develop commercial technologies and services. However, we
believe that our cash, cash equivalents and short-term investment
balances at September 30, 2016 will be sufficient to meet our
expected cash requirements for the next twelve months. In order
for us to continue as a going concern beyond this point and
ultimately to achieve profitability, we may be required to obtain
capital from external sources, increase revenues and reduce
operating costs. However, there can be no assurance that our
operations will become profitable or that external sources of
financing, including the issuance of debt and/or equity securities,
will be available at times and at terms acceptable to us, or at
all. The issuance of additional equity or convertible debt
securities will also cause dilution to our stockholders. If
external financing sources are not available or are inadequate to
fund our operations, we will be required to reduce operating costs,
including research projects and personnel, which could jeopardize
our future strategic initiatives and business plans.
"Capital Requirements. We may also encounter unforeseen
difficulties that may deplete our capital resources more rapidly
than anticipated. As a result, we may be required to seek
additional funding through equity, debt or other external
financing, and there can be no assurance that additional funding
will be available on favorable terms, in a timely fashion or at
all," as disclosed in the report.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/h5SDzi
About Combimatrix
Irvine, California-based CombiMatrix Corporation specializes in
pre-implantation genetic screening, miscarriage analysis, prenatal
and pediatric healthcare, offering DNA-based testing for the
detection of genetic abnormalities beyond what can be identified
through traditional methodologies. Its clinical lab and corporate
offices are located in Irvine, California.
Combimatrix reported a net loss of $6.60 million in 2015 compared
to a net loss of $8.70 million in 2014.
Haskell & White LLP, in Irvine, California, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company has limited
working capital and a history of incurring net losses and net
operating cash flow deficits. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
COMPCARE MEDICAL: PCO Files 2nd Interim Report
----------------------------------------------
Constance Doyle, the Patient Care Ombudsman for Compcare Medical,
Inc., has filed the Second Interim Report for the period of
September 1, 2016 to October 31, 2016.
The Patient Care Ombudsman finds that all care provided to the
patients by the Debtor is well within the standards of care.
The Ombudsman noted that there are no changes in the medical record
process and all are electronic. Also, the Ombudsman reported that
there are no current plans to replace the position of one employee
that left recently.
Overall, the Ombudsman observed that there are no issues identified
for the Debtor.
About CompCare Medical
CompCare Medical Inc. filed a chapter 11 petition (Bankr. C.D. Cal.
Case No. 16-15707) on June 27, 2016. The petition was signed by
Alphonso Benton, president. The Debtor is represented by Todd L.
Turoci, Esq., at The Turoci Firm. The Debtor estimated assets at
$100,001 to $500,000 and liabilities at $500,001 to $1 million.
COMSTOCK RESOURCES: Reports 3rd Quarter 2016 Financial Results
--------------------------------------------------------------
Comstock Resources, Inc. reported a net loss of $28.47 million on
$50.33 million of total oil and gas sales for the three months
ended Sept. 30, 2016, compared to a net loss of $544.99 million on
$61.36 million of total oil and gas sales for the same period in
2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $80.20 million on $127.21 million of oil and gas sales
compared to a net loss of $758.56 million on $205.19 million of
total oil and gas sales for the same period a year ago.
As of Sept. 30, 2016, Comstock had $885.51 million in total assets,
$1.10 billion in total liabilities and a stockholders' deficit of
$220.02 million.
On Sept. 6, 2016, Comstock completed a debt exchange with the
holders of 98% of the Company's outstanding senior notes. $697.2
million of its senior secured notes were exchanged for the
Company's new 10% Senior Secured Toggle Notes due 2020 and warrants
exercisable for approximately 1.9 million shares of Comstock's
common stock, and $440.3 million of the Company's unsecured senior
notes were exchanged for new convertible second lien PIK notes.
The transaction freed up the Company's operating cash flow which
the Company now intends to invest in its high return Haynesville
shale drilling program. Prior to completion of the debt exchange,
the Company had retired $236.9 million in principal amount of its
long-term debt for shares of the Company's common stock and cash
for total consideration of $59.7 million.
Drilling Results
During the first nine months of 2016, Comstock spent $36.7 million
on its development and exploration activities. After commencing
drilling in March 2016, Comstock drilled three (2.8 net) successful
Haynesville shale horizontal gas wells before releasing its
operated drilling rig in July 2016. On Sept. 28, 2016, the Company
restarted its Haynesville shale drilling program after the
completion of the debt exchange. Comstock recently drilled its
fourth operated Haynesville shale horizontal well, the James Pace
5-8 #1 well in DeSoto Parish, Louisiana. This well was drilled to
a total measured depth of 19,452 feet with an estimated 7,500 foot
horizontal lateral. The well will be the first well to be
completed with a larger stimulation package, which includes 3,800
pounds of proppant per lateral foot as compared to 2,800 pounds on
the earlier wells. Completion operations are expected to commence
on the well within the next week. Currently, Comstock has two
operated rigs drilling two Haynesville shale horizontal wells (2.0
net) and it is participating in two non-operated Haynesville shale
wells (0.2 net).
Under its revised drilling program, Comstock expects to drill five
additional wells (3.7 net) in the fourth quarter of 2016 and 22
horizontal wells (17.1 net) in 2017. Capital expenditures for this
drilling program are currently estimated to be $20.9 million in the
fourth quarter of 2016 and $142.9 million in 2017.
Comstock has also initiated its 2017 hedging program and currently
has 12.6 billion cubic feet ("Bcf") of its 2017 natural gas
production hedged at approximately $3.27 per thousand cubic feet
("Mcf").
A full-text copy of the press release is available for free at:
https://is.gd/raw5fO
About Comstock Resources
Comstock Resources, Inc. is an independent energy company based in
Frisco, Texas and is engaged in oil and gas acquisitions,
exploration and development primarily in Texas and Louisiana. The
Company's stock is traded on the New York Stock Exchange under the
symbol CRK.
As of June 30, 2016, Comstock Resources had $1.04 billion in total
assets, $1.25 billion in total liabilities and a $207.26 million
total stockholders' deficit.
The Company reported a net loss of $1.04 billion for the year ended
Dec. 31, 2015, compared to a net loss of $57.11 million for the
year ended Dec. 31, 2014.
* * *
As reported by the TCR on Sept. 23, 2016, S&P Global Ratings raised
its corporate credit rating on Comstock Resources Inc. to 'CCC+'
from 'SD' (selective default). The outlook is negative.
"The rating actions on Comstock are in conjunction with the
Sept. 6, 2016, close of their comprehensive debt exchange and our
assessment of the company's revised capital structure and credit
profile," said S&P Global Ratings credit analyst Aaron McLean.
Comstock Resources carries a Caa2 corporate family rating
from Moody's Investors Service.
CONCORDIA INTERNATIONAL: S&P Lowers CCR to 'B-'; Outlook Neg.
-------------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on Concordia
International Corp. to 'B-' from 'B'. The outlook is negative.
At the same time, S&P lowered its rating on the company's secured
debt to 'B-' from 'B'. S&P's recovery rating on this debt remains
'3', indicating expectations for meaningful (50%-70%, at the higher
end of the range) recovery in the event of a payment default. S&P
also lowered its rating on the company's unsecured debt to 'CCC'
from 'CCC+'. S&P's recovery rating on this debt remains '6',
indicating its expectation for negligible (0%-10%) recovery for
lenders in the event of payment default.
"The rating action on Concordia reflects increased risk in the
company's ability to sustain free cash flow generation given
growing generic competition in its North American business
reflected in two consecutive quarters of operating underperformance
and increased regulatory pressure on the company's pricing
practices in the U.K., which could result in additional unfavorable
outcomes," said S&P Global Ratings credit analyst Kim Logan.
The negative outlook on Concordia reflects S&P's doubts about the
company's ability to achieve its cash flow forecast, S&P's less
than adequate liquidity assessment, and its view that event risk is
very high given the company's recent deterioration in operating
performance and the CMA investigation into Concordia's pricing
practices and the proposed legislation on generic pricing in the
U.K. S&P continues to expect that leverage will remain above 6x
over the next two years.
The company's margins are very high and a minor decline in revenue
could have a meaningful impact on EBITDA. S&P could also lower the
rating if cash flows after the milestone payments deteriorate
significantly.
S&P could revise the outlook back to stable if it gains confidence
that its 2017 adjusted EBITDA will be close to S&P's forecast and
it believes the company will be able to manage regulatory risk in a
way that does not imperil cash flow.
CONSTELLATION BRANDS: Moody's Ba1 CR on Review For Upgrade
----------------------------------------------------------
Moody's Investors Service placed the Ba1 Corporate Family and other
ratings of Constellation Brands, Inc. ("Constellation") on review
for upgrade following its announcement that it will manage its net
debt to EBITDA to around 3.5x. At the same time, Moody's raised
Constellation Brands' speculative grade liquidity rating to SGL-1
from SGL-3.
Moody's had previously stated that leverage of below 3.5 times
could lead to an upgrade. The shift in the leverage target follows
a period of heavy investment both in capital expenditures to build
out its brewing capacity in Mexico and a string of acquisitions and
divestitures that continue to transform the business. The rating
review will focus on the company's ongoing financial policy,
including the likely shareholder return strategy going forward and
the potential risk of ongoing M&A activity. The review will also
assess the exposure to political risk resulting from the company's
reliance on Mexico for its beer production. Moody's will consider
both the company's geographic sales focus on the US, and its
growing concentration on premium alcoholic beverages.
Ratings placed on review for upgrade:
Constellation Brands, Inc.:
-- Corporate Family Rating at Ba1
-- Probability of Default Rating at Ba1-PD
-- Senior Unsecured Notes rating at Ba1 (LGD 4)
-- Senior Unsecured Shelf rating at (P)Ba1
Ratings upgraded:
Constellation Brands, Inc.:
-- Speculative Grade Liquidity Rating, Upgraded to SGL-1 from
SGL-3
Outlook Actions:
Constellation Brands, Inc.
-- Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE
Constellation's Ba1 Corporate Family Rating reflects its meaningful
scale, and its good product diversification. Constellation's
products include an extensive portfolio of premium wine, spirits
and imported beers. Constellation is the third largest beer company
in the United States -- albeit well behind the leaders -- and the
largest imported beer company in the country. Moody's expects that
Constellation's portfolio of premium imported Mexican beers will
continue to grow faster than the overall U.S. beer market. The Ba1
rating also reflects Constellation's franchise strength and
diversity with a presence in all three alcohol categories, as well
as its strong cash flow and solid profitability. These strengths
are offset by the company's high leverage, its large capital
spending requirements, and an aggressive financial policy. An
upgrade could occur if the company sustains strong operating
profit, and reduces leverage. An upgrade would also require that
management show a firm commitment to a more conservative financial
policy, including setting financial targets that would reduce
leverage levels such that debt to EBITDA is maintained under 3.5
times. Furthermore, there would need to be a clearly articulated
commitment by management to being investment grade.
A downgrade could occur if operating performance weakens such that
EBITA margins are sustained below 15%, if for any other reason
debt/EBITDA is sustained above 4.5 times, or liquidity weakens. In
addition, problems related to the brewery expansion in Mexico,
further debt-financed acquisitions or debt-financed shareholder
returns could also lead to a downgrade.
The change in Constellation's Speculative Grade Liquidity Rating to
SGL-1 reflects improved internal and external liquidity with free
cash flow expected to reach around $275 million in the next year
even after dividends and CAPEX. The company's $1.15 billion credit
facility is expected to remain largely undrawn over the next 12
months
The principal methodology used in this rating was Global Alcoholic
Beverage Industry published in October 2013.
Headquartered in Victor, New York, Constellation Brands, Inc.
("Constellation", or "STZ") is a leading alcoholic beverage company
with a broad portfolio of premium brands across the wine, spirits,
and imported beer categories. Major brands in the company's
portfolio include Corona, Modelo, Pacifico, Robert Mondavi, Clos du
Bois, Ravenswood, Blackstone, Nobilo, Kim Crawford, Meomi, The
Prisoner, Jackson-Triggs, Arbor Mist, Black Velvet Canadian Whisky,
Casa Noble, High West and SVEDKA vodka. The company's net sales for
the twelve months ended August 31, 2016, approximated $7 billion,
with about half of its revenues coming from beer and the rest from
wine and spirits.
CONTROL COMMUNICATIONS: Allowed to File Plan Until Dec. 23
----------------------------------------------------------
Judge John K. Olson of the U.S. Bankruptcy Court for the Southern
District of Florida extended Control Communications, Inc.'s
exclusive periods to file a plan of reorganization and disclosure
statement, and solicit acceptances to the plan, to December 23,
2016 and February 21, 2017, respectively.
The Debtor previously asked for the extension of its exclusive
periods, contending that its finances had just recently stabilized
after undergoing a significant restructuring of its business
operations during these chapter 11 proceedings, as a result of the
termination of its business relationship with Motorola. The Debtor
further contended that it could evaluate its ongoing cash needs and
formulate a confirmable plan.
The Debtor related that the Claims Bar Date would expire on October
24, 2016, and the Debtor would need to file objections to some of
the filed claims. The Debtor further related that additional time
was needed so that claims could be reviewed, analyzed and evaluated
and a plan of reorganization formulated.
About Control Communications, Inc.
Control Communications, Inc., based in Fort Lauderdale, Fla., filed
a Chapter 11 petition (Bankr. S.D. Fla. Case No. 16-18978) on June
24, 2016. The petition was signed by Sigilfredo Rodriguez, Jr.,
president. The case is assigned to Judge John K. Olson. The
Debtor is represented by Robert C. Furr, Esq. and Alvin S.
Goldstein, Esq. of Furr & Cohen, P.A. The Debtor disclosed $1.07
million in assets and $1.77 million in liabilities.
The Debtor employs Louis M. Cohen and the accounting firm of Caler,
Donten, Levine, Cohen, Porter & Veil, P.A. as accountant.
The Office of the U.S. Trustee disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Control Communications, Inc.
COSMOPOLITAN HOTEL: DBRS Assigns BB Rating on Class E Notes
-----------------------------------------------------------
DBRS, Inc. (DBRS) finalized on November 9, 2016, the provisional
ratings on the following classes of Commercial Mortgage
Pass-Through Certificates, Series 2016-COSMO (the Certificates) to
be issued by Cosmopolitan Hotel Trust 2016-COSMO:
-- Class A at AAA (sf)
-- Class X-CP at AAA (sf)
-- Class X-EXT at AAA (sf)
-- Class B at AA (high) (sf)
-- Class C at A (sf)
-- Class D at BBB (sf)
-- Class E at BB (sf)
All trends are Stable. All classes will be privately placed.
The collateral for the transaction consists of the fee, condominium
and operating leasehold interests in a 3,005-key luxury hotel and
casino located in Las Vegas. In addition to the $1.037 billion
mortgage loan, there is a $388.0 million senior mezzanine loan and
$125.0 million junior mezzanine loan outside of the trust. The
loan, together with the mezzanine loans, will be used to refinance
existing debt of $1.3 billion, pay closing costs of approximately
$15.5 million and return $234.5 million to the sponsor.
The collateral includes the fee interest in amenities, including,
but not limited to, over 250,000 square feet (sf) of convention and
banquet facilities; 111,500 sf of casino space; over 96,000 sf of
entertainment space (including a 3,200-capacity multi-use
entertainment venue); 23,500 sf of retail space; 50,000 sf of spa
and fitness facilities; and a five-level underground parking
garage. The property also includes 17 condominium units, 15 of
which are owned by third parties as condominium-hotel units and are
not collateral for the loan. The sponsor, Blackstone Real Estate
Partners VII-NQ L.P., is an affiliate of The Blackstone Group L.P.
(Blackstone). The property is self-managed by Blackstone. As at
June 30, 2016, Blackstone had approximately $356.3 billion of
assets under management. The property has benefited from a Marriott
Autograph Collection Affiliation agreement since the property
opened in December 2010.
The property is located at the center of the Las Vegas Strip, a
4.2-mile stretch of some of the largest hotel, casino and resort
properties in the world. The Las Vegas hotel market has averaged
89.4% occupancy from 1985 to 2015, with the lowest occupancy of
83.5% occurring in 2010. The property has continued to stabilize
since the previous securitization in Q1 2015, and because of
operational efficiencies and increased gaming margin, overall
gaming revenues and room count, among other factors, net cash flow
(NCF) has grown by 40.6% from the trailing 12 months (T-12) ended
January 2015 to the T-12 ended January 2016, increasing by
approximately $49.7 million. As at the T-12 ended August 2016
period, the property led its respective competitive set in terms of
occupancy (94.2%), average daily rate ($307.89) and revenue per
available room ($290.00) with market penetration rates of 103.4%,
119.7% and 124.2%, respectively. Gaming revenue (before promotions)
comprised 25.6% of the property's total revenue for YE2015, which
is much smaller than the 41.6% of total-income-to-total revenue for
casinos with gaming revenue of $1.0 million and over within Clark
County, Nevada, for YE2015.
The DBRS NCF is $149,685,294, representing a -12.5% variance from
the Issuer's NCF. Although the loan does not amortize, the going-in
leverage is reasonable with a DBRS Debt Yield of 14.4%. In
addition, the DBRS Refinance Debt Service Coverage Ratio (DSCR) is
at 1.44 times (x), which is commensurate with the initial ratings
assigned by DBRS and is based on a stressed 10.0% refinance
constant. The loan has minimal default risk during the five-year
fully extended loan term, as the DBRS Term DSCR is quite high at
3.11x. The DBRS loan-to-value ratio is 67.5% based on a 9.75% cap
rate and utilizes a DBRS value of $1.54 billion, which is a 36.0%
and 45.9% discount to the appraised as-is value of $2.40 billion
and stabilized value of $2.84 billion, respectively. As a result of
the high-quality, irreplaceable Las Vegas Strip location and
corresponding leverage, the Certificates, backed by the $1.037
billion of first-mortgage debt, are receiving provisionally
assigned ratings between AAA and BB.
The ratings assigned to the Certificates by DBRS are based
exclusively on the credit provided by the transaction structure and
underlying trust assets. All classes will be subject to ongoing
surveillance, which could result in upgrades or downgrades by DBRS
after the date of issuance.
CREW ENERGY: S&P Affirms 'B' CCR; Outlook Stable
------------------------------------------------
S&P Global Ratings said it affirmed its 'B' long-term corporate
credit rating on Calgary, Alta.-based Crew Energy Inc. The outlook
is stable. At the same time, S&P Global Ratings affirmed its 'B-'
issue-level rating on the company's senior unsecured notes due
2020. The '5' recovery rating on the debt is unchanged, reflecting
S&P's expectation of modest (10%-30%; in the high end of the range)
recovery under our simulated default scenario.
"The ratings reflect Crew's production profile during our outlook
period, as well as its structure, relatively small-but-growing
reserve size, and significant exposure to persistently weak natural
gas prices, given the high portion of natural gas in its product
mix," said S&P Global Ratings credit analyst Wendell Sacramoni.
As the company continues to expand its upstream operations, S&P
expects natural gas will remain a significant portion of its
product mix, representing more than 80% of total production.
S&P's analysis also attributes relatively low risk to Crew's
ability to convert reserves into production, despite what S&P views
as an average proved developed ratio and reserve life index (RLI).
S&P believes the company's production and reserve base are
sustainable during S&P's outlook period because Crew has
accumulated a significant acreage position in Montney region in
Northeast British Columbia.
S&P believes the company's unlevered unit full-cycle costs (cash
operating and finding and development costs), are competitive. S&P
expects Crew's profitability metrics, which S&P measures using both
the company's unhedged unit EBIT, will remain in line with the
industry average and commensurate with the 'B' rating in the next
few years given S&P's expectation on gas prices.
In S&P's view, Crew's financial risk profile reflects S&P's
expectation that the company will generate negative free operating
cash flow throughout its forecast period.
The stable outlook on Crew reflects S&P's view that the company
will moderately increase its liquids-rich natural gas production in
2016 at a capital cost that should support credit measures
appropriate for the rating such as three-year, weighted-average,
fully adjusted FFO-to-debt between 20% and 30%.
S&P could lower the rating if Crew's three-year, weighted-average,
fully adjusted FFO-to-debt drops below 20% consistently. This
could result from a failure to realize production growth or
lower-than-expected hydrocarbon prices such as Henry Hub gas prices
below US$2.50 per million Btu. S&P could also take a negative
rating action if the company is not able to renew its revolving
credit facility or if liquidity deteriorates making S&P to reassess
liquidity as weak.
A positive rating action could occur if Crew's overall business
risk profile strengthens due to a significant increase of daily
production and proved reserves or if the company can improve its
financial credit metrics under S&P's current hydrocarbon prices,
reaching FFO-to-debt consistently above 30%.
CTI BIOPHARMA: Incurs $29.2 Million Net Loss in Third Quarter
-------------------------------------------------------------
CTI Biopharma Corp. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $29.2 million on $4.43 million of total revenues for the three
months ended Sept. 30, 2016, compared to a net loss of $32.59
million on $964,000 total revenues for the same period a year ago.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $45.63 million on $48.26 million of total revenues
compared to a net loss of $93.78 million on $4.79 million of total
revenues for the nine months ended Sept. 30, 2015.
As of Sept. 30, 2016, CTI Biopharma had $76.48 million in total
assets, $63.96 million in total liabilities and $12.51 million in
total shareholders' equity.
As of Sept. 30, 2016, cash and cash equivalents totaled $61.6
million, compared to $128.2 million at Dec. 31, 2015.
"We recently reported top-line data from our second Phase 3 trial
of pacritinib and are encouraged by its clinical profile,
particularly in patients with severe thrombocytopenia, and look
forward to the presentation of the full results at an upcoming
scientific meeting," said Richard Love, interim president and CEO
of CTI BioPharma. "With this data in hand, our top priority is to
work with the FDA in short order to seek to address their
recommendations for getting pacritinib off clinical hold and back
on a development track. This has been a challenging year for us;
however, we are committed to bringing novel therapies to patients
with a critical unmet medical need."
Recent Events
* In August 2016, the Company announced top-line results from
the PERSIST-2 randomized, controlled Phase 3 clinical trial
comparing pacritinib, an investigational oral multikinase
inhibitor, with physician-specified best available therapy
(BAT) for the treatment of patients with myelofibrosis whose
platelet counts are less than or equal to 100,000 per
microliter. Preliminary results demonstrated that the
PERSIST-2 trial met one of the co-primary endpoints showing a
statistically significant response rate in spleen volume
reduction in patients with myelofibrosis treated with
pacritinib compared to BAT, including the approved JAK2
inhibitor ruxolitinib (p
CUI GLOBAL: Reports $507,000 Net Loss for Third Quarter
-------------------------------------------------------
CUI Global, Inc. filed with the Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of $507,000
on $23.25 million of total revenues for the three months ended
Sept. 30, 2016, compared to a net loss of $59,000 on $24.84 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 $4.65 million on $67.05 million of total revenues
compared to a net loss of $4.63 million on $64.35 million of total
revenues for the same period a year ago.
As of Sept. 30, 2016, CUI Global had $84.02 million in total
assets, $31.58 million in total liabilities and $52.44 million in
total stockholders' equity.
"We continued to make steady progress in driving market adoption of
our gas technology solutions in the third quarter while managing
our P&EM business to a 5% sequential increase in revenue and stable
backlog despite continued weakness in the worldwide electronics
market," stated William Clough, president and CEO of CUI Global.
"We were awarded a five-year framework agreement from National Grid
that assures us a minimum of $40 million in already authorized work
over the term of the agreement and cements our relationship with
this important customer. Our successful delivery of an initial 400
GasPT units to Snam Rete - on time and on budget - confirms our
ability to manage large scale deployments as we pursue other iconic
European gas pipeline companies. Underscoring the value proposition
of our GasPT solution, Snam Rete is today a key reference customer
for us. Finally, our cash balance, which increased to $7.1 million
as a result of sequential improvements in net loss and working
capital, will continue to provide ample capital to achieve our
goals and take us to profitability.
"Our strategy to grow market awareness and drive adoption of our
gas technology products is gaining traction," continued Mr. Clough.
"We continue to leverage the gas industry's developing interest in
our GasPT and VE technology solutions to broaden the opportunities
internationally and across our entire gas technology portfolio. In
the third quarter, we partnered with Daily Thermetrics in North
America, giving our VE thermal well sampling systems solutions
entree into an addressable market of hundreds of thousands of
thermal wells deployed throughout the North American pipeline
system. In Western Europe, we are expanding our penetration of
existing customers, such as Scotia Gas and National Grid, while
also creating cross-selling opportunities for gas technology sales
as demonstrated by the framework agreement with National Grid. We
continue to advance opportunities with national gas transmission
companies with a partner network that now encompasses every GasPT
opportunity of size in the industry. Cumulatively, our efforts are
generating momentum that puts us on a path to greater gas
technology sales in 2017.
"Our optimism for growth in 2017 is founded in the gas industry's
growing acceptance of our technology solutions as industry-shifting
and aligned with the global transition to natural gas energy from
other fossil fuels," concluded Mr. Clough. "From fiscal monitoring
for gas transmission companies, to process control for large
natural gas-fired turbines and compressors, to thermal well
applications and trace element detection like moisture and mercury,
the value proposition of our technology portfolio to meet
challenges facing the natural gas industry is becoming increasingly
evident. Demand for one product creates complimentary demand for
others in our portfolio. As we build our Energy business, the
partners and customers we secure today will be the foundation for
our sustained growth tomorrow."
As of Sept. 30, 2016, CUI Global held cash and cash equivalents of
$7.1 million, a decrease of $(0.2) million since Dec. 31, 2015.
Operations, investments, patents and equipment have been funded
through cash on hand during the nine months ended Sept. 30, 2016.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/BIbUt2
About CUI Global
Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx,
Inc., is a platform company dedicated to maximizing shareholder
value through the acquisition, development and commercialization
of new, innovative technologies.
CUI Global reported a net loss of $5.98 million on $86.7 million
of total revenues for the year ended Dec. 31, 2015, compared to a
net loss of $2.80 million on $76.04 million of total revenues for
the year ended Dec. 31, 2014.
CUMULUS MEDIA: Posts $46.3 Million Net Income for Third Quarter
---------------------------------------------------------------
Cumulus Media Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $46.32 million on $286.1 million of net revenue for the three
months ended Sept. 30, 2016, compared to a net loss of $542.2
million on $289.4 million of net revenue for the three months ended
Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, Cumulus Media reported
net income of $32.95 million on $841.9 million of net revenue
compared to a net loss of $541.9 million on $859.85 million of net
revenue for the nine months ended Sept. 30, 2015.
As of Sept. 30, 2016, Cumulus Media had $3.05 billion in total
assets, $2.99 billion in total liabilities and $51.39 million in
total stockholders' equity.
Mary Berner, president and chief executive officer of Cumulus Media
Inc. said, "A year into our turnaround effort, we have made
considerable progress against our operational priorities while
leading the industry in ratings growth. Though our performance in
the quarter was negatively impacted by headwinds which have
challenged us all year, we see evidence that our work is paying off
financially as we gained share this quarter for the first time in
at least four years. As we seek to maintain the momentum of our
initial strategies, we have now also launched a focused effort to
improve sales execution as the next logical step in our turnaround
plan."
As previously disclosed, on Nov. 3, 2015, the Company received a
notification from the Listing Qualifications Department of The
NASDAQ Stock Market LLC indicating that the Company was not in
compliance with NASDAQ Listing Rule 5450(a)(1) because the minimum
bid price of the Company's Class A common stock had closed below
$1.00 per share for 30 consecutive business days.
On Oct. 27, 2016, the Company received notification from NASDAQ
that it had regained compliance with the Rule in order for the
Company's Class A common stock to remain listed on the NASDAQ
Capital Market.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/V8GVv1
On Nov. 8, 2016, Cumulus Media held an investor conference call and
webcast to discuss financial results for the three months ended
Sept. 30, 2016, a copy of the presentation is available for free at
https://is.gd/sUKK84
About Cumulus Media
Atlanta, Georgia-based Cumulus Media Inc. --
http://www.cumulus.com/-- is a radio broadcasting company. The
Company is also a provider of country music and lifestyle content
through its NASH brand, which serves through radio programming,
NASH Country Weekly magazine and live events. Its product lines
include broadcast advertising, digital advertising, political
advertising and non-advertising based license fees. Its broadcast
advertising includes the sale of commercial advertising time to
local, national and network clients. Its digital advertising
includes the sale of advertising and promotional opportunities
across its Websites and mobile applications. Its across the nation
platform generates content distributable through both broadcast and
digital platforms.
Cumulus Media put AR Broadcasting Holdings Inc. and three other
units to Chapter 11 protection (Bankr. D. Del. Lead Case No.
11-13674) in 2011 after struggling to pay off debt that topped
$97 million as of June 30, 2011.
Cumulus Media reported a net loss attributable to common
shareholders of $546 million on $1.16 billion of net revenue for
the year ended Dec. 31, 2015, compared to net income attributable
to common shareholders of $11.8 million on $1.26 billion of net
revenue for the year ended Dec. 31, 2014.
* * *
In March 2016, Standard & Poor's Ratings Services lowered its
corporate credit ratings on Cumulus Media and its subsidiary
Cumulus Media Holdings Inc. to 'CCC' from 'B-'. The downgrades
follow Cumulus' announcement that it had been pursuing a
transaction that would exchange a portion of its 7.75%
senior notes due 2019 for debt and common stock in the company.
As reported by the TCR on March 29, 2016, Moody's Investors Service
downgraded Cumulus Media Inc.'s Corporate Family Rating to Caa1
from B3 and Probability of Default Rating to Caa1-PD from B3-PD.
Cumulus' Caa1 Corporate Family Rating reflects the company's
excessive leverage with debt-to-EBITDA exceeding 9.5x (including
Moody's standard adjustments) and Moody's revised expectation that
debt-to-EBITDA will remain elevated over the next 12 months due to
continued declines in network revenue and increased operating
expenses more than offsetting the benefits from an expected
increase in station group revenue and political ad sales in 2016.
CYTOSORBENTS CORP: Incurs $2.68 Million Net Loss in Third Quarter
-----------------------------------------------------------------
Cytosorbents Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $2.68 million on $2.41 million of total revenue for the three
months ended Sept. 30, 2016, compared to a net loss of $2.84
million on $1.34 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 $7.52 million on $6.44 million of total revenue
compared to a net loss of $6.13 million on $3.03 million of total
revenue for the same period a year ago.
As of Sept. 30, 2016, Cytosorbents had $10.85 million in total
assets, $9.47 million in total liabilities and $1.37 million in
total stockholders' equity.
Dr. Phillip Chan, chief executive officer of CytoSorbents stated,
"We finished another exceptional quarter, exceeding $2 million in
quarterly CytoSorb revenue for the first time in our history,
driven by continued strength among our direct sales territories,
and orders from our broad distributor and strategic partner
network. With healthy product gross margins of 68%, we continue to
demonstrate the vigor of our pure high margin disposables
business."
"We have continued to invest in potential future catalysts with the
goal of driving operational profitability in the near term.
Focusing on sales, we have strengthened our direct and
international sales infrastructure with the addition of key
personnel, added more distributors and converted more countries to
revenue producing accounts, and expanded our higher margin direct
sales territories. In addition, we have worked closely with
strategic partners Fresenius, Terumo Cardiovascular, and Biocon, to
ensure that their significant contributions of resources are being
used optimally. In particular, we are pleased that Terumo will
start selling CytoSorb very soon, just months after signing our
partnership agreement. We have also refined our manufacturing
processes to optimize production of CytoSorb at lower cost.
Finally, the clinical data on CytoSorb continues to develop, most
recently with the completion of REFRESH I, where we were the first
to demonstrate safety of intraoperative CytoSorb usage during
complex cardiac surgery in a randomized controlled trial. Pending
discussions with the FDA, we anticipate a pivotal REFRESH 2 trial
to begin next year, designed to support U.S. approval."
"We expect to finish 2016 in a much stronger commercial position
than when we started, with a CytoSorb sales run rate of
approximately $8.6 million as of the third quarter. It is a
testament to the hard work and effort of all of the people and
organizations that we work with, that we are in this favorable
position."
As of Sept. 30, 2016, the Company had an accumulated deficit of
$(140,050,118), which included net losses of $(7,524,260) for the
nine months ended Sept. 30, 2016, and $(6,130,065) for the nine
months ended Sept. 30, 2015. The Company's losses have resulted
principally from costs incurred in the research and development of
the Company's polymer technology and selling, general and
administrative expenses. The Company intends to continue to
conduct significant additional research, development, and clinical
study activities which, together with expenses incurred for the
establishment of manufacturing arrangements and a marketing and
distribution presence and other selling, general and administrative
expenses, are expected to result in continuing operating losses for
the foreseeable future. The amount of future losses and when, if
ever, the Company will achieve profitability is uncertain. The
Company's ability to achieve profitability will depend, among other
things, on successfully completing the development of the Company's
technology and commercial products, obtaining additional requisite
regulatory approvals in markets not covered by the CE Mark
previously received and for potential label extensions of the
Company's current CE Mark, establishing manufacturing and sales and
marketing arrangements with third parties, and raising sufficient
funds to finance the Company's activities. No assurance can be
given that the Company's product development efforts will be
successful, that the Company’s current CE Mark will enable the
Company to achieve profitability, that additional regulatory
approvals in other countries will be obtained, that any of the
Company's products will be manufactured at a competitive cost and
will be of acceptable quality, or that the Company will be able to
achieve profitability or that profitability, if achieved, can be
sustained. These matters raise substantial doubt about the
Company's ability to continue as a going concern," as disclosed in
the quarterly report.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/ZJ8bLg
About Cytosorbents
Cytosorbents Corporation is a leader in critical care immunotherapy
commercializing its CytoSorb blood purification technology to
reduce deadly uncontrolled inflammation in hospitalized patients
around the world, with the goal of preventing or treating multiple
organ failure in life-threatening illnesses. The Company, through
its subsidiary CytoSorbents Medical Inc. (formerly known as
CytoSorbents, Inc.), is engaged in the research, development and
commercialization of medical devices with its blood purification
technology platform which incorporates a proprietary adsorbent,
porous polymer technology. The Company, through its European
Subsidiary, conducts sales and marketing related operations for the
CytoSorb device. CytoSorb, the Company’s flagship product, is
approved in the European Union and marketed in and distributed in
thirty-two countries around the world, as a safe and effective
extracorporeal cytokine absorber, designed to reduce the "cytokine
storm" that could otherwise cause massive inflammation, organ
failure and death in common critical illnesses such as sepsis, burn
injury, trauma, lung injury, and pancreatitis. CytoSorb is also
being used during and after cardiac surgery to remove inflammatory
mediators, such as cytokines and free hemoglobin, which can lead to
post-operative complications, including multiple organ failure. In
March 2011, the Company received CE Mark approval for its CytoSorb
device.
Cytosorbents reported a net loss available to common shareholders
of $8.13 million in 2015 following a net loss available to common
shareholders of $18.58 million in 2014.
D & C ENTERPRISES: Unsecureds To Get $500 for 84 Mos. at 0%
-----------------------------------------------------------
D & C Enterprises P.C., filed with the U.S. Bankruptcy Court for
the Western District of Missouri a disclosure statement referring
to the Debtor's plan of reorganization.
There are eight general unsecured claims, all of which are credit
card debts. Class 7 General Unsecured Claims will be paid in
quarterly distributions of $500 per quarter for 84 months at 0%
interest. Class 7 is impaired.
The Plan payments will be funded from the income earned by the
business.
The Disclosure Statement is available at:
http://bankrupt.com/misc/mowb16-41803-39.pdf
About D & C Enterprises
D & C Enterprises, P.C., Runs a veterinary services business
located at 1102 E 23rd St. in Independence, Mo. The company is
also known as the Cedar Ridge Animal Hospital, and is located on
the premises of the building in which it operates. Both businesses
are owned by the veterinarian, Dr. Cassie Cure. On July 11, 2016,
D & C Enterprises, P.C., sought Chapter 11 protection (Bankr. W.D.
Mo. Case No. 16-41803). George J. Thomas, Esq., at Phillips &
Thomas LLC, serves as counsel to the Debtor. No trustee, examiner,
or statutory committee has been appointed in the Chapter 11 case.
At the time of the filing, the Debtor disclosed $35,100 in assets
and $1.06 million in debts.
DAKOTA PLAINS: Forbearance Period Extended Until January 2017
-------------------------------------------------------------
Dakota Plains Holdings, Inc. and certain of its subsidiaries
entered into an Amendment No. 4 to Forbearance Agreement to amend
the Forbearance Agreement dated as of May 3, 2016, by and among
Dakota Plains Transloading, LLC, Dakota Plains Sand, LLC, Dakota
Plains Marketing, LLC, the Company, DPTS Marketing LLC, Dakota
Petroleum Transport Solutions, LLC and DPTS Sand, LLC, the lenders
from time to time party thereto, and SunTrust Bank, as
administrative agent for the Lenders.
Among other things, the Amendment extends the forbearance period
under the Forbearance Agreement until Jan. 3, 2017. The Amendment
also requires that the Company receive one or more executed letters
of intent for the purchase of all or substantially all of the
Company's equity or assets from potential purchasers with
demonstrated ability to close a Potential Transaction by Nov. 18,
2016, and enter into a definitive asset purchase agreement a
Potential Transaction by Dec. 13, 2016.
About Dakota Plains
Headquartered in Wayzata, Minnesota, Dakota Plains Holdings, Inc.,
is an integrated midstream energy company operating the Pioneer
Terminal, with services that include outbound crude oil storage,
logistics and rail transportation and inbound fracturing sand
logistics. The Pioneer Terminal is located in Mountrail County,
North Dakota, where it is uniquely positioned to exploit
opportunities in the heart of the Bakken and Three Forks plays of
the Williston Basin. The Williston Basin of North Dakota and
Montana is the largest onshore crude oil production source in North
America where the lack of available pipeline capacity provides a
surplus of crude oil available for the core business of the
Company. Its frac sand business provides services for UNIMIN
Corporation, a leading producer of quartz proppant and the largest
supplier of frac sand to exploration and production operating
companies in the Williston Basin.
Dakota Plains reported a net loss of $24.96 million in 2015
following net income of $2.25 million in 2014.
"The Company is focused on increasing the throughput and reducing
the expenses at the transloading facility, but the decline in crude
oil prices and contraction of the price spread between Brent and
WTI has materially reduced the revenues that the Company is able to
generate from its transloading operations, which, in turn, has
negatively affected the Company's working capital and income (loss)
from operations. The potential for future crude oil prices to
remain at their current low levels raises substantial doubt about
the Company's ability to meet its obligations when they come due
and continue as a going concern," the Company stated in its June
30, 2016, quarterly report.
DAKOTA PLAINS: James Thornton Quits as Chief Financial Officer
--------------------------------------------------------------
James L. Thornton terminated his employment with Dakota Plains
Holdings, Inc., on Nov. 1, 2016. He is expected to continue
serving in the positions of general counsel and secretary as an
independent consultant.
The Board appointed Martin J. Beskow to serve as chief financial
officer, replacing Mr. Thornton in that position, effective
Nov. 7, 2016. Mr. Beskow, age 45, has served as the Company's
director of finance and administration since April 2016. He has
also served as the chief financial officer, vice president of
Capital Markets and Strategy and treasurer at American Eagle Energy
Corporation since August 2013. From March 2012 to July 2013, he
served as executive vice president and vice president of finance
and capital markets at Emerald Oil, Inc. From 2010 to February
2012, he served as vice president, senior equity research analyst,
at Northland Securities, operating as Northland Capital Markets,
covering oil exploration and production companies, many with
operations focused on the Williston Basin. From 2009 to 2010 he
served as vice president and portfolio manager at Blue Water
Capital Advisors, a money management firm that managed a natural
resource focused portfolio and broad based portfolios. From 2007
to 2009, he served as vice president at Interlachen Capital Group,
a multi-strategy hedge fund. He began his career with four years
of service at KPMG LLP. Mr. Beskow holds a B.S. in Accounting from
St. Cloud State University, is a Charter Financial Analyst (CFA)
charter holder, a Certified Public Accountant (CPA, inactive) and
is Accredited in Business Valuation (ABV). Mr. Beskow served as an
executive officer of American Eagle Energy Corporation at the time
it filed a voluntary petition for relieve under Chapter 11 of the
U.S. Bankruptcy Code in May 2015. American Eagle Energy
Corporation's assets were sold in a transaction pursuant to Section
363 of the code in November 2015. The sale transaction remains
subject to a confirmation hearing scheduled for November 2016.
Mr. Beskow has transitioned from independent contractor to employee
in connection with the additional position, but will continue to
earn an annualized salary of $276,000. He will be eligible to
participate in other compensation and benefit programs generally
available to our executive officers. The Company has not amended
or entered into any plan, contract or arrangement with Mr. Beskow
in connection with his appointment to the new position.
On Nov. 4, 2016, Gary L. Alvord, Steven A. Blank, David J. Fellon,
and Craig M. McKenzie each resigned as a director of the Company
and from all positions with the Board and its committees, effective
immediately.
There are no disagreements between Messrs. Alvord, Blank, Fellon,
McKenzie or Thornton and the Company relating to its operations,
policies or practices that resulted in their respective decisions
to resign or terminate employment.
On Nov. 7, 2016, the Board elected Anna M. Phillips to serve as an
additional member of the Board to fill an existing vacancy. On the
same date, the Board also reduced its size to two directors.
In connection with Ms. Phillips's election, the Company has entered
into a letter agreement with Stone Phillips, LLC dated Nov. 7,
2016. Pursuant to the agreement Stone Phillips will be entitled to
a cash retainer of $10,000 per month for 30 hours of service, plus
expenses and incremental fees for each additional hour of service.
About Dakota Plains
Headquartered in Wayzata, Minnesota, Dakota Plains Holdings, Inc.,
is an integrated midstream energy company operating the Pioneer
Terminal, with services that include outbound crude oil storage,
logistics and rail transportation and inbound fracturing sand
logistics. The Pioneer Terminal is located in Mountrail County,
North Dakota, where it is uniquely positioned to exploit
opportunities in the heart of the Bakken and Three Forks plays of
the Williston Basin. The Williston Basin of North Dakota and
Montana is the largest onshore crude oil production source in North
America where the lack of available pipeline capacity provides a
surplus of crude oil available for the core business of the
Company. Its frac sand business provides services for UNIMIN
Corporation, a leading producer of quartz proppant and the largest
supplier of frac sand to exploration and production operating
companies in the Williston Basin.
Dakota Plains reported a net loss of $24.96 million in 2015
following net income of $2.25 million in 2014.
"The Company is focused on increasing the throughput and reducing
the expenses at the transloading facility, but the decline in crude
oil prices and contraction of the price spread between Brent and
WTI has materially reduced the revenues that the Company is able to
generate from its transloading operations, which, in turn, has
negatively affected the Company's working capital and income (loss)
from operations. The potential for future crude oil prices to
remain at their current low levels raises substantial doubt about
the Company's ability to meet its obligations when they come due
and continue as a going concern," the Company stated in its June
30, 2016, quarterly report.
DAKOTA PLAINS: Posts $16.1 Million Net Income for Third Quarter
---------------------------------------------------------------
Dakota Plains Holdings, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
of $16.07 million on $2.23 million of total revenues for the three
months ended Sept. 30, 2016, compared to a net loss of $21.18
million on $6.15 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 $10.96 million on $7.29 million of total revenues
compared to a net loss of $21.55 million on $24.24 million of total
revenues for the same period a year ago.
As of Sept. 30, 2016, Dakota had $60.82 million in total assets,
$76.44 million in total liabilities and a total stockholders'
deficit of $15.62 million.
As of Sept. 30, 2016, the Company had cash and cash equivalents and
trade receivables of approximately $7 million and accounts payable
and accrued expenses of approximately $13.4 million. In addition,
it had $56.9 million aggregate principal amount of promissory notes
due within the next 12 months.
"Despite the decline in demand and pricing for its services, the
Company continues to pursue several actions including (i) actively
engaging in discussions with SunTrust Bank focused on restructuring
the existing promissory notes, (ii) minimizing capital
expenditures, (iii) reducing general and administrative expenses,
(iv) managing the operating costs at the transloading facility and
(v) considering bankruptcy protection. The Company has engaged an
advisor to assist with recapitalizing or restructuring the Company.
These efforts continue in earnest, but the Company can provide no
assurance that (x) its efforts will result in sufficient liquidity
to satisfy the Company's obligations as they come due or the
ability to continue as a going concern or (y) it will not be forced
to seek bankruptcy protection," as disclosed in the report.
"The Company considers highly liquid investments with insignificant
interest rate risk and original maturities of three months or less
to be cash equivalents. Cash equivalents consist primarily of
interest-bearing bank accounts and money market funds. The
Company's cash positions represent assets held in checking and
money market accounts. These assets are generally available to the
Company on a daily or weekly basis and are highly liquid in nature.
Due to the balances being greater than $250,000, the Company does
not have FDIC coverage on the entire amount of bank deposits. The
Company believes this risk of loss is minimal."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/V6tdYF
About Dakota Plains
Headquartered in Wayzata, Minnesota, Dakota Plains Holdings, Inc.,
is an integrated midstream energy company operating the Pioneer
Terminal, with services that include outbound crude oil storage,
logistics and rail transportation and inbound fracturing sand
logistics. The Pioneer Terminal is located in Mountrail County,
North Dakota, where it is uniquely positioned to exploit
opportunities in the heart of the Bakken and Three Forks plays of
the Williston Basin. The Williston Basin of North Dakota and
Montana is the largest onshore crude oil production source in North
America where the lack of available pipeline capacity provides a
surplus of crude oil available for the core business of the
Company. Its frac sand business provides services for UNIMIN
Corporation, a leading producer of quartz proppant and the largest
supplier of frac sand to exploration and production operating
companies in the Williston Basin.
Dakota Plains reported a net loss of $24.96 million in 2015
following net income of $2.25 million in 2014.
"The Company is focused on increasing the throughput and reducing
the expenses at the transloading facility, but the decline in crude
oil prices and contraction of the price spread between Brent and
WTI has materially reduced the revenues that the Company is able to
generate from its transloading operations, which, in turn, has
negatively affected the Company's working capital and income (loss)
from operations. The potential for future crude oil prices to
remain at their current low levels raises substantial doubt about
the Company's ability to meet its obligations when they come due
and continue as a going concern," the Company stated in its June
30, 2016, quarterly report.
DEVAL CORPORATION: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: DeVal Corporation
7341 Tulip Street
Philadelphia, PA 19136
Case No.: 16-17922
Chapter 11 Petition Date: November 11, 2016
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Judge: Hon. Ashely M. Chan
Debtor's Counsel: Robert M. Greenbaum, Esq.
SMITH KANE HOLMAN, LLC
112 Moores Road, Suite 300
Malvern, PA 19355
Tel: (610) 407-7216
E-mail: rgreenbaum@sgllclaw.com
- and -
David B. Smith, Esq.
SMITH KANE HOLMAN, LLC
112 Moores Road, Suite 300
Malvern, PA 19355
Tel: (610) 407-7217
Fax: (610) 407-7218
E-mail: dsmith@smithkanelaw.com
dsmith@skhlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dominic Durinzi, president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/pawb16-17922.pdf
DEXTERA SURGICAL: Reports Fiscal 2017 First Quarter Results
-----------------------------------------------------------
Dextera Surgical Inc. reported a net loss of $3.95 million on
$467,000 of total revenue for the three months ended Sept. 30,
2016, compared to a net loss of $4.64 million on $755,000 of total
revenue for the three months ended Sept. 30, 2015.
As of Sept. 30, 2016, Dextera had $12.06 million in total assets,
$8.43 million in total liabilities and $3.62 million in total
stockholders' equity.
"Recently, we announced the completion of more than 55 clinical
cases with the MicroCutter 5/80 by several key opinion leading
surgeons around the world, with excellent performance of both the
blue and white reloads confirmed across multiple tissues and
specialties," said Julian Nikolchev, president and CEO of Dextera
Surgical Inc. "Today, we believe we have a device that is working
consistently and reliably in surgical settings, and the MicroCutter
5/80 has been termed 'procedure-enabling' by the surgeons using the
device. We are now working to scale up our manufacturing
capabilities in anticipation of a selective launch within a few
weeks."
"Last month, we added a strategic partner in B. Braun Surgical S.A.
for distribution in Spain, as the MicroCutter 5/80 fills an
important gap in their product portfolio. And, we are making
progress in our co-development agreement with Intuitive Surgical to
develop a new robotic surgical stapler and staple cartridge."
Total product sales were $0.4 million for the fiscal 2017 first
quarter compared with $0.7 million for the fiscal 2016 first
quarter. The decrease in product sales was due to lower
MicroCutter sales resulting from management's focus on the initial
clinical evaluation of the MicroCutter 5/80 and due to Century
Medical's anticipated smaller order for PAS-Port in the first
quarter of this year. Total license and royalty revenue for the
fiscal 2017 first quarter was $40,000 compared with $18,000 in
royalty revenue for the fiscal 2016 first quarter. Total revenue
was approximately $0.5 million for the fiscal 2017 first quarter
compared with $0.8 million for the fiscal 2016 first quarter.
Cash, cash equivalents and investments as of Sept. 30, 2016, were
approximately $9.0 million, compared with approximately $12.7
million at June 30, 2016. As of Sept. 30, 2016, there were
approximately 8.9 million shares of common stock outstanding and
191,474 shares of Series A convertible preferred stock outstanding.
Recent Highlights and Accomplishments:
* Completed more than 55 clinical cases in Europe and the United
States to evaluate the clinical benefits of the MicroCutter
5/80 in select clinical applications including, thoracic,
pediatric and solid organ surgeries. Data collected from more
than 55 procedures and 200 deployments of the MicroCutter 5/80
indicate that the surgical stapler is firing reliably,
consistently and with excellent hemostasis. The device was
used at leading hospitals throughout the U.S. and Europe
including Mayo Clinic, New York Presbyterian/Cornell, Florida
Hospital, James Cook University Hospital, Royal Infirmary,
Glasgow Children's Hospital, Klinik Schillerhohe, Klinikum
Bogenhausen and Kantonsspital St. Gallen.
* Entered into a marketing and distribution agreement with B.
Braun Surgical S.A. to bring the MicroCutter 5/80 to surgeons
in Spain. The MicroCutter 5/80 with its unique design and
ability to enable minimally invasive surgery complements B.
Braun's comprehensive portfolio of surgical devices and other
laparoscopic instruments.
* Two surgeons presented new data on the use of the MicroCutter
5/80 surgical stapler to enable new and innovative procedures
at the Annual Meeting of the German Society for Thoracic
Surgery.
* Davor Stamenovic, M.D., thoracic surgeon at St. Vincentius
Krankenhaus compared his first experiences performing a
uniportal video assisted thoracic surgery (VATS) for
anatomical lung resection using the MicroCutter 5/80 with
traditional VATS approaches, noting the MicroCutter
increased visibility, reduced dissection of tissue and
avoided interference with other instruments within the
narrow operating area inside the chest.
* Thomas Kyriss, M.D., thoracic surgeon at Robert-Bosch
Hospital, introduced a new technique to perform a diagnostic
wedge resection of the lung to remove and collect small
portions of cancerous tissue and assess the progression of
disease using the MicroCutter 5/80 to facilitate this
procedure, which is significantly less invasive than the
conventional wedge resection.
* Joel Dunning, M.D., thoracic surgeon at James Cook University
Hospital in the UK presented results of a study of a new
procedure called the microlobectomy (a new procedure similar
to VATS techniques that requires only 5mm incisions between
the ribs, versus 12mm incisions) at the European Association
of Cardio-Thoracic Surgery (EACTS). Data from 72 patients
from six hospitals worldwide (Mayo Clinic, Royal Infirmary
Edinburgh, Rigshospitalet Copenhagen, others), a majority of
whom received a procedure enabled by the MicroCutter 5/80,
demonstrated significant benefit for patients, with 22 percent
going home after one day and more than 40 percent going home
on day two. This compares to an average stay of up to seven
days for traditional open lobectomy procedures and three to
four days for lobectomy using VATS techniques. In addition,
surgeons reported a short learning curve for the MicroCutter
5/80 during this procedure.
* Started enrollment in a post-market surveillance registry, the
MicroCutter-Assisted Thoracic Surgery Hemostasis (MATCH)
registry to evaluate the hemostasis and ease-of-use for the
MicroCutter 5/80. This is a prospective, open-label, multi-
center registry and Dextera Surgical plans to enroll up to 120
patients requiring surgical stapling during a lobectomy or
segmentectomy at leading centers in the U.S. and Europe.
* Continued the co-development program with Intuitive Surgical
to develop a surgical stapler and cartridge for use with
Intuitive's da Vinci Surgical System.
Milestones
Management's key objectives over the next three quarters are as
follows:
* Demonstrate clinical adoption for Video-Assisted Thoracic
Surgery (VATS) by a select group of centers in both the EU
and the U.S.;
* Initiate a selective launch of the MicroCutter 5/80 in the
fourth quarter of calendar 2016, expanding the launch in
calendar 2017;
* Demonstrate adoption by 15 key opinion leaders in the U.S.
and 15 key opinion leaders in the EU in the first quarter of
calendar 2017;
* Optimize supply chain and establish production capacity of
120 MicroCutters per week by the end of the first quarter of
calendar 2017;
* Continue advancement of co-development project with Intuitive
Surgical to develop new robotic stapler based on MicroCutter
technology; and
* Establish Dextera Surgical's product pipeline, including
final design of the next generation MicroCutter to expand use
and achieve cost goals.
A full-text copy of the press release is available for free at:
https://is.gd/6iZWzy
About Dextera Surgical Inc.
Dextera Surgical Inc., formerly Cardica, Inc., is focused on the
commercialization and development of microcutter product line
intended for use by surgeons. The Company is engaged in
commercializing and developing MicroCutter XCHANGE 30 based on its
staple-on-a-strip technology for use by thoracic, pediatric,
bariatric, colorectal and general surgeons. Its MicroCutter
XCHANGE 30 is a cartridge based microcutter device with around five
millimeter shaft diameter and around 30 millimeter staple line
cleared for use in the United States for specific indications for
use, and in the European Union for a range of indications for use.
Dextera reported a net loss of $15.98 million in 2015, a net loss
of $19.18 million in 2014 and a net loss of $16.96 million in
2013.
BDO USA, LLP, in San Jose, California, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company has suffered recurring
losses from operations that raise substantial doubt about its
ability to continue as a going concern.
DIAMONDHEAD CASINO: Incurs $377K Net Loss in Third Quarter
----------------------------------------------------------
Diamondhead Casino Corporation filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss applicable to common stockholders of $376,526 for the
three months ended Sept. 30, 2016, compared to a net loss
applicable to common stockholders of $736,136 for the three months
ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss applicable to common stockholders of $849,942 compared to
a net loss applicable to common stockholders of $786,240 for the
same period a year ago.
As of Sept. 30, 2016, Diamondhead had $5.64 million in total
assets, $8.66 million in total liabilities and a total
stockholders' deficiency of $3.02 million.
"The Company has no operations and generates no operating revenues.
During the nine months ended September 30, 2016 and 2015 the
Company incurred net losses applicable to common shareholders,
exclusive of the recording of change in the fair value of
derivatives, of $631,919 and $1,574,751, respectively.
"The Company has had no operations since it ended its gambling
cruise ship operations in 2000. Since that time, the Company has
concentrated its efforts on the development of its Diamondhead,
Mississippi Property. The development of the Diamondhead Property
is dependent on obtaining the necessary capital, through equity
and/or debt financing, unilaterally, or in conjunction with one or
more partners, to master plan, design, obtain permits for,
construct, staff, open, and operate a casino resort.
"In the past, in order to raise capital to continue to pay on-going
costs and expenses, the Company has borrowed funds, through Private
Placements of convertible instruments and other means... Some of
these instruments are past due for payment of both principal and
interest. In addition, at September 30, 2016, the Company had
current liabilities totaling $6,483,340 and only $47,100 cash on
hand.
"The above conditions raise substantial doubt as to the Company's
ability to continue as a going concern," as disclosed in the
report.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/PZQ93w
About Diamondhead Casino
Largo, Fla.-based Diamondhead Casino Corporation, from inception
through approximately August of 2000, operated gaming vessels in
international waters. The Company eventually divested itself of
its gaming operations to satisfy financial obligations to its
vendors, lenders and taxing authorities and to focus its resources
on the development of a casino resort in Diamondhead, Mississippi.
The Company owns, through its wholly-owned subsidiary, Mississippi
Gaming Corporation, an approximate 404.5 acre tract of unimproved
land in Diamondhead, Mississippi. The property is located at 7051
Interstate 10. The Company intends, in conjunction with unrelated
third parties, to develop the site in phases beginning with a
casino resort. The casino resort is expected to include a casino,
a hotel and spa, pools, a sport and entertainment center, a
conference center and a state-of-the-art recreational vehicle
park.
Diamondhead Casino reported net income applicable to common
stockholders of $53,000 for the year ended Dec. 31, 2015, compared
to a net loss applicable to common stockholders of $3.37 million
for the year ended Dec. 31, 2015.
Friedman LLP, in New York, issued a "going concern" qualification
on the consolidated financial statements for the year ended
Dec. 31, 2015, citing that the Company has incurred significant
recurring net losses over the past few years. In addition, the
Company has no operations, except for its efforts to develop the
Diamondhead, Mississippi property. Such efforts may not contribute
to the Company's cash flows in the foreseeable future. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
DOMINICA LLC: Hires Suffolk as Real Estate Broker
-------------------------------------------------
Dominica LLC seeks authorization from the U.S. Bankruptcy Court for
the District of Massachusetts to employ Suffolk Real Estate as real
estate broker.
The Debtor owns a three family home at 20 Sutton Street, Boston,
Massachusetts (the "real estate").
The Debtor requires Suffolk as the real estate broker to rent the
vacant second floor unit.
Suffolk will be paid a fee of one month's rent.
David Alce, authorized representative of Suffolk, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estate.
Suffolk can be reached at:
David Alce
SUFFOLK REAL ESTATE, LLC
218 Boston Street, Suite 110
Topsfield, MA 01983
Tel: (617) 960-0789
About Dominica LLC
Dominica LLC filed a chapter 11 petition (Bankr. D. Mass. Case No.
16-13461) on Sept. 8, 2016. The petition was signed by Evangeline
Martin, manager. The Debtor is represented by Michael Van Dam,
Esq., at Van Dam Law LLP. The Debtor estimated assets and
liabilities at $500,001 to $1 million at the time of the filing.
DOOR TO DOOR: Can Get $1 -Mil. DIP Loan, Use Cash on Interim Basis
------------------------------------------------------------------
Judge Christopher M. Alston of the U.S. Bankruptcy Court for the
Western District of Washington authorized Door to Door Storage Inc.
to obtain post-petition loan facility from the Bennett Dorrance
Trust Dated April 21, 1989, as Amended, and to use cash collateral,
on an interim basis, until December 7, 2016.
The Debtor had contended that it had incurred various obligations
with JPMorgan Chase Bank, N.A. in the aggregate amount of not less
than $4,006,202 as of petition date, secured by security interests
in all the Debtor's property, which include property now owned and
hereafter acquired by the Debtor, and proceeds and products
thereof.
As adequate protection for the Debtor's use of cash collateral:
(a) The Debtor was directed to pay JPMorgan current interest
at the non-default rate under the Loan Documents;
(b) The Debtor will accrue reasonable fees and expenses of
financial and legal advisors engaged by JPMorgan;
(c) The Debtor was directed to provide JPMorgan with financial
and other reporting in compliance with the Loan Documents;
(d) JPMorgan was granted with a valid, binding, enforceable
and perfected replacement liens on and security interests in all
postpetition collateral, to secure any decrease in the value of the
JPMorgan's interest in the collateral.
(e) The adequate protection liens will have priority over all
liens, claims, encumbrances, and interest of every kind and nature,
as well as the liens granted to the Bennett Dorrance Trust;
(f) The Debtor will continue to maintain insurance on its
assets as the same existed as of the Petition Date.
The Debtor was authorized to obtain a DIP Loan from the Bennett
Dorrance Trust and to make advances until Dec. 7, 2016, under these
material terms:
(1) Loan Amount: $1,000,000, of which $150,000 is earmarked
for retention payments to the Debtor's employees, to the extent
approved by the Court.
(2) Maturity Date: Earlier of:
(a) December 31, 2017;
(b) confirmation of Debtor's Chapter 11 Plan;
(c) sale of all or substantially all of the Borrower's
assets;
(d) appointment of a Trustee in this Case; or
(e) conversion of the case to a case under Chapter 7.
(3) Interest Rate: 5% per annum, paid monthly in arrears.
(4) Fees: None
(5) Collateral: Security interest in the Debtor's assets
junior to the security interest of JPMorgan, including any adequate
protection liens granted JPMorgan in connection with proposed use
of cash collateral.
(6) Advances: Multiple Advances, non-revolving;
(7) Priority: Junior to the Adequate Protection Obligations
JPMorgan.
Judge Alston also approved the Professional Fund, which was
included in the Debtor's proposed Budget, providing for the payment
of the post-petition, allowed fees and costs of all professionals
retained in the Chapter 11 case, whether by the Debtor or an
unsecured creditors committee, if one is formed.
The final hearing on the Debtor's motion will be held on Dec. 7,
2016 at 9:30 a.m., any objections and any reply will be due on Nov.
30, 2016, and Dec. 5, 2016, respectively.
A full-text copy of the Interim Order, dated November 10, 2016, is
available at https://is.gd/saADna
About Door to Door Storage
Headquartered in Kent, Washington, Door to Door Storage, Inc. is in
the business of providing nationwide portable, containerized
storage services in approximately 50 locations across the United
States to approximately 8,200 customers and has 56 employees.
Door to Door Storage, Inc., filed a chapter 11 petition (Bankr.
W.D. Wash. Case No. 16-15618-CMA) on Nov. 7, 2016. The Petition
was signed by Tracey F. Kelly, president. The case is assigned to
Judge Christopher M. Alston. The Debtor is represented by Armand
J. Kornfeld, Esq., at Bush Kornfeld, LLP. At the time of filing,
the Debtor had total assets of $4.08 million and total liabilities
of $5.65 million.
DUER WAGNER: Hires Bonds Ellis as Bankruptcy Counsel
----------------------------------------------------
Due Wagner III Oil & Gas LP and its debtor-affiliates seek
permission from the U.S. Bankruptcy Court for the Northern District
of Texas to employ Bonds Ellis Eppich Schafer Jones LLP as their
Bankruptcy Counsel.
The Debtors require Bonds Ellis to:
(a) Render bankruptcy related legal advice to the Debtors;
(b) Assist, on behalf of the Debtors, in the preparation of
necessary applications, notices, motions, answers, orders, reports,
and other legal papers;
(c) Assist the Debtors in obtaining confirmation and
consummation of a plan of reorganization;
(d) Assist the Debtors in preserving and protecting the
Debtors’ estates; and
(e) Perform all other legal services for the Debtors which
may be necessary or appropriate in administering the bankruptcy
case.
Bonds Ellis lawyers who will work on the Debtors' cases and their
hourly rates are:
D. Michael Lynn, of counsel $675
John Y. Bonds, III, partner $495
Joshua N. Eppich, partner $425
H. Brandon Jones, partner $385
Paul M. Lopez, associate $275
Bonds Ellis will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Joshua N. Eppich, founding partner of Bonds Ellis Eppich Schafer
Jones LLP, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtors and
their estates.
Bonds Ellis may be reached at:
Joshua N. Eppich, Esq.
John Y. Bonds, III, Esq.
H. Brandon Jones, Esq.
Paul M. Lopez, Esq
Bonds Ellis Eppich Schafer Jones LLP
420 Throckmorton St., Suite 1000
Fort Worth, TX 76102
Telephone: (817)405-6900
Facsimile: (817)405-6902
About Duer Wagner III
Duer Wagner III Oil & Gas, LP, and its affiliates each filed
Chapter 11 bankruptcy petition in the Northern District of Texas
(Ft. Worth) on May 15, 2015. The petitions were signed by Roy E.
Guinnup, manager of Duer Wagner III & Partners, LLC, the general
partner.
The cases are jointly administered under Case No. 15-41961. The
Debtors are represented by Joshua N. Eppich, Esq., Hunter Brandon
Jones, Esq., and John Y. Bonds, III, Esq., at Shannon, Gracey,
Ratliff & Miller, LLP.
Duer Wagner III estimated assets of $1 million to $10 million and
debts of $100 million to $500 million.
ELBIT IMAGING: 2014 Restructuring Plan of Subsidiary Revised
------------------------------------------------------------
Elbit Imaging Ltd. announced the following updates on the
restructuring plan approval of Plaza Centers N.V., an indirect
subsidiary (45%) of the Company:
1. Under the Restructuring Plan, principal payments under the
notes (both those that are traded on the Tel Aviv Stock
Exchange and those held by Polish investors) issued by Plaza
and originally due in the years 2013 to 2015 were deferred
for a period of four and a half years, and principal payments
originally due in 2016 and 2017 were deferred for a period of
one year.
2. The Restructuring Plan further provides that, if Plaza does
not prepay an aggregate amount of at least NIS 434,000,000
(approximately EUR103 million) on the principal of the notes
on or before 1 December 2016, the principal payments due
under the Extended Repayment Schedule will be advanced by
one year.
3. Since the Restructuring Plan became effective, Plaza has
made Early Prepayments of an aggregate amount of
approximately NIS 142.5 million (approximately EUR34
million) and has repaid a total amount of approximately
EUR71 million on account of principal and interest (on top
of the issuance to the bondholders of 13.21% of its
outstanding share capital). At the same time, Plaza
continues to implement an aggressive cost cutting plan in
order to reduce its general and administrative expenses
(such expenses were reduced by approximately 20% over the
mentioned period).
4. Plaza is currently in active negotiations on several
disposal transactions with a total negotiated value of
approximately EUR140 million (with an estimated EUR71
million expected net proceeds to the Company) and, although
there is no certainty that the transactions will be
completed, it is expected that the closing of these
transactions will take place within few months after 1
December 2016.
5. The enforcement of the Accelerated Repayment Schedule would
add significant pressure to Plaza's liquidity and result in
an acceleration of the asset sales, which is likely to have
an adverse impact upon the value achieved on any disposals.
The Accelerated Repayment Schedule may, therefore, adversely
affect the position of Plaza's stakeholders, including its
shareholders and creditors.
6. Accordingly, Plaza has a strong preference to continue
operating on the basis of the Extended Repayment Schedule.
In order to ensure that the Extended Repayment Schedule
remains applicable, in the event that the closing of the
aforementioned transactions takes longer than anticipated,
Plaza is proposing to seek, from its bondholders, a
relaxation of the terms of the Early Prepayment required to
maintain the Extended Repayment Schedule.
7. The proposed amendments sought by Plaza comprise the
postponement of the Early Prepayment date by up to four
months, and the reduction of the total amount of the
required Early Prepayments to at least NIS 382,000,000 (a
reduction of up to 12% from the original amount) (the
"Requested Amendment"). Apart from this Requested Amendment,
Plaza intends to fully comply with the repayment schedule of
the notes. Plaza intends to implement the Requested
Amendment through a consensual process with its bondholders
and will shortly be initiating discussions with its
bondholders in order to seek their consent to the Requested
Amendment.
8. Plaza has made considerable progress in creating value and
generating proceeds from its assets and appreciates the
continued support of its stakeholders in order to be able to
continue the implementation of the approved Restructuring
Plan.
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.
ENDLESS POSSIBILITIES: Unsecureds To Get $75,000 in 10 Years
------------------------------------------------------------
Endless Possibilities, LLC, filed with the U.S. Bankruptcy Court
for the Western District of Missouri a third amended combined plan
and disclosure statement dated Oct. 31, 2016.
Under the Plan, Class 5 General Unsecured Creditors are impaired
and will be paid over 10 years with a monthly payment of $625
starting March 1, 2022, and continuing the first day of each month
thereafter for 10 years until a total of $75,000 is paid.
Payments and distributions under the Plan will be funded by the
Debtor's ongoing operations.
The Third Amended Combined Plan and Disclosure Statement is
available at http://bankrupt.com/misc/mowb15-42927-115.pdf
As reported by the Troubled Company Reporter on Sept. 21, 2016, the
Hon. Arthur B. Federman of the U.S. Bankruptcy Court for the
Western District of Missouri conditionally approved the Debtor's
disclosure statement describing the Debtor's Chapter 11 plan.
Under the Debtor's Second Amended Combined Plan and Disclosure
Statement dated Aug. 23, 2016, Class 5 General Unsecured Claims
would be paid over 10 years with a monthly payment of $625 starting
Oct. 1, 2021, and continuing the first day of each month thereafter
for 10 years until a total of $90,000 is paid.
About Endless Possibilities
Since 1998, Endless Possibilities, LLC, has been in the business of
daycare and children's education.
Endless Possibilities, LLC, filed a Chapter 11 petition (Bankr.
W.D. Mo. Case No. 15-42927) on Oct. 6, 2015, and is represented by
Robert E. Arnold, III, Esq., at Arnold Law Firm LLC and Colin N.
Gotham, Esq., at Evans & Mullinix, P.A.
ENERGY FUTURE: Parties Seek Dismissal of Chapter 11 Cases
---------------------------------------------------------
BankruptcyData.com reported that several individual parties filed
with the U.S. Bankruptcy Court a motion to dismiss the Chapter 11
cases of Energy Future Holdings' "Asbestos Debtors": EECI, EEC
Holdings, LSGT SACROC and LSGT Gas Co. on the grounds that the
bankruptcy petitions were not filed in good faith. According to
documents filed with the Court, "The Asbestos Debtors did not file
the petitions for a valid reorganizational purpose. Under
controlling Third Circuit law, this is not a proper reorganization
purpose. And it is inimical to the fundamental principle that
bankruptcy must not be used to obtain a windfall at the expense of
creditors. The Asbestos Debtors had been sued pre-petition for
asbestos-related injuries associated with the Asbestos Debtors'
electricity generation activities and discontinued gas distribution
businesses . They have assets of at least $990 million in
admittedly valid inter-company claims, which are reinstated by the
Plan. The Debtors have estimated that their annual costs for
resolving asbestos claims are approximately $3 million each year.
The Plan provides that the Asbestos Debtors would remain separate
corporate entities, wholly-owned by reorganized EFH Corp. which, in
turn, will be wholly owned by NextEra, Inc. All EFH Debtor
Intercompany Claims (Class A3), and interests in the EFH Debtors
other than EFH Corp. held by the Asbestos Debtors would be
reinstated. All General Legacy Unsecured Claims, including Asbestos
Claims (Class A3) against the Asbestos Debtors also would be
reinstated. Thus, the only practical effect the Plan would have on
the Asbestos Debtors is that it would allow them to shed their
future liabilities for un-manifested Asbestos Claims, without
compensation. Indeed, the Asbestos Debtors' only apparent purpose
for seeking to maintain Chapter 11 protection is to cleanse
themselves of future liabilities, thus unfairly and improperly
benefitting their controlling parent, EFH Corp., at the expense of
their asbestos victims, in direct contravention of the fundamental
principle of bankruptcy that creditors be paid before stockholders
retain equity."
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.
ENERGY XXI: Enters Into Plan Support Agreement with Creditors
-------------------------------------------------------------
Energy XXI Ltd. on Nov. 14, 2016, disclosed that it has entered
into a plan support agreement (the "plan support agreement") with
substantially all of the Company's creditor constituencies,
including holders of approximately 70% of the Company's secured
second lien 11.0% notes, the Official Committee of Unsecured
Creditors, the ad hoc group of holders of certain unsecured notes
issued by EGC and the ad hoc group of holders of certain unsecured
notes issued by EPL. The restructuring contemplated by the plan
support agreement is also supported by the Company's first lien
lenders and the indenture trustee for the Company's senior
convertible notes.
The Company has filed with the United States Bankruptcy Court for
the Southern District of Texas, Houston Division an amended Plan of
Reorganization (the "Plan") and related Disclosure Statement that
incorporates and implements the agreement. The Company is seeking
a hearing to approve the Disclosure Statement on Nov. 14, 2016 and
a confirmation hearing is scheduled to commence on Dec. 8, 2016.
The Company expects to complete the court-supervised process and
emerge from Chapter 11 by the end of 2016.
"This plan support agreement significantly accelerates our
financial restructuring process and reflects global consensus among
our key creditors," said Energy XXI's Chief Executive Officer,
John Schiller. "This agreement is the result of successful
mediation and settlement discussions, and paves the way for Energy
XXI to move forward with enhanced financial flexibility. In
addition, we are pleased to note that under the terms of the plan
support agreement, most of our trade vendors will receive nearly
full recoveries. We thank our business partners, vendors and
customers for their support and we look forward to continuing our
relationships following our emergence."
Mr. Schiller continued, "I would like to thank our employees for
their dedication and commitment to working safely while ensuring
that our production has remained on track throughout this process.
We remain focused on completing this process as quickly as possible
and executing on our business strategies and initiatives with our
deleveraged balance sheet."
In connection with the plan support agreement, John Schiller will
continue to lead the Company in his role as Chief Executive Officer
upon emergence.
The full terms of the plan support agreement are available in the
Company's Quarterly Report on Form 10-Q for the period ended
September 30, 2016 that will be filed with the Securities and
Exchange Commission.
PJT Partners LP is serving as Energy XXI's financial advisor,
Opportune LLP is serving as Energy XXI's restructuring advisor, and
Vinson & Elkins L.L.P. is serving as Energy XXI's legal advisor.
About Energy XXI Ltd
Energy XXI Ltd (OTCMKTS: EXXIQ) was incorporated in Bermuda on July
25, 2005. With its principal operating subsidiary headquartered in
Houston, Texas, Energy XXI is engaged in the acquisition,
exploration, development and operation of oil and natural gas
properties onshore in Louisiana and Texas and in the Gulf of Mexico
Shelf.
Energy XXI Ltd and 25 of its affiliates filed bankruptcy petitions
(Bankr. S.D. Tex. Lead Case No. 16-31928) on April 14, 2016. The
petitions were signed by Bruce W. Busmire, the CFO. Judge Karen K.
Brown is assigned to the cases.
Energy XXI Ltd on April 14, 2016, also filed a winding-up petition
commencing an official liquidation proceeding under the laws of
Bermuda before the Supreme Court of Bermuda.
The Debtors sought bankruptcy protection after reaching a deal With
lenders on the filing of a restructuring plan that would convert
$1.45 billion owed to second lien noteholders into equity of the
reorganized company.
Energy XXI scheduled $95,979,564.02 in total assets and
$2,749,509,954.98 in total liabilities as of the petition date.
The Debtors have hired Vinson & Elkins LLP as counsel, Gray Reed &
McGraw, P.C. as special counsel, Conyers Dill & Pearman as Bermuda
counsel, Locke Lord LLP as regulatory counsel, PJT Partners LP as
investment banker, Opportune LLP as financial advisor, Epiq
Systems, Inc., as notice and claims agent.
Wilmer Cutler Pickering Hale and Dorr LLP represent an ad hoc group
of certain holders and investment advisors and managers for holders
of obligations arising from the 8.25% Senior Notes due 2018 issued
pursuant to that certain Indenture, dated as of Feb. 14, 2011, by
and among EPL Oil & Gas, Inc., certain of EPL's subsidiaries, as
guarantors, and U.S. Bank National Association, as trustee.
The Office of the U.S. Trustee on April 26, 2016, appointed five
creditors of Energy XXI Ltd. to serve on the official committee of
unsecured creditors. The Committee retains Heller, Draper,
Patrick, Horn & Dabney LLC as its co-counsel, Latham & Watkins LLP
as its co-counsel, and FTI Consulting, Inc. as its financial
advisor.
The U.S. Trustee also appointed an Official Committee of Equity
Security Holders. The Equity Committee retained Hoover Slovacek
LLP as its legal counsel, and Williams Barristers & Attorneys, as
Bermuda counsel.
The Ad Hoc Committee of Second Lien Noteholders is represented in
the case by Robert Bernard Bruner --
bob.bruner@nortonrosefulbright.com -- at Norton Rose Fulbright.
ENVISION HEALTHCARE: S&P Rates Proposed $750MM Sr. Notes 'B'
------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '6'
recovery rating to New Amethyst Corp.'s (to be renamed Envision
Healthcare Corp.) proposed $750 million senior unsecured notes due
2024. The '6' recovery rating indicates S&P's expectation for
negligible (0%-10%) recovery of principal in the event of a
default. New Amethyst (Envision) is a wholly owned subsidiary of
AmSurg Corp., and it will be the surviving entity of the proposed
merger of Envision Healthcare Holdings Inc. and AmSurg.
Envision plans to use the proceeds from the debt issuance, along
with the proceeds from its previously announced new term loan B, to
help finance the pending the merger with AmSurg.
"Our corporate credit rating on, Envision Healthcare Holdings is
'BB-' and the rating outlook is positive. The rating reflects the
parent's post-merger business profile, which is well established in
its three business segments and will provide a variety of clinical
network solutions that will account for over 30 million patient
encounters. We expect the combined business to take advantage of
the growth opportunities within the physician outsourcing industry
and believe the improved scale will better position the company to
compete for new outsourcing contracts. However, the combined
company will still operate in highly competitive and fragmented
markets and remain susceptible to reimbursement risk," S&P said.
"We expect pro forma leverage of about 4.0x in 2017 and believe
that the combined company's growing EBITDA will result in leverage
below 4x by 2018. After the merger, we expect that Envision's
financial policies will be relatively conservative and believe the
company can finance annual acquisition spending of about
$800 million using internally generated cash flow. The positive
rating outlook on Envision Healthcare Holdings reflects our view
that the company could reduce leverage to the high-3x to low-4x
range over the next year, at which point we would consider its
credit quality to be consistent with its 'BB' rated peers," S&P
noted.
RATINGS LIST
Envision Healthcare Holdings Inc.
Corporate Credit Rating BB-/Positive/--
New Ratings
Envision Healthcare Corp.
New Amethyst Corp.
Senior Unsecured
$750 million notes due 2024 B
Recovery Rating 6
EQUINOX HOLDINGS: Moody's B2 CFR Unchanged Amid Debt Issuance
-------------------------------------------------------------
Moody's Investors Service says Equinox Holdings, Inc.'s B2
Corporate Family Rating, B2-PD Probability of Default Rating, debt
instrument ratings and stable outlook remain unchanged following
the company's announcement that it plans to issue a $50 million
fungible add-on to its existing first lien term loan and extend the
maturity of its senior secured revolving credit facility currently
set to expire in February 2018. Proceeds from the incremental term
loan will be used for general corporate purposes, and to pay
related fees and expenses. Pricing and other terms and conditions
are expected to remain unchanged from those set forth in the
original first lien credit agreement.
Equinox Holdings, Inc., headquartered in New York, operates fitness
facilities across the US under the Equinox, Pure Yoga and Blink
brands. The company operates in both the high-end and the
middle-to-budget market segments and targets members across all
demographics, although the membership base is heavily skewed toward
more affluent individuals. Equinox is owned by individuals and
entities affiliated with Related Companies, L.P. ("Related"), a New
York limited partnership, and members of management. EHI's
consolidated revenues (including unrestricted subsidiaries) were
$1.1 billion for the 12 months ended September 30, 2016. Unless
otherwise specified, references to "Equinox" herein refer to EHI's
restricted group, which excludes Blink Holdings, Inc. For the 12
months ended September 30, 2016, Equinox generated total revenues
of approximately $900 million.
ERICKSON INC: Moody's Assigns Default Rating After Ch.11 Filing
---------------------------------------------------------------
Moody's Investors Service downgraded the Probability of Default
Rating of Erickson Incorporated to D-PD from Caa3-PD and Corporate
Family Rating to Ca from Caa3, following the company's announcement
on Nov. 9, 2016, that it filed for relief under Chapter 11 of the
U.S. bankruptcy code in the U.S. Bankruptcy Court for the Northern
District of Texas, (Dallas Division), for itself and certain
subsidiaries. The company expects to pursue a plan of
reorganization with the support of its creditors. Concurrently,
Moody's affirmed the Ca rating on senior secured second-lien notes
and the SGL-4 Speculative Grade Liquidity rating. The ratings
outlook remains negative. All ratings will be withdrawn shortly
following this ratings action.
Moody's has taken these actions:
Issuer -- Erickson Incorporated:
Probability of Default Rating, downgraded to D-PD from Caa3-PD;
Corporate Family Rating, downgraded to Ca from Caa3;
Senior Secured Second Lien Notes due 2020, affirmed at Ca
(LGD4);
Speculative Grade Liquidity rating, affirmed at SGL-4.
Outlook is negative.
RATINGS RATIONALE
The downgrade of Erickson's PDR to D-PD is a result of the
bankruptcy filing. The downgrade of the Erickson's other ratings
reflects Moody's view of the potential recoveries overall and on
the debt instruments, based on the company's capital structure
entering bankruptcy. The restructuring plan expects to call for
the elimination of approximately $500 million of debt (including
$128 million drawn on its first-lien ABL revolver (unrated) and
$355 million of second-lien notes outstanding), commensurate with
removal of related annual interest expense of about $40million. The
company expects to have access to DIP financing to fund its ongoing
operations during the restructuring period, which is expected to
conclude in early 2017.
Moody's will withdraw all of Erickson's ratings, shortly after this
rating action, consistent with Moody's practice for companies
operating under the purview of the bankruptcy courts wherein the
availability and flow of information becomes typically more
limited.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Erickson is a global provider of aviation services specializing in
government services, legacy aircraft MRO and manufacturing, and
commercial services such as firefighting, HVAC, power line,
specialty, construction, oil and gas, and timber harvesting.
Erickson operates a fleet of approximately 69 rotary-wing (light,
medium, and heavy) and fixed-wing aircraft, including 20 heavy-lift
S-64 Aircranes. Founded in 1971, Erickson is based in Portland,
Oregon, and maintains operations in North America, South America,
Europe, the Middle East, Africa, Asia Pacific, and Australia. It
is a publicly traded company and a majority of its outstanding
shares are owned by entities affiliated with ZM Equity Partners,
LLC.
ERICKSON INC: Nov. 18 Meeting Set to Form Creditors' Panel
----------------------------------------------------------
William T. Neary, Acting United States Trustee for Region 6, will
hold an organizational meeting on Nov. 18, 2016, at 10:30 a.m. in
the bankruptcy case of Erickson Incorporated, et al.
The meeting will be held at:
United States Trustee – Fifth Floor 341 Meeting
Rooms
Earl Cabell Federal Building
1100 Commerce Street, Room 524
Dallas, Texas 75242
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 Erickson
Founded in 1971, Erickson is a vertically-integrated manufacturer
and operator of the powerful heavy-lift Erickson S-64 Aircrane
helicopter, and is a leading global provider of aviation services.
Erickson currently possesses a diverse fleet of 69 rotary-wing and
fixed-wing aircraft that support a variety of government and civil
customers worldwide.
The Company, which employs 711 individuals, has a broad range of
aerial services consisting of three primary business segments: (i)
global defense and security, (ii) civil aviation services, and
(iii) manufacturing and maintenance, repair, and overhaul.
Jeff Roberts was appointed as president and chief executive officer
in April 2015.
The Debtors have hired Haynes and Boone, LLP as counsel; Imperial
Capital LLC, as investment banker; Alvarez & Marsal as financial
and restructuring advisor; and Kurtzman Carson Consultants as
claims and noticing agent.
ESTERLITA TAPANG: Unsecured Creditors to be Paid 2% Under Plan
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
is set to hold a hearing on December 1, at 10:00 a.m., to consider
approval of the disclosure statement explaining the Chapter 11 plan
of reorganization of Esterlita Cortes Tapang.
The hearing will take place at Courtroom 215, 1300 Clay Street
Oakland, California.
Under the restructuring plan, general unsecured creditors will get
2% of their claims in 20 equal quarterly installments. Payments
will start on the effective date of the plan.
General unsecured creditors, which assert $531,336 in claims, may
not take any collection action against the Debtor so long as she is
not in material default under the plan, according to court
filings.
About Esterlita Cortes Tapang
Esterlita Cortes Tapang sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Calif. Case No. 11-59479) on October
12, 2011.
The case is assigned to Judge Charles Novack. The Debtor is
represented by Francisco J. Aldana, Esq., at the Law Offices of
Francisco Javier Aldana.
EVO PAYMENTS: $690MM in New Loans Get B-Level Rating from S&P
-------------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Atlanta-based EVO Payments International LLC. The rating outlook
is stable.
At the same time, S&P assigned its 'B' issue-level rating and '3'
recovery rating to the company's proposed $100 million five-year
first-lien revolver and $590 million seven-year first-lien term
loan. The '3' recovery rating indicates S&P's expectation for
meaningful recovery (50%-70%; lower half of the range) of principal
in the event of a payment default.
S&P also assigned its 'B-' issue-level rating and '5' recovery
rating to the company's proposed $155 million eight-year
second-lien term loan. The '5' recovery rating indicates S&P's
expectation for modest recovery (10%-30%; lower half of the range)
of principal in the event of a payment default.
"Our 'B' corporate credit rating on EVO reflects the company's
modest scale and high leverage in the competitive payment
processing industry," said S&P Global Ratings credit analyst Jenny
Chang.
S&P expects debt to EBITDA to approach 7x pro forma for the
transaction, which is expected to close by the end of 2016.
Supporting the rating is EVO's solid, geographically diverse market
position in an industry with expected global growth rates in the
high-single-digit percentages, driven by consistent consumer
spending growth and the ongoing global conversion from cash to card
and electronic based transactions.
The outlook is stable, reflecting S&P's expectation that the
company will continue to grow organically in the high-single-digit
percentages, but will remain highly leveraged as it pursues
acquisitions to build scale and increase margins.
EVO PAYMENTS: Gets Moody's B2 Corp. Rtng Amid $845MM in New Loans
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating and
B2-PD Probability of Default Rating ("PDR") to EVO Payments
International, LLC ("EVO"). Concurrently, Moody's assigned a B1
rating to the company's proposed senior secured first lien bank
credit facility, comprised of a $590 million term loan and a $100
million revolver, and assigned a Caa1 rating to the company's
proposed senior secured second lien term loan. The rating action
follows EVO's announced plans to refinance its existing
indebtedness and to bolster cash balances to fund potential
acquisitions. The rating outlook is stable.
Moody's assigned the following ratings:
Issuer: EVO Payments International, LLC:
-- Corporate Family Rating- B2
-- Probability of Default Rating- B2-PD
-- $590m Senior Secured First lien Term Loan due 2023 --B1
(LGD-3)
-- $100m Senior Secured First Lien Revolving Credit Facility
expiring 2021 -- B1 (LGD-3)
-- $155m Senior Secured Second Lien Term Loan due 2024 -- Caa1
(LGD-5)
-- Outlook is Stable
RATINGS RATIONALE
EVO's B2 CFR reflects the company's high initial financial leverage
(about 6x on a Moody's adjusted basis at closing) and small size
and scale relative to larger payment processors with greater
financial resources in a highly competitive merchant acquirer
space. EVO is in the process of stabilizing its declining U.S. and
Canada business, which is concentrated in the small and medium
sized business market and is susceptible to higher attrition rates,
by shifting its sales mix from traditional independent sales
organizations ("ISO") to faster growing eCommerce and independent
software vendor ("ISV") channels. EVO's prospects of restoring
revenue growth in the U.S. will largely depend on its ability to
acquire and integrate ISV and technology capabilities to supplement
the core payment processing business.
The B2 CFR benefits from EVO's geographically diverse revenue base
with a rapidly growing European business (about 44% of global
payment volumes) supported by bank alliances in Eastern Europe,
Germany, Spain, and Ireland. EVO also benefits from bank referral
exclusivity in these European markets, where card usage growth
opportunities are higher than in the U.S., and scaling advantages
arising from owning its payment processing platforms. Moody's
expects EVO to produce adjusted EBITDA margins of 30% with annual
free cash flow of about $35 million.
EVO's good liquidity position is supported by over $50 million of
available cash on hand at June 30, 2016 (excluding funds set aside
for merchant settlement activities) and Moody's expectation of free
cash flow generation (net of distribution to its members) that will
exceed 5% of debt by the end of 2017. The company's liquidity is
also reinforced by an undrawn $100 million revolving credit
facility due 2021.
The stable outlook reflects Moody's expectation that EVO will
generate organic net revenue growth in the high single digits with
a commitment to reduce debt leverage to the low 5 times over the
next 12 to 18 months. Operating performance will likely be buoyed
by the rapid growth of the ISV channel, an expanding merchant base
in Mexico and Europe, and the ongoing shift to electronic payment
cards from cash and checks worldwide.
The ratings could be upgraded if EVO increases market share through
organic revenue growth without pressuring operating margins and
sustains debt to EBITDA at near 4 times. The ratings could be
downgraded with declines in revenue and profits, increased customer
churn, or weakening free cash flow. In addition, negative rating
pressure could arise from debt funded dividend payments or
acquisitions such that financial leverage exceeds 6 times for an
extended period of time.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
EVO is a global provider of electronic commerce and payment
processing solutions for merchants.
FIDELITY NATIONAL: Fitch Affirms 'BB+' Senior Unsecured Debt Rating
-------------------------------------------------------------------
Fitch Ratings has affirmed Fidelity National Financial, Inc.'s
(FNF) title insurance operating company Insurer Financial Strength
(IFS) ratings at 'A-'. Fitch has also affirmed FNF's Issuer Default
Rating (IDR) at 'BBB-' and senior unsecured debt at 'BB+.' The
Rating Outlook is Stable.
KEY RATING DRIVERS
Fitch's affirmation of FNF's IFS ratings are based on
market-leading scale, margins, and operating company
capitalization. Offsetting these positives though has been a
history of periodic consolidated balance sheet financial leverage
increases to fund acquisitions of ancillary businesses. While Fitch
notes that past ventures have been successful, historical results
do not mitigate future risks.
FNF's more aggressive holding company capital management, coupled
with higher tangible financial leverage, are the primary reasons
for the expansion of holding company debt notching in relation to
the IFS rating. FNF's financial leverage as of Sept. 30, 2016 was
29%; however, tangible financial leverage was 80%. Debt/EBITDA was
2.4x and GAAP fixed charge coverage was 8x as of Sept. 30, 2016.
Fitch's ratings analysis considers both the two tracking stocks,
FNF Core (Ticker: FNF NYSE) and FNF Financial Ventures (Ticker:
FNFV NYSE). Fitch recognizes the tracking stock gives FNF's
management the ability to streamline the organizational chart and
lessen the volatility of title insurance operations; however, it
does not alleviate holding company obligations, as neither is a
separate legal entity. Any future material organizational structure
changes at FNF would merit further assessment from a ratings
context.
FNF has a leading position in title insurance accounting for
approximately 33% of the U.S. title insurance market by premiums.
This scale coupled with an aggressive cost management focus has
allowed FNF to be one of the most profitable title insurance
companies reporting a GAAP title insurance pretax operating margin
of approximately 10% as of Sept. 30, 2016.
Fidelity's title insurance operating subsidiaries have strong
capitalization when measured by statutory operating leverage and a
risk adjusted capital (RAC) score. Fitch anticipates this will
continue over the rating horizon.
RATING SENSITIVITIES
The following is a list of key rating drivers that could lead to an
upgrade for the holding company ratings:
-- Sustained improvement in debt/EBITDA of 2.3x or lower and/or
significant improvement in tangible financial leverage;
-- No material deterioration in GAAP fixed charge coverage.
These factors, as well as the following, could lead to an upgrade
of both IFS and debt ratings:
-- Maintenance of operating company capital strength as
demonstrated by a RAC score above 175% and net leverage
below 4.0x;
-- An improvement in stated financial leverage to 25%;
-- Maintenance of GAAP title operating margins at current
levels that remain in the top tier versus industry peers.
The following is a list of key rating drivers that could lead to a
downgrade:
-- A RAC score below 130%.
-- Any acquisition that increases financial leverage above 35%.
-- A significant write-down in goodwill or signs that indicate
a potential write-down of goodwill is possible.
-- Deterioration in earnings, primarily measured by
consolidated pretax GAAP margins, at a pace greater than
peer averages.
-- Sustained material adverse reserve development.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings with a Stable Outlook:
Fidelity National Title Ins. Co.
Alamo Title Insurance Co. of TX
Chicago Title Ins. Co.
Commonwealth Land Title Insurance Co.
-- IFS ratings at 'A-'.
Fitch has affirmed the following ratings with a Stable Outlook:
Fidelity National Financial, Inc.
-- IDR at 'BBB-';
-- $300 million 6.6% senior note maturing May 15, 2017 at
'BB+';
-- $300 million 4.25% convertible senior note maturing Aug. 15,
2018 at 'BB+';
-- $400 million 5.5% senior note maturing September 1, 2022 at
'BB+'
-- Four-year $800 million unsecured revolving bank line of
credit due July 2018 at 'BB+'.
FIELDPOINT PETROLEUM: Completes First Tranche of Funding
--------------------------------------------------------
FieldPoint Petroleum Corporation has completed the first tranche of
funding under the previously announced Stock and Mineral Interest
Purchase Agreement dated Aug. 12, 2016, with HFT Enterprises, LLC.
By Partial Assignment and Assumption Agreement and Consent dated
Oct. 24, 2016, HFT assigned its right and obligation to purchase
the first tranche under the Purchase Agreement to two individual
investors. Pursuant to the Purchase Agreement and Partial
Assignment, the Company sold an aggregate of 884,564 shares of
common stock at a price of $0.45 per share. HFT has committed
under the Purchase Agreement to purchase a second tranche
consisting of an additional 884,564 shares of common stock at a
price of $0.45 per share on or before Dec. 31, 2016.
All shares of common stock issued and issuable under the Purchase
Agreement are "restricted securities" within the meaning of the
Securities Act of 1933, as amended, and have been approved for
listing on the NYSE MKT exchange. Euro Pacific Capital Inc acted
as placement agent and will receive a 5% fee on this transaction.
Phillip Roberson, president and CFO of FieldPoint, said, "As stated
before, this is an important step in helping stabilize the Company
and moving forward with our plans for growth and maintaining our
listing with the NYSE."
About Fieldpoint Petroleum
FieldPoint Petroleum Corporation acquires, operates and develops
oil and gas properties. Its principal properties include Block
A-49, Spraberry Trend, Giddings Field, and Serbin Field, Texas;
Flying M Field, Sulimar Field, North Bilbrey Field, Lusk Field, and
Loving North Morrow Field, New Mexico; Apache Field, Chickasha
Field, and West Allen Field, Oklahoma; Longwood Field, Louisiana;
and Big Muddy Field, Wyoming. As of Dec. 31, 2015, the Company had
varying ownership interests in 472 gross wells (113.26 net).
FieldPoint Petroleum Corporation was founded in 1980 and is based
in Austin, Texas.
As of June 30, 2016, Fieldpoint Petroleum had $9.20 million in
total assets, $9.76 million in total liabilities and a total
stockholders' deficit of $557,072.
The Company reported a net loss of $10.98 million in 2015 following
a net loss of $1.94 million in 2014.
Hein & Associates LLP, in Dallas, Texas, 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, and has a working capital deficit. This raises substantial
doubt about the Company's ability to continue as a going concern.
FOUNDATION HEALTHCARE: Appoints Justin Bynum as CFO
---------------------------------------------------
Justin Bynum, 37, was named Foundation Healthcare, Inc.'s chief
financial officer and its principal financial and accounting
officer on Nov. 7, 2016. Mr. Bynum joined the Company in May 2016
and worked directly with the Company's chief executive officer on
strategic finance initiatives. From May 2013 to April 2016, Mr.
Bynum served as vice president and chief financial officer of Saint
Anthony Hospital, a not-for-profit stand-alone safety-net hospital
in Chicago, Illinois. From 2009 to May 2013, Mr. Bynum served in
various roles in the healthcare industry including chief financial
officer, division financial manager, and assistant chief financial
officer for hospitals owned by Health Management Associates and
Vanguard. Prior to entering the healthcare industry, Mr. Bynum was
a stockbroker from 2001 to 2007. Mr. Bynum holds degrees in
economics and political science from the University of North
Carolina at Chapel Hill and an MBA from The College of William and
Mary.
As chief financial officer, Mr. Bynum will receive an annual base
salary of $220,000 and will be eligible to earn a bonus up to 50%
of his base salary if the Company meets certain earnings targets
and other objectives to be determined by our Compensation
Committee. Mr. Bynum is expected to be awarded stock options for
the purchase of 250,000 shares of the Company' s common stock at an
exercise price of $2.00 per share. In addition, Mr. Bynum will be
reimbursed for certain relocation costs including certain moving
expenses and temporary living expenses for a period of 90 days not
to exceed $1,400 per month.
There are no other arrangements or understandings pursuant to which
Mr. Bynum was selected as the Company's chief financial officer.
There are no family relationships among any of the Company's
directors, executive officers, and Mr. Bynum, and there are no
related party transactions between the Company and Mr. Bynum
reportable under Item 404(a) of Regulation S-K.
About Foundation Healthcare
Oklahoma City-based Foundation Healthcare is a healthcare services
company primarily focused on owning controlling interests in
surgical hospitals and the inclusion of ancillary service lines.
The Company currently owns controlling and noncontrolling
interests in surgical hospitals located in Texas. The Company also
owns noncontrolling interests in ambulatory surgery centers
("ASCs") located in Texas, Oklahoma, Pennsylvania, New Jersey,
Maryland and Ohio.
Additionally, the Company provides sleep testing management
services to various rural hospitals in Iowa, Minnesota, Missouri,
Nebraska and South Dakota under management contracts with the
hospitals. The Company provides management services to a majority
of its Affiliates under the terms of various management agreements.
Prior to Dec. 2, 2013, the Company's name was
Graymark Healthcare, Inc.
As of June 30, 2016, Foundation had $127 million in total assets,
$136 million in total liabilities, $6.96 million in preferred stock
non-controlling interest and a total deficit of $15.7 million.
Foundation Healthcare reported net income attributable to the
Company's common stock of $5.19 million on $126 million of
revenues for the year ended Dec. 31, 2015, compared to a net loss
attributable to the Company's common stock of $2.09 million on
$102 million of revenues for the year ended Dec. 31, 2014.
FPL ENERGY: Fitch Affirms 'BB' Debt Rating on $365MM Opco Notes
---------------------------------------------------------------
Fitch Ratings has affirmed the ratings on FPL Energy National Wind,
LLC's (Opco) and FPL Energy National Wind Portfolio, LLC's (Holdco)
senior secured notes as follows:
-- Opco $365 million ($52.406 million outstanding) senior
secured indebtedness due 2024 at 'BB';
-- Holdco $100 million ($2.54 million outstanding) senior
secured indebtedness due 2019 at 'B-'.
The Rating Outlook is revised to Stable from Negative for both
tranches of debt.
The ratings are supported by a diverse wind regime generating
revenues under fixed-price long-term power purchase agreements
(PPA), but historical wind volatility and increased operating costs
have reduced cash flows below initial estimates. Rating case
financial performance reflects a near-term downturn that is below
the current 'BB' rating for the Opco, while the long-term profile
suggests potentially improved credit quality. The Holdco's rating
case reliance on reserves to support debt repayment through 2018
provides a limited margin of safety consistent with the 'B-'
rating. The Stable Outlooks reflect the project's completion of
structural repairs at one of its wind farms, and improved portfolio
operating and financial performance, which Fitch expects can be
maintained going forward.
KEY RATING DRIVERS
Fully Contracted Revenues - Revenue Risk- Price: Midrange
Revenues are derived under fixed-price long-term contracts for a
portfolio of eight wind farm projects totalling 389.6 megawatts
(MW). The credit quality of the offtakers, which are investment
grade, does not actively constrain the current ratings.
Revised Production Estimates - Revenue Risk- Volume: Weaker
Actual wind resource performance has fallen persistently below the
original estimates. The project benefits from geographic
diversification but any portfolio effect has not fully mitigated
generation losses from reduced wind speeds overall. Revised
projections exclude one divested portfolio project and utilize an
updated P50 forecast based on actual performance, which is on
average 10% below the original P50.
Stabilizing Operating Profile - Operating Risk: Midrange
Operating and maintenance (O&M) expenses have persisted well above
the original base case. Fitch's projections utilize the increased
actual historical O&M cost in the base case with additional stress
applied in the rating case for the later years. The project has
historically maintained good availability with an average of about
94% portfolio-wide since 2005.
Debt Structure - Debt Structure: Midrange (Opco)/Weaker (Holdco)
The Opco and Holdco debt benefit from 12-month debt service
reserves (DSR) with additional reserves for operations and major
maintenance. The distribution trigger at Opco of 1.25x for the past
12 months and projected six months at 1.10x helps to ensure timely
debt payment at Opco. Under a cash trap scenario, however, the
Holdco debt is fully reliant on limited cash reserves.
Limited Financial Cushion
Financial performance has been lower than original projections due
to reduced energy revenues and higher operating costs. Fitch's
rating case includes a 9%-12% reduction to output and a 10%
increase to O&M expenses. The Opco rating case average debt service
coverage ratio (DSCR) is 1.37x with a minimum of about 1.15x in
2017 and 2018. Under the rating case, Holdco cash and debt service
reserves are adequate to support debt payment through 2018, just
short of the March 2019 maturity.
Peers
Opco and Holdco ratings are lower than publicly rated peers. Fitch
rated wind projects that meet the rating case investment grade DSCR
threshold of 1.30x include Continental Wind ('BBB-'/ Stable
Outlook) with an average DSCR of 1.38x and a minimum of 1.33x, and
Caithness Shepherds Flat ('BBB-'/Stable Outlook) with an average
DSCR of 1.41x and a minimum of 1.31x.
RATING SENSITIVITIES
Negative: Material decline in generation output and Opco DSCR below
1.20x.
Positive: Positive rating action is unlikely prior to full and
timely payment of the Holdco debt, given challenges in past
performance.
SUMMARY OF CREDIT
Performance Update
Operating performance has rebounded in the second half of 2016, as
management reports foundation repairs at one of the wind farms were
completed resulting in strong third quarter (Q3) plant availability
consistent with historical levels. Overall portfolio availability
averaged 94% in Q3, consistent with historical levels. Portfolio
electricity production for the year has been about 80% of budget
due to the combination of plant availability and wind resource
conditions.
As a result of the improved operating performance, the six-month
DSCR ending September 2016 was just above 1.40x, exceeding Fitch's
expectations. Though the February 2016 DSCR was less than 1.0x, the
debt payment was made with support from the debt service reserve,
which management reports has since been replenished. Use of the
reserve was driven by the timing of repairs and now that they are
complete, Fitch would not expect a similar strain on cash flow
unless the wind resources severely underperform.
Base and Rating Cases
Under the assumption that Opco financial and operational
performance rebounds, base case DSCRs are more than 1.70x. In this
scenario, the Opco meets the forward and backward equity
distribution test, allowing it to release cash to support Holdco
obligations.
In Fitch's rating case of 10% higher expenses and about 10% lower
generation output, the project's average DSCR is 1.34x through debt
maturity in 2024 for the Opco, which is in line with average
historical performance prior to the 2015 operating challenges.
DSCRs in the rating case are stressed in 2017 and 2018 to an
average of 1.15x. In this scenario, cash is trapped at the Opco and
unavailable for Holdco debt repayment, which will rely on available
reserve funds. Fitch projects that after this temporary decline
through 2018, the Opco annual DSCRs should return to 1.22x or
greater. If the Opco doesn't meet the distribution test in early
February 2017, Holdco repayment will rely on meeting the test in
September 2017 or February 2018 to support the last Holdco debt
payment in February 2019.
The Opco and Holdco maintain solid liquidity to mitigate unforeseen
events. The Opco has cash reserves of $2.6 million in the revenue
account, which is roughly equal to half of the February 2017 debt
payment. The Opco also has $2.5 million for major maintenance.
There is an O&M reserve of $15 million and a letter of credit (LC)
backing the 12-month DSR for Opco. The Holdco has a 12-month DSR,
which along with the LC and O&M reserve, is guaranteed by the
sponsor NextEra Energy Capital Holdings, Inc. (NextEra; 'A-',
Stable Outlook). Any draws on the reserves must be replenished
through the project's cash flow but there are no required interest
payments or established timeframes for replenishment.
The Opco is a portfolio of eight operating wind farms with an
aggregate capacity of approximately 389.6 MW (previously 533.5 MW
including the 144 MW Wyoming project). Each project company is
wholly owned by the Opco and is otherwise unencumbered with
project-level indebtedness. All of the output of each wind farm is
committed under long term PPAs with counterparties that are
unaffiliated with the Opco.
Under the agreements, the Opco generally receives a fixed-energy
price for all energy produced by the wind farm, and the
counterparty generally pays all costs associated with transmission
and scheduling. Distributions from the Opco are the Holdco's sole
source of revenues. The HoldCo is an indirect, wholly owned
subsidiary of NextEra.
FUNCTION(X) INC: Seeks to Settle Dispute with Debenture Holders
---------------------------------------------------------------
As disclosed in Function(x) Inc.'s Current Report on Form 8-K/A
filed on Oct. 28, 2016, the Company did not make the first
amortization payment of approximately $444,444, plus accrued
interest of approximately $113,580 under the Debentures issued in
connection with its private placement of $4,444,444 principal
amount of Convertible Debentures and Common Stock Purchase
Warrants.
As previously disclosed, the Company has entered into waiver
agreements with purchasers of the Debentures holding approximately
87% of the principal amount of the Debentures with respect to the
failure to make the first amortization payment. Pursuant to the
terms of the Waiver, the Purchasers have agreed to waive the
payment of the amortization payments and accrued interest due for
October 2016 and November 2016. In consideration for waiving the
payment terms of the Debentures, the Company has agreed to pay,
upon execution of the Waiver, 10% of the Amortization Amount that
became due on Oct. 12, 2016, and has agreed to pay on Nov. 12,
2016, 10% of the Amortization Amount due in November 2016. All
other amounts will be due and payable in accordance with the terms
of the Debentures, with the deferred payments due at maturity.
The Company did not receive a waiver from one of its debenture
holders, holding approximately 13% of the principal amount of the
Debentures with respect to the event of default arising out of the
Company's failure to make the first amortization payment when due.
Pursuant to the terms of the Debentures, such holder has sent a
notice of acceleration, stating that the Company owes $695,679,
reflecting the principal amount of the Debenture plus interest
through Nov. 1, 2016. Interest will accrue at 18% until this
amount is satisfied. The Company is seeking to settle the matter
with the holder; however, there can be no assurance that an
agreement will be reached.
As previously disclosed, the Company has not maintained the Minimum
Cash Reserve as required by the Purchase Agreement. Pursuant to the
terms of the Debentures, the failure to cure the failure to
maintain the Minimum Cash Reserve within three trading days
constitutes an Event of Default. Among other things: (1) at the
Purchaser's election, the outstanding principal amount of the
Debentures, plus accrued but unpaid interest, plus all interest
that would have been earned through the one year anniversary of the
original issue date if such interest has not yet accrued,
liquidated damages and other amounts owed through the date of
acceleration, shall become, immediately due and payable in either
cash or stock pursuant to the terms of the Debentures; and (2) the
interest rate on the Debentures will increase to the lesser of 18%
or the maximum allowed by law. In addition to other remedies
available to the Purchasers, the Company's obligation to repay
amounts due under the Debentures is secured by a first priority
security interest in and lien on all of its assets and property,
including its intellectual property, and such remedies can be
exercised by the Purchasers without additional notice to the
Company.
The Waivers entered into with some of the Purchasers related to the
failure to pay the amortization amounts do not address the failure
to maintain the Minimum Cash Reserve.
In addition, the Company reported in the Form 8-K/A filed on
Oct. 28, 2016, that the events of default under the Debentures also
constituted a default under the note issued in connection with the
acquisition of Rant, Inc. The holder of the Rant note has executed
a waiver that provides that, until May 15, 2017, the events of
default arising out of the failure to pay the amounts due under the
Debentures as of the date of the waiver and the failure by the
Company to maintain the Minimum Cash Reserve will not constitute
events of default for purposes of the Rant Note.
About Function(x)Inc.
Function(x)Inc., formerly known as DraftDay Fantasy Sports Inc.,
offers a high quality daily fantasy sports experience directly to
consumers and to businesses desiring turnkey solutions to new
revenue streams. DraftDay Fantasy Sports Inc. is the largest
shareholder of DraftDay Gaming Group, with a 44% stake. Sportech
owns 35%. By combining and capitalizing on the well-established
operational business assets of DraftDay and Sportech, the new
DraftDay is well-positioned to become a significant player in the
explosive fantasy sports market. DraftDay has paid out over $30
million in prizes with increased player retention and brand
loyalty. DraftDay Fantasy Sports also operates MyGuy and Viggle
Football both of which offer real-time interactive participation
with professional and college football games; Wetpaint, which
offers entertainment and celebrity news; and Choose Digital, a
digital marketplace platform that allows companies to incorporate
digital content into existing rewards and loyalty programs in
support of marketing and sales initiatives.
As of June 30, 2016, Function(x) had $23.03 million in total
assets, $48.21 million in total liabilities, $4.94 million in
series C convertible redeemable preferred stock and a $30.11
million total stockholders' deficit.
The Company incurred a net loss of $63.68 million for the year
ended June 30, 2016, compared to a net loss of $78.53 million for
the year ended June 30, 2015.
BDO USA, LLP, in New York, NY, 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 and at June 30, 2016, has a deficiency in
working capital that raise substantial doubt about its ability to
continue as a going concern.
GENIUS BRANDS: Effects Reverse Common Stock Split
-------------------------------------------------
Genius Brands International, Inc., announced that it will effect a
reverse stock split of its outstanding common stock at a one for
three (1:3) ratio. The reverse stock split became effective on
Nov. 7, 2016, and the Company's common stock will begin trading on
a post-split basis under the symbol "GNUSD" at the open of trading
on Tuesday, Nov. 8, 2016.
The reverse stock split is being implemented to facilitate the
uplisting of the Company's common stock to The NASDAQ Capital
Market. Genius Brands International has applied for listing its
common stock on NASDAQ, which has a minimum market (bid) price
requirement for new applicants of $4.00 per share. Genius Brands
International Chief Executive Officer Andy Heyward stated, "This
stock split represents an important step in the process of
uplisting to and trading on NASDAQ. We expect that having our
stock listed there will bring many benefits to the Company and its
investors, including broadening the appeal of our shares to
institutional investors, increasing exposure of our shares and
brand identity. We are now entering a period of extraordinary
growth for several of our children's brands imminently coming to
retail, as well as our channel, the 'Kid Genius Cartoon Channel',
and we look forward to increasing exposure of our Company to
institutional investors."
Genius Brands International common stock will be quoted on the
OTCQB on a post-split basis under the symbol "GNUSD" for the
earlier of 20 business days, or upon a successful listing on NASDAQ
which can be as early as after 5 days of trading at or above $4 per
share. At such time the symbol will revert back to GNUS. On the
effective date of the reverse stock split, the CUSIP number of the
Company's common stock will be changed to 37229T 301. Additional
information regarding the reverse stock split is contained in the
Company's Current Report on Form 8-K as filed with the SEC on Nov.
7, 2016. There are no assurances that The NASDAQ Stock Market will
approve the Company's application for listing its common stock even
after the reverse stock split is effective.
About Genius Brands
Beverly Hills, Calif.-based Genius Brands International, Inc.,
creates and distributes music-based products which it believes are
entertaining, educational and beneficial to the well-being of
infants and young children under its brands, including Baby Genius
and Little Genius.
Genius Brands reported a net loss of $3.48 million on $907,983 of
total revenues for the year ended Dec. 31, 2015, compared to a net
loss of $3.72 million on $926,000 of total revenues for the year
ended Dec. 31, 2014.
As of June 30, 2016, Genius Brands $19.11 million in total assets,
$6.42 million in total liabilities and $12.68 million in total
stockholders' equity.
* * *
This concludes the Troubled Company Reporter's coverage of Genius
Brands until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
GENIUS BRANDS: To Effect a 1-for-3 Stock Split
----------------------------------------------
Genius Brands International, Inc., distributed to its shareholders
a letter announcing, among other things, a 1 for 3 stock split in
preparation of its anticipated move from the OTC exchange to
NASDAQ. A full-text copy of the Letter is available for free at:
https://is.gd/Wq3Kbc
About Genius Brands
Beverly Hills, Calif.-based Genius Brands International, Inc.,
creates and distributes music-based products which it believes are
entertaining, educational and beneficial to the well-being of
infants and young children under its brands, including Baby Genius
and Little Genius.
Genius Brands reported a net loss of $3.48 million on $907,983 of
total revenues for the year ended Dec. 31, 2015, compared to a net
loss of $3.72 million on $926,000 of total revenues for the year
ended Dec. 31, 2014.
As of June 30, 2016, Genius Brands $19.11 million in total assets,
$6.42 million in total liabilities and $12.68 million in total
stockholders' equity.
GIGA-TRONICS INC: Incurs $396,000 Net Loss in Second Quarter
------------------------------------------------------------
Giga-Tronics Incorporated filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $396,000 on $4.39 million of net sales for the three months
ended Sept. 24, 2016, compared to a net loss of $1.30 million on
$3.06 million of net sales for the three months ended Sept. 26,
2015.
For the six months ended Sept. 24, 2016, the Company reported a net
loss of $498,000 on $7.83 million of net sales compared to a net
loss of $1.93 million on $7.43 million of net sales for the six
months ended Sept. 26, 2015.
As of Sept. 24, 2016, Giga-Tronics had $11.78 million in total
assets, $9.15 million in total liabilities and $2.63 million in
total shareholders' equity.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/tF6T6C
About Giga-Tronics
Headquartered in San Ramon, California, Giga-tronics Incorporated
includes the operations of the Giga-tronics Division and
Microsource Inc. (Microsource), a wholly owned subsidiary.
Giga-tronics Division designs, manufactures and markets the new
Advanced Signal Generator (ASG) for the electronic warfare market,
and switching systems that are used in automatic testing systems
primarily in aerospace, defense and telecommunications.
Going Concern
The Company incurred net losses of $4.1 million and $1.7 million in
the fiscal years ended March 26, 2016 and March 28, 2015,
respectively. These losses have contributed to an accumulated
deficit of $24.0 million as of March 26, 2016.
The Company has experienced delays in the development of features,
orders, and shipments for the new ASG. These delays have
significantly contributed to a decrease in working capital from
$3.0 million at March 28, 2015, to $1.8 million at March 26, 2016.
The new ASG product has now shipped to several customers, but
potential delays in the development of features, longer than
anticipated sales cycles, or the ability to efficiently manufacture
the ASG, could significantly contribute to additional future losses
and decreases in working capital.
To help fund operations, the Company relies on advances under the
line of credit with Bridge Bank. The line of credit expires on May
7, 2017. The agreement includes a subjective acceleration clause,
which allows for amounts due under the facility to become
immediately due in the event of a material adverse change in the
Company's business condition (financial or otherwise), operations,
properties or prospects, or ability to repay the credit based on
the lender's judgement. As of March 26, 2016, the line of credit
had a balance of $800,000, and additional borrowing capacity of
$906,000.
These matters, the Company said, raise substantial doubt as to its
ability to continue as a going concern.
GLOBAL AMENITIES: Taps Sfiris as Financial Services Provider
------------------------------------------------------------
Global Amenities, LLC seeks authorization from the U.S. Bankruptcy
Court for the District of South Carolina to employ John Sfiris of
Sfiris Accounting Services to provide financial services.
The Debtor requires Sfiris Accounting to:
(a) provide the Debtor with tax and financial advice with
respect to its continued management and control of its
assets, and its responsibilities regarding liabilities of
its creditors;
(b) provide financial advice to the Debtor regarding its
responsibility to file monthly operating reports with the
Court, to pay quarterly fees to the U.S. Trustee's Office,
to seek and receive through its attorney consent of the
Court to incur debt or sell property, and other related
matters; and
(c) assist in the preparation of tax filings, financial
reports, as well as any other necessary applications,
reports, or tax documents relative to the Chapter 11 case.
Sfiris Accounting will be paid at $120 per hour.
Sfiris Accounting will be reimbursed for reasonable out-of-pocket
expenses incurred.
John Sfiris, owner of Sfiris Accounting, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtor and its estate.
Sfiris Accounting can be reached at:
John Sfiris
SFIRIS ACCOUNTING SERVICES
880 South Pleasantburg Drive
Greenville, SC 29607
Tel: (864) 242-1040
E-mail: johnsfiris@aol.com
About Global Amenities
Global Amenities, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.S.C. Case No. 16-04635) on September 13,
2016. The petition was signed by Andrew Manios, managing member.
At the time of the filing, the Debtor estimated assets of less than
$50,000 and liabilities of less than $500,000.
GOLFSMITH INT'L: CPO Recommends Transfer of the Customers' PII
--------------------------------------------------------------
Cassandra M. Porter, the consumer privacy ombudsman, appointed for
Golfsmith International Holdings, Inc., and its affiliated debtors,
has filed a report before the U.S. Bankruptcy Court for the
District of Delaware on October 28, 2016.
The report was submitted to assist the Court in its consideration
of the facts, circumstances and conditions of the proposed sale and
transfer of personally identifiable information "PII" of the
Debtors' customers to Dick's Sporting Goods, Inc. and its
affiliates, pursuant to the Asset Purchase Agreement Dated By and
Among Dick's Sporting Goods, Inc., the Agent Referred to Herein,
Golfsmith International Holdings, Inc., and the Other Parties
Signatory Hereto.
In the case, the CPO noted that the Buyer has agreed to follow
applicable laws with respect to the deletion of data for any
Customer who Opts-Out of the transfer. Specifically, the Buyer
will use industry standard practices and means to delete data for
any Customer who Opts-Out. Moreover, the Debtors have agreed to
use industry standard practices and means to destroy records and
otherwise dispose of records and information not transferred to the
Buyer.
Moreover, the CPO does not foresee that the Customers will
experience losses or costs if the sale and transaction are approved
by the Court. Thus, the CPO recommended that the Court approve the
referenced transfer of Customer PII.
The Consumer Privacy Ombudsman is represented by:
Cassandra M. Porter, CIPP/US
LOWENSTEIN SANDLER LLP
65 Livingston Avenue
Roseland, NJ 07039
Tel.: (973) 422-6538
E-mail: cporter@lowenstein.com
-- and --
Mary J. Hildebrand, CIPP/E/US
LOWENSTEIN SANDLER LLP
65 Livingston Avenue
Roseland, NJ 07039
Tel.: (973) 597-6308
Email: mhildebrand@lowenstein.com
About Golfsmith International
Headquartered in Austin, Texas, Golfsmith International Holdings,
Inc., the parent company of Golfsmith International, Inc., is a
holding company. The Company is a specialty retailer of golf and
tennis equipment, apparel, footwear and accessories. The Company
operates as an integrated multi-channel retailer, providing its
customers the convenience of shopping in the retail stores across
United States, through its Internet site,
http://www.golfsmith.com/,and from its catalogs. The Company
offers a product selection that features national brands, pre-owned
clubs and its branded products. It offers a number of customer
services and customer care initiatives, including its club trade-in
program, 30-day playability guarantee, 115% low-price guarantee,
its credit card, in-store golf lessons, and SmartFit, its
club-fitting program. As of Jan. 1, 2011, the Company operated 75
stores in 21 states and 33 markets.
Golfsmith International Holdings, Inc., and 12 affiliates filed
Chapter 11 petitions (Bankr. D. Del. Case No. 16-12033) on Sept.
14, 2016, and are represented by Mark D. Collins, Esq., John H.
Knight, Esq., Zachary I. Shapiro, Esq., and Brett M. Haywood, Esq.,
at Richards, Layton & Finger, P.A., in Wilmington, Delaware; and
Michael F. Walsh, Esq., David N. Griffiths, Esq., and Charles M.
Persons, Esq., at Weil, Gotshal & Manges LLP, in New York.
The Debtors' financial advisor is Alvarez & Marsal North America,
LLC. The Debtors' investment banker is Jefferies LLC. The Debtors'
claims, noticing and solicitation agent is Prime Clerk LLC. Pope
Shamsie & Dooley LLP serves as tax accountants.
At the time of filing, the Debtor had $100 million to $500 million
in estimated assets and $100 million to $500 million in estimated
liabilities.
Andrew Vara, acting U.S. trustee for Region 3, on Sept. 23, 2016,
appointed seven creditors to serve on the official committee of
unsecured creditors. The Committee hires Cooley LLP as lead
counsel, Chaitons LLP as Canadian counsel, Polsinelli PC as
Delaware counsel, Province, Inc. as financial advisor, and A&G
Realty Partners as real estate advisor.
HALCON RESOURCES: Moody's Assigns B3 Rating After Ch.11 Exit
------------------------------------------------------------
Moody's Investors Service assigned new ratings to Halcon Resources
Corporation, following its emergence from bankruptcy. New ratings
include a B3 Corporate Family Rating, a B3-PD Probability of
Default Rating (PDR), and a Caa1 rating to its senior secured
second lien notes due 2020. Moody's also assigned a SGL-3
Speculative Grade Liquidity Rating. The outlook is stable.
In July 2016, Halcon filed voluntary petitions under Chapter 11 of
the United States Bankruptcy Code in the U.S. Bankruptcy Court for
the District of Delaware to pursue a pre-packaged plan of
reorganization. On Sept. 8, 2016, the Bankruptcy Court entered an
order confirming the plan, and Halcón emerged from bankruptcy
thereafter.
The restructuring plan eliminated approximately $1.8 billion in
long-term debt, with a commensurate reduction in annual interest
expense of more than $200 million. Halcon's new capital structure
includes: (i) $600 million senior secured revolving credit
facility, (ii) $700 million of 8.625% senior secured second lien
notes due 2020, and (iii) $112.8 million of 12% senior secured
second lien notes due 2022.
Ratings Assigned
Issuer: Halcon Resources Corporation
Corporate Family Rating, assigned B3
Probability of Default Rating, assigned B3-PD
Senior Secured Second Lien Notes due 2020, assigned Caa1 (LGD 5)
Speculative Grade Liquidity Rating, assigned SGL-3
Outlook, assigned Stable
RATINGS RATIONALE
Halcon's B3 CFR reflects its modest scale with average daily
production expected to approach 40,000 boe/d in 2017, with a
limited drilling program in the Bakken. The company's cash flows
benefit from oil which represented 76% of production in the third
quarter of 2016. As Halcon successfully reduced its debt and
interest expense burden through the bankruptcy process from
previously unsustainable levels, the company's leverage metrics on
debt-to-production and debt-to-PD reserves have improved to
somewhat better than B3 median metrics. However, the rating is
constrained by the company's high operating, gathering and
transportation costs relative to some other prolific basins, and
which require higher oil prices to break even. The company's
inventory of economic drilling locations is also somewhat limited
at low oil prices. In addition, the company's EBITDA is expected
to fall significantly as its hedges roll-off in 2017, limiting the
company's ability to grow without raising additional debt or equity
capital.
Halcon's second lien notes due 2020 are rated Caa1, which is one
notch below the company's B3 CFR. This notching reflects the
priority claim given to the senior secured revolving credit
facility in the capital structure.
Halcon's SGL-3 Speculative Grade Liquidity Rating reflects its
adequate liquidity profile. Halcon had $369 million of liquidity
as of Sept. 30, 2016, which includes $2 million of cash and $367
million available under its revolving credit facility with a $600
million borrowing base. Negative free cash flow is expected to be
funded by borrowings under the revolving credit facility. The
senior secured credit facility matures on the earlier of (i)
July 28, 2021, and (ii) the 120th day prior to the February 1, 2020
stated maturity date of the Company's 2020 second lien notes, if
such notes have not been refinanced, redeemed or repaid in full by
then. The senior secured credit facility has two covenants: a
Total Net Indebtedness Leverage Ratio of 4.75x, which decreases to
4.50x and 4.00x on Sept. 30, 2017 and March 31, 2019, respectively,
and a Current Ratio of 1.0x, beginning with the fiscal quarter
ending Dec. 31, 2016. At Sept. 30, the company was in compliance
with its financial covenants.
The rating outlook is stable.
The rating could be upgraded if the company sustains production
above 40 Mboe/day and proved developed reserves above 75 MMboe,
while retained cash flow to debt exceeds 20% on a sustained basis
after its hedges roll off.
The rating could be downgraded if production falls materially below
expectations, or if the company undertakes significant debt-funded
acquisitions. The rating could also be downgraded if retained cash
flow to debt falls below 10% or if liquidity significantly
deteriorates.
The principal methodology used in these ratings was Global
Independent Exploration and Production Industry published in
December 2011.
Halcon Resources Corporation is an independent exploration and
production (E&P) company with a primary focus on liquids-rich
resource plays in North Dakota and East Texas.
HEAT BIOLOGICS: Recurring Losses Raise Going Concern Doubt
----------------------------------------------------------
Heat Biologics, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net loss
of $1.66 million on $220,233 of licensing revenue for the three
months ended September 30, 2016, compared to a net loss of $5.43
million on $nil of licensing revenue for the same period in 2015.
The Company's balance sheet at September 30, 2016, showed total
assets of $9.79 million, total liabilities of $4.65 million, and a
stockholders' deficit of $5.14 million.
The Company has an accumulated deficit of approximately $53.5
million as of September 30, 2016 and a net loss of approximately
$9.4 million for the nine months ended September 30, 2016, and has
not generated significant revenue or positive cash flows from
operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
To meet its capital needs, the Company is considering multiple
alternatives, including, but not limited to, additional equity
financings (including through the "at-the-market" Issuance Sales
Agreement (the "FBR Sales Agreement") that it entered into with FBR
Capital Markets & Co. ("FBR") in August 2016), debt financings,
partnerships, collaborations and other funding transactions. There
can be no assurance that the Company will be able to meet the
requirements for use of the FBR Sales Agreement or to complete any
such transactions on acceptable terms or otherwise. On April 1,
2016, the Company implemented a cost-savings plan and focused
corporate strategy involving reductions in headcount as well as a
deferral of a portion of annual base salaries for the Company's
leadership team to decrease operating costs. These cost-saving
measures are intended to significantly reduce the Company's cost
structure and scale the organization appropriately for its current
goals. The Company has, and plans to continue to, direct its
resources primarily to enable the completion of its Phase 2
clinical trial of HS-410 for the treatment of non-muscle invasive
bladder cancer (NMIBC) and to advance the Phase 1b trial evaluating
HS-110 in combination with nivolumab, a Bristol-Myers Squibb PD-1
checkpoint inhibitor, for the treatment of non-small cell lung
cancer (NSCLC). The Company has sufficient cash and cash
equivalents to fund its clinical trials until the HS-410 Phase 2
data is released. If the Company is unable to obtain the necessary
capital required to maintain operations, it will need to pursue a
plan to license or sell its assets, seek to be acquired by another
entity and/or cease operations.
A full-text copy of the Company's Form 10-Q is available at:
http://bit.ly/2fq1OSs
Based in Durham, N.C., Heat Biologics, Inc., is focused on
developing allogeneic, off-the-shelf cellular therapeutic vaccines
to combat a range of cancers. The Company's operations to date
have been primarily limited to organizing and staffing its company,
business planning, raising capital, acquiring and developing its
technology, identifying potential product candidates and
undertaking preclinical and clinical studies of its most advanced
product candidates.
HECK INDUSTRIES: Investar To Be Paid $600K of BP Claim Proceeds
---------------------------------------------------------------
Heck Industries, Inc., and Heck Enterprises, Inc., filed with the
U.S. Bankruptcy Court for the Middle District of Louisiana a first
amended disclosure statement for the Debtors' joint plan of
reorganization dated Oct. 31, 2016.
The amendments made in this First Amended Disclosure Statement
reflect certain revisions in the treatment of Class 1, 2, and 7
allowed claims in the Debtors' First Amended Joint Plan resulting
from additional negotiations and mediation efforts subsequent to
the filing of the Debtors' original Plan and Disclosure Statement
on Oct. 26, 2016.
Under the Plan, Class 1 Secured Claim of Investar Bank is impaired.
The total estimate of the allowed Class 1 Claim is approximately
$1,537,938.39, plus interest and reasonable fees (capped at
$200,000), costs or charges provided for under the agreements, and
allowed.
The holder of the Class 1 Claim will be paid $600,000 of the BP
Claim proceeds on or as soon after the Effective Date as practical
but in no event later than 10 days after its occurrence. Investar
has been paid $127,600 from the sale of the 5 trucks involved in
the Mansura/Moreauville Plant sale and Investar also has been paid
$450,000 from the sale of a condominium mortgaged to Investar owned
by Wallace E. Heck, Jr. personally. After the aforesaid payments
were applied to principal and once the additional $600,000 payment
from the BP Claim proceeds is applied to principal, the remaining
principal balance due Investar will be approximately $1,537,983.39,
plus attorney's fees which Investar and the Debtors have agreed to
cap at $200,000. Following the receipt and crediting of the above
amounts, the principal balance of the indebtedness owed to Investar
will be divided into two promissory notes plus a third note
documenting the obligation to pay Investar its attorney's fees.
The Debtor will maintain the monthly payment of all accrued
interest due to Investar up to and including the Effective Date of
this Plan which payments are due under those certain orders entered
within the Heck Industries, Inc.'s case, including the consent
order authorizing interim use of cash collateral and granting
related relief, the amended consent order authorizing continued
interim use of cash collateral, granting related relief, the court
order extending term of consent order authorizing continued interim
use of cash collateral and granting related relief and other court
orders and agreements affecting the Debtors' obligations to
Investar.
The $1,537,983.39 balance will be split into two new promissory
notes, one for $837,983.39 to be primarily secured by the Adams
Avenue Property Plant and another for $700,000.
The First Amended Disclosure Statement is available at:
http://bankrupt.com/misc/lamb16-10516-386.pdf
As reported by the Troubled Company Reporter on Nov. 4, 2016, the
Debtors filed with the Court a disclosure statement for the
Debtors' joint plan of reorganization dated Oct. 26, 2016. Under
the Plan, Class 5 General Unsecured Claims are impaired, with an
estimated percentage recovery of either 58% if Option 1 is chosen
or 100% if Option 2 is chosen.
* * *
The U.S. Bankruptcy Court for the Middle District of Louisiana held
a hearing on November 9, at 10:00 a.m., to consider approval of the
disclosure statement explaining the Chapter 11 plan of Heck
Industries, Inc. and Heck Enterprises, Inc.
About Heck Enterprises & Heck Industries
Heck Enterprises, Inc., and Heck Industries, Inc., are both
Louisiana corporations. Established in 1957 and purchased in 1959
by Wallace E. Heck, Sr., Industries was formerly known as Altex
Ready-Mixed Concrete Corporation and is a concrete business which
operates primarily in Louisiana (though Industries maintains a
batch plant in Mississippi as well). Enterprises was created in
1986 as a holding company for numerous companies, including
Industries, which is the sole remaining company owned by
Enterprises.
Heck Industries, Inc., the owner of a concrete supply business
which has operated throughout Louisiana since 1957, sought Chapter
11 protection (Bankr. M.D. La. Case No. 16-10516) on April 29,
2016, in Baton Rouge, Louisiana. The Hon. Douglas D. Dodd is the
case judge. William E. Steffes, Esq., Noel Steffes Melancon, Esq.,
and Barbara B. Parsons, Esq., at Steffes, Vingiello & McKenzie,
L.L.C., serve as the Debtor's bankruptcy counsel. The Debtor
estimated $1 million to $10 million in assets and debt.
Heck Enterprises, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M. D. La. Case No. 16-10514) on April 29,
2016. The petition was signed by Wallace E. Heck, Jr., president
and chief executive officer. The Debtor is represented by Noel
Steffes Melancon, Esq., Barbara B. Parsons, Esq., and William E.
Steffes, Esq., at Steffes, Vingiello & McKenzie, LLC. The case is
assigned to Judge Douglas D. Dodd. At the time of the filing, the
Debtor estimated its assets and debts at $1 million to $10 million.
HIG HOLDINGS: S&P Affirms 'B' CCR & Rates $273.5MM Facilities 'B'
-----------------------------------------------------------------
S&P Global Ratings said it affirmed its 'B' corporate credit rating
on HIG Holdings Inc. (HIG) and its core subsidiaries. The outlook
is stable.
At the same time, S&P assigned its 'B' issue level credit ratings
on HIG's proposed $273.5 million first lien credit facilities,
which consist of a $233.5 million term loan and a $40 million
revolver due 2021. The recovery ratings on these debt issues are
'3', indicating S&P's expectation for meaningful recovery at the
high end of 50% - 70% in the event of a payment default.
"The 'B' rating on HIG Holdings Inc. reflects our view of the
company's geographical concentration, participation in the highly
competitive middle-market insurance brokerage industry, and small
revenue base. It also incorporates our opinion that the company
will remain highly leveraged with thin cash flow protection
measures over the next 12 months," said S&P Global Ratings credit
analyst Laline Carvalho.
HIG is the largest privately owned retail broker in the state of
Texas, offering property/casualty (P/C) and employee benefits
insurance and risk management to small and middle-market clients
across the state.
HIG's business risk profile (BRP) reflects its geographical
concentration and narrow focus in the highly competitive,
fragmented, and cyclical middle-market insurance brokerage
industry. HIG's small revenue base and geographical concentration
in the state of Texas limits its ability to respond to potential
revenue and earnings volatility from economic, competitive, or
technological threats as compared to its peers with larger revenue
bases and greater product diversity. Slightly offsetting this
concentration risk is the fact that the group has demonstrated its
expertise in the Texas market through its successful broker
partnership structure and its track record of relatively healthy
operating margins and growth.
"We assess the financial risk profile (FRP) as highly leveraged
given the significant amount of debt in its capital structure,
limited financial flexibility, and its aggressive financial
strategy given its partial private equity ownership. HIG is
majority-owned by its management and employees, who we expect to
own approximately 72.5% of the group on a pro-forma basis
accounting for the new debt issuances. We expect the remainder of
ownership to be by Stone Point Capital (approximately 25.6%) and a
few other investors (less than 2%). Since the ownership by the
financial sponsor is less than 40% and the financial sponsor does
not exercise control of the company, we don't view HIG as a
financial sponsor-owned company. Furthermore, we do not expect
Stone Point to materially change the company's current financial
policy," S&P said.
Following HIG's refinancing, S&P expects pro-forma S&P's adjusted
debt-to-EBITDA ratio (including operating leases and contingent
earn-outs) for the last 12-months ended Sept. 30, 2016, to be
approximately 6.9x which S&P expects to be the high water mark for
the company. Although S&P expects the company to exhibit some
deleveraging as a result of improving cash flow management, it is
S&P's opinion that management will use a significant portion of its
free cash flow to continue funding acquisitions before paying down
outstanding debt. S&P forecasts leverage to be between 7.0x and
7.5x at year-end 2016 and in the 6.5x-7.0x range at year-end 2017.
The stable outlook on HIG Holdings, Inc. reflects S&P Global
Ratings' expectations that the company will continue to produce
healthy margins and earnings growth due to increased scale coming
from both organic growth and modest acquisitive strategy. In S&P's
view, this will result in a modest deleveraging trend in the next
year. Under S&P's base case assumptions it expects margins of
28%-30% over same time period resulting in adjusted debt to EBITDA
in the 7x to 7.5x range for 2016 and in the 6.5x-7.0x range for
2017. S&P forecasts adjusted EBITDA interest coverage (pro forma
for annualized earnings from mergers and acquisitions) in the
upper-2.0x range over the next 12 months.
S&P could lower its rating within the next 12 months if S&P
believes HIG's organic growth, cash flow generation, or margins
were to meaningfully deteriorate. These factors would put pressure
on execution of strategy and increase the risk of
higher-than-expected financial leverage and/or weaker-than-expected
EBITDA coverage. The specific trigger points that could lead to a
downgrade include S&P's forecast of financial leverage in excess of
7.5x and EBITDA coverage below 2.0x on a sustained basis.
Although an upgrade is unlikely within the next 12 months, S&P
could raise the rating if cash flow and EBITDA growth were to
improve financial leverage below 5.0x and EBITDA coverage above
2.5x on a sustained basis.
HIGGINBOTHAM INSURANCE: Moody's Keeps B3 Rating on Term Loan Hike
-----------------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
rating and B3-PD probability of default rating of Higginbotham
Insurance Agency, Inc. (Higginbotham) following the announcement
that it will increase its first- and second-lien term loans as part
of a recapitalization. The transaction will include a sizable
dividend, which Moody's views as credit negative, although a
majority of the payout will be reinvested in the company by
employee shareholders. Moody's also affirmed the B2 ratings on the
company's first-lien credit facilities (see list below). The rating
outlook for Higginbotham is stable.
RATINGS RATIONALE
Moody's said the affirmation of Higginbotham's ratings reflects its
strong market presence in Texas middle market insurance brokerage;
good diversification across clients, client industries, products,
producers and insurance carriers; and solid organic growth and
EBITDA margins. Since 2008, Higginbotham has completed 25 small and
mid-sized acquisitions, typically financing such transactions with
a mix of cash, equity and performance-based earnout payments. The
company integrates these acquisitions through centralized financial
reporting, a common agency management system and common branding
and marketing. Following the recapitalization, Higginbotham
managers, employees and key clients will own more than 70% of the
company.
Higginbotham's strengths are tempered by its modest size relative
to other rated insurance brokers and service companies, its limited
geographic scope given that it operates solely in Texas, its
limited free cash flow, and its periodic debt-funded dividends,
which keep financial leverage near the top of the range for its
rating category. The company's existing and acquired operations
also face potential liabilities from errors and omissions in the
delivery of professional services.
Higginbotham's ongoing financial policy includes the use of
debt-funded dividends to facilitate transfers of ownership back to
employees, reducing the stake held by private equity firm Stone
Point Capital. Funding sources for the pending recapitalization
will include increased borrowings under the term loans as well as
equity contributed by Higginbotham employees through reinvestment
of dividends. Funds will be used to repay borrowings under the
revolving credit facility, pay a dividend to shareholders and pay
related fees and expenses.
Moody's estimates that Higginbotham's debt-to-EBITDA ratio,
including contingent earnout obligations as debt, along with other
standard accounting adjustments, will be in the range of 7x-7.5x
following the recapitalization. The rating agency expects the
company to reduce leverage below 7x over the next few quarters, and
to generate (EBITDA - capex) interest coverage in the range of
1.5x-2x.
Factors that could lead to an upgrade of Higginbotham's ratings
include: (i) debt-to-EBITDA ratio below 5.5x, (ii) EBITDA - capex)
coverage of interest exceeding 2x, and (iii) free-cash-flow-to-debt
ratio exceeding 5%.
Factors that could lead to a rating downgrade include: (i)
debt-to-EBITDA ratio remaining above 7x, (ii) (EBITDA - capex)
coverage of interest below 1.2x, or (iii) free-cash-flow-to-debt
ratio below 2%.
Moody's has affirmed the following ratings (and loss given default
(LGD) assessment):
-- Corporate family rating at B3;
-- Probability of default rating at B3-PD;
-- $40 million first-lien revolving credit facility maturing in
November 2020 at B2 (LGD3);
-- $233.5 million (including $44.9 million increase) first-lien
term loan maturing in November 2021 at B2 (LGD3).
The company also has a $59.5 million (including $8 million
increase) second-lien term loan maturing in May 2022 (unrated).
The principal methodology used in these ratings was Insurance
Brokers & Service Companies published in December 2015.
Headquartered in Fort Worth, Texas, Higginbotham ranks as the
31st-largest US insurance broker based on 2015 revenues, according
to Business Insurance. The company's product mix is about 60%
property & casualty insurance and 40% employee benefits and related
products, all distributed to middle market businesses and
individuals across Texas. The company generated total revenue of
$138 million for the 12 months through September 2016.
HILTON GRAND: S&P Assigns 'BB+' CCR; Outlook Stable
---------------------------------------------------
S&P Global Ratings said it assigned its 'BB+' corporate credit
rating to Orlando, Fla.-based Hilton Grand Vacations Inc. (HGV).
The outlook is stable.
At the same time, S&P assigned a 'BBB' issue-level rating and '1'
recovery rating to both the company's proposed $200 million senior
secured revolving credit facility due 2021 and $200 million senior
secured term loan due 2021. The '1' recovery rating indicates
S&P's expectation for very high (90%-100%) recovery for lenders in
the event of a payment default.
S&P also assigned a 'BB' issue-level rating and '5' recovery rating
to the company's proposed $300 million senior unsecured notes due
2024. The '5' recovery rating indicates S&P's expectation for
modest (10% to 30%; lower half of the range) recovery for lenders
in the event of a payment default.
"The rating on HGV primarily reflects moderate leverage, the
company's capital-light inventory sourcing model, and its strong
brand, which are somewhat tempered by high expected EBITDA
volatility over economic cycles, a reliance on external sources of
capital to grow, and its presence in the highly competitive
timeshare business," said S&P Global Ratings credit analyst Emile
Courtney.
The stable outlook reflects S&P's expectation for captive
finance-adjusted leverage in the mid- to high-1x area through 2017
and continued strong growth in timeshare sales and resort
management fees. While S&P believes that HGV could finance a
moderately higher percent of sales in the future, S&P do not
believe leverage measures or loss ratios at the captive will worsen
meaningfully.
HOUSTON BLUEBONNET: Hires Ellison Firm as Special Counsel
---------------------------------------------------------
Houston Bluebonnet, LLC seeks authorization from the U.S.
Bankruptcy Court for the Southern District of Texas to retain the
law firm of Gary E. Ellison, PC as special counsel.
Houston Bluebonnet filed a voluntary Chapter 11 petition on
September 30, 2016. Houston Bluebonnet has filed an application to
retain H. Miles Cohn and the law firm of Crain, Caton & James, P.C.
("CCJ") as its general counsel in this case. However, Houston
Bluebonnet believes it is necessary to retain the Ellison Firm, the
oil and gas law firm that represented Houston Bluebonnet in general
oil and gas matters, the lawsuit styled Daniel R. Japhet, et al.,
v. Kenneth R. Lyle, et al., in the 149th Judicial District of
Brazoria County, Texas, removed to this Court under Adversary
Proceeding No. 16-03225 (the "Japhet Lawsuit"), and the lawsuit
styled Henry R. Hamman, et al. v. Kenneth R. Lyle, et al., in the
149th Judicial District Court of Brazoria County, Texas, which
Houston Bluebonnet intends to remove. The Ellison Firm has the
experience and expertise necessary to continue representing Houston
Bluebonnet in the Lawsuits.
The Ellison Firm represented Houston Bluebonnet for six years in
connection with the Japhet Lawsuit and for three years in
connection with the Hamman Lawsuit. Houston Bluebonnet desires to
retain the Ellison Firm as special counsel with respect to all
matters related to the Lawsuit.
The Ellison Firm lawyer and paralegal who will work on the Debtor's
case and their hourly rates are:
Gary E. Ellison, Esq. $400
Martha Blecher, legal assistant/paralegal $80
On October 21, 2016, the Ellison Firm received a check in the
amount of $15,479.14.
Gary E. Ellison, Esq., principal in the Firm, assured the Court
that the firm does not represent any interest adverse to the Debtor
and its estates.
Ellison Firm can be reached at:
Gary E. Ellison, Esq.
Gary E. Ellison, P.C.
11767 Katy Freeway, Suite 330
Houston, TX 77079
Phone: 281-531-5588
Fax: 281-531-6166
Email: ge-ellisonlaw@comcast.net
About Houston Bluebonnet, LLC
Houston Bluebonnet, LLC, filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Tex. Case No. 16-34850) on Sept. 30, 2016, estimating
its assets and liabilities at between $100,001 to $500,000. The
petition was signed by Allyson Davis.
H. Miles Cohn, Esq., of
Crain, Caton & James, P.C., serves as the Debtor's bankruptcy
counsel.
HOUSTON BLUEBONNET: Hires Snelling Firm as Special Counsel
----------------------------------------------------------
Houston Bluebonnet, LLC seeks authorization from the U.S.
Bankruptcy Court for the Southern District of Texas to retain
Snelling Law Firm as special counsel.
Houston Bluebonnet filed a voluntary Chapter 11 petition on
September 30, 2016. Houston Bluebonnet has filed an application to
retain Gary E. Ellison and the law firm of Gary E. Ellison, P.C. as
special counsel. However, Houston Bluebonnet believes it is
necessary to retain the Snelling Firm, which previously represented
Houston Bluebonnet, and worked together with Mr. Ellison in the
lawsuits styled Daniel R. Japhet, et al., v. Kenneth R. Lyle, et
al., Cause No. 30776, in the 149th Judicial District of Brazoria
County, Texas, removed to this Court under Adversary Proceeding No.
16-03225 (the "Japhet Lawsuit"), and Henry R. Hamman, et al. v.
Kenneth R. Lyle, et al., Cause No. 75054-CV, in the 149th Judicial
District Court of Brazoria County, Texas, which Houston Bluebonnet
intends to remove. The Snelling Firm has the experience and
expertise necessary to continue representing Houston Bluebonnet in
the Lawsuits.
Snelling Firm will assist in the civil legal briefing raised by the
new evidence, along with Gary Ellison, who will handle the oil and
gas matters and those matters related to the Lawsuits.
Snelling's lawyer and paralegal who will work on the Debtor case
and their hourly rates are:
Tina Snelling, Esq. $200
Aimee LeBlanc $75
The Snelling Law Firm is holding a post-petition retainer in the
amount of $3,000.
Tine Snelling, Esq., principal in the Snelling Law Firm, assured
the Court that the firm does not represent any interest adverse to
the Debtor and its estates.
Houston Bluebonnet has filed an application to retain H. Miles Cohn
and the law firm of Crain, Caton & James, P.C. ("CCJ") as its
general counsel in this case.
Snelling Firm can be reached at:
Tina Snelling
Snelling Law Firm
1413 Brittmoore Road
Houston, TX 77043
Tel: (713) 787-5333
Fax: (713) 600-3969
E-mail: tsnelling@snellinglawfirm.com
About Houston Bluebonnet, LLC
Houston Bluebonnet, LLC, filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Tex. Case No. 16-34850) on Sept. 30, 2016, estimating
its assets and liabilities at between $100,001 to $500,000. The
petition was signed by Allyson Davis.
H. Miles Cohn, Esq., of
Crain, Caton & James, P.C., serves as the Debtor's bankruptcy
counsel.
ICTS INTERNATIONAL: Reports $3.3-Mil. Net Loss in June 30 Quarter
-----------------------------------------------------------------
ICTS International, N.V. reported a net loss of $3.31 million on
$123.93 million of revenue for the six months ended June 30, 2016,
compared to a net loss of $4.25 million on $84.99 million of
revenue for the six months ended June 30, 2015.
As of June 30, 2016, ICTS International had $58.77 million in total
assets, $104.13 million in total liabilities and a total
shareholders' deficit of $45.36 million.
The Company has a working capital deficit and a history of
recurring losses from continuing operations and negative cash flows
from continuing operations. As of June 30, 2016, and
Dec. 31, 2015, the Company has a working capital deficit of
$4,575,000 and $5,005,000 respectively. During the periods ended
June 30, 2016, and 2015, the Company incurred net losses of
$3,311,000 and $4,254,000 respectively. Collectively, these
factors raise substantial doubt about the Company's ability to
continue as a going concern.
Management believes that the Company's operating cash flows and
related party/third party financing activities will provide it with
sufficient funds to meet its obligations and execute its business
plan for the next twelve months. However, there are no assurances
that management's plans to generate sufficient cash flows from
operations and obtain additional financing from related
parties/third parties will be successful.
A full-text copy of the Form 6-K is available for free at:
https://is.gd/izeSCX
About ICTS International
ICTS International N.V. is a public limited liability company
organized under the laws of The Netherlands in 1992.
ICTS specializes in the provision of aviation security and other
aviation services. Following the taking of its aviation security
business in the United States by the TSA in 2002, ICTS, through
its subsidiary Huntleigh U.S.A. Corporation, engages primarily in
non-security related activities in the USA.
ICTS, through I-SEC International Security B.V., supplies aviation
security services at airports in Europe and the Far East.
In addition, I-SEC Technologies B.V. including its subsidiaries
develops technological systems and solutions for aviation and non?
aviation security.
ICTS reported a net loss of $4.70 million on $187 million of
revenue for the year ended Dec. 31, 2015, compared to net income of
$1.43 million on $173 million of revenue for the year ended Dec.
31, 2014.
Mayer Hoffman McCann CPAs, in New York, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, noting that the Company has a history of
losses from continuing operations, negative cash flows from
operations and a working capital and shareholders' deficit.
Collectively, these conditions raise substantial doubt about the
Company's ability to continue as a going concern.
ILLINOIS POWER: Has Insufficient Cash to Satisfy Maturing Debt
---------------------------------------------------------------
Illinois Power Generating Company filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q,
disclosing a net loss of $66 million on $147 million of revenues
for the three months ended September 30, 2016, compared to a net
loss of $517 million on $146 million of revenues for the same
period in 2015.
The Company's balance sheet at September 30, 2016, showed total
assets of $497 million, total liabilities of $999 million, and a
stockholders' deficit of $502 million.
As a result of continued weak energy prices, unsold capacity
volumes, on-going required maintenance and environmental
expenditures as well as consideration of a $300 million debt
maturity in 2018, during the second quarter of 2016 the Company
engaged advisors and began a strategic review. While the Company's
projected future cash flow is sufficient to cover its obligations
through December 31, 2016, it may not have sufficient future
operating cash flow to satisfy its debt maturity in 2018, absent a
debt refinancing or restructuring. Therefore, there is substantial
doubt about the Company's ability to continue as a going concern.
On October 14, 2016, the Company entered into a restructuring
support agreement (the "RSA") with Dynegy and an ad hoc group of
bondholders to restructure its Senior Notes either through (a) an
out-of-court exchange of its Senior Notes or (b) if the conditions
to the Exchange Offer are not satisfied or waived, a pre-packaged
plan of reorganization for Genco filed in a Chapter 11 of the
Bankruptcy Code. On November 7, 2016, the Company launched a
restructuring transaction with Dynegy with respect to its Senior
Notes in accordance with the terms of the RSA.
A full-text copy of the Company's Form 10-Q is available at:
http://bit.ly/2g5NAIg
About Illinois Power
Illinois Power Generating Company is an electric generation
subsidiary of Illinois Power Resources, LLC, which is an indirect
wholly-owned subsidiary of Dynegy Inc. The Company is
headquartered in Houston, Texas and were incorporated in Illinois
in March 2000. It owns and operates a merchant generation business
in Illinois. The Company has an 80 percent ownership interest in
Electric Energy, Inc., which it consolidates for financial
reporting purposes. EEI operates merchant electric generation
facilities in Illinois and FERC-regulated transmission facilities
in Illinois and Kentucky. The Company also consolidates its
wholly-owned subsidiary, Coffeen and Western Railroad Company, for
financial reporting purposes.
ILLINOIS POWER: Launches Restructuring Transaction
--------------------------------------------------
Dynegy Inc. and Illinois Power Generating Company (Genco), an
indirect, wholly owned subsidiary of Dynegy, launched a
restructuring transaction with respect to Genco's outstanding
indebtedness (the Restructuring), consisting of either (a) an
out-of-court offer to exchange (the Exchange Offer) Genco's
outstanding 7.00% Senior Notes, Series H, due 2018, 6.30% Senior
Notes, Series I, due 2020 and 7.95% Senior Notes, Series F, due
2032 (collectively, the Genco Notes) for up to (i) $210.0 million
aggregate principal amount of new 7-year Senior Notes of Dynegy
(the Dynegy Notes), (ii) 10 million new warrants of Dynegy (the
Dynegy Warrants and, together with the Dynegy Notes, the Dynegy
Securities) and (iii) $130.0 million in cash (subject to reductions
for interest payments, the Cash Consideration and, together with
the Dynegy Securities, the Exchange Consideration) and solicitation
of consents (Indenture Consents) on behalf of Genco to proposed
amendments to the indenture governing the Genco Notes (the
Indenture Consent Solicitation) or (b) in the event that the
conditions to the Exchange Offer are not satisfied or waived, an
in-court restructuring of Genco pursuant to a prepackaged plan of
reorganization of Genco (the Plan), the votes for which are being
solicited concurrently with the Exchange Offer (the Plan
Solicitation).
The Restructuring reflects the terms of a restructuring support
agreement (the Support Agreement) among Dynegy, Genco, certain of
their affiliates and Eligible Holders (as defined below) of 69.9%
in aggregate principal amount of the outstanding Genco Notes (the
Supporting Noteholders). Pursuant to the Support Agreement, the
Supporting Noteholders have agreed, subject to the terms and
conditions contained therein, among other things, to (1) support
and take all actions reasonably necessary to achieve the
Restructuring, including by tendering (and not withdrawing) their
Genco Notes in the Exchange Offer, consenting in the Indenture
Consent Solicitation and voting in favor of the Plan; (2) not
support any other plan or restructuring transaction or take any
other action that is inconsistent with, or would reasonably be
expected to impede, the Restructuring; and (3) not direct the
trustee under the indenture governing the Genco Notes to take any
action inconsistent with the Supporting Noteholders' obligations
under the Support Agreement. Dynegy and Genco may not modify
certain terms of the Exchange Offer, including increasing the
Minimum Participation Threshold (as defined below), or the Plan
without the consent of some or all of the Supporting Noteholders.
The Exchange Offer
Pursuant to the Exchange Offer, Eligible Holders of Genco Notes who
validly tender and do not validly withdraw their Genco Notes on or
prior to 11:59 p.m., New York City time, on Dec. 6, 2016, unless
extended by Dynegy (such time and date, as the same may be
extended, the Expiration Date), and whose Genco Notes are accepted
by Dynegy, will receive the applicable consideration.
Completion of the Exchange Offer is subject to the satisfaction or
waiver of a number of conditions, including the receipt of valid
tenders (that are not validly withdrawn) from Eligible Holders
representing 97% or more of the aggregate principal amount of the
Genco Notes (the Minimum Participation Threshold).
Execution of the supplemental indenture containing the proposed
amendments in the Indenture Consent Solicitation will be subject to
certain conditions, including receipt by the relevant trustee of
certain legal opinions from counsel to Dynegy. Accordingly, the
supplemental indenture may be executed by Genco and such trustee
upon or at any time after consummation of the Exchange Offer and
the proposed amendments will become operative upon execution of the
supplemental indenture. If the proposed amendments become
operative, certain restrictive covenants and other provisions of
the indenture governing the Genco Notes will be amended or
eliminated with respect to any Genco Notes that remain outstanding
after consummation of the Exchange Offer.
The Exchange Offer is being made only (i) inside the United States
to holders of Genco Notes who are "qualified institutional buyers"
(as defined in Rule 144A under the U.S. Securities Act of 1933, as
amended (the Securities Act)) or who are "accredited investors" (as
defined in Rule 501(a) of Regulation D under the Securities Act) in
reliance on Section 4(a)(2) of the Securities Act and (ii) outside
the United States to holders of Genco Notes who are persons other
than U.S. persons (as defined in Rule 902 under the Securities Act)
in offshore transactions in reliance upon Regulation S under the
Securities Act (such holders, Eligible Holders). The Dynegy
Securities have not been registered under the Securities Act or the
securities laws of any other jurisdiction and may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements.
The Plan Solicitation
The Plan Solicitation is being made to all holders of Genco Notes
as of the Oct. 28, 2016, record date (the Voting Record Date). In
the event that the Exchange Offer is not consummated for any
reason, but holders of Genco Notes voting to accept the Plan
constitute a majority in number of the holders of Genco Notes who
have voted on the Plan and hold at least 66.7% of the aggregate
amount of Noteholder Claims (as defined in the Offering Memorandum
and Disclosure Statement) held by holders of Genco Notes voting on
the Plan, then, subject to approval by Genco's board of directors,
Genco intends to commence a case under Chapter 11 of the United
States Code and pursue confirmation and consummation of the Plan.
If the Chapter 11 case is commenced and Plan becomes effective, (1)
holders of Genco Notes who tender their Genco Notes (in a process
subsequent to the expiration of the Exchange Offer) and certify
that they are Eligible Holders will receive, in exchange for their
claim (the principal amount of their Genco Notes plus the accrued
interest as of the filing date of the Chapter 11 case), their pro
rata share (across all Noteholder Claims) of (i) $100,693,750 of
cash consideration, (ii) $210.0 million of Dynegy Notes and (iii)
10 million Dynegy Warrants and (2) holders of Genco Notes who
tender their Genco Notes (in a process subsequent to the expiration
of the Exchange Offer) and certify that they are not Eligible
Holders (Non-Eligible Holders) will receive, in exchange for their
claim (the principal amount of their Genco Notes plus accrued and
unpaid interest as of the filing date of the Chapter 11 case), an
amount in cash equal to (i) their pro rata share (across all
Noteholder Claims) of $100,693,750 of cash consideration, plus (ii)
the principal amount of Dynegy Notes that such Non-Eligible Holder
would receive under the Plan if they were an Eligible Holder plus
(iii) their pro rata share (across all Noteholder Claims) of
$15,000,000 (representing the estimated value of the Dynegy
Warrants that Eligible Holders will receive under the Plan).
The Exchange Offer and Indenture Consent Solicitation are being
made only to Eligible Holders, and the Plan Solicitation is being
made to all holders of Genco Notes. The Exchange Offer, the
Indenture Consent Solicitation and the Plan Solicitation will
expire at the Expiration Date, unless extended by Dynegy. Tenders
of Genco Notes in the Exchange Offer may be withdrawn and Indenture
Consents and ballots with respect to the Plan may be revoked on or
prior to the Expiration Date.
Eligible Holders will not be permitted to consent to the applicable
proposed amendments without tendering their Genco Notes in the
Exchange Offer, and Eligible Holders will not be permitted to
tender their Genco Notes for exchange without consenting to the
applicable proposed amendments. Eligible Holders who validly
withdraw Genco Notes prior to the Expiration Date will be deemed to
have concurrently revoked the related Indenture Consents.
The tender of Genco Notes by an Eligible Holder and the delivery of
an agent’s message will, upon consummation of the Exchange Offer,
constitute a release and discharge of certain claims the Eligible
Holder may have against Dynegy, Genco and certain of their
affiliates and other parties. The Plan contains a substantially
identical release and discharge of such claims by all holders,
which will become effective upon the effectiveness of the Plan.
If the Chapter 11 case is commenced, additional information will be
provided to the holders with respect to the procedures that will be
required in order to receive Plan distributions. Any holder who
fails to follow the required distribution procedures with respect
to the applicable Genco Notes on or prior to the 165th day after
the effective date of the Plan (or the next business day) will have
its Noteholder Claim and its distribution pursuant to the Plan on
account of such Noteholder Claim discharged and forfeited and will
not receive any distribution
under the Plan. Any property in respect of such forfeited
Noteholder Claims will revert to Dynegy or Genco, as applicable.
Additional Information
The Exchange Offer, Indenture Consent Solicitation and Plan
Solicitation are made only by, and pursuant to, the terms set forth
in the Offering Memorandum and Indenture Consent Solicitation
Statement and Disclosure Statement Soliciting Acceptances of a
Prepackaged Plan of Reorganization (the Offering Memorandum and
Disclosure Statement), and, as applicable, ballots and any
supplements thereto. The information in this news release is
qualified by reference to such documents.
Dynegy reserves the right to, subject to the Support Agreement and
applicable law, terminate, withdraw, amend or extend the Exchange
Offer and Indenture Consent Solicitation at any time and for any
reason, with notice to the Exchange Agent of such extension and by
making public disclosure by press release or other appropriate
means of such extension to the extent required by law; provided,
however, that pursuant to the Support Agreement, Dynegy has agreed
to consult with Genco and the Supporting Noteholders in connection
with any extension of the Expiration Date.
Dynegy reserves the right to, subject to the Support Agreement and
applicable law, extend the Expiration Date after consultation with
Genco and the Supporting Noteholders. In addition, Dynegy and Genco
reserve the right to not count any vote that does not comply with
the voting procedures.
Dynegy has retained D.F. King & Co., Inc. to serve as the
information agent and the exchange agent for the Exchange Offer and
the Indenture Consent Solicitation. Requests for documents,
including the Offering Memorandum and Disclosure Statement and the
accompanying consent and letter of transmittal, may be directed to
D.F. King & Co. by telephone at 212.269.5550 (bankers and brokers)
or 800.697.6975 (all others) or in writing at 48 Wall Street, 22nd
Floor, New York, New York 10005.
Genco has retained Epiq Bankruptcy Solutions, LLC to serve as the
voting agent for the Plan Solicitation. Banks and brokers may
contact genco@epiqsystems.com to request documents. Voting
documents will be sent to beneficial owners as of the Voting Record
Date.
A full-text copy of the press release is available for free at:
https://is.gd/HyZoOY
About Illinois Power
Illinois Power Generating Company is an electric generation
subsidiary of Illinois Power Resources, LLC, which is an indirect
wholly-owned subsidiary of Dynegy Inc. The Company is
headquartered in Houston, Texas and were incorporated in Illinois
in March 2000. It owns and operates a merchant generation business
in Illinois. The Company has an 80 percent ownership interest in
Electric Energy, Inc., which it consolidates for financial
reporting purposes. EEI operates merchant electric generation
facilities in Illinois and FERC-regulated transmission facilities
in Illinois and Kentucky. The Company also consolidates its
wholly-owned subsidiary, Coffeen and Western Railroad Company, for
financial reporting purposes.
Illinois Power reported a net loss of $563 million on $534 million
of revenues for the year ended Dec. 31, 2015, compared to a net
loss of $48 million on $648 million of revenues for the year ended
Dec. 31, 2014.
As of June 30, 2016, the Company had $550 million in total assets,
$986 million in total liabilities, and a total deficit of $436
million.
* * *
As reported by the TCR on June 17, 2016, S&P Global Ratings revised
its outlook on Illinois Power Generating Co. to negative from
stable. At the same time, S&P affirmed the 'CCC+' corporate credit
rating and 'CCC+' ratings on the senior unsecured debt.
As reported by the TCR on Oct. 11, 2016, Moody's Investors Service
downgraded the corporate family rating, Probability of Default
rating (PD) and senior unsecured rating of Illinois Power
Generating Company (Genco) to Ca from Caa3. The speculative grade
liquidity rating is affirmed at SGL-4. The rating outlook is
negative.
INMAR INC: Moody's B2 Rating Unchanged Amid $125MM Term Loan Hike
-----------------------------------------------------------------
Moody's Investors Service says Inmar, Inc.'s B2 Corporate Family
Rating (CFR), B2-PD Probability of Default Rating, debt instrument
ratings and stable rating outlook remain unchanged following the
company's announcement that it plans to upsize its first lien term
loan by $125 million.
The company is also proposing a $10 million commitment increase and
maturity extension for its existing $50 million revolver, which is
currently set to expire in January 2019.
Inmar will apply the proceeds from the proposed incremental
facility to finance the acquisition of Collective Bias, Inc., repay
borrowings under the revolver, and pay related fees and expenses.
Pricing on the first lien term loan is expected to increase by
25bps to LIBOR plus 350bps, and the financial covenant thresholds
for the revolver will be reset to accommodate the proposed increase
in debt. All other terms and conditions are expected to remain
substantially unchanged from the existing first lien credit
agreement.
Inmar, Inc., headquartered in Winston-Salem, North Carolina, is a
provider of promotion, supply chain and healthcare services in
North America. The company's service offerings include (i) reverse
logistics for returned, damaged, discontinued and expired consumer
goods, (ii) coupon processing and transaction settlement services
and (iii) pharmacy financial management and pharmaceutical returns
and recalls. The company is owned by affiliates of ABRY Partners.
For the 12 months ended June 30, 2016, Inmar generated total
revenues of $400 million.
INMAR INC: S&P Affirms 'B' CCR; Outlook Stable
----------------------------------------------
S&P Global Ratings affirmed its 'B' corporate credit rating on
Winston-Salem, N.C.-based Inmar Inc. The outlook is stable.
S&P also affirmed its 'B' rating on the company's upsized $60
million first-lien revolver due 2020 and $475 million first-lien
term loan due 2021 with a recovery rating of '3', reflecting S&P's
expectation for meaningful (50%-70%; in the higher half of the
range) recovery in the event of a payment default. At the same
time, S&P affirmed its 'CCC+' rating on the second-lien term loan
with a recovery rating of '6', reflecting S&P's expectation for
negligible (0%-10%) recovery in the event of a payment default.
The ratings assume the transaction will close substantially on the
terms presented to us.
S&P estimates pro forma debt outstanding as of Sept. 30, 2016, is
about $575 million.
"The rating affirmation reflects our expectation that
notwithstanding the increased debt burden, Inmar will successfully
integrate CB and continue to generate moderate profit growth
through organic expansion and tuck-in acquisitions and modestly
improve credit ratios, including adjusted debt to EBITDA to about
5x by the end of next year," said S&P Global Ratings credit analyst
Katherine Heng.
The stable outlook reflects S&P's expectations that Inmar will
successfully integrate CB, strengthening its digital promotion
capability and offerings. S&P expects the company to deliver
moderate profit growth through organic expansion and tuck-in
acquisitions and modestly improve credit ratios, including
improving adjusted debt to EBITDA to about 5x by the end of next
year.
S&P could lower the rating if debt to EBITDA weakens on a sustained
basis to above 7.5x. This could happen if profitability
unexpectedly deteriorates, which could be caused by key customer
losses or if the company's financial policy becomes more
aggressive, with significant debt-financed acquisitions or
dividends. S&P estimates that EBITDA would have to decline by 25%
for this to occur.
S&P could raise the rating if debt to EBITDA is sustained at or
below 5x. This could result if the company meets S&P's
expectations for high single digit pro forma EBITDA growth and
adopts financial policies which S&P believes will not result in a
re-leveraging event. Given its ownership by a financial sponsor,
S&P would need to have confidence that the company would maintain
those improved metrics on a sustained basis.
INT'L SHIPHOLDING: Liberty Global Objects to RSA with SEACOR
------------------------------------------------------------
BankruptcyData.com reported that Liberty Global Logistics filed
with the U.S. Bankruptcy Court an objection to International
Shipholding's restructuring support agreement with SEACOR Capital.
The objection asserts, "The RSA Motion seeks the Court's blessing
of an insider transaction in favor of Erik L. Johnsen, President
and CEO of the Debtors and the Debtors' DIP Lender, SEACOR Capital
Corp. ('SEACOR' or the 'DIP Lender'), that removes the core of the
Debtors' businesses from competitive bidding, to the detriment of
the Debtors' estates and their creditors. Accordingly, the RSA
Motion should be denied. Given the attempt by the CEO and DIP
Lender to eliminate competitive bidding for the Debtors' core
assets, the Court should ensure that any plan proposed by the
Debtors provides for a competitive process for plan sponsorship so
as to ensure that the value of the Debtors' estates is maximized
for the benefit of the Debtors' creditor. Even apart from the
benefits being provided to an insider in the transactions proposed
in the RSA Motion and Sale Motion, the Court should not countenance
a DIP Lender sponsoring a plan that does not provide for
competitive bidding. That is particularly true here, where the DIP
Lender is proposing to pay only $28 million ($10 million in cash
and $18 million to pay off the DIP Loan) in exchange for 100% of
the reorganized equity in the Debtors' three core business
segments, the Jones Act, PCTC, and Rail-Ferry businesses. However,
Liberty has already indicated to the Debtors that it will pay $55
million in cash for just one of the Debtors' business segments, the
PCTC business, and will pay additional amounts for the two other
core business segments, the Jones Act and Rail-Ferry businesses."
The Troubled Company Reporter, on Nov. 11, 2016, citing
BankruptcyData.com reported that the Debtor filed with the U.S.
Bankruptcy Court a motion for entry of an order authorizing the
Debtors' entry into a restructuring support agreement (RSA) with
Seacor Capital.
The motion explains, "In the three months since the Petition Date,
the Debtors have worked diligently with their key constituencies
toward a goal of maximizing the value of the Debtors' estates.
After concluding a comprehensive analysis of the alternatives
available to the estates, the Debtors have determined that the way
to best reach this goal is a two-pronged approach: the Debtors will
(1) execute a sale process for one of their four business segments,
the Specialty Business Segment, and (2) propose a plan of
reorganization (the 'Plan'), with SEACOR as plan sponsor, to
reorganize the remaining business segments. As a first step in this
process, the Debtors are seeking authority to enter into the RSA,
which serves as a blueprint for a Plan and contemporaneously
herewith have filed a motion to establish procedures to sell the
Specialty Business Segment. The RSA and its associated Term Sheet
-- both of which were heavily negotiated by the Debtors and their
advisors contemplate that pursuant to the Plan and the transactions
contemplated thereby, SEACOR will: contribute $10 million in cash
to the reorganization process and contribute the DIP Claim
(including that portion owned by DVB Bank SE ('DVB'), which shall
be purchased by SEACOR or repaid by SEACOR) in exchange for 100% of
the equity in the reorganized Debtors offer employment
opportunities to the Debtors' union members on terms contained in
CBAs modified to contain terms not less favorable than the terms
proposed by the unions currently utilized by SEACOR for
substantially similar jobs (with such terms not including any
obligation to contribute to any defined benefit pension plans that
would be new to SEACOR) arrange for a $25 million exit facility
assume certain of the Debtors' pre-petition contracts."
About International Shipholding
International Shipholding Corporation filed a Chapter 11 petition
(Bankr. S.D.N.Y. Case No. 16-12220) on July 31, 2016. Its
affiliated Debtors also filed separate Chapter 11 petitions. The
petitions were signed by Manuel G. Estrada, vice president and
chief financial officer.
The Debtors are represented by David H. Botter, Esq., Sarah Link
Schultz, Esq., and Travis A. McRoberts, Esq., at Akin Gump Strauss
Hauer & Feld LLP. The Debtors' Restructuring Advisor is Blackhill
Partners, LLC. Their Claims, Noticing & Balloting Agent is Prime
Clerk LLC.
The Debtors disclosed total assets at $305.08 million and total
debts at $226.83 million as of March 31, 2016.
William K. Harrington, the U.S. Trustee for the Southern District
of New York, on Sept. 1 appointed three creditors to serve on the
official committee of unsecured creditors of International
Shipholding Corporation. The Committee hires Pachulski Stang Ziehl
& Jones LLP as counsel, and AMA Capital Partners, LLC as financial
advisor.
INTERPACE DIAGNOSTICS: Heartland Holds 8.7% Stake as of Oct. 31
---------------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Heartland Advisors, Inc. and William J. Nasgovitz
disclosed that as of Oct. 31, 2016, they beneficially own
1,570,763 shares of common stock of Interpace Diagnostics Group,
Inc., which represents 8.7 percent of the shares outstanding. A
full-text copy of the regulatory filing is avaiable for free at:
https://is.gd/N843Ee
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: James Lapeyre Reports 10% Stake as of Nov. 3
-------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, James M. Lapeyre, Jr. disclosed that as of Nov. 3,
2016, he beneficially owns 1,183,016 shares of common stock of
ION Geophysical Corporation which represents 10 percent based on
11,786,297 shares of Common Stock outstanding as of Oct. 25, 2016,
as reported in ION Geophysical's Quarterly Report on Form 10-Q for
the quarter ended Sept. 30, 2016 and filed with the Securities and
Exchange Commission on Nov. 3, 2016. Laitram, L.L.C. also reported
beneficial ownership of 924,309 common shares.
Mr. Lapeyre is the president of Laitram. He is also a director of
ION and Chairman of its Board of Directors. As a director of ION,
Mr. Lapeyre may take an active role in corporate strategy and
business decisions involving ION.
A full-text copy of the regulatory filing is available at:
https://is.gd/W0MEvx
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 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.
* * *
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.
ION MEDIA: Moody's Says B1 CFR Unchanged Amid Term Loan Add-On
--------------------------------------------------------------
Moody's Investors Service said that Ion Media Networks, Inc.'s
("Ion Media") B1 Corporate Family rating (CFR), B1-PD Probability
of Default rating, B1/LGD3 senior secured bank credit facility
rating and the stable outlook will not change as a result of the
proposed $250 million add-on to its existing term loan B. Proceeds
from the add-on along with excess balance sheet cash will be used
to fund a distribution to affiliates of Black Diamond Capital
Management, the company's financial sponsors. Ion Media also
announced that it would reprice its existing approximately $827
million term loan B, which would lead to interest cost savings and
positively impact free cash flows. All other terms and conditions
governing the bank credit facility, including the maturity date of
December 2020, remain unchanged.
The proposed transaction will add about a turn of leverage to the
company's current debt-to-EBITDA and result in pro forma
debt-to-EBITDA of roughly 4.4x (as of 09/30/2016 and incorporating
Moody's standard adjustments). Based on Ion Media's positive
operating momentum and expectations for continued EBITDA growth
going forward, we estimate that adjusted leverage will continue to
decline and reduce to under 4.0x within the next twelve months,
such that the company will be solidly positioned in its rating
category. Notably, as a result of solid growth in EBITDA and some
debt reduction, the company's leverage (Moody's adjusted) declined
from 4.5x at the end of 2014 to 3.4x at 09/30/2016. "We believe Ion
Media will continue to build excess cash on its balance sheet and
from time to time make adjustments to its capital structure and
operate around the 4.0x adjusted leverage target in order to make
distributions to its financial sponsors and invest in its
businesses." Moody's said. Since the company's credit metrics,
including projected adjusted leverage of 4.0x, are within the range
expected for the B1 CFR, the announced transactions will not impact
the company's ratings or the stable outlook. Looking ahead, we
anticipate that Ion Media's operating performance will continue to
benefit from its networks' broad audience reach and prudent cost
management. The company's liquidity profile benefits from its
strong cash flow generation capabilities, an unused $75 million
revolving credit facility expiring in December 2018 and absence of
financial maintenance covenants under the bank agreement.
ION Media Networks, Inc., formed in 1993, owns the ION Television
network through a geographically diversified group of 60 owned &
operated broadcast stations in the U.S. as well as through carriage
agreements with pay television providers covering roughly 99
million TV households. ION Media also owns and operates the Qubo
and ION Life television networks. The company maintains
headquarters in West Palm Beach, FL, and generated revenues of
approximately $489.9 million for the 12 months ended September 30,
2016. Black Diamond Capital Management's affiliates are the primary
indirect owners of ION Media through their ownership of Media
Holdco, whose primary asset is an 85% equity interest in ION
Media.
ION MEDIA: S&P Affirms 'B+' CCR; Outlook Stable
-----------------------------------------------
S&P Global Ratings said that it affirmed its 'B+' corporate credit
rating on U.S. television broadcaster ION Media Networks Inc. The
rating outlook is stable.
At the same time, S&P affirmed its 'B+' issue-level rating on ION's
$75 million five-year revolving credit facility and $1.12 billion
(after the $250 million add-on) term loan B due 2020. The '3'
recovery rating remains unchanged, indicating S&P's expectation for
meaningful recovery (50%-70%; lower half of the range) of principal
for lenders in the event of a payment default.
The company will use the proceeds from the term loan to pay a
dividend to its financial sponsor. Pro forma for the transaction,
ION will have about $1.1 billion of outstanding debt.
"The 'B+' corporate credit rating reflects our view that ION's pro
forma leverage will increase to the mid-4x area following the debt
add-on and that the company's leverage will remain in the 4x-5x
range through 2018," said S&P Global Ratings' credit analyst Khaled
Lahlo. S&P expects ION to generate $90 million to
$100 million in annual free operating cash flow in 2016 and 2017
and use some of the proceeds toward debt repayments, through
mandatory amortization payments and cash flow sweep. S&P also
expects the company to use a significant portion of its cash flow
to fund dividends, which would slow the pace of debt reduction and
maintain leverage above 4x.
"The stable rating outlook reflects our expectation that ION will
keep its adjusted leverage in the 4x-5x range, with the risk of
releveraging beyond 5x remaining very low," said Mr. Lahlo.
S&P could lower its corporate credit rating on ION if weak
advertising demand and higher-than-expected content costs result in
significant EBITDA margin erosion that causes the company's
leverage to rise above 5x on a sustained basis. S&P could also
lower the rating if ION's leverage rises above 5x as a result of
debt-financed acquisitions or dividends.
Although unlikely over the next two years, S&P could consider an
upgrade if ION is able to diversify its revenue streams
substantially, including a significant increase in the percentage
of revenue it generates from more predictable sources such as
retransmission or cable subscription fees. S&P could also consider
an upgrade if ION adopts a more conservative financial policy and
maintains leverage below 4x on a sustained basis, while continuing
to generate solid free operating cash flow and maintaining an
adequate liquidity and sufficient covenant headroom.
IPS STRUCTURAL: Moody's Assigns B3 Rating Amid $420MM in New Loans
------------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating to
IPS Structural Adhesives Holdings, Inc. (co-borrower with IPS
Intermediate Holdings, Inc., together referred to as "IPS"), a
B3-PD Probability of Default Rating, a B2 rating to the company's
proposed $310 million first lien term loan and a Caa2 rating to the
company's proposed $110 million second lien term loan. The rating
outlook is stable.
The proceeds of the term loans will be used to refinance the
company's existing debt as well as fund a $110 million distribution
to the company's private equity owners Nautic Capital Partners. As
part of the transaction, IPS will also be entering into a $35
million asset based revolving credit facility.
Moody's took the following rating actions on IPS Structural
Adhesives Holdings, Inc. (co-borrower with IPS Intermediate
Holdings, Inc.):
-- Corporate Family Rating, assigned B3;
-- Probability of Default Rating, assigned B3-PD;
-- $310 million backed first lien term loan, assigned B2
(LGD3);
-- $110 million backed second lien term loan, assigned Caa2
(LGD5);
-- Outlook is stable.
RATINGS RATIONALE
IPS' B3 Corporate Family Rating considers its high debt leverage
that will stand at 6.9x pro forma for the $110 million dividend
recapitalization transaction. Moody's expects this metric to
decline to 6.1x by the end of fiscal 2017 (year end June 30) with
it falling further to 5.4x in the following fiscal year. The
likelihood of any significant decrease in debt leverage below 5.5x
is lessened by the company's acquisitive growth strategy, which
would prioritize cash flow to fund tuck in acquisitions rather than
reducing debt; and its private equity ownership, which could use a
lower debt leverage as an opportunity to recapitalize the business
again for another distribution. The rating is also constrained by
the company's small size and scale. With revenues of only $258
million for the twelve months trailing September 30, 2016, IPS is
much smaller than many of its rated peers.
At the same time, the rating considers IPS' good business profile
which benefits from leading market positions in most of its niche
products, an ability to pass cost increases through to customers,
and a revenue stream that is diversified both geographically and in
terms of end markets. The rating also considers the company's good
credit metrics other than debt leverage. Gross margins are expected
to improve to 42.4% for fiscal year 2017 from 41.7% for the twelve
months trailing September 30, 2016 and EBITA interest coverage is
expected to improve to 2.2x from 2.1x over the same time period.
Additionally, the rating is supported by the company's continued
positive free cash flow generation which Moody's expects to exceed
$17 million for fiscal 2017 before consideration of the
distribution.
Moody's expects IPS to maintain a good liquidity profile over the
next 12 to 18 months. Its liquidity profile is supported by
projected positive free cash flow generation and cash balances of
$19.7 million as of September 2016. The company is expected to have
full availability under its $35 million asset based revolving
credit facility that is committed through 2021. The new term loans
are not subject to any financial maintenance covenants but the
revolver is subject to a springing fixed charge covenant that is
tested if availability falls below 10%. Moody's does not expect IPS
to be tested but it would be in compliance if it were. Alternate
liquidity sources are limited by the company's secured capital
structure.
The stable rating outlook is based on Moody's expectation of
improvements in credit metrics amidst a favorable operating
environment.
The ratings could be downgraded if debt to EBITDA rises above 7.0x
on a sustained basis, EBITA interest coverage falls below 1.0x, and
if free cash flow turns negative.
The ratings could be upgraded if the company's debt to EBITDA is
sustained below 5.0x and EBITA interest coverage is sustained above
2.5x. Additionally, positive rating action could be considered if
the company is able to significantly increase its size and scale.
The principal methodology used in these ratings was Global
Manufacturing Companies published in July 2014.
Headquartered in Compton, CA, IPS Structural Adhesives Holdings,
Inc. ("IPS") is a manufacturer of specialty adhesives and plumbing
accessories used in a variety of structural and plumbing
applications. Demand for IPS' products is primarily driven by the
new residential, repair and remodeling, and commercial construction
markets. IPS sells under a variety of brand names, including
Weld-On and Watertite, primarily through wholesale distribution
channels. Revenues for the twelve months trailing September 30,
2016 were $258 million.
ISIGN SOLUTIONS: Obtains $900,000 Loans from Investors
------------------------------------------------------
iSign Solutions Inc. entered into a Note and Warrant Purchase
Agreement with certain investors on Nov. 3, 2016. Under the terms
of the Purchase Agreement, the Company received loans in the
aggregate amount of $900,000 from the Investors in exchange for the
Company's issuance to each of the Investors of (a) an unsecured
convertible promissory note equal to the principal amount of such
Investor's loan to the Company and (b) warrants to purchase 276,917
shares of Company common stock. The Notes bear interest at the
rate of 6% per annum, and have a maturity date of Dec. 31, 2018.
The Notes may be converted by their terms at the option of
Investors into shares of the Company's common stock. The Warrants
are exercisable for a period of three years from the date of
closing at an exercise price of $1.625 per share.
The Company may use any funds received from the Investors for
working capital and general corporate purposes, in the ordinary
course of business, and to pay fees and expenses in connection with
the Company's entry into the Purchase Agreement.
Transactions With Related Persons
SG Phoenix LLC assisted the Company in negotiating with Investors
the term sheet for the transaction described above, the terms of
which were approved by a Special Committee of the Board of
Directors comprised of disinterested directors, as well as the
entire Board of Directors. SG Phoenix LLC is the management
company of Phoenix Venture Fund LLC, the Company's largest
stockholder, which has participated in several of the Company's
previous financing transactions. Philip Sassower and Andrea Goren
are the co-managers of SG Phoenix LLC, and are also the Company's
chief executive officer and chief financial officer, respectively.
Mike Engmann, Stanley Gilbert, Andrea Goren and entities affiliated
to them participated as Investors in the above described financing.
Messrs. Sassower and Engmann are Co-Chairmen of the Board of
Directors, Mr. Goren is also a member of the Company's Board of
Directors and the Company's Corporate Secretary, and Mr. Gilbert is
a member of the Company's Board of Directors.
About iSign
iSIGN (formerly known as Communication Intelligence Corporation or
CIC) -- http://www.isignnow.com/-- is a provider of digital
transaction management (DTM) software enabling fully digital
(paperless) business processes. iSIGN's solutions encompass a wide
array of functionality and services, including electronic
signatures, simple-to-complex workflow management and various
options for biometric authentication. These solutions are
available across virtually all enterprise, desktop and mobile
environments as a seamlessly integrated software platform for both
ad-hoc and fully automated transactions. iSIGN's software platform
can be deployed both on-premise and as a cloud-based service, with
the ability to easily transition between deployment models. iSIGN
is headquartered in Silicon Valley. iSIGN's logo is a trademark of
iSIGN.
iSign Solutions reported a net loss attributable to common
stockholders of $7.61 million on $1.62 million of revenue for the
year ended Dec. 31, 2015, compared to a net loss attributable to
common stockholders of $7.37 million on $1.51 million of revenue
for the year ended Dec. 31, 2014.
As of June 30, 2016, iSign had $1.20 million in total assets, $3.13
million in total liabilities, and a total deficit of $1.93
million.
Armanino LLP, in San Ramon, California, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company's significant
recurring losses and accumulated deficit raise substantial doubt
about its ability to continue as a going concern.
ITT EDUCATIONAL: Former Lender Moves to Seize $8.8M
---------------------------------------------------
Peg Brickley, writing for The Wall Street Journal Pro Bankruptcy,
reported that one of the private student loan programs that propped
up ITT Educational Services Inc. has asked a bankruptcy judge to
allow it to seize $8.8 million as the failed for-profit school
operator scrambles to find funds for creditors.
According to the report, former student lender Student CU Connect
CUSO LLC sought a court order granting it access to money stored up
in its arrangements with ITT Tech, which faced a barrage of fraud
litigation when it went under. The WSJ noted that Student CU
Connect isn't accused in the lawsuits and has sustained heavy
losses from its dealings with the for-profit education company.
Richard Bernard, Esq., a lawyer for Student CU Connect, told WSJ it
"decided to participate in this student loan program with the best
of intentions, to help students pay for their educations." The
credit-union-based lending operation acted in good faith and has
cooperated with governmental inquiries, he further told the WSJ.
The WSJ pointed out that Student CU Connect ran one of the ITT Tech
private student loan programs that are the focus of lawsuits aimed
at the company by the Consumer Financial Protection Bureau and
Securities and Exchange Commission. Though not named as a
defendant, Student CU Connect allegedly boosted ITT Tech's growth,
the report related. As a source of private loans, it helped
qualify ITT Tech for the taxpayer-backed loans that brought in most
of its revenues, the report said.
About ITT Educational
ITT Educational Services, Inc., is a proprietary provider of
post-secondary degree programs in the United States based on
revenue and student enrollment. As of Dec. 31, 2015, ITT was
offering: (a) master, bachelor and associate degree programs to
approximately 45,000 students at ITT Technical Institute and
Daniel
Webster College locations; and (b) short-term information
technology and business learning solutions for individuals.
ITT Educational and its subsidiaries ESI Service Corp. and Daniel
Webster College, Inc. ceased operations and commenced bankruptcy
proceedings by filing voluntary petitions for relief under
Chapter 7 of the Bankruptcy Code (Bankr. S.D. Ind.) on Sept.
16, 2016.
JO-JO HOLDINGS: Nov. 18 Meeting Set to Form Creditors' Panel
------------------------------------------------------------
William T. Neary, Acting United States Trustee for Region 6, will
hold an organizational meeting on Nov. 18, 2016, at 11:00 a.m. in
the bankruptcy case of Jo-Jo Holdings, Inc.
The meeting will be held at:
Office of the U. S. Trustee Program
Fritz G. Lanham Federal Building
819 Taylor Street, Room 7A24
Fort Worth, Texas 76102
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.
JOHN R. FRIEDENBERG: Disclosure Statement Hearing on Dec. 13
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona is set to
hold a hearing on December 13, at 1:30 p.m., to consider approval
of the disclosure statement explaining the Chapter 11 plan of John
and Lynne Friedenberg.
The hearing will take place at Court Room 329, 38 S. Scott, Tucson,
Arizona, or Phoenix Court Room 301. The deadline for filing
objections is fixed at five business days prior to the hearing.
The Debtors are represented by:
Eric Slocum Sparks, Esq.
Law Offices of Eric Slocum Sparks, P.C.
3505 North Campbell Avenue #501
Tucson, AZ 85719
Phone: (520) 623-8330
Fax: (520) 623-9157
Email: law@ericslocumsparkspc.com
Email: eric@ericslocumsparkspc.com
About The Friedenbergs
John R. Friedenberg and Lynne D. Friedenberg filed for Chapter 11
bankruptcy protection (Bankr. D. Ariz. Case No. 15-11773) on Sept.
15, 2015. The case is assigned to Judge Scott H. Gan.
JOHN SILAS: Disclosure Statement Hearing on Jan. 10
---------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida is set
to hold a hearing on January 10, at 2:30 p.m., to consider approval
of the disclosure statement explaining the Chapter 11 plan of John
and Norma Silas.
The hearing will take place at Courtroom D, 4th Floor, 300 North
Hogan Street, Jacksonville, Florida. Objections must be filed and
served seven days before the hearing.
The Debtors are represented by:
Thomas C. Adams, Esq.
301 W. Bay Street, Suite 1430
Jacksonville, FL 32202
About John and Norma Silas
John W. Silas and Norma G. Silas sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 15-05249) on
December 1, 2015. The case is assigned to Judge Jerry A. Funk.
JOSE DIEGO ESPINOZA: Disclosures Okayed, Plan Hearing on Dec. 6
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona will consider
approval of the Chapter 11 plan of Jose Diego Espinoza at a hearing
on December 6.
The hearing will be held at 10:00 a.m., at Courtroom 703, 7th
Floor, 230 North First Avenue, Phoenix, Arizona.
The court had earlier approved the Debtor's disclosure statement,
allowing him to start soliciting votes from creditors.
The October 26 order set a November 29 deadline for creditors to
cast their votes and file their objections.
The Debtor is represented by:
Mark J. Giunta, Esq.
Liz Nguyen, Esq.
Law Office of Mark J. Giunta
245 W. Roosevelt Street, Suite A
Phoenix, AZ 85003
Phone: (602) 307-0837
Fax: (602) 307-0838
Email: markgiunta@giuntalaw.com
About Jose Diego Espinoza
Jose Diego Espinoza sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 15-14649) on November 17,
2015. The case is assigned to Judge Eddward P. Ballinger Jr.
JOSE JAIMES VERA: Unsecured Creditors To Get 0.90% Under Plan
-------------------------------------------------------------
General unsecured creditors will get 0.90% of their claims under a
Chapter 11 plan of reorganization of Jose Jaimes Vera and Prisila
Mendez-Delgado.
Under the plan, Class 3 general unsecured creditors will receive
their pro rata share of the monthly plan payments, which the
Debtors estimate to be 0.90% of the claims.
Payments under the plan will be funded from the Debtors' projected
monthly rental income and personal income, according to the
disclosure statement filed on October 27 in the U.S. Bankruptcy
Court for the District of Nevada.
The court will hold a hearing on December 20, at 1:30 p.m., to
consider approval of the plan. The hearing will take place at
Courtroom 4, 300 South Las Vegas Boulevard, Las Vegas, Nevada.
The deadline for creditors to cast their votes and file their
objections to the plan is December 6.
A copy of the disclosure statement is available for free at
https://is.gd/jY8X3k
The Debtors are represented by:
Gina M. Corena, Esq.
400 S. 4TH Street, Suite 500
Las Vegas, NV 89101
Tel: (702) 943-0308
Fax: (888) 897-6507
Email: gina@lawofficecorena.com
About Jose Jaimes Vera
Jose Jaimes Vera and Prisila Mendez-Delgado sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No.
14-13093).
JOSEPH HEATH: Mitchells Buying Alexandria Property for $601,000
---------------------------------------------------------------
Joseph F. Heath asks the U.S. Bankruptcy Court for the Eastern
District of Virginia to authorize the sale of real property known
as 1905 Joliette Court, Alexandria, Virginia, to Kenneth and
Michelle Mitchell for $601,000.
The Debtor and the Purchasers entered into a Residential Sales
Contract dated Nov. 5, 2016.
A copy of the Residential Sales Contract attached to the Motion is
available for free at:
http://bankrupt.com/misc/Joseph_Heath_23_Sales.pdf
The application of the realtor, Maria Castiganio of Keller and
Williams, for employment in the case is in process and will be
filed shortly.
The property is encumbered by two liens: (i) a deed of Trust with
CitiBank with a balance of approximately $370,800; and (ii) a tax
lien in the amount of $970,369. The total of all liens on the
property exceed the property's value and the net proceeds which are
expected to come from the proposed sale.
The Debtor is a real estate investor and landlord with 30
properties titled in his name, including the subject of the Motion.
Many of these properties have significant equity and can be sold
sequentially in order to pay down the IRS lien. However, the
Debtor needs some of the proceeds from this sale to fund payment of
the mortgages on the other properties, and will ask the IRS to
allow him to retain a small portion of the proceeds for that
purpose.
Upon information and belief, the trust holders whose claims are
impaired by the proposed sale either have or will consent to the
sale.
The proposed sale is in the best interest of the estate, since it
represents the greatest value to the estate and to the creditors
which may be derived from the property, and also because the sale
of the property will reduce the indebtedness owed to the IRS,
blanket lien holder, and help to create equity in the other
property securing their claims.
The Debtor asks the Court to approve the sale of the property free
and clear of all liens, allow the costs of sale including the real
estate commission be paid from the settlement, and that the claims
of the lien holder will attach to the net proceeds of the sale in
the order of their priority, and for such other relief as may be
needed.
Counsel for the Debtor:
Richard G. Hall, Esq.
4208 McWhorter Place, Suite 412
Annandale, VA 22003
Telephone: (703)256-7159
About Joseph F. Heath
Joseph F. Heath sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 07-14107) on Dec. 27, 2007.
The Debtor estimated assets in the range of $0 to $50,000 and
$100,001 to $500,000 in debt.
The Debtor tapped Bennett A. Brown, Esq., at The Law Office of
Bennett A. Brown, as counsel.
JPE HOME: Unsecureds To Recover 25% Under Plan
----------------------------------------------
JPE Home Care LLC filed with the U.S. Bankruptcy Court for the
District of New Jersey a disclosure statement describing the
Debtor's Chapter 11 plan.
Under the Plan, all general unsecured claims will be paid 25% of
their allowed claim amount in quarterly installments over a period
of time not to exceed 60 months.
The Plan will be funded by the continued operations of the Non-
Medical in home companion and personal care service.
The Disclosure Statement is available at:
http://bankrupt.com/misc/paeb16-12609-103.pdf
JPE Home Care LLC; dba At Home Certified Senior HealthCare filed
for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No.
16-12609) on April 13, 2016, estimating its assets at between
$50,001 and $100,000 and its liabilities at between $500,001 and $1
million. Paul Gregory Lang, Esq., at Gallant And Parlow, PC,
serves as the Debtor's bankruptcy counsel.
K4M CONSTRUCTION: Dec. 1 Plan Confirmation Hearing
--------------------------------------------------
K4M Construction & Development, LLC, is now a step closer to
emerging from Chapter 11 protection after a bankruptcy judge
approved the outline of its plan of reorganization.
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas on October 27 gave the thumbs-up to the
disclosure statement, allowing the company to start soliciting
votes from creditors.
The order set a November 28 deadline for creditors to cast their
votes and file their objections to the plan.
A court hearing to consider confirmation of the plan is scheduled
for December 1, at 9:30 a.m.
About K4M Construction
K4M Construction & Development, LLC, owns a single family residence
located at 2919 Oak Pointe Boulevard, Missouri City, Texas 77479.
It was created in December 2011. Based upon a short history with
Michael Mauck, and his companies M2 Investments and MPM Capital, in
buying, refurbishing and selling houses, Kirt McGhee incorporated
K4M in order to continue the real estate investment and
construction business formerly done between Kirt McGhee
individually, and MPM.
K4M Construction filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Tex. Case No. 16-30646) on Feb. 2, 2016. Johnie J. Patterson,
Esq., at Walker & Patterson as bankruptcy counsel. The case is
assigned to Judge Marvin Isgur.
KATE SPADE: S&P Raises CCR to 'BB-'; Outlook Stable
---------------------------------------------------
S&P Global Ratings raised its corporate credit rating on New
York-based handbag, apparel, and accessory retailer Kate Spade &
Co. to 'BB-' from 'B+'. The outlook is stable.
S&P also raised the issue-level rating on the company's senior
secured term loan due 2021 to 'BB-' from 'B+'. The '3' recovery
rating remains unchanged, indicating S&P's expectation for
meaningful recovery (50%-70%; upper half of the range) of principal
in the event of a payment default.
"The rating action reflects Kate Spade's continued operating
performance improvement including positive comparable-store sales
and meaningfully improved EBITDA margins, resulting in better
credit metrics," said credit analyst Mathew Christy. "Kate Spade
has benefited from expansion both domestically and internationally,
with same-store sales and new store growth balanced across
geographies, as the company continues to expand on its core
strength in hand bags and lifestyle merchandising categories.
Furthermore, EBITDA margins have improved because of sales leverage
and tight expense and inventory management, resulting in adjusted
EBITDA margins in the low-20% range, up from about 16% in fiscal
2015. We expect these trends to continue and believe that
initiatives in e-commerce, product availability, customer
engagement, and marketing will drive continued growth. We expect
credit metrics will remain consistent with recent levels, including
adjusted leverage in the mid-2x range."
The stable rating outlook reflects S&P's expectation for modest
earnings growth over the next 12 months and credit protection
metrics that remain consistent with recent results. S&P expects
moderated same-store sales in the low-single-digit range over this
time frame and that sales leverage will result in EBITDA margins
that remain the low-20% range, leading to leverage in the mid- to
low-2x area.
S&P could consider a negative rating action if Kate Spade's
operating trends significantly underperform S&P's base-case
expectations. This could occur if sales trends turn negative
because of merchandising missteps and the over expands its store
base. For this scenario to occur, S&P anticipates a
300-basis-point drop in EBITDA margins and a low-single-digit
decline in comparable sales leads to leverage sustained at or above
the low-3x range. Although unlikely given the company's current
financial policy, S&P could also lower the rating if the company
becomes more aggressive and increases debt leverage to the low-3x
range.
S&P could consider a higher rating if operating performance is
better than S&P anticipates with comparable sales greater than 10%
and EBITDA margins improving to a high-20% range, a result from
consistently good operating execution and store expansion. Under
this scenario, leverage will improve to under 2x or better and FFO
to debt would approach 45%. S&P may also consider a higher rating
if the company uses its free operating cash flow and cash balances
to reduce debt by more than $140 million or the company exhibits
consistent operating performance and EBITDA margins while
continuing to increase its operating scale relative to peers.
KEY ENERGY: Hires Alvarez & Marsal as Financial Advisors
--------------------------------------------------------
Key Energy Services, Inc. and its debtors-affiliates seek
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ Alvarez & Marsal North America, LLC as financial
advisors, nunc pro tunc to the October 24, 2016 petition date.
Alvarez & Marsal will provide such restructuring support services
as Alvarez & Marsal and the Debtors shall deem appropriate and
feasible in order to manage and advise the Debtors in the course of
the Chapter 11 Cases, including, but not limited to:
(a) assistance to the Debtors in the preparation of financial-
related disclosures required by the Court;
(b) assistance with the identification and implementation of
short-term cash management procedures;
(c) assistance to Debtors' management team and counsel focused
on the coordination of resources related to the ongoing
reorganization effort;
(d) assistance in the preparation of financial information for
distribution to creditors and others, including, but not
limited to, cash flow projections and budgets, cash
receipts and disbursement analysis, analysis of various
asset and liability accounts, and analysis of proposed
transactions for which Court approval is sought;
(e) attendance at meetings and assistance in discussions with
potential investors, banks, and other secured lenders, any
official committees appointed in the Chapter 11 Cases, the
United States Trustee, other parties in interest and
professionals hired by same, as requested;
(f) assistance in the preparation of information and analysis
necessary for the confirmation of a plan of reorganization
in the Chapter 11 Cases, including information contained in
the disclosure statement; and
(g) rendering such other general business consulting or such
other assistance as Debtors' management or counsel may deem
necessary consistent with the role of a financial advisor
to the extent that it would not be duplicative of services
provided by other professionals in this proceeding.
Alvarez & Marsal will be paid at these hourly rates:
Managing Directors $700-$975
Directors $500-$775
Analysts/Associates $325-$575
Alvarez & Marsal will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Alvarez & Marsal received $500,000 as a retainer in connection with
preparing for and conducting the filing of the Chapter 11 Cases, as
described in the Engagement Letter. In the 90 days prior to the
Petition Date, Alvarez & Marsal received retainers and payments
totaling $1,749,879.08 in the aggregate for services performed for
the Debtors.
Edgar W. Mosley, managing director of Alvarez & Marsal, 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 Court will hold a hearing on the application on Nov. 16, 2016,
at 2:00 p.m. Objections were due Nov. 10, 2016.
Alvarez & Marsal can be reached at:
Edgar W. Mosley
ALVAREZ & MARSAL NORTH AMERICA, LLC
2100 Ross Avenue, 21st Floor
Dallas, TX 75201
Tel: (214) 438-1000
Fax: (214) 438-1001
About Key Energy
Headquartered in Houston, Texas, Key Energy, Inc. claims to be the
largest domestic onshore, rig-based well servicing contractor based
on the number of rigs owned. The Company, which currently has
approximately 2,900 employees, provides a full range of well
services to major oil companies, foreign national oil companies and
independent oil and natural gas production companies including
Chevron Texaco Exploration and Production.
Key was organized in April 1977 and commenced operations in July
1978 under the name National Environmental Group, Inc. In December
1992, the Company's name was changed to "Key Energy Group, Inc."
and then was subsequently changed to "Key Energy Services, Inc." in
December 1998.
The Debtors own approximately 880 rigs of various sizes,
approximately 2,500 trucks and similar vehicles, and thousands of
pieces of other equipment related to their businesses. The Debtors
also own more than 135 pieces of real estate, including, among
other things, various permitted disposal wells for disposal of
saltwater and other fluid byproducts. In addition, the Debtors own
certain patents and other intellectual property.
Each of Misr Key Energy Investments, LLC, Key Energy Services,
Inc., Key Energy Services, LLC, and Misr Key Energy Services, LLC,
filed a voluntary petition under Chapter 11 of the Bankruptcy Code
on Oct. 24, 2016 (Bankr. D. Del. Proposed Lead Case No. 16-12306).
Key's other domestic and foreign subsidiaries are not part of the
bankruptcy filing.
As of the second quarter of 2016, the Company had approximately
$1.13 billion in total assets and approximately $1 billion in
aggregate funded debt. As of the date of the Petition Date, the
Debtors hold approximately $29.8 million in encumbered,
unrestricted cash. The Debtors currently have approximately $13.4
million of trade debt and other debt owed to general unsecured
creditors, as disclosed in court papers.
The Debtors have hired Sidley Austin LLP as general bankruptcy
counsel; Young, Conaway, Stargatt & Taylor, LLP, as Delaware
counsel; PJT Partners LP as investment bankers; Alvarez and Marsal
North America, LLC, as financial advisors; and Epiq Bankruptcy
Solutions, LLC, as notice, claims, solicitation and voting agent.
KEY ENERGY: Hires Epiq as Administrative Agent
----------------------------------------------
Key Energy Services, Inc. and its debtor-affiliates seek
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ Epiq Bankruptcy Solutions, LLC as administrative
agent, nunc pro tunc to the October 24, 2016 petition date.
The Debtors require Epiq to:
(a) consult the Debtors and their counsel regarding timing
issues, voting and tabulation procedures, and documents
needed for the solicitation of any chapter 11 plan;
(b) assist the Debtors with administrative tasks in the
preparation of their schedules of assets and liabilities
and statements of financial affairs, including, as needed,
(i) coordinating with the Debtors and their advisors
regarding the Schedules and Statements process,
requirements, timelines and deliverables; (ii) create and
maintain databases for maintenance and formatting of
Schedules and Statements data; and (iii) coordinate
collection of data from Debtors and advisors;
(c) review voting-related sections of the voting procedures
motion, disclosure statement and ballots for procedural and
timing issues;
(d) assist in obtaining information regarding members of voting
classes, including lists of holders of bonds from DTC and
other entities;
(e) coordinate distribution of solicitation documents;
(f) respond to requests for documents from parties in interest,
including brokerage firms, bank back-officers and
institutional holders;
(g) respond to telephone inquiries from lenders, bondholders
and nominees regarding the disclosure statement and the
voting procedures;
(h) provide evidence with respect to receipt and examination of
all ballots and master ballots cast by voting parties and
tabulation of all ballots and master ballots received prior
to the voting deadline in accordance with established
procedures, and
(i) undertake such other duties as may be requested by the
Debtors.
Epiq will be paid at these hourly rates:
Clerical/Administrative Support $25-$45
Case Manager $50-$80
IT/Programming $65-$90
Sr. Case Manager/Dir. of Case
Management $70-$150
Consultant/Sr. Consultant $145-$170
Director/VP Consulting $170-$195
Executive VP - Solicitation $200
Executive VP - Consulting Waived
Communications Counselor $350
Epiq will also be reimbursed for reasonable out-of-pocket expenses
incurred.
The Debtors and Epiq agreed upon a 10% discount off hourly fees on
each monthly invoice before and during the pendency of the Chapter
11 cases.
Epiq received a retainer in the amount of $25,000 from the Debtors.
As of the Petition Date, all amounts owed on account of
prepetition invoices issued by Epiq have been paid by the Debtors.
Bradley J. Tuttle, vice president and senior managing consultant of
Epiq, 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 Court will hold a hearing on the application on Nov. 16, 2016,
at 2:00 p.m. Objections were due Nov. 10, 2016.
Epiq can be reached at:
Pamela Corrie
EPIQ BANKRUPTCY SOLUTIONS, LLC
777 Third Avenue, Third Floor
New York, NY 10017
Tel: (302) 574-2600
About Key Energy
Headquartered in Houston, Texas, Key Energy, Inc. claims to be the
largest domestic onshore, rig-based well servicing contractor based
on the number of rigs owned. The Company, which currently has
approximately 2,900 employees, provides a full range of well
services to major oil companies, foreign national oil companies and
independent oil and natural gas production companies including
Chevron Texaco Exploration and Production.
Key was organized in April 1977 and commenced operations in July
1978 under the name National Environmental Group, Inc. In December
1992, the Company's name was changed to "Key Energy Group, Inc."
and then was subsequently changed to "Key Energy Services, Inc." in
December 1998.
The Debtors own approximately 880 rigs of various sizes,
approximately 2,500 trucks and similar vehicles, and thousands of
pieces of other equipment related to their businesses. The Debtors
also own more than 135 pieces of real estate, including, among
other things, various permitted disposal wells for disposal of
saltwater and other fluid byproducts. In addition, the Debtors own
certain patents and other intellectual property.
Each of Misr Key Energy Investments, LLC, Key Energy Services,
Inc., Key Energy Services, LLC, and Misr Key Energy Services, LLC,
filed a voluntary petition under Chapter 11 of the Bankruptcy Code
on Oct. 24, 2016 (Bankr. D. Del. Proposed Lead Case No. 16-12306).
Key's other domestic and foreign subsidiaries are not part of the
bankruptcy filing.
As of the second quarter of 2016, the Company had approximately
$1.13 billion in total assets and approximately $1 billion in
aggregate funded debt. As of the date of the Petition Date, the
Debtors hold approximately $29.8 million in encumbered,
unrestricted cash. The Debtors currently have approximately $13.4
million of trade debt and other debt owed to general unsecured
creditors, as disclosed in court papers.
The Debtors have hired Sidley Austin LLP as general bankruptcy
counsel; Young, Conaway, Stargatt & Taylor, LLP, as Delaware
counsel; PJT Partners LP as investment bankers; Alvarez and Marsal
North America, LLC, as financial advisors; and Epiq Bankruptcy
Solutions, LLC, as notice, claims, solicitation and voting agent.
KEY ENERGY: Hires PJT Partners as Investment Banker
---------------------------------------------------
Key Energy Services, Inc. and its debtors-affiliates seek
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ PJT Partners LP as investment banker, nunc pro
tunc to the October 24, 2016 petition date.
The Debtors require PJT Partners to:
(a) assist in the evaluation of the Debtors' businesses and
prospects;
(b) assist in the development of the Debtors' long-term
business plan and related financial projections;
(c) assist in the development of financial data and
presentations to the Debtors' Board of Directors, various
creditors and other third parties;
(d) analyze the Debtors' financial liquidity and evaluate
alternatives to improve such liquidity;
(e) analyze various restructuring scenarios and the potential
impact of these scenarios on the recoveries of those
stakeholders impacted by the Restructuring;
(f) provide strategic advice with regard to restructuring or
refinancing the Debtors' Obligations;
(g) evaluate the Debtors' debt capacity and alternative capital
structures;
(h) participate in negotiations among the Debtors and their
creditors, suppliers, lessors and other interested parties;
(i) value securities offered by the Debtors in connection with
a Restructuring;
(j) advise the Debtors and negotiate with lenders with respect
to potential waivers or amendments of various credit
facilities;
(k) assist in arranging financing for the Debtors, as
requested;
(l) provide expert witness testimony concerning any of the
subjects encompassed by the other investment banking
services; and
(m) provide such other advisory services as are customarily
provided in connection with the analysis and negotiation of
a Restructuring, as requested and mutually agreed.
The Debtors agreed to pay PJT Partners according to the following
Fee Structure:
-- Monthly Fees: The Debtors shall pay PJT a monthly advisory
fee in the amount of $150,000 per month, in cash, with the
first Monthly Fee payable upon the execution of the
Engagement Letter by both parties and additional
installments of such Monthly Fee payable in advance on each
monthly anniversary of the Effective Date.
-- Restructuring Fee: The Debtors shall pay a restructuring
fee equal to $4,750,000. The Restructuring Fee will be:
(i) earned on the earliest of:
(A) consummation of the Restructuring,
(B) in the event the Debtors attempt to implement the
Restructuring in whole or in part by means of an
exchange offer, then upon commencement of the
exchange offer,
(C) in the event that the Debtors attempt to implement
the Restructuring by means of a prenegotiated plan of
reorganization under chapter 11, the receipt of
sufficient commitments, agreements or other
expressions of intention to accept such plan that the
Debtors elect to file a chapter 11 case and therein
represent to the Bankruptcy Court hearing such case
that the Debtors will seek to confirm a plan based on
the prenegotiated plan, and
(D) in the event that the Debtors solicit acceptances for
a prepackaged plan of reorganization under chapter 11
to implement the Restructuring, then on the date that
the Debtors commence the solicitation of acceptances
for such prepackaged plan of reorganization, and
(ii) payable, in immediately available funds, on the
earliest of, and subject to one of:
(A) consummation of the Restructuring,
(B) consummation of the exchange offer, and
(C) the first business day immediately following (I) in
the case of clause "(C)" above, the receipt of such
commitments, agreements or expressions of intention
to accept the prenegotiated plan, and (II) in the
case of clause "(D)" above, the earlier of (i)
consummation of the Restructuring and (ii) July 31,
2017. Notwithstanding the foregoing, a Restructuring
specifically shall be deemed to exclude any
assumption at face value of Obligations in connection
with the sale or disposition of any subsidiaries,
joint ventures, assets or lines of business of the
Debtors;
-- Capital Raising Fee: The Debtors will pay PJT a capital
raising fee for any financing arranged by PJT, at the
Debtors' request, earned and payable upon receipt of
proceeds. The Capital Raising Fee will be calculated as
1.0% of the total issuance size for senior debt financing,
3.0% of the total issuance size for junior debt financing,
and 5.0% of the issuance amount for equity financing. It is
further provided that the total issuance size or amount used
to calculate the Capital Raising Fee will exclude all
amounts of capital raised, including amounts raised through
a rights offering, from parties that are, at the time of the
applicable capital raise, either existing shareholders of
the Debtors or creditors of the Debtors otherwise
participating in a Restructuring;
-- Expense Reimbursement: In addition to the fees described
above, the Debtors agree to reimbursement of all reasonable
documented out-of-pocket expenses incurred during this
engagement, including, but not limited to, travel and
lodging, direct identifiable data processing, document
production, publishing services and communication charges,
courier services, working meals, reasonable documented fees
and expenses of PJT's external legal counsel and other
necessary expenditures, payable upon rendition of invoices
setting forth in reasonable detail the nature and amount of
such expenses. In connection therewith, the Debtors shall
pay PJT on the Effective Date and maintain thereafter a
$15,000 expense advance for which PJT shall account upon
termination of the Engagement Letter.
James Cuminale, general counsel of PJT Partners, 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 Court will hold a hearing on the application on Nov. 16, 2016,
at 2:00 p.m. Objections were due Nov. 10, 2016.
PJT Partners can be reached at:
James Cuminale, Esq.
PJT PARTNERS LP
280 Park Avenue
New York, NY 10017
Tel: (212) 364-7800
About Key Energy
Headquartered in Houston, Texas, Key Energy, Inc. claims to be the
largest domestic onshore, rig-based well servicing contractor based
on the number of rigs owned. The Company, which currently has
approximately 2,900 employees, provides a full range of well
services to major oil companies, foreign national oil companies and
independent oil and natural gas production companies including
Chevron Texaco Exploration and Production.
Key was organized in April 1977 and commenced operations in July
1978 under the name National Environmental Group, Inc. In December
1992, the Company's name was changed to "Key Energy Group, Inc."
and then was subsequently changed to "Key Energy Services, Inc." in
December 1998.
The Debtors own approximately 880 rigs of various sizes,
approximately 2,500 trucks and similar vehicles, and thousands of
pieces of other equipment related to their businesses. The Debtors
also own more than 135 pieces of real estate, including, among
other things, various permitted disposal wells for disposal of
saltwater and other fluid byproducts. In addition, the Debtors own
certain patents and other intellectual property.
Each of Misr Key Energy Investments, LLC, Key Energy Services,
Inc., Key Energy Services, LLC, and Misr Key Energy Services, LLC,
filed a voluntary petition under Chapter 11 of the Bankruptcy Code
on Oct. 24, 2016 (Bankr. D. Del. Proposed Lead Case No. 16-12306).
Key's other domestic and foreign subsidiaries are not part of the
bankruptcy filing.
As of the second quarter of 2016, the Company had approximately
$1.13 billion in total assets and approximately $1 billion in
aggregate funded debt. As of the date of the Petition Date, the
Debtors hold approximately $29.8 million in encumbered,
unrestricted cash. The Debtors currently have approximately $13.4
million of trade debt and other debt owed to general unsecured
creditors, as disclosed in court papers.
The Debtors have hired Sidley Austin LLP as general bankruptcy
counsel; Young, Conaway, Stargatt & Taylor, LLP, as Delaware
counsel; PJT Partners LP as investment bankers; Alvarez and Marsal
North America, LLC, as financial advisors; and Epiq Bankruptcy
Solutions, LLC, as notice, claims, solicitation and voting agent.
KEY ENERGY: Hires Sidley Austin as Counsel
------------------------------------------
Key Energy Services, Inc. and its debtors-affiliates seek
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ Sidley Austin LLP as counsel, nunc pro tunc to
the October 24, 2016 petition date.
The Debtors require Sidley Austin to:
(a) provide legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their businesses;
(b) take all necessary actions on behalf of the Debtors to
protect and preserve the Debtors' estates, including the
prosecution of actions on the Debtors' behalf, the defense
of any actions commenced against the Debtors, the
negotiation of disputes in which the Debtors are involved
and the preparation of objections to claims filed against
the Debtors' estates;
(c) prepare on behalf of the Debtors, as debtors-in-possession,
all necessary motions, applications, answers, orders,
reports and other papers in connection with the
administration of the Debtors' estates;
(d) take all necessary actions in connection with any chapter
11 plan and related disclosure statement, including,
without limitation, the Plan and Disclosure Statement, and
all related documents, and such further actions as may be
required in connection with the administration of the
Debtors' estates;
(e) provide legal advice and representation with respect to
various obligations of the Debtors and their managers and
officers;
(f) provide legal advice and perform legal services with
respect to matters relating to the terms and issuance of
corporate securities, corporate governance, the
interpretation, application or amendment of the Debtors'
organizational documents, material contracts, and matters
involving the fiduciary duties of the Debtors and their
officers, directors and managers;
(g) provide legal advice and legal services with respect to
litigation, tax and other general non-bankruptcy legal
issues for the Debtors to the extent requested by the
Debtors;
(h) attend meetings and negotiate with representatives of
creditors and other parties in interest, attend court
hearings and advise the Debtors on the conduct of their
Chapter 11 Cases;
(i) take all necessary actions in connection with any sale of
some or all of the Debtors' assets during the pendency of
the Chapter 11 Cases; and
(j) perform all other necessary legal services for the Debtors
in connection with the prosecution of the Chapter 11 Cases,
including, without limitation: (i) analyze the Debtors'
leases and contracts and the assumption and assignment or
rejection thereof; (ii) analyze the validity of liens
against the Debtors; and (iii) advise the Debtors on
corporate and litigation matters.
Sidley Austin will be paid at these hourly rates:
Attorneys $413-$1400
Paraprofessionals $210-$390
Sidley Austin will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Sidley Austin is not a creditor of the Debtors. During the nearly
six month period prior to the Petition Date, Sidley Austin received
payments and advances in the aggregate amount of approximately $7.6
million for professional services performed and to be performed in
connection with the restructuring, including the commencement and
prosecution of the Chapter 11 Cases. Sidley Austin has a remaining
credit balance in favor of the Debtors for any outstanding amounts
relating to the period before the Petition Date that were not
processed through Sidley's billing system as of the Petition Date
and for future professional services to be performed, and expenses
to be incurred, in connection with the Chapter 11 Cases in the
approximate amount of $1.3 million (the "Fee Advance").
Jeffrey E. Bjork, partner of Sidley Austin, 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 following answers are provided in response to the questions set
forth in Paragraph D.1 of the U.S. Trustee Guidelines:
-- Sidley Austin did not agree to any variations from, or
alternatives to, its standard or customary billing
arrangements for comparable chapter 11 reorganizations in
its post-petition representation of the Debtors in the
Chapter 11 Cases.
-- the hourly rates of the Sidley Austin professionals
representing the Debtors are consistent with the rates that
Sidley charges other chapter 11 clients, regardless of the
geographic location of the chapter 11 case.
-- the billing rates and material financial terms of Sidley
Austin's prepetition engagement by the Debtors are as set
forth in the Application. Such billing rates and material
financial terms have not changed postpetition.
-- Sidley Austin, in conjunction with the Debtors, is
developing a prospective budget and staffing plan for these
Chapter 11 Cases for the period from the Petition Date
through December 31, 2016.
The Court will hold a hearing on the application on Nov. 16, 2016,
at 2:00 p.m. Objections were due Nov. 10, 2016.
Sidley Austin can be reached at:
Jeffrey E. Bjork, Esq.
SIDLEY AUSTIN LLP
555 West Fifth Street
Los Angeles, CA 90013
Tel: (213) 896-6037
E-mail: jbjork@sidley.com
About Key Energy
Headquartered in Houston, Texas, Key Energy, Inc. claims to be the
largest domestic onshore, rig-based well servicing contractor based
on the number of rigs owned. The Company, which currently has
approximately 2,900 employees, provides a full range of well
services to major oil companies, foreign national oil companies and
independent oil and natural gas production companies including
Chevron Texaco Exploration and Production.
Key was organized in April 1977 and commenced operations in July
1978 under the name National Environmental Group, Inc. In December
1992, the Company's name was changed to "Key Energy Group, Inc."
and then was subsequently changed to "Key Energy Services, Inc." in
December 1998.
The Debtors own approximately 880 rigs of various sizes,
approximately 2,500 trucks and similar vehicles, and thousands of
pieces of other equipment related to their businesses. The Debtors
also own more than 135 pieces of real estate, including, among
other things, various permitted disposal wells for disposal of
saltwater and other fluid byproducts. In addition, the Debtors own
certain patents and other intellectual property.
Each of Misr Key Energy Investments, LLC, Key Energy Services,
Inc., Key Energy Services, LLC, and Misr Key Energy Services, LLC,
filed a voluntary petition under Chapter 11 of the Bankruptcy Code
on Oct. 24, 2016 (Bankr. D. Del. Proposed Lead Case No. 16-12306).
Key's other domestic and foreign subsidiaries are not part of the
bankruptcy filing.
As of the second quarter of 2016, the Company had approximately
$1.13 billion in total assets and approximately $1 billion in
aggregate funded debt. As of the date of the Petition Date, the
Debtors hold approximately $29.8 million in encumbered,
unrestricted cash. The Debtors currently have approximately $13.4
million of trade debt and other debt owed to general unsecured
creditors, as disclosed in court papers.
The Debtors have hired Sidley Austin LLP as general bankruptcy
counsel; Young, Conaway, Stargatt & Taylor, LLP, as Delaware
counsel; PJT Partners LP as investment bankers; Alvarez and Marsal
North America, LLC, as financial advisors; and Epiq Bankruptcy
Solutions, LLC, as notice, claims, solicitation and voting agent.
KEY ENERGY: Taps Young Conaway as Bankruptcy Co-counsel
-------------------------------------------------------
Key Energy Services, Inc. and its debtors-affiliates seek
authorization from the U.S. Bankruptcy Court for the District of
Delaware to employ Young Conaway Stargatt & Taylor, LLP as
bankruptcy co-counsel, effective October 24, 2016 petition date.
The Debtors require Young Conaway to:
(a) provide legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued
operation of their businesses, management of their
properties, and the potential sale of their assets;
(b) prepare and pursue confirmation of a plan and approval of a
disclosure statement;
(c) prepare, on behalf of the Debtors, necessary applications,
motions, answers, orders, reports, and other legal papers;
(d) appear in Court and protecting the interests of the Debtors
before the Court; and
(e) perform all other legal services for the Debtors that may
be necessary and proper in these proceedings.
Young Conaway will be paid at these hourly rates:
Robert S. Brady $850
Edwin J. Harron $780
Kenneth J. Enos $540
Ryan M. Bartley $480
Justin P. Duda $460
Michael Girello, paralegal $265
Young Conaway will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Young Conaway was retained by the Debtors pursuant to the
engagement agreement dated as of April 28, 2016. In accordance
with the Engagement Agreement, Young Conaway received a retainer in
the amount of $50,000 on May 3, 2016, in connection with the
planning and preparation of initial documents, its proposed
post-petition representation of the Debtors, and anticipated
chapter 11 filing fees. Young Conaway received the following
supplements to the Retainer: $25,000 on June 1, 2016 and $60,000
on June 22, 2016.
Robert S. Brady, partner of Young Conaway, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Consistent with the United States Trustees' Appendix B –
Guidelines for Reviewing Applications for Compensation and
Reimbursement of Expenses Filed Under 11 U.S.C. section 330 by
Attorneys in Larger Chapter 11 Cases (the "U.S. Trustee
Guidelines"), which became effective on November 1, 2013,4 I state
as follows:
-- Young Conaway has not agreed to a variation of its
standard or customary billing arrangements for this
engagement;
-- None of the Firm's professionals included in this engagement
have varied their rate based on the geographic location of
the Chapter 11 Cases;
-- Young Conaway was retained by the Debtors pursuant to the
Engagement Agreement dated as of April 28, 2016. The
billing rates and material terms of the prepetition
engagement are the same as the rates and terms described in
the Application; and
-- The Debtors have approved or will be approving a prospective
budget and staffing plan for Young Conaway's engagement for
the postpetition period as appropriate. In accordance with
the U.S. Trustee Guidelines, the budget may be amended as
necessary to reflect changed or unanticipated developments.
The Court will hold a hearing on the application on Nov. 16, 2016,
at 2:00 p.m. Objections were due Nov. 10, 2016.
Young Conaway can be reached at:
Robert S. Brady, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6690
Fax: (302) 576-3283
E-mail: rbrady@ycst.com
About Key Energy
Headquartered in Houston, Texas, Key Energy, Inc. claims to be the
largest domestic onshore, rig-based well servicing contractor based
on the number of rigs owned. The Company, which currently has
approximately 2,900 employees, provides a full range of well
services to major oil companies, foreign national oil companies and
independent oil and natural gas production companies including
Chevron Texaco Exploration and Production.
Key was organized in April 1977 and commenced operations in July
1978 under the name National Environmental Group, Inc. In December
1992, the Company's name was changed to "Key Energy Group, Inc."
and then was subsequently changed to "Key Energy Services, Inc." in
December 1998.
The Debtors own approximately 880 rigs of various sizes,
approximately 2,500 trucks and similar vehicles, and thousands of
pieces of other equipment related to their businesses. The Debtors
also own more than 135 pieces of real estate, including, among
other things, various permitted disposal wells for disposal of
saltwater and other fluid byproducts. In addition, the Debtors own
certain patents and other intellectual property.
Each of Misr Key Energy Investments, LLC, Key Energy Services,
Inc., Key Energy Services, LLC, and Misr Key Energy Services, LLC,
filed a voluntary petition under Chapter 11 of the Bankruptcy Code
on Oct. 24, 2016 (Bankr. D. Del. Proposed Lead Case No. 16-12306).
Key's other domestic and foreign subsidiaries are not part of the
bankruptcy filing.
As of the second quarter of 2016, the Company had approximately
$1.13 billion in total assets and approximately $1 billion in
aggregate funded debt. As of the date of the Petition Date, the
Debtors hold approximately $29.8 million in encumbered,
unrestricted cash. The Debtors currently have approximately $13.4
million of trade debt and other debt owed to general unsecured
creditors, as disclosed in court papers.
The Debtors have hired Sidley Austin LLP as general bankruptcy
counsel; Young, Conaway, Stargatt & Taylor, LLP, as Delaware
counsel; PJT Partners LP as investment bankers; Alvarez and Marsal
North America, LLC, as financial advisors; and Epiq Bankruptcy
Solutions, LLC, as notice, claims, solicitation and voting agent.
KLEEN ENERGY: Fitch Affirms 'BB' Ratings on $358MM in Term Loans
----------------------------------------------------------------
Fitch Ratings has affirmed at 'BB' the ratings for Kleen Energy
Systems, LLC's (Kleen):
-- $435 million ($108.1 million outstanding) term loan A due
2018 and
-- $295 million ($250.9 million outstanding) term loan B due
2024.
The Rating Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect Kleen's stable base of capacity payments under
a long-term contract with a strong, investment-grade offtaker and
the facility's uncertain competitiveness in a merchant environment.
The reduced debt service burden after 2017 should substantially
mitigate operating risks, though the level of financial cushion
will depend upon Kleen's profitability as a merchant generator. The
Stable Outlook is supported by Kleen's consistent operational
performance and improved cost visibility over the past two years.
Fitch estimates that Kleen achieved a debt service coverage ratio
(DSCR) of 1.29x in 2015 and expects the DSCR will improve to 1.37x
in 2016. In the near term, Fitch believes that DSCRs are unlikely
to fall below 1.30x absent significant departure from recent
operating performance. After the tolling agreement expires in 2017,
capacity payments alone should be adequate to support an average
DSCR of 1.44x.
Revenue Risk: Midrange
Fixed price agreements: Kleen's revenues are currently derived from
fixed-price tolling and capacity agreements with investment-grade
counterparties, partially mitigating price risks through 2017. The
project remains subject to replacement power costs in the event of
a forced outage under the tolling agreement. Kleen is vulnerable to
margin risks during the post-2017 merchant period but is not
entirely dependent on market-based revenues, as capacity payments
alone should be sufficient to meet debt service requirements.
Operation Risk: Weaker
Kleen has not yet established an extensive history of cost
stability or consistent operating performance. Actual costs have
exceeded original projections by a wide margin and demonstrated
considerable volatility. Kleen's ability to meet target
availability requirements under the capacity agreement remains
uncertain based on Kleen's history of forced outages. Kleen
otherwise benefits from commercially proven technology operated and
maintained by experienced O&M providers.
Supply Risk: Midrange
Low Supply Risk: Volumetric risks are minimal, as the project is
situated in a highly liquid and competitive natural gas market. The
tolling counterparty bears natural gas supply risks in the short
term, and Kleen's dual-fuel capability protects against temporary
supply disruptions.
Debt Structure: Midrange
Mitigated Refinancing Risk: Fitch believes Kleen will likely fully
prepay the term loan A balloon payment prior to maturity if the
facility continues to maintain a high level of operational
performance. The supplemental amortization mechanism relies upon
contracted revenues during the tolling period, and catch-up
provisions provide some protection against temporary interruptions
in cash flow.
Near-Term Financial Vulnerability: The expected 2017 DSCR of 1.40x
provides Kleen with limited financial cushion to protect against
variable cost risk and market-based contractual penalties under the
tolling agreement. The potential for a missed target amortization
payment is therefore greatest prior to 2018, when the tolling
agreement is no longer in effect. Fitch-projected DSCRs generally
range between 1.40x and 1.45x during the merchant period based
solely on contractual capacity revenues, which could be consistent
with higher credit quality.
Peer Comparison: Kleen's credit quality is consistent with other
thermal projects in the 'BB' rating category. Lea Power Partners,
LLC (rated 'BB+', Stable Outlook) has stabilized its operating
costs, and cash flows are sufficient to support a higher average
rating case DSCR of 1.37x. Conversely, CE Generation LLC (rated
'BB-', Stable Outlook) is exposed to a greater degree of price risk
with rating case DSCRs that fall below breakeven, such that the
project is reliant upon sponsor support.
RATING SENSITIVITIES
Negative - Further increases in costs would heighten the project's
vulnerability to operating event risks.
Negative - Persistently low availability, repeated forced outages,
or an accelerated degradation in heat rates could reduce revenue
and subject the project to contractual penalties.
Negative - In the event that an outstanding balance remains on the
term loan A at maturity, market conditions and/or project-specific
factors could prevent Kleen from refinancing.
Positive - Kleen's financial profile could improve if the project
enters the merchant period with a stable operational profile and a
favorable competitive position.
SUMMARY OF CREDIT
Fitch believes that Kleen's financial profile has stabilized, as
the project has recorded more than two consecutive years of
improved operating results and recently resolved outstanding
disputes with its offtakers that should improve revenues going
forward. Kleen achieved a DSCR of 1.29x in 2015, and the 2016 DSCR
is expected to further improve to 1.37x based on operational cash
flows. The project is now current on target amortization payments
and continues to rapidly deleverage as the maturity of the term
loan A approaches in June 2018.
Kleen has maintained availability of more than 98% with stable heat
rates below 7,100 btu/kWh. This positive trend follows a severe
outage in January 2014 that had a major impact on revenues. The
two-year average capacity factor of 80% suggests that tolling
agreement is economic for the offtaker, though Kleen's
competitiveness in a merchant environment remains untested. Certain
unreimbursed variable expenses, such as Regional Greenhouse Gas
Initiative (RGGI) costs and the Connecticut Gross Receipts Tax,
have eroded margins.
The recovery of Kleen's financial profile has tracked the
improvement in operational performance. Fitch projects a year-end
(YE) 2016 DSCR of 1.37x excluding extraordinary items related to
the settlement of disputes with insurers and contractual offtakers.
The estimated 2016 DSCR exceeds the 1.34x Fitch base case DSCR.
Marginally increased revenues, lower RGGI costs, and reduced legal
fees are the primary drivers of financial performance for 2016.
Fitch believes there is now greater visibility regarding Kleen's
operating expenses. Fitch estimates that 2016 expenses have
returned to pre-2015 levels of approximately $33 million to $34
million. RGGI costs have eroded Kleen's financial profile but
should not significantly contribute to cost volatility in the near
term, as Kleen entered into a forward contract to purchase RGGI
allowances through 2017. Kleen also expects to incur lower legal
expenses following the 2016 settlements.
Kleen's post-2017 cost profile will primarily depend upon the
facility's competitiveness as a merchant generator. Many of the
unanticipated costs that Kleen has incurred, such as RGGI
allowances and the Connecticut Gross Receipts Tax, largely reflect
Kleen's lack of dispatch control. A prudently run merchant facility
would only incur these costs if the market price of electricity
justified the all-in cost of dispatch.
Fitch expects that the 2017 DSCR should reach 1.4x based on a cost
profile grounded in the past two years of relatively stable
operations. Financial performance after 2017 will depend upon
Kleen's prospects as a merchant facility. Fitch estimates that
DSCRs would average 1.44x, assuming only the receipt of contractual
capacity payments.
Fitch believes that this scenario represents a highly conservative
view of projected financial performance, given the current level of
natural gas prices and the position of Kleen within the dispatch
stack. Projected financial performance could potentially support
credit quality above the current rating once the tolling period
expires and the outstanding balance of the term loan A is largely
repaid.
Kleen is a special-purpose company created to own and operate the
project, which consists of a 620-megawatt combined-cycle electric
generating facility located near Middletown, CT. Kleen sells
capacity under a 15-year agreement with Connecticut Light & Power
(IDR 'A-', Stable Outlook). Exelon Generation Company (ExGen; IDR
'BBB', Stable Outlook) purchases the facility's energy output under
a seven-year tolling agreement. Exelon Corp. (IDR 'BBB', Stable
Outlook), ExGen's parent, has partially guaranteed ExGen's
contractual obligations.
SECURITY
The collateral includes a first-priority security interest in the
ownership interests in Kleen, all real and personal property,
including Kleen's rights under the project documents, the project
accounts, and all revenues.
KLX INC: S&P Affirms 'B+' CCR; Outlook Remains Negative
-------------------------------------------------------
S&P Global Ratings affirmed its 'B+' corporate credit rating on KLX
Inc. The outlook remains negative.
At the same time, S&P lowered its issue-level rating on KLX Inc.'s
senior unsecured notes to 'B' from 'B+' and revised S&P's recovery
rating on the notes to '5' from '4'. The '5' recovery rating
indicates S&P's expectation for modest recovery (10%-30%; upper
half of the range) in a payment default scenario.
"The affirmation reflects our view that though credit metrics are
expected to remain weak, they should improve modestly in fiscal
2017 due to the absence of large charges like those incurred in
2016, as well as contributions from the Herndon acquisition and
recent program wins," said S&P Global Ratings credit analyst
Tennille Lopez. "These should result in debt to EBITDA of close to
5.0x-5.5x in fiscal 2017, improving to below 4.0x in fiscal 2018."
KLX's aerospace segment's revenues declined 1.3% in the first half
of 2017 due to production rate cuts, weaker military demand, and
pushed out orders from certain customers. S&P Global Ratings views
the delay in orders to be temporary and expect improvements in the
second half of the year into fiscal 2018, as KLX benefits from
recent program wins and associated market share gains. The company
should also benefit from the recent $221.5 million acquisition of
Herndon Aerospace. The acquisition is consistent with the size and
type of acquisition S&P expects KLX to make and the company's
strategy of growing its aftermarket presence.
The performance of KLX's energy segment is highly correlated to oil
prices, which have fallen sharply over the past two years and
resulted in dramatic cutbacks in exploration, with U.S oil rig
counts down over 70%. This has resulted in a substantial decline
in revenues for the segment, which now comprises only 8% of total
sales compared with 17% a year ago. KLX competes with many other
companies to provide technical and logistics services to
exploration and production (E&P) customers, and the material
decline in the amount of work available has placed significant
pressure on the company's pricing. The company's energy segment
recorded an operating loss of about $70 million in 2016 and S&P
expects close to $90 million in losses in 2017. However, S&P
expects operating losses to decline over the next year as KLX
implements various initiatives to stem losses, but losses may
continue unless oil prices recover.
The negative outlook on KLX incorporates S&P's expectation that the
company's credit metrics will improve modestly but remain weak over
the next 12 months. Although S&P expects losses at the energy
services segment to decline, the company may not be successful in
reducing costs or demand could weaken further.
S&P could lower its ratings on KLX in the next 12 months if the
company's earnings do not improve as S&P expects or if it
undertakes acquisitions that exceed those in S&P's forecast such
that its debt-to-EBITDA metric remains above 5.0x. S&P's
forecasted earnings improvement could be stalled by a further drop
in demand from E&P customers or if management's efforts to reduce
costs are not sufficient to offset the lower demand.
S&P could revise its outlook on KLX to stable if the conditions in
the company's oilfield service segment improve or cost reduction
efforts are successful in minimizing losses faster than S&P
anticipates resulting in debt/EBITDA declining below 5.0x and S&P
expects it to remain there.
LAKEWOOD DEVELOPMENT: Hires Krigel & Krigel as Bankr. Counsel
-------------------------------------------------------------
Lakewood Development Company, Inc., seeks authorization from the
U.S. Bankruptcy Court for the Western District of Missouri to
employ Krigel & Krigel, PC as attorneys of the Debtor and
Debtor-in-Possession.
The Debtor requires Krigel & Krigel to:
a. advise the Debtor with respect to its powers and duties as
Debtor and Debtor-in-Possession in the continued management and
operation of its business;
b. attend meetings and negotiate with representatives of
creditors and other parties in interest;
c. take all necessary action to protect and preserve the
estate, including the prosecution of actions on its behalf, the
defense of any actions commenced against the Debtor's estate, and
objections to claims filed against the estate;
d. prepare on behalf of Debtor all motions, applications,
answers, orders, reports and papers necessary to the administration
of the estate;
e. negotiate and prosecute on the Debtor's behalf all
contracts for the sale of assets, plan of reorganization,
disclosure statement, and all related agreements and/or documents,
and take any action that is necessary for the Debtor to obtain
confirmation of its Plan of Reorganization;
f. appear before this Court and the United States Trustee;
and protect the interests of the Debtor's estate before the Court
and the U.S. Trustee; and
g. perform all other necessary legal services and provide all
other necessary legal advice to the Debtor in connection with this
Chapter 11 proceedings.
Krigel & Krigel lawyers and paralegals who will work on the Debtor
case and their hourly rates are:
Sanford P. Krigel $350
Erlene W. Krigel $275
Paul Hentzen $275
Karen Rosenberg $225
Steve Braun $225
Kelsey Nazar $225
Dana Wilders $225
Lara Pabst $225
Christopher Smith $225
Legal Assistants $75
Erlene W. Krigel of the law firm of Krigel & Krigel, PC, assured
the Court that the firm does not represent any interest adverse to
the Debtor and its estates.
Krigel & Krigel may be reached at:
Erlene W. Krigel
Krigel & Krigel, PC
4520 Main Street, Suite 700
Kansas, MO 64111
Telephone: (816)756-5800
Facsimile: (816)756-1999
About Lakewood Development Company LLC
Lakewood Development Company LLC filed a Chapter 11 bankruptcy
petition (Bankr. w.D.MO. Case No. 16-50425) on October 17,
2016. Hon. Cynthia A. Norton presides over the case. Krigel &
Krigel, PC represents the Debtor as counsel.
The Debtor disclosed total assets of $4.20 million and total
liabilities of $2.42 million. The petition was signed by Jerry Alan
Sigtist, managing partner.
LAW-DEN NURSING: Patient Care Ombudsman Files 2nd Report
--------------------------------------------------------
Deborah L. Fish, the Patient Care Ombudsman for Law-Den Nursing
Home, Inc., has filed a second report for the period September 6,
2016, to November 1, 2016.
The PCO noted that the Debtor has continued the same quality of
care post-petition as it did prepetition.
During the visit, the PCO received a banking question from one
resident. The PCO then spoke with Todd Johnson, the Debtor's
administrative staff, and reported back the concern to the
resident.
The PCO observed that there are no changes to the security since
her last oral report to the court. All doors were tested and the
door/alarm noted in her written report was repaired.
The PCO said the administration has confirmed that the Debtor has
maintained its relationship with its prepetition suppliers and
there have been no interruptions in service, nor any changes
invmedical supplies. The nursing staff reported that they had all
supplies needed for thevresidents and the laundry/maintenance staff
reported the same.
About Law-Den Nursing Home
Law-Den Nursing Home, Inc., filed a Chapter 11 petition (Bankr.
E.D. Mich. Case No. 16-52058) on August 30, 2016. The petition was
signed by Todd Johnson, administrator. The Debtor is represented
by Clinton J. Hubbell, Esq., at Hubbell Duvall PLLC, in Southfield,
Michigan. The case is assigned to Judge Phillip J. Shefferly. At
the time of its filing, the Debtor estimated assets at $0 to
$50,000 and liabilities at $1 million to $10 million.
LBJ HEALTHCARE: Mattresses Needed Replacements, PCO Says
---------------------------------------------------------
Constance Doyle, the Patient Care Ombudsman for LBJ Healthcare
Partners Inc., filed a Third Interim Report for the period of
September 1, 2016, through October 31, 2016.
The Patient Care Ombudsman finds that all care provided to the
residents/clients by LBJ Healthcare Inc., at the Villa Luren
Resident Home is within the standard of care.
The PCO noted that there are no issues identified for the two-month
period, only that the PCO expressed the hope to purchase a few new
mattresses as replacements were needed.
Meanwhile, the PCO observed that the facility remains clean and the
residences all appear well nourished and cared for. Also, the
staffs remain vigilant and continuously interact with the
residences, and work to tend to needs.
Headquartered in Whittier, Calif., LBJ Healthcare Partners Inc.,
fdba Bayshore Villa Healthcare Partners, Inc., aw Brian Buenviaje,
aw Rosalinda Buenviaje, filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Cal. Case No. 16-15197) on April 21, 2016, with
$49,370 in estimated total assets and $1.27 million in estimated
total liabilities. The petition was signed by Brian Buenviaje,
president and CEO. Judge Vincent P. Zurzolo presides over the case.
Robert M. Aronson, Esq., at the Law Office of Robert M. Aronson,
serves as the Debtor's bankruptcy counsel.
LEARFIELD COMMS: Moody's Assigns B2 Corp. Rating Amid Atairos Deal
------------------------------------------------------------------
Moody's Investors Service assigned A-L Parent LLC (A-L), which is
the holding company of Learfield Communications, Inc., a B2
corporate family rating (CFR) and a B1 rating to the proposed $540
million first lien credit facility including a new $65 million
revolver and $475 million first lien term loan. The $100 million
second lien term loan was assigned a Caa1 rating. The outlook is
stable.
The proceeds of the debt offering as well as new equity from
Atairos Group, Inc. (Atairos) will be used to fund the acquisition
of the company, repay existing debt and transaction expenses. All
the existing ratings at Learfield Communications, Inc. will be
withdrawn upon repayment of the outstanding first lien credit
facility.
Initially the rating is expected to be assigned to A-L Parent LLC
and then to Learfield Communications, LLC shortly after closing.
Moody's took the following rating actions:
Issuer: initially A-L Parent LLC and then Learfield
Communications, LLC shortly after closing
-- Corporate Family Rating, assigned a B2
-- Probability of Default Rating, assigned a B2-PD
-- $65 million 1st lien senior secured revolving credit
facility due 2021, assigned a B1 (LGD3)
-- $475 million 1st lien senior secured term loan due 2023,
assigned a B1 (LGD3)
-- $100 million 2nd lien senior secured term loan due 2024,
assigned a Caa1 (LGD5)
-- Outlook, Stable
The assigned ratings are subject to review of final documentation
and no material change in the terms and conditions of the
transaction as provided to Moody's.
RATINGS RATIONALE
A-L's B2 CFR reflects the very high leverage level of 7.2x
pro-forma for the transaction as of 6/30/16 (including Moody's
standard adjustments) as well as our expectation that leverage will
decline to below 6.5x by the end of FY 2017 (ending June 2017).
However, the very high leverage weakly positions the company at the
existing rating and leaves little room for underperformance.
Included in the ratings are the limited tangible assets with the
company's value driven by the intellectual capital of management,
long term business relationships, and contracts with over 120
different college athletic programs and organizations through its
subsidiary Learfield Communications, Inc. As part of the contract
with colleges and universities, the company has a substantial
amount of guaranteed payments over a multiyear period. There is
also the potential for increased competition in collegiate sports
rights that could negatively impact the ability to renew contracts
and EBITDA margins over time. The company has been acquisitive over
the past few years and Moody's expects it will continue to consider
acquisitions going forward. In addition, A-L has some joint
ventures and affiliate investments that are not guarantors of the
credit facilities.
Ratings are supported by the strong growth the company has
demonstrated over the past several years aided by acquisitions.
College sports rights revenue is expected to continue to rise due
to its strong fan base and the underpenetrated nature of some
college media rights compared to professional sports. However,
multimedia rights costs are also expected to increase which have
the potential to erode EBITDA margins if they are not offset by
additional multimedia revenue opportunities or higher sponsorship
rates. Acquisitions have also grown the scale of its multimedia
rights business and increased the number of different services that
can be cross sold to its client base. Atairos' relationship with
Comcast is expected to lead to additional growth opportunities over
time. Good renewal rates with its university base, long contract
periods, and revenue visibility due to a substantial amount of
pre-sold ad inventory also support the ratings.
"We anticipate the company will maintain good liquidity over the
next 12 to 18 months from cash on the balance sheet of
approximately $17 million pro-forma for the transaction as well as
the $65 million revolving credit facility due December 2021."
Moody's said. Results and cash flows are expected to be seasonal
with strongest results posted during the quarters ending in
December and March of each year. Free cash flow to debt percentages
are expected to be in the mid single percentages over the next 12
months and are aided by modest capex spending. Learfield is
required to make material future minimum payments to the
universities that it has multimedia rights contracts with which
will reduce its existing cash balance during the June and July
period when payments are typically made.
The revolver is expected to have a springing first lien net
leverage ratio of 7.5x if more than 35% of the revolver is drawn.
The first and second lien term loans are anticipated to be covenant
lite. "We expect the company will maintain an adequate cushion of
compliance with the covenant over the next 12-18 months." Moody's
said. The company has the ability to issue an unlimited amount of
first lien, second lien, or unsecured debt subject to a pro-forma
incurrence test.
The stable outlook reflects our expectations that EBITDA will grow
in the high single digit percentage range over the next twelve
months. While the company's results have been strong to date, there
is the risk that competitive conditions in the industry could
negatively impact performance over time.
An upgrade is not likely in the near term due to the current very
high leverage level. However, ratings could be upgraded if leverage
were to decline below 4.5x (Moody's adjusted) on a sustained basis
with a good liquidity profile. Confidence would also be needed that
industry conditions are positive and that the new owner would
maintain leverage below the required level.
Ratings could be downgraded due to the loss of material university
media rights contracts, downward margin pressure at contract
renewal, pronounced ad weakness, or additional debt that caused
expected leverage levels to remain above 6.5x (Moody's adjusted) by
the end of the company's 2017 fiscal year.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
A-L Parent LLC (A-L) through its subsidiary Learfield
Communications, Inc. (Learfield) is an operator in the collegiate
sports multimedia rights and marketing industry. Atairos Group,
Inc. entered into an agreement in October, 2016 to acquire the
company from Providence Equity Partners, Nant Capital, and certain
members of management and is headquartered in Plano, TX with
satellite sales offices located on or near college campuses across
the country.
LEARFIELD COMMS: S&P Assigns 'B' Credit Rating Over Atairos Deal
----------------------------------------------------------------
S&P Global Ratings said it assigned its 'B' corporate credit rating
to Plano, Texas-based A-L Parent LLC, parent company to Learfield
Communications Holdings Inc. The rating outlook is stable.
At the same time, S&P assigned its 'B+' issue-level rating to
parent and initial borrower A-L Parent LLC's proposed $540 million
first-lien credit facility (consisting of a $475 million first-lien
term loan due 2023 and $65 million revolving credit facility due
2021). The recovery rating on the first-lien facility is '2,'
reflecting S&P's expectation for substantial (70%-90%; lower half
of the range) recovery for lenders in the event of a payment
default. S&P also assigned its 'CCC+' issue level rating to the
proposed $100 million second-lien term loan due 2024. The recovery
rating on this debt is '6', indicating S&P's expectation for
negligible (0% to 10%) recovery for lenders in the event of a
payment default.
Upon the close of the transaction, A-L Parent LLC will be merged
into Learfield Communications LLC, which will be the surviving
borrower and rated entity. The proceeds from the new first- and
second-lien term loans are expected to be used to refinance
existing debt, to pay fees and expenses, and to partly fund the
acquisition of Learfield by Atairos Group Inc. The remaining
purchase consideration will be funded by a meaningful equity
contribution by financial sponsor Atairos.
S&P also removed its 'B' corporate credit rating on Learfield from
CreditWatch, where S&P had placed it with negative implications on
Oct. 11, 2016, and affirmed the rating. S&P expects to withdraw
ratings on this entity following the completion of the proposed
transactions.
"The 'B' corporate credit rating reflects our belief that, despite
incremental leverage to finance Atairos' acquisition of Learfield,
our measure of lease- and guarantee-adjusted debt to EBITDA will
likely be sustained below our 7x downgrade threshold," said S&P
Global Ratings credit analyst Emile Courtney.
S&P expects that adjusted debt to EBITDA for the fiscal year ending
June 2017 will increase to the low-6x area, about 1x higher than
S&P's previous base-case forecast on Learfield for fiscal year
2017. In addition, S&P anticipates that lease- and
guarantee-adjusted EBITDA coverage of interest expense will be in
the mid-2x area in fiscal 2017. Under S&P's base-case forecast for
fiscal 2018, it expects that continued strength in same-store
operating performance, as well as a modest level of anticipated
acquisitions, will enable the company to grow EBITDA and thereby
reduce adjusted leverage to the 6x area by the end of fiscal 2018.
S&P expects that Learfield will continue to expand its product
offerings to universities where Learfield currently holds
multimedia rights (MMR) contracts, while also expanding its network
of universities by selling ancillary products and services to
universities where Learfield is not the MMR contract holder. S&P's
highly leveraged financial risk assessment on the company also
reflects financial sponsor ownership by Atairos and the tendency of
financial sponsor controlled companies to increase leverage over
time to fund distributions to shareholders. S&P believes that
EBITDA coverage of cash interest will be good at around 3.5x
through 2018, partly offsetting anticipated high leverage.
The stable outlook reflects S&P's expectation that Learfield will
reduce leverage over time primarily through EBITDA growth, and that
the company will sustain lease- and guarantee-adjusted debt to
EBITDA below S&P's 7x downgrade threshold, incorporating potential
distributions to shareholders and acquisitions.
LIBERTY INTERACTIVE: Fitch Affirms 'BB' LT Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' Long-Term Issuer Default Rating
(IDR) for Liberty Interactive LLC (Liberty) and its wholly owned
subsidiary QVC Inc. (QVC). Additionally, Fitch has affirmed the
issue ratings of Liberty and QVC as outlined at the end of the
release. The Rating Outlook is Stable. As of Sept. 30, 2016,
Liberty had approximately $8.5 billion of debt outstanding,
including approximately $5.7 billion at QVC.
KEY RATING DRIVERS
Consolidated Profile Drives Ratings: Liberty's and QVC's ratings
reflect the consolidated legal entity/obligor credit profile,
rather than the tracking stock structure of Interactive
(QVCA/B)/Ventures (LVNTA/B). Based on Fitch's interpretation of
Liberty's indentures, Liberty could not spin out QVC without
bondholder consent. Fitch believes QVC generates 81% and 95% of
Liberty's last 12 months (LTM) ended Sept. 30, 2016 revenues and
EBITDA, respectively; a spinoff would trigger the "substantially
all" asset disposition restriction in the Liberty indentures.
Ratings Reflect Spinoff: Fitch's ratings materially rely on QVC
with Liberty's other investments viewed as incremental support. The
ratings incorporate LVNTA/B's spinoffs of CommerceHub, Inc.
completed in July 2016 and Liberty Expedia Holdings, Inc. in
November 2016. Pro forma for the spinoffs and $345 million of new
borrowings under the QVC/zulily llc (zulily) revolver to fund
Liberty's 1% HSNi exchangeable debentures put, Fitch calculates
QVC's gross leverage at 2.8x and Liberty's gross leverage at 4.3x
as of Sept. 30, 2016.
Broadband Investment: Liberty used cash on hand to invest $2.4
billion in Liberty Broadband Corporation (Broadband) for a 24%
ownership position in Broadband in May 2016. Broadband used the
proceeds to fund its $5 billion stock purchase for 25% ownership in
a new entity (New Charter) created by Charter Communications Inc.'s
merger with Time Warner Cable Inc. and acquisition of Bright House
Networks. Liberty also exchanged its TWC ownership into a 2%
ownership position in New Charter.
QVC Debt Ratings: Fitch rates both QVC's senior secured bank credit
facility and the senior secured notes 'BBB-', two notches higher
than QVC's IDR. The secured issue rating reflects what Fitch
believes QVC's stand-alone ratings would be.
Recent Operating Weakness: Fitch recognizes QVC's ability to manage
product mix and adapt to its customers' shopping preferences.
However, QVC has been experiencing top line weakness across an
increasing number of product categories including jewelry and
electronics. and Fitch will pay close attention to QVC's operating
performance over the next few quarters to determine the breadth,
depth and tenor of this weakness.
EBITDA Margin: While EBITDA margin fluctuation is driven in part by
product mix, Fitch believes QVC's margins will remain within its
historical 18%-20% range over the next few years. One additional
driver of this expectation is QVC's recent announcement regarding
the elimination of 100 corporate positions as part of a broader
effort to reduce SG&A expenses by $30 million to 35 million in
2017.
Cash Deployment: Fitch expects Liberty's free cash flow (FCF) to be
dedicated to share repurchases and debt reduction. Although Fitch
expects QVC to manage leverage down to its stated 2.5x leverage
target within 12-15 months, recent operating performance weakness
suggests that debt repayment may be necessary to accomplish this.
Fitch also recognizes the risk remains that Liberty may acquire the
62% of HSN Inc. it does not own, but believes Liberty's $2.3
billion acquisition of zulily in October 2015 reduced this
probability.
QVC experienced an increase in credit write-offs driven by issues
with Easy-Pay, a broadly offered program designed to extend
customer payment terms without credit checks. Bad debt expense
began stepping up in 2Q16, significantly exceeding 1% for the first
time in several years, driven primarily by a higher default rate
among new and infrequent customers. QVC has since become more
conservative in offering this program and will work to reduce
write-offs to more normalized levels below 1%. While Fitch is
mindful of this trend, it remains well below industry averages.
Fitch also notes that QVC offers a credit card though Synchrony
Bank which has not experienced any worsening credit trends.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
-- High single-digit revenue growth in FY2016 as a full year of
zulily more than offsets QVC's weak second-half performance
-- Mid-single-digit growth thereafter driven by mid-teen growth
at zulily, low single-digit U.S. growth and mid-single-digit
International growth.
-- Consolidated EBITDA margins remain within their historical
range between18%-20%
-- Annual FCF in the range of $1 billion-$1.2 billion.
-- QVC Inc. reduces total leverage below its 2.5x target in
2017, which is within Fitch's rating parameters, using a mix
of EBITDA improvement and FCF. The EBITDA growth and debt
repayment are also sufficient to reduce Liberty's total
leverage below 4x.
RATING SENSITIVITIES
Positive Rating Actions: Fitch believes if Liberty were to manage
to more conservative leverage targets, ratings could be upgraded.
Liberty would need to demonstrate sustained gross unadjusted
leverage below 3.5x and QVC's unadjusted gross leverage managed to
below 2x.
Negative Rating Actions: Negative action could occur if QVC does
not return leverage to below 2.5x within 12-15 months; if financial
policy changes, including more aggressive leverage targets and
asset mix changes weakening bondholder protection; or if there are
unexpected revenue declines in excess of 10% that materially drive
declines in EBITDA and FCF, and result in QVC's leverage exceeding
2.5x in the absence of a credible plan to reduce leverage.
LIQUIDITY
Fitch believes liquidity at QVC will be sufficient to support
operations and its expansion into other markets. Fitch expects
near-term debt repayment, acquisitions and share buybacks to be a
primary use of FCF. Fitch also believes there is sufficient
liquidity and cash generation (from investment dividends and tax
sharing between the tracking stocks) to support debt service and
disciplined investment at Liberty. Fitch recognizes that in the
event of a liquidity strain at Liberty, QVC could provide funding
to support debt service (via intercompany loans), or the tracking
stock structure could be collapsed.
Fitch notes that cash can travel throughout all Liberty entities
relatively easily. Although the tracking stock structure adds a
layer of complexity, Liberty has in the past reattributed assets
and liabilities. Fitch believes that resources at QVC would be used
to support Liberty, and vice versa, if ever needed.
Liberty's consolidated liquidity as of Sept. 30, 2016 included $505
million in readily available cash, $680 million available under
QVC's $2.65 billion revolving credit facility (RCF), the majority
of which expires in June 2021 (see below) and $1.8 billion in
available-for-sale investments. Fitch calculates FCF of
approximately $1.04 billion. Fitch expects FCF to be in the $1.1
billion-$1.2 billion range in 2017 and 2018. Liberty's balance
sheet includes public holdings with an estimated market value of
$5.6 billion. Fitch believes the remaining assets could be
liquidated in the event that Liberty needed additional liquidity.
Liberty has $1.2 billion of near-term maturities that are only
classified as near term because Liberty does not own the underlying
shares needed to redeem the debentures. However, Liberty has no
intention or requirement to redeem them in the near term, and
maturities range from 2029 to 2046. QVC's next maturity, other than
its $2.7 billion RCF in 2021, is $400 million aggregate principal
of 3.125% senior secured notes due in 2019. Fitch believes Liberty
has sufficient liquidity to handle this maturity.
In June 2016, QVC amended its senior secured credit facility to
include a $400 million revolver (Tranche 2) on which Liberty's
subsidiary zulily is a co-borrower. Although pricing did not
change, the maturity on Tranche 1 and Tranche 2 ($2.1 billion) was
extended to June 23, 2021, with the remaining $140 million (Tranche
3) maintaining the existing June 30, 2016 maturity. QVC's maximum
leverage ratio covenant under the new credit facility will be 3.5x,
which is unchanged from the previous credit facility. Additionally,
there is a combined zulily and QVC leverage covenant, which
improves the overall interest rate under the new credit facility.
Tranche 1 is secured by the stock of QVC and zulily while Tranches
2 and 3 continue to be secured by QVC stock only.
Fitch expects cash deployment to be dedicated toward debt repayment
in the near term along with share buybacks and acquisitions. Fitch
recognizes the risk that Liberty may acquire the 62% of HSN Inc. it
does not already own, but believes the zulily acquisition reduced
this probability. However, depending on how the transaction is
structured and the company's commitment to returning QVC's and
Liberty's leverage to 2.5x and 4x, respectively, ratings may remain
unchanged. Fitch believes that Ventures cash deployment will be
primarily toward acquisitions and investments.
FULL LIST OF RATING ACTIONS
Fitch affirms the following ratings:
Liberty Interactive LLC
-- LT Issuer Default Rating (IDR) at 'BB';
-- Senior unsecured at 'BB/RR4'.
QVC
-- IDR at 'BB'.
-- Senior secured debt at 'BBB-/RR1'.
The Rating Outlook is Stable.
LIGHTNING BOLT LEASING: Disclosure Statement Hearing on Dec. 20
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida is set
to hold a hearing on December 20, at 11:30 a.m., to consider
approval of the disclosure statement explaining the Chapter 11 plan
of Lightning Bolt Leasing, LLC and CCR, Inc.
The hearing will take place at Courtroom D, 4th Floor, 300 North
Hogan Street, Jacksonville, Florida. Objections must be filed and
served seven days before the hearing.
About Lightning Bolt Leasing
Lightning Bolt Leasing, LLC, filed for Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Case No. 15-05173) on Nov. 25, 2015.
On November 27, 2015, CCR, Inc. sought Chapter 11 bankruptcy
protection (Bankr. M.D. Fla. Case No. 15-05183). The petitions
were signed by David Lancaster, president. The cases are jointly
administered.
Robert D. Wilcox, Esq., at Wilcox Law Firm serves as the Debtors'
bankruptcy counsel.
At the time of the filing, Lightning Bolt estimated assets and
liabilities of less than $50,000. CCR estimated assets of less
than $50,000 and liabilities of $1 million to $10 million.
LINN ENERGY: Creditors' Panel Hires Gardere as Local Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Linn Energy, LLC,
et al., seeks authorization from the U.S. Bankruptcy Court for the
Southern District of Texas to employ Gardere Wynne Sewell LLP as
local counsel for the Committee, nunc pro tunc to June 8, 2016.
The Committee requires Gardere to:
a. investigate and analyze the existence, extent, validity,
enforceability, and priority of liens asserted against the Debtors'
oil and gas assets, and participate as necessary in any action
related to such investigation;
b. to the extent requested by the Committee, analyze any
other Texas law and/or oil and gas law issues related these chapter
11 cases;
c. to the extent requested by the Committee, participate in
any related investigation of the Debtors and/or the Debtors'
secured lenders to the extent related to (a) and (b) above;
d. advise the Committee in connection with its powers and
duties under the Bankruptcy Code, the Local Rules, and the
Bankruptcy Local Rules;
e. provide legal advice and services regarding local rules,
practices, and procedures;
f. provide certain services in connection with administration
of the chapter 11 cases, including, without limitation, preparing
agenda letters, hearing notices, and hearing binders of documents
and pleadings;
g. review and comment on proposed drafts of pleadings and
other documents to be filed with the Court as local bankruptcy
counsel or Texas oil and gas counsel to the Committee;
h. at the request of the Committee, appear in Court and at
any meeting with the U.S. Trustee and any meeting of creditors at
any given time on behalf of the Committee as its Texas Counsel;
i. perform all other services assigned by the Committee to
Gardere as Texas Counsel;
j. provide legal advice and services on any matter on which
Ropes & Gray may have a conflict, or otherwise as needed based on
specialization;
k. assist and advise the Committee in its consultation with
the Debtors relative to the administration of these cases as Texas
Counsel;
l. attend meetings and negotiate with the representatives of
the Debtors and other parties-in-interest as Texas Counsel;
m. assist and advise the Committee in its examination and
analysis of the conduct of the Debtors' affairs as Texas Counsel;
n. assist and advise the Committee in connection with any
sale of the Debtors’ assets pursuant to section 363 of the
Bankruptcy Code as Texas Counsel;
o. assist the Committee in the review, analysis and
negotiation of any chapter 11 plan(s) of reorganization or
liquidation that may be filed and assist the Committee in the
review, analysis and negotiation of the disclosure statement
accompanying any such plan(s) as Texas Counsel;
p. assist the Committee in analyzing the claims asserted
against and interests asserted in the Debtors, in negotiating with
the holders of such claims and interests, and in bringing,
participating, or advising the Committee with respect to contested
matters and adversary proceedings, including objections or
estimations proceedings, with respect to such claims or interests
as Texas Counsel;
q. assist with the Committee's review of the Debtors'
Schedules of Assets and Liabilities, Statement of Financial Affairs
and other financing reports prepared by the Debtors, and the
Committee's investigation of the acts, conduct, assets,
liabilities, and financial condition of the Debtors and of the
historic and ongoing operation of their businesses as Texas
Counsel;
r. assist the Committee in its analysis of, and negotiations
with, the Debtors or any third party related to, among other
things, cash collateral issues, financings, compromises of
controversies, assumption or rejection of executory contracts and
unexpired leases, and matters affecting the automatic stay as Texas
Counsel;
s. take all necessary action to protect and preserve the
interests of the Committee, including (i) possible prosecution of
actions on its behalf; and (ii) if appropriate, negotiations
concerning all litigation in which the Debtors are involved as
Texas Counsel;
t. appear, as appropriate, before this Court, the appellate
courts, and the United States Trustee, and protect the interests of
the Committee before those courts and before the United States
Trustee as Texas Counsel;
u. take all actions, including attending meetings, reviewing
pleadings, preparing or filing pleadings and/or submitting reports
that are related to items (a)-(t), review, analyze and respond to
related pleadings or reports filed by other parties and participate
at hearings on such pleadings or reports as Texas Counsel; and
v. perform all other necessary legal services in these cases
as Texas Counsel.
Gardere professionals who will work on the Debtors' cases and their
hourly rates are:
John Melko, Partner $700
Quan Vu, Partner $630
Tim Spear, Partner $610
David S. Elder, Of Counsel $585
Sharon Beausoleil, Senior Attorney $425
Michael Riordan, Associate $385
Christopher Marchbanks, Associate $340
Sean Wilson, Associate $280
Albert Jou, Associate $260
Danielle Osburn, Associate $250
Gale Gattis, Paralegal $235
Gardere will also be reimbursed for reasonable out-of-pocket
expenses incurred.
John Melko, Esq., partner of the firm of Gardere Wynne Sewell LLP,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtors and their
estates.
The following is provided in response to the request for additional
information set forth in D1 of the U.S. Trustee's Appendix B
Guidelines:
-- Gardere did not represent the Committee in the 12 months
prepetition.
-- Gardere has submitted a budget to the Committee for July,
August, September, and October of 2016.
Gardere can be reached at:
John Melko, Esq.
Gardere Wynne Sewell LLP
1000 Louisiana Street, 20th Floor
Houston, TX 77002
Tel: 713-276-5500
About Linn Energy
Headquartered in Houston, Texas, Linn Energy, LLC, and its
affiliates are independent oil and natural gas companies. Each of
Linn Energy, LLC, and 14 of its subsidiaries filed a voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Lead Case No. 16-60040) on May 11, 2016. The petitions were signed
by Arden L. Walker, Jr., chief operating officer of LINN Energy.
The Debtors have hired Paul M. Basta, Esq., Stephen E. Hessler,
Esq., Brian S. Lennon, Esq., James H.M. Sprayregen, Esq., and
Joseph M. Graham, Esq., at Kirkland & Ellis LLP and Kirkland &
Ellis International LLP as general bankruptcy counsel, Jackson
Walker L.L.P. as co-counsel, Lazard Freres & Co. LLC as financial
advisor, AlixPartners as restructuring advisor and Prime Clerk LLC
as claims, notice and balloting agent.
Judge David R. Jones presides over the cases.
The Office of the U.S. Trustee has appointed five creditors of Linn
Energy LLC to serve on the official committee of unsecured
creditors. The Committee tapped Mark I. Bane, Esq., and Keith H.
Wofford, Esq., at Ropes & Gray LLP; and Moelis & Company LLC as
investment banker. It also retained as Texas Oil & Gas Counsel,
John P. Melko, Esq., David S. Elder, Esq., and Michael K. Riordan,
Esq., at Gardere Wynne Sewell LLP.
LONG-DEI LIU: PCO Files Third Interim Report
--------------------------------------------
Constance Doyle, the Patient Care Ombudsman for Long-Dei Liu, has
filed the Third Interim Report for the period of September 1, 2016
to October 31, 2016.
The PCO finds that all care provided to the patients by the Debtor
is well within the standard the care.
The PCO noted that the deliveries are reported 1-2 per month with
an average of 2 patients per day for gynecological issues on the
month of September 2016. On the same month, the PCO observed that
there is no change in staff or equipment. The PCO added that the
Debtor continues to focus on trying to maintain practice, and
observed that the patients were graciously greeted and cared for by
the Debtor and the Office Manager.
Meanwhile, on October 2016, the PCO noted that the patient
population is primarily for gynecology issues with on about 2
deliveries per month.
About Long-Dei Liu
Orange, Calif.-based Long-Dei Liu filed for Chapter 11 bankruptcy
protection (Bankr. C.D. Cal. Case No. 16-11588). Judge Theodor
Albert presides over the case. Long-Dei Liu, MD, is a single
practitioner who has practiced obstetrics and gynecology since
1981.
MADDYBRAND INC: Hires James M. Joyce as Bankr. Counsel
------------------------------------------------------
Maddybrand Inc., seeks authorization from the U.S. Bankruptcy Court
for the Western District of New York to employ James M. Joyce, Esq.
as attorney.
The Debtor requires James M. Joyce, Esq., to:
a. advise the applicant as to its right, duties and powers
as a debtor in possession;
b. prepare and file any statements, schedules, plans or
other documents or pleadings to be filed by the applicant in this
case;
c. represent the applicant in all hearings, meetings of
creditors, conferences, trials and other proceedings in this
case; and
d. perform such other legal services as may be necessary in
connection with this case.
The Debtor will James M Joyce, Esq., at the rate of $250.00 per
hour.
James M Joyce, Esq., assured the Court that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estates.
James M. Joyce may be reached at:
James M. Joyce, Esq.
4733 Transit Road
Buffalo, New York 14043
Phone: (716)656-0600
About Maddybrand Inc.
Maddybrand Inc. filed a Chapter 11 bankruptcy petition (Bankr.
W.D.N.Y. Case No. 16-10682) on October 11, 2016. James M. Joyce,
Esq. serves as bankruptcy counsel.
The Debtor says assets and liabilities are both below $1 million.
MARACAS CLUB: DOJ Watchdog Seeks Ch. 11 Trustee Appointment
-----------------------------------------------------------
William K. Harrington, the United States Trustee for Region 2, asks
the U.S. Bankruptcy Court for the Eastern District of New York to
direct the appointment of a Chapter 11 Trustee for Maracas Club and
Restaurant, LLC.
According to the U.S. Trustee, the Debtor has:
(a) failed to pay post-petition Federal Withholding Taxes;
(b) failed to pay post-petition New York State Withholding and
Sales Tax;
(c) failed to pay post-petition unemployment insurance
contributions; and,
(d) failed to pay Quarterly Fees and Timely File Monthly
Operating Reports;
Therefore, the U.S. Trustee asserts that the Debtor's gross
mismanagement warrants the appointment of a Trustee under Sec.
1104(a)(1) of the Bankruptcy Code.
Maracas Club and Restaurant LLC, dba Maracas New York, filed a
Chapter 11 petition (Bankr. E.D.N.Y. Case No. 14-44489) on
September 2, 2014, and is represented by Dawn Kirby Arnold, Esq.,
at Delbello Donnellan Weingarten Wise, et al.
MARY STREET: Seeks to Employ Trenk DiPasquale as Attorney
---------------------------------------------------------
Mary Street Housing, LLC, seeks authorization from the U.S.
Bankruptcy Court for the District of New Jersey to employ Trenk,
DiPasquale, Della Fera & Sodono, P.C., as attorney.
The Debtor requires Trenk DiPasquale to:
(a) advise the Debtor with respect to the power, duties and
responsibilities in the continued management of the financial
affairs as a debtor, including the rights and remedies of the
debtor-in-possession with respect to its assets and with respect to
the claims of creditors;
(b) advise the Debtor with respect to preparing and obtaining
approval of a Disclosure Statement and Plan of Reorganization;
(c) prepare on behalf of the Debtor, as necessary,
applications, motions, complaints, answers, orders, reports and
other pleadings and documents;
(d) appear before the Court and other officials and tribunals,
if necessary, and protect the interests of the Debtor in federal,
state and foreign jurisdictions and administrative proceedings;
(e) negotiate and prepare the documents relating to the use,
reorganization and disposition of assets, as requested by the
Debtor;
(f) negotiate and formulate a Disclosure Statement and Plan of
Reorganization;
(g) advise the Debtor concerning the administration of its
estate as a debtor-in-possession; and,
(h) perform such other legal services for the Debtor, as may
be necessary and appropriate.
Trenk DiPasquale will be paid at these hourly rates:
Richard D. Trenk (Director) $610
Irena Goldstein (Director) $460
Robert S. Roglieri (Associate) $240
Partners $375 - $610
Associates $225 - $370
Law Clerks $195
Paralegals and Support Staff $145 - $210
Richard D. Trenk, Esq., attorney-at-law of Trenk DiPasquale,
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.
Trenk DiPasquale can be reached at:
Richard D. Trenk, Esq.
TRENK, DIPASQUALE, DELLA FERA & SODONO, P.C.
347 Mount Pleasant Ave # 300
West Orange, NJ 07052
Tel.: 973-323-8660
Fax: 973-243-8677
Email: rtrenk@trenklawfirm.com
Headquartered in New Jersey, HarMac Corp., et al., are engaged in
the rental business owning four residential rooming houses
(specifically for low income individuals) with 69 units and a
commercial office building located in Union County. The units
consist of studios and shared living spaces, and most rents are
subsidized.
HarMac Corp., Mary Street Housing, LLC, 111 Cherry Street, Inc.,
137 West 5th Associates, LLC and 301 3rd Street, LLC, each filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
D.N.J. Lead Case No. 16-29568) on Oct. 13, 2016. The Chapter 11
cases are jointly administered. The Chapter 11 cases are assigned
to Judge Vincent F. Papalia.
The Debtors are represented by Robert S. Roglieri, Esq., and
Richard D. Trenk, Esq., at Trenk, Dipasquale, Dellafera & Sodona,
P.C., in West Orange, New Jersey.
MCDONALD BUILDING: Hires ROI as Commercial Real Estate Broker
-------------------------------------------------------------
McDonald Building, LLC, an Arizona limited liability company seeks
authorization from the U.S. Bankruptcy Court for the District of
Arizona to employ ROI Properties, LLC as commercial real estate
broker.
The Debtor owns a 50% tenant-in-common interest in the McDonald
Building with Miller McDonald, LLC. On the Petition Date, the
Debtor filed an Adversary Complaint seeking to sell the McDonald
Building free and clear of all interests, including without
limitation the Miller TIC interest, pursuant to Bankruptcy Code.
The Adversary Complaint is currently pending before the Court
The Debtor requires R.O.I Properties, LLC to market and sell the
commercial building located at 7595 E. McDonald Boulevard,
Scottsdale, Arizona
ROI will charge the Debtor's estate a 5% commission fee for the
sale of the McDonald Building.
ROI Properties, LLC assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtor and its estates.
ROI may be reached at:
Beth Jo Zeitzer
R.O.I. Properties
2001 E. Campbell Ave., Ste. 202
Phoenix, AZ 85016
Phone: 602.319.1326
Fax: 602.522.2014
About McDonald Building
McDonald Building, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 16-10430) on September 9,
2016. The petition was signed by Ceasar A. Perez, manager. At the
time of the filing, the Debtor estimated its assets and debts at $1
million to $10 million.
Diamond Storage Investments, LLC, filed a Chapter 11 petition
(Bankr. D. Ariz. Case No. 16-10708) on September 16, 2016, and is
represented by Janel M. Glynn, Esq., at Gallagher & Kennedy.
MENCO PACIFIC: Hires Kallman & Thompson as Accountants
------------------------------------------------------
Menco Pacific, Inc. asks for permission from the Hon. Maureen A.
Tighe of the U.S. Bankruptcy Court for the Central District of
California to employ Kallman & Thompson & Logan, LLP as the
estate's certified public accountants.
The Debtor requires Kallman & Thompson to assist in its efforts to
comply with applicable tax reporting and filing requirements, U.S.
Trustee Compliance and Chapter 11 plan formulation.
Kallman & Thompson will be paid at these hourly rates:
Stephen Logan, partner $350
Frances Kallman, partner $300
Danielle Li, staff accountant $250
Sally Delmonte, staff accountant $200
Kallman & Thompson will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Pursuant to the Cash Collateral Ordered entered by the Bankruptcy
Court on October 17, 2016, Kallman & Thompson received $10,000,
post-petition that is being held in Kallman & Thompson's trust
account pending the approval of this Application. The retainer is
an advance against fees and costs, subject to approval by the
Bankruptcy Court.
Stephen Logan, partner of Kallman & Thompson, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estate.
Kallman & Thompson can be reached at:
Stephen Logan
KALLMAN & THOMPSON & LOGAN, LLP
125 S. Barrington Place
Los Angeles, CA 90049
Tel: (310) 909-1900
About Menco Pacific
Menco Pacific, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C. D. Calif. Case No. 16-12791) on
September 26, 2016. The petition was signed by Oscar Ruben
Mendoza, president.
The case is assigned to Hon. Maureen Tighe.
At the time of the filing, the Debtor estimated its assets and
liabilities at $1 million to $10 million.
MERRIMACK PHARMACEUTICALS: Incurs $30.3 Million Net Loss in Q3
--------------------------------------------------------------
Merrimack Pharmaceuticals, Inc. filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $30.27 million on $28.07 million of total revenues
for the three months ended Sept. 30, 2016, compared to a net loss
of $42.38 million on $16.44 million of total revenues for the same
period a year ago.
For the nine months ended Sept. 30, 2016, Merrimack reported a net
loss of $119.89 million on $83.03 million of total revenues
compared to a net loss of $99.72 million on $67.83 million of total
revenues for the nine months ended Sept. 30, 2015.
As of Sept. 30, 2016, Merrimack had $118.41 million in total
assets, $345.55 million in total liabilities and a total
stockholders' deficit of $226.78 million.
As of Sept. 30, 2016, within the Company's unrestricted cash and
cash equivalents, $0.4 million was cash and cash equivalents held
by its majority owned subsidiary, Silver Creek Pharmaceuticals,
Inc., or Silver Creek, which is consolidated for financial
reporting purposes. This $0.4 million held by Silver Creek is
designated for the operations of Silver Creek.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/xTkVQR
About Merrimack
Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a
biopharmaceutical company discovering, developing and preparing to
commercialize innovative medicines consisting of novel
therapeutics paired with companion diagnostics. The Company's
initial focus is in the field of oncology. The Company has five
programs in clinical development. In it most advanced program,
the Company is conducting a pivotal Phase 3 clinical trial.
Merrimack reported a net loss of $148 million on $89.3 million of
total revenues for the year ended Dec. 31, 2015, compared to a net
loss of $83.6 million on $103 million of total revenues for the
year ended Dec. 31, 2014.
METABOLIX INC: Signs Separation Agreement with Former CEO
---------------------------------------------------------
Metabolix, Inc. previously announced that Joseph Shaulson had
stepped down from his executive responsibilities as president and
chief executive officer of the Company. In connection with his
departure, on Nov. 4, 2016, Mr. Shaulson and the Company entered
into a Separation Agreement.
The Separation Agreement provides that Mr. Shaulson will remain an
employee and provide transition support to the Company and its
management team through the end of 2016. He will also remain on
the Company's board of directors. He will continue to receive base
compensation and standard employee benefits during the transition
period through Dec. 31, 2016. Base compensation was continued at
the rate of $350,000 per year through the end of October and then
reduced to the rate of $175,000 per year through the end of
December. Contemporaneously with the execution of this Separation
Agreement, Mr. Shaulson and the Company entered into a Release
Agreement.
The Separation Agreement provides for the following in lieu of any
cash severance and 2016 cash bonus payable under Mr. Shaulson's
previous employment agreement:
* Mr. Shaulson's outstanding non-qualified stock options
covering 191,667 shares of Company common stock were
immediately vested and remain exercisable for the balance of
their original term through Dec. 19, 2023.
* Mr. Shaulson's outstanding restricted stock units covering
151,250 shares of Company common stock were immediately
vested.
* Mr. Shaulson was granted new non-qualified stock options
under the Company's stock option plan exercisable for a total
of 750,000 shares of Company common stock. The new options
have an exercise price equal to the closing price of the
Company's common stock on the date of grant, will become
fully vested upon the effective date of the Release
Agreement, and will be exercisable through Dec. 19, 2023.
One of the new options, exercisable for 350,000 of the
750,000 shares of Company common stock, is subject to
approval by the Company's stockholders of certain amendments
to the Company's stock option plan.
In order to attract and retain talent during and after its
transition to Yield10 Bioscience, the Company is adopting changes
to its compensation program to reduce overall cash compensation and
increase equity-based compensation, by for example, suspending its
cash bonus program and granting new stock options to its executive
officers and other employees. In connection with these changes,
amendments to the Company's 2014 Stock Option and Incentive Plan
were approved by the Company's Board of Directors on Oct. 31, 2016,
increasing the number of shares of common stock authorized for
issuance under the plan by 5,833,333, to a total of 10,000,000
shares plus the number of shares underlying any awards under the
Company's 2006 Stock Option and Incentive Plan and the Metabolix,
Inc. 2005 Stock Plan that are forfeited, canceled or terminated
(other than by exercise). The amendments also increased the
maximum award of stock options or stock appreciation rights that
may be granted to any one individual from 500,000 to 2,000,000
shares of common stock for any calendar year period and increased
the maximum award of restricted stock, restricted stock units or
performance shares that may be granted to any one individual and
qualify as "performance-based compensation" under Section 162(m) of
the Code from 500,000 to 2,000,000 shares of common stock in any
performance cycle (in each case, subject to adjustment for stock
splits and similar events). The Company expects to hold a special
stockholder meeting to vote on the amendments during December
2016.
About Metabolix
Metabolix, Inc. is implementing a strategic plan under which the
Company has wound down its legacy PHA biopolymer business and
Yield10 Bioscience will become its core business, with a focus on
developing disruptive technologies for step-change improvements in
crop yield. Yield10 is leveraging Metabolix's extensive track
record of innovation based around optimizing the flow of carbon
intermediates in living systems. Yield10 is working on new
approaches to improve fundamental elements of plant metabolism
through enhanced photosynthetic efficiency and directed carbon
utilization. Yield10 is advancing several yield traits in
development in crops such as camelina, canola, soybean and corn.
The Company is based in Woburn, Mass.
As of June 30, 2016, Metabolix had $9.38 million in total assets,
$5.24 million in total liabilities and $4.14 million in total
stockholders' equity.
Metabolix reported a net loss of $23.68 million in 2015, a net loss
of $29.53 million in 2014 and a net loss of $30.50 million in
2013.
PricewaterhouseCoopers LLP, in Boston, Massachusetts, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2015, citing that the
Company has suffered recurring losses from operations and has
insufficient capital resources, which raises substantial doubt
about its ability to continue as a going concern.
MGM RESORTS: Posts $535.6 Million Net Income for Third Quarter
--------------------------------------------------------------
MGM Resorts International filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing net income
attributable to the Company of $535.6 million on $2.51 billion of
revenues for the three months ended Sept. 30, 2016, compared to net
income attributable to the Company of $66.42 million on $2.28
billion of revenues for the same period a year ago.
For the nine months ended Sept. 30, 2016, the Company reported net
income attributable to the Company of $1.07 billion on $6.99
billion of revenues compared to net income attributable to the
Company of $333.7 million on $6.99 billion of revenues for the nine
months ended Sept. 30, 2015.
As of Sept. 30, 2016, MGM Resorts had $27.70 billion in total
assets, $17.78 billion in total liabilities and $9.91 billion in
total stockholders' equity.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/Ty5AmG
About MGM Resorts
MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/
-- is a global hospitality company, operating a portfolio of
destination resort brands
including Bellagio, MGM Grand, Mandalay Bay and The Mirage. The
Company also owns 51% of MGM China Holdings Limited, which owns
the MGM Macau resort and casino and is in the process of
developing a gaming resort in Cotai, and 50% of CityCenter in Las
Vegas, which features ARIA resort and casino.
MGM Resorts reported a net loss attributable to the Company of
$447.72 million in 2015, a net loss attributable to the Company of
$149.87 million in 2014 and a net loss attributable to the Company
of $171.73 milion in 2013.
* * *
This concludes the Troubled Company Reporter's coverage of MGM
Resorts International until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
MIAMI TEES: Unsecureds To Recover 17.25% Under Plan
---------------------------------------------------
Miami Tees, Inc., filed with the U.S. Bankruptcy Court for the
Southern District of Florida a disclosure statement dated Oct. 31,
2016, referring to the Debtor's plan of reorganization.
The approved general unsecured claimants in Class 2 will receive a
distribution of 17.25% of their allowed claims distributed in three
equal payments of 1/3 each. The first 1/3 amount will be paid on
the Effective Date of the Debtor's confirmed Plano, with the second
1/3 paid 45 days after the first, and third 1/3 paid 45 days after
the second.
Payments and distributions under the Plan will be funded by the
proposed Debtor-in-Possession lender, Global Warehousing, located
in Miami, Florida, and from surplus cash flow generated by the
Debtor's operations.
The Disclosure Statement is available at:
http://bankrupt.com/misc/flsb16-13346-83.pdf
The Plan was filed by the Debtor's counsel:
William J. Maguire, Esq.
Maguire Law Chartered
400 Columbia Drive, Suite 100
West Palm Beach, FL 33409
Tel: (561) 300-6812
Fax: (561) 687-8103
E-mail: william@maguire-law.com
About Miami Tees
Miami Tees, Inc., was formed on Aug. 17, 1988, as a Florida
corporation. In its 28 years of operation, the Debtor achieved
significant brand success and revenues in the apparel industry,
primarily as a silk screen printer for casual wear and T-shirts.
The Debtor filed a Chapter 11 petition (Bankr. S.D. Fla. Case No.
16-13346) on March 9, 2016. The petition was signed by Michael J.
Chavez, president.
The Debtor is represented by William J. Maguire, Esq., at Maguire
Law Chartered. The case is assigned to Judge Jay A. Cristol.
The Debtor disclosed total assets of $1.86 million and total debt
of $1.42 million.
MIDCONTINENT COMMS: $535MM in New Loans Get "BB+" from S&P
----------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '1'
recovery rating to Minneapolis-based incumbent cable provider
Midcontinent Communications' proposed $250 million senior secured
revolving credit facility due 2021 and $285 million senior secured
term loan due 2023. The '1' recovery rating indicates S&P's
expectation for very high (90%-100%) recovery in the event of
payment default.
S&P expects the company will use proceeds from the term loan to
refinance its existing credit facility. The 'BB-' corporate credit
rating is not affected by the transaction despite the modest
reduction in leverage from the pay down of the term loan A. As part
of the refinancing, Midcontinent will also increase the size of its
revolver to $250 million from $125 million, which will improve its
liquidity position.
RATINGS LIST
Midcontinent Communications
Corporate Credit Rating BB-/Stable/--
New Rating
Midcontinent Communications
Senior Secured
$250 mil. revolver due 2021 BB+
Recovery Rating 1
$285 mil. term loan due 2023 BB+
Recovery Rating 1
MIGUEL ANGEL RODRIGUEZ: Unsecured Creditors to be Paid 3.6%
-----------------------------------------------------------
General unsecured creditors will get 3.6% of their claims under a
Chapter 11 plan of reorganization proposed by Miguel Angel
Rodriguez.
Under the plan, Class 6 general unsecured creditors, which assert a
total of $419,033 in claims, will share pro rata in a total
distribution of $15,000.
Any Class 6 creditor scheduled to receive $250 or less will be paid
in a lump sum within 60 days from the effective date of the plan.
Meanwhile, any Class 6 creditor scheduled to receive more than $250
will be paid over five years in 10 quarterly payments.
Each quarterly payment will be in the amount of $1,425. The first
payment is due on the first day of the 31st month following the
effective date.
The source of funds for the Debtor's plan includes contribution of
$11,500 from his company Caring Hands Assisting Living; rental
income from the property where the company operates; and income
from his employment as a firefighter, according to the disclosure
statement filed with the U.S. Bankruptcy for the Southern District
of Florida.
A copy of the disclosure statement is available for free at
https://is.gd/d8NRcU
The Debtor is represented by:
Zach B. Shelomith, Esq.
Leiderman Shelomith Alexander +
Somodevilla, PLLC
2699 Stirling Road, Suite C401
Fort Lauderdale, FL 33312
Tel: 954-920-5355
Fax: 954-920-5371
Email: zbs@lsaslaw.com
About Miguel Angel Rodriguez
Miguel Angel Rodriguez is employed as a firefighter with Miami-Dade
County, Florida. The Debtor also owns an assisted living facility
through Caring Hands Assisting Living, a company that he solely
owns. Caring Hands operates out of the real property located at
12735 N. Miami Avenue, Miami, Florida, which is also owned by the
Debtor.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Fla. Case No. 14-36743) on December 5, 2014.
MIRAMAR LABS: Recurring Losses Raise Going Concern Doubt
--------------------------------------------------------
Miramar Labs, Inc., filed with the U.S. Securities and Exchange
Commission its quarterly report on Form 10-Q, disclosing a net loss
of $3.92 million on $4.30 million of revenue for the three months
ended September 30, 2016, compared to a net loss of $3.69 million
on $3.79 million of revenue for the same period in 2015.
The Company's balance sheet at September 30, 2016, showed total
assets of $16.52 million, total liabilities of $16.25 million, and
a stockholders' equity of $268,950.
Since its inception in 2006 as a Delaware corporation, the Company
incurred significant net losses and negative cash flows from
operations. During 2015 and the nine months ended September 30,
2016, the Company had net losses of $14.5 million and $17.0
million, respectively. At September 30, 2016, the Company had an
accumulated deficit of $110.5 million.
These factors raise substantial doubt about the Company's ability
to continue as a going concern. At September 30, 2016, the Company
had cash and cash equivalents of $6.1 million. To date, the
Company has financed its operations principally through private
placements of its preferred stock, issuances of senior secured debt
and receipts of customer deposits for new orders and payments from
customers for systems sold. Through September 30, 2016, the
Company has received proceeds of $100.5 million from the issuance
of shares of our preferred and common stock.
A full-text copy of the Company's Form 10-Q is available at:
http://bit.ly/2f7EdmB
Miramar Labs, Inc., formerly KTL Bamboo International Corp., is a
shell company. The Company was previously engaged in the
distribution of water filtration systems produced in China.
MMM HOLDINGS: S&P Affirms 'B-' Rating Amid Term Loan Extension
--------------------------------------------------------------
S&P Global Ratings said it affirmed its 'B-' counterparty credit
and secured debt ratings on MMM Holdings Inc. The outlook was
revised to positive from stable.
"The outlook revision is based on our view that MMM has removed a
significant near-term financial risk by extending the maturity of
its term loan from Dec. 12, 2017 to June 30, 2019," said S&P Global
Ratings credit analyst James Sung. The maturity extension will
provide MMM with time to demonstrate that its recent earnings
improvement is sustainable, and repay debt on a more gradual basis.
If MMM is able to execute on these actions, it will be in position
to ultimately refinance its debt (or seek strategic alternatives)
on better terms than it could over the immediate near-term.
"MMM's business performance is generally tracking ahead of our
expectations in 2016. We forecast MMM's Medicare Advantage (MA)
and Medicaid (Reforma) membership to be down roughly 2% for
full-year 2016, but revenues will be up 2%-3% and EBIT margin will
be a solid 3%-4%. MMM's MA product/benefit changes (including
network cuts) have hurt membership growth, but medical claims
trends, due partly to positive prior year development, have been
favorable. The relatively new Medicaid business (the contract
started in April 2015) has been profitable and performing better
than our expectations," S&P said.
"We believe part of MMM's recent business improvement will carry
forward to 2017. For 2017, we expect MMM to generate relatively
flat membership growth (-1%) but with stronger revenues (5%-6%) due
to higher MA-related STAR quality bonuses and a new risk adjustment
model. The company will also benefit from the federal government's
one-year moratorium on Affordable Care Act (ACA) industry taxes.
These factors will result in stable to slightly improved EBIT
margins of 3%-5% in 2017. The Zika virus remains a potential
earnings risk but Puerto Rico health insurers have yet to report
material Zika-related claims," S&P noted.
S&P views the term loan extension as an overall credit positive.
However, MMM will be paying a higher interest rate and will be
required to make a series of required and conditional one-time debt
repayments during the next 15 months (subject to meeting regulatory
capital minimums). Among the credit agreement changes:
-- The term loan interest rate, which is currently Libor plus
825 bps, will increase to Libor plus 875 bps in 2017, and
Libor plus 925 bps in 2018-2019. In addition, interest
payments will now be required to be made on a cash basis (no
PIK option).
-- MMM will pay a one-time debt payment of $40 million at the
closing date of the credit agreement amendment (already
completed), and will be required to make another $20 million
payment on or before March 31, 2017.
-- Amortization payments (10% of the total facility amount, or
$45 million per year), which were previously waived, will
resume on March 31, 2018, subject to the company maintaining
a 205% risk-based capital (RBC) ratio at the regulated
entities. MMM will make a one-time $15 million term loan
payment on March 31, 2018, if regulators approve the
maturity extension of MMM's outstanding $38 million
intercompany loan from its regulated entities as an admitted
asset (due in Dec. 2017). Otherwise, MMM will repay the
$38 million loan as scheduled.
-- Financial covenants include a minimum EBITDA per quarter and
minimum RBC ratio of 150% for year-end 2016 and 2017 and
175% for year-end 2018. S&P forecasts MMM to have
significant cushion under these covenants.
The positive outlook reflects that S&P may raise its rating to 'B'
during the next 12 months if the company is able to sustain its
earnings improvement in 2017, and Medicare and Medicaid
reimbursement rates for 2018 (released in 2017) are supportive of
continued earnings stability.
S&P expects total membership growth of roughly -2% in 2016 and -1%
in 2017, revenue growth of 2%-3% in 2016 and 5%-6% in 2017, and
EBIT ROR of 3%-4% in 2016 and 3%-5% in 2017. S&P also expects
debt-to-capital of above 100% in 2016-2017, debt-to-EBITDA of 2x-3x
in 2016-2017, and EBITDA interest coverage of 3.5x-4.0x in
2016-2017.
S&P may revise its outlook to stable or negative during the next 12
months if MMM's business performance and key metrics fall
materially below S&P's expectations. S&P would also consider
lowering its rating to the 'CCC' category if S&P could envision a
potential default scenario again. Lower than forecasted
membership/revenue growth, or higher medical/operating costs could
drive this downside scenario.
S&P may raise the rating to 'B' during the next 12 months per the
parameters set in its base-case scenario.
MOBILESMITH INC: Incurs $1.57 Million Net Loss in Third Quarter
---------------------------------------------------------------
Mobilesmith, Inc. filed with the Securities and Exchange Commission
its quarterly report on Form 10-Q disclosing a net loss of $1.57
million on $415,166 of total revenue for the three months ended
Sept. 30, 2016, compared to a net loss of $1.97 million on $494,371
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 $5.67 million on $1.38 million of total revenue
compared to a net loss of $5.70 million on $1.32 million of total
revenue for the same period a year ago.
As of Sept. 30, 2016, MobileSmith had $1.22 million in total
assets, $45.65 million in total liabilities and a total
stockholders' deficit of $44.43 million.
Liquidity and Capital Resources
"We have not yet achieved positive cash flows from operations, and
our main source of funds for our operations continues to be the
sale of our notes under our two convertible note facilities. In
May 2016 we extended to November 14, 2018 (from November 16, 2016)
the maturity date of the notes outstanding under this facility. We
are also authorized to utilize the facilities through November
2018. We need to continue to rely on the facilities until we are
able to generate sufficient cash from revenues to fund our
operations or obtain alternate sources of financing. We believe
that anticipated cash flows from operations, and additional
issuances of notes under the facility, of which no assurance can be
provided, together with cash on hand, will provide sufficient funds
to finance our operations for the next 12 months from the date of
this report on Form 10-Q. Changes in our operating plans, lower
than anticipated sales, increased expenses, or other events may
cause us to seek additional equity or debt financing in future
periods. There can be no guarantee that financing will be
available to us under the convertible note facilities or otherwise
on acceptable terms or at all. The convertible note facilities are
scheduled to expire on November 14, 2018 and all outstanding notes
thereunder, which stood at $40,755,000 as of the date of this
report, are to come due and payable on such date. Additional
equity and convertible debt financing could be dilutive to the
holders of shares of our common stock, and additional debt
financing, if available, could impose greater cash payment
obligations and more covenants and operating restrictions.
"Nonetheless, there are factors that can impact our ability to
continue to fund our operating the next twelve months. These
include:
* our ability to expand revenue volume;
* our ability to maintain product pricing as expected,
particularly in light of increased competition and its unknown
effects on market dynamics;
* our continued need to reduce our cost structure while
simultaneously expanding the breadth of our business,
enhancing our technical capabilities, and pursing new business
opportunities.
"In addition, if UBS were to elect to not renew the irrevocable
letter of credit issued by it beyond May 31, 2017, the currently
scheduled expiration date, then such non-renewal will result in an
event of default under our Loan and Security Agreement (the "LSA")
with Comerica Bank, at which time all amounts outstanding
thereunder, which are approximately $5,000,000 as of the date of
this report, will become due and payable. Currently, the letter of
credit is automatically extended for one year periods, unless
notice of non-renewal is given by UBS AG at least 45 days prior to
the then current expiration date. As of the date of this report on
Form 10Q, no such notice has been provided to us nor have we been
provided with any indication that we are to receive notice of
non-renewal of the letter of credit.
"On May 24, 2016, we and Comerica Bank agreed to extend the
maturity date of the LSA to June 9, 2018."
Uses of Cash
During the nine months ended Sept. 30, 2016, the Company used in
operating activities approximately $5.6 million, which was offset
by $1.7 million in cash collected from its customers. The uses of
cash were as follows: approximately $2.4 million was used to pay
interest payments on the convertible notes and bank debt;
approximately $2.4 million for payroll, benefits and related costs;
approximately $335,000 was used for non-payroll related sales and
marketing efforts, such as tradeshows and marketing campaigns and
approximately $450,000 was used for other non-payroll development
and general and administrative expenses, which included among other
things: infrastructure costs, rent, insurance, legal, professional,
compliance, and other expenditures.
During the nine months ended Sept. 30, 2015, the Company used in
operating activities approximately $5.3 million, which was offset
by $1.3 million in cash collected from its customers. The uses of
cash were as follows: approximately $2.3 million was used to pay
interest payments on the convertible notes and bank debt;
approximately $2 million was used for payroll, benefits and related
costs; approximately $335,000 was used for non-payroll related
sales and marketing efforts, such as tradeshows and marketing
campaigns and approximately $436,000 was used for other non-payroll
development and general and administrative expenses, which included
among other things: infrastructure costs, rent, insurance, legal,
professional, compliance, and other expenditures.
Capital Expenditures and Investing Activities
The Company's capital expenditures are limited to the purchase of
new office equipment and new mobile devices that are used for
testing. Cash used for investing activities was not significant
and the Company does not plan any significant capital expenditures
in the near future.
Going Concern
The Company's independent registered public accounting firm has
issued an emphasis of matter paragraph in their report included in
the Annual Report on Form 10-K for the year ended Dec. 31, 2015, in
which they express substantial doubt as to the Company's ability to
continue as a going concern. The condensed consolidated financial
statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the
amounts or classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
"Our continuation as a going concern depends on our ability to
generate sufficient cash flows to meet our obligations on a timely
basis, to obtain additional financing that is currently required,
and ultimately to attain profitable operations and positive cash
flows. There can be no assurance that our efforts to raise capital
or increase revenue will be successful. If our efforts are
unsuccessful, we may have to cease operations and liquidate our
business."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/eYQNCv
About MobileSmith, Inc.
Raleigh, North Carolina-based MobileSmith, Inc. was incorporated as
Smart Online, Inc. in 1993 and changed its name to MobileSmith,
Inc. effective July 1, 2013. The company develops and markets
software products and services tailored to users of mobile devices.
Its flagship product, MobileSmith(R) Platform is an app
development platform that enables organizations to rapidly create,
deploy and manage custom, native smartphone and tablet apps
deliverable across iOS and Android mobile platforms.
MobileSmith reported a net loss of $7.71 million on $1.82 million
of total revenue for the year ended Dec. 31, 2015, compared to a
net loss of $7.33 million on $879,086 of total revenue for the year
ended Dec. 31, 2014.
Cherry Bekaert LLP, in Raleigh, North Carolina, issued a "going
concern" qualification on the consolidated financial statements for
the year ended Dec. 31, 2015, citing that the Company has suffered
recurring losses from operations and has a working capital
deficiency as of Dec. 31, 2015. These conditions, the auditors
noted, raise substantial doubt about the Company's ability to
continue as a going concern.
MORAN FOODS: Moody's Assigns B2 Corporate Rating Amid Onex Deal
---------------------------------------------------------------
Moody's Investors Service assigned a Corporate Family Rating of B2
and a Probability of Default Rating of B2-PD to Moran Foods LLC,
the parent of Save-A-Lot Holdings, LLC. ("Save-A-Lot"). Moody's
also assigned a B2 rating to the company's proposed $740 million
senior secured seven year term loan. The outlook is stable.
The proceeds of the proposed new debt will be used to partially
finance the acquisition of all of the issued and outstanding
membership units of Moran Foods, LLC and its subsidiaries by Onex
Partners Manager LP. Save-A-Lot is currently owned by SUPERVALU
Inc. (B1 stable). The remainder of the purchase price will be
financed through equity contributed by Onex and management. All
ratings are subject to satisfactory review of final documentation
and closing of the transaction.
"Although we expect the company to benefit in the longer term from
the favorable hard discount grocery industry dynamics and its
relative resistance to economic cycles, the space will remain
highly competitive", Moody's Senior Credit Officer Mickey Chadha
stated. "We expect operating margins to remain very thin with weak
interest coverage and no material improvement in credit metrics in
the next 12-18 months", Chadha further stated.
RATINGS RATIONALE
The company's B2 corporate family rating reflects its good market
position in an underpenetrated but growing segment of the hard
discount food retailing business. With about 1,370 stores including
888 licensed stores, Save-A-Lot is the second largest hard discount
grocery store operator in the U.S. behind Aldi. Save-A-Lot's
licensee store base enables capital efficient growth while
leveraging its distribution network and purchasing scale. Despite
declines in identical store sales for the last four quarters with
Q2 2017 identical stores sales declining 5.2% exacerbated by
deflationary pressure on meat, eggs and dairy products, the ratings
reflect our belief that the hard discount food retail sector is
well positioned for growth relative to other retail channels given
its low price points and relative resistance to economic cycles
albeit still in a very highly competitive operating environment.
The majority of Save-A-Lot customers remain financially strapped as
wage growth has been lagging and underemployment remains high.
"Although the company's proforma financial leverage is moderate
with lease adjusted debt/EBITDA at about 4.5 times, we expect
EBIT/interest to be weak at below 1 times for the next 12 to 18
months. This is a reflection of the company's expected weak EBIT
margins which we expect to be below 1%. Moreover, we do not expect
any material improvement in credit metrics or EBIT margin until
fiscal 2019 (fiscal year ends February 28). However, we do
acknowledge that (EBITDA-Capex)/interest is about 2.0 times.
Expected new entrants like Lidl into the U.S. hard discount grocery
market could create additional competitive pressure on Save-A-Lot
in the long term and an extended period of deflation could result
in weaker than expected profitability and credit metrics." Moody's
said.
The company's adequate free cash flow generation and very good
liquidity are also positive rating factors. The company's
non-unionized labor force is also a distinct advantage over its
unionized peers. The rating also reflects our belief that the
company's separation from SUPERVALU will create a new focus on
Save-A-Lot's operating performance and profitability with new
management's initiatives including increased offerings of selective
national brands, consolidation of private label brands, shrink
reduction, improved ethnic offerings and streamlining of operations
including merchandising, procurement, and labor resulting in
improved operating performance. However, these initiatives will
take time to implement and we do not expect to see tangible
improvement in profitability until the fiscal year ending in
February 2020. In addition to the volatility in financial policies
inherent with ownership by a financial sponsor, our ratings also
reflect the execution risks associated with these new management
initiatives.
The following ratings are assigned:
Moran Foods LLC
-- Corporate Family Rating at B2
-- Probability of Default Rating at B2-PD
-- Proposed $740 million senior secured term loan maturing 2023
at B2 (LGD4)
-- Outlook is stable
The rating outlook is stable and incorporates our expectation that
financial policy will remain benign, same store sales growth will
improve, and liquidity and credit metrics will not deteriorate in
the next 12-18 months.
Ratings could be upgraded if debt/EBITDA remains at the current
level (about 4.5x), EBIT/interest is sustained above 1.75 times,
financial policies remain benign and liquidity is good.
Ratings could be downgraded if the company's cash flow and
liquidity declines, same store sales growth and operating margins
deteriorate or financial policies become aggressive. Quantitatively
ratings could be downgraded if debt to EBITDA is sustained above
6.0 times or EBIT to interest does not demonstrate any sustained
improvement.
Save-A-Lot is a hard discount grocery store operator with 1,370
stores of which 888 are operated by licensees. LTM revenues totaled
approximately $4.6 billion.
The principal methodology used in these ratings was Retail Industry
published in October 2015.
MORGANS HOTEL: Extends Merger Termination Date to Nov. 30
---------------------------------------------------------
Morgans Hotel Group Co. previously entered into an Agreement and
Plan of Merger with SBEEG Holdings, LLC, a Delaware limited
liability company, and Trousdale Acquisition Sub, Inc., a Delaware
corporation and wholly owned subsidiary of SBE ("Merger Sub") on
May 9, 2016.
On Nov. 8, 2016, the parties entered into Amendment No. 1 to the
Merger Agreement, pursuant to which the parties to the Merger
Agreement agreed to extend the date after which, if the merger has
not yet been consummated, either party generally has the right to
terminate the Merger Agreement from Nov. 9, 2016, to Nov. 30, 2016.
In that connection, the relevant parties have also extended the
termination date of each of the preferred equity commitment letter,
the rollover contribution and the debt commitment letter related to
the equity and debt financing for the merger to
Nov. 30, 2016. The parties are continuing to work towards closing
the merger as promptly as practicable. SBE and its partners,
Yucaipa Hospitality Investments, LLC and Cain Hoy Enterprises, L.P,
and the Company have finalized the terms of an assumption of the
guarantee relating to the Hudson/Delano mortgage debt, and the
mortgage guarantee assumption has been submitted to the rating
agencies for approval. Based on market practice, the Company
anticipates that the rating agency confirmation process will take
between two and four weeks and that the merger would close promptly
thereafter assuming all other conditions have been met or waived.
SBE has advised us that it has substantially completed the
definitive documentation for each of the preferred equity
commitment letter, the rollover contribution and the debt
commitment letter, and anticipates being able to consummate the
transactions required by those financing agreements promptly
following receipt of rating agency confirmation in respect of the
Hudson/Delano mortgage debt.
There can be no assurance that the condition to the merger related
to the assumption or refinancing of the Hudson/Delano mortgage debt
will be satisfied, or that the other remaining conditions to the
merger will be satisfied prior to the new Outside Date or that the
Outside Date will be further extended if the merger has not closed
by Nov. 30, 2016. If the Merger Agreement is terminated by reason
of the failure of SBE to satisfy the condition related to the
assumption or refinancing of the Hudson/Delano mortgage debt or the
failure of SBE to obtain the other financing for the merger, the
Company intends to seek payment by SBE of the termination fee of
$6.5 million. There can be no assurance whether SBE will make this
payment or as to the timing of payment.
A full-text copy of the Agreement and Plan of Merger is available
for free at https://is.gd/a0nCCf
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
Morgans Hotel reported net income attributable to common
stockholders of $5.45 million on $220 million of total revenues for
the year ended Dec. 31, 2015, compared to a net loss attributable
to common stockholders of $66.6 million on $234 million of total
revenues for the year ended Dec. 31, 2014.
As of Sept. 30, 2016, Morgans Hotel had $509.32 million in total
assets, $742.48 million in total liabilities and a total deficit of
$233.15 million.
MORGANS HOTEL: Incurs $13.2 Million Net Loss in Third Quarter
-------------------------------------------------------------
Morgans Hotel Group Co. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
attributable to common stockholders of $13.16 million on $48.44
million of total revenues for the three months ended Sept. 30,
2016, compared to a net loss attributable to common stockholders of
$11.75 million on $53.20 million of total revenues for the same
period a year ago.
For the nine months ended Sept. 30, 2016, the Company reported
a net loss attributable to common stockholders of $37 million on
$152.32 million of total revenues compared to a net loss
attributable to common stockholders of $39.21 million on $162.72
million of total revenues for the same period a year ago.
As of Sept. 30, 2016, Morgans Hotel had $509.32 million in total
assets, $742.48 million in total liabilities and a total deficit of
$233.15 million.
As of Sept. 30, 2016, the Company had approximately $10.6 million
in cash and cash equivalents. However, approximately $4.9 million
of this amount was at the Company's Owned Hotels and Owned F&B
Operations and was primarily needed for outstanding payables in
early October 2016. There are also significant payables remaining
at the corporate level, including accrued transaction costs related
to the Company's acquisition by SBE. Additionally, as of Sept. 30,
2016, the Company had $16.7 million of restricted cash, which
consisted primarily of cash held in escrow accounts for debt
service or lease payments, capital expenditures, taxes and
litigation.
The Company's current cash balance and future cash flows may be
insufficient to meet its near term obligations. Unforeseen
expenses, a further downturn in operating results, the acquisition
of the Company by SBE not closing, or any combination of the
foregoing would further increase its cash flow concerns.
"We are actively managing our cash flow to meet our obligations,
however there can be no assurance that we will be successful.
Furthermore, cash flow has historically been negative in January,
our operationally slowest month of the year.
"All transaction costs incurred to date related to the SBE
acquisition, which as of September 30, 2016 were approximately $5.6
million, have been accrued but not paid. If the sale of the
Company to SBE is consummated, these transaction costs will be paid
by the purchaser. If the sale to SBE is not completed, we will be
responsible for paying these expenses. Currently, we do not
project there to be sufficient cash flow to pay these expenses and
there can be no assurance that we can obtain funds to pay these
expenses either through the termination fee that could be payable
under the merger agreement, as discussed below, or other external
sources," the Company said in the filing.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/nCY1kT
About Morgans Hotel Group
Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) --
http://www.morganshotelgroup.com/-- is widely credited as the
creator of the first "boutique" hotel and a continuing leader of
the hotel industry's boutique sector. Morgans Hotel Group
operates and owns, or has an ownership interest in, Morgans,
Royalton and Hudson in New York, Delano and Shore Club in South
Beach, Mondrian in Los Angeles and South Beach, Clift in San
Francisco, Ames in Boston, and Sanderson and St Martins Lane in
London. Morgans Hotel Group and an equity partner also own the
Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans
Hotel Group also manages hotels in Isla Verde, Puerto Rico and
Playa del Carmen, Mexico. Morgans Hotel Group has other property
transactions in various stages of completion, including projects
in SoHo, New York and Palm Springs, California.
Morgans Hotel reported net income attributable to common
stockholders of $5.45 million on $220 million of total revenues for
the year ended Dec. 31, 2015, compared to a net loss attributable
to common stockholders of $66.6 million on $234 million of total
revenues for the year ended Dec. 31, 2014.
MOUNTAIN PROVINCE: Appoints Karen Goracke to Board of Directors
---------------------------------------------------------------
Mountain Province Diamonds Inc. announced the appointment of Karen
Goracke to the Company's board of directors.
Ms. Goracke is president and CEO of Borsheims Fine Jewelry, a
Berkshire Hathaway company. She began her career at Borsheims in
1988 as a Sales Associate, but soon was promoted. In her time at
Borsheims she has worked as inventory supervisor, watch buyer,
ladies jewelry buyer, director of merchandising, and, in 2013, was
named president and CEO by Berkshire Hathaway Chairman Warren
Buffett.
Ms. Goracke graduated from the University of Nebraska -- Kearney
with Bachelors of Science degrees in Business Administration and
Organizational Communication. She serves as a Director with the
Jewelers Vigilance Committee, the leading compliance organization
in the jewelry and gem industry, as well as on a number of other
boards and committees within the gem and jewelry industry.
Jonathan Comerford, chairman of Mountain Province Diamonds,
welcomed Karen Goracke to the Mountain Province board, noting: "As
Mountain Province prepares for its first sale of rough diamonds
from the Gahcho Kue mine, we look forward to the contribution Karen
will make in helping us understand the dynamics of the world's
largest diamond retail market in the United States".
Mountain Province Diamonds is a 49% participant with De Beers
Canada in the Gahcho Kue diamond mine located in Canada's Northwest
Territories. Gahcho Kue consists of a cluster of four
diamondiferous kimberlites, three of which have a probable mineral
reserve of 35.4 million tonnes grading 1.57 carats per tonne for
total diamond content of 55.5 million carats.
Gahcho Kue is the world's largest and highest grade new diamond
mine. A 2014 NI 43-101 feasibility study report filed by Mountain
Province (available on SEDAR) indicates that the Gahcho Kue project
has an IRR of 32.6%.
Mountain Province's share of the diamond production from the Gahcho
Kue mine will be sold on open tender in Antwerp through the
respected diamond broker, Bonas. The Company's first rough diamond
sale will take place in January, 2017, and approximately every five
weeks thereafter.
About Mountain Province Diamonds
Headquartered in Toronto, Canada, Mountain Province Diamonds Inc.
(TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/--
is a Canadian resource company in the process of permitting and
developing a diamond deposit known as the "Gahcho Kue Project"
located in the Northwest Territories of Canada. The Company's
primary asset is its 49 percent interest in the Gahcho Kue
Project.
Mountain Province Diamonds Inc. reported a net loss of C$43.16
million in 2015, a net loss of C$4.39 million in 2014, a net loss
of C$26.60 million in 2013, and a net loss of C$3.33 million in
2012.
As of June 30, 2016, Mountain Province had C$733 million in total
assets, C$405 million in total liabilities and C$328 million in
total shareholders' equity.
MOUNTAINEER GAS: Fitch Affirms 'BB+' LT Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Mountaineer Gas Company (MGC) at 'BB+'. Fitch has affirmed
MGC's senior unsecured debt at 'BBB-' and assigned a Recovery
Rating of 'RR1'.
The Rating Outlook is Stable.
KEY RATING DRIVERS
Small Scale of Operations
The ratings of MGC are restricted by the utility's small scale of
operations. MGC is one of the smallest investor-owned natural gas
distribution utilities rated by Fitch. Due to MGC's modest size,
small changes in revenue or expenses can have an outsized impact on
financial metrics, causing the utility to be more vulnerable to
external shocks.
Private Equity Ownership
MGC's ratings are also restricted by the utility's private equity
ownership. MGC's holding company, Mountaineer Gas Holdings Limited
Partnership, is owned by private equity funds ultimately owned by
iCON Infrastructure LLP, Deutsche Bank AG, and IGS Utilities LLC.
Fitch considers private equity ownership to present an increased
level of credit risk due to the typically more aggressive dividend
payout policy, weaker financial flexibility, and less transparent
corporate governance compared with a publicly traded company.
Challenging Regulatory Environment
Fitch regards West Virginia's regulatory environment as
challenging. The Public Service Commission of West Virginia (PSCWV)
does not allow MGC to use revenue decoupling or weather
normalization. In addition, the PSCWV's use of a historical test
year for rate case decisions makes it difficult for MGC to earn its
authorized return on equity (ROE). However, the PSCWV's recent
implementation of an infrastructure replacement and expansion
program (IREP) cost recovery rider partially mitigates regulatory
lag. MGC's latest rate case resulted in an increase of $7.7
million, or 3%, effective Nov. 1, 2015 and an authorized ROE of
9.75%.
Supportive, But Volatile, Financial Metrics
Fitch expects MGC's financial profile to remain supportive of the
ratings, but the company's small size, large seasonal working
capital borrowings, and exposure to the effects of weather result
in significant swings in financial metrics, both on a seasonal
basis and year to year. Assuming normal weather, Fitch expects
adjusted debt/EBITDAR to average 4.3x-4.7x, funds flow from
operations (FFO) adjusted leverage to average around 4.5x, and FFO
fixed-charge coverage to average 3.7x-4.2x through 2019.
Large Capex Program
Capex is expected to be significantly larger over the next several
years. Excluding the Eastern Panhandle expansion project, capex is
expected to average approximately $25 million per year over
2016-2020. An additional $28 million of capex in 2018 and $15
million in 2019 are planned to be spent on MGC's Eastern Panhandle
expansion project, which is designed to provide natural gas
distribution service to unserved and underserved areas in
northeastern West Virginia. The inclusion of the Eastern Panhandle
expansion project capex in MGC's IREP cost recovery rider helps to
alleviate concerns related to the large capex program.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for MGC include:
-- Gas sales volume growth of 5.5% in 2017 and 0%-0.5% in 2018
and 2019;
-- EBITDA margin averaging 15% through 2019;
-- Capex averaging approximately $25 million per year over
2016-2020, with the Eastern Panhandle expansion project
adding another $28 million in 2018 and $15 million in 2019;
-- Normal weather.
RATING SENSITIVITIES
Positive Rating Action: A positive rating action is not likely,
given the small scale of operations, the aggressive financial
policy of MGC's private equity owners, and the challenging
regulatory environment in West Virginia. Implementation of revenue
decoupling and/or other regulatory measures sufficient to provide a
greater level of stability and predictability to MGC's credit
metrics would be needed for a ratings upgrade.
Negative Rating Action: A negative rating action is not likely, but
could occur if MGC's private equity owners instituted a more
aggressive financial policy that increased leverage, with adjusted
debt/EBITDAR around 5.0x and FFO fixed-charge coverage less than
3.5x on a sustained basis.
LIQUIDITY
MGC's natural gas distribution business is very seasonal, with much
larger sales during the winter heating season. Short-term debt is
used to temporarily fund natural gas inventories and customer
receivables, which normally peak in late December and return to
more normalized amounts by the end of the first quarter.
Fitch considers MGC's liquidity to be adequate, primarily supported
by a $100 million unsecured revolving credit facility. The
five-year facility expires Dec. 1, 2019 and includes an accordion
feature that could expand the facility's size to $170 million to
account for the possibility of unusually high natural gas prices
and sales volumes that could occur during an abnormally cold winter
heating season. Fitch expects this facility to provide MGC with
sufficient availability for its working capital needs. As of Sept.
30, 2016, $9 million of borrowings were outstanding under the
facility, leaving $91 million available.
The credit facility includes financial covenants requiring MGC to
maintain a minimum EBITDA interest coverage ratio of 2.0x and a
maximum debt-to-capital ratio of 65%.
MGC's next long-term debt maturity is in December 2017, when $70
million of 7.58% unsecured senior notes comes due. The company's
only other long-term debt outstanding is its $20 million floating
rate senior note due in 2022, which has its interest rate hedged at
4.48%.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings:
Mountaineer Gas Company
-- Long-Term IDR at 'BB+', Stable Outlook;
-- Senior unsecured debt at 'BBB-'; assigned Recovery Rating of
'RR1'.
MUSCLEPHARM CORP: Incurs $1.44 Million Net Loss in Third Quarter
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MusclePharm Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $1.44 million on $30.69 million of net revenue for the three
months ended Sept. 30, 2016, compared to a net loss of $27.64
million on $33.98 million of net revenue for the same period in
2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $12.24 million on $106.5 million of net revenue
compared to a net loss of $42.15 million on $125.78 million of net
revenue for the nine months ended Sept. 30, 2015.
As of Sept. 30, 2016, MusclePharm had $38.33 million in total
assets, $54.77 million in total liabilities and a total
stockholders' deficit of $16.44 million.
As of Sept. 30, 2016, the Company had approximately $5.9 million in
cash and $21 million in working capital deficit.
Ryan Drexler, MusclePharm's interim chief executive officer,
president and chairman of the Board of Directors, said: "We believe
that the strong results of the third quarter validate the immense
strides we have made in the implementation of our strategic
restructuring program. We have turned a corner on our plan to
return the Company to profitability and value creation, and
anticipate continued improvement in our operating margins and
expense structure going forward."
Mr. Drexler said he was most pleased that the Company's brand has
come out of the restructuring stronger than ever, and that
MusclePharm continues to build upon its status as a leading
nutritional supplement innovator focusing on the needs of all
athletes. "While we still have work to do, the Company is on a
much stronger financial foundation than when we began the
restructuring," said Mr. Drexler. "We are making significant
progress in stabilizing the Company and positioning MusclePharm for
future growth."
The Company also announced that it executed a settlement agreement
related to litigation involving Capstone Nutrition. Under terms of
the settlement agreement, the Company has agreed to pay to INI
Buyer Inc. (a company related to Capstone Nutrition) $11.0 million
within five business days following the execution of the settlement
agreement. In addition, the Company has issued to INI Buyer Inc. a
warrant to purchase 1,289,378 shares of the Company's common stock.
The exercise price of the warrant is $1.83 per share, subject to
adjustment under certain circumstances provided for therein. The
warrant has a term of four years. The Company has estimated that
the aggregate grant date fair market value of the warrant is
approximately $1.9 million.
The Company had previously recorded approximately $21.9 million in
accounts payable and accrued liabilities associated with the
Capstone liability as of Sept. 30, 2016. Based upon the
settlement, the Company anticipates recording a gain of
approximately $8.9 million during the fourth quarter of 2016.
In conjunction with the settlement and as further proof of Mr.
Drexler's confidence in MusclePharm, the Company entered into a
convertible secured promissory note agreement with Mr. Drexler
pursuant to which he has agreed to loan the Company $11 million.
Proceeds from the 2016 Convertible Note will be used to fund the
settlement payment. The 2016 Convertible Note is secured by all
assets and properties of the Company and its subsidiaries, whether
tangible or intangible. The 2016 Convertible Note carries interest
at a rate of 10% per annum, or 12% if there is an event of default.
Both the principal and the interest under the 2016 Convertible
Note are due on Nov. 8, 2017, unless converted earlier. Mr.
Drexler may convert the outstanding principal and accrued interest
into shares of the Company's common stock for $1.83 per share at
any time.
The Company concluded its restructuring plan announced in August
2015. In the third quarter of 2016, the Company closed its finance
and administration office in Denver, CO, and a distribution center
in Pittsburg, CA. The Company's previous restructuring efforts
include the sale of its subsidiary, BioZone Laboratories Inc., for
$8.3 million (excluding the earn-out potential), a reduction in
headcount from 310 employees to fewer than 90 employees, and the
closure of seven facilities. The Company has also optimized
product SKUs, eliminated unprofitable licensing agreements,
migrated to new product suppliers and the Arnold Schwarzenegger
product-line licensing agreement has been terminated. As the
Company continues to execute its growth strategy and searches for
additional cost savings opportunities, it anticipates continued
improvement in its operating margins and expense structure.
Liquidity and Capital Resources
"Since the inception of MusclePharm, other than cash from product
sales, our primary source of cash has been from the sale of equity,
issuance of convertible secured promissory notes and other
short-term debt... In January 2016, we entered into a factoring
facility agreement with Prestige Capital Corporation. The maximum
total advances outstanding at any time under this agreement is $10
million.
"As of September 30, 2016, our cash balance was approximately $5.9
million, which consists primarily of cash on deposit with banks.
Our principal use of cash is to purchase inventory, pay for
operating expenses, acquire capital assets and historically to
repurchase outstanding shares of our capital stock. As of
September 30, 2016, we had a deficit in working capital of $21.0
million, an accumulated deficit of $159.8 million and a total
stockholders' deficit of $16.4 million. As of September 30, 2016,
we had outstanding borrowings of $6.0 million under our convertible
note with a related party.
"Our management believes that the recently completed restructuring,
which includes a reduction in ongoing operating costs and enhanced
expense controls, will enable us ultimately to be profitable;
however, we may need to continue to raise capital in order to
execute its business plan. There can be no assurance that such
capital will be available on acceptable terms or at all."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/Zv1qFc
About MusclePharm
Headquartered in Denver, Colorado, MusclePharm Corporation
(OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life-
style company that develops and manufactures a full line of
National Science Foundation approved nutritional supplements that
are 100 percent free of banned substances. MusclePharm is sold in
over 120 countries and available in over 5,000 U.S. retail outlets,
including GNC and Vitamin Shoppe. MusclePharm products are also
sold in over 100 online stores, including bodybuilding.com,
Amazon.com and Vitacost.com.
MusclePharm Corporation reported a net loss of $13.8 million in
2014, a net loss of $17.7 million in 2013 and a net loss of $19
million in 2012.
NEONODE INC: Incurs $2.16 Million Net Loss in Third Quarter
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Neonode Inc. filed with the Securities and Exchange Commission its
quarterly report on Form 10-Q disclosing a net loss attributable to
the Company of $2.16 million on $1.63 million of net revenues for
the three months ended Sept. 30, 2016, compared to a net loss
attributable to the Company of $1.36 million on $3.11 million of
net 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 the Company of $4.86 million on $7.34
million of net revenues compared to a net loss attributable to the
Company of $5.23 million on $8.15 million of net revenues for the
same period a year ago.
As of Sept. 30, 2016, Neonode had $10.85 million in total assets,
$6.06 million in total liabilities and $4.78 million in total
stockholders' equity.
"Our business model is based on generating revenue from three
sources; royalty based license fees, B2B sensor modules and
consumer products incorporating our sensor modules. We have built
a scalable, fully automatic manufacturing process to build our
sensor modules. We can expand and locate these manufacturing
facilities anywhere in the world. Our first consumer product is
AirBar. Our partner Salutica Allied Solutions, does the final
assembly and packaging of AirBar and ship it to Ingram Micro for
both the U.S. and European markets. We made our first shipments of
AirBar to Ingram Micro U.S. and Europe for online distribution and
they now available for purchase," said Thomas Eriksson, Neonode
CEO.
"Our automotive market presence is expanding with new product
offerings. This quarter we signed our first B2B sensor module
supply agreement with a U.S. based auto OEM taking a significant
step towards expanding our automotive market. We are growing our
business beyond infotainment systems by supplying sensors for door
handles, car and truck tailgates and steering wheels," continued
Mr. Eriksson.
"To complete my remarks, we are finally starting to see some
rewards from the work we have put into growing our licensing
business in the printer markets. Canon and another U.S. based
printer customers have begun their initial shipment of printers and
we now have customer diversification beyond HP. We have been
engaged with these customers for the past couple of years and
expect this to have a positive impact on future revenues beginning
in the fourth quarter of this year," concluded Mr. Eriksson.
Liquidity
"We have incurred significant operating losses and negative cash
flows from operations since our inception. The Company incurred
net losses attributable to Neonode Inc. of approximately $2.2
million and $4.9 million and $1.4 million and $5.2 million for the
three and nine months ended September 30, 2016 and 2015,
respectively, and had an accumulated deficit of approximately
$178.6 million and $173.7 million as of September 30, 2016 and
December 31, 2015, respectively. Working capital (current assets
less current liabilities) was $3.7 million as of September 30, 2016
compared to $1.5 million as of December 31, 2015. In addition, the
Company used cash in operating activities of approximately $3.7
million for the nine months ended September 30, 2016, compared to
approximately $4.9 million for the nine months ended September 30,
2015.
"In August 2016, Neonode entered into a purchase agreement (the
"Securities Purchase Agreement") with institutional and accredited
investors as part of a private placement pursuant to which Neonode
agreed to issue a total of 8,627,352 shares of Neonode common
stock, as described below, and warrants for an aggregate purchase
price of $7.9 million in net proceeds. The total number of shares
includes (i) an aggregate of 427,352 shares at $1.17 per share to
Thomas Eriksson, Chief Executive Officer of Neonode, and Remo
Behdasht, SVP AirBar Devices at Neonode (the "Employee Investor
Shares") for gross proceeds of approximately $500,000, (ii) an
aggregate of 4,600,000 shares at a price of $1.00 per share to
outside investors (the "Outside Investor Shares" and, together with
the Employee Investor Shares, the "Initial Shares") for gross
proceeds of $4,600,000, and (iii) up to 3,600,000 shares (the
"Pre-Funded Warrant Shares") issuable upon exercise of warrants
(the "Pre-Funded Warrants" and, together with the Initial Shares,
the "Investor Shares") for which Neonode received $3,564,000
pre-funded in gross proceeds and up to $36,000 in proceeds upon
future cash exercises. In addition, under the terms of the
Securities Purchase Agreement, Neonode issued warrants (the
"Purchase Warrants") to all investors in the private placement to
purchase up to a total of 4,313,676 shares of Neonode common stock
(the "Purchase Warrant Shares") at an exercise price of $1.12 per
share.
"In June 2014, we filed a shelf registration statement with the SEC
that became effective on June 12, 2014. We may from time to time
issue shares of our common stock under our shelf registration in
amounts, at prices, and on terms to be announced when and if the
securities are offered. The specifics of any future offerings,
along with the use of proceeds of any securities offered, will be
described in a prospectus supplement and any other offering
materials, at the time of the offering. Our shelf registration
statement will expire on June 12, 2017.
On October 13, 2015, we issued 3,200,000 shares of our common stock
from our shelf registration statement to investors in connection
with an equity financing transaction. We sold the stock at $1.90
per share and raised approximately $6.1 million gross and received
approximately $5.4 million in cash, net of direct offering costs
including underwriting discounts and legal, audit and other
regulatory costs of approximately $0.7 million.
"As of September 30, 2016 there were 1,800,000 shares remaining for
issuance under our existing shelf registration statement.
"We believe that, based upon our current operating plan, our
existing cash and cash provided by operations to meet our
anticipated cash needs for the next twelve months. We expect our
revenues from license fees, non-recurring engineering fees and
AirBar sales will enable us to reduce our operating losses in 2016.
In addition, we have improved the overall cost efficiency of our
operations, as a result of the transition from providing our
customers a full custom design solution to providing standardized
sensor modules which require limited to no custom design work. We
intend to continue to implement various measures to improve our
operational efficiencies. No assurances can be given that
management will be successful in meeting its revenue targets and
reducing its operating loss.
"In the future, we may require sources of capital in addition to
cash on hand to continue operations and to implement our strategy.
No assurances can be given that we will be successful in obtaining
such additional financing on reasonable terms, or at all. If
adequate funds are not available on acceptable terms, or at all, we
may be unable to adequately fund our business plans and it could
have a negative effect on our business, results of operations and
financial condition. In addition, if funds are available, the
issuance of equity securities or securities convertible into equity
could dilute the value of shares of our common stock and cause the
market price to fall, and the issuance of debt securities could
impose restrictive covenants that could impair our ability to
engage in certain business transactions."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/hMczTx
About Neonode Inc.
Lafayette, Calif.-based Neonode Inc. (OTC BB: NEON)
-- http://www.neonode.com/-- provides optical touch screen
solutions for hand-held and small to midsize devices.
Neonode reported a net loss attributable to the Company of
$7.82 million on $11.11 million of net revenues for the year ended
Dec. 31, 2015, compared to a net loss attributable to the Company
of $14.23 million on $4.74 million of net revenues for the year
ended Dec. 31, 2014.
NEWALTA CORPORATION: DBRS Cuts Issuer Rating to 'CCC'
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DBRS Limited downgraded the Issuer Rating of Newalta Corporation
(Newalta or the Company) to CCC (high) from B. The Company's
Recovery Rating remains unchanged at RR6 (poor) based on an
anticipated unsecured debt recovery of less than 10% in a
hypothetical default scenario. This results in a two-notch
adjustment to arrive at an Unsecured Notes rating of CCC (low). The
trends remain Negative.
DBRS noted in its August 4, 2016, comment on Newalta's Q2 2016
results that further deterioration in operating results could lead
to additional downgrades. Based on the announcement on November 9,
2016, operating performance in Q3 2016 was indeed once again
materially weaker on a year-over-year (YOY) basis, and the Company
reduced the upper end of its full-year 2016 EBITDA guidance,
although notable sequential improvement was achieved. In addition
to the ongoing challenges associated with reduced customer activity
in response to the lower oil price environment, heavy rains
affected results in Q3 2016, although not to the same degree as the
fires at Fort McMurray in Q2 2016. Overall, revenues fell by 39%
YOY, although they were up by 23% versus the weak Q2 2016 result.
During Q3 2016, a free cash flow deficit was financed with an
additional $11 million drawn on the Senior Secured Credit Facility,
bringing total balance sheet debt to $317 million. On a last 12
months' (LTM) basis, key financial metrics have weakened further
beyond the current rating range. Operating cash flow was negative,
and debt to EBITDA rose to 23 times (x). EBITDA fell to only 0.6x
interest, while debt in the capital structure remained elevated at
over 50%. Note that all DBRS metric calculations include
adjustments for operating leases.
Despite the significant strain on the Company's credit metrics,
Newalta remained compliant with its only active credit facility
covenant in Q3 2016 after choosing Q3 2016 as the quarter in which
to exercise its EBITDA-to-interest covenant waiver, an
accommodation granted previously from the lending syndicate. The
Company avoided breaching the minimum 1.00:1 threshold, as this
metric was 0.89x in Q3 2016. Newalta received an additional
precautionary waiver for this covenant for Q4 2016. As per the
covenant calculations (which differ from DBRS's methods), senior
debt to LTM EBITDA was 3.29x versus the 6.50x limit. The
total-debt-to-EBITDA covenant remains waived through Q1 2018. The
Company has also remained compliant with the covenants and
restrictions associated with its unsecured debentures.
While the weakening of the financial metrics is substantial and a
cause for concern, liquidity remains adequate. Newalta's Senior
Secured Credit Facility matures in July 2018 and can be extended on
an annual basis, subject to the approval of the lending syndicate.
As at September 30, 2016, $45 million was drawn. On October 31,
2016, the principal borrowing amount was reduced by $10 million to
$150 million, which leaves the Company with total liquidity of $84
million using the September 30, 2016, reported drawings; the small
amount of cash on the balance sheet; and after adjusting for the
portion supporting $22 million in letters of credit. DBRS projects
that Newalta will again post a free cash flow deficit in 2017, but
the drawings required to finance this will likely be modest,
assuming the continuation of substantially reduced capital spending
compared with historical levels and that the dividend suspension
through at least March 2018 remains in place.
Newalta's current financial profile, based on its key credit
metrics through the LTM ended September 2016, is inconsistent with
even the downgraded ratings. However, some of its key business
strengths, such as its technical capacities, good reputation among
customers and lower operating cost structure following a major push
to drive down expenses, remain intact. Market conditions remain
challenging, the oil price outlook is tepid and visibility
regarding revenues and cash flows is poor, all of which factor into
the maintenance of the Negative trend. However, should Newalta
continue the performance achieved in Q3 2016 (excluding the impact
of the heavy rains) into subsequent quarters, projected activity
should be sufficient for Newalta to achieve material improvement
compared with its recent very weak performance. Under such a
scenario, financial metrics would recover strongly into 2017,
albeit from a particularly weak base, and DBRS would likely
consider changing the trend to Stable. In lieu of any additional
exogenous shocks during this timeframe, operating conditions could
possibly enable Newalta to begin generating free cash flow and to
make modest debt-reduction payments in 2018. If Newalta is unable
to sustain the performance achieved in Q3 2016, DBRS will likely
consider an additional downgrade.
RATINGS
Issuer Debt Rated Rating Action Rating
------ ---------- ------------- ------
Newalta Issuer Rating Downgraded CCC(high)
Corporation
Newalta Unsecured Notes Downgraded CCC(low)
Corporation
NORTH GATEWAY CORE: Hires Henry & Horne as Expert Witness
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North Gateway Core Acreage Investors, LLC seeks authorization from
the U.S. Bankruptcy Court for the District of Arizona to employ
Henry & Horne, LLP as expert witness and financial advisor.
The Debtor is the defendant and counterclaimant in a lawsuit in
which the Propst Family Partnership ("Propst") is the plaintiff and
counterdefendant. The Lawsuit was filed in the Superior Court of
Arizona, Maricopa County, Case No. CV 2014-011739, and was removed
to this Court on September 21, 2016 [Adv. No. 2:16-ap-00462-BKM].
Security Title is a third-party defendant in the Lawsuit
The services Henry & Horne will provide to the Debtor pursuant to
this Application include, without limitation, preparing an expert
witness report and testifying as to the proper calculation of
Propst's claim, critiquing Propst's calculation of his claim
amount, preparing an expert report and/or opining on the
confirmability of the Debtor's plan of reorganization and the
satisfaction of the various confirmation requirements, and
providing such other services as the Debtor may request.
Henry & Horne will be paid at these hourly rates:
Directors $355
Managers $245
Analysts $150
Para Professionals $85
Henry & Horne will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Edward M. Burr, director of Henry & Horne, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estate.
Henry & Horne can be reached at:
Edward M. Burr
HENRY & HORNE, LLP
7098 E, Cochise Rd., Ste. 100
Scottsdale, AZ 85253
Tel: (480) 483-1170
E-mail: tedb@HHCPA.com
North Gateway Core Acreage Investors, LLC sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
16-07286) on June 27, 2016. The petition was signed by Gary White,
co-manager of managing member.
At the time of the filing, the Debtor estimated its assets at $1
million to $10 million and debts at $500,000 to $1 million.
The Office of the U.S. Trustee disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of North Gateway Core Acreage Investors, LLC.
NORTH WASATCH: DOJ Watchdog Seeks Ch. 7 Conversion, Ch. 11 Trustee
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The United States Trustee asks the U.S. Bankruptcy Court for the
District of Utah to enter an order dismissing the Chapter 11 case
of North Wasatch Treatment Center, Inc., or converting the case to
one under Chapter 7, or alternatively ordering the appointment of a
Chapter 11 Trustee.
According to the U.S. Trustee, cause exists to dismiss the case to
convert the Chapter 11 case to one under Chapter 7 based on the:
(a) verification of appropriate insurance to avoid risks to
the estate or public;
(b) information requested by the United States Trustee;
(c) unexcused failure to satisfy timely any filing
requirements established by title 11; and
(d) meetings reasonably requested by the United States
Trustee.
Moreover, the U.S. Trustee asserts that cause is established to
appoint a Chapter 11 trustee in the present Case based on the:
(a) failure to comply with basic duties and responsibilities
under the Bankruptcy Code;
(b) failure to Timely File Information with the Court; and,
(c) potential risks to the estate and the public.
Therefore, the U.S. Trustee asks the Court to enter an order
dismissing the Case, converting the case to one under Chapter 7,
or, in the alternative, ordering the appointment of a Chapter 11
Trustee and for such other and further relief as the Court deems
appropriate under the circumstances.
North Wasatch Treatment Center, Inc., filed a Chapter 11 petition
(Bankr. D. Utah Case No. 16-28732) on October 3, 2016, and is
represented by Charles Parson, Esq., at The Parson Group, LP.
NUVERRA ENVIRONMENTAL: Incurs $38.4 Million Net Loss in Q3
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Nuverra Environmental Solutions, Inc. filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing a
net loss attributable to common shareholders of $38.39 million on
$35.44 million of total revenue for the three months ended Sept.
30, 2016, compared to a net loss attributable to common
shareholders of $127.76 million on $76.52 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 attributable to common shareholders of $107.54 million on
$116.39 million of total revenue compared to a net loss
attributable to common shareholders of $161.57 million on $288.06
million of total revenue for the same period a year ago.
As of Sept. 30, 2016, Nuverra had $388.29 million in total assets,
$496.26 million in total liabilities and a total shareholders'
deficit of $107.96 million.
"As reflected in the condensed consolidated financial statements,
we had an accumulated deficit at September 30, 2016, and a net loss
for the nine months ended September 30, 2016 and 2015. These
factors, coupled with our large outstanding debt balance, raise
substantial doubt about our ability to continue as a going concern.
We are attempting to generate sufficient revenues and reduce
costs; however, our cash position may not be sufficient to support
our daily operations if we are not successful. While we have
executed a comprehensive strategy to restructure our indebtedness,
improve liquidity and reduce costs, including cash interest
expense, to sustain operations through the prolonged depression in
oil and natural gas prices and the corresponding impact on our
business operations, there can be no assurances to that effect.
Our ability to continue as a going concern is dependent upon our
ability to generate sufficient liquidity to meet our obligations
and operating needs. While we were in compliance with our existing
debt arrangements as of September 30, 2016, we recognize that
absent an improvement in oil prices, it is likely that we will not
have enough liquidity, including cash on hand, to service our debt,
operations, and avoid covenant violations," the Company stated in
the report.
Net cash used in operating activities from continuing operations
during nine months ended Sept. 30, 2016, was $19.3 million, while
asset sales net of capital expenditures from continuing operations
provided proceeds of $7.3 million. For the nine months ended Sept.
30, 2016, free cash flow was negative at $12 million, compared with
positive free cash flow of $51.4 million in the same period in
2015.
Total liquidity as of Sept. 30, 2016, consisting almost entirely of
available borrowings under the ABL Credit Facility, was $8.9
million.
As of Sept. 30, 2016, total debt outstanding was $469.9 million,
including $40.4 million of 2018 Notes, $346 million of 2021 Notes,
$25.5 million under a term loan, $43.9 million under the ABL
Facility, and $14.1 million in capital leases and notes payable.
The Company made cumulative payments, net of proceeds received,
during the nine months ended Sept. 30, 2016, of $57.9 million to
reduce total debt outstanding under the ABL Facility.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/YGKb56
About Nuverra
Nuverra Environmental Solutions, Inc. (OTCQB: NESC) provides
environmental solutions to customers focused on the development and
ongoing production of oil and natural gas from shale formations.
The Scottsdale, Arizona-based Company operates in shale basins
where customer exploration and production activities are
predominantly focused on shale and natural gas.
Nuverra reported a net loss attributable to common stockholders of
$195 million in 2015, a net loss attributable to common
stockholders of $516 million in 2014 and a net loss attributable to
common stockholders of $232 million in 2013.
KPMG LLP, in Phoenix, Arizona, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company has incurred recurring
losses from operations and has limited cash resources, which raise
substantial doubt about its ability to continue as a going concern.
OLMOS EQUIPMENT: Hires Greg Murray as Accountant
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Olmos Equipment Inc. seeks authorization from the U.S. Bankruptcy
Court for the Western District of Texas to employ Greg T. Murray
PLLC as accountants.
The Debtor requires Murray to:
(a) review the current and future amounts due under current
construction projects;
(b) actively pursue collection of any outstanding and future
contractual payments, including retainage on completed
contracts;
(c) record all accounting transactions in the Debtor's
accounting records. Disburse and record payments, including
payroll if applicable.
(d) prepare any payroll and sales tax returns as required for
Federal and State reporting requirements;
(e) complete monthly operating reports in compliance with the
U.S. Trustee requirements;
(f) prepare cash flow projections and reports as requested by
the Court and U.S. Trustee office; and
(g) prepare supporting information required to complete Federal
Income Tax returns for the company to the tax accountant.
The Debtor reported that the hourly fee for professional services
rendered is $200. The hourly fee for bookkeeping services
performed by non-professional staff is $60.
Murray will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Greg T. Murray, president of Murray, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtor and its estate.
Murray can be reached at:
Greg T. Murray
GREG T. MURRAY, PLLC
1503 Tarton Lane
San Antonio, TX 78231
Tel: (210) 413-9162
Fax: (210) 492-6389
E-mail: greg@gregmurraycpa.com
About Olmos Equipment
Olmos Equipment Inc. filed a Chapter 11 petition (Bankr. W.D. Tex.
Case No. 16-51834) on Aug. 12, 2016. The petition was signed by
Larry Struthoff, president. The Debtor is represented by William
B. Kingman, Esq., at the Law Offices of William B. Kingman, PC. The
case is assigned to Judge Craig A. Gargotta. The Debtor estimated
assets at $1 million to $10 million and liabilities at $10 million
to $50 million at the time of the filing.
Judge Craig A. Gargotta, the United States Bankruptcy Judge for
the District of Texas, entered an order approving the appointment
of Randolph N. Osherow as Chapter 11 Examiner for the Debtor, Olmos
Equipment, Inc.
OLMOS EQUIPMENT: Hires Williams Crow as Accountant
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Olmos Equipment Inc., seeks authorization from the U.S. Bankruptcy
Court for the Western District of Texas to Williams, Crow, Mask,
LLP as accountant for limited purpose.
WCM's employment shall be limited to assisting the Debtor in all
issues relating to the filing of its corporate income tax returns
and other required financial filings and possibly providing tax
advice that may arise during the course of this bankruptcy
proceeding.
The Debtor will pay WCM a flat fee of $2,400 for the preparation of
the 2015 corporate tax returns and the Texas franchise tax return.
However, if WCM provides any additional services for the Debtor,
WCM shall comply with the requirements of Local Rule 2016 and shall
submit applications for compensation and reimbursement of
expenses.
Kirk Mask, CPA, partner in the accounting firm of Williams, Crow,
Mask, LLP, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estates.
WCM may be reached at:
Kirk Mask, CPA
Williams, Crow, Mask, LLP
1100 NE Loop 410, Suite 350
San Antonio, TX 78209
Tel: (210)684-1071
Fax: (210)684-8983
E-mail: kmask@wcmtexas.com
About Olmos Equipment
Olmos Equipment Inc. filed a Chapter 11 petition (Bankr. W.D. Tex.
Case No. 16-51834) on Aug. 12, 2016. The petition was signed by
Larry Struthoff, president. The Debtor is represented by William
B. Kingman, Esq., at the Law Offices of William B. Kingman, PC. The
case is assigned to Judge Craig A. Gargotta. The Debtor
estimated assets at $1 million to $10 million and liabilities at
$10 million to $50 million at the time of the filing.
The Court has entered an order approving the appointment of
Randolph N. Osherow as Chapter 11 Examiner for the Debtor, Olmos
Equipment, Inc.
ONEMAIN HOLDINGS: Fitch Affirms 'B-' LT Issuer Default Ratings
--------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of OneMain Holdings, Inc. (OneMain Holdings), OneMain
Financial Holdings, LLC (OneMain Financial) and Springleaf Finance
Corp. (Springleaf) at 'B-'. Fitch has also affirmed the senior
unsecured debt ratings of OneMain Financial and Springleaf at
'B/RR3' and 'B-/RR4, respectively. The Rating Outlook has been
revised to Positive from Stable.
KEY RATING DRIVERS - IDRs, SENIOR UNSECURED DEBT, TRUST PREFERRED
SECURITIES
The Positive Rating Outlook reflects OneMain's actual and expected
continued reduction of leverage following the closing of Springleaf
Holdings Inc.'s acquisition of OneMain Financial in November 2016,
progress in addressing outsized debt maturities in 2017, and
continued execution of its integration with OneMain Financial,
which is expected to be completed by the middle of 2017.
The rating affirmations reflect OneMain's leading market position
in the personal installment lending segment, above average
profitability, proven underwriting history, and seasoned management
team. Rating constraints include the substantial increase in
leverage of the consolidated entity following the completion of
Springleaf Holdings Inc.'s acquisition of OneMain Financial last
year, elevated integration and execution risks associated with the
transaction, a reliance on wholesale funding, the higher credit
risk profile of its lending businesses which primarily target
subprime borrowers, elevated regulatory and legislative risk and
the potential for regulatory restrictions on capital being
upstreamed from OneMain's insurance subsidiary.
Since the closing of Springleaf Holdings Inc.'s acquisition of
OneMain Financial in November 2016, when consolidated
debt-to-tangible equity ratio rose to approximately 20.0x,
management has made reducing leverage a key priority. The company
has indicated that it targets leverage of 5x-7x, and anticipates
reaching the higher end of that range by the second half of 2018,
which is within Fitch's Outlook horizon of 12-24 months. While the
primary avenue to achieving its leverage target will be through
earnings accretion and the amortization of intangibles, the company
has taken several other actions including selling its 47% stake in
SpringCastle Holdings, LLC, a joint venture formed in 2013 to
acquire a distressed consumer loan portfolio from HSBC Holdings
plc, and additional sales of real estate loans to accelerate the
reduction in leverage. Fitch expects earnings accretion to have a
more pronounced impact on reducing leverage as purchase accounting
adjustments begin to diminish over the course of next year and into
2018.
At the end of the third quarter of 2016 (3Q16), OneMain's stated
leverage ratio was 10.7x, down from 18.5x at the end of 2015. On an
adjusted basis, which attempts to strip out the positive impact
that purchase accounting adjustments have on the company's leverage
ratio and make it comparable to peers, Fitch estimates OneMain's
leverage was 13.4x at 3Q16. Although higher than OneMain's stated
leverage, Fitch expects this differential to narrow over the next
two years as the vast majority of the purchase accounting
adjustments amortize through GAAP earnings.
Over the past year, OneMain has improved its funding and liquidity
profile by increasing the capacity of its credit facilities through
the completion of four term securitizations (including its
inaugural securitization of its direct auto product), refinancing a
portion of its December 2017 debt maturities, and executing asset
and branch sales. In April 2016, OneMain issued $1 billion of
senior unsecured notes with a coupon of 8.25% that mature in
December 2020, of which $600 million of the proceeds were used to
repurchase a portion of the $1.6 billion of 6.9% bonds scheduled to
mature in December 2017.
Although the cost of issuance on the new notes is greater than the
cost of the notes being redeemed, which will have a modestly
negative impact on OneMain's future profitability, Fitch views the
transaction favorably since it results in a smoother unsecured debt
maturity schedule and also demonstrates OneMain's ability to access
the capital markets, on an unsecured basis, during a period of
market volatility. Fitch expects the company to maintain a roughly
even mix of unsecured and secured debt moving forward and to
maintain unsecured debt maturities in any one year at less than 20%
of the total debt outstanding.
Along with its 3Q16 earnings report earlier this week, management
lowered its loan growth expectations for 2016 and 2017, raised its
credit loss outlook for next year, and sharply lowered its previous
guidance for adjusted net income for its Consumer and Insurance
(C&I) segment for 2016 (15% reduction) and 2017 (35% reduction).
Management indicated the changes were driven by several factors,
most notably the on-going integration of the OneMain branches,
which the company believes is temporary in nature, as well as
tightening of underwriting for lower credit tier borrowers, which
is more strategic in nature. While integration challenges are not
unusual for a merger of this size, Fitch will continue to monitor
the effects of the integration through the targeted completion by
the middle of next year in order to determine the potential impacts
on new business originations and existing business collections and
loss mitigation.
To the extent the expected moderation in loan growth is driven by a
tightening of underwriting to borrowers at lower credit tiers,
Fitch would view this trend favorably, particularly if the reduced
demand on growth capital supports the company's ability to reach
the higher end of its leverage target range of 7x by the end of
2018.
Although OneMain's GAAP financial results thus far in 2016 have
been significantly impacted by the effects of purchase accounting
adjustments and several non-recurring items, core financial results
for the company have been solid. The company reported GAAP net
income of $188 million through the first three quarters of 2016
compared to a loss of $23 million in the prior year period. The
company's GAAP results included a negative pre-tax $528 million
impact from acquisition related accounting impacts.
In 3Q16, the company's average net loan portfolio was up 4.3%
versus the prior year, ending the quarter at $13.4 billion.
Excluding the loan sale of $600 million required by the Department
of Justice in order to complete the merger, growth would have been
roughly 10%. Loan growth was aided by growth in legacy OneMain
Financial's secured loan originations, which more than doubled from
3Q16 relative to 3Q15. Management is projecting loan growth of 5%
in 2016 and 5%-10% in 2017, down from its previous expectations of
10%-15% for both periods.
OneMain's credit performance weakened through the first three
quarters of 2016, but charge-offs for the full year are still
expected to be within management's guidance at the beginning of the
year of 6.8%-7.3%. The company's charge-off rate averaged 6.9%
through the first three quarters of 2016, compared to 6.5% over the
same period in 2015. In addition to portfolio seasoning, the
increase in credit losses was in part attributable to retaining the
delinquent balances on its branch/loan sale in May 2016, and also
reflects the impact of non-recurring issues related to the merger.
The company's early stage delinquency rate (30 - 89 days) has also
trended higher, ending 3Q16 at 2.6% compared to 2.2% in 3Q15.
OneMain has indicated that the increase in delinquencies is largely
being driven by temporary disruptions from the integration and
seasoning of the 2015 loan vintage, which should ease over the
course of the next two years. If the shift in credit performance
proves to be more structural in nature, it could impact OneMain's
ratings and/or Outlook.
Revenue yield on loans in the Consumer and Insurance (C&I) segment
dipped modestly for the first nine months of 2016, averaging 28.2%
compared to 28.7% for the same period a year ago. Fitch believes
this is largely a function of mix shift of the portfolio toward
direct auto loans, which carry lower yields but also are expected
to produce lower losses given the secured nature of the loans.
Similarly, risk-adjusted margin declined in through the first three
quarters of 2016, averaging 21.3% compared to 22.2% for the same
period in 2015.
A key component of the strategic rationale behind Springleaf
Holdings, Inc.'s acquisition of OneMain Financial was the potential
for cost rationalization and improved operating efficiency. Over
the nine month period ended Sept. 30, 2016, the company lowered its
operating expense ratio within the C&I segment from 10.8% in 4Q15
to 9.9% in 3Q16. Return on receivables in the C&I segment of 3.7%
thus far in 2016, while below the company's long-term target of
4.0%-4.5%, remained strong.
The 'B-' rating on Springleaf's senior unsecured debt is equalized
with OneMain's IDR and reflects Fitch's expectation of average
recovery prospects for the notes as expressed by the Recovery
Rating (RR) of 'RR4', which implies a stressed recovery of 31%-50%.
The 'B' rating assigned to OneMain Financial's senior unsecured
debt is one notch higher than OneMain's 'B-' IDR, reflecting
Fitch's expectation of above average recoveries for the
instruments, as indicated by the RR of 'RR3', which implies a
stressed recovery of 51%-70%.
OneMain Financial's unsecured debt rating also reflects the
restrictive covenants within its existing bond indenture that limit
the level of unsecured indebtedness OneMain Financial can incur and
the outflow of capital to One Main from OneMain Financial for so
long as the existing bonds remain outstanding. As a result, OneMain
Financial's stand-alone leverage is expected to remain considerably
lower than the consolidated entity. These positive factors are
counterbalanced by the ability of the holding company to extract up
to 50% of OneMain Financial's cumulative net income generated since
4Q14 in addition to other one-time and annual payments allowable
under the bond indenture.
AGFC Capital Trust I is a special-purpose entity that was
established in 2007 to facilitate the issuance of trust preferred
securities on behalf of Springleaf. The 'CC' rating on AGFC's trust
preferred securities is two-notches below Springleaf's IDR,
reflecting the subordinated nature of the instrument as indicated
by the RR of 'RR6', which implies a stressed recovery of 0%-10%.
RATING SENSITIVITIES - IDRs, SENIOR UNSECURED DEBT, TRUST PREFERRED
SECURITIES
OneMain's ratings could be upgraded if consolidated leverage is
brought down to the company's targeted level of 5x-7x, near-term
debt maturities are appropriately managed, and the integration of
OneMain and Springleaf is completed. Fitch expects the resolution
of the Rating Outlook to be in the latter part of the 12 to 24
month Outlook horizon as the company does not currently expect to
reach its leverage target until the fourth quarter of 2018. In
addition, upward momentum would be conditioned upon further
evidence that management's revised credit loss expectations are
temporary in nature, stable credit performance for the less tenured
direct auto loan product, a proportionate reduction in capital held
at its insurance subsidiaries, and the absence of developments in
the regulatory landscape that significantly impact OneMain's core
businesses.
Conversely, negative ratings momentum could be driven by an
inability to access the capital markets at a reasonable cost,
greater competitive intensity in the nonprime lending segment,
substantial credit quality deterioration that is structural rather
than temporary (i.e. integration-related) in nature, a significant
increase in asset encumbrance, potential new and more onerous rules
and regulations, as well as potential shareholder-friendly actions
given the high private equity ownership. An inability to further
deleverage the balance sheet could also result in the Outlook being
revised to Stable from Positive.
Although Fitch believes OneMain may have higher longer-term ratings
potential reflecting its strong franchise and profitability,
potential upward momentum will likely be limited to below
investment-grade levels, given OneMain's monoline business model,
core demographic and high reliance on the capital markets for
funding. Furthermore, Fitch views the elevated regulatory,
legislative and litigation risks that exist for OneMain, as well as
a lack of prudential regulation, as key rating constraints.
The rating assigned to Springleaf's senior unsecured debt is
equalized with OneMain's IDR, and therefore, would be expected to
move in tandem with any change in OneMain's IDR, absent a material
change in the recovery prospects for the senior unsecured notes, as
expressed by the RR. Were OneMain to incur material additional
secured debt, such that the recovery prospects for Springleaf's
senior unsecured notes were viewed as below average, this could
result in a downgrade of the notes and the RR.
The rating assigned to OneMain Financial's senior unsecured debt is
one notch above OneMain's IDR, and would be expected to move in
tandem with any change in OneMain's IDR, absent a material change
in the recovery prospects for the senior unsecured notes, as
expressed by the RR, or material changes to OneMain Financial's
bond indenture. Were OneMain Financial to incur material additional
secured debt, such that the recovery prospects for the senior
unsecured notes were viewed as average or below average, this could
result in a downgrade of the notes and the RR.
The ratings assigned to AGFC Capital Trust I's trust preferred
securities are primarily sensitive to changes in OneMain's IDR and
to a lesser extent, the recovery prospects of the instrument. That
said, Fitch views further downgrades to the trust preferred
securities as more limited because a downgrade to 'C' would
represent nonperformance. As such, a further downgrade to OneMain
would not necessarily result in a downgrade to the trust preferred
securities unless they were to defer and Fitch believed that
nonperformance would be sustained and not temporary.
Fitch has affirmed the following ratings:
OneMain Holdings, Inc.
-- Long-Term IDR at 'B-'; Outlook revised to Positive.
Springleaf Finance Corp.
-- Long-term IDR at 'B-'; Outlook revised to Positive;
-- Senior unsecured debt at 'B-/RR4'.
OneMain Financial Holdings, LLC
-- Long-Term IDR at 'B-'; Outlook revised to Positive;
-- Senior unsecured debt at 'B/RR3'.
AGFC Capital Trust I
-- Trust preferred securities at 'CC/RR6'.
OTS CAPITAL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: OTS Capital Partners, LLC
616 Elliott Rd.
McDonough, GA 30252
Case No.: 16-70357
Chapter 11 Petition Date: November 11, 2016
Court: United States Bankruptcy Court
Northern District of Georgia (Atlanta)
Debtor's Counsel: William A. Rountree, Esq.
MACEY, WILENSKY & HENNINGS, LLC
Suite 4420
303 Peachtree Street, NE
Atlanta, GA 30308
Tel: 404-584-1200
Fax: 404-681-4355
E-mail: swenger@maceywilensky.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dan C. Fort, authorized representative.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/ganb16-70357.pdf
OUT OF THIS WORLD: Names Carmen Conde Torres as Counsel
-------------------------------------------------------
Out of This World, Inc., dba Budatai seeks authorization from the
U.S. Bankruptcy Court for the District of Puerto Rico to employ
Carmen D. Conde Torres from the Law Offices of C. Conde & Assoc. as
legal counsel.
The Debtor requires Ms. Conde Torres to:
(a) advise the Debtor with respect ot its duties, powers and
responsibilities in this case under the laws of the United
States and Puerto Rico in which the Debtor in possession
conducts its operations, do business, or is involved in
litigation;
(b) advise the Debtor in connection with a determination
whether a reorganization is feasible and, if not, helping
the Debtor in the orderly liquidation of its assets;
(c) assist the Debtor with respect to negotiations with
creditors for the purpose of arranging the orderly
liquidation of assets and for proposing a viable plan of
reorganization;
(d) prepare on behalf of the Debtor the necessary complaints,
answers, orders, reports, memoranda of law and any other
legal papers or documents;
(e) appear before the bankruptcy court, or any court in which
Debtor assert a claim interest or defense directly or
indirectly related to this bankruptcy case;
(f) perform other legal services for the Debtor as may be
required in these proceedings or in connection with the
operation of, and involvement with the Debtor's business,
including but not limited to notarial services; and
(g) employ other professional services, if necessary.
The firm will be paid at these hourly rates:
Carmen D. Conde Torres $300
Associates $275
Junior Attorney $250
Legal Assistant $150
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The Debtor paid the firm a $15,000 retainer.
Carmen D. Conde Torres, senior attorney 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 Debtor and its estate.
The firm can be reached at:
Carmen D. Conde Torres, Esq.
C. CONDE & ASSOC.
254 San Jose Street, 5th Floor
Old San Juan, PR 00901
Tel: (787) 729-2900
Fax: (787) 729-2203
E-mail: condecarmen@condelaw.com
Out Of This World, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. D.P.R. Case No. 16-08730) on October 31, 2016, disclosing
under $1 million in both assets and liabilities.
The Debtor is represented by Carmen D. Conde Torres, Esq.
OUTSIDE PLANET: Hires Adams Law as Counsel
------------------------------------------
Outside Plant Damage Recovery, LLC d/b/a Paragon Risk Management
Group seeks authorization from the U.S. Bankruptcy Court for the
District of Colorado to employ Adams Law, LLC, as counsel for the
Debtor-in-Possession.
The Debtor requires Adams Law to:
a. Prepare Petition and Schedules;
b. Prepare on behalf of the Debtor-in-Possession all
necessary reports, orders and other legal papers required in this
Chapter 11 proceeding;
c. Perform all legal services for Debtor as
Debtor-in-Possession which may become necessary herein; and
d. Represent the Debtor in any litigation which the Debtor
determines is in the best interest of the estate.
The Firm's professionals' hourly rates for their services are:
Roger K. Adams $250
Paralegals $100
Law Clerks $125
Other Assistance $75
The Adams Law received the total amount of $10,000 in retainer from
the Debtor.
Prior to the filing of the petition, the Law Firm rendered services
to the Debtor in conjunction with pre-bankruptcy planning, legal
advice and costs in the amount of $5,417. The Law Firm applied the
amount of $5,417 to the retainer from the Debtor for the
pre-petition services up through the filing of the Debtor's Chapter
11 bankruptcy case.
Roger K. Adams, partner of Deloitte & Touche, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Adams Law may be reached at:
Roger K. Adams, Esq.
4200 East 8th Avenue, Suite 101
Denver, CO 80220
Telephone: (720) 233-7900
Fax: (303) 586-6224
E-mail: RogerKAdams@rka-law.com
About Outside Plant Damage Recovery, LLC d/b/a
Paragon Risk Management Group
Outside Plant Damage Recovery, LLC d/b/a Paragon Risk Management
Group filed a Chapter 11 bankruptcy petition (Bankr. D.CO. Case No.
16-20629) on October 28, 2016. Hon. Thomas B. McNamara presides
over the case. Adams Law, LLC. represents the Debtor as counsel.
In its petition, the Debtor estimated $0 to $50,000 in assets and
$1 million to $10 million in liabilities. The petition was signed
by Joseph Fanciulli, owner.
OUTSIDE PLANT: Hires Buechler & Garber as Counsel
-------------------------------------------------
Outside Plant Damage Recovery, LLC dba Paragon Risk Management
Group seeks authorization from the U.S. Bankruptcy Court for the
District of Colorado to employ Buechler & Garber, LLC as counsel.
The Debtor requires Buechler & Garber to:
(a) prepare on behalf of the Debtor-in-Possession all necessary
reports, orders and other legal papers required in this
Chapter 11 proceeding;
(b) perform all legal services for Debtor as Debtor-in-
Possession which may become necessary herein; and
(c) represent the Debtor in any litigation which the Debtor
determines is in the best interest of the estate.
Buechler & Garber will be paid at these hourly rates:
Kenneth J. Buechler $350
Aaron A. Garber $350
Michael J. Guyerson $350
Jonathan M. Dickey $225
Paralegals $105
Buechler & Garber will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Prior to the bankruptcy filing, Buechler & Garber received the
total amount of $25,000 in retainer from the Debtor for the
Buechler & Garber's fees and costs. Buechler & Garber rendered
services to the Debtor in conjunction with pre-bankruptcy planning,
legal advice and costs in the amount of $4,342.50.
Buechler & Garber is holding the amount of $20,675.50 as retainer
in its trust account subject to Court approval.
Kenneth J. Buechler, managing member of Buechler & Garber, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estate.
Buechler & Garber can be reached at:
Kenneth J. Buechler, Esq.
BUECHLER & GARBER, LLC
999 18th Street, Suite 1230-S
Denver, CO 80202
Tel: (720) 381-0045
Fax: (720) 381-0382
E-mail: ken@BandGlawoffice.com
Headquartered in Lakewood, Colorado, Outside Plant Damage Recovery,
LLC, dba OPDR, dba PRMG, dba Paragon Risk Management Group filed
for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No.
16-20629) on October 28, 2016, The Hon. Thomas B. McNamara presides
over the case. Roger K. Adams, Esq. serves as bankruptcy counsel.
In its petition, the Debtor estimated under $50,000 in assets and
$1 million to $10 million in liabilities. The petition was signed
by Joseph Fanciulli, owner.
PARADISE TRANSITIONAL: Hires Medley & Associates as Counsel
-----------------------------------------------------------
Paradise Transitional Living Senter LLC seeks authorization from
the U.S. Bankruptcy Court for the Northern District of Georgia to
employ Medley & Associates, LLC as counsel.
The Debtor requires Medley & Associates to provide legal services
which may be necessary in the administration of this case,
including preparation or amendment of schedules, representation in
contested matters and adversary proceedings, preparation of a plan
of reorganization and disclosure statement, and other matters which
may arise during the administration of this case.
Medley & Associates will be paid at these hourly rates:
Leonard Medley, Esq. $350
Associate Attorney $275
Paralegal $110
Medley & Associates, LLC. has been paid a pre-petition fee retainer
in the amount of $1717 by the Debtor.
Leonard Medley, Esq. of Medley & Associates, LLC, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Medley & Associates may be reached at:
Leonard Medley, Esq.
Medley & Associates, LLC
2727 Paces Ferry Road Suite 1450
Atlanta, GA 30339
Telephone: (770)319-7592
Facsimile: (770)319-7594
E-mail: leonard@mkalaw.com
About Paradise Transitional Living Senter LLC.
Paradise Transitional Living Senter LLC. filed a Chapter 11
bankruptcy petition (Bankr. N.D.GA. Case No. 16-69299) on October
28, 2016. Leonard Medley, Esq. at Medley & Associates, LLC serves
as bankruptcy counsel.
The Debtor says assets and liabilities are both below $1 million.
PARAGON OFFSHORE: Dean Taylor Named as President & CEO
------------------------------------------------------
BankruptcyData.com reported that according to a corporate release,
Paragon Offshore's board of directors appointed, effective
immediately, Dean E. Taylor (a director of the Company since its
founding in 2014) to serve as interim president and chief executive
officer. Additionally, the board named Lee M. Ahlstrom (currently
the Company's S.V.P. of investor relations, strategy and planning)
as interim chief financial officer. Taylor has also served as the
chairperson of Paragon Offshore's nominating and corporate
governance committee since its founding in 2014. He previously
served in a variety of roles at Tidewater from 1978 through 2012,
including C.E.O. and chairman and serves on the board of the
American Bureau of Shipping and previously on the boards of Trican
Well Service and Whitney Holding. Ahlstrom has more than 20 years
of experience in the oil and gas industry. Prior to his role at
Paragon Offshore, he served as S.V.P. - strategic development and
V.P. of investor relations and planning of Noble. Prior to joining
Noble, Ahlstrom held various management positions at UNOCAL and was
an engagement manager with McKinsey & Company. Ahlstrom began his
career with Exxon, where he held a variety of surface and
subsurface engineering positions. Ahlstrom serves on the board of
directors for the National Investor Relations Institute (NIRI) and
holds NIRI's Investor Relations Charter credential. J. Robinson
West, chairman of the board, states, "We are fortunate to have a
deep bench of talent, and thank Mr. Taylor and Mr. Ahlstrom for
taking on these important responsibilities. The Board will work
closely with them and our advisors in bringing the company's
ongoing restructuring efforts to a successful conclusion." Taylor
and Ahlstrom succeed Randall D. Stilley and Steven A. Manz, who are
no longer with the Company. In addition, Stilley is no longer a
member of the Paragon Offshore board.
About Paragon Offshore
Paragon Offshore plc -- http://www.paragonoffshore.com/-- is a
global provider of offshore drilling rigs. Paragon's operated
fleet includes 34 jackups, including two high specification heavy
duty/harsh environment jackups, and six floaters (four drillships
and two semisubmersibles). Paragon's primary business is
contracting its rigs, related equipment and work crews to conduct
oil and gas drilling and workover operations for its exploration
and production customers on a dayrate basis around the world.
Paragon's principal executive offices are located in Houston,
Texas. Paragon is a public limited company registered in England
and Wales and its ordinary shares have been trading on the
over-the-counter markets under the trading symbol "PGNPF" since
December 18, 2015.
Paragon Offshore Plc, et al., filed Chapter 11 bankruptcy
Petitions (Bankr. D. Del. Case Nos. 16-10385 to 16-10410) on Feb.
14, 2016, after reaching a deal with lenders on a reorganization
plan that would eliminate $1.1 billion in debt.
The petitions were signed by Randall D. Stilley as authorized
representative. Judge Christopher S. Sontchi is assigned to the
cases.
The Debtors reported total assets of $2.47 billion and total debt
of $2.96 billion as of Sept. 30, 2015.
The Debtors engaged Weil, Gotshal & Manges LLP as general counsel,
Richards, Layton & Finger, P.A. as local counsel, Lazard Freres &
Co. LLC as financial advisor, Alixpartners, LLP as restructuring
advisor, and Kurtzman Carson Consultants as claims and noticing
agent.
PCI MANUFACTURING: Selling Texas Property at Auction on Dec. 14
---------------------------------------------------------------
PCI Manufacturing, LLC, asks the U.S. Bankruptcy Court for the
Eastern District of Texas to authorize the sale of real property
and personal property located at 200 CMH Drive, Sulphur Springs,
Texas, by public auction on Dec. 14, 2016, to be conducted by Loeb
Winternitz Industrial Auctioneers, LLC.
The real property includes approximately 68,000 square feet in two
buildings on approximately 10 acres of land.
These parties assert security interests and/or liens upon the real
property: Hopkins County Tax Office, Sulphur Springs ISD, Texas
Heritage National Bank, Steel & Pipe Supply, Inc., Univar USA,
Inc., and Quality Trailer Products.
The Debtor owns personal property located at 200 CMH Drive, Sulphur
Springs, Texas, 906 Hillcrest Drive, Sulphur Springs, Texas and 903
I-30 East Sulphur Springs, Texas. The personal property consists
of machinery and equipment, attachments and parts including, but
not limited to, plant support equipment, tooling attachments,
material handling, rolling stock, furniture, furnishings and
fixtures, scrap materials, inventory and finished goods, and other
tangible property.
These parties assert security interests and/or liens upon the
personal property: Sulphur Springs Independent School District,
City of Sulphur Springs, Hopkins County Tax Office, Element
Financial Corporation, Steel & Pipe Supply, Co. and Sovereign
Bank.
There is no equity in either the real property or the personal
property above the amount of the Secured Creditors' liens.
The Debtor seeks authority to sell the real property and personal
property by public auction on Dec. 14, 2016 or at such other time
as the Debtor, upon consultation with its auctioneer, determines is
in the best interest of the bankruptcy estate. The real property
will be auctioned with a reserve. If the reserve amount is not
reached, the Debtor has the option to withdraw the real property
from the sale. Also, among the personal property items, only the
inventory and finished goods will be sold subject to a reserve.
From the gross auction sale proceeds, and prior to making payment
to the respective Secured Creditors, the Debtor will pay: (i)
applicable auctioneer costs and real estate agent commissions; (ii)
the ad valorem property taxes associated with the real property and
personal property; (iii) U.S. Trustee Quarterly Fees associated
with the sale; and (iv) the attorney's fees incurred by the
Debtor's counsel associated with the auction and conveyance of
title to the personal property to the buyers at auction ("Costs of
Sale"). The Costs of Sale will only be paid by the Debtor
following further order of Court. After the payment of the Costs
of Sale the Debtor will file a motion to distribute the remaining
auction proceeds to the appropriate secured creditor.
The Debtor has filed an application to employ DFW Lee & Associates
to market and sell the real property. The agreed upon sale
commission is 6% of the first $2,000,000 and 4.5% on the remainder
of the sale price. The Debtor has also filed an application to
employ the Auctioneer to conduct the auction of the personal
property. The Debtor proposes to compensate the Auctioneer through
a 15% buyer's premium to be collected from the purchasers plus
reimbursement from the Debtor for out-of-pocket expenses not to
exceed $75,000. A buyer's premium based on a sale price in excess
of $1,000,000 will result in 25% rebate to the Debtor calculated on
the amount over $1,000,000.
The Debtor asks authority to sell the subject real property and
personal property free and clear of liens, claims and encumbrances.
The Debtor submits that the sale of the real property and personal
property at an auction under Section 363(f) is in the best interest
of the estate and its creditors. The auction process will enable
the Debtor to receive the highest and best price for the
properties.
The Debtor asks the Court that the 14-day stay under Fed. R. Bankr.
P. Rule 6004(h) not apply so that the buyers at the auction can
promptly obtain title to the real property and personal property.
About PCI Manufacturing
PCI Manufacturing, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Tex. Case No. 16-41888) on Oct. 18,
2016. The petition was signed by Miles J. Arnold, president. The
case is assigned to Judge Brenda T. Rhoades. At the time of the
filing, the Debtor estimated its assets and liabilities at $1
million to $10 million.
PERPETUAL ENERGY: S&P Assigns 'CCC', Sees Need for External Funds
-----------------------------------------------------------------
S&P Global Ratings assigned its 'CCC' long-term corporate credit
rating to Calgary, Alta.-based Perpetual Energy Inc. The outlook
is negative. At the same time, S&P Global Ratings assigned its
'CC' issue-level rating and '6' recovery ratings to Perpetual's
senior unsecured notes, indicating its expectation of modest
recovery (0%-10%), for unsecured bondholders in a default scenario.
"In our view, Perpetual's small, natural gas-focused upstream
operations; high full-cycle cost structure; and limited ability to
internally fund organic reserves and production growth negatively
weighs on its competitive position," said S&P Global Ratings credit
analyst Wendell Sacramoni.
With natural gas representing the majority of Perpetual's proven
reserves, and gas-dominated production, the company's forecast
revenues will remain constrained in a persistently weak natural gas
price environment. S&P is forecasting Perpetual's production
levels to continue declining, because S&P's base-case scenario
assumes capital spending will continue at low levels throughout
S&P's 2016-2017 cash-flow forecasting period.
Projected cash flow generation and leverage metrics should remain
very weak through the next 12 months because S&P expects the
company's daily average production to decrease to about 8,000
barrels of oil equivalent per day in 2017, after the significant
asset dispositions and constrained capital spending. S&P expects
funds from operation (FFO) to remain negative during the next 12
months, supporting S&P's view that Perpetual's current capital
structure is unsustainable.
The negative outlook reflects S&P's view of Perpetual's weak
liquidity and S&P's expectation that, without external funding such
as the sale of its Tourmaline shares or other assets, the company
will be unable to fund its required maintenance financing charges
and minimum capital spending within the next 12 months.
S&P would lower the ratings if Perpetual's liquidity position does
not improve within the next six months, which would result in the
company facing an eminent default scenario in the following six
months.
S&P would raise the ratings if the company secures enough external
funds to support its financing charges and minimal capital spending
beyond the next 12 months.
PHILADELPHIA ENERGY: Moody's Cuts Rating to B3 Over Weak Margins
----------------------------------------------------------------
Moody's Investors Service downgraded Philadelphia Energy Solution
Refining and Marketing LLC's (PESRM) Corporate Family Rating (CFR)
to B3 from B1, Probability of Default Rating to B3-PD from B1-PD,
and the rating on its senior secured credit term loan to B3 from
B1. The outlook was changed from stable to negative. The
Speculative Grade Liquidity Rating was withdrawn.
"The downgrade of Philadelphia Energy Solution's ratings reflects
our expectation for continued weak refining margins into 2017,
which combined with low availability of advantaged domestic crudes,
will lead to continued weak credit metrics for the East Coast
refiner," commented Arvinder Saluja, Moody's Vice President- Senior
Analyst. "We also consider refinancing risk with PESRM's term loan
that matures in early 2018."
RATINGS RATIONALE
PESRM's B3 CFR is driven by the expectation of high leverage in an
unfavorable refining margin environment, which is exacerbated by
the high cost of renewable energy credits and narrow price
differentials between Brent-benchmarked crudes and WTI-benchmarked
crudes. The company previously benefitted materially from a wider
differential, the absence of which has led to lower availability of
cost-advantaged domestic crude for PESRM and other US refiners,
particularly on the East Coast. By purchasing cheaper crude and
selling product at favorable market prices in the PADD I region in
the US, PESRM was able to generate significant EBITDA even though
it faced some operational challenges after the change of ownership
in late 2012. Moreover, Moody's expects the high product inventory
driven refining crack spreads to stay weak into 2017, but start to
gradually improve modestly if industrywide refinery utilization
lowers and inventories reduce overtime.
PESRM's B3 CFR also reflects the company's relatively short track
record as an independent refiner, the term loan refinancing risk,
and asset concentration at a single site, albeit with two large
adjacent refineries. The company's weakened EBITDA may pose
challenges to refinancing its term loan that matures in April 2018.
The rating is supported by the management team's substantial
refining industry experience, large combined refining capacity with
flexible capability to process light crudes from a variety of
domestic and foreign sources, adequate liquidity, and our
expectation of some cost savings going forward.
Moody's expects that PESRM will maintain adequate liquidity with
the ability to fund its interest payments and maintenance capital
expenditures over at least the next 12-18 months with its existing
cash balance ($179 million) and ABL revolver availability of $32
million (as of June 30, 2016). There are no active financial
maintenance covenants associated with the revolver, which is due
October 2019. However, if PESRM's $550 million term loan due April
2018 is not refinanced three months prior to maturity or if its
crude supply and product off-take agreement (intermediation
agreement) terminates or expires, the revolver would mature
earlier. PESRM's liquidity is significantly enhanced by the
intermediation agreement, which accounts for substantially all of
the refineries' crude supply and product off-take. However, not
unlike other refiners with intermediation agreements, the company
is highly reliant on it and would need to arrange additional
liquidity if it were to terminate or expire.
The negative outlook reflects the likelihood that PESRM's financial
performance in 2017 might not start returning to mid-cycle levels
if renewable credit costs remain high or weak crack spreads
persist. A downgrade could result if PESRM's leverage and interest
coverage do not trend towards 6x and 1.5x, respectively, in 2017;
if it pays aggressive dividends to its owners; if refining margins
deteriorate further beyond seasonal norms; or if inadequate
progress is made towards refinancing of the term loan. "We could
consider an upgrade if there is a material increase in operational
diversity and scale that is funded conservatively, and if leverage
can be sustained below 4x." Moody's said.
Philadelphia Energy Solutions Refining and Marketing LLC (PESRM)
owns a refinery complex in Philadelphia with two refineries, Girard
Point and Point Breeze. These assets were previously owned by
Sunoco, Inc., and in September 2012 were contributed to
Philadelphia Energy Solutions which is jointly owned by The Carlyle
Group and Sunoco, Inc.
The principal methodology used in these ratings was Refining and
Marketing Industry published in August 2015.
PICO HOLDINGS: FT Covers RPN's Struggle For Value Creation
----------------------------------------------------------
PICO Holdings, Inc. (Nasdaq:PICO), based in La Jolla, Calif., is a
diversified holding company reporting recurring losses since 2008.
PICO owns 57% of UCP, Inc. (NYSE:UCP), 100% of Vidler Water
Company, Inc., a securities portfolio and various interests in
small businesses. PICO has $662 million in assets and $426 million
in shareholder equity. Central Square Management LLC and River Road
Asset Management LLC collectively own more than 14% of PICO. Other
activists at http://ReformPICONow.com/(RPN) have taken to the
Internet to advance the shareholder cause.
The bloggers note they have made the big time. "On November 7,
2016, 'Agenda' a service of the Financial Times, published an
article on the struggle for value creation at PICO Holdings. FT
Reporter Tony Chapelle gets the PICO situation exactly right when
he writes 'Boards should take note of this case to understand how
separate shareholders can form loose alliances and force radical
changes in governance.'
According to the bloggers, "Mr. Chapelle's article is an excellent
portrayal of the shareholder-led effort for value creation at PICO.
Mr. Chapelle interviewed RPN, Andrew Shapiro of Lawndale Capital,
former PICO Director Carlos Campbell and Tom Pollock, Esq.,
corporate finance attorney at Paul Hastings. We encourage all
readers to sign up for a free 3-week trial subscription to Agenda
and read Mr. Chapelle's article."
The bloggers are surprised by revelations made by Carlos Campbell.
"Mr. Chapelle reveals that Carlos 'The NACD-Decorated Horse Thief'
Campbell states that he did not retire from the PICO Board, that
the official PICO press release is untrue. Instead, Mr. Campbell
claims that he was pushed off the Board by his fellow Directors, he
was made a 'sacrificial lamb.'
"We have three things to say. First, we applaud all our Directors
who participated in the quiet removal of Mr. Campbell from the PICO
Board. He was a deplorable Director and, as his incoherent and
unprofessional tirade at the Annual Meeting proved, he was unfit to
serve on the Board of a publicly held corporation.
"Second, we laugh at Mr. Campbell's self-serving characterization
-- that he was removed as a sacrificial lamb. If only the truth
were so benign. Mr. Campbell was universally despised by PICO
shareholders. If Mr. Campbell had stood for reelection in 2016, he
would have been thrown from the Board faster than he could utter
"performance" (if you need this PICO joke explained, contact RPN).
Mr. Campbell was not made a "sacrificial lamb" but another animal
analogy is apt; his tenure on the PICO Board was effectively
euthanized -- it was humanely terminated.
"Third, we question the sanity of a man who besmirches himself so
gravely in public. Mr. Campbell had made a quiet exit from PICO. As
best we knew, everyone thought he retired. Now, Mr. Campbell comes
forward publicly revealing that he was removed under humiliating
circumstances. No wonder he was Juicer's appointee. If he was any
less perceptive, you would have to water him twice per week.
"Not only does Mr. Campbell attempt to sully the current PICO
Directors. He also takes a few cheap shots at former Chairwoman
Kristina Leslie. In just a single interview, Mr. Campbell manages
to disparage just about all his PICO peers, both past and present.
Boy Carlos, you are going to be a popular guy at the next NACD
Convention!"
The bloggers call on the PICO Board to remove Director Michael
Machado in the same manner. "We ask the PICO Board -- specifically
the CGNC -- to similarly euthanize the Directorship of Michael
'Desperado' Machado before the 2017 Annual Meeting.
"As CGNC Chair, Desperado is directly responsible for the soft
declassification implemented after the 2015 Annual Meeting.
Desperado was one of two Legacy Comp Committee members when the
criminal Hart Compensation Scheme was promulgated. Desperado
shamelessly signed his name to the criminal Hart Compensation
Scheme in the 2016 Proxy Statement. Wwe would appreciate it if the
CGNC members would save us, and all shareholders, the trouble.
Euthanasia of Desperado's Directorship is good corporate
governance. It will save resources while implementing a conclusion
that is already foregone."
The bloggers continue to express displeasure with the current PICO
Board. "This Board of Directors has not maximized shareholder
value. Hapless Howie Brownstein refused to initiate an independent
investigation when we broke PICOGate. Raymond 'Delaymond' Marino
refused to seek evidence to fire John 'The Juicer' Hart for cause,
an omission which unnecessarily cost PICO owners $11 million. We
screamed at these men over and over again to do the right thing.
They refused.
"We believe the PICO Board needs one or two more shareholder
oriented Directors. As currently configured, this Board is not
maximizing shareholder value. The greatest corroboration for our
opinion is in this Board's performance, which is wanting.
Mr. Chapelle's article is impressive for its accuracy. He gets a
lot of things right, but one stands out: RPN is not finished. Far
from it."
PLUG POWER: Announces 2016 Third Quarter Results
------------------------------------------------
Plug Power Inc. reported a net loss attributable to common
shareholders of $13.42 million on $17.55 million of total revenue
for the three months ended Sept. 30, 2016, compared to a net loss
attributable to common shareholders of $10.23 million on $31.43
million of total revenue for the three months ended Sept. 30,
2015.
For the nine months ended Sept. 30, 2016, Plug Power reported a net
loss attributable to common shareholders of $38.35 million on
$53.35 million of total revenue compared to a net loss attributable
to common shareholders of $30.56 million on $64.85 million of total
revenue for the same period a year ago.
Third quarter 2016 operational activity included system deployments
at three sites where the Company utilizes a PPA. For those sites,
the value of the systems deployed was $17.3 million and the costs
to deploy the systems was $11.5 million. In 2015, the Company
financed PPA deployments under arrangements which required revenue
and cost recognition in the period deployed, whereas the finance
arrangements utilized in 2016 do not allow such revenue and cost
recognition in the period.
Two new customers were signed in the third quarter, along with
continued progress expanding existing customers including Walmart,
Home Depot and Sysco. One of the new customer sites was sold and
implemented within the quarter, but revenues from the sale will be
recognized in the fourth quarter of 2016 due to the timing of the
customer's greenfield site commissioning.
"Plug Power is executing on a balanced strategy of delivering
sustainable returns within the material handling space while
beginning to unearth new market opportunities to maintain our
position as a global market leader in fuel cell technology," said
Andy Marsh, CEO of Plug Power. "Our third quarter results
underline continued improvement in our operating model, with
production and implementations on schedule, a robust and growing
sales pipeline, and continued margin expansion. Looking ahead, we
are encouraged at the immense long-term opportunity set we see for
our technology within motive power electric vehicle applications
worldwide."
Net cash used in operating activities for the third quarter of 2016
and 2015 was $13.9 million and $13.0 million, respectively. As of
Sept. 30, 2016, Plug Power had total cash of $88.4 million,
including cash and cash equivalents of $42.5 million and restricted
cash of $45.9 million.
A full-text copy of the press release is available for free at:
https://is.gd/O6bkdc
About Plug Power
Plug Power Inc. is a provider of alternative energy technology
focused on the design, development, commercialization and
manufacture of fuel cell systems for the industrial off-road
(forklift or material handling) market.
Plug Power reported a net loss attributable to the Company of $55.7
million on $103 million of total revenue for the year ended Dec.
31, 2015, compared to a net loss attributable to the Company of
$88.5 million on $64.2 million of total revenue for the year ended
Dec. 31, 2014.
POST EAST: Hires Chappo as Mortgage Broker
------------------------------------------
Post East, LLC seeks authorization from the U.S. Bankruptcy Court
for the District of Connecticut to employ Chappo LLC as mortgage
broker.
The Debtor owns a commercial rental property located at 740-748
Post Road East, Westport, Connecticut. The property is occupied by
seven retail or business tenants.
Connect REO, LLC holds a single claim in the original sum of
$1,000,000, plus interest, costs, and fees evidenced by a note on
which Post East, LLC and its affiliate Uncas, LLC are co-makers.
The claim is secured by mortgages and collateral assignments of
rents on the Property owned by Post East LLC, and by a mortgage on
a property owned by Uncas, LLC, 2A Owenoke Park, Westport,
Connecticut.
During the course of these proceedings the Debtor, managed by its
sole member, Michael Calise, continues to manage the Property and
has made adequate protection payments to Connect.
The Debtor is seeking new financing for the Property to allow it to
pay the claim of Connect. The Debtor believes Chappo LLC, as
mortgage broker, can offer access to a lender ready, willing and
able to lend against the Property in the required sum to achieve
this goal.
The Debtor shall compensate Chappo 1% of the refinance amount
payable upon closing on refinancing.
The Debtor's principal paid a pre-petition retainer of $5,000 to
Chappo in an agreement to refinance any or all of several
properties inclusive of Debtors property.
Richard J. Chappo, mortgage broker and principal of Chappo LLC
assured the Court that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Chappo can be reached at:
Richard J. Chappo
Chappo LLC
82 Patrick Road
Westport, CT 06880
Phone: +1 203-226-8936
About Post East, LLC
Post East, LLC, owns real estate at 740-748 Post Road East,
Westport, Connecticut. The property is commercial real estate
which presently has seven leased spaces. The secured creditor is
Connect REO, LLC, which is owed $1,043,000.
Post East, LLC, filed for Chapter 11 bankruptcy protection (Bankr.
D. Conn. Case No. 16-50848) on June 27, 2016. The petition was
signed by Michael F. Calise, member. The Debtor is represented by
Carl T. Gulliver, Esq., at Coan Lewendon Gulliver & Miltenberger
LLC. The Debtor estimated assets and liabilities at $1 million to
$10 million at the time of the filing.
PRO CONSTRUCTION: Hires Ernest DeMarco as Accountant
----------------------------------------------------
Pro Construction Trades, Inc. dba Premier Facility Services seeks
authorization from the U.S. Bankruptcy Court of District of New
Jersey to employ Ernest P. DeMarco & Associates, LLC as
accountant.
The Debtor requires the accounting firm to assist with accounting
matters, including preparation of Monthly Operating Reports and tax
returns, review and negotiate claims by taxing authorities, if
any.
The accounting firm will be paid at these hourly rates:
CPA $300
Senior Accountant $240
Staff Accountants $180
The accounting firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Dennis G. Barker, member of Ernest P. DeMarco, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estate.
The accounting firm can be reached at:
Dennis G. Barker
ERNESTO P. DEMARCO & ASSOCIATES, LLC
533 Lafayette Avenue
Hawthorne, NJ 07506
Tel: (973) 423-3177
Fax: (973) 423-0975
About Pro Construction Trades
Pro Construction Trades, Inc., dba Premier Facility Services,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D.N.J. Case No. 16-30001) on October 19, 2016. The petition was
signed by Brian Troast, president.
The case is assigned to Judge John K. Sherwood.
At the time of the filing, the Debtor estimated assets of less than
$500,000 and liabilities of less than $1 million.
PROFESSIONAL PROVIDER: Hires Van Horn as Counsel
------------------------------------------------
Professional Provider Services, Inc., seeks authorization from the
U.S. Bankruptcy Court for the Southern District of Florida to
employ Van Horn Law Group, Inc., as counsel for the Debtor.
The Debtor requires Van Horn to:
a. give advice to the Debtor with respect to its powers and
duties as a debtor in possession and the continued management of
its business operations;
b. advise the debtor with respect to its responsibilities in
complying with the US Trustee's Operating Guidelines and Reporting
Requirements and with the rules of court;
c. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal document necessary in the
administration of the case;
d. protect the interest of the debtor in all matters pending
before the court;
e. represent the debtor in negotiation with its creditors in
the preparation of a plan.
Chad T. Van Horn, Esq., founding partner of the law firm of Van
Horn Law Group P.A., assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtor and its estates.
Van Horn may be reached at:
Chad T. Van Horn, Esq.
Van Horn Law Group P.A.
330 N Andrews Avenue, #450
Fort Lauderdale, FL 33301
Tel: 954.765.3166
E-mail: chad@cvhlawgroup.com
About Professional Provider Services, Inc.
Professional Provider Services, Inc. filed a Chapter 11 bankruptcy
petition (Bankr. S.D.Fla. Case No. 16-24289) on March 23, 2016.
Chad T. Van Horn, Esq., at Van Horn Law Group, P.A. serves as
bankruptcy counsel.
The Debtor says assets and liabilities are both below $1 million.
PYKKONEN CAPITAL: Plan Confirmation Hearing on Dec. 6
-----------------------------------------------------
Pykkonen Capital LLC is now a step closer to emerging from Chapter
11 protection after a bankruptcy judge approved the outline of its
plan of reorganization.
Judge Joseph Rosania, Jr., of the U.S. Bankruptcy Court for the
District of Colorado gave the thumbs-up to the disclosure statement
after finding that it contains "adequate information."
The order set a December 2 deadline for creditors to cast their
votes and file their objections.
A court hearing to consider confirmation of the plan is scheduled
for December 6, at 11:00 a.m. The hearing will take place at the
U.S. Custom House, Courtroom D, 721, 19th Street, Denver,
Colorado.
The Plan embodies the sale of the Echo Mountain Resort to SkiEcho,
LLC, for $3.77 million.
Under the Plan, the allowed secured claim held by Yuki Group will
be satisfied by the proceeds of the Echo Mountain sale.
Moreover, allowed claims held by unsecured creditors (Class 3)
will
receive a pro rata distribution of the remaining net proceeds from
the Sale, cash on hand, and any Avoidance Action proceeds.
Nora Pykkonen and her immediate family will voluntarily waive
receipt of payment on their claim until the other Class 3
creditors
have been paid their Allowed Claims in full.
About Pykkonen Capital
Pykkonen Capital, LLC, is the owner of a ski resort located south
of Idaho Springs, Colorado, known as Echo Mountain Resort. The
Company is 100% owned by its single member, Nora Pykkonen.
Pykkonen Capital filed for Chapter 11 bankruptcy (Bankr. D. Colo.,
Case No. 16-10897) on Feb. 5, 2016. The petition was signed by
Nora Pykkonen, manager. The Hon. Joseph G. Rosania Jr. presides
over the case.
Lee M. Kutner, Esq., at Kutner Brinen Garber, P.C, serves as the
Debtor's bankruptcy counsel.
Pykkonen Capital LLC bought the ski area in August 2012 for $1.53
million, according to county records. In its petition, Pykkonen
Capital estimated $1 million to $10 million in both assets and
liabilities.
QUINTESS LLC: Creditors' Panel Hires Brown Rudnick as Co-counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Quintess, LLC
seeks authorization from the U.S. Bankruptcy Court for the District
of Colorado to retain Brown Rudnick LLP as co-counsel to the
Committee, nunc pro tunc to October 24, 2016.
The Committee requires Brown Rudnick to:
(a) assist and advise the Committee in its discussion with the
Debtor and other parties-in-interest regarding the overall
administration of the case;
(b) represent the Committee at hearings to be held before the
Court and communicate with the Committee regarding the
matters heard and the issues raised as well as the
decisions and considerations of the Court;
(c) assist and advise the Committee in its examination and
analysis of the conduct of the Debtor's affairs;
(d) review and analyze pleadings, orders, schedules and other
documents filed and to be filed with this Court by parties-
in-interest in this case; advise the Committee as to the
necessity, propriety and impact of the foregoing upon the
Debtor's chapter 11 case; and consent or object to
pleadings or orders on behalf of the Committee, as
appropriate;
(e) assist the Committee in preparing such applications,
motions, memoranda, proposed orders and other pleadings as
may be required in support of positions taken by the
Committee, including all trial preparation as may be
necessary;
(f) confer with the professionals retained by the Debtor and
other parties-in-interest, as well as with such other
professionals as may be selected and employed by the
Committee;
(g) coordinate the receipt and dissemination of information
prepared by and received from the Debtor's professionals,
as well as such information as may be received from
professionals engaged by the Committee or other parties-in-
interest in this case;
(h) participate in such examinations of the Debtor and other
witnesses as may be necessary in order to analyze and
determine, among other things, the Debtor's assets and
financial condition, whether the Debtor has made any
avoidable transfers of property, or whether causes of
action exist on behalf of the Debtor's estate;
(i) negotiate and formulate a plan of reorganization or
liquidation for the Debtor; and
(j) assist the Committee generally in performing such other
services as may be desirable or required for the discharge
of the Committee's duties pursuant to Bankruptcy Code
section 1103.
Brown Rudnick will be paid at these hourly rates:
William R. Baldiga $700
Sharon I. Dwoskin $485
Brown Rudnick will agree to cap its hourly rates charged in this
case at $700 per hour
Brown Rudnick will also be reimbursed for reasonable out-of-pocket
expenses incurred.
William R. Baldiga, attorney of Brown Rudnick, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estate.
Brown Rudnick can be reached at:
William R. Baldiga, Esq.
BROWN RUDNICK LLP
One Financial Center
Boston, MA 02111
Tel: (617) 856-8586
Fax: (617) 289-0420
About Quintess LLC
Quintess, LLC, filed a chapter 11 petition (Bankr. D. Colo. Case
No. 16-19955) on Oct. 7, 2016. The petition was signed by Pete
Estler, CEO. The Debtor is represented by Duncan E. Barber, Esq.,
at Shapiro Bieging Barber Otteson LLP and Ron Bender, Esq., at
Levene, Neale, Bender, Yoo & Brill LLP. The case is assigned to
Judge Joseph G. Rosania, Jr. The Debtor estimated assets at $0 to
$50,000 and liabilities at $1 million to $10 million at the time of
the filing.
QUOTIENT LIMITED: May Issue Add'l 1.1M Shares Under Incentive Plan
------------------------------------------------------------------
Quotient Limited initially registered 1,500,000 ordinary shares for
issuance under the 2014 Stock Incentive Plan pursuant to a
Registration Statement on Form S-8 filed with the Securities and
Exchange Commission on April 25, 2014.
Pursuant to an "evergreen" provision contained in the 2014 Plan, on
April 1 of each year from 2015 through 2023, the number of shares
authorized for issuance under the 2014 Plan automatically increased
by an amount equal to the lesser of 1% of the total number of the
Company's ordinary shares outstanding on March 31 of the preceding
year, 200,000 ordinary shares or such smaller amount as determined
by the Board of Directors of the Company. Pursuant to this
provision, on April 1, 2015, 170,205 additional ordinary shares
became authorized for issuance under the 2014 Plan, and on April 1,
2016, 200,000 additional ordinary shares became authorized for
issuance under the 2014 Plan.
On Oct. 28, 2016, at the annual shareholder meeting of the Company,
the shareholders of the Company approved the adoption of the
Amended and Restated 2014 Stock Incentive Plan, which reflected
amendments to the 2014 Plan to increase by 750,000 both the number
of ordinary shares authorized for issuance and the maximum number
of ordinary shares that may be issued upon the exercise of
incentive stock options.
The Company filed a Registration Statement on Form S-8 to register
(a) an aggregate of 370,205 ordinary shares that were automatically
added to the number of shares authorized for issuance under the
2014 Plan pursuant to the "evergreen" provision contained in the
2014 Plan; and (b) 750,000 additional ordinary shares reserved for
issuance under the Amended and Restated 2014 Plan.
A full-text copy of the Form S-8 prospectus is available at:
https://is.gd/gH9v1w
About Quotient Limited
Quotient is a commercial-stage diagnostics company committed to
reducing healthcare costs and improving patient care through the
provision of innovative tests within established markets. With
an initial focus on blood grouping and serological disease
screening, Quotient is developing its proprietary MosaiQ
technology platform to offer a breadth of tests that is unmatched
by existing commercially available transfusion diagnostic
instrument platforms. The Company's operations are based in
Edinburgh, Scotland; Eysins, Switzerland and Newtown,
Pennsylvania.
Quotient Limited reported a net loss of US$33.87 million for the
year ended March 31, 2016, a net loss of US$59.05 million for
the yera ended March 31, 2015, and a net loss of US$10.16 million
for the year ended March 31, 2014.
Ernst & Young LLP, in Belfast, United Kingdom, issued a "going
concern" qualification on the consolidated financial statements
for the year ended March 31, 2016, citing that the Company has
recurring losses from operations and planned expenditure
exceeding available funding that raise substantial doubt about
its ability to continue as a going concern.
RALPH ROBERTS: Court DirectsTurnover of Profit from Property Sale
-----------------------------------------------------------------
In the case captioned RALPH ROBERTS REALTY, LLC, Plaintiff, v. JON
SAVOY, et al., Defendants, Adv. Pro. No. 12-6131 (Bankr. E.D.
Mich.), Judge Thomas J. Tucker of the United States Bankruptcy
Court for the Eastern District of Michigan, Southern Division,
ruled in favor of the Realty and against certain of the Defendants,
but for less than the full relief sought.
This adversary proceeding arises out of the participation of the
Defendants in an investor program run by the Plaintiff. The
Defendants are Jon Savoy; Arnold Hassig, a.k.a. Butch Hassig; Adam
Hassig; and four entities formed by them -- Prime Residential
Properties Group, LLC; Ryan Residential Properties Group, LLC; Adam
Residential Properties Group, LLC; and 1836 Brys, LLC. The
Defendants' participation in the Investor Program was under an oral
agreement entered into before Realty filed bankruptcy. Some of the
Defendants purchased 16 real estate properties under the Investor
Program. Realty seeks a judgment against all the Defendants,
jointly and severally:
(1) declaring that 30% of any profits made on the sale of any
properties purchased under the Investor Program that had not
already been sold as of the date the adversary complaint are
property of the bankruptcy estate (Count I);
(2) an accounting of the funds received from the prepetition
sale of three of the properties purchased under the Investor
Program (Count II); and
(3) the turnover of not less than $100,500, allegedly owed for
the profit split on properties purchased under the Investor Program
that were resold (Count III).
The Defendants argue that there was no "meeting of the minds" on
material contract terms, and therefore no enforceable contract. The
Court finds otherwise, however, based on the evidence.
Defendants claim that their oral agreement included a right of
first refusal, as against other potential investors, on the
purchase of any property, and that Realty breached this agreement
term. Based on the testimony of Ralph Roberts, however, the Court
finds that this was not part of the agreement between Realty and
the Defendants.
Defendants contend that Realty had a contractual duty to find
profitable properties for Defendants, and that Realty breached that
duty with respect to several properties that Defendants acquired
and suffered losses on. But the Court finds that Realty had no such
contractual duty. And there was no guarantee or requirement that
properties would all be profitable that was part of the agreement
between Realty and Defendants. Profit on every property certainly
was everyone's hope, but it was not guaranteed, Judge Tucker said.
Defendants' other arguments claiming various breaches by Realty of
the parties' agreement are not supported by the evidence; rather,
they are refuted by the evidence, and so the Court rejects them.
A full-text copy of the Trial Opinion dated October 14, 2016 is
available at https://is.gd/ypCbjU from Leagle.com.
Ralph Roberts Realty, LLC., Debtor In Possession, is represented by
Michael P. DiLaura, Esq. & Stuart A. Gold, Esq. -- Gold, Lange &
Majoros PC.
Daniel M. McDermott, U.S. Trustee, is represented by Kelley
Callard, United States Trustee.
Official Committee of Unsecured Creditors, Creditor Committee, is
represented by Christopher A. Grosman, Esq. --
cgrosman@carsonfischer.com -- Carson Fischer & Robert A. Weisberg,
Esq.
About Ralph Roberts
Ralph Roberts and his namesake firm, Ralph Roberts Realty LLC, in
Sterling Heights, Michigan, filed for Chapter 11 bankruptcy
(Bankr. E.D. Mich. Case Nos. 12-53023 and 12-53024) on May 25,
2012. Ralph Roberts is a Clinton Township realtor who owns the
giant nail from the iconic Uniroyal tire near Detroit Metropolitan
Airport.
According to Detroit News, the bankruptcy filing followed years of
disputes with real estate investors and fallout from a 2004
indictment stemming from the federal probe of Macomb County
Prosecutor Carl Marlinga.
Judge Thomas J. Tucker presides over the case. Hannah Mufson
McCollum, Esq., and John C. Lange, Esq., at Gold, Lange & Majoros,
PC, serve as the Debtors' counsel. Mr. Roberts listed more than
$1.86 million in assets and $73.2 million in liabilities in his
own Chapter 11 petition. The real estate firm scheduled assets of
$1,520,232 and liabilities of $108,381.
RAY MARVIN GOTTLIEB: Former Wife Files Plan of Liquidation
----------------------------------------------------------
Sandra Gottlieb filed with the U.S. Bankruptcy Court for the
District of Maryland a disclosure statement with respect to the
plan of liquidation for Ray Marvin Gottlieb.
Ray Marvin Gottlieb is a dentist who lives in Montgomery County,
Maryland. He is the former spouse of the Plan Proponent. The
Debtor and the Plan Proponent were divorced in a judgment of
absolute divorce dated Jan. 27, 2014. The Judgment of Absolute
Divorce was based on the Debtor's purported disclosure of all of
his assets. Soon after the Judgment of Absolute Divorce, the
Debtor recorded several valuable patents that had not been
disclosed in the divorce case, and assigned them to a newly formed
company, STEVI, LLC. Sandra Gottlieb sued the Debtor and obtained
a judgment of $1,090,504.68 against the Debtor, as well as other
smaller judgments. After Sandra Gottlieb sought to execute on her
judgments, the Debtor filed this bankruptcy case.
Class 6 consists of holders of general unsecured claims, including
the claims of Capital One Bank (USA), N.A. (Claim No. 1) and Robert
Kressin (Claim No. 2), any deficiency claim for any of the secured
claims, and the scheduled claims of Bank of America, Kenneth S.
Goldblatt, Linda Herrmann, and Ronald Bergman.
Provided that a General Unsecured Claim not been paid prior to the
Effective Date, and except to the extent that a holder of a General
Unsecured Claim agrees to a different treatment, each holder of an
allowed General Unsecured Claim will receive from the plan trustee,
in full and complete settlement, satisfaction and discharge of its
Allowed General Unsecured Claim, on the distribution date, to the
extent that the General Unsecured Claim is allowed, a pro rata
distribution of all remaining proceeds of the sale of the Debtor's
assets and a pro rata distribution of any proceeds of the
resolution of the Debtor's causes of action. Class 6 is impaired
under the Plan.
The Plan contemplates the sale of substantially all of the Debtor's
assets which are not fully exempt by a plan trustee, and the
pursuit of any causes of action of the Debtor by that plan trustee.
Proceeds of the sale of the Debtor's assets and the resolution of
his causes of action will be distributed in accordance with the
Plan.
The Plan will be executed and implemented pursuant to a sale of the
Property free and clear of all liens, claims, encumbrances and
other interests pursuant to Section 363(f) of the Bankruptcy Code
and on an "as is, where is" basis, without representations or
warranties of any kind, nature or description. The Confirmation
Order will approve the appointment of the Plan Trustee to
immediately market and sell all assets of the estate, other than
fully exempt assets, in accordance with the terms of this Plan and
the confirmation court order, and to pursue any causes of action
belonging to the estate. The plan trustee or his/her
professionals, will collect the proceeds of the sale or sale and
proceeds of the causes of action and distribute such funds in
accordance with the Plan. The plan trustee will have the right to
amend the Debtor's schedules, and to object to claims scheduled by
the Debtor as liquidated, undisputed, and non-contingent.
Except as otherwise provided in the Plan, all assets of the estate,
other than fully exempt assets, and all causes of action, will vest
in the plan trustee on the confirmation date, subject to any liens
as existed prior to the Debtor's bankruptcy that are not
subsequently disallowed by the Court avoided by the plan trustee,
and any liens created by the Plan.
The Disclosure Statement is available at:
http://bankrupt.com/misc/mdb16-17525-37.pdf
The Plan was filed by Sandra Gottlieb's counsel:
McNamee, Hosea, Jernigan, Kim, Greenan & Lynch, P.A.
Janet M. Nesse, Esq.
Justin P. Fasano, Esq.
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
Tel: (301) 441-2420
E-mail: jnesse@mhlawyers.com
jfasano@mhlawyers.com
About Ray Marvin Gottlieb
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. D.
Md. Case No. 16-17525) on June 2, 2016. Steven H. Greenfeld, Esq.,
at Cohen, Baldinger & Greenfeld, LLC, serves as the Debtor's
bankruptcy counsel.
RAY MARVIN GOTTLIEB: Judgment Creditor Seeks Ch. 11 Trustee
-----------------------------------------------------------
Sandra Gottlieb asks the U.S. Bankruptcy Court for the District of
Maryland to direct the appointment of a Chapter 11 trustee for the
bankruptcy estate of Ray Marvin Gottlieb.
Ray Marvin Gottlieb is a dentist who lives in Montgomery County,
Maryland. He is the former spouse of the Plan Proponent. The
Debtor and the Plan Proponent were divorced in a judgment of
absolute divorce dated Jan. 27, 2014. The Judgment of Absolute
Divorce was based on the Debtor's purported disclosure of all of
his assets. Soon after the Judgment of Absolute Divorce, the
Debtor recorded several valuable patents that had not been
disclosed in the divorce case, and assigned them to a newly formed
company, STEVI, LLC. Sandra Gottlieb sued the Debtor and obtained
a judgment of $1,090,504.68 against the Debtor, as well as other
smaller judgments. After Sandra Gottlieb sought to execute on her
judgments, the Debtor filed this bankruptcy case.
The Debtor was the personal representative for the estate of his
now-deceased parents and lives in a home, located at 14820 Fireside
Dr., in Silver Spring, Maryland, which had been owned by the
Debtor's parents, Stanley and ED Gottlieb. According to Ms.
Gottlieb, the Debtor closed his parents' estates without
transferring the title of the Home to the estate or to the
beneficiaries and without informing the Orphan's Court. As shown
by the Maryland State Department of Assessments and Taxation
statement, the Home is still in the name of the Debtor's parents,
Ms. Gottlieb tells the Court.
Ms. Gottlieb alleges that the Debtor is attempting to commit fraud
by filing for bankruptcy relief without making any effort to
reorganize and by refusing to use his assets in a manner beneficial
to the estate and its creditors. Also, the Debtor also transferred
assets pre-petition in an attempt to protect those assets from his
creditors, particularly the Movant, Ms. Gottlieb asserts.
Based on the case, the failure of the Debtor to maximize the
earning potential of his assets, by failing to provide the
documents required of him at his meeting of creditors, and by
failing to account for a missing payment to the Movant, the Debtor
has also displayed his incompetence, Ms. Gottlieb further asserts.
This warrants the appointment of a Chapter 11 Trustee, she says.
Ray Marvin Gottlieb filed a Chapter 11 petition (Bankr. D. Md. Case
No. 16-17525) on June 2, 2016, and is represented by Steven H.
Greenfeld, Esq., at Cohen, Baldinger & Greenfeld, LLC.
RED DOOR LOUNGE: Court Converts Bankruptcy Case to Ch. 7
--------------------------------------------------------
In the case captioned In re RED DOOR LOUNGE, INC., Debtor, Case No.
15-61151-11,
Judge Ralph B. Kirscher of the United States Bankruptcy Court for
the District of Montana concluded that conversion of Red Door
Lounge, Inc.'s Chapter 11 case to a case under Chapter 7 of the
Bankruptcy Code is in the best interests of creditors and the
estate.
Accordingly, Judge Kirscher granted First Interstate Bank and the
U.S. Trustee's Motions to Convert, and converted this case to a
case under Chapter 7.
In this Chapter 11 bankruptcy, the Court held a hearing in Missoula
after notice on October 6, 2016 on: (1) Debtor's Objection to Proof
of Claim No. 4 filed by First Interstate Bank; (2) the Motion to
Convert of Dismiss filed by First Interstate Bank, successor by
merger to Mountain West Bank, N.A.; (3) the United States Trustee's
Motion to Dismiss or Convert; (4) final approval of Debtor's
Disclosure Statement filed June 7, 2016; and (5) confirmation of
the Debtor's Chapter 11 Plan filed June 7, 2016.
In response to objections to approval of the Debtor's Disclosure
Statement filed June 7, 2016, the Debtor filed an Amended
Disclosure Statement on September 9, 2016. The Debtor's counsel
acknowledged certain inconsistencies in both the Disclosure
Statement filed June 7, 2016, and the Amended Disclosure Statement
September 9, 2016, and represented that the Debtor would file a
further amended disclosure statement.
Given the concession by the Debtor, approval of the Debtor's
Disclosure Statement and Amended Disclosure Statement is denied.
Additionally, the Ballot Report filed September 13, 2016, relates
to the Debtor's Chapter 11 Plan filed June 7, 2016. Counsel for
the Debtor, First Interstate Bank and the United States Trustee
recognized that the ballots and the Ballot Report relate to the
Debtor's Chapter 11 Plan, which Plan was superseded by a First
Amended Chapter 11 Plan filed September 9, 2016, at docket no. 63.
Given that approval of Debtor's Disclosure Statement and Amended
Disclosure Statement was denied, and given that the filed ballots
relate to a plan that was superseded, confirmation of any plan is
premature at this time, Judge Kirscher held. The Court thus
proceeded with the hearing on the motions to dismiss or convert and
on Debtor's Objection to First Interstate Bank's Proof of Claim.
A full-text copy of the Memorandum Decision dated October 14, 2016
is available at https://is.gd/cQIg7Z from Leagle.com.
RED DOOR LOUNGE, INC. is represented by:
James A. Patten, Esq.
The Fratt Building, Suite 300
2817 Second Avenue North
Billings, MT 59101
Tel: (406)545-0195
Fax: (406)294-9500
OFFICE OF THE U.S. TRUSTEE is represented by:
Neal G. Jensen, Esq.
UNITED STATES TRUSTEE'S OFFICE
301 Central Avenue, Suite 204
Great Falls, MT 59401
Tel: (406)761-8777
Fax: (406)761-8895
Red Door Lounge, Inc. (Bankr. D. Mont. Case No. 15-61151) filed a
Chapter 11 Petition on December 10, 2015. The Debtor is
represented by James A. Patten, Esq., at Patten Peterman Bekkedahl.
RESOLUTE ENERGY: Incurs $18.9 Million Net Loss in Third Quarter
---------------------------------------------------------------
Resolute Energy Corporation filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $18.85 million on $47.41 million of total revenue for the three
months ended Sept. 30, 2016, compared to a net loss of $182.76
million on $36.61 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 $141.07 million on $101.81 million of total revenue
compared to a net loss of $650.09 million on $126.14 million of
total revenue for the same period a year ago.
As of Sept. 30, 2016, Resolute Energy had $294.87 million in total
assets, $634.01 million in total liabilities and a total
stockholders' deficit of $339.14 million.
Nicholas J. Sutton, Resolute's chief executive officer, said: "The
third quarter of 2016 was quite strong for Resolute. Sequential
average daily production for the quarter increased 36 percent to
16,085 barrels of oil equivalent ("Boe") per day, almost 10,000 Boe
per day of which came from our Permian Basin operations. In
addition, we reduced our lease operating expense ("LOE") to $11.20
per Boe, a 37 percent reduction compared to the prior year period
and a 23 percent reduction from the prior quarter.
"Our Delaware Basin drilling program in Reeves County, Texas,
continues to post impressive results. The South Goat well, a long
lateral (10,000 foot) in our Appaloosa project area has established
a peak 24-hour rate of 3,336 Boe per day and a peak 30-day rate of
3,107 Boe per day. In addition to the strong initial production
rates, the production profiles of our recent wells continue to show
shallower-than-forecast decline rates. Five of the wells in our
2016 drilling program have established peak 90-day and peak 120-day
rates. The peak 90-day rates average almost 94 percent of the peak
30-day rates, and the peak 120-day rates average approximately 90
percent of the peak 30-day rates. Four of the wells in our 2016
drilling program have established peak 150-day rates that are
approximately 89 percent of the peak 30-day rates. We believe that
the stability of production results from the combination of
prudent, conservative operations and excellent reservoir
characteristics.
"We recently reached total depth on two mid-length laterals (7,500
foot) in the eastern part of our Mustang project area. These wells
will be our first 80-acre spacing test, with completions currently
scheduled for mid-November. The success of these two wells will be
an important step in validating our inventory of more than 300
potential Wolfcamp A and Wolfcamp B wells in the Delaware Basin.
We will follow this test with additional spacing tests later in the
fourth quarter and early in 2017.
"During the quarter, we also closed the sale of our Reeves County
midstream assets. This transaction provided approximately $36
million of net proceeds to Resolute. Those proceeds were used to
repay debt outstanding under our revolving credit facility and for
general corporate purposes.
"Following the end of the quarter, as previously disclosed,
Resolute closed the acquisition of additional Reeves County oil and
gas properties consisting of 3,293 net acres in Mustang, and
interests in thirteen horizontal and fifteen vertical wells, which
produced approximately 1,200 net Boe per day. We operate
substantially all of the acquired properties. The properties
contain estimated proved reserves of 6.2 MMBoe with PV-10 of $45.8
million, using strip pricing at June 30, 2016. We issued 2,114,523
shares of our common stock to the seller and financed the remaining
consideration with the net proceeds of the
private placement of 62,500 shares of 8⅛% Series B Cumulative
Perpetual Convertible Preferred Stock and borrowings under our
revolving credit facility.
"With our current rig scheduled to spud three additional wells
during the fourth quarter, we have turned our attention to the 2017
development plan. Our Board of Directors has given preliminary
approval to a 2017 Delaware Basin plan that will utilize two rigs
to drill approximately 22 gross (20.8 net) wells. We expect that
this program will result in substantially all of our Delaware Basin
acreage being held by production by the end of the year. While we
anticipate that 2017 capital expenditures will exceed cash flow, we
expect to have sufficient liquidity to fund the balance. We expect
to refinance our revolving credit facility before March 2017, and
believe that the borrowing capacity of our asset base is sufficient
to enable us to fund our 2017 capital program. Assuming that we
drill with a two rig program and continue to deliver high quality
drilling results, average annual production during 2017 could be
almost double that of 2016. Assuming a 2017 average oil price of
$55 per barrel and a gas price of $3.25 per MMBtu, the organic
gains in Adjusted EBITDA generated from such a program could be
expected to improve leverage metrics significantly, resulting in a
year-end 2017 debt to Adjusted EBITDA ratio approaching 3x.
"Finally, consistent with our ongoing strategy of divesting
non-core assets, we received a proposal to purchase our remaining
New Mexico assets and believe that the disposition will close in
the fourth quarter."
"Outstanding indebtedness of $528.3 million at Sept. 30, 2016,
consisted of $0 in revolving credit facility debt, $128.3 million
of the second lien term loan and $400 million of senior notes,
compared to total indebtedness of $738.6 million at Sept. 30, 2015,
a reduction of $210.3 million. As of Sept. 30, 2016, the borrowing
base under our revolving credit facility was $105 million. The
borrowing base was reaffirmed by our lender group on September 23,
2016."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/BVgXvw
About Resolute Energy Corporation
Resolute Energy Corp. -- http://www.resoluteenergy.com/-- is an
independent oil and gas company focused on the acquisition,
exploration, exploitation and development of oil and gas
properties, with a particular emphasis on liquids focused,
long-lived onshore U.S. opportunities. Resolute's properties are
located in the Paradox Basin in Utah and the Permian Basin in Texas
and New Mexico.
Resolute reported a net loss of $742 million in 2015, a net loss of
$21.9 million in 2014, and a net loss of $114 million in 2013.
RESOLUTE ENERGY: Offering $750 Million Worth of Securities
----------------------------------------------------------
Resolute Energy Corporation filed with the Securities and Exchange
Commission a Form S-3 registration statement relating to the offer
and sale of up to $750 million of the Company's senior and
subordinated debt securities, common stock, $0.0001 par value per
share, preferred stock, $0.0001 par value per share, warrants to
purchase any of the other securities that may be sold under this
prospectus, senior or subordinated unsecured guarantees of debt
securities, rights to purchase common stock, preferred stock and/or
senior or subordinated debt securities, depositary shares and units
consisting of two or more of these classes or series of securities,
securities that may be convertible or exchangeable to other
securities covered hereby, in one or more transactions.
The net proceeds the Company expects to receive from these sales
will be described in the prospectus supplement.
The Company's common stock is listed on the NYSE under the symbol
"REN." On Nov. 3, 2016, the last reported sales price of the
Company's common stock on the NYSE was $23.74 per share. The
applicable prospectus supplement will contain information, where
applicable, as to any other listing on the NYSE or any securities
exchange of the securities covered by the prospectus supplement.
A full-text copy of the Form S-3 prospectus is available at:
https://is.gd/Gt1j8N
About Resolute Energy Corporation
Resolute Energy Corp. -- http://www.resoluteenergy.com/-- is an
independent oil and gas company focused on the acquisition,
exploration, exploitation and development of oil and gas
properties, with a particular emphasis on liquids focused,
long-lived onshore U.S. opportunities. Resolute's properties are
located in the Paradox Basin in Utah and the Permian Basin in Texas
and New Mexico.
Resolute reported a net loss of $742 million in 2015, a net loss of
$21.9 million in 2014, and a net loss of $114 million in 2013.
As of Sept. 30, 2016, Resolute Energy had $294.87 million in total
assets, $634.01 million in total liabilities and a total
stockholders' deficit of $339.14 million.
ROCKWELL MEDICAL: Incurs $4.56 Million Net Loss in Third Quarter
----------------------------------------------------------------
Rockwell Medical, Inc. filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
of $4.56 million on $12.81 million of sales for the three months
ended Sept. 30, 2016, compared to a net loss of $2.41 million on
$14.37 million of sales for the three months ended Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $14.74 million on $39.89 million of sales compared to a
net loss of $8.65 million on $41.21 million of sales for the same
period a year ago.
As of Sept. 30, 2016, the Company had $82.85 million in total
assets, $27.09 million in total liabilities and $55.75 million of
total shareholders' equity.
Mr. Robert L. Chioini, chairman and chief executive officer of
Rockwell stated, "We continue to make solid progress in our efforts
to obtain transitional add-on reimbursement for Triferic. We
believe we are moving closer to our goal of securing it. Multiple
stakeholders have aided us and support add-on reimbursement for
Triferic. Concurrently, we have been educating our customers and
patients about Triferic and its unique benefits. We also have
advanced Triferic clinical development work for the renal
application outside the U.S. as well as additional therapeutic
indications. Overall, we are pleased with our progress, which
includes ensuring we have redundancy in our manufacturing and
supply capability."
A full-text copy of the press release is available for free at:
https://is.gd/Z67y2x
About Rockwell
Rockwell Medical, Inc. (Nasdaq: RMTI), headquartered in Wixom,
Michigan, is a fully-integrated biopharmaceutical company
targeting end-stage renal disease ("ESRD") and chronic kidney
disease ("CKD") with innovative products and services for the
treatment of iron deficiency, secondary hyperparathyroidism and
hemodialysis (also referred to as "HD" or "dialysis").
Rockwell's lead investigational drug is in late stage clinical
development for iron therapy treatment in CKD-HD patients. It is
called Soluble Ferric Pyrophosphate ("SFP"). SFP delivers iron to
the bone marrow in a non-invasive, physiologic manner to
hemodialysis patients via dialysate during their regular dialysis
treatment.
Rockwell Medical reported a net loss of $14.4 million on $55.35
million of sales for the year ended Dec. 31, 2015, compared to a
net loss of $21.3 million on $54.2 million of sales for the year
ended Dec. 31, 2014. The Company also reported a net loss of
$48.8 million for the year ended Dec. 31, 2013.
* * *
This concludes the Troubled Company Reporter's coverage of Rockwell
Medical until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
RONALD MARINO: Nov. 22 Deadline to File Confirmation Objections
---------------------------------------------------------------
Ronald Marino received preliminary approval from a U.S. bankruptcy
court for his proposed disclosure statement, which explains his
plan to exit Chapter 11 protection.
The order, issued on Oct. 27 by the U.S. Bankruptcy Court for the
Eastern District of Michigan, set a November 22 deadline for
creditors to cast their votes and file their objections to final
approval of the disclosure statement and confirmation of the plan.
The court will hold a hearing on the objections on November 29, at
10:30 a.m., at Room 1875, 211 West Fort Street, Detroit, Michigan.
The Debtor is represented by:
Jason W. Bank, Esq.
William C. Blasses, Esq.
KERR, RUSSELL AND WEBER, PLC
500 Woodward Avenue, Suite 2500
Detroit, Michigan 48226
Tel: (313) 961-0200
Email: jbank@kerr-russell.com
Email: wblasses@kerr-russell.com
About Ronald Marino
Ronald A. Marino is the sole shareholder and president of
Glencorp., which is an earth-moving contractor engaged in the
business of moving dirt and heavy cuts, digging retention ponds,
and digging roads for developers in subdivisions. Glencorp
operates out of offices located on Ryan Road in Shelby Township,
Michigan.
Mr. Marino sought bankruptcy protection (Bankr. E.D. Mich., Case
No. 16-47104) on May 10, 2016. The case is assigned to Judge Marci
B. McIvor.
SABLE NATURAL: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Sable Natural Resources Corporation
fka Nytex Energy Holdings, INc.
12222 Merit Drive
Suite 1850
Dallas, TX 75251
Case No.: 16-34422
Type of Business: An independent oil and gas company, acquires,
develops, and produces oil and natural gas
reserves from wells in carbonate reservoirs.
Chapter 11 Petition Date: November 11, 2016
Court: United States Bankruptcy Court
Northern District of Texas (Dallas)
Judge: Hon. Barbara J. Houser
Debtor's Counsel: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
12720 Hillcrest Road, Suite 625
Dallas, TX 75230
Tel: (972) 503-4033
Fax: (972) 503-4034
E-mail: joyce@joycelindauer.com
Total Assets: $20.24 million
Total Debts: $3.19 million
The petition was signed by Michael Galvis, president.
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Vast Mountain 12% Debenture $625,000
Development, Inc. Holder
12222 Merit Drive, Suite 1850
Dallas, TX 75251
Trans Global 12% Debenture $250,000
Technologies, Inc. Holder
12222 Merit Drive, Suite 1370
Dallas, TX 75251
Penn Investment Funds, LLC 12% Debenture $250,000
1216 Saddlebrook Way Holder
Bartonville, TX 76226
Diana Francis Business Debt $200,000
David & Sunny Parker 12% Debenture $175,000
Holder
Strasburger & Price Business Debt $135,000
Pecunia Acquisitions, LLC 12% Debenture $100,000
Holder
John R. Bertsch 12% Debenture $100,000
Holder
Henry M. Wedemeyer 12% Debenture $100,000
Holder
Francisco Battle 12% Debenture $100,000
Holder
Flaplift, Inc. 12% Debenture $100,000
Holder
Whitley Penn Business Debt $71,881
Delaware Division of Estimated Taxes $66,390
Corporations
The Pai Family Trust 12% Debenture $50,000
Holder
Martha Zann Womack 12% Debenture $50,000
Holder
Terry J. Kuras 12% Debenture $25,000
Holder
M Butte Ltd. 12% Debenture $25,000
Holder
Workiva Business Debt $21,283
Winstead PC Business Debt $17,602
Continental Stock Business Debt $15,443
SAILING EMPORIUM: Wants to Use Cash Collateral Until Jan. 31
------------------------------------------------------------
The Sailing Emporium, Inc. asks the U.S. Bankruptcy Court for the
District of Maryland for authorization to use cash collateral
through Jan. 31, 2017.
The Debtor owns and operates a full service marina located on the
picturesque Eastern Shore of Maryland on eight acres on Rock Hall
Harbor in Rock Hall, Maryland.
The Peoples Bank, the Debtor's principal secured creditor, asserts
an interest in the Debtor's assets, including certain rents that
become due or owing under the leases on account of the use and/or
occupancy of the Debtor's property, pursuant to a Deed of Trust
executed by the Debtor, along with William Arthur Willis and Mary
Sue Willis, and Peoples Bank.
The Debtor tells the Court that it requires the use of cash
collateral to meet its ordinary and necessary expenses, including
insurance, utilities, and payroll, among others, so that it may
maintain and preserve the value of its assets for the benefit of
its estate and creditors.
As adequate protection for Peoples Bank, the Debtor proposes to:
(a) file its monthly operating reports in a timely manner
setting forth its income, expenditures, and use of cash
collateral;
(b) keep the Property in good working order, maintenance and
repair; and
(c) request that the Court grant Peoples Bank replacement
liens on the same assets on which it held prepetition liens and all
products and their products and proceeds.
A full-text copy of the Debtor's Motion, dated November 11, 2016,
is available at
http://bankrupt.com/misc/SailingEmporium2016_1624498_13.pdf
The Peoples Bank is represented by:
Adam M. Lynn, Esq.
MCCALLISTER DE TAR SHOWALTER & WALKER
100 North West Street
Easton, MD 21601
E-mail: alynn@mdswlaw.com
About The Sailing Emporium
The Sailing Emporium, Inc., filed a chapter 11 petition (Bankr. D.
Md. Case No. 16-24498) on November 1, 2016. The petition was
signed by William Arthur Willis, president. The case is assigned
to Judge Thomas J. Catliota. The Debtor estimated assets and
liabilities at $1 million to $10 million at the time of the filing.
The Debtor is represented by Lisa Yonka Stevens, Esq., at Yumkas,
Vidmar, Sweeney & Mulrenin, LLC.
The Debtor owns and operates a full service marina located on the
picturesque Eastern Shore of Maryland on eight acres on Rock Hall
Harbor in Rock Hall, Maryland. Services include boat sales, boat
repair and restoration, electronics sales and service and sailboat
charters. The Property also includes a marine store and nautical
gift shop. The Property has 155 deep water slips and 20 transient
slips, and the landscaped grounds and other amenities have made
this marina a point of interest in Rock Hall.
SAWTELLE PARTNERS: Approval of Peter Mastan as Trustee Sought
-------------------------------------------------------------
The United States Trustee asks the U.S. Bankruptcy Court for the
Central District of California to enter an Order Approving the
Appointment of Peter J. Mastan as the Chapter 11 Trustee for
Sawtelle Partners, LLC.
Peter J. Mastan, partner of the law firm known as Gumport | Mastan,
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.
Peter J. Mastan can be reached at:
Peter J. Mastan, Esq.
GUMPORT | MASTAN
550 South Hope Street, Suite 1765
Los Angeles, CA 90071-2627
Email: travis@gumportlaw.com
Tel.: (213) 452-4928
About Sawtelle Partners
Sawtelle Partners, LLC, based in Los Angeles, CA, filed a Chapter
11 petition (Bankr. C.D. Cal. Case No. 16-21234) on August 23,
2016. The Hon. Barry Russell presides over the case. The petition
was signed by Ethan Margalith, managing member.
The Debtor disclosed $9.59 million in assets and $13.05 million in
liabilities as of the bankruptcy filing.
Michael R. Totaro, at Totaro & Shanahan, serves as bankruptcy
counsel.
No official committee of unsecured creditors has been appointed in
the case.
SKYPORT GLOBAL: 5th Circ. Affirms $137K Sanction vs. Attorneys
--------------------------------------------------------------
This is an appeal stemming from a bankruptcy court's order holding
attorney Samuel Goldman and Franklin Craig in contempt for
violating the court's preliminary injunction and assessing
attorneys' fees and expenses against them.
The bankruptcy court overseeing the bankruptcy proceedings of
Skyport Global Communications, Inc., now known as TrustComm, Inc.,
awarded monetary sanctions to the SkyPort parties. The award was
one quarter of the requested attorneys' fees and 95% of the
requested expenses, in the total amount of $137,513, for which
Goldman and Craig were held jointly and severally liable.
Goldman and Craig appealed the bankruptcy court's ruling to the
district court, which affirmed the bankruptcy court's ruling in all
respects arguing that: (1) the bankruptcy court lacked jurisdiction
because the nature of the contempt proceeding was criminal; (2) the
attorneys' fees assessed were not reasonable and necessary because
neither compensatory damages nor coercive relief was granted; (3)
the award was erroneous because the preliminary injunction was
dissolved; and (4) Goldman and Craig did not violate the
preliminary injunction as they reasonably understood it.
The United States Court of Appeals for the Fifth Circuit affirmed
the decision of the district court affirming the bankruptcy court.
The Fifth Circuit pointed out that the record reveals that Goldman
and Craig repeatedly violated the injunction. The record also
demonstrates that they were aware of the terms of the injunction,
yet they willfully violated it, the Fifth Circuit pointed out. The
SkyPort parties spent a substantial amount to ensure compliance and
the bankruptcy court acted appropriately in awarding fees in a
civil contempt proceeding, the court further pointed out.
The appeals case is captioned SAMUEL GOLDMAN; FRANKLIN CRAIG,
Appellants, v. BANKTON FINANCIAL CORPORATION, L.L.C.; ROBERT
KUBBERNUS; BALATON GROUP, INCORPORATED; BANKTON FINANCIAL
CORPORATION; TRUSTCOMM, INCORPORATED, Appellees. In the matter of:
SKYPORT GLOBAL COMMUNICATIONS, INCORPORATED, formerly known as
Skyport International, Incorporated, doing business as SkyPort
International PC, doing business as SkyComm International,
Incorporated, Debtor. FRANKLIN CRAIG, Appellant, v. TRUSTCOMM,
INCORPORATED; ROBERT KUBBERNUS; BALATON GROUP, INCORPORATED,
Appellees. In the matter of: SKYPORT GLOBAL COMMUNICATIONS,
INCORPORATED, formerly known as Skyport International,
Incorporated, doing business as SkyPort International PC, doing
business as SkyComm International, Incorporated, Debtor. SAMUEL
GOLDMAN; FRANKLIN CRAIG, Appellants, v. TRUSTCOMM, INCORPORATED,
formerly known as Skyport Global Communications, Incorporated;
ROBERT KUBBERNUS; BALATON GROUP, INCORPORATED; BANKTON FINANCIAL
CORPORATION, L.L.C., BANKTON FINANCIAL CORPORATION, Appellees, in
relation to bankruptcy case In the Matter of: SKYPORT GLOBAL
COMMUNICATIONS, INCORPORATED, formerly known as Skyport
International, Incorporated, doing business as SkyPort
International PC, doing business as SkyComm International,
Incorporated, Debtor, No. 15-20243 (9th Cir.).
A full-text copy of the Decision dated October 12, 2016 is
available at https://is.gd/b5WxDF from Leagle.com.
H. Miles Cohn, Esq. -- mcohn@craincaton.com -- Crain Caton & James
for Appellant.
Edward L. Rothberg, Esq. -- rothberg@hooverslovacek.com -- Hoover
Slovacek LLP for Appellee.
Walter J. Cicack, Esq. -- wcicack@hmgnc.com -- Hawash Meade Gaston
Neese & Cicack LLP for Appellee.
Robert Alan York, Esq. for Appellee.
Annie E. Catmull, Esq. -- catmull@hooverslovacek.com -- Hoover
Slovacek LLP for Appellee.
About SkyPort Global
Satellite and terrestrial communication service provider SkyPort
Global Communications, Inc. -- http://www.skyportglobal.com/--
sought Chapter 11 protection (Bankr. S.D. Tex. Case No. 08-36737)
on Oct. 24, 2008. Edward L. Rothberg, Esq., at Weycer Kaplan
Pulaski & Zuber, in Houston, represents the Debtor. At the time
of the chapter 11 filing, the Debtor reported $8,736,791 in assets
and was unable to estimate its liabilities. The Court confirmed
Skyport's Chapter 11 Plan of Reorganization orally from the bench
at a hearing held on Aug. 7, 2009. The Court entered an order
confirming the Plan on Aug. 12, 2009.
SMART MOTION: Richard Voell to Get $2,000 Per Month Under Plan
--------------------------------------------------------------
Smart Motion Robotics, Inc., filed with the U.S. Bankruptcy Court
for the Northern District of Illinois a fourth amended disclosure
statement in support of the Debtor's plan of reorganization.
Under the Plan, the Class 3 secured claim of Richard Voell --
totaling $493,049.32 -- is impaired and will be paid monthly
payments of $2,000 pursuant to the cash court orders; retention of
security interests; the Reorganized Debtor reserves the right to
prepay the principal amount of this Claim as cash flow permits.
The Fourth Amended Disclosure Statement is available at:
http://bankrupt.com/misc/ilnb14-82459-235.pdf
As reported by the Troubled Company Reporter on Oct. 17, 2016, the
Debtor filed a Third Amended Disclosure Statement explaining the
Debtor's Plan of Reorganization. Under that Plan, the holders of
Unsecured Claims will receive 10 bi-annual payments over a period
of five years, which are estimated to equal approximately 4% to 6%
of the amount of each unsecured claim if the Debtor's conservative
projection of its net income over the 5-year period commencing
January 2017 is realized, and perhaps higher if the Debtor is
successfully able to grow its business.
About Smart Motion Robotics
Smart Motion Robotics, Inc., is a privately held Illinois sub-S
corporation with its principal place of business at 805 Thornwood
Drive, Sycamore, Illinois, 60178. The Debtor was formed in 1996 by
Vickie Gilmore and Scott Gilmore, and is wholly owned by them.
Vickie Gilmore, the Debtor's Secretary and Treasurer, owns 51% of
the Debtor's shares and acts as its Chief Financial Officer
while Scott Gilmore, President of the Debtor, owns 49% of the
Debtor's shares and acts as its CEO. The Debtor is a manufacturer
and system integrator of robotic case packing and palletizing
systems for various industries. The Debtor's customer base
consists largely of producers of food products, including feed for
animals, egg producers and candy companies. While its customers
are primarily located in the United States, over the last few years
the Debtor has been expanding its business and customer base into
Latin America due to the increasing interest in its robotic
solutions in countries such as Columbia and Venezuela.
The Debtor filed a Chapter 11 petition (Bankr. N.D. Ill. Case No.
14-82459), on Aug. 8, 2014. The case is assigned to Judge Thomas
M. Lynch. The Debtor's counsel is John A. Lipinsky, Esq., at Coman
& Anderson, P.C., of 650 Warrenville Road, Suite 500, Lisle,
Illinois. At the time of filing, the Debtor had $796,999 of total
assets and $3.18 million of total liabilities. The petition was
signed by Scott Gilmore, president.
No committee of unsecured creditors has been appointed in this
case. A list of the Debtor's 20 largest unsecured creditors is
available for free at http://bankrupt.com/misc/ilnb14-82459.pdf
SMITH ACQUISITION: S&P Assigns 'B' CCR for Supervalue Spinoff
-------------------------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
Smith Acquisition Corp. The outlook is stable.
Concurrently, S&P assigned its 'B' issue-level rating and '3'
recovery rating to the company's proposed $740 million term loan
due 2023. The '3' recovery rating indicates S&P's expectation for
meaningful recovery (50%-70%; lower half of the range) in the event
of payment default or bankruptcy.
Smith Finance LP and Moran Foods LLC are the issuers of the term
loan.
"The rating on Smith Acquisition Corp. reflects the company's
participation in the highly competitive and fragmented food retail
industry, as well as the execution risks associated with the carve
out from former parent, Supervalu. The rating also incorporates
the company's increased debt burden and financial sponsor
ownership," said credit analyst Declan Gargan. "Smith Acquisition
Corp. is a direct holding company being used to acquire Supervalu's
Save-A-Lot business. Save-A-Lot is a hard discount grocery retailer
that provides a limited assortment of high volume, low-priced,
predominantly private-label products in small format stores with no
frills service."
The stable outlook reflects S&P's view that operating results will
gradually stabilize over the next 12 months as near term pressures
affecting performance abate. S&P also believes the company's
identified business improvement opportunities including
merchandising initiatives and operational improvements around labor
processes, shrink, and supply management are achievable and if
successfully executed, should contribute to earnings growth in
future years.
Although unlikely over the next 12 months, S&P would consider a
positive rating action if the company is able to improve leverage
such that debt to EBITDA approaches the low-4x area and maintains
EBITDA coverage above 3x on a sustained basis. For this to occur,
S&P would expect the company to successfully achieve merchandising
initiatives and operational improvements ahead of S&P's
expectations, contributing to sustained same-store sales growth in
the mid-single digits and gross margins improving at least 100
basis points, resulting in EBITDA growing more than 20% beyond
S&P's projections. Additionally, the company would need to
demonstrate that it is committed to a financial policy that will
allow it to maintain credit metrics at that level on a sustained
basis.
S&P could lower the ratings if weaker than expected operating
performance drove debt to EBITDA above 6.5x on a sustained basis.
For this to occur, S&P would expect intensifying levels of
competition, protracted food deflation or execution issues
associated with the carve out to pressure sales growth and strain
gross margins by more than 100 bps below S&P's expectations. Under
this scenario, deteriorating performance would lead to sustained
negative free operating cash flow, causing the company to increase
reliance on its revolving credit facility and pressuring liquidity.
S&P could also lower the rating if the financial sponsor
demonstrates a more aggressive financial policy than anticipated,
for instance, by implementing a debt funded dividend over the next
two years.
SMITH FARM: Case Summary & 9 Unsecured Creditors
------------------------------------------------
Debtor: Smith Farm, LLC
310 South Buffalo
Yuma, CO 80759
Case No.: 16-21062
Chapter 11 Petition Date: November 11, 2016
Court: United States Bankruptcy Court
District of Colorado (Denver)
Judge: Hon. Joseph G. Rosania Jr.
Debtor's Counsel: Mark A. Larson, Esq.
WEINMAN & ASSOCIATES, P.C.
1600 Stout Street, Ste. 1100
Denver, CO 80202
Tel: 303-534-4499
Fax: 303-893-8332
E-mail: mlarson@allen-vellone.com
- and -
Jeffrey Weinman, Esq.
WEINMAN & ASSOCIATES, P.C.
730 17th St., Ste. 240
Denver, CO 80202
Tel: ( ) 303-572-1010
E-mail: jweinman@epitrustee.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Marylu Smith-Dischner, manager.
A copy of the Debtor's list of nine unsecured creditors is
available for free at http://bankrupt.com/misc/cob16-21062.pdf
SOCIEDAD EL PARAISO: Disclosures OK'd; Plan Hearing on Dec. 14
--------------------------------------------------------------
The Hon. Brian K. Tester of the U.S. Bankruptcy Court for the
District of Puerto Rico has approved Sociedad El Paraiso S.E. and
Conrado Rosa Guzman's disclosure statement dated Aug. 18, 2016,
referring to the Debtors' plan of reorganization.
A hearing for the consideration of confirmation of the Plan will be
held on Dec. 14, 2016, at 9:00 a.m.
Any objection to confirmation of the Plan must be filed on or
before seven 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 Section 1129, the acceptances
and rejections, and the computation of the same, within seven
working days before the hearing on confirmation.
As reported by the Troubled Company Reporter, the Debtors filed a
Chapter 11 plan of reorganization that will set aside $42,017 to
pay general unsecured creditors. Under the plan, Class 11 general
unsecured creditors will receive from the Debtors a promissory
note, providing a payment of $42,017 to be made in consecutive
monthly installments of $700 over five years.
About Sociedad El Paraiso
Sociedad El Paraiso, SE, a special partnership organized by Conrado
Rosa Guzman in Puerto Rico, operates privately-owned properties
leased to third parties for residential and commercial purposes.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.P.R. Lead Case No. 14-09700) on Nov. 24, 2014.
The petitions were signed by Conrado Rosa Guzman, authorized
representative.
At the time of the filing, Sociedad El Paraiso estimated its assets
and debts at $1 million to $10 million.
SOTERA WIRELESS: Creditors' Panel Hires Sullivan Hill as Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Sotera Wireless,
Inc. and Sotera Research, Inc. filed an ex-parte application to the
U.S. Bankruptcy Court for the Southern District of California to
retain Sullivan Hill Lewin Rez & Engel, APLC as legal counsel, nunc
pro tunc to October 24, 2016.
The Committee requires Sullivan Hill to:
(a) advise the Committee with respect to its powers and duties;
(b) appear on behalf of the Committee at all meetings required
under the Guidelines of the Office of the United States
Trustee and the Debtor's Section 341 meeting of creditors,
and any hearings before the Court;
(c) assist the Committee in its investigation of the Debtor's
financial affairs, including but not limited to the
Debtor's assets and pre-bankruptcy conduct;
(d) advise the Committee in connection with any litigation in
the cases;
(e) advise the Committee regarding the resolution of claims
against the Debtor;
(f) analyze the liens, claims and security interests of any of
the Debtor's secured creditors, and where appropriate,
raise challenges on behalf of the Committee;
(g) advise, consult with, and otherwise assist the Committee
with regard to evaluation of the Debtor's reorganization
prospects and means of satisfying creditors' claims;
(h) represent and advise the Committee with regard to the terms
of any sales of assets or plans of reorganization or
liquidation, including but not limited to any of the
Debtor's plans of reorganization and related disclosure
statements, and assist the Committee in negotiations with
the Debtor and other parties;
(i) prepare, on behalf of the Committee, all necessary
pleadings, reports, and other papers; and
(j) provide such other services as are customarily provided by
counsel to a creditors' committee in cases of this kind.
Sullivan Hill will be paid at these hourly rates:
James P. Hill, shareholder $550
Joseph L. Marshall, shareholder $525
Gary B. Rudolph, shareholder $495
Christopher V. Hawkins, shareholder $475
Kathryn A. Millerick, associate $285
Sullivan Hill will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Christopher V. Hawkins, shareholder of Sullivan Hill, 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.
Sullivan Hill can be reached at:
Christopher V. Hawkins, Esq.
SULLIVAN HILL LEWIN REZ & ENGEL, APLC
550 West C Street, Ste 1500
San Diego, CA 92101
Tel: (619) 233-4100
About Sotera Wireless
Sotera Wireless, Inc., and Sotera Reseach, Inc., filed chapter 11
petitions (Bankr. S.D. Cal. Case Nos. 16-05968 and 16-05969) on
Sept. 30, 2016. The Debtors have requested the joint
administration of their cases. The Debtors are represented by
Victor A. Vilaplana, Esq. and Marshall J. Hogan, Esq., at Foley &
Lardner LLP. The cases are assigned to Judge Laura S. Taylor. At
the time of the filing, Sotera Wireless estimated assets and
liabilities at $10 million to $50 million, while Sotera Research
estimated assets at $1 million to $10 million and liabilities at
$10 million to $50 million.
SOTERA WIRELESS: Hires Foley & Lardner as Counsel
-------------------------------------------------
Sotera Wireless, Inc., seeks authorization from the U.S. Bankruptcy
Court for the Southern District of California to employ Foley &
Lardner LLP as counsel, nunc pro tunc to September 30, 2016.
The Debtor requires Foley to:
a. analyze the Debtors' current financial and legal
situation;
b. prepare and file on behalf of the Debtors all necessary
and appropriate petitions, applications, motions, pleadings, draft
orders, notices and other documents, including amendments thereto,
and review all financial and other reports to be filed in these
Chapter 11 Cases;
c. assist the Debtors with respect to any sales of assets
under Section 363 of the Bankruptcy Code;
d. advise the Debtors concerning their powers and duties as
debtors- in-possession in the continued operation of their business
and management of their property;
e. advise the Debtors concerning, and assisting in the
negotiation and documentation of, financing agreements, debt
restructurings, cash collateral arrangements and related
transactions;
f. advise the Debtors with regard to their relationships with
secured and unsecured creditors and equity security holders, past,
present and future, negotiate with such creditors and security
holders, and their representatives and legal counsel, as necessary,
and take such legal action or actions as may be necessary or
advisable in the best interests of the Debtors;
g. review the nature and validity of liens asserted against
the property of the Debtors and advise the Debtors concerning the
enforceability of such liens;
h. negotiate and assist in the drafting and preparation of
leases, security instruments, and other contracts as may be in the
best interests of the Debtors;
i. represent the Debtors at the meeting of creditors,
confirmation hearing, and such other hearings as may occur;
j. advise the Debtors concerning the actions that might be
taken to collect and to recover property for the benefit of the
Debtors' estates;
k. assist and counsel the Debtors in connection with a plan
of reorganization;
l. prepare, on behalf of the Debtors, a disclosure statement
in connection with a plan of reorganization, and assist the Debtors
in soliciting acceptances of the Plan;
m. advise the Debtors concerning, and prepare responses to,
applications, motions, pleadings, notices, and other papers that
may be filed and served in these Chapter 11 Cases;
n. represent the Debtors in adversary proceedings and other
contested matters;
o. perform all other legal services for or on behalf of the
Debtors that may be necessary or prudent in the administration of
the Chapter 11 Cases and the reorganization of the Debtors'
business, including advising and assisting the Debtors with respect
to debt restructurings, stock or asset dispositions, claims
analysis and disputes, and legal issues involving general
corporate, bankruptcy, labor, health care, intellectual property,
employee benefits, tax, finance, real estate, and litigation
matters, and utilizing paraprofessionals, law clerks, associates,
and partners of Foley as may be prudent and economical under the
circumstances.
Foley lawyers and professional who will work on the Debtors' cases
and their hourly rates are:
Vilaplana, Victor A., partners and of counsel $710
Simon, John A., partners and of counsel $525
Hogan, Marshall J., Associates $490
Haake, Jack, Associates $325
Nichols, Dianne, Paraprofessionals $215
Prior to the filing of these Chapter 11 Cases, on September 25,
2016, the Debtors paid Foley a retainer of $25,000. In addition, on
the morning of September 29, 2016, prior to the filing of the
Chapter 11 petitions, the Debtors paid Foley via wire transfer the
balance of the legal fees and expenses incurred prior to that point
not covered by the Retainer. This wire transfer was in the amount
of $41,879.
Prior to the filing of the Chapter 11 Cases, the Debtors
transferred $300,000 into a retainer account for payment of
Foley’s fees and costs incurred in its representation of the
Debtors in the Chapter 11 Cases.
Victor A. Vilaplana, counsel with the law firm of Foley & Lardner
LLP, assured the Court that the firm is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code and
does not represent any interest adverse to the Debtor and its
estates.
Foley may be reached at:
Victor A. Vilaplana, Esq.
Marshall J. Hogan, Esq.
Foley & Lardner LLP
3579 Valley Centre Drive, Suite 300
San Diego, CA 92130
Telephone: 858.847.6700
Facsimile: 858.792.6773
E-mail: vavilaplana@foley.com
mhogan@foley.com
About Sotera Wireless
Sotera Wireless, Inc., and Sotera Reseach, Inc., filed chapter 11
petitions (Bankr. S.D. Cal. Case Nos. 16-05968 and 16-05969) on
Sept. 30, 2016. The Debtors are represented by Victor A.
Vilaplana, Esq. and Marshall J. Hogan, Esq., at Foley & Lardner
LLP. The cases are assigned to Judge Laura S. Taylor. At the time
of the filing, Sotera Wireless estimated assets and liabilities at
$10 million to $50 million, while Sotera Research estimated assets
at $1 million to $10 million and liabilities at $10 million to $50
million.
SPECTRUM HEALTHCARE: DOJ Watchdog Names Nancy Shaffer as PCO
------------------------------------------------------------
William K. Harrington, the United States Trustee for the District
of Connecticut, appointed Nancy Shaffer, M.A., a member of the
Connecticut Long Term Care Ombudsman's Office, as the Patient Care
Ombudsman for Spectrum Healthcare Derby, LLC, Spectrum Healthcare
Hartford, LLC, Spectrum Healthcare Manchester, LLC, and Spectrum
Healthcare Torrington, LLC.
Nancy Shaffer, in a verified statement, assured the Court that she
does not have any connection with the Debtors, the creditors, other
parties in interest, or their respective attorneys and accountants
or with the Office of the United States Trustee, except that she
serves as the Connecticut State Long Care Ombudsman.
Ms. Shaffer further guaranteed that she does not hold or represent
any interest adverse (i) to the bankruptcy estates of the Debtors,
or (ii) to any class of creditors or equity security holders, by
reason of any direct or indirect relationship to, connection with,
or interest in, the Debtor or for any other reason.
The Patient Care Ombudsman is expressly permitted to utilize the
staff and the facilities of the Connecticut Department of Social
Services' Office of the Connecticut State Long Term Care Ombudsman,
save for her reporting obligations as set forth in Section
333(b)(2) of the Bankruptcy Code.
Nancy Shaffer can be reached at:
Nancy Shaffer, M.A.
CONNECTICUT STATE LONG TERM CARE OMBUDSMAN
State Department of Aging
55 Farmington Avenue, 12th Floor
Hartford, CT 06105-3730
Tel.: (860) 424-5238
Fax: (860) 424-4808
Email: Nancy.Shaffer@ct.gov
About Spectrum Healthcare
Spectrum Healthcare, LLC (Case No. 16-21635), Spectrum Healthcare
Derby, LLC (Case No. 16-21636), Spectrum Healthcare Hartford, LLC
(Case No. 16-21637), Spectrum Healthcare Manchester, LLC (Case No.
16-21638) and Spectrum Healthcare Torrington, LLC (Case No.
16-21639) filed Chapter 11 petitions on Oct. 6, 2016.
The Debtors are represented by Elizabeth J. Austin, Esq., Irve J.
Goldman, Esq., and Jessica Grossarth, Esq., at Pullman & Comley,
LLC, in Bridgeport, Connecticut.
At the time of filing, the Debtors listed these assets and
liabilities:
Total Estimated
Assets Liabilities
---------- -----------
Spectrum Healthcare $282,369 $500K-$1M
Spectrum Healthcare Derby $2,068,467 $1M-$10M
Spectrum Healthcare Hartford $4,188,568 N/A
Spectrum Healthcare Manchester, LLC $2,729,410 N/A
Spectrum Healthcare Torrington, LLC $3,321,626 N/A
The petitions were signed by Sean Murphy, chief financial officer.
The official committee of unsecured creditors of Spectrum
Healthcare LLC retains Klestadt Winters Jureller Southard &
Stevens, LLP, as counsel, and Zeisler & Zeisler, P.C. as local
counsel.
Spectrum Healthcare and its affiliates previously filed Chapter 11
petitions (Bankr. D. Conn. Case No. 12-22206) on Sept. 10, 2012.
STARCO VENTURES: Ch. 11 Trustee Hires Jacob as Real Estate Agent
----------------------------------------------------------------
Maynard "Mike" D. Luetgert, the Chapter 11 Trustee of Starco
Ventures, Inc. seeks authorization from the U.S. Bankruptcy Court
for the Middle District of Florida to employ Jacob Real Estate
Services Inc. and Kathleen D. Jacob as Agent to sell the Debtor's
listed units, nunc pro tunc to November 1, 2016.
The Trustee seeks to employ and retain Jacob Real to market and
sell the property identified as:
"Units 105, 301, 402, 505, and 604, San Remo, a Condominium And
Time Share Plan, as per the Declaration of Condominium thereof as
recorded in Official Record Book 5571, Pages 1309, et seq.,
re-recorded in Official Records Book 5643, Pages 1217, et seq., and
Amendments recorded in Official Records Book 5652, Pages 1540, et
seq., and Official Records Book 6232, Pages 1201, et seq.,
according to the Plat thereof as recorded in Condominium Plat Book
69, Pages 114 through 119, inclusive, all of the Public Records of
Pinellas County, Florida, incl. Book 6518, Page 518, et seq. (the
"Listed Units")."
The material terms of the proposed engagement require Jacob Real
Estate Services and Jacob to list, market, and sell the Listed
Units in exchange for which, if there is no cooperating broker,
Jacob Real Estate Services and Jacob will receive a commission of
4% of the sales price. Alternatively, if there is a co-operating
broker, Jacob Real Estate Services and Jacob, together with the
cooperating broker, will receive as a commission the amount of 5%
of the sales price upon the sale of each Listed Unit.
James C. Jacob, president and broker of Jacob Real Estate, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estate.
Jacob Real can be reached at:
James C. Jacob
JACOB REAL ESTATE SERVICES, INC.
607 West Bay St.
Tampa, FL 33606
Tel: (813) 258-3200
About Starco Ventures
Headquartered in Seminole, Florida, Starco Ventures, Inc., filed
for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No.
13-05326) on April 24, 2013, estimating its assets at between $1
million and $10 million and debts at between $10 million and $50
million. The petition was signed by Antoinette Van Putte,
president.
Judge K. Rodney May presides over the case.
Leon A. Williamson, Jr., Esq., at Leon A. Williamson, Jr., P.A.,
serves as the Debtor's bankruptcy counsel.
Maynard D. Luetgert was appointed Chapter 11 Trustee of Starco
Ventures, Inc.
STEVEN LEYDIG: Has Until Nov. 18 To File Plan, Disclosure Statement
-------------------------------------------------------------------
The Hon. Jeffery A. Deller of the U.S. Bankruptcy Court for the
Western District of Pennsylvania has extended by 45 days until Nov.
18, 2016, the deadline for Steven E. Leydig, Sr., and Betty D.
Leydig to file a plan of reorganization and disclosure statement.
Steven E. Leydig, Sr., and Betty D. Leydig filed for Chapter 11
bankruptcy protection (Bankr. W.D. Penn. Case No. 16-70153) on
March 3, 2016.
SUNEDISON INC: Brookfield in Deal Talks for TerraForm Yieldcos
--------------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal Pro Bankruptcy,
reported that Canada's Brookfield Asset Management has floated the
possibility of a takeover of both TerraForm Power Inc. and
TerraForm Global Inc.
According to the WSJ, in a filing with the U.S. Securities and
Exchange Commission, Brookfield said it met with representatives of
the boards of the TerraForm companies to discuss the possibility of
a deal.
Brookfield said in the filing that it is considering either
purchasing the shares of both companies from their stockholders, or
buying the companies -- the so-called "yieldcos" that helped fuel
the now-bankrupt SunEdison Inc.'s boom -- outright for cash, the
report related.
The Canadian investment firm previously said it was interested in
taking charge of TerraForm Power, which owns SunEdison-created
projects in the U.S., Canada, U.K. and Chile, the report further
related. Brookfield avoided entering a quiet competition for
TerraForm Power due to restrictions on it as a large shareholder,
the report said, citing people familiar with the matter.
Refusal to enter the competition, however, didn't signal Brookfield
had lost interest, the report noted.
WSJ pointed out that the revelation that Brookfield is offering to
take on the TerraForm companies could catch the attention of
creditors of SunEdison, the bankrupt alternative-power developer
that has control of both.
TerraForm Global, according to WSJ, is the smaller and more
vulnerable of the two "yieldcos," owning projects in Brazil, China,
India and emerging markets.
About SunEdison, Inc.
SunEdison, Inc. (OTC PINK: SUNEQ), is a developer and seller of
photovoltaic energy solutions, an owner and operator of clean
power
generation assets, and a global leader in the development,
manufacture and sale of silicon wafers to the semiconductor
industry.
On April 21, 2016, SunEdison, Inc., and 25 of its affiliates each
filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case Nos.
16-10991 to 16-11017). Martin H. Truong, the senior vice
president, general counsel and secretary, signed the petitions.
The Debtors disclosed total assets of $20.7 billion and total debt
of $16.1 billion as of Sept. 30, 2015.
The Debtors have hired Skadden, Arps, Slate, Meagher & Flom LLP as
counsel, Togut, Segal & Segal LLP as conflicts counsel, Rothschild
Inc. as investment banker and financial advisor, McKinsey Recovery
& Transformation Services U.S., LLC, as restructuring advisors and
Prime Clerk LLC as claims and noticing agent. The Debtors
employed
PricewaterhouseCoopers LLP as financial advisors; and KPMG LLP as
their auditor and tax consultant.
SunEdison also has tapped Eversheds LLP as its special counsel for
Great Britain and the Middle East. Cohen & Gresser LLP has also
been retained as special counsel.
The Debtors retained Ernst &Young LLP to provide tax-related
services. Keen-Summit Capital Partners LLC has been hired as real
estate advisor. Binswanger of Texas, Inc., also has been retained
as real estate agent.
Sullivan & Cromwell LLP serves as counsel to TerraForm Power,
Inc.,
and TerraForm Global, Inc.
An official committee of unsecured creditors has been appointed in
the case. The Committee tapped Weil, Gotshal & Manges LLP as its
general bankruptcy counsel and Morrison & Foerster LLP as special
counsel. Togut, Segal & Segal LLP and Kobre & Kim LLP serve as
conflicts counsel. Alvarez & Marsal North America, LLC, serves as
the Committee's financial advisors.
Counsel to the administrative agent under the Debtors' prepetition
first lien credit agreement are Richard Levy, Esq., and Brad
Kotler, Esq., at Latham & Watkins.
Counsel to the administrative agent under the postpetition DIP
financing facility are Scott Greissman, Esq., and Elizabeth Feld,
Esq. at White & Case LLP.
Counsel to the Tranche B Lenders (as defined in the DIP credit
agreement) and the steering committee of the second lien creditors
are Arik Preis, Esq., and Naomi Moss, Esq., at Akin Gump Strauss
Hauer & Field, LLP.
Counsel to the administrative agent under the Debtors' prepetition
second lien credit agreement is Daniel S. Brown, Esq., at
Pillsbury
Winthrop Shaw Pittman LLP.
The collateral trustee under the Debtors' prepetition second lien
credit agreement and the indenture trustee under each of the
Debtors' outstanding bond issuances, is represented by Marie C.
Pollio, Esq., at Shipman & Goodwin LLP.
Counsel to the ad hoc group of certain holders of the Debtors'
convertible senior notes is White & Case LLP's Tom Lauria, Esq.
TATOES LLC: Cash Use on Final Basis Until January 2017 OK
----------------------------------------------------------
Judge Frederick P. Corbit of the U.S. Bankruptcy Court for the
Eastern District of Washington authorized Tatoes, LLC, Wahluke
Produce, Inc., and Columbia Manufacturing, Inc., d/b/a/ Columbia
Onion to use cash collateral on a final basis.
The Debtors' authorization to use cash collateral will continue
until the earliest to occur of January 31, 2017, or the
confirmation of a Chapter 11 plan, and/or the dismissal or
conversion of any of the Debtors cases.
The approved 4-month budget for the months of October 2016 to
January 2017, provides total expenses in the aggregate amount of
$4,123,012 for Tatoes, $1,685,160 for Wahluke, and $1,035,654 for
Columbia.
The Debtors were authorized to use the 2016 crops grown by Tatoes,
as well as the proceeds of the 2016 crops and the packing and sale
revenues of Wahluke and Columbia arising from the packing and sale
of the 2016 crops.
Judge Corbit authorized the Debtors to make lease payments on "true
leases," as opposed to disguised financing or secured transactions.
Judge Corbit also authorized the Debtors to make payments for
"excess use charges" to John Deere for the months of October 2016
to January 2017, so long as Rabo AgriFinance LLC approves of such
payments.
The Debtors were directed to make an interest only payment to Rabo
AgriFinance, no later than Nov. 30, 2016 for the period of Oct. 1,
2016 through Nov. 30, 2016, and a second interest only payment to
Rabo AgriFinance, no later than Jan. 31, 2017 for the period of
Dec. 1, 2016 through Jan. 31, 2017. These interest only payments
will be calculated using an interest rate of 4.5% based on the
outstanding claim amount of $22,152,130 asserted by Rabo
AgriFinance as of Petition Date.
Judge Corbit authorized the Debtors to make adequate protection
payments to creditors holding secured claims against the property
of the Debtors in an amount equal to the amount due to such
creditors under their pre-petition loan documents.
Rabo AgriFinance and any other party holding a valid, perfected,
and unavoidable security interest or lien in the 2016 cash
collateral were also granted with a valid, automatically perfected
replacement lien against any 2017 crops grown by the Debtors, and
in any products, proceeds or insurance recoveries related thereto.
The Debtors were ordered continue to provide Rabo AgriFinance with
a monthly report detailing: the expenses paid by each of the
Debtors during the preceding month on a cash basis; a comparison of
actual expenses paid to the expenses estimated in the monthly
budgets; the quantity of 2015, 2016 and 2017 crops held by each of
the Debtors; and the amount of the Debtors' outstanding accounts
receivables as of the end of the monthly reporting period.
Judge Corbit directed the Debtors to provide Rabo AgriFinance with
CPA-reviewed consolidated financial statements for each Debtors,
and non-Debtor related parties U12B253, LLC, Terra Management, LLC
and EZ Fixing Foods, LLC for the fiscal year ending December 31,
2015, along with a Complaint Certificate as of the end of that
period. The Debtors were also directed to pay for any fumigants,
chemicals, fertilizers, supplies or labors provided by Saddle
Mountain Supply Company, Windflow or any other suppliers.
A full-text copy of the Stipulated Final Order, dated November 10,
2016, is available at https://is.gd/Mzgirk
About Tatoes, LLC.
Tatoes, LLC, Wahluke Produce, Inc., and Columbia Manufacturing,
Inc., are engaged in farming, packing, storing, and selling
potatoes, onions and wheat. Tatoes, LLC, et al., filed Chapter 11
bankruptcy petitions (Bankr. E.D. Wash. Case Nos. 16-00900,
16-00899 and 16-00898, respectively) on March 21, 2016. The
petitions were signed by Del Christensen, president.
Tatoes LLC estimated assets and liabilities at $10 million to $50
million. Wahluke Produce and Columbia Manufacturing each estimated
assets and liabilities at $50 million to $100 million.
Wahluke has employed Roger William Bailey, Esq., at Bailey & Busey,
PLLC as legal counsel; Columbia has employed Hurley & Lara as legal
counsel; and Tatoes has employed the Law Offices of Paul H.
Williams as counsel. Southwell & O'Rourke is counsel for Tatoes
Unsecured Creditors Committee.
Gail Brehm Geiger, acting U.S. trustee for Region 18, on April 28,
2016, appointed three creditors of Tatoes LLC to serve on the
official committee of unsecured creditors. Ms. Geiger disclosed
that no official committee of unsecured creditors has been
appointed in the Chapter 11 cases of Wahluke Produce Inc. and
Columbia Manufacturing Inc., both affiliates of Tatoes LLC.
The deadline for filing proofs of claim was Aug. 1, 2016.
TAYLOR EQUIPMENT: Case Summary & 7 Unsecured Creditors
------------------------------------------------------
Debtor: Taylor Equipment Company, Inc.
2882 Stoystown Road
Friedens, PA 15541
Case No.: 16-70781
Chapter 11 Petition Date: November 11, 2016
Court: United States Bankruptcy Court
Western District of Pennsylvania (Johnstown)
Judge: Hon. Jeffery A. Deller
Debtor's Counsel: Robert H. Slone, Esq.
MAHADY & MAHADY
223 South Maple Avenue
Greensburg, PA 15601
Tel: 724-834-2990
E-mail: robertslone223@gmail.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by David P. Taylor, president.
A copy of the Debtor's list of seven unsecured creditors is
available for free at http://bankrupt.com/misc/pawb16-70781.pdf
TEMPLE UNIVERSITY: Fitch Affirms BB+ Rating on 2 Cl. of Bonds
-------------------------------------------------------------
Fitch Ratings has affirmed these series of bonds issued by the
Hospital and Higher Education Facilities Authority of Philadelphia
on behalf of Temple University Health System (TUHS) at 'BB+':
-- $302,905,000 series 2012A and B;
-- $203,985,000 series 2007 A and B.
The Rating Outlook has been revised to Stable from Positive.
SECURITY
The bonds are secured by a pledge of gross revenues of the
obligated group, mortgages on certain properties of the obligated
group, and a debt service reserve fund. The obligated group
represented approximately 95% of the assets and 100% of the
revenues of the consolidated system in fiscal 2016 (June 30
year-end). Fitch reports on the performance of the consolidated
system.
KEY RATING DRIVERS
REVISION OF THE OUTLOOK TO STABLE: The revision of the Outlook to
Stable from Positive, despite a second year of positive operating
results in fiscal 2016, was driven by higher maximum annual debt
service (MADS) of $49.5 million, related to inclusion of several
equipment loans and capitalized leases, which were not included in
the MADS used by Fitch in the prior analysis. The resulting 1.8x
MADS coverage is lower than expectations since coverage during
Fitch's last review was based on bonded debt only.
MAINTAINING POSITIVE OPERATING RESULTS: Temple produced a second
year of positive operating results in fiscal 2016, and management
is projecting further strengthening of operating performance in the
next year. The system ended fiscal 2016 with operating income of
$3.6 million for an operating margin of 0.2%, on par with the prior
year, despite operating in a very difficult and competitive market,
significant investment in EPIC implementation, increased transfers
to the School of Medicine (SOM) and decreased support from Temple
University (University). Management budgets to end the fiscal 2017
with $15.8 million in operating income.
ESSENTIALITY AND HIGH DEPENDENCE ON SUPPLEMENTAL PAYMENTS: TUHS's
flagship facility - Temple University Hospital (TUH) - serves both
as a provider of high-end specialty services and as a de facto
safety net hospital for North Philadelphia. As such, its continued
viability is of critical importance to the greater Philadelphia
market, which has been reflected in the significant support the
institution has been receiving in the form of supplementary
revenues, which in 2016 remained significant and slightly higher
than in 2015, though not all of it was received before the end of
the fiscal year. While there are uncertainties about the
composition and level of the supplemental funding, management
anticipates that it will be maintained at close to the historical
level in 2017.
GOOD VOLUMES AND HIGHER ACUITY: Despite the competitive nature of
the market and the general decreasing volume trend in the greater
Philadelphia area, TUHS was able to maintain a stable level of
discharges in fiscal 2016 and increased its share of the high
acuity discharges by 1.8%, which was one of the drivers of the
positive operating performance. TUH's overall case mix index
increased to 1.77 in fiscal 2016, as compared to 1.59 in fiscal
2013 and the system has increased its share of the high-end cases
to 6%, from 4.9% in fiscal 2011.
MIXED LEVERAGE: The system's coverage of maximum annual debt
service (MADS) by EBITDA was 1.8x in fiscal 2016, but the system's
MADS as a percent of revenues is still a moderate 3% of revenues,
lower than Fitch's 'BBB' median of 3.6%. Further mitigating the
slim coverage, TUHS has an all fixed rate debt structure, no swap
exposure and no additional debt plans in the near term.
MODEST LIQUIDITY: Liquidity remains light, unrestricted cash and
investments were $336.1 million at 2016 year-end, slightly below
budget due to delay in the receipt of $22 million of the
supplemental funding. Unrestricted cash and investments at 2016
year end translate to 77.6 days cash on hand (DCOH), cushion ratio
of 6.9x and cash equal to 64.9% of debt.
RATING SENSITIVITIES
NEED TO STRENGTHEN OPERATING PERFORMANCE: A return to the
investment grade rating category would require Temple University
Health System to generate meaningful improvement in operating
performance leading to strengthened coverage and balance sheet
metrics.
CREDIT PROFILE
TUHS is a Philadelphia based health care system, whose flagship is
TUH, a 722-bed teaching hospital located on the campus of Temple
University (University) in North Philadelphia. TUH sits on the
University's health science campus, along with the University's
School of Medicine and its other research and educational
facilities. TUHS also owns and operates Jeanes Hospital (Jeanes),
a 146-licensed bed community hospital located in a residential area
in Northeast Philadelphia and the adjoining 100-bed American
Oncologic Hospital d/b/a Fox Chase Cancer Center (Fox Chase), one
of only 41 National Cancer Institute designated Comprehensive
Cancer Centers in the nation. TUHS reported $1.64 billion revenues
in fiscal 2016.
MAINTAINING POSITIVE OPERATING RESULTS
Led by a strong and stable management team, TUHS produced a second
year of positive operating results in fiscal 2016, recording
operating income of $3.5 million, equal to a slim, but positive
0.2% operating margin and 5% operating EBITDA margin compared to
sizeable operating losses of $15.8 million and $24.8 million in
2014 and 2013. Fitch's calculation of TUHS's metrics excludes the
non-preferred appropriations ($6.2 million in both 2016 and 2015),
for which TUHS only serves as a conduit for Temple University. The
improved performance was partially driven by an increase in the
high acuity discharges based on continued recruitment and retention
of high caliber physicians, as well as improved performance at both
the Fox Chase and Jeanes.
Constraining profitability was the $19 million increased expense
related to the implementation of EPIC at TUH, as well as increased
pharmaceutical expense, and increased transfers to the SOM - at
$89.3 million, almost twice the level two years ago. At the same
time, as planned, the University cut back its support for physician
recruitment from $36 million two years ago to $0.5 million.
Management budgeted a stronger $15.8 million operating income (0.9%
operating margin) for the system for fiscal 2017, which includes
the last year of Epic implementation expense of $20.9 million.
SUPPLEMENTARY PAYMENTS MECHANISM EVOLVING
The supplementary payments are essential to supporting the
organization's position as a safety net provider to inner city
Philadelphia with close to 40% of gross revenues from Medicaid.
Management has historically worked closely with the Commonwealth
for the critically needed supplemental payments. The 2016 funding
was $138.6 million, up from $131 million in 2015, but only $75
million of that amount had been received by the fiscal year end,
impacting the liquidity level. The balance of the 2016 funding was
remitted in the first quarter of fiscal 2017. There continues to
be concern regarding the level and sources of the supplemental
funding, but management is fairly optimistic in expecting that the
level in fiscal 2017 will be close to prior year levels.
MODEST LIQUIDITY
The $336.1 million of unrestricted cash and investments at 2016
year end was a slight decline from $374.3 million in the prior year
with the variance including higher amounts owed from the
Commonwealth, as well as increased spending on IT and higher
volumes resulting in higher net receivables. The supplemental
funding expected to be received by June 30, 2016, was
$22.6 million less than had been budgeted. Management has budgeted
liquidity at $350 million for fiscal 2017 and set a goal of 100
DCOH by 2019.
WEAK COVERAGE
TUHS had $517.8 million of long-term debt at 2016 fiscal year-end,
which is 100% fixed rate and the system has no swaps. Consolidated
MADS is $49.5 million and occurs in fiscal 2017. The increase in
MADS from $38.9 million (at the time of Fitch's last review in
December 2015) is due to the debt service related to several
equipment loans and capitalized leases, which were not included in
the MADS used by Fitch in the prior analysis. Coverage of MADS
based on the TUHS consolidated EBITDA was 1.8x in fiscal 2016. The
obligated group reported higher coverage of 2.4x in fiscal 2016
based on the master trust indenture calculation, which is on annual
debt service.
TENAFLY GOURMET: Hires Shin & Jung as Bankruptcy Counsel
--------------------------------------------------------
Tenafly Gourmet Farms, Inc., seeks authorization from the U.S.
Bankruptcy Court for the District of New Jersey to employ Shin &
Jung LLP as attorney for Debtor-in-Possession.
The Debtor requires Shin & Jung to:
a. prepare applications, motions, orders and all other
pleadings in this action; and
b. perform other legal services in connection with the
bankruptcy case and its related proceedings whenever requested by
the Debtor.
Shin & Jung will be paid at these hourly rates:
Attorney $250
Seeing Han (Aaron) Shin, Esq., member of or associated with the
firm of Shin & Jung LLP, assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtor and its estates.
Shin & Jung may be reached at:
Seeing Han (Aaron) Shin, Esq.
Shin & Jung LLP
2400 Lemoine Ave. Suite 204
Fort Lee, NJ 07024
Tel: (201)482-8095
Fax: (201)399-3269
About Tenafly Gourmet Farms, Inc.
Tenafly Gourmet Farms, Inc. filed a Chapter 11 bankruptcy
petition (Bankr. D.N.J.. Case No. 16-28809) on September 30,
2016. Hon. John K. Sherwood presides over the case. Shin & Jung
LLP represents the Debtor as counsel.
The Debtor disclosed total assets of $1.48 million and total
liabilities of $7.93 million. The petition was signed by Yong Kim,
president.
TIDEWATER INC: Obtains Covenant Waiver Extension Until January 27
-----------------------------------------------------------------
As previously reported, Tidewater Inc. has been in discussions with
its principal lenders and noteholders to amend the company's
various debt arrangements to obtain relief from certain covenants.
Pending the resolution of those discussions, the company had
previously received limited waivers from the necessary lenders and
noteholders which waived compliance with these covenants until Nov.
11, 2016. The company has now received extensions of these waivers
until Jan. 27, 2017.
Headquartered in New Orleans, Louisiana, Tidewater is a provider of
Offshore Service Vessels (OSVs) to the global energy industry.
TRIDENT HOLDING: S&P Affirms 'B-' Corporate Credit Rating
---------------------------------------------------------
S&P Global Ratings affirmed its 'B-' corporate credit rating on
Trident Holding Co. Inc.
At the same time S&P affirmed its 'B-' issue-level ratings on the
company's first-lien debt. The recovery rating remains '3',
indicating S&P's expectations for meaningful recovery in the event
of default, at the high end of the 50% to 70% range. S&P also
affirmed the 'CCC' issue-level rating on the second-lien debt and
the recovery rating is '6', reflecting S&P's expectations for
negligible (0% to 10%) recovery in the event of default.
"The affirmation reflects our view that despite the improvement in
scale and profitability from the acquisition, the company will
continue to face substantial challenges, as the skilled nursing
industry (which represents 80% of Trident's customer base) faces
intensifying headwinds," said credit analyst Lucas Taylor.
The stable outlook on Trident reflects S&P's expectations that
credit measures, upon the merger are not materially different from
the previous standalone entity. While there are improvements to
revenue and EBITDA on a nominal level, the credit offers a similar
risk in terms of both its business and financial position.
S&P would consider a lower rating if the company fails to meet
S&P's expectations for free cash flow improvement over the coming
years, thereby calling into questioning the sustainability of the
capital structure. If covenants cushions tighten again to a point
that the step-downs would put the company at risk of breaching, S&P
would likely lower the rating to reflect the unsustainable capital
structure. This scenario could occur if margins fall approximately
150 bps. Alternatively, poor execution in integration could hinder
the expected cost synergies, which could lead to weaker margins and
cash flows.
S&P could raise the rating if it gains confidence the company will
achieve the full extent of the potential cost synergies in this
transaction. This would involve about 500 bps of margin
improvement and substantial free cash flow.
TRIDENT USA: Moody's Affirms B3 CFR & Revises Outlook to Stable
---------------------------------------------------------------
Moody's Investors Service affirmed the ratings of New Trident
Holdcorp, Inc. (TridentUSA) including the B3 Corporate Family
Rating, B3-PD Probability of Default Rating, B2 senior secured
first-lien rating and Caa2 senior secured second-lien rating. In
addition, Moody's assigned a B2 rating to the new revolving credit
facility expiring 2019. At the same time, Moody's revised
TridentUSA's rating outlook to stable from negative.
The change in the rating outlook to stable from negative reflects
improving liquidity stemming from an anticipated equity
contribution, reduced revolver borrowings, and the anticipated
modification of financial covenants providing the company with more
headroom.
Ratings affirmed:
New Trident Holdcorp, Inc.:
Corporate Family Rating at B3
Probability of Default Rating at B3-PD
Senior secured revolver expiring 2018 at B2 (LGD 3) (to be
withdrawn at the close of the transaction)
Senior secured 1st lien term loan due 2019 (inclusive of the
proposed $25 million incremental term loan) at B2 (LGD 3)
Senior secured 2nd lien term loan due 2020 at Caa2 (LGD 5)
Ratings assigned:
New Trident Holdcorp, Inc.:
Senior secured revolver expiring 2019 at B2 (LGD 3)
Outlook revised to stable from negative
RATINGS RATIONALE
TridentUSA's B3 Corporate Family Rating reflects its very high
financial leverage, flat operating performance at its mobile x-ray
segment and high corporate infrastructure investments to support
recent acquisitions growth. In addition, the rating is constrained
by TridentUSA's concentration in mobile x-ray services (including
ultrasound), which comprises about 70% of revenues. This business
is reliant on skilled nursing facility (SNF) customers, which face
soft demand. Moreover, the ratings also reflect our expectation
that TridentUSA will continue to pursue acquisitions and de novo
expansion to supplement organic growth. The company faces execution
risk as it continues transition to a new billing platform,
potentially lengthening its accounts receivable cycle and dampening
liquidity.
The rating is supported by the company's leading presence in a very
fragmented sector -- portable x-ray -- and its success at being the
sole industry consolidator. This provides advantages in dealing
with larger customers and creates efficiencies that can lead to
operating leverage as the company grows in the future.
The stable outlook reflects Moody's anticipation that financial
leverage will remain high as x-ray volume growth remains
challenging, but that liquidity will remain adequate. Moody's
expects that the company will continue to pursue tuck-in
acquisitions to supplement organic growth.
The ratings could be upgraded if the company's operating
performance stabilizes and its liquidity profile improves. An
upgrade would also require that the company significantly increase
its revenue size and reduce adjusted debt to EBITDA to below
5.5 times on a sustained basis, while simultaneously sustaining
positive free cash flow.
The ratings could be downgraded if the company faces deterioration
in liquidity, or increasing financial leverage due to declining
earnings or large debt-funded acquisitions.
New Trident Holdcorp. Inc., is a holding company whose principal
operating subsidiary is TridentUSA Health Services. Based in
Burbank, CA, TridentUSA is a leading nationwide
vertically-integrated provider of outsourced ancillary healthcare
and clinical services, offering mobile x-ray, ultrasound,
teleradiology, mobile clinical and laboratory services to skilled
nursing home, assisted living, home healthcare, hospice and
correctional markets. TridentUSA is owned by private equity
sponsors Audax Group and Formation Capital. The company reported
revenues of $455 million for fiscal year-end 2015.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
TRINITY RIVER: Hires T2 Land as Ordinary Course Professionals
-------------------------------------------------------------
Trinity River Resources, LP seeks authorization from the U.S.
Bankruptcy Court for the Western District of Texas to employ T2
Land Resources as ordinary course professionals.
The Debtor was established in 2010 as an oil and gas exploration
and production company with a focus on East Texas non-operated
working interests. Specifically, the Debtor owns approximately
63,000 net acres in the established Woodbine sands and Austin Chalk
formations throughout Polk, Tyler, and Jasper counties.
The Debtor's current net production is approximately 3,000 boe/d
comprised of 43.5% oil and 56.5% rich gas from approximately 164
wells (27 vertical Woodbine wells and 137 horizontal Austin Chalk
wells). The Debtor's working interests are primarily operated by
its non-debtor affiliate BBX Operating, LLC.
On April 21, 2016, the Debtor filed with the United States
Bankruptcy Court for the Western District of Texas, Austin Division
a voluntary petition for relief under chapter 11.
On July 8, 2016, GE Capital EFS Financing, Inc. filed its Motion to
Appoint Chapter 11 Trustee. On September 1, 2016, the Court entered
the Order Authorizing the Debtor to Employ and Retain Independent
Manager.
The Debtor seeks to employ the Ordinary Course Professional in
order to assist in the evaluation of net revenue and working
interest in approximately 420 wells and prospective wells currently
purported to be owned by the Debtor.
T2 Land will be paid at these daily rates:
Senior Project Manager $500
Field Landman $450
T2 Land will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Travis TeSelle, manager of T2 Land resources, LLC, assured the
Court that the firm does not represent any interest adverse to the
Debtor and its estates.
T2 Land may be reached at:
Travis TeSelle
T2 Land resources, LLC
2601 Scott Ave., Ste. 201
Forth Worth, TX 76103
Phone: 817-332-4900
About Trinity River Resources
Trinity River Resources, LP, filed a Chapter 11 bankruptcy petition
(Bankr. W.D. Tex. Case No. 16-10472) on April 21, 2016. The
petition was signed by Matthew J. Telfer as manager of Trinity
River Resources, GP, LLC. The Debtor estimated assets in the range
of $50 million to $100 million and liabilities of up to $500
million. The Debtor has hired Bracewell LLP as counsel,
Bridgepoint Consulting, LLC, as financial advisor, and Scotiabank
as investment banker. Judge Tony M. Davis is assigned to the case.
TUSCANY ENERGY: Given Until Dec. 30 to Solicit Acceptances to Plan
------------------------------------------------------------------
Judge Erik P. Kimball of the U.S. Bankruptcy Court for the Southern
District of Florida extended Tuscany Energy, LLC's exclusive period
to solicit acceptances to its Plan of Reorganization, to December
30, 2016.
The Debtor sought the extension of its exclusive period to solicit
acceptances of its Plan of Reorganization, relating that Armstrong
Bank, its largest secured creditor, had filed a Motion to Dismiss,
or in the Alternative, for Abstention and a Motion for Relief from
Automatic Stay, or in the Alternative, for Adequate Protection.
The Debtor contended that the Court has referred various matters
relating to the Debtor and Armstrong Bank, including confirmation
objections and the Armstrong Motions, to judicial settlement
conference before Judge Cornish. The Debtor further contended that
the parties attended the judicial settlement conference on June 28,
2016. The Debtor said that the parties most recently agreed to
continue the judicial settlement conference to October 31, 2016.
The Debtor further said that it had also sought and obtained a
continuance of the hearing on approval of the Disclosure Statement
to November 30, 2016, which continuance was agreed to by Armstrong
Bank.
The Debtor told the Court that in order to minimize costs and
preserve judicial resources, the Debtor sought additional time to
attempt to resolve issues with Armstrong Bank prior to pursuing
approval of the Disclosure Statement, and soliciting votes in favor
of the Plan. The Debtor believed that any settlement reached with
Armstrong Bank will likely result in modifications or amendments to
the Plan and Disclosure Statement.
The Debtor filed its Plan of Reorganization and Disclosure
Statement on April 25, 2016.
About Tuscany Energy, LLC.
Tuscany Energy LLC filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Fla. Case No. 16-10398) on Jan. 11, 2016. The
petition was signed by Donald Sider, manager. The case is assigned
to Judge Erik P. Kimball. The Debtor is represented by Bradley S.
Shraiberg, Esq., at Shraiberg, Ferrara, & Landau P.A. At the time
of the filing, the Debtor estimated assets at $100,000 to $500,000
and liabilities at $1 million to $10 million.
UD DISSOLUTION: Hires Morris James as Special Counsel
-----------------------------------------------------
The UD Dissolution Liquidating Trust of UD Dissolution Corp. filed
an ex parte application to U.S. Bankruptcy Court for the District
of Utah to employ Morris James LLP as special counsel for the UD
Trust.
On October 30, 2015, the UD Trust filed a Complaint before the
Bankruptcy Court against Sphere 3D Corporation ("Sphere") and
others commencing an adversary proceeding captioned as, UD
Liquidating Dissolution Trust v. Sphere 3D Corp., et al., Adv. Pro.
No. 15-02196. The UD Trust objects to the proof of claim filed by
Sphere and affirmatively asserts a number of claims seeking
significant damages against the defendants.
The UD Trust wishes to employ Morris James for the purpose of
representing the UD Trust as local counsel with respect to the
Sphere Litigation and other litigation as may be needed.
Morris James will be paid at these hourly rates:
Albert H. Manwaring, IV $650
Albert J. Carroll $365
Senior Partners $775
New Associates $225
Morris James will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Morris James required UD Trust an initial retainer of $10,000.
Albert H. Manwaring IV, partner of Morris James, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estate.
Morris James can be reached at:
Albert H. Manwaring, IV, Esq.
MORRIS JAMES LLP
500 Delaware Avenue, Suite 1500
P.O. Box 2306
Wilmington, DE 19899-2306
Tel: (302) 888-6868
Fax: (302) 571-1750
E-mail: amanwaring@morrisjames.com
UD Dissolution Corp., (fka V3 Systems, Inc.), based in Draper,
Utah, filed for Chapter 11 (Bankr. D. Utah Case No. 14-32546) on
Nov. 26, 2014. Judge Joel T. Marker presides over the case.
Deborah Rae Chandler, Esq., at Miller Toone, P.C., serves as the
Debtor's counsel. In its petition, UD estimated under $50,000 in
assets and $1 million to $10 million in liabilities. The petition
was signed by Eric Lindstrom, trustee. A list of the Debtor's 20
largest unsecured creditors is available for free at
http://bankrupt.com/misc/utb14-32546.pdf
ULTRA PETROLEUM: Unit Agrees to Assume Pinedale Liquids Lease
-------------------------------------------------------------
CorEnergy Infrastructure Trust, Inc. on Nov. 11, 2016, disclosed
that Ultra Petroleum's subsidiary has agreed to assume the Lease on
its Pinedale Liquids Gathering System without amendment, through a
motion filed on Nov. 11 with the Bankruptcy Court. In exchange,
CorEnergy agreed to withdraw its damages claims and its motion to
dismiss its tenant from the bankruptcy proceedings. CorEnergy
maintains its right to assert claims in the future to protect the
value of its Pinedale LGS System. These agreements are subject to
approval by the court.
David Schulte, CEO of CorEnergy commented, "The motion filed
[Fri]day confirms that our asset is critical to Ultra's business
plan. We believe our agreement to drop our damages claims was an
important concession. We are pleased to continue our relationship
with Ultra as it dedicates capital to increasing gas production for
the benefit of its stakeholders."
Conference Call
CorEnergy will host a conference call on Monday, November 14, 2016
at 9:00 a.m. Central Time to discuss the agreement and answer
investor questions. Please dial into the call at 877-407-8035 (for
international, 1-201-689-8035) approximately five to ten minutes
prior to the scheduled start time. A link to the webcast will be
accessible at corenergy.reit.
A replay of the call will be available until 10:59 p.m. Central
Time on December 14, 2016 by dialing 877-481-4010 (for
international, 1-919-882-2331). The Conference ID is 10157. A
replay of the conference call will also be available on the
Company's website.
About CorEnergy Infrastructure Trust, Inc.
CorEnergy Infrastructure Trust, Inc. -- 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.
UNCAS LLC: Hires Chappo as Mortgage Broker
------------------------------------------
Uncas, LLC seeks authorization from the U.S. Bankruptcy Court for
the District of Connecticut to employ Chappo LLC as mortgage
broker.
The Debtor owns a commercial rental property located at 2A Owenoke
Park, Westport, Connecticut. The property is undeveloped comprising
about 17 acres.
Connect REO, LLC holds a single claim in the original sum of
$1,000,000, plus interest, costs, and fees evidenced by a note on
which Uncas, LLC and its affiliate Post East, LLC are co-makers.
The claim is secured by a mortgage on the Property owned by Uncas
LLC, and by a mortgage on a property owned by Post East, LLC,
located at 740-748 Post Road East, Westport, Connecticut.
During the course of these proceedings the Debtor, managed by its
sole member, Michael Calise, continues to manage the Property and
has made adequate protection payments to Connect.
Uncas is seeking new financing for the Property to allow it to pay
the claim of Connect. The Debtor believes Chappo LLC, as mortgage
broker, can offer access to a lender ready, willing and able to
lend against the Property in the required sum to achieve this goal.
The Debtor shall compensate Chappo one percent of the refinance
amount payable upon closing on refinancing.
The Debtor's principal paid a pre-petition retainer of $5,000 to
Chappo in an agreement to refinance any or all of several
properties inclusive of Debtors property.
Richard J. Chappo, mortgage broker and principal of Chappo LLC,
assured the Court that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Chappo can be reached at:
Richard J. Chappo
Chappo LLC
82 Patrick Road
Westport, CT 06880
Phone: +1 203-226-8936
About Uncas LLC
Uncas, LLC sought protection under Chapter 11 of the
Bankruptcy
Code (Bankr. D. Conn. Case No. 16-50849) on June 28,
2016. The
petition was signed by Michael F. Calise,
member.
At the time of the filing, the Debtor estimated
its assets and
liabilities at $1 million to $10 million.
UNI-PIXEL INC: May Issue Add'l 1.6M Shares Under Incentive Plan
---------------------------------------------------------------
Uni-Pixel, Inc., filed with the Securities and Exchange Commission
a Form S-8 registration statement for the purpose of registering an
additional 1,600,000 shares of common stock, par value $0.001 per
share, of Uni-Pixel, Inc., a Delaware corporation, issuable
pursuant to the Uni-Pixel 2011 Stock Incentive Plan, as amended.
Initial shares of the Plan were registered pursuant to that
Registration Statement on Form S-8 (File No. 333-176850), filed
with the SEC on Sept. 15, 2011. Additional shares of the Plan were
registered pursuant to that Registration Statement on Form S-8
(File No. 333-188531), filed with the SEC on May 10, 2013, and that
Registration Statement on Form S-8 (File No. 333-207959), filed
with the SEC on Nov. 12, 2015, the contents of which are hereby
incorporated by reference.
On April 18, 2016, the Board of Directors of the Company approved,
and by vote of the stockholders of the Company dated June 8, 2016,
the stockholders approved, the addition of 1,600,000 shares of
Common Stock as issuable under the Plan by way of a third amendment
to the Plan. Such increase became effective on the date of
stockholder approval, June 8, 2016.
A full-text copy of the Form S-8 prospectus is available at:
https://is.gd/BsYtc2
About Uni-Pixel Inc.
The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL)
-- http://www.unipixel.com/-- is a production stage company
delivering its Clearly Superior(TM) Performance Engineered Films
to the Lighting & Display, Solar and Flexible Electronics market
segments.
Uni-Pixel reported a net loss of $37.02 million on $3.75 million of
revenue for the year ended Dec. 31, 2015, compared to a net loss of
$25.7 million on $0 of revenue for the year ended Dec. 31, 2014.
The Company also was in the red since 2010, reporting a net loss of
$3.8 million that year, $8.5 million in 2011, $9.0 million in 2012
and $15.2 million in 2013.
As of June 30, 2016, Uni-Pixel had $22.52 million in total assets,
$4.64 million in total liabilities and $17.88 million in total
shareholders' equity.
As of June 30, 2016, the Company had a cash balance of
approximately $11.3 million and working capital of $14.4 million.
* * *
This concludes the Troubled Company Reporter's coverage of
Uni-Pixel, Inc. until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
USG CORP: S&P Raises CCR to 'BB+' & Removes from CreditWatch Pos.
-----------------------------------------------------------------
S&P Global Ratings said it raised its corporate credit rating on
Chicago-based USG Corp. to 'BB+' from 'BB' and removed the rating
from CreditWatch, where S&P had placed it with positive
implications on Aug. 29, 2016.
At the same time, S&P raised the issue-level rating on the
company's guaranteed senior notes to 'BB+' from 'BB' (in line with
the corporate credit rating). The recovery rating on notes remains
capped at '3', indicating S&P's expectation for meaningful recovery
(50%-70%; upper half of the range) in the event of a default.
In addition, S&P raised the issue-level rating on the company's
nonguaranteed senior notes and industrial revenue bonds to 'BB+'
from 'B+'. Due to the repayment of senior debt, S&P revised the
recovery rating on these facilities to '3', where it is capped,
from '6', indicating S&P's expectation of meaningful (50%-70%;
upper half of the range) recovery in the event of default.
S&P also removed the ratings on the guaranteed and unguaranteed
notes from CreditWatch, where it had placed them with positive
implications on Aug. 29, 2016.
"The stable outlook reflects our expectation that USG will maintain
credit measures within the intermediate category over the next 12
months," said S&P Global Ratings credit analyst Kimberly Garen.
"We expect leverage ratios will improve further to the lower end of
the range in 2017."
S&P do not view an upgrade as likely in 2017, because it do not
expect USG will lower and maintain debt leverage further to the
modest category (sustained debt to EBITDA of less than 2x). S&P
thinks an upgrade to investment grade would be predicated on an
improvement in the company's business risk profile to satisfactory
from the current fair. For this to occur, in S&P's view, USG would
either have to diversify its business lines to include products
less correlated to housing cycles and/or, it would need to
demonstrate less earning volatility through the next building
downturn.
S&P do not believe a downgrade is likely within the next 12 months
given its forecast for further improvement in U.S. construction
markets. Still, a downgrade could occur in a recessionary
environment, causing U.S. housing starts to contract and USG's debt
leverage to be sustained above 3x. However, S&P's economists place
only a 20% to 25% probability on a new recession.
UTSTARCOM HOLDINGS: Chief Financial Officer Resigns
---------------------------------------------------
UTStarcom announced that Mr. Min Xu, the Company's chief financial
officer, has resigned to accept a position with another company.
Mr. Xu will continue in his role at the Company until Nov. 11,
2016, and will remain available in an advisory capacity until May
2017.
The Company also announced that Mr. Eric Lam joined the company as
the vice president of finance, reporting to the chief executive
officer. Mr. Lam is a seasoned technology and finance executive
with nearly 40 years of business experience. Prior to rejoining
UTStarcom, he served as a special advisor to Shanghai Phicomm
Communications. Before that, he served at UTStarcom for eight
years in a variety of senior roles. He was educated in the United
States, with a B.A. from Tufts University and an M.B.A. from
Columbia University Business School.
"On behalf of the entire company and our Board of Directors, we
thank Min for his valuable service, and wish him well in his future
endeavors," said Mr. Tim Ti, UTStarcom's chief executive officer.
"Min built a strong financial team. We are confident that Eric has
the skill and experience to lead our financial function through
UTStarcom's future growth."
Mr. Min Xu commented, "I want to thank the team at UTStarcom for
this opportunity to impact operations over the past few years. The
improvement in operations this year shows that the Company's new
strategic direction is gaining traction, and the outlook is bright.
As I move on to a new personal opportunity, I am confident that
Tim and the team will achieve great success in the years ahead."
About UTStarcom Holdings Corp.
UTStarcom (NASDAQ:UTSI) is a global telecom infrastructure provider
dedicated to developing technology that will serve the rapidly
growing demand for bandwidth from cloud-based services, mobile,
streaming and other applications. The Company works with carriers
globally, from Asia to the Americas, to meet this demand through a
range of innovative broadband packet optical transport and
wireless/fixed-line access products and solutions. The Company's
end-to-end broadband product portfolio, enhanced through in-house
Software Defined Networking (SDN)-based orchestration, enables
mobile and fixed-line network operators and enterprises worldwide
to build highly efficient and resilient future-proof networks for a
range of applications, including mobile backhaul, metro
aggregation, broadband access and Wi-Fi data offload. The
Company's strategic investments in media operational support
service providers expand UTStarcom's capabilities in the field of
next generation video platforms. UTStarcom was founded in 1991,
started trading on NASDAQ in 2000, and has operating entities in
Tokyo, Japan; San Jose, USA; Hangzhou, China; Delhi and Bangalore,
India. For more information about UTStarcom, please visit
http://www.utstar.com.
UTStarcom reported a net loss of $20.7 million on $117 million of
net sales for the year ended Dec. 31, 2015, compared to a net loss
of $30.3 million on $129 million of net sales for the year ended
Dec. 31, 2014.
* * *
This concludes the Troubled Company Reporter's coverage of
UTStarcom Holdings until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
UTSTARCOM HOLDINGS: Gu, et al., Own 13.7% of Shares as of Oct. 31
-----------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Gu Guoping, Shanghai Phicomm Communication Co., Ltd.,
Phicomm Technology (Hong Kong) Co., Limited and The Smart Soho
International Limited disclosed that as of Oct. 31, 2016, they
beneficially own 5,000,000 ordinary shares, par value US$0.00375
per share, of UTStarcom Holdings Corp. which represents 13.7
percent of the shares outstanding. A copy of the regulatory filing
is available for free at https://is.gd/d8yc8S
About UTStarcom Holdings Corp.
UTStarcom (NASDAQ:UTSI) is a global telecom infrastructure provider
dedicated to developing technology that will serve the rapidly
growing demand for bandwidth from cloud-based services, mobile,
streaming and other applications. The Company works with carriers
globally, from Asia to the Americas, to meet this demand through a
range of innovative broadband packet optical transport and
wireless/fixed-line access products and solutions. The Company's
end-to-end broadband product portfolio, enhanced through in-house
Software Defined Networking (SDN)-based orchestration, enables
mobile and fixed-line network operators and enterprises worldwide
to build highly efficient and resilient future-proof networks for a
range of applications, including mobile backhaul, metro
aggregation, broadband access and Wi-Fi data offload. The
Company's strategic investments in media operational support
service providers expand UTStarcom's capabilities in the field of
next generation video platforms. UTStarcom was founded in 1991,
started trading on NASDAQ in 2000, and has operating entities in
Tokyo, Japan; San Jose, USA; Hangzhou, China; Delhi and Bangalore,
India. For more information about UTStarcom, please visit
http://www.utstar.com.
UTStarcom reported a net loss of $20.7 million on $117 million of
net sales for the year ended Dec. 31, 2015, compared to a net loss
of $30.3 million on $129 million of net sales for the year ended
Dec. 31, 2014.
* * *
This concludes the Troubled Company Reporter's coverage of
UTStarcom Holdings until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
UTSTARCOM HOLDINGS: Guoping Gu Quits From Board of Directors
------------------------------------------------------------
UTStarcom announced that Mr. Guoping Gu resigned from the Company's
Board of Directors, effective Nov. 8, 2016. The Board appointed
Mr. Tim Ti, the Company's chief executive officer, to replace Mr.
Gu, also effective immediately.
Himanshu Shah, the Chairman of UTStarcom's Board of Directors,
commented, "We thank Mr. Gu for his contributions to UTStarcom
during his tenure, and wish him all the best going forward.
Meanwhile, we are delighted that Tim agreed to join the Board.
Tim's experience and leadership at the Company will further enhance
the quality and effectiveness of our Board."
About UTStarcom, Inc.
UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a
global leader in IP-based, end-to-end networking solutions and
international service and support. The Company sells its
solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables
its customers to rapidly deploy revenue-generating access services
using their existing infrastructure, while providing a migration
path to cost-efficient, end-to-end IP networks. The Company's
headquarters are currently in Alameda, California, with its
research and design operations primarily in China.
UTStarcom reported a net loss of $20.7 million on $117 million of
net sales for the year ended Dec. 31, 2015, compared to a net loss
of $30.3 million on $129 million of net sales for the year ended
Dec. 31, 2014.
* * *
This concludes the Troubled Company Reporter's coverage of
UTStarcom Holdings until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
UTSTARCOM HOLDINGS: Incurs $1.83 Million Net Loss in Third Quarter
------------------------------------------------------------------
UTStarcom reported its unaudited financial results for the third
quarter ended Sept. 30, 2016.
For the three months ended Sept. 30, 2016, the Company reported a
net loss attributable to the Company of $1.83 million on $16.38
million of net sales for the three months ended Sept. 30, 2016,
compared to a net loss attributable to the Company of $5.12 million
on $27.30 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 attributable to the Company of $1.91 million on $58.96
million of net sales compared to a net loss attributable to the
Company of $7.66 million on $91.04 million of net sales for the
same period a year ago.
As of Sept. 30, 2016, UTStarcom Holdings had $194.39 million in
total assets, $99.69 million in total liabilities and $94.70
million in total equity.
UTStarcom's Chief Executive Officer Tim Ti stated, "The third
quarter was transitional for us, as we progress from the strong
demand environment in the first half of the year, to the ramp of
exciting new growth opportunities in 2017. During the quarter we
introduced our newest SyncRing product, which provides critical
functionality for next generation mobile backhaul networks. Our
PTN product line is poised to benefit next year from a rollout of
100G metro networks in our prime geographies, such as Japan. We
believe that our new strategy is the right one, with a tight focus
on a small set of markets in which we can add the most value for
our customers. We are seeing the payoff from this strategy, with
stable revenue and higher margins."
Mr. Min Xu, UTStarcom's chief financial officer, commented,
"Although financial results were not as robust as in the first half
of the year, we remain on track to realize the financial benefits
of the new strategic plan we initiated last year. Revenue was
within our guidance range, which reflected our anticipation of
slower demand in the second half of the year. Gross margin improved
from last year, due to our focus on our higher-value, higher margin
products. We continue to demonstrate outstanding expense
discipline, bringing down our operating expenses by almost $1
million from the second quarter level. This effort resulted in
meaningful operating cash flow improvement, enabling us to
repurchase shares while maintaining our balance sheet strength."
Cash provided by operating activities was $1.6 million.
Cash used in investing activities was $1.3 million.
Cash used in financing activities was $0.7 million, mainly due to
the share repurchase.
As of Sept. 30, 2016, UTStarcom had cash and cash equivalents of
$81.1 million.
For the fourth quarter of 2016, the Company expects to generate
non-GAAP revenue in the range of $15 million to $20 million.
Mr. Ti concluded, "We continue to focus foremost on profitability
and cash flow. With our business model stabilized and supported by
a strong balance sheet, we can focus on our key market
opportunities to drive growth in 2017. At the same time, we intend
to reward shareholders with a return of capital via share
repurchases, and will continue the current buyback program for
another two years. In the long run, we believe that the stock
market will recognize and reward solid fundamentals and our respect
for shareholders, who are the owners of this business."
A full-text copy of the press release is available for free at:
https://is.gd/1ach3Y
About UTStarcom Holdings Corp.
UTStarcom (NASDAQ:UTSI) -- http://www.utstar.com/-- is a global
telecom infrastructure provider dedicated to developing technology
that will serve the rapidly growing demand for bandwidth from
cloud-based services, mobile, streaming and other applications.
The Company works with carriers globally, from Asia to the
Americas, to meet this demand through a range of innovative
broadband packet optical transport and wireless/fixed-line access
products and solutions. The Company's end-to-end broadband product
portfolio, enhanced through in-house Software Defined Networking
(SDN)-based orchestration, enables mobile and fixed-line network
operators and enterprises worldwide to build highly efficient and
resilient future-proof networks for a range of applications,
including mobile backhaul, metro aggregation, broadband access and
Wi-Fi data offload. The Company's strategic investments in media
operational support service providers expand UTStarcom's
capabilities in the field of next generation video platforms.
UTStarcom was founded in 1991, started trading on NASDAQ in 2000,
and has operating entities in Tokyo, Japan; San Jose, USA;
Hangzhou, China; Delhi and Bangalore, India.
UTStarcom reported a net loss of $20.7 million on $117 million of
net sales for the year ended Dec. 31, 2015, compared to a net loss
of $30.3 million on $129 million of net sales for the year ended
Dec. 31, 2014.
* * *
This concludes the Troubled Company Reporter's coverage of
UTStarcom Holdings until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
VALEANT PHARMACEUTICALS: Reports Q3 2016 Financial Results
----------------------------------------------------------
Valeant Pharmaceuticals International, Inc., reported a net loss of
$1.21 billion on $2.47 billion of total revenues for the three
months ended Sept. 30, 2016, compared to net income of $51.7
million on $2.78 billion 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 $1.89 billion on $7.27 billion of total revenues
compared to net income of $98.6 million on $7.68 billion of total
revenues for the same period a year ago.
"This past quarter, we made further progress toward establishing
the new Valeant," said Joseph C. Papa, chairman and chief executive
officer. "We have, where appropriate, begun to centralize some
parts of the business, and hired two key senior executives: Paul
Herendeen, Chief Financial Officer, and Dr. Louis Yu, Chief Quality
Officer. We also have started to present our financial results
under three operating and reportable segments, which we believe
will help clarify areas of strength and provide additional
transparency. While we have revised our expectations for the
remainder of 2016, I continue to be encouraged by the commitment of
our employees who work each day toward meeting our mission of
helping improve people's lives through our healthcare products."
Total Revenues
Total revenues in the third quarter of 2016 were $2.48 billion as
compared to $2.79 billion in the third quarter of 2015, a decrease
of 11%, primarily due to a decline in product sales revenues from
our existing businesses. Third quarter revenues were also impacted
by negative foreign currency exchange, as well as divestitures and
discontinuations, which were partially offset by incremental
product sales revenues from acquisitions completed in 2015.
On a sequential basis, revenues grew from a base of $2.37 billion
in the first quarter of 2016 to $2.42 billion in the second quarter
to $2.48 billion in the third quarter.
GAAP Earnings Per Share (EPS)
GAAP EPS for the third quarter of 2016 came in at ($3.49) as
compared to $0.14 in the third quarter of 2015. On a sequential
basis, GAAP EPS moved from ($1.08) in the first quarter of 2016 to
($0.88) in the second quarter to ($3.49) in the third quarter.
Adjusted EPS (non-GAAP)
Adjusted EPS (non-GAAP) for the third quarter of 2016 came in at
$1.55 as compared to $2.41 in the third quarter of 2015. On a
sequential basis, adjusted EPS (non-GAAP) grew from $1.27 in the
first quarter of 2016 to $1.40 in the second quarter to $1.55 in
the third quarter.
Adjusted Net Income (non-GAAP)
Adjusted net income (non-GAAP) in the third quarter of 2016 was
$543 million as compared to $845 million in the third quarter of
2015. On a sequential basis, adjusted net income (non-GAAP) was
$443 million in the first quarter of 2016, growing to $488 million
the second quarter followed by $543 million in the third quarter.
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA (non-GAAP) for the third quarter of 2016 came in at
$1.16 billion, an improvement over second quarter results of $1.09
billion and first quarter results of $1.01 billion, reflecting
growth.
Segment Revenues
As announced on Aug. 9, 2016, Valeant now presents results in three
operating and reportable segments: Bausch + Lomb / International,
Branded Rx, and U.S. Diversified Products.
The Bausch + Lomb / International segment consists of (i) sales in
the U.S. of pharmaceutical products, OTC products and medical
device products in the area of eye health, primarily comprised of
Bausch & Lomb products, with a focus on four product offerings
(Vision Care, Surgical, Consumer and Ophthalmology Rx), and (ii)
branded pharmaceutical products, branded generic pharmaceutical
products, OTC products, medical devices, and Bausch + Lomb products
sold in Europe, Asia, Australia and New Zealand, Latin America,
Africa and the Middle East.
In the third quarter of 2016, the Bausch + Lomb / International
segment reported revenues of $1.16 billion, an increase of 4% from
$1.12 billion in the third quarter of 2015. The segment, which
contributed 47% of total company revenues, reflected an increase in
product sales revenues of $67 million in the third quarter of 2016
from all 2015 acquisitions, partially offset by a $4 million
decline in product sales revenues from our existing businesses. The
decline was primarily due to lower realized prices related to our
ophthalmology products as a result of the implementation of rebates
and other price adjustments versus prior year.
The decline in product sales due to lower realized prices was
partially offset by higher volumes in U.S. consumer product sales,
as well as product sales in Eastern Europe (excluding Poland) and
China. The results were also affected by, to a lesser extent, the
negative impact of foreign exchange on the existing business and
from divestitures and product discontinuations.
On a sequential basis, segment revenues grew from $1.07 billion in
the first quarter of 2016 to $1.2 billion in the second quarter and
$1.16 billion in the third quarter.
The Branded Rx segment consists of sales of pharmaceutical products
related to (i) the Salix product portfolio in the U.S., (ii) the
Dermatological product portfolio in the U.S., (iii) the Canadian
product portfolio, and (iv) product portfolios in the U.S., in the
areas of oncology, dentistry and women's health.
The Branded Rx segment reported third quarter 2016 revenues of $847
million, a decline from $1.1 billion in the third quarter of 2015.
The segment, which contributed 34% of total company revenues,
reflected a decline in product sales revenue from our existing
business of $251 million in the third quarter. The gap was
primarily a result of lower average realized prices resulting from
higher managed care rebates in dermatology and Salix, lower price
appreciation credits in dermatology and Salix, and changes in the
fulfillment model which led to reduced volumes.
Wholesaler inventory levels at Salix were reduced to approximately
1.5 months as of Sept. 30, 2016, consistent with the overall
inventory levels at our U.S. wholesalers for branded products
(excluding generic products).
On a sequential basis, segment revenues grew from $739 million in
the first quarter of 2016 and $732 million in the second quarter to
$847 million in the third quarter.
The U.S. Diversified Products segment consists of (i) sales in the
U.S. of pharmaceutical products, OTC products and medical device
products in the areas of neurology and certain other therapeutic
classes, including aesthetics (which includes the Solta and Obagi
businesses), and (ii) sales of generic products in the U.S.
The U.S. Diversified Products segment reported third quarter 2016
revenues of $471 million, a decline from $564 million in the third
quarter of 2015. The segment, which contributed 19% of total
company revenues, reflected a decline in product sales revenue from
our existing business of $92 million, primarily due to the
Company's neurology products being challenged by generic
competition.
To a lesser extent, the decline in product sales was due to lower
average realized prices of the Company's neurology products, which
resulted from higher managed care rebates, lower price appreciation
credits and higher group purchasing organization chargebacks on
Nitropress and Isuprel, as well as the negative impact from
divestitures and discontinuations. These factors were partially
offset by the incremental product sales revenue from all 2015
acquisitions.
On a sequential basis, segment revenues lagged from $560 million in
the first quarter of 2016 to $491 million in the second quarter to
$471 million in the third quarter.
Operating Expenses
Cost of Goods Sold increased $15 million, or 2%, to $649 million in
the third quarter of 2016 as compared to $635 million in the third
quarter of 2015, primarily due to an increase related to
acquisitions completed in 2015, as well as costs associated with
the voluntary recall of PeroxiClear, partially offset by a decline
in sales volumes, and decreases related to divestitures and
discontinuations.
As a percentage of total revenues, COGS was 26% in the third
quarter of 2016, as compared to 23% in the same period in 2015. The
increase in COGS percentage was primarily driven by unfavorable
foreign exchange, the impact of mix mainly lower neurology revenues
due to generic competition, and lower dermatology revenues. Those
factors were partially offset by a favorable sales impact from
certain products acquired in the Salix acquisition in 2015, such as
Xifaxan, which represent higher margin products as compared to the
Company's overall portfolio.
On a sequential basis, COGS rose from $620 million in the first
quarter of 2016 to $647 million in the second quarter and $649
million in the third quarter of 2016. COGS as a percentage of
total revenues was 26% in the first quarter of 2016, followed by
27% in the second quarter and 26% in the third quarter.
Selling, General and Administrative (SG&A) expenses decreased $37
million, or 5%, to $661 million in the third quarter of 2016 as
compared to $698 million in the third quarter of 2015. As a
percentage of total revenues, SG&A was 27% in the third quarter of
2016, as compared to 25% in the same period in 2015. SG&A
reflected lower expenses of approximately $73 million incurred by
the U.S. operations, primarily due to lower advertising and
promotional expenses for our dermatology business. This was offset
by higher corporate expenditures of $22 million primarily driven by
increased personnel costs resulting from changes in our senior
management team as well as professional fees incurred related to
our material weakness remediation efforts, higher expenses of $17
million related to 2015 acquisitions, and professional fees of $18
million in the third quarter in connection with recent legal and
governmental proceedings, investigations and information requests
relating to, among other matters, the Company's distribution,
marketing, pricing, disclosure and accounting practices.
SG&A has shown a quarterly sequential decline from $813 million in
the first quarter of 2016 to $672 million in the second quarter and
$661 million in the third quarter. As a percentage of total
revenues, SG&A has shown a sequential quarterly decline from 34% in
the first quarter of 2016 to 28% in the second quarter and 27% in
the third quarter.
Research and development (R&D) expenses remained flat at $101
million in the third quarter of 2016 as compared to the third
quarter of 2015. In the first nine months of 2016, R&D increased
$90 million, or 38%, to $328 million as compared to $239 million in
the first nine months of 2015, primarily due to the development
programs related to the Company's dermatology product portfolio, as
well as spending on brodalumab and programs acquired from Salix.
GAAP Cash Flow from Operations
GAAP Cash flow from operations was $570 million in the third
quarter of 2016 as compared to $733 million in the third quarter of
2015. On a sequential basis, GAAP Cash flow from operations was
$557 million in the first quarter of 2016, $448 million in the
second quarter and $570 million in the third quarter.
2016 Full Year Guidance Revised
Valeant has revised its full year 2016 guidance as follows:
* Total Revenues now expected to be in the range $9.55 billion -
$9.65 billion, from previous range of $9.9 billion to $10.1
billion
* Adjusted EPS (non-GAAP) now expected to be $5.30 - $5.50, from
previous range of $6.60 -$7.00
* Adjusted EBITDA (non-GAAP) now $4.25 billion - $4.35 billion,
from previous range of $4.80 billion - $4.95 billion
A full-text copy of the press release is available for free at:
https://is.gd/IVREEs
About Valeant
Valeant Pharmaceuticals International, Inc. (NYSE/TSX:VRX) --
http://www.valeant.com/-- is a multinational specialty
pharmaceutical company that develops, manufactures and markets a
broad range of pharmaceutical products primarily in the areas of
dermatology, gastrointestinal disorder, eye health, neurology and
branded generics.
Valeant reported a net loss attributable to the Company of $291.7
million on $10.44 billion of revenues for the year ended Dec. 31,
2015, compared to net income attributable to the Company of $880.7
million on $8.20 billion of revenues for the year ended Dec. 31,
2014.
As of June 30, 2016, Valeant had $47.7 billion in total assets,
$42.3 billion in total liabilities and $5.40 billion in total
equity.
* * *
Valeant carries a 'B2' Corporate Family Rating from Moody's
Investors Service.
As reported by the TCR on April 19, 2016, Standard & Poor's
Ratings Services said that it has lowered its corporate credit
ratings on Valeant Pharmaceuticals International Inc. to 'B' from
'B+' and placed both the corporate credit rating and the
issue-level ratings on CreditWatch with developing implications.
WALDEN REAL ESTATE: Hires DurretteCrump as Counsel
--------------------------------------------------
Walden Real Estate Ventures, LLC seeks authorization from the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
DurretteCrump PLC as counsel for Debtor.
The Debtor requires DurretteCrump to render general legal services
to the Debtor as needed throughout the course of this Chapter 11
case, including bankruptcy and restructuring, finance, litigation,
and tax assistance and advice.
DurretteCrump lawyer and paraprofessional who will work on the
Debtor case and their hourly rates are:
Kevin J. Funk, Principal $260
Elizabeth C. McMillen, Legal Secretary $85
DurretteCrump will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Kevin J. Funk, Esq., director of DurretteCrump PLC, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
DurretteCrump may be reached at:
Kevin J. Funk, Esq.
DurretteCrump PLC
Bank of America Center
1111 East Main Street, 16th Floor
Richmond, VA 23219
Telephone: (804)775-6900
Facsimile: (804)775-6911
Email: kfunk@DurretteCrump.com
About Walden Real Estate Ventures, LLC
Walden Real Estate Ventures, LLC filed a Chapter 11 bankruptcy
petition (Bankr. E.D. Va. Case No. 15-35082) on October 1,
2015. Hon. Keitth L. Phillips presides over the case. Kaplan,
Voekler, Cunningham & Frank, PLC represents the Debtor as counsel.
In its petition, the Debtor estimated $1 million to $10 million in
assets and $500,000 to $1 million in liabilities. The petition was
signed by Lee A Barnes, Jr., managing member.
WATCO COS: S&P Revises Outlook to Negative After SkyKnight Deal
---------------------------------------------------------------
S&P Global Ratings said it revised its outlook on U.S.-based Watco
Cos. LLC to negative from stable and affirmed all of its rating on
the company, including its 'B' corporate credit rating.
The outlook revision on Watco reflects S&P's expectation that the
company's credit metrics will remain highly leveraged following its
issuance of preferred equity to SkyKnight Capital (the family
office of Crowley Maritime) to help finance its $100 million
acquisition of bulk terminals from Kinder Morgan. The company
expects that the new terminals will provide it with about $15
million-$20 million of additional earnings, which will lead its
debt-to-EBITDA metric to remain in the 6.0x-6.5x range rather than
decrease below 5.0x as S&P had previously anticipated.
"The negative outlook on Watco reflects our expectation that the
company's credit metrics may remain stretched, given the expected
increase in the company's debt and the ongoing weakness in its
energy-related shipment volumes," said S&P Global Ratings credit
analyst Tatiana Kleiman. "That said, the company's earnings should
benefit from its recent acquisitions and expansion projects. We
expect Watco's debt-to-EBITDA metric to be in the low-6x area and
its FFO-to-debt ratio to be about 10.5% in 2016."
S&P could downgrade Watco if the company's operating performance is
weaker than expected or if it aggressively uses debt or debt
equivalents (i.e. preferred equity) to finance its acquisitions
such that its FFO-to-debt ratio remains below 8% on a sustained
basis.
S&P could revise its outlook on Watco to stable if the company
reduces its debt, if energy prices rise beyond S&P's expectations,
or if the earnings contribution from its recent acquisitions are
greater than expected, causing its FFO-to-debt ratio to exceed 11%
on a sustained basis.
WELLFLEX ENERGY: Nov. 30 Hearing on Liquidation Plan Confirmation
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas will
consider approval of the Chapter 11 plan of liquidation of Wellflex
Energy Solutions, LLC, at a hearing on November 30.
The hearing will be held at 1:30 p.m., at the Eldon B. Mahon United
States Courthouse, First Floor, 501 W. 10th Street, Fort Worth,
Texas.
The court had earlier approved the Debtor's disclosure statement,
allowing it to start soliciting votes from creditors.
The October 27 order set a November 28 deadline for creditors to
cast their votes and file their objections to the plan.
The Debtor is represented by:
Jeff P. Prostok, Esq.
Forshey & Prostok, L.L.P.
777 Main St., Suite 1290
Ft. Worth, TX 76102
Tel: 817-877-8855
Email: jprostok@forsheyprostok.com
About Wellflex Energy Solutions
Wellflex Energy Solutions, LLC dba Wellflex Acquisition Partners,
fdba Arch Production Solutions, LLC, filed a Chapter 11 petition
(Bankr. N.D. Tex. Case No. 16-41049), on March 13, 2016. The case
is assigned to Judge Mark X. Mullin. The Debtor's counsel is Jeff
P. Prostok, Esq. at Forshey & Prostok, LLP, in Fort Worth, Texas.
At the time of filing, the Debtor had both assets and liabilities
estimated at $1 million to $10 million. The petition was signed by
Nick Klaus, president.
WESTMORELAND COAL: Files Copy of Investor Presentation with SEC
---------------------------------------------------------------
Westmoreland Coal Company published on Nov. 9, 2016, an investor
presentation that included the slides, a copy of which is available
for free at https://is.gd/fyMxwJ
About Westmoreland Coal
Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE
AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest
independent coal company in the United States. The Company's coal
operations include coal mining in the Powder River Basin in
Montana and lignite mining operations in Montana, North Dakota and
Texas. Its power operations include ownership of the two-unit
ROVA coal-fired power plant in North Carolina.
Westmoreland reported a net loss applicable to common shareholders
of $203 million on $1.41 billion of revenues for the year ended
Dec. 31, 2015, compared to a net loss applicable to common
shareholders of $173 million on $1.11 billion of revenues for
the year ended Dec. 31, 2014.
As of Sept. 30, 2016, Westmoreland Coal had $1.71 billion in total
assets, $2.30 billion in total liabilities and a total deficit of
$581.20 million.
* * *
Moody's Investors Service at the end of February 2016 downgraded
the ratings of Westmoreland, including its corporate family rating
to 'Caa1' from 'B3'.
Standard & Poor's Ratings Services in March 2016 affirmed its 'B'
corporate credit rating on Westmoreland and revised the rating
outlook to "negative" from "stable". "The negative outlook
reflects weaker-than-expected liquidity as a result of a
combination of exposure to a lower price environment and
difficult-to-secure favorable new volume commitments," said
Standard & Poor's credit analyst Vania Dimova.
WILLIAM COLE: Wells Fargo Opposes Approval of Plan Outline
----------------------------------------------------------
Wells Fargo Bank, N.A., asked a bankruptcy court to deny approval
of the disclosure statement explaining the Chapter 11 plan of
reorganization proposed by William and Milagros Cole.
In a filing with the U.S. Bankruptcy Court for the District of
Massachusetts, the bank criticized the proposed treatment of its
claim under the plan, saying it should be treated as a secured
claim.
The restructuring plan treats the claim as unsecured and proposes
to pay Wells Fargo $3,000 on an annual basis for five years
beginning on the effective date of the plan.
"Wells Fargo's second mortgage claim should not be treated as
unsecured as there is equity above the total claim due on the first
mortgage," said its lawyer, Richard Mulligan, Esq., at Harmon Law
Offices, P.C.
According to Mr. Mulligan, the bank is entitled to "fully secured
treatment" if there is any equity in the property above the amount
owed on the first mortgage.
Wells Fargo is the holder of a home equity line mortgage on real
estate in the original amount of up to $78,000 given by The Coles.
The mortgage covers the premises located at 28 Ward Street, Boston,
Massachusetts. The bank also holds the first mortgage on the
property.
The bank said it has obtained a valuation that suggests the
property is worth $575,000, not $490,000 as claimed by The Coles.
Mr. Mulligan's contact information is:
Richard T. Mulligan, Esq.
Harmon Law Offices, P.C.
P.O. Box 610345
Newton Highlands, MA 02461-0345
Phone: 781-398-4800
Email: mabk@harmonlaw.com
About The Coles
William Cole and Milagros Cole sought Chapter 11 protection (Bankr.
D. Mass. Case No. 16-11695) on May 3, 2016. The Debtors are
represented by Michael Van Dam, Esq., at Van Dam Law LLP.
WILLIAM MERLO: Unsecureds To Get Pro Rata Distribution of 25%
-------------------------------------------------------------
William Merlo filed with the U.S. Bankruptcy Court for the Southern
District of Florida a disclosure statement referring to the
Debtor's plan of reorganization.
Under the Plan, Class 3 is impaired and consists of general
unsecured claims. This class will receive a pro rata distribution
of 25% of allowed claims in equal monthly payments over 48 months
starting on the effective date of the Plan. The plan payments will
be equal to or in excess of those required to exceed the amount
unsecured creditors would receive in a case under Chapter 7. The
effective date of the plan will occur 30 days after the date of
confirmation of the Plan. The payments will continue for 48 months
after the effective date of the Plan unless the amount contemplated
to be paid under the plan is paid earlier.
The principal of the debtor will contribute any amounts needed by
the Debtor to fund the initial payment under the Plan.
The Debtor will fund any other payments due pursuant to the Plan
from income, and the operation business interests. From the
foregoing, the Reorganized Debtor will make all payments required
to be made on the Effective Date. These funds will also be used to
make all administrative expense payments required under the Plan
unless other treatment is agreed to. The amount required to fund
the Plan is unknown at the filing of the Disclosure Statement.
Even though the amount needed to confirm its Plan is unknown, the
Debtor believes that the amount will not exceed $15,000.
The Disclosure Statement is available at:
http://bankrupt.com/misc/flsb15-25639-40.pdf
The Plan was filed by the Debtor's counsel:
Richard Siegmeister, Esq.
Richard Siegmeister P.A.
One Plaza Brickell, Suite 304
1800 S.W. 1 Avenue
Miami, Florida 33125-1180
Tel: (305) 859-7376
E-mail: rspa111@att.net
rspa-ernest@att.net
William Merlo owns real property located at 1855 S. Bayshore Drive,
Miami, Florida 3133. The property in addition to a residence
generates rental income. There is a first position mortgage on the
property held by Ocwen Loan Servicing, LLC. There an inferior
mortgage held by the Bank of New York Mellon as successor to
others. The debtor filed the case herein with the intention of
modifying the first Mortgage. The Debtor believed that the
inferior mortgage held no equity position because of the value of
the property at the time of filing. The property was the subject
of a foreclosure action.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. S.D.
Fla. Case No. 15-25639) on Aug. 28, 2015.
WILLIAM S. MERRELL: Disclosures OK'd; Plan Hearing on Dec. 7
------------------------------------------------------------
The Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the
Southern District of Florida has approved William S. Merrell's
disclosure statement dated Oct. 27, 2016, referring to the Debtor's
plan of reorganization.
A hearing to consider the confirmation of the Plan will be held on
Dec. 7, 2016, at 2:00 p.m.
Objections to the confirmation of the Plan, as well as the report
of the plan proponents and confirmation affidavit and the
certificate for confirmation regarding payment of domestic support
obligations and required tax returns, must be filed by Dec. 2,
2016.
The deadline for filing ballots accepting or rejecting the Plan is
Nov. 30, 2016.
Objections to claims must be filed by Nov. 23, 2016, which is also
the deadline for filing fee applications.
William S. Merrell filed a Chapter 11 petition (Bankr. S.D. Fla.
Case No. 15-32407) on Dec. 31, 2015. John J. Anastasio, Esq., who
has an office in Stuart, Florida, serves as the Debtor's bankruptcy
counsel.
WYNN RESORTS: S&P Cuts Corp. Rating to 'BB-' Over Macau Property
----------------------------------------------------------------
S&P Global Ratings lowered its corporate credit ratings on Wynn
Resorts Ltd. and its subsidiaries to 'BB-' from 'BB'. The rating
outlook is stable.
At the same time, S&P lowered all issue-level ratings one notch in
conjunction with the downgrade of the corporate credit rating. The
recovery rating on the senior secured debt remains '2', indicating
substantial (lower half of the 70%-90% range) recovery in the event
of a default.
The downgrade reflects S&P's expectation that Wynn's new Macau
property, Wynn Palace, will ramp up more slowly than S&P previously
anticipated, and that a slower ramp-up coupled with an increase in
the final Wynn Palace development budget to
$4.4 billion from $4.2 billion, and still-elevated capital spending
as Wynn Resorts builds out its new Wynn Boston resort, will result
in Wynn Resorts sustaining its adjusted net leverage above 5x (the
level at which S&P said it would lower the rating) through 2018.
Wynn Resorts' leverage peaked in the third quarter of 2016 as it
completed and opened its new Wynn Palace resort on the Cotai Strip.
Notwithstanding a slow ramp-up, S&P expects Wynn Resorts' leverage
to improve by about a turn in 2017 as the property ramps up cash
flow generation. S&P expects Wynn's adjusted net leverage to
improve to the high-5x area by the end of 2017 from the mid- to
high-6x area at the end of 2016. S&P's forecast for leverage
incorporates our view that combined EBITDA at Wynn's two Macau
properties will grow about 10% in 2016, and about 25% in 2017. S&P
expects Wynn Palace's EBITDA will be around $100 million in 2016,
and grow to around $400 million in 2017. For Wynn Macau, S&P is
forecasting about a 5% decline in property EBITDA in 2016,
reflecting some degree of cannibalization of its EBITDA from the
opening of Wynn Palace. S&P expects cannibalization to potentially
drive an additional 10% to 15% decline in Wynn Macau's EBITDA in
2017.
"The stable outlook reflects our view that Wynn's high leverage
will improve by roughly one turn over the next year as Wynn Palace
ramps up operations," said S&P Global Ratings credit analyst
Melissa Long.
S&P expects Wynn will reduce leverage to the high-5x area in 2017,
under S&P's 6x downgrade threshold, from the mid- to high-6x area
at the end of 2017. Wynn's strong liquidity and sizable cash
balances support the stable rating outlook.
S&P could lower the rating if Wynn Palace does not ramp up to at
least $400 million in property level EBITDA or if Wynn Palace
causes greater-than-expected cannibalization at Wynn Macau, such
that its property EBITDA falls by more than 15% in 2017. In either
of these events, leverage at the end of 2017 would be higher than
6x, the threshold at which S&P would lower the rating on Wynn. S&P
could also lower the rating if Wynn embarked on additional
development spending, most likely at its Las Vegas property, such
that it no longer expected leverage to improve below 6x in 2017.
S&P believes an upgrade is unlikely before 2018 given its forecast
for leverage to remain above 5x through 2018 as Wynn Palace slowly
ramps up and construction progresses on the Wynn Boston resort.
S&P would raise the rating one notch to 'BB' if it expected Wynn's
leverage would improve below 5x. Such an improvement in leverage
compared to S&P's base case forecast would most likely result from
a meaningfully faster ramp up in cash flow at Wynn Palace, coupled
with less cannibalization at its existing Macau property. This
scenario would require the market to improve faster than S&P is
expecting and to absorb a meaningful increase in supply more
rapidly.
XEROX BUSINESS: Moody's Assigns B2 Rating on Unsecured Bond Issue
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Xerox Business
Services LLC's, ("XBS") proposed $750 million unsecured bond issue.
Proceeds from this financing by XBS, an operating subsidiary of
parent company, Conduent Inc. ("Conduent "), will be used to
partially fund Conduent's pending separation from its corporate
parent Xerox Corporation ("Xerox") though a spin-off transaction.
Moody's assigned the following ratings:
Issuer: Xerox Business Services LLC:
-- $750m Senior Unsecured Notes due 2024 -- B2 (LGD-5)
RATINGS RATIONALE
The Ba3 Corporate Family Rating ("CFR") reflects Conduent's
moderately levered capital structure, competitive pressures from
larger and financially stronger rivals as well as competitors based
in lower cost regions, the company's susceptibility to weakening
pricing trends which weigh heavily on sales growth prospects, and
weak near term free cash flow metrics. Pro forma for its pending
recapitalization and spin-off from Xerox, Conduent's adjusted debt
balance will approximate $3.4 billion (including adjustments for
operating leases), resulting in LTM debt leverage of approximately
3.3x (Moody's adjusted) as of June 30, 2016. Moody's forecasts debt
leverage to improve to 3.1x by the end of 2017 as the company
implements strategic cost reduction initiatives to bolster
profitability margins and increase free cash flow from fairly
nominal levels in 2016, but uncertainty with respect to the timing
and effectiveness of these cost reductions add incremental risk to
the company's credit profile. However, these uncertainties are
partially offset by Conduent's scale and strong market position as
a provider of business process services to clients operating in the
healthcare industry and other private sector markets as well as
domestic and foreign governments. Additionally, the highly
recurring nature of the company's revenues as well as Conduent's
diversified and longstanding customer relationships and high client
retention rates provide strong top-line visibility that support its
fundamental credit profile.
The B2 rating for the senior unsecured notes reflects XBS' Ba3-PD
Probability of Default Rating ("PDR") and a Loss Given Default
("LGD") assessment of LGD5 and is two notches lower than the CFR
given the notes' junior ranking in the capital structure relative
to XBS' credit facility.
Conduent's SGL-2 speculative grade liquidity rating is supported by
a cash balance of approximately $400 million expected upon closing
of the spin-off in late 2016 as well as Moody's expectation that
the company will generate minimal free cash flow in 2016 and about
$200 million in 2017. Liquidity is expected to improve moderately
over the intermediate term as cost savings initiatives drive
improved free cash flow generation. Additionally, the company's
liquidity is bolstered by an undrawn $750 million revolving credit
facility due in 2021. The revolver and tranche A of the company's
term loan are subject to a financial maintenance covenant requiring
that Conduent's maximum net leverage ratio does not exceed 4.25x
with a step-down to 3.75x on December 31, 2018. Moody's expects the
company to remain well in compliance with this covenant over the
next 12-18 months.
The stable ratings outlook reflects Moody's projection for a low
single digit contraction in revenues in 2017 and modest revenue
growth in 2018. In 2017, Moody's expects weakening pricing trends
will continue to constrain sales growth prospects, while greater
management focus on improving the economics related to unfavorable
contracts should facilitate modest growth in 2018. Cost reduction
efforts stemming from the company's sizable operational
restructuring program should bolster profitability margins and
drive mid-single digit improvement in EBITDA during 2017.
What Could Change the Rating - Up
-- Conduent demonstrates organic sales growth while
concurrently realizing meaningful improvements in
profitability and free cash flow generation and 2) Conduent
maintains conservative financial policies.
What Could Change the Rating - Down
-- Conduent's sales continue to decline and efforts to drive
profitability and free cash flow expansion stall or 2)
Conduent adopts more aggressive financial policies.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Conduent is provider of business process services to clients
operating in the healthcare industry and other private sector
markets as well as domestic and foreign governments. The company is
in the process of a separation from its corporate parent Xerox
though a spin-off transaction, expected to be completed by the end
of 2016.
YRC WORLDWIDE: Presented at Stephens Fall Conference
----------------------------------------------------
YRC Worldwide Inc. presented at the Stephens Fall Investment
Conference in New York on Nov. 9, 2016. A copy of the materials
used at the conference is available for free at:
https://is.gd/V4w6Gq
About YRC Worldwide
Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ:
YRCW) -- http://www.yrcw.com/-- is a holding company that offers
its customers a wide range of transportation services. These
services include global, national and regional transportation as
well as logistics.
YRC Worldwide reported net income attributable to common
shareholders of $700,000 on $4.83 billion of operating revenue for
the year ended Dec. 31, 2015, compared to a net loss attributable
to common shareholders of $85.8 million on $5.06 billion of
operating revenue for the year ended Dec. 31, 2014.
As of Sept. 30, 2016, the Company had $1.87 billion in total
assets, $2.21 billion in total liabilities and a total
shareholders' deficit of $342.2 million.
* * *
As reported by the TCR on Feb. 18, 2014, Moody's Investors Service
had upgraded the Corporate Family Rating for YRC Worldwide from
'Caa3' to 'B3', following the successful closing of its
refinancing transactions.
In the Aug. 11, 2015, TCR report, Standard & Poor's Ratings
Services said that it has raised its corporate credit rating on
Overland, Kan.-based less-than-truckload (LTL) trucking company
YRC Worldwide to 'B-' from 'CCC+'.
"The upgrade reflects YRC's earnings growth and improved liquidity
position, along with our belief that gradual improvement in the
company's operating performance will result in credit measures
that are commensurate with the rating," said Standard & Poor's
credit analyst Michael Durand.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2016. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***