/raid1/www/Hosts/bankrupt/TCR_Public/170329.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, March 29, 2017, Vol. 21, No. 87
Headlines
1231 41 STREET: Voluntary Chapter 11 Case Summary
17545 LASSEN: Seeks to Hire Levene Neale as Legal Counsel
186-14 WILLIAMSON: Taps Alan C. Stein as Legal Counsel
2319 PENMAR: Seeks to Hire Bardavid as Legal Counsel
362 ROUTE 108: Eastern Bank Tries tp Block Disclosures Approval
ABC DISPOSAL: Plan Objection Deadline on April 19
AEROSPACE HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
AEROSPACE HOLDINGS: Will Sell Aero-Structures Business to Harlow
AGESONG GENESIS: Needs 3rd-Party Trustee, PCO 1st Report Says
AGS ENTERPRISES: Ch. 7 Conversion, Trustee Sought Amid Losses
ALIXPARTNERS LLP: Term Loan Upsize No Impact on Moody's B2 CFR
ALLEGHENY TECHNOLOGIES: S&P Affirms B CCR, Alters Outlook to Stable
ATKINS SPECIALTY: Taps Wayne Long & Co. as Accountant
ATLANTIC POWER: Moody's Affirms B1 Corporate Family Rating
AXIOS LOGISTICS: Receiver Wants to Protect Pallets in the U.S.
AZURE MIDSTREAM: Files Chapter 11 Plan of Liquidation
BAILEY HILL: Maltz to Auction 2 Properties on April 20
BANCA TURCO: Liquidator Will Pursue Claims vs Ex-Director in the US
BEBE STORES: Hires Advisers as Retail Shakeout Continues
BERTELLI REALTY: Unsecureds Will Be Paid in Full in 4 Installments
BIODATA MEDICAL: Wants Exclusivity Extended Through September
CARETRUST REIT: S&P Affirms 'B+' CCR & Alters Outlook to Positive
CEDAR FAIR: Moody's Rates New 1st Lien Credit Facility 'Ba1'
CEDAR FAIR: S&P Affirms 'BB' Corporate Credit Rating
CHC GROUP: Concludes Financial Restructuring, Exits Chapter 11
CHOBANI LLC: Moody's Rates New $530MM 8-Year Unsecured Notes Caa2
CLINE GRAIN: MetLife Seeks Trustee Appointment, Ch. 11 Dismissal
COMPREHENSIVE VASCULAR: Says PCO Appointment Not Necessary
CONTANDA LLC: Moody's Affirms B2 Senior Secured Rating
CROFCHICK INC: PNC Bank Tries to Block Plan & Disclosures OK
CSD REALTY CORP: Taps Mark Cohen as Legal Counsel
CYCLONE POWER: Late 10-K Shows $1.47 Million Net Loss in 2015
CYCLONE POWER: Late 10-Q Shows $261K Net Loss in Q1 of 2016
CYCLONE POWER: Late 10-Q Shows $362K Net Loss in Q3 of 2016
CYCLONE POWER: Late Form 10-Q Shows $277K Net Loss in Q2 of 2016
DANA CORP: Moody's Affirms Ba3 Corp. Family Rating
DAVID'S BRIDAL: S&P Lowers CCR to 'CCC+' on Capital Structure
DIGICERT HOLDINGS: Moody's Rates New $260MM 1st Lien Term Loan B2
DIGICERT INC: S&P Assigns 'B-' Rating on New $260MM 1st Lien Loan
DON GREEN FARMS: Seeks to Hire J.J. Luckey as Accountant
DPL INC: S&P Lowers ICR to 'BB-' on Coal Plant Retirements
DRUMM CORP: S&P Lowers CCR to 'B-', On CreditWatch Negative
DUN & BRADSTREET: S&P Lowers CCR to 'BB+' on Slow Turnaround
EARL DURON: Nordwicks Buying Rockport Property for $60K
ENERGY FUTURE: Settlement of Noteholders' Makewhole Claims Okayed
ETON PARK: To Shut Down as $3 Trillion Fund Industry Faces Turmoil
EXGEN TEXAS: Moody's Lowers Rating on Term Loan B Due 2021 to Caa3
EXTERRAN ENERGY: Moody's Rates Proposed $300MM Sr. Unsec. Notes B3
EXTERRAN ENERGY: S&P Assigns 'BB-' CCR, Outlook Stable
FOREST PARK FORT WORTH: May 1 Plan Confirmation Hearing Set
FR DIXIE: S&P Lowers CCR to 'CCC+' on Elevated Debt Leverage
GABEL LEASE: Unsecureds to Be Paid in Full Over Five Years
GRAND TRAVERSE: S&P Affirms BB- Rating on 2007 Public School Bonds
GRAY TELEVISION: $85MM Loan Add-on No Impact on Moody's Ba2 Rating
GREENSPRINGS HEALTHCARE: April 25 Receivership Claims Bar Date Set
HEALTHIER CHOICES: Posts $12.3 Million Net Income for 2016
HEALTHIER CHOICES: Takes Steps to Enter Marijuana Industry in Fla.
HEBREW HEALTH: Asks Court to Extend Exclusivity through May 30
IFM US: Fitch Affirms BB+ LT Issuer Default Rating, Outlook Stable
III EXPLORATION: Kimmel Buying City Ranch Property for $30K
INTERNATIONAL AUTOMOTIVE: S&P Affirms 'B' CCR; Outlook Negative
J TIMOTHY SHELNUT: Ex-Wife OK'd to Pursue Claims in Superior Court
J. COPELLO INTERNATIONAL: Taps McGuigan & McGuigan as Accountant
JAMES A. CRIPE: BF Adventures Buying 26 Mobile Homes for $500K
JEVIC TRANSPORTATION: S.C. Rejects Structured Bankruptcy Dismissals
JOLIVETTE HAULING: Voluntary Chapter 11 Case Summary
KIMBALL HILL: F&D Ordered to Dismiss Claims vs TG
MCELRATH LEGAL: Proposes Private Sale of 39 Filing Cabinets
MELI INVESTMENTS: Seeks to Hire Leiderman as Legal Counsel
METRO NEWSPAPER: Case Summary & 20 Largest Unsecured Creditors
MICRON TECHNOLOGY: S&P Affirms 'BB' CCR; Outlook Stable
MILLENNIUM SUPER: 786 May Purchase Leased Property, Court Says
N&B INDUSTRIES: S&P Affirms 'B' CCR on Proposed LBO
NEPHROS INC: Incurs $3.03 Million Net Loss in 2016
NETWORK CREATIVE: Selling Assets Valued at $25K Below
NEW ENGLAND HEALTH: Chapter 7 Trustee to Destroy Patient Records
NEWFIELD EXPLORATION: S&P Affirms 'BB+' CCR; Outlook Stable
NEXXLINX CORP: Seeks More Time to Confirm Plan Through April 30
NORTH PHILADELPHIA: Sale of Former Hospital Property for $8.1M OK'd
NOUVELLE FOODS: Case Summary & 30 Largest Unsecured Creditors
OCEAN RIG UDW: Chapter 15 Case Summary
ONTARIO CENTURY: Marc Realty Buying Chicago Condo Unit for $884K
PENN TREATY: Deadline to File Claims Set for August 31
PICO HOLDINGS: Bloggers Displeased by Unnecessary UCP Incentives
PIZZA PALZ: Seeks to Hire Walding as Legal Counsel
PRADO MANAGEMENT: Voluntary Chapter 11 Case Summary
PRICO ENTERPRISES: Disclosures OK'd; Plan Hearing on May 2
RELATIVITY FASHION: Netflix Must Pay $818K in Atty Fees, Expenses
REX ENERGY: D. E. Shaw Ceases to be 5% Shareholder
ROBINSON PREMIUM: Unsecureds to Get Full Payment at 6% in 48 Months
ROCKY MOUNTAIN: Reports $2.41 Million Net Loss in Second Quarter
RSP PERMIAN: S&P Affirms 'B+' CCR & 'B+' Sr. Unsec. Debt Rating
SAEXPLORATION HOLDINGS: FMR LLC Reports 8.4% Stake as of Feb. 13
SCIO DIAMOND: Incurs $355K Net Loss in Third Quarter
SEMLER SCIENTIFIC: Glenhill Advisors et al. Have 9.7% Stake
SIAD INC: Seeks to Hire Sender Wasserman as Legal Counsel
SKYLINE CORP: Venator Capital Reports 6.8% Stake as of Dec. 31
SPICE MODERN: Trustee Asks Court to Liquidate Steakhouse
STEVE'S FROZEN: Case Summary & 20 Largest Unsecured Creditors
STONEMOR PARTNERS: S&P Lowers CCR to 'CCC+' on Delayed 10-K Filing
TOWERSTREAM CORP: Melody Ceases as 5% Shareholder
TOWERSTREAM CORP: Stetson, et al., Have 9.9% Stake as of Dec. 31
ULTRA PETROLEUM: Fight over OpCo Funded Debt Claims Underway
ULTRA PETROLEUM: Hedging Transactions Announced
ULTRA PETROLEUM: Whitebox Reports 5.1% Equity Stake
UNITI GROUP: Moody's Affirms B2 Corporate Family Rating
UTILITY ONE: S&P Assigns 'B' CCR & Rates $550MM Facility 'B'
VANGUARD NATURAL: Unit to Sell O&G Assets in Glasscock for $78M
VANGUARD NATURAL: Wants DIP Loan Hearing Pushed Back to April 13
VILLAGE AT LAKERIDGE: S.C. to Hear Insider Disputes Appeals Process
VITARGO GLOBAL: Taps Kang Spanos & Moos as Litigation Counsel
WAGLE LLC: Unsecureds to Get 2% Under Amended Plan
WALNUT CREEK: Committee Taps Baird Holm as Legal Counsel
WEATHERFORD INT'L: Clearbridge Has 11.45% Stake as of Dec. 31
WEATHERFORD INTERNATIONAL: Will Form OneStim Joint Venture
WINDSTREAM SERVICES: Moody's Alters Outlook Neg & Affirms B1 CFR
WPX ENERGY: S&P Raises Rating on Sr. Unsecured Notes to 'B+'
*********
1231 41 STREET: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: 1231 41 Street, LLC
4415 13th Avenue
Brooklyn, NY 11219
Case No.: 17-41407
About the Debtor: The Debtor is a limited liability company
based in Brooklyn, New York.
Chapter 11 Petition Date: March 27, 2017
Court: United States Bankruptcy Court
Eastern District of New York (Brooklyn)
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Solomon Rosengarten, Esq.
1704 Avenue M
Brooklyn, NY 11230-5423
Tel: (718) 627-4460
Fax: (718) 627-4456
E-mail: VOKMA@aol.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/nysb17-41407.pdf
17545 LASSEN: Seeks to Hire Levene Neale as Legal Counsel
---------------------------------------------------------
17545 Lassen St. LLC seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire Levene, Neale, Bender, Yoo & Brill LLP
to give legal advice regarding its duties under the Bankruptcy
Code, help obtain a bankruptcy loan, prepare a plan of
reorganization, and provide other legal services.
David Neale, Esq., and Jeffrey Kwong, Esq., the attorneys expected
to represent the Debtor, will charge $595 per hour and $375 per
hour, respectively.
Mr. Neale disclosed in a court filing that his firm is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
David L. Neale, Esq.
Jeffrey S. Kwong, Esq.
Levene, Neale, Bender, Yoo & Brill LLP
10250 Constellation Boulevard, Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
Email: dln@lnbyb.com
Email: jsk@lnbyb.com
About 17545 Lassen St. LLC
Based in Beverly Hills, California, 17545 Lassen St. LLC sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Calif. Case No. 17-11734) on February 13, 2017. The petition was
signed by Chris Brown, managing member.
The case was initially assigned to Judge Sheri Bluebond. On
February 17, 2017, Judge Bluebond ordered the reassignment of the
case to Judge Victoria Kaufman. The case was assigned a new case
number: 17-10445.
At the time of the filing, the Debtor estimated its assets and
debts at $1 million to $10 million.
186-14 WILLIAMSON: Taps Alan C. Stein as Legal Counsel
------------------------------------------------------
186-14 Williamson Ave., Corp. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to hire legal
counsel in connection with its Chapter 11 case.
The Debtor proposes to hire the Law Office of Alan C. Stein, P.C.
to give legal advice regarding its duties under the Bankruptcy
Code, assist in the preparation of a bankruptcy plan, and provide
other legal services. The firm will charge an hourly rate of $400
for partners.
Alan Stein, Esq., disclosed in a court filing that his firm is
"disinterested" as defined in section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Alan C. Stein, Esq.
Law Office of Alan C. Stein, P.C.
7600 Jericho Turnpike, Suite 308
Woodbury, N.Y. 11797
Phone: (516) 932-1800
Fax: 516-932-0220
Email: alan@alanstein.net
About 186-14 Williamson Ave.
186-14 Williamson Ave., Corp. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 17-70603) on February
2, 2017.
On February 3, 2017, the Debtor re-filed its petition (Bankr.
E.D.N.Y. Case No. 17-40503). The petition was signed by Robin
Eshaghpour, president. A copy of the petition is available for
free at https://is.gd/dzfpHH
The case is assigned to Judge Nancy Hershey Lord.
At the time of the filing, the Debtor estimated assets of less than
$500,000 and liabilities of less than $50,000.
2319 PENMAR: Seeks to Hire Bardavid as Legal Counsel
----------------------------------------------------
2319 Penmar, LLC seeks approval from the U.S. Bankruptcy Court for
the Central District of California to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire the Law Offices of Moises S. Bardavid
to give legal advice regarding its duties under the Bankruptcy
Code, examine claims filed in its case, prepare a bankruptcy plan,
and provide other legal services.
Moses Bardavid, Esq., will charge an hourly rate of $350 for his
services.
Mr. Bardavid disclosed in a court filing that he and the employees
of his firm do not hold any interest adverse to creditors or
shareholders of the Debtor.
The firm can be reached through:
Moises S. Bardavid, Esq.
Law Offices of Moises S. Bardavid
16133 Ventura Blvd 7th Fl
Encino, CA 91436
Tel: 818-377-7454
Fax: 818-377-7455
Email: mbardavid@hotmail.com
About 2319 Penmar LLC
Based in Las Vegas, Nevada, 2319 Penmar, LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case
No. 17-11464) on February 7, 2017. The petition was signed by
Josef Guttmann, managing member. The case is assigned to Judge
Robert N. Kwan.
At the time of the filing, the Debtor estimated its assets and
debts at $1 million to $10 million.
362 ROUTE 108: Eastern Bank Tries tp Block Disclosures Approval
---------------------------------------------------------------
Eastern Bank filed with the U.S. Bankruptcy Court for the District
of New Hampshire an objection to 362 Route 108 Realty Trust's
disclosure statement dated Feb. 27, 2017.
Eastern Bank, successor in interest to Centrix Bank, is the holder
of the first mortgage dated June 25, 2008 on the Debtor’s
property located at 362 Route 108, Somersworth, New Hampshire
03878.
As of Jan. 23, 2017, the balance due to Eastern Bank was
$405,133.23. The Debtor has not made any adequate protection
payments to Eastern Bank.
Eastern Bank complains that the Debtor's disclosure statement fails
to provide sufficient information to allow Eastern Bank to make an
informed decision. The bank adds that although the Disclosure
Statement provides a proposed plan for payments, the Debtor's
monthly operating reports do not support the ability to make any of
the payments proposed.
The Objection is available at:
http://bankrupt.com/misc/nhb16-11405-75.pdf
As reported by the Troubled Company Reporter on March 7, 2017, the
Debtor filed with the Court a disclosure statement referring to the
Debtor's plan of reorganization, which proposed that holders of
Class 7 General Unsecured Claims get an amount equal to a pro rata
share of the lesser of 10% of the proofs of claim in this class --
$35,577 -- or the total amount of allowed claims in this class --
$4,593.31 -- payable over five years. The holders will get monthly
payments of $145.83 for the first year, and $51.12 per month for
the next four years. The first payment is expected within 60 days
of the Effective Date, which is June 1, 2017.
Eastern Bank is represented by:
KALIL & LaCOUNT
Jillian E. Colby, Esq.
681 Wallis Road
Rye, NH 03870
Tel: (603) 964-1414
E-mail: jillian.ryelaw@comcast.net
About 362 Route 108 Realty Trust
362 Route 108 Realty Trust sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D.N.H. Case No. 16-11405) on Oct. 3,
2016. The petition was signed by G. Brandt Atkins, trustee.
At the time of the filing, the Debtor estimated assets and
liabilities of less than $1 million.
The Debtor hired William S. Gannon, PLLC, as legal counsel.
ABC DISPOSAL: Plan Objection Deadline on April 19
-------------------------------------------------
The Hon. Joan N. Feeney of the U.S. Bankruptcy Court for the
District of Massachusetts has approved ABC Disposal Services, Inc.,
et al.'s second amended disclosure statement with respect to the
Debtors' second amended joint plan of reorganization.
A hearing to consider the confirmation of the Plan is set for April
26, 2017, at 11:00 a.m. Eastern Time. Objections to the plan
confirmation must be filed by 4:30 p.m. Eastern Time, on April 19,
2017. Responses to the objection must be filed by 4:30 p.m.
Eastern Time on April 24, 2017.
All persons and entities will deliver their ballots by 5:00 p.m.
Eastern Time on April 19, 2017.
About ABC Disposal Service
ABC Disposal Service, Inc., provides full service waste hauling,
disposal and recycling services, and sells, rents and services
compaction and baling equipment to a variety of industrial,
institutional, commercial and construction related customers.
New Bedford Waste owns and operates municipal solid waste and
construction and demolition debris transfer stations in New
Bedford, Sandwich, and Rochester, Massachusetts which transfer and
process residential, commercial, industrial, and institutional and
construction wastes under approved state and local government
permits and licenses.
Solid Waste Services, Inc., is a Massachusetts corporation
organized in 1999 to hold an ownership interest in New Bedford
Waste.
Shawmut Associates and A&L Enterprises are Massachusetts limited
liability companies which own and lease real estate to ABC and New
Bedford Waste in connection with their operations.
ZERO Waste Solutions, LLC, is a Massachusetts limited liability
company formed in 2013 for the purposes of developing and
operating an advanced mixed waste recycling facility located on
Shawmut Associates' Rochester property to process and market
recyclable material and then turn unrecyclable material into
compact, clean burning, high yield fuel briquettes which have a
variety of industrial uses.
The principals of the Debtors are Laurinda F. Camara and her
children Susan M. Sebastiao, Kenneth J. Camara, Steven A. Camara,
and Michael A. Camara. Each of the Principals owns 20% of the
stock in ABC. Each of Susan M. Sebastiao, Kenneth J. Camara,
Steven A. Camara and Michael A. Camara own a 12.5% interest in New
Bedford Waste and a 25% interest in Shawmut Associates, A&L
Enterprises, and Solid Waste Services. Solid Waste Services owns
the remaining 50% of the membership interests in New Bedford
Waste. New Bedford Waste owns 80% of the membership interests in
ZERO Waste.
ABC Disposal Service, Inc., New Bedford Waste Services, LLC, Solid
Waste Services, Inc., Shawmut Associates, LLC, A&L Enterprises,
LLC, and ZERO Waste Solutions, LLC each filed a voluntary petition
under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case Nos.
16-11787 to 16-11792, respectively) on May 11, 2016. The
petitions were signed by Michael A. Camara as vice president/CEO.
Judge Joan N. Feeney presides over the cases.
Harold B. Murphy, Esq., Christopher M. Condon, Esq., and Michael
K. O'Neil, Esq., at Murphy & King Professional Corporation serves
as the Debtors' counsel. Argus Management Corp. is the Debtors'
financial advisor. The Debtors engaged Source Capital Group, Inc.
as investment banker, and CliftonLarsonAllen, LLP as accountant.
The Official Committee of Unsecured Creditors tapped Jager Smith
P.C. as counsel.
AEROSPACE HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
Aerospace Holdings, Inc. 17-10635
366 Madison Avenue, 9th Floor
New York, NY 10017
Website: http://www.groupaero.com
Valley Tool & Manufacturing, Inc. 17-10636
NC Dynamics Incorporated 17-10637
NCDI Mexico, Inc. 17-10638
GroupAero Seattle, Inc. 17-10639
Business Description: The Debtors design and manufacture a wide
variety of products, including machined
parts, fabricated components, and tooling
for the commercial aerospace and defense
markets. Collectively, the Debtors
encompass a full spectrum of precision
manufacturing capabilities for any scale,
from individual prototypes to large lot
production.
Chapter 11 Petition Date: March 27, 2017
Court: United States Bankruptcy Court
District of Delaware (Delaware)
Debtors' Counsel: Dennis A. Meloro, Esq.
GREENBERG TRAURIG, LLP
The Nemours Building
1007 North Orange Street, Suite 1200
Wilmington, Delaware 19801
Tel: (302) 661-7000
Fax: (302) 661-7360
Email: melorod@gtlaw.com
- and -
Nancy A. Mitchell, Esq.
Matthew L. Hinker, Esq.
Sara A. Hoffman, Esq.
GREENBERG TRAURIG, LLP
The MetLife Building
200 Park Avenue
New York, NY 10166
Tel: (212) 801-9200
Fax: (212) 801-6400
Email: mitchelln@gtlaw.com
hinkerm@gtlaw.com
hoffmans@gtlaw.com
Debtors'
Financial
Advisors: Matt D. Sedigh, Esq.
Michael N. Flynn, Esq.
CONWAY MACKENZIE
333 South Hope Street, Suite 3625
Los Angeles, California 90071
Tel: 213-416-6200
Fax: 213-416-6201
Email: msedigh@conwaymackenzie.com
mflynn@conwaymackenzie.com
Debtors'
Claims &
Noticing
Agent: BMC GROUP, INC.
Estimated Assets: $10 million to $50 million
Estimated Debts: $50 million to $100 million
The petition was signed by Matthew Sedigh, chief restructuring
officer.
List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Corinthian Capital Group LLC Sponsor Note $17,500,580
366 Madison Avenue, 9th Floor
New York, NY 10017
Tel: 212-920-2300
Brookside Mezzanine Partners Subordinated Debt $17,056,648
One Stamford Forum
201 Tresser Boulevard, Suite 330
Stamford, CT 06901
Corey Sclar
Tel: 203-595-4530
Patriot Capital Subordinated Debt $5,087,327
509 South Exeter Street
Suite 210
Baltimore, MD 21202
Tel: 443-573-3010
Catalus Capital Management Subordinated Debt $5,087,327
57 W. 57th Street, 4th Floor
New York, NY 10019
Tel: 203-816-0752
New England Manufacturing Group, Seller Note $2,835,000
Inc.
22 Prindle Hill Road
Orange, CT 06477
Dennis Murray
Corinthian Capital Group LLC Management Fees $2,337,039
366 Madison Avenue, 9th Floor and Expense
New York, NY 10017 Reimbursement
Tel: 212-920-2300
AMI Metals Inc. Trade Debt $1,367,545
P.O. Box 952474
St. Louis, MO 63195
Tel: 800-727-1903
The Bazz Family Trust & Seller Note $1,209,417
The Scott Family Trust
1509 Beachcomber Dr.
Seal Beach, CA 90740
Boeing Co. c/o TMX Aero Trade Debt $1,045,689
P.O. Box 3707
Seattle, WA 98124
Tel: 800-926-2600
Service Steel Co. Trade Debt $290,845
7925 Crossway Drive
Pico Rivera, CA 90660
Tel: 800-624-8073
Shepherd and Safari, LLC Rent $232,474
Thyssenkrupp Aerospace/TKX Trade Debt $223,406
Email:
Kathie.Sadloski@Thyssenkrupp.com
Golenbock Eiseman Assor Bell & Professional $167,639
Peskoe LLP Fees
Coast Plating, Inc. Trade Debt $135,441
HM Dunn Company, Inc. Trade Debt $108,400
Castle Metals Aerospace Trade Debt $106,774
PricewaterhouseCoopers LLP Professional $101,994
Fees
Timet Trade Debt $101,377
American Handforge, LLC Trade Debt $62,520
Email: Kjohnson@Handforge.com
Cygnus, Inc. Trade Debt $56,853
Email: Info@Cygnusaero.com
AEROSPACE HOLDINGS: Will Sell Aero-Structures Business to Harlow
----------------------------------------------------------------
Aerospace Holdings, Inc., Valley Tool & Manufacturing, Inc., NC
Dynamics Incorporated, NCDI Mexico, Inc., and GroupAero Seattle,
Inc., suppliers and manufacturers of products for the commercial
aerospace and defense markets, sought bankruptcy protection on
March 27, 2017, with the goal of selling substantially all of their
assets to Harlow Aerostructures LLC, as the stalking horse bidder,
and securing an effective and efficient wind down of their
estates.
The bankruptcy filing comes seven years after Aerospace started the
business of designing and manufacturing a wide variety of products,
including machined parts, fabricated components, and tooling for
the commercial aerospace and defense markets. Aerospace was formed
in 2010 to build an aero-structures business by acquiring small and
separate fabrication and machining enterprises and to integrate
those companies under one corporate umbrella to facilitate branding
strategies, to promote cross-selling opportunities and to leverage
customer relationships across platform.
Chief Restructuring Officer Matthew D. Sedigh, a director at Conway
MacKenzie, Inc., said, "These chapter 11 cases are the result of
the Debtors' liquidity constraints caused by the unexpected
cancellation of two long term projects and reduced defense
spending, which significantly impacted the Debtors' balance sheet,
impaired their ability to grow through acquisition, hampered their
ability to improve existing customer relationships, caused
significant turnover in management and limited the Debtors'
opportunities to successfully refinance or restructure their
indebtedness."
According to court papers, the Debtors have outstanding debt
obligations in the aggregate principal amount of approximately
$92.8 million as of the Petition Date, consisting primarily of (a)
approximately $38.6 million of secured debt under a prepetition
credit agreement with Comerica Bank acting as administrative agent
(b) approximately $27.1 million under a subordinated credit
facility, (c) approximately $21.6 million under various
subordinated promissory notes and (d) approximately $5.5 million
owed to venders, landlords and other unsecured creditors.
Due to the impending maturity of the Prepetition Credit Agreement
and certain operational issues, the Debtors retained G2 Capital
Advisors, LLC, in July 2016, to, among other things, review and
analyze their business and financial projections and advise and
assist them in evaluating potential financing or sale transactions.
With the assistance of Comerica Bank, the Debtors engaged in an
extensive prepetition marketing process which resulted in Harlow
acquiring Comerica Bank's interest in the Prepetition Obligations
to effect a transaction through the Chapter 11 cases. Harlow, a
competitor of the Debtors, has also agreed to provide the Debtors
with a $1.534 million debtor-in-possession financing, subject to
the court's approval.
"The Debtors have an urgent and immediate need to obtain
postpetition financing because they do not have sufficient funds on
hand or generated from their business to fund operations," said Mr.
Sedigh. "Without the financing proposed by the motion, the Debtors
will not have the funds necessary to continue their operations or
conduct a reasonable sales process."
The Debtors intend to seek court approval of bidding procedures to
govern the sale of their assets to Harlow or another higher
bidder.
Business Acquisitions
Aerospace's first acquisition was Stadco Inc., a company founded in
1941. Due to the cancellation of the Lockheed Martin F-22 fighter
jet and the Airbus A380 projects, and the resulting impact on
Stadco's operations and balance sheet, Stadco caused a significant
drain on management, negatively impacted Aerospace's balance sheet,
constrained liquidity, hampered Aerospace's ability to identify
other potential growth opportunities and caused significant
turnover of key employees. As a result, Aerospace divested Stadco
in 2014 at a significant loss.
Shortly after acquiring Stadco, Aerospace acquired Valley. In
2014, as Aerospace was divesting Stadco, Valley's key customer was
acquired by a global security and aerospace company, which resulted
in fewer orders during that acquisition process. Approximately 90%
of Valley's business is derived from that customer and is closely
related to demand for military rotorcraft. As a result, the
reductions in military spending from 2014 to 2016 negatively
impacted Valley's growth.
Aerospace acquired NCDI in the first quarter of 2012. While NCDI
maintains a strong reputation and relationship with its customers,
the issues caused by the cancellation of the Stadco programs
negatively impacted NCDI's ability to effectively operate. Since
2014, NCDI has experienced a significant decline in revenue due in
large part to the cancellation of the C-5 program.
In late 2013, Aerospace acquired GroupAero Seattle, to establish a
presence in Washington and further develop a relationship with a
global aerospace company and leading manufacturer of commercial
jetliners and defense, space and security systems. Despite
Aerospace's efforts, that relationship failed to materialize. As a
result, GroupAero Seattle's assets were sold at auction in 2014.
About Aerospace
Aerospace, a Delaware corporation, owns 100% of the equity
interests in (i) Valley, a Delaware corporation, (ii) NCDI, a
California corporation and (iii) GroupAero Seattle, a Washington
corporation. NCDI owns 100% of the equity interests in NCDI
Mexico, Inc., a Delaware corporation. The equity interests of
Aerospace are held by several private equity investors,
institutional investors, members of management and other
individuals.
Valley operates a facility in Orange, Connecticut and primarily
focuses on the machining and fabrication of sheet metal parts, such
as doorframes, dashboards and hinges, as well as small-machined
components for military and commercial rotary wing aircrafts.
Valley also possesses tube-bending capabilities (up to 40 mm in
diameter) that are used in the manufacturing of nozzles and
tubing.
NCDI was founded in 1979 and engineers, manufactures and assembles
sophisticated metallic machined structures for the commercial
aerospace and defense industry. Aerospace acquired NCDI in March
2012 and at the time of acquisition, NCDI's net sales exceeded $24
million and its EBITDA exceeded $5.3 million. NCDI specializes in
monolithic components and assemblies manufactured from "hard
metals" such as titanium, stainless steel alloys and high strength
aluminum. NCDI offers multi-axis machining along with precision
component assembly. NCDI operates its business from a 118,000
square foot facility in Long Beach, California. NCDI has been a
key supplier for a number of commercial aerospace platforms,
including the Airbus A320, Boeing 737, Boeing 787, Bombardier
C-Series and Mitsubishi Regional Jets as well as a key supplier to
several defense platforms including the F-16, F-18, F-35 JSF, C-5
Galaxy and Apache AH-64.
As of the Petition Date, the Debtors' operations employ in excess
of 220 people.
AGESONG GENESIS: Needs 3rd-Party Trustee, PCO 1st Report Says
-------------------------------------------------------------
Joseph Rodrigues, the State Long-Term Care Ombudsman appointed for
AgeSong Genesis, LLC, files a First Report on March 23, 2017.
The PCO reported that during the Resident Council meeting, there
were some complaints about the food. Some residents are diabetic
and some meals have food with many carbohydrates.
Moreover, the PCO noted that the three lower management persons
generally provide the day to day operations of the facility. They
are in the middle of the Debtor's management and the individual
controlling finances. There does not appear to be an active
organizational chart demonstrating who is responsible for the
administration of the facility. According to the Ombudsman, it is
essential to identify the lines of command and supervision to
resolve resident issues.
The Report further provides that it is the opinion of the local
Ombudsman Program as well as the State Long-Term Care Ombudsman
that the conflict between the person who controls the money, the
debt, and the management company AgeSong, needs an ongoing third
party trustee. During these few weeks, the Ombudsman Program
Coordinator conducted interviews of staff, residents, some family
members, and AgeSong representatives. The PCO noted that hopefully,
some entity can chart a path into the future, where all issues as
well as effective leadership of this facility can survive and
thrive.
About AgeSong Genesis
Nader Shabahangi, AgeSong Living, LLC, a California limited
liability company, and Eldership III, LLC, a California limited
liability company filed an involuntary Chapter 11 case (Bankr. Case
No. 17-30175 HLB) against AgeSong Genesis, LLC, on February 24,
2017. The Petitioners are represented by Randy Michelson, Esq., at
Michelson Law Group, in San Francisco, California.
AGS ENTERPRISES: Ch. 7 Conversion, Trustee Sought Amid Losses
-------------------------------------------------------------
University Loft Company asks the U.S. Bankruptcy Court for the
Northern District of Texas to convert the Chapter 11 bankruptcy
cases of AGS Enterprises, Inc., and KLN Steel Products Company,
LLC, to cases under Chapter 7 or to appoint a Chapter 11 Trustee.
Based on the Motion, the case should be converted to Chapter 7
because the Debtors have:
(i) wound up their operations as previously planned and
communicated to the Court and all creditors;
(ii) no longer have the equipment or employees to continue
business operations; and
(iii) not presented a plan and cannot articulate a viable plan
of reorganization which has any likelihood of being confirmed.
Further, the conversion is appropriate to avoid substantial and
continuing loss and diminution of the estates that will occur by
keeping the Debtors' management in control, given that they have
objectives that are in substantial conflict with the fiduciary
duties owed by the Debtors in Possession.
Based on the Motion, University Loft also submits that cause exists
under Section 1104 of the Bankruptcy Code to appoint a Chapter 11
trustee to prevent further losses caused by self-interested
dealings and decision-making of the Debtors' principals.
The Movant is represented by:
Brian T. Cumings, Esq.
GRAVES DOUGHERTY HEARON & MOODY, P.C.
401 Congress Ave., Suite 2200
Austin, TX 78701
Tel.: 512.480.5626
Fax: 512.536.9926
Email: bcumings@gdhm.com
About AGS Enterprises
AGS Enterprises, Inc., and KLN Steel Products Company, LLC, each
filed a chapter 11 petition (Bankr. N.D. Tex. Case Nos. 16-34322
and 16-34323, respectively) on November 2, 2016. The petitions were
signed by Kelly O'Donnell, president. The Debtors are represented
by Frank Jennings Wright, Esq., at Coats Rose, P.C. The case is
assigned to Judge Stacey G. Jernigan. The Debtors both estimated
assets and liabilities at $1 million to $10 million at the time of
the filing.
ALIXPARTNERS LLP: Term Loan Upsize No Impact on Moody's B2 CFR
--------------------------------------------------------------
Moody's Investors Service said that AlixPartners, LLP's proposed
term loan upsize is credit negative, but has no impact on the
company's ratings, including its B2 Corporate Family Rating (CFR),
B2-PD Probability of Default Rating (PDR), B2 rating on its first
lien senior secured term loan and revolving credit facility, or
stable outlook.
AlixPartners, LLP is a global provider of a broad range of
consulting services, including Enterprise Improvement, Financial
Advisory, Digital, Leadership & Organizational Effectiveness, and
Turnaround & Restructuring. The company operates 25 offices located
in the U.S., Europe, and Asia. Since January 2017, AlixPartners'
owners include the company's founder Jay Alix, a group of investors
composed of CDPQ, PSP Investments, and Investcorp, and its existing
Managing Directors. In 2016, AlixPartners generated over $1 billion
in revenues.
ALLEGHENY TECHNOLOGIES: S&P Affirms B CCR, Alters Outlook to Stable
-------------------------------------------------------------------
S&P Global Ratings said it revised its rating outlook on
Pittsburgh-based Allegheny Technologies Inc. to stable from
negative and affirmed its 'B' corporate credit rating on the
company.
At the same time, S&P affirmed its 'B' issue-level rating on the
company's senior unsecured notes. The recovery rating on the
unsecured notes remains '3', indicating S&P's expectation for
meaningful (50% to 70%; rounded estimate: 55%) recovery in the
event of a payment default. S&P also affirmed its 'B+' issue-level
rating on the senior unsecured debt of ATI's subsidiary, Allegheny
Ludlum. The recovery rating on this debt remains '2', indicating
S&P's expectation for substantial (70% to 90%; rounded estimate:
85%) recovery in the event of a payment default.
"The stable outlook reflects our view that, over the next 12
months, Allegheny Technologies' credit quality will remain within
expectations of slightly improving operating and financial
performance," said S&P Global Ratings credit analyst William
Ferara. "We expect debt to EBITDA and EBITDA interest coverage of
about 7x and 2x, respectively, in 2017."
S&P could lower its rating over the next 12 months if the company's
business risk weakened due to deteriorating profitability or
competitive position or if S&P expected debt to EBITDA to be
sustained notably above 8x and EBITDA interest coverage below 1.5x
throughout 2017. This could occur if shipments to ATI's key
aerospace, energy, or other markets continue to weaken, competitive
pressures further erode prices and margins, or it does not achieve
targeted cost reductions. S&P could also lower the rating if the
company's liquidity profile were to fall to less than adequate from
adequate.
S&P could consider upgrading Allegheny Technologies over the next
12 months if operating performance increased such that adjusted
debt to EBITDA was sustained below 5x. S&P would expect this to be
driven by stainless steel prices and improved market conditions and
overall product demand.
ATKINS SPECIALTY: Taps Wayne Long & Co. as Accountant
-----------------------------------------------------
Atkins Specialty Services Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of California to hire an
accountant.
The Debtor proposes to hire Wayne Long & Co., CPA's to prepare its
tax returns and monthly operating reports, and provide other
accounting services related to its Chapter 11 case.
The hourly rates charged by the firm are:
CPA Manager $200
Staff Accountant $100 - $115
Staff/Clerical $75
Wayne Long does not hold or represent any interest adverse to the
Debtor's bankruptcy estate or any of its creditors, according to
court filings.
The firm can be reached through:
Wayne E. Long
1502 Mill Rock Way, Suite 200
Bakersfield, CA 93311
Tel: (661) 664-0909
Fax: (661) 664-0915
Email: WEL@welcpa.com
About Atkins Specialty Services
Atkins Specialty Services, Inc. sought protection under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 17-10337) on
January 31, 2017. The petition was signed by Jeffrey G. Atkins,
chief executive officer. At the time of the filing, the Debtor
estimated assets and liabilities of less than $500,000.
The case is assigned to Judge Fredrick E. Clement. The Debtor is
represented by Jacob L. Eaton, Esq., at Klein, DeNatale, Goldner,
Cooper Rosenlieb & Kimball, LLP.
ATLANTIC POWER: Moody's Affirms B1 Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service affirmed the Ba3 rating of APLP Holdings
Limited Partnership's (APLP Holdings) $640 million senior secured
term due 2023 and $200 million senior secured revolving credit
facility. Moody's also affirmed APLP Holdings parent Atlantic Power
Corporation's (Atlantic Power) B1 corporate family rating (CFR).
The outlook on Atlantic Power and APLP Holdings' ratings remains
positive because Moody's expects the company's credit metrics to
improve with additional cost and debt reductions over the next
twelve to eighteen months.
Downgrades:
Issuer: Atlantic Power Corporation
-- Speculative Grade Liquidity Rating, Downgraded to SGL-2 from
SGL-1
Outlook Actions:
Issuer: APLP Holdings Limited Partnership
-- Outlook, Remains Positive
Issuer: Atlantic Power Corporation
-- Outlook, Remains Positive
Affirmations:
Issuer: APLP Holdings Limited Partnership
-- Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD3)
Issuer: Atlantic Power Corporation
-- Probability of Default Rating, Affirmed B1-PD
-- Corporate Family Rating, Affirmed B1
RATINGS RATIONALE
"Atlantic Power's cash flow leverage ratio improved in 2016 but was
weaker than expected mainly due to a lower hydro production", said
Toby Shea, Vice President -- Senior Credit Officer "we see further
improvements going forward based on a continuous debt reduction."
Atlantic Power is a relatively small independent power producer
with about 1,500 MW of net generation capacity. The company
generates stable, contracted cash flows from 23 projects located
across the US and Canada. Most of the projects have been in
existence for more than a decade and their aggregate contracted
cash flow is expected to decline somewhat over the next few years
as the initial terms of their power purchase agreements expire,
with a more substantial drop off starting in 2023.
The company is highly leveraged against its cash flows with a CFO
Pre-WC (cash flow from operation pre-working capital) to debt
standing at 7.1% in 2016 (including the convertible debt) and
projected to be above 10% in 2017 and 2018 due to a combination of
higher cash flows and a lower debt balance. APLP Holding's $640
million term loan, which is rated one notch above the CFR at Ba3,
benefits from a security interest in most of the projects and a 50%
cash flow sweep that should pay off most of the term loan balance
over the next seven years.
Liquidity
Atlantic Power has good liquidity to meet the needs of its
operations and debt service obligations. The company is expected to
generate more than $100 million of annual cash flow, on average
over the next three years, available for the cash sweep under APLP
Holdings' term loan. Atlantic Power has access to a $200 million
revolving credit facility and intend to maintain a minimum
unrestricted cash balance of about $70 million. The revolving
credit facility, which has the same collateral and security as the
$640 million term loan, will expire in 2021. Atlantic Power is
currently using $81.5 million of the credit facility to support
letters of credit and a 6 month debt service reserve fund in favor
of the $640 million term loan. Atlantic Power does not have any
major debt maturities until 2019, when about $103 million of
convertible debt will be due at the holding company.
Rating Outlook
The positive outlook reflects the reliability and consistency of
the contracted cash flows from its portfolio of 23 power projects,
improving credit metrics, coupled with an expected declining debt
balance due to debt amortization at APLP Holdings as well as at
some of the projects.
Factors that Could Lead to an Upgrade
Upward rating pressure could result from a CFO pre-W/C to debt
ratio maintained at around the 10% or above range on a sustained
basis with the continuation of its credit-friendly financial
policy.
Factors that Could Lead to a Downgrade
Atlantic Power could be downgraded if cash flow deteriorates and
the CFO pre-W/C to debt ratio is sustained at mid-single digit or
lower or the company finds itself in a cash flow deficit position
after paying its debt service.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in October
2014.
APLP Holdings is an independent power producer and a subsidiary of
Atlantic Power Corporation, headquartered in Dedham, Massachusetts.
AXIOS LOGISTICS: Receiver Wants to Protect Pallets in the U.S.
--------------------------------------------------------------
A. Farber & Partners Inc., the court-appointed receiver and duly
authorized foreign representative for Axios Logistics Solutions
Inc., Axios Mobile Assets Inc., Axios Mobile Assets, Inc., and
Axios Mobile Assets Corp., filed a petition under Chapter 15 of the
Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware seeking to enjoin parties from seizing or enforcing any
claim or lien against any property of the Debtors located in the
United States. Contemporaneously with the filing of the petition,
the Receiver also sought recognition in the United States of
insolvency proceedings currently pending in Toronto, Ontario,
Canada.
"A stay of proceedings against the Debtors' assets located in the
United States, as well as the provisional application of sections
362 and 365 of the Bankruptcy Code, is crucial to preserve key
contracts and prevent any creditors of the Debtors from pursuing
remedies and taking other action that may have a cascading and
devastating effect and result in significant erosion in the value
of the Debtors, assets to the detriment of all stakeholders," said
Peter Crawley, vice president of A. Farber & Partners Inc.
"Accordingly, application of section 362 and 365 of the Bankruptcy
Code is necessary so that contract counterparties continue to be
obligated pursuant to the Debtors' contracts, if any, to preserve
and maintain the Debtors' pallets in working condition until such
time as the Receiver can retrieve them."
Prior to shutting down their business, the Debtors were suppliers
of shipping pallets primarily to the perishable food industry. The
Debtors produce and supply to producers in the perishable food
industry an "environmentally friendly" structural and trackable
technology enabled mobile asset platform (or pallet) made from
composite material as an alternative to traditional shipping
options, such as wooden pallets. The Axios pallets are equipped
with advanced radio frequency identification tags, barcodes, and
additional sensor capabilities, making them readily trackable at
any point in time. The pallets are manufactured using a
proprietary compound through a proprietary manufacturing process,
and the intellectual property in connection therewith is owned by
Debtor Axios Corp.
Mr. Crawley said that due to a recent inability to raise additional
capital, Axios began experiencing significant financial
difficulties. Further, Axios struggled with high personnel
turnover. Earlier this year, key management departed the company
including John Albright who resigned as director and Michael Cooke
who resigned as chief financial officer.
According to the September 2016 financial statements, Axios had a
net loss of approximately $10,835,000 in the nine-month period
ended Sept. 30, 2016. In previous fiscal years, Axios had net
losses (before taxes) of approximately $3,100,000 and $9,108,000 in
the 2014 and 2015, respectively. As of Sept. 30, 2016, the Debtors
had assets of $5,579,000 and liabilities of $17,285,000.
Last month, Axios began to shut down its operation due to a
substantial exhaustion of its cash and credit resources. Axios has
since terminated all of its employees other than its chief
executive officer.
Export Development Canada, the government of Canada's export credit
agency, is Axios Canada's senior secured lender. As of Feb. 9,
2017, the Debtors owed EDC $3,026,383 under the 2015 EDC Loan
Agreement and $2,014,071 under the 2016 EDC Loan Agreement.
As of Sept. 30, 2016, the Debtors have approximately $3,523,000 of
outstanding accounts payable and other accrued liabilities, all of
which are now past due.
Receivership Order
The Ontario Superior Court of Justice granted EDC's application for
a receiver of the Debtors' assets. EDC brought the application for
the Receiver Order when it became aware that pallets owned by the
Debtors, and located at various third party retail centers
throughout the United States, were at risk of being disposed of by
the owners of the retail centers, if not promptly retrieved.
The Receiver Order provided for a "Receiver's Charge" which secured
fees and disbursement of the receiver and the fees and
disbursements of the Receiver's counsel against the collateral of
the Debtors, including the collateral located in the United
States.
The Canadian Court also authorized the Receiver to borrow up to
$300,000 from EDC, which is the amount the Receiver estimates will
be needed to cover fees and disbursements during the initial
investigatory phase of the receivership. The initial investigatory
phase will be focused on retrieving and securing the pallets,
determining creditor constituencies of the Debtors, and determining
ownership of the pallets. In this regard, the Canadian Court
granted a "Receiver's Borrowing Charge" against the assets of the
Debtors, including assets located in the United States, to secure
the Receiver's obligation to repay any borrowed amounts, up to a
maximum principal amount of $300,000 pending a further order of the
Canadian Court.
Axios Corp is duly incorporated under the law of Ontario. Its
registered office is the office of its legal counsel Fogler,
Rubinoff LLP, in Toronto, Ontario, and its principal place of
business is a leased office located at 30 Topflight Drive, Unit 7,
Mississauga, Ontario.
Before its recent cessation of business operations, the Axios Group
had the following distribution system for the pallets: (i) pallet
components were manufactured at a factory owned by a third party in
Buffalo, New York; (ii) the pallets were then assembled at a
factory owned by a third party in Guelph, Ontario; (iii) after
manufacture, the pallets were shipped to sanitization facilities in
Ohio and Pennsylvania; (iv) following sanitization, the pallets
were then shipped on trucks and trailers to customers
(predominantly egg producers and suppliers), who then used the
pallets to transport their product to regional retail distribution
centers; and (v) finally, once a customer's product was delivered
to the applicable distribution center, the pallets were retrieved
from the distribution center and returned to a sanitization
facility for washing before their next deployment.
In addition, the Debtors leased a warehouse in Elmira, New York for
unused pallets, and pallet pooling locations in Detroit, Michigan
and Ithaca, New York. The Detroit location employed three
individuals and the Ithaca location had seven employees. In order
to facilitate the rental of pallets and related transportation
services within the United States, Axios Canada sold its pallets to
Axios Logistics, which was then able to rent to customers in the
United States.
As of the Petition Date, the Debtors have approximately 80,000
pallets in circulation. The vast majority of the pallets are at 30
retail distribution locations in the United States owned by
Wal-Mart Stores, Inc.
AZURE MIDSTREAM: Files Chapter 11 Plan of Liquidation
-----------------------------------------------------
Azure Midstream Partners, L.P., et al., filed with the U.S.
Bankruptcy Court for the Southern District of Texas a disclosure
statement dated March 20, 2017, for the Debtors' joint plan of
liquidation.
On the Effective Date, each holder of an allowed Class 4 General
Unsecured Claim will receive its pro rata share of the general
unsecured creditor distribution, payable on the later of the
Effective Date and the date on which the General Unsecured Claim
becomes an Allowed General Unsecured Claim, or as soon as
reasonably practical thereafter. To the extent any available cash
from any source of funds of the Debtors, including, but not limited
to, the Debtors' business operations, the sale or other disposition
of any of the Debtors' assets (including sale proceeds and de
minimis asset sale proceeds), or from any other source, remains
after making the distributions contemplated by the Plan (other than
distributions to Classes 6 or 7, but including the payment in full
of allowed lender claims), the available cash will first be
distributed to the holders of General Unsecured Claims in an amount
not to exceed the allowed amount of General Unsecured Claims. The
General Unsecured Creditors Distribution and any distributions of
available cash will be in full and final satisfaction of the
General Unsecured Claims. This class is impaired by the Plan.
Azure will serve as plan administrator for each of the Debtors.
On or before the Effective Date, Azure Midstream Partners GP, LLC,
will form a subsidiary limited liability company to serve as the
Azure Custodian. The Azure Custodian's single and sole purpose
will be to hold the Azure Plan Interest on and after the Effective
Date for the benefit of the holders of the former Existing Azure
Interests consistent with their former relative priority and
economic entitlements.
On the Effective Date:
(a) all of the Debtor Affiliates will be merged into Azure and
the Plan Administrator may dissolve the Debtors and complete the
winding up of the Debtor Affiliates without the necessity for any
other or further actions to be taken by or on behalf of such
dissolving Debtor or its shareholders or any payments to be made in
connection therewith, other than the filing of a certificate of
dissolution with the appropriate governmental authorities;
(b) all assets of the Debtor Affiliates will be transferred to
Azure, and all claims filed or scheduled in the Debtor Affiliates'
cases will be deemed to have been filed in the Chapter 11 case of
Azure;
(c) Azure may change its name to Azure Midstream Liquidating,
LP, and the Chapter 11 Case of Azure may be renamed accordingly;
and
(d) the Chapter 11 Cases of the Debtor Affiliates will be
closed.
In the discretion of the Plan Administrator, after the Effective
Date, Azure may engage in any other transaction in furtherance of
the Plan. Any transactions may be effective as of the Effective
Date pursuant to the plan confirmation court order without any
further action by the shareholders, members, general or limited
partners, or directors of any of the Debtors.
The Disclosure Statement is available at:
http://bankrupt.com/misc/txsb17-30461-179.pdf
About Azure Midstream Partners
Azure Midstream Partners, LP, is a publicly traded Delaware master
limited partnership that was formed by NuDevco Partners, LLC, and
its affiliates to develop, own, operate and acquire midstream
energy assets.
Azure Midstream and 11 of its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
17-30461) on Jan. 30, 2017. The petitions were signed by I.J.
Berthelot, II, president. The cases are assigned to Judge David R
Jones.
Azure disclosed $375.53 million in assets and $179.38 million in
liabilities as of as of Sept. 30, 2016.
Vinson & Elkins LLP is serving as corporate counsel to the Debtors;
Evercore Group LLC is serving as as financial advisor; Alvarez &
Marsal North America LLC is serving as restructuring advisor; and
Kurtzman Carson Consultants LLC is serving as claims, noticing &
balloting agent.
BAILEY HILL: Maltz to Auction 2 Properties on April 20
------------------------------------------------------
Maltz Auctions will hold an auction for two prime developments
sites owned by Bailey Hill Management LLC on April 20, 2017, at
11:00 a.m., at Murtha Cullina, CityPlace I, 185 Asylum Street, 29th
Floor, Hartford, Connecticut. The properties up for sale are:
a) 388,000 sq. ft. approved mixed-used subdivision, 56.3 acres
with 212 residence units plus commercial.
b) 30 lot/12.55 acre proposed subdivision
All bids for the properties must be file no later than 4:00 p.m. on
April 18, 2017.
In addition, a 6% buyer's premium will be added to the successful
bidder's high bid to determine the contract price to be paid by the
successful bidder. A 2% commission will be paid to any properly
licensed buyer broker who registers a successful buyer in
accordance with the buyer broker guidelines.
Maltz Auctions can be reached at:
MALTZ AUCTIONS
39 Windsor Place
Central Islip, NY 11722
Tel: 516.349.7022
Fax: 516.349.0105
Email: info@MaltzAuctions.com
About Bailey Hill Management
Bailey Hill Management, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. D. Conn. Case No. 16-20005) on Jan. 4, 2016. The Hon. Ann
M. Nevins presides over the case. Groob Ressler & Mulqueen, P.C.,
serves as counsel to the Debtor. In its petition, the Debtor
estimated $1 million to $10 million in both assets and liabilities.
The petition was signed by Edward R. Eramian, managing member of
the Debtor.
BANCA TURCO: Liquidator Will Pursue Claims vs Ex-Director in the US
-------------------------------------------------------------------
Ms. Marina Cornelia Saita, the duly authorized representative of
Fondul de Garantare a Depozitelor Bancare, formerly the Fondul de
Garantare a Depozitelor in Sistemul Bancar, filed a Chapter 15
petition in the U.S. Bankruptcy Court for the Southern District of
Florida seeking recognition in the United States of a bankruptcy
proceeding of Banca Turco Romana SA pending before the Bucharest
Court - VII Commercial Chamber in Bucharest, Romania.
Ms. Saita needs the Bankruptcy Court's assistance to further her
investigation of potential claims against Kamuran Cortuk -- a
former director of the Debtor -- and related corporate entities.
Ms. Saita said she has a factual basis to believe that Cortuk or
his affiliates have assets, to which the Debtor has claims, in the
United States.
On May 16, 2002, the National Bank of Romania filed a petition to
place the Debtor into bankruptcy. The bankruptcy arose as a result
of the fraudulent lending practices of the Debtor's officers
between 1998 and 2002. On July 3, 2002, the Romanian Court ordered
the compulsory liquidation of the Debtor and appointed FGDB as the
judicial liquidator.
As of Nov. 7, 2005, Ms. Saita has been the authorized
representative of FGDB. In that capacity, she is charged with,
among others, the duties to inventory and preserve the Debtor's
assets, evaluate creditor's claims, pursue legal actions to recover
preferential or fraudulent transfers, and to investigate the
conduct of the bank and its officers.
Ms. Saita disclosed she has made, to date, statutory compensation
payments to over 2,700 individual customers of the Debtor and
distributions of over $12 million to domestic and foreign
creditors. The total of unpaid creditor claims is, at present,
approximately $17 million. There are a total of 704 valid creditor
claims that remain unpaid.
"Through extensive investigation, the Foreign Representative has
identified that the majority of the Debtor's shareholders were
Turkish corporate entities ultimately owned and controlled by Mr.
Kamuran Cortuk -- a former director of the Debtor," said Arnoldo B.
Lacayo, Esq., at Astigarraga Davis Mullins & Grossman, P.A., one of
the Foreign Representative's attorneys. "Cortuk, through a complex
structure of corporate entities, including corporate vehicles
domiciled in foreign financial havens, utilized the Debtor to
further numerous fraudulent transfers and schemes for his own
illicit enrichment," he added.
The Foreign Representative has pursued various proceedings against
or involving Cortuk and related corporate entities. More
specifically, the Foreign Representative has participated in
Romanian criminal proceedings commenced in furtherance of
convicting Cortuk for the fraudulent acts. In addition, the
Foreign Representative has participated in and commenced foreign
criminal and civil proceedings in Switzerland to pursue the assets
of Cortuk.
The Debtor's center of main interests is Romania. All of the
Debtor's offices and employees were located in Romania. The
Debtor's banking operations were chiefly in Romania, at the height
of which the Debtor had over 50,000 banking customers, over 650
employees, and an approximate 4.4% share of the Romanian banking
market. The National Bank of Romania granted the Debtor its
operative banking license.
BEBE STORES: Hires Advisers as Retail Shakeout Continues
--------------------------------------------------------
Lillian Rizzo, writing for The Wall Street Journal Pro Bankruptcy,
reported that Bebe Stores Inc. is the latest in a long line of
mall-based retailers hiring restructuring advisers in an bid to
survive a shakeout in an industry that is rapidly being transformed
by online shopping.
According to the report, the Brisbane, Calif.-based store said that
it hired B. Riley & Co. as financial advisers to help it explore
strategic alternatives, according to a news release.
Unlike a number of its struggling peers, people close to the matter
don't foresee a chapter 11 filing for Bebe -- at least not in the
near future, the report related.
Bebe has also engaged a real estate adviser "to assist with options
related to its lease holdings," the report further related.
"There is no assurance that this process will result in any
specific transaction," and it won't provide further updates until a
specific transaction has been approved, the report said, citing the
release.
For retailers Sports Authority Holdings Inc., Aéropostale Inc.,
Limited Stores Co. and Wet Seal Inc., among many others, the key
problems have been hefty debt loads and a large brick-and-mortar
presence, the report added.
With no secured debt, the publicly traded Bebe, known for its night
club dresses and accessories, has only one of those problems, the
report pointed out.
Instead the retailer intends to focus on its real estate issues by
likely reducing its footprint substantially, or altogether, the
people added, the report further pointed out.
The Journal pointed out that the retail industry is undergoing a
profound shift thanks to the growth of online shopping led by
retail juggernaut Amazon.com Inc. At the same time, mall traffic
has slowed dramatically as consumer behavior changes, forcing many
to discount heavily, hurting profit margins, the report further
pointed out.
Bebe is no exception and its revenue has been on a steady decline
in recent quarters, the report said, citing filings with the
Securities and Exchange Commission. The company's second quarter
net sales fell nearly 17% to $101.9 million, the report said.
BERTELLI REALTY: Unsecureds Will Be Paid in Full in 4 Installments
------------------------------------------------------------------
Bertelli Realty Group, Inc., filed with the U.S. Bankruptcy Court
for the District of Massachusetts a disclosure statement dated
March 20, 2017, referring to the Debtor's plan of reorganization.
The Plan provides for the distribution of all funds to its
creditors, primarily to Raymond C. Green, Inc., as a holder of a
mortgage, to be paid $300,000, and a dividend to unsecured
creditors.
Class Three consists of all unsecured claims. All allowed
unsecured claims will be paid in full, in four equal payments, the
first due within 30 days of the effective date of the court order
confirming the Debtor's Plan or within 10 days of a final court
order determining the amount owed on the claim. The last three
payments will be paid annually, on the anniversary of the
confirmation of the plan of reorganization. This claim is
impaired.
The Main Street Building, upon the effective date of confirmation,
will be transferred to CB Realty, LLC. CB Associates, Inc., will
remain responsible for all payments under the Plan.
The Disclosure Statement is available at:
http://bankrupt.com/misc/mab16-31081-38.pdf
About Bertelli Realty Group
Bertelli Realty Group, Inc., is a corporation whose principal asset
is at 935 - 979 Main Street, Springfield, Massachusetts 01301. The
Main Street Building is a building in downtown Springfield, and
approximately one block from the MGM project being built in
Springfield.
The Debtor filed a Chapter 11 petition (Bankr. D. Mass. Case No.
16-31081) on Dec. 21, 2016. The petition was signed by Brent J.
Bertelli, president. The Debtor is represented by Louis S. Robin,
Esq., at the Law Offices of Louis S. Robin. The Debtor disclosed
total assets at $1.80 million and total liabilities at $585,088.
BIODATA MEDICAL: Wants Exclusivity Extended Through September
-------------------------------------------------------------
BioData Medical Laboratories, Inc. asks the U.S. Bankruptcy Court
for the Central District of California to extend the time by which
it must file a Chapter 11 plan and the time by which it must
solicit acceptances for that plan through and including September
1, 2017, and November 1, 2017, respectively.
The Debtor relates that it has to determine the amount of secured
debt and prosecute adversary cases relating to the usurious loans
-- which the alleged lender contends it bought the Debtor's
receivables, thus creating another potential issue on the ownership
of the receivables. Given these circumstances, the Debtor asserts,
it is not possible to resolve all the issued necessary for
formation of a confirmation plan in the current exclusive period.
The Debtor avers that cause exists for the exclusivity extension
sought. The Debtor cites that (1) its case is complex, (2) the
current Exclusivity Motion is its first extension request, (3) the
case has not been pending a long time, relative to its size and
complexity, (4) it is not proceeding in bad faith, (5) it has
improved it operating results and is paying its current expenses,
(6) it has shown a reasonable prospect for filing a plan, (7) it is
making satisfactory progress in negotiating with key creditors, (8)
it is not seeking an extension of exclusivity in order to pressure
creditors, and (9) it is not depriving the creditors of material or
relevant information.
About BioData Medical
BioData Medical Laboratories, Inc., based in Montclair, California,
owns and operates a medical testing business that provides medical
services for individuals. The Debtor filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 16-20446) on Nov. 28, 2016. The Hon.
Mark S. Wallace presides over the case.
In its petition, the Debtor estimated $2.23 million in assets and
$5.90 million in liabilities. The petition was signed by Henry
Wallach, CEO.
The Law Offices of Robert M. Yaspan serves as general bankruptcy
counsel to the Debtor; Darweesh, Lewis, Kelly & Von Dohlen, LLP as
special counsel; and Muhammad Khilji and his firm CFO & Tax
Solutions Inc. as accountant and business consultant.
No trustee or committee has been appointed in the case.
CARETRUST REIT: S&P Affirms 'B+' CCR & Alters Outlook to Positive
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on CareTrust REIT Inc. to
positive from stable. At the same time, S&P affirmed its 'B+'
corporate credit rating and 'BB-' issue-level rating on the
company's senior unsecured notes, with the recovery rating
remaining '2'.
"The revised outlook reflects CareTrust's improved credit metrics
following approximately $200 million of equity issuance in 2016
with an additional $48.7 million raised through the company's
At-The-Market (ATM) program through Feb. 28, 2017. Our positive
outlook also reflects the continued improvement in diversification
away from top-tenant Ensign (now 49% of revenues) and relatively
stable operating performance of CareTrust's tenants in a
challenging environment for skilled nursing facility (SNF)
operators," said credit analyst Michael Souers.
The positive outlook on CareTrust reflects S&P's expectation for
steady cash flow generation, supported by triple-net leased
healthcare properties with strong rent coverage and lease tenors.
S&P also expects the company to pursue acquisitions in a
leverage-neutral manner to maintain conservative credit metrics,
given the ongoing reimbursement challenges facing SNF operators.
S&P could raise the rating if the company maintains debt to EBITDA
around 5x and demonstrates commitment to a conservative financial
policy, which could prompt a favorable revision to S&P's financial
risk profile score. S&P would also consider raising the rating by
one notch if the company diversifies its tenant base and greatly
increases its scale in a leverage-neutral manner, while maintaining
adequate covenant cushion and liquidity.
S&P would consider revising the outlook back to stable if the
company encounters tenant stress within its small, concentrated
portfolio, or if CareTrust pursues debt-financed acquisitions that
result in trailing-12-month debt to EBITDA reverting back above
5.5x.
CEDAR FAIR: Moody's Rates New 1st Lien Credit Facility 'Ba1'
------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Cedar Fair,
L.P.'s (Cedar Fair) proposed 1st lien credit facility (consisting
of a $275 million revolver and $650 million term loan B). The
revolver will have $275 million in US$ capacity with $15 million of
the total issued by subsidiary, Canada's Wonderland Company. The
Ba3 Corporate Family Rating (CFR) and all other debt ratings are
unchanged as is the stable outlook.
Cedar Fair plans to use the proceeds to refinance its 1st lien term
loan and pay transaction related expenses as well as general
corporate purposes. Moody's anticipates the company will issue
additional unsecured debt in the near term. The proposed offering
increases debt by $47 million but extends the maturity date of its
revolver to 2022 and the term loan B to 2024. The ratings on the
existing credit facility will be withdrawn after repayment.
Issuer: Cedar Fair, L.P.
-- $260 million revolver due 2022, assigned a Ba1 (LGD2)
-- $650 million term loan B due 2024, assigned a Ba1 (LGD2)
-- Corporate Family Rating, Unchanged at Ba3
Outlook, Unchanged at stable
Issuer: Canada's Wonderland Company
-- $15 million revolver due 2022, assigned a Ba1 (LGD2)
RATINGS RATIONALE
Cedar Fair's Ba3 CFR reflects good operating cash flow, strong
EBITDA margins generated from its portfolio of regional amusement
parks, moderate leverage, MLP distribution payout, and exposure to
discretionary consumer spending. Operations and substantial
attendance (25.1 million in 2016) are supported by experienced park
management teams and high entry barriers. Sizable re-investment is
necessary to maintain a competitive service offering as attendance
is exposed to competition from a wide variety of other leisure and
entertainment activities as well as cyclical discretionary consumer
spending. Results are also highly seasonal and sensitive to weather
conditions. Debt-to- EBITDA leverage (3.5x pro-forma FY 2016
incorporating Moody's standard adjustments) is moderate, and has
declined from 5.2x in 2009. However, distributions to unit holders
under the MLP structure (the annual per unit distribution was
increased to $3.42 from $3.30 in Q4 2016) consume a sizable amount
of cash flow and leads to minimal free cash flow. Limited free cash
flow after distributions offset the low leverage level for the
current rating and restrain upward rating pressure.
Cedar Fair's SGL-2 speculative-grade liquidity rating reflects its
good liquidity position over the next 12 months supported by
material covenant headroom, revolver availability, a large cash
balance, and no near term debt maturities pro-forma for the
transaction. Moody's projects free cash flow in 2017 will be
minimal (after interest expense, approximately $55 to 65 million of
taxes, about $170 million of capital expenditures, and $190 million
in distributions). This factors in Cedar Fair's plan for slightly
higher capital spending in 2017, the increase in the distribution
rate in Q4 2016, and higher tax expense. The EBITDA to interest
coverage ratio pro-forma for the transaction is 5.3x as Q4 2016.
Cedar Fair is reliant on its $275 million revolver for seasonal
borrowings. The maximum amount the prior revolver was drawn in 2016
was $101 million which was up from $85 million in 2015 and 2014.
Moody's projects Cedar Fair will maintain over $150 million of
unused capacity under its revolvers around the peak in seasonal
cash needs in April and May. Moody's expects Cedar Fair will
maintain an EBITDA cushion of more than 30% based on Moody's
revenue/EBITDA growth assumptions. The maximum debt to EBITDA
covenant is 5.5x for the life of the loan. The new revolver will
not be subject to a clean down provision. Moody's anticipates the
company would reduce its distribution levels or cut growth capex in
a dire scenario that would provide additional liquidity.
The stable rating outlook incorporates Moody's expectations of low
to mid single digit revenue and EBITDA growth if weather conditions
are favorable and that Cedar Fair will maintain a good liquidity
position. Moody's also anticipates material distributions to equity
holders which will continue to rise over time.
The MLP structure and likelihood that management will direct cash
to unit holders over time constrains the ratings. A debt-to-EBITDA
ratio below 3.5x on a sustained basis could lead to an upgrade if
the board of directors demonstrated a commitment to maintaining
leverage below that level. An EBITDA to interest ratio above 4.5x
would also be required for an upgrade as would a positive free cash
flow to debt ratio after distributions of over 5%. Performance
ahead of plan by itself will not likely warrant positive rating
movement given expectations that a majority of excess cash flow
after capital expenditures and required debt service would benefit
unit holders through increased distributions, rather than
creditors.
Weak operating performance, debt funded equity repurchases,
distributions or acquisitions that led to leverage above 4.5x on an
ongoing basis would likely put negative pressure on the ratings. An
EBITDA to interest ratio below 2.5x or a deterioration in liquidity
due to increasing revolver usage (above seasonal draw downs), or
failure to maintain sufficient EBITDA cushion under financial
covenants would also lead to negative rating pressure.
Cedar Fair, L.P. (Cedar Fair), headquartered in Sandusky, Ohio, is
a publicly traded Delaware master limited partnership (MLP) formed
in 1987 that owns and operates eleven amusement parks, two outdoor
water parks, one indoor water park, and five hotels in the U.S. and
Canada. Properties include Cedar Point (OH), Kings Island (OH),
Knott's Berry Farm (CA), and Canada's Wonderland (Toronto). In June
2006, Cedar Fair acquired Paramount Parks, Inc. from CBS
Corporation for a purchase price of $1.24 billion. Cedar Fair's
revenue for its fiscal year ended December 2016 was approximately
$1.3 billion.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
CEDAR FAIR: S&P Affirms 'BB' Corporate Credit Rating
----------------------------------------------------
S&P Global Ratings assigned its 'BBB-' issue-level rating and '1'
recovery rating to Sandusky, Ohio-based theme park operator Cedar
Fair L.P.'s proposed $650 million first-lien term loan due 2024.
S&P also left unchanged its 'BBB-' issue-level rating on the
company's proposed upsized and extended $275 million revolving
credit facility due 2022. The '1' recovery rating on this debt is
unchanged and reflects S&P's expectation for very high (90%-100%;
rounded estimate: 95%) recovery in the event of a payment default.
It is our understanding that the company also intends to raise
additional unsecured debt, and S&P would not expect the 'BB-'
senior unsecured issue-level rating and '5' recovery rating to
change. Cedar Fair intends to use the proceeds from the proposed
term loan to repay its existing term loan due 2020, and to increase
cash balances by about $130 million to fund investment spending,
including the expansion of its resort and amateur sports offerings.
S&P anticipates that the company may issue additional unsecured
debt in the near future. The planned refinancing transactions will
also improve the company's debt maturity profile by extending its
maturities.
The 'BB' corporate credit rating and stable outlook are unchanged.
Although there is a moderate anticipated increase in total debt,
part of the proceeds will reside as cash on the balance sheet
(which S&P mostly net from debt balances) until Cedar Fair uses it
to support an increased level of investment spending in 2017 and
2018. As a result, under S&P's revised base-case forecast for
credit measures, total adjusted debt to EBITDA will likely increase
modestly in 2017 to the mid-3x area from the low-3x area.
RECOVERY ANALYSIS
Key Analytical Factors
-- S&P's recovery rating on Cedar Fair's secured credit
facility is '1' and S&P's recovery rating on the senior
unsecured debt is '5'. S&P's simulated default scenario
contemplates a payment default in 2022, reflecting a
substantial decline in cash flow as a result of a
significant loss of interest in and demand for the company's
amusement parks, a prolonged economic downturn, or multiple
years of unfavorable weather conditions at the parks.
-- S&P assumes a reorganization following the default, using an
emergence EBITDA multiple of 6.5x (consistent with the
multiples S&P uses for other theme park operators) to value
the company.
Simplified Waterfall
-- Emergence EBITDA: $190 million
-- Multiple: 6.5x
-- Gross recovery value: $1,238 million
-- Net recovery value for waterfall after admin. expenses (5%):
$1,176 million
-- Obligor/nonobligor valuation split: 100%/0%
-- Estimated secured debt: $883 million
-- Value available for first-lien claims: $1,176 million
-- Recovery expectation: 90%-100% (rounded estimate: 95%)
-- Estimated senior unsecured claims: $1,078 million
-- Value available for unsecured claims: $293 million
-- Recovery expectation: 10%-30% (rounded estimate: 25%)
Note: All debt amounts include six months of prepetition interest.
RATINGS LIST
Cedar Fair L.P.
Corporate Credit Rating BB/Stable/--
New Rating
Cedar Fair L.P.
$650 mil. first-lien term loan due 2024
Senior Secured BBB-
Recovery Rating 1 (95%)
Ratings Affirmed; Recovery Rating Unchanged
Cedar Fair L.P.
$275 revolver due 2022
Senior Secured BBB-
Recovery Rating 1 (95%)
CHC GROUP: Concludes Financial Restructuring, Exits Chapter 11
--------------------------------------------------------------
CHC Group on March 24, 2017, disclosed that it has successfully
concluded its financial restructuring and emerged from Chapter 11
as its court-confirmed Plan of Reorganization (the "Plan") went
into effect on March 24, 2017.
With the support of its creditors and stakeholders, CHC completed
its court-supervised financial restructuring process and emerged as
a significantly stronger, better-capitalized company. CHC's
competitive financial and operating structure will allow the
Company to capitalize on its legacy of innovation and invest in and
grow the business.
In conjunction with CHC's emergence from its court-supervised
financial restructuring process and pursuant to the Plan, the
Company received $300 million in new capital from its existing
creditors. The Plan also provides the Company 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.
Karl Fessenden, President and Chief Executive Officer:
"This is a pivotal moment in CHC's history. [Fri]day marks a new
beginning for CHC as we re-emerge as an economically robust and
agile competitor in the global helicopter services market. Although
proceeding with a restructuring is not a decision any company would
take lightly, we recognized that, if we approached this process in
the right way, we could transform CHC as well as change the shape
of the industry moving forward. This process has allowed us to
help secure CHC's long-term health, and create a streamlined,
highly competitive cost structure while establishing a fleet of
aircraft better aligned with our customers' businesses. All of
this constructed on the bedrock of CHC -- our commitment to
maintaining the highest global standards in the industry for
safety."
Mr. Fessenden continued, "We would like to again thank all of our
dedicated employees as well as our customers, suppliers and other
business partners for their support throughout this process. We
look forward to entering a new chapter for our company and being an
even better partner as we continue these relationships for many
years to come."
CHC's Plan and Disclosure Statement as well as other information
related to the restructuring proceedings are available at
www.kccllc.net/chc.
Customers, suppliers and other stakeholders can find additional
information about CHC's reorganization at
www.chcheli.com/restructuring.
About CHC Group Ltd.
Headquartered in Irving, Texas, CHC Group Ltd. (OTC PINK: HELIQ) 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.
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.
Angelo, Gordon & Co. and Cross Ocean Partners, which either hold
claims or manage funds and accounts that hold claims against the
Debtors' estates arising on account of the 9.25% Senior Secured
Notes due 2020 issued under the Indenture, dated as of Oct. 4,
2010, by and among CHC Helicopter S.A., as issuer, each of the
guarantors named therein, HSBC Corporate Trustee Company (UK)
Limited, as collateral agent, and the Bank of New York Mellon, as
indenture trustee, are represented by Jones Day.
CHOBANI LLC: Moody's Rates New $530MM 8-Year Unsecured Notes Caa2
-----------------------------------------------------------------
Moody's Investors Service, Inc. assigned a Caa2 rating to proposed
$530 million eight-year senior unsecured notes being offered today
by Chobani, LLC. Moody's affirmed all of the company's other
ratings, including the B3 Corporate Family Rating and B1 senior
secured first-lien debt ratings. The outlook is positive.
The proposed notes offering is the second part of a two-part
transaction launched last week to refinance the company's existing
13% (5% cash, 8% PIK) $643 million second-lien term loan. Proceeds
from the senior unsecured notes offering, together with proceeds
from the $175 million incremental first-lien term loan offered last
week, will be used to retire the second-lien term loan (including a
$26 million call premium) and to pay transaction fees.
Upon consummation, the refinancing transaction will cause financial
leverage to increase slightly. Including Moody's adjustments,
Chobani's debt/EBITDA will be approximate 7.8x at closing, compared
to 7.4x at year end 2016.
Rating actions:
Chobani Global Holdings, LLC:
Corporate Family Rating affirmed at B3;
Probably of Default Rating affirmed at B3-PD.
Chobani, LLC:
Proposed $530 million senior unsecured notes due 2025 assigned
Caa2 (LGD 5);
$150 million senior secured first-lien revolving credit facility
expiring 2021 affirmed at B1 (LGD 3);
$825 million (increased from $650 million) senior secured
first-lien term loan due 2023 affirmed at B1 (LGD 3).
The rating outlook is positive.
The new private 144A notes will be issued by Chobani LLC, the
primary operating company, and co-issued by a newly created
financing subsidiary Chobani Finance Corporation, Inc. The notes
will be guaranteed by parent holding company Chobani Global
Holdings Inc. and several operating subsidiaries that together with
Chobani LLC, represent 93% of consolidated sales.
RATINGS RATIONALE
The B3 Corporate Family Rating reflects Chobani's high financial
leverage, significant exposure to milk input price volatility, and
high concentration in the U.S. Greek yogurt category that recently
has experienced sales declines and increasing competitive activity.
The rating also reflects high execution risks related to Chobani's
rapid pace of new product expansion, which is a key component of
its plan for earnings growth and financial deleveraging. Heavy
growth capital expenditures has caused negative free cash flow in
the past; however, these investments should generate both earnings
growth and positive free cash flow in 2017 and thereafter. The
rating is supported by strong equity value of the Chobani brand
that holds a leading position in the $4.5 billion U.S. Greek yogurt
category.
The positive outlook mainly reflects anticipated benefits from the
contemplated retirement of the second-lien term loan. These
benefits include lower financing costs, elimination of PIK interest
that contributes to a growing debt balance and relief from
tightening financial covenants that currently allow little
operating cushion. Once completed, the refinancing will allow
Chobani to focus more on generating sustainable sales and earnings
growth. The positive outlook assumes that the proposed refinancing
is consummated successfully under contemplated terms.
Ratings could be upgraded if Chobani successfully grows earnings,
improves its liquidity profile, sustains debt/EBITDA below 7.0x and
is likely to generate sustained positive free cash flow.
Ratings could be downgraded if Chobani is unable to sustain a
steady pace of EBITDA growth that provides for continued
deleveraging or if the company is unable to generate positive free
cash flow.
Chobani Global Holdings, LLC, based in Norwich, New York, is a
manufacturer of Greek-style yogurt under the Chobani and Chobani
"Flip" brands. Domestic sales approximate $1 billion. The company's
ownership interests are held 79% by its CEO and founder Hamdi
Ulukaya and 20% by funds affiliated with private investor TPG
Capital. The Chobani Foundation holds about a 1% share.
The principal methodology used in these ratings was Global Packaged
Goods published in January 2017.
CLINE GRAIN: MetLife Seeks Trustee Appointment, Ch. 11 Dismissal
----------------------------------------------------------------
Metropolitan Life Insurance Company, the secured Creditor of
Michael and Kimberly Cline and Allen and Teresa Cline, asks the
U.S. Bankruptcy Court for the Southern District of Indiana to enter
an order appointing a Chapter 11 Trustee for Cline Grain, Inc., and
its four debtor-affiliates, or, in the alternative, dismissing the
Chapter 11 cases.
MetLife asserts that the appointment of a Chapter 11 Trustee is
appropriate because:
(a) The Debtors have only filed one operating report in each
case for the period of January 2017. In the operating reports, it
is demonstrated that as to the corporate Debtors, they are not
operating. As to the individual Debtors, they have no income and
are not engaged in any income producing activity including, but not
limited to, farming. They are operating at a loss and there is
negative cash flow. Additionally, these operating reports show that
they were dated in February 2017, yet inexplicably, they were not
filed until March 8, 2017.
(b) Despite not operating the farm in 2016, but having their
grown children do so, the individual Debtors have indicated their
inability to continue the farming operations themselves. Further,
since the filing of the bankruptcy case, the Debtors have taken no
action to enter into a new agreement with their grown children with
regard to the farming operations despite having testified at the
341 creditors meeting on February 2, 1017, that it was their
contemplated course of action.
(c) The Debtors have also failed to take any other action for the
sale or marketing of the farmland if it is not going to be actively
farmed by either the Debtors or their grown children pursuant to
the bankruptcy court approval.
Moreover, MetLife asserts that cause exits for the dismissal of the
Chapter 11 bankruptcy cases because (i) there is a substantial or
continuing loss or diminution of the bankruptcy estate and there is
an absence of a reasonable likelihood of rehabilitation; and (ii)
there is gross mismanagement of the bankruptcy estate.
MetLife is represented by:
Gary A. Barnes, Esq.
BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C.
1600 Monarch Plaza
3414 Peachtree Road, N.E.
Atlanta, GA 30326
Tel.: 404.221.6509
Fax: 404.228.9609 (Facsimile)
Email: Gbarnes@bakerdonelson.com
About Cline Grain
Cline Grain, Inc., and its four debtor-affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S. D. Ind. Case
Nos. 17-80004, 17-80005, 17-80006, 17-00013 and 17-00014) on
January 3, 2017. The petitions were signed by Allen Cline,
authorized representative.
The cases are assigned to Judge Jeffrey J. Graham.
At the time of the filing, the Debtors reported these assets and
liabilities:
Estimated Estimated
Assets Liabilities
---------- -----------
Cline Grain, Inc. $0-$50K $1M-$10M
Cline Transport, Inc. $500K-$1M $1M-$10M
New Winchester Properties $10M-$50M $1M-$10M
COMPREHENSIVE VASCULAR: Says PCO Appointment Not Necessary
----------------------------------------------------------
Comprehensive Vascular Surgery of Georgia, Inc., asks the U.S.
Bankruptcy Court for the Northern District of Georgia to enter an
order finding that the appointment of a Patient Care Ombudsman is
unnecessary in the Chapter 11 case.
The Debtor provides in-patient and out-patient vascular surgery
services and related diagnostic evaluation and therapeutic
services. The Debtor says it falls within the definition of a
"health care business." Moreover, the Debtor says the reason for
the bankruptcy filing was unrelated to the quality of care the
Debtor provided to its patients, and there is no evidence that the
Debtor's commercial dispute with its prior management company or
its bankruptcy filing have affected, or soon will affect, the
quality of the Debtor's services to its patients.
The Debtor adds that nothing precludes the Court from revisiting
the issue at a future date in the unlikely event that issues
develop with regard to patient care.
The Debtor is represented by:
Gary W. Marsh, Esq.
Bryan E. Bates, Esq.
303 Peachtree Street, Suite 5300
Atlanta, GA 30308
Tel.: 404-527-4073
Fax: 404-527-4198
Email: bryan.bates@dentons.com
About Comprehensive Vascular
Surgery of Georgia
Comprehensive Vascular Surgery of Georgia, Inc. filed a Chapter 11
petition (Bankr. N.D. Ga. Case No.: 17-53761) on March 1, 2017, and
is represented by Bryan E. Bates, Esq., in Atlanta, Georgia.
At the time of the filing, the Debtor had $1 million to $10 million
in estimated assets and $1 million to $10 million in estimated
liabilities.
The petition was signed by Albert T. Tagoe, M.D., CEO.
A copy of the Debtor's list of 15 unsecured creditors is available
for free at http://bankrupt.com/misc/ganb17-53761.pdf
CONTANDA LLC: Moody's Affirms B2 Senior Secured Rating
------------------------------------------------------
Moody's Investors Service affirmed the B2 senior secured rating of
Contanda LLC (formerly known as Westway Group, LLC). The rating
outlook is revised to stable from negative.
Contanda is a bulk liquid storage and ancillary services provider
headquartered in Houston, TX. It is a wholly-owned by an affiliate
of EQT Infrastructure II (EQT or Sponsor).
RATINGS RATIONALE
The B2 rating affirmation and change in outlook to stable considers
Moody's expectations of continued support from EQT to enable
Contanda to remain in compliance with its leverage covenant and to
fund the Project's expansion growth capital expenditures. The
rating affirmation also considers the fact that Contanda is
generating sufficient cash flow from its existing underlying
business activities to cover operating expenses, maintenance capex,
and meet debt service obligations before growth capital
expenditures. For example, according to Moody's calculations,
Contanda produced a debt service coverage ratio (DSCR) based on
scheduled debt service of about 2.0 times in 2016 and a funds from
operations to debt ratio (FFO/Debt) of 9.0%. These metrics fall
within the B to Ba range in the published Generic Project Finance
Methodology. However, EQT equity support is needed to fund growth
capital expenditures and to insure compliance with the leverage
covenant which, by its terms, becomes more restrictive over time.
Such Sponsor support, which is economically driven by the company's
growth capital expenditure requirements, is factored into today's
rating action.
Since EQT acquired Contanda in 2013, Moody's calculates that the
Sponsor has invested approximately $255 million in the business,
made up of an initial investment of $172 million, an approximate
$28 million equity contribution in 2016 to fund growth capital
expenditures, an additional $51.6 million, also in 2016, to fund
the acquisition of a steel port and terminalling business on the
Houston Ship Channel and an equity cure of $3.2 million in 2016 to
ensure compliance with the Project's leverage covenant.
Contanda's growth strategy is centered around transforming their
existing business platform into a larger provider of bulk storage
and terminalling services with expanded product lines and markets,
especially in hydrocarbons in the Houston area. To execute on that
strategy, EQT contributed about $80 million in equity to the
Contanda business in 2016 to fund expansion growth capital
expenditures (largely at its Houston terminal location) and to fund
the acquisition in November 2016 of Inbesa America, Inc. (Inbesa),
a private steel port in Houston. Inbesa offers bulk storage of
steel used in the refining business as well as steel
imports/exports through its dock on the Houston Ship Channel to
American and international markets, which enables Contanda to
expand its terminal footprint on the Houston Ship Channel. Moody's
understand that management plans to spend in excess of $300 million
over the next several years to increase Contanda's ability to store
new product categories, such as ethanol, petrochemicals, clean
products and hydrocarbons to meet demand from Houston's refining
industry. Much of this expansion is anticipated to be funded by EQT
through additional equity contributions. Despite the anticipated
Sponsor support, the Houston expansion represents a major change in
strategy for Contanda, and introduces related execution risk.
Moody's notes the company's continuing challenges associated with
the Grays Harbor expansion in the Pacific Northwest as a credit
concern with this strategy particularly since the Grays Harbor
delay is a contributing factor to Contanda's inability to meet
covenant compliance on their own. Counterbalancing this concern is
a new management team that has had success in extending existing
contractual arrangements and procuring incremental contracts across
their business platform, and in many cases, at higher rates.
Contanda's loan documentation contains two financial covenants: a
minimum debt service coverage ratio; and a maximum leverage ratio.
The latter is measured quarterly by the ratio of Net Debt to
adjusted EBITDA on a rolling 12 month basis. The Net Debt to
adjusted EBITDA covenant becomes more restrictive over time owing
to the expectation that debt would have been repaid rapidly from
the excess cash flow sweep generated by excess cash flow originally
forecasted from expansion growth capex projects, such as the Grays
Harbor expansion.
For the June 30, 2016 period, Contanda's breached the Net Debt to
adjusted EBITDA covenant, which became more restrictive, declining
to 5.25x. The sponsor subsequently cured the covenant breach by
contributing $3.2 million as an equity cure. The Net Debt to
adjusted EBITDA covenant has a further step down to 5.0x for the
December 31, 2016 and March 31, 2017 periods. Based upon Moody's
understanding, Contanda has remained in compliance for the
remainder of 2016 and is expected to remain in compliance through
the Q1 2017. However, the Net Debt to adjusted EBITDA covenant has
an additional step down to 4.75x, which increases the potential for
an additional covenant breach at quarter end June 30, 2017. Based
upon management forecasts, an equity cure of about $7.0 million is
likely to be needed to bring the calculation into compliance, and
Moody's ratings action incorporates Moody's beliefs that EQT will
address this covenant violation with another equity cure, if
needed. According to the loan documentation, the Sponsor can make
up to five equity cures over the life of the transaction, and no
more than two equity cures in any period of four consecutive
quarters, to help ensure compliance with the financial covenant. An
equity cure made in any given quarter can be carried forward and
added to adjusted EBITA for four subsequent quarters.
The B2 rating also considers Contanda's limited internal liquidity.
Moody's understand that the Project had about $13.7 million in
unrestricted cash at year end 2016 and $23 million available under
the $30 million revolving credit facility (most of the $7 million
usage relates to a 6-month debt service reserve letter of credit).
While year-end liquidity levels appears ample, the revolver is
likely to be utilized to fund growth capital expenditures and
expires in February 2018, which therefore limits Contanda's
liquidity position in Moody's views. The remainder of the growth
capital expenditures is expected to come from the Sponsor as there
are limitations on the ability of Contanda to incur incremental
indebtedness. Moody's understand that management may soon enter
into in discussions with the banking group about extending this
facility. Such an extension may also be part of a comprehensive
refinancing that will include the term loan, which is due in 2020
and currently has about $230 million outstanding, as well as debt
funding for Contanda's growth capital expenditures.
Outlook
The stable outlook considers the involvement and ownership of the
Project by EQT as well as Moody's expectations of continued support
from EQT to enable Contanda to remain in compliance with its
leverage covenant and to fund the Project's expansion growth
capital expenditures.
What Could Change the Rating - Up
In light of the affirmation and the stable outlook, limited
prospects exist for the rating to be upgraded, at least in the
short-term. The rating could come under upward pressure if the
Project shows sustained improvement in its credit metrics such that
Contanda can remain in compliance with its leverage covenant in its
own right on a sustained basis, without support from the Sponsor.
What Could Change the Rating - Down
Conversely, the rating could be revised downward if EQT fails to
address a potential covenant violation with an equity cure and/or
demonstrates in another way that it no longer supports this
Project, such as the failure to fund expansion growth capital
expenditures. The rating and/or outlook could also come under
pressure if the expansion projects experience significant cost
overruns and/or delays and liquidity is further stretched,
including the failure to extend the revolving credit facility
before its expiration in 2018.
The principal methodology used in these ratings was Generic Project
Finance Methodology published in December 2010.
Contanda LLC is a bulk liquid storage and ancillary services
provider headquartered in Houston, TX. Contanda has approximately 7
million barrels of storage capacity across 15 terminals in North
America. The business is focused on niche liquid products and
customized service offerings and has a leading market position in
the agricultural and chemical sectors. Contanta is owned by an
affiliate of EQT Infrastructure II, a EUR1.9 billion (approximately
$2.6 billion) infrastructure fund advised by EQT Partners, a
leading European based investment advisor. EQT Infrastructure
targets existing infrastructure companies located primarily in
Europe and North America.
CROFCHICK INC: PNC Bank Tries to Block Plan & Disclosures OK
------------------------------------------------------------
PNC Bank, National Association, filed with the U.S. Bankruptcy
Court for the Middle District of Pennsylvania an objection to
Crofchick, Inc., and Crofchick Realty, LLC's second amended
disclosure statement and second amended Chapter 11 plan of
reorganization dated Feb. 11, 2017.
As of Aug. 28, 2015, the total claim of PNC Bank against the
Debtors was $159,950.51. On May 10, 2016, PNC Bank filed a proof
of claim in the amount of $159,950.51 secured by all the assets of
the Debtors.
As reported by the Troubled Company Reporter on March 21, 2017, the
Debtors filed a second amended disclosure statement dated Feb. 8,
2017, referring to the Debtor's Chapter 11 plan, which proposes
that holders of Class 4 General Unsecured Claims, which are
unimpaired by the Plan, recover 100% in equal monthly installments
over a period of 60 months commencing no greater than 30 days
following the Effective Date of the Plan. The Debtor may choose to
pay general unsecured claims in a shorter period of time due to the
de minimis nature of the claims.
The Debtors propose to pay the claim of PNC Bank in full by making
yearly payments of $41,400 in monthly payments ranging from $5,700
to $2,700 to PNC Bank and tendering a Deed of Crofchick Realty,
LLC, to PNC Bank which can be recorded if and only if the Debtor is
in arrears with the payments schedule, provided that PNC Bank first
provides advance written notice of the default and affords Debtor
and Crofchick, Realty, LLC, 60 days to cure the default.
According to PNC Bank, the Debtor's previously filed monthly
operating reports describe a discrepancy between projected income
and actual income for the Debtor and net monthly losses.
PNC Bank complains that:
a. the Second Amended Disclosure Statement fails to provide
adequate information regarding the viability of the
projected income and projected expenses of the Debtor's
business operation, and the liquidation value and possible
deterioration value of Debtor's assets; and
b. based upon lack of information provided to verify or give
some credence to the projected income of Debtor and the
Debtor's failure to reach projected numbers in its past
operating reports, the Debtor has not shown that its
business can sustain itself in the next five years and
increase its sales to fund its Second Amended Plan.
Copies of the Objections are available at:
http://bankrupt.com/misc/pamb15-03723-179.pdf
http://bankrupt.com/misc/pamb15-03724-162.pdf
PNC Bank is represented by:
Robert P. Sheils, III, Esq.
SHEILS LAW ASSOCIATES, P.C.
108 North Abington Road
Clarks Summit, PA 18411
Tel: (570) 587-2600
Fax: (570) 585-0313
E-mail: rsheilsIII@sheilslaw.com
About Crofchick, Inc.
Crofchick, Inc., and Crofchick Realty, LLC, filed for Chapter 11
bankruptcy protection (Bankr. M.D. Pa. Case No. 15-03723 and
15-03724) on Aug. 30, 2015. Tullio DeLuca, Esq., serves as the
Debtors' bankruptcy counsel.
On June 22, 2016, the Debtors each filed its Chapter 11 Small
Business Disclosure Statement and Chapter 11 Small Business Plan.
CSD REALTY CORP: Taps Mark Cohen as Legal Counsel
-------------------------------------------------
CSD Realty Corp. seeks approval from the U.S. Bankruptcy Court for
the Eastern District of New York to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire Mark Cohen, Esq., to give legal advice
regarding its duties under the Bankruptcy Code, prosecute actions
to protect its bankruptcy estate, and provide other legal services.
Mr. Cohen will charge an hourly rate of $400 for his services.
In a court filing, Mr. Cohen disclosed that he is a "disinterested
person" as defined in section 101(14) of the Bankruptcy Code.
Mr. Cohen maintains an office at:
Mark E. Cohen, Esq.
108-18 Queens Boulevard, 4th Floor, Suite 3
Forest Hills, NY 11375
Phone: 718-258-1500
Email: MECESQ2@aol.com
About CSD Realty Corp.
CSD Realty Corp. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 17-71102) on February 27,
2017. The petition was signed by David S. Frankel, president.
At the time of the filing, the Debtor estimated assets of less than
$1 million and liabilities of less than $500,000.
CYCLONE POWER: Late 10-K Shows $1.47 Million Net Loss in 2015
-------------------------------------------------------------
Cyclone Power Technologies, Inc., on March 20, 2017, filed with the
Securities and Exchange Commission its annual report on Form 10-K
disclosing a net loss of $1,470,303 for the year ended Dec. 31,
2015 compared with a net loss of $4,954,425 for the year ended Dec.
31, 2014.
The Company's revenues declined $329,027, or 100%, to $0 for the
year ended Dec. 31, 2015 compared with $329,027 for the comparable
period in 2014. The lack of revenues was due to current contracts
on a completed contract basis versus prior milestone basis. Their
2014 revenues included $140,527 from the successful fulfillment of
the final milestone under the U.S. Army contract, and $175,000 from
the income recognition of the license agreement with Q2 Power.
The Company's operating expenses decreased $1,890,075, or 63%, to
$1,128,147 for the year ended Dec. 31, 2015 compared with
$3,018,222 for the comparable period in 2014. The majority of the
decrease was due to lower research and development expenses of
$550,942 (54%) that were attributable the spin off in 2014 of the
WHE engine as well as a reduction in staff and the 2014 loss on
retirement of R&D equipment. This was partially offset by a
$112,000 2015 inventory reserve. General and administrative
expenses were lower by $1,237,049 (65%) due to reduced staffing and
related expenses, lower stock based payments for services and cost
controls reflective of funding considerations. Advertising and
promotion expenses were $102,084 or 93% lower reflective of the
2014 $85,583 loss on the retirement of demonstration equipment.
The Company's net loss decreased $3,484,122, or 70%, to $1,470,303
for the year ended Dec. 31, 2015 compared to $4,954,425 for the
comparable period in 2014. The decrease is due to the factors set
forth above. The resulting net loss per weighted average share for
2015 and 2014 was ($0.00) and ($0.01), respectively.
As of Dec. 31, 2016, Cyclone Power had $742,045 in total assets,
$2,683,052 in total liabilities and a $1,970,046 stockholder's
deficit.
Anton & Chia, LLP, in Newport Beach, California, issued a going
concern qualification on the financial statements for 2015. It
said, "[T]he Company has recurring losses from operations, negative
cash flows from operations, and a stockholders' deficit. These
conditions, among others, raise substantial doubt about the
Company's ability to continue as a going concern."
A full-text copy of the Form 10-K is available for free at
https://is.gd/6bMyYB
About Cyclone Power
Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink
Sheets: CYPW) is a clean-tech engineering company, whose business
is to develop, commercialize and license its patented Rankine cycle
engine technology for applications ranging from renewable power
generation to transportation. The Company is the successor entity
to the business of Cyclone Technologies LLLP, a limited liability
limited partnership formed in Florida in June 2004. Cyclone
Technologies LLLP was the original developer and intellectual
property holder of the Cyclone engine technology.
Cyclone Power reported a net loss of $3.79 million on $715,000 of
revenues for the year ended Dec. 31, 2013, as compared with a net
loss of $3 million on $1.13 million of revenues for the year ended
Dec. 31, 2012.
CYCLONE POWER: Late 10-Q Shows $261K Net Loss in Q1 of 2016
-----------------------------------------------------------
Cyclone Power Technologies, Inc., filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
net loss of $260,610 for the quarter ended March 31, 2016 compared
to a net loss of $587,637 for the quarter ended March 31, 2015.
The Company had no revenues in the quarters ended March 31 2016,
and March 31, 2015.
As of March 31, 2016, Cyclone Power had $738,844 in total assets,
$2,907,735 in total liabilities and a $2,201,232 stockholders'
deficit.
Operating expenses incurred for the quarter ended March 31, 2016,
were $230,603 as compared to $378,760 for the same period in the
previous year, a reduction of $148,157 or 39%. The majority of the
decrease was due to a reduction in General and Administrative
expenses of $80,960 (30%): staffing, insurance and professional
fees. Research and Development expenses were lower by $72,234 or
67%, reflective of staff reduction. To continue its progress and
development, the Company has entered into consulting contracts.
"The Company incurred substantial net losses for the three months
ended March 31, 2016 of approximately $0.26 million. Cumulative
operating and other losses since inception are approximately $26.7
million and non cash derivative losses are $32.3 million. The
Company has a working capital deficit at March 31, 2016 of
approximately $2.6 million. There is no guarantee whether the
Company will be able to support its operations on a long term
basis. This raises doubt about the Company's ability to continue
as a going concern," the Company said in its Form 10-Q.
A full-text copy of the Form 10-Q is available for free at
https://is.gd/jp8GuZ
About Cyclone Power
Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink
Sheets: CYPW) is a clean-tech engineering company, whose business
is to develop, commercialize and license its patented Rankine cycle
engine technology for applications ranging from renewable power
generation to transportation. The Company is the successor entity
to the business of Cyclone Technologies LLLP, a limited liability
limited partnership formed in Florida in June 2004. Cyclone
Technologies LLLP was the original developer and intellectual
property holder of the Cyclone engine technology.
CYCLONE POWER: Late 10-Q Shows $362K Net Loss in Q3 of 2016
-----------------------------------------------------------
Cyclone Power Technologies, Inc., on March 20, 2017, filed with the
Securities and Exchange Commission its quarterly report on Form
10-Q, disclosing net loss $362,294 for the quarter ended Sept. 30,
2016, compared with a net loss of $297,196 for the quarter ended
Sept. 30, 2015.
The Company had $0 revenue in the quarters ended Sept. 30, 2016 and
Sept. 30, 2015.
For the nine months ended Sept. 30, 2016, the Company reported a
net loss of $900,126 compared with a net loss of $1.2 million for
nine months ended Sept. 30, 2015.
As of Sept. 30, 2016, the Company had $776,013 total assets,
$3,311,137 in total liabilities, and a $2,535,124 stockholders'
deficit.
Operating expenses incurred for the quarter ended Sept. 30, 2016
were $329,923 as compared to $231,332 for the same period in the
previous year, an increase of $98,591 or 43%. R&D expenses were
$45,628 or 44% lower largely due to a $60,000 inventory reserve
provided for in 2015. General and administrative expenses
increased by $144,572 (115%) primarily from higher audit and legal
fees for the 2014 and 2015 audit, increased consulting expenses and
increased patent maintenance fees (renewal timing). The net loss
for the quarter ended Sept. 30, 2016 was $362,294, compared with a
net loss of $297,196 for the same period in the previous year. The
unfavorable variance of $65,098 or 22% primarily relates to the
higher general and administrative expense.
"[T]he Company incurred substantial operating and other losses and
expenses of approximately $.9 million for the nine months ended
Sept. 30, 2016 and $1.5 million for the year ended December 31,
2015. The cumulative deficit since inception is approximately $
59.6 million, which is comprised of $27.3 million attributable to
actual operating losses (which were paid in cash, stock for
services and other equity instruments) and net other expenses, and
$32.3 million in non-cash derivative liability accounting which was
a result of the conversion of the Company's Series A Convertible
Preferred Stock in 2011, the retirement of a common stock purchase
warrant in 2012, and the change in fair value of derivatives
associated with notes payable funded in the years ended December
31, 2013 and 2014. The Company has a working capital deficit at
Sept. 30, 2016 of approximately $2.9 million. There is no guarantee
whether the Company will be able to generate enough revenue and/or
raise capital to support its operations. This raises substantial
doubt about the Company's ability to continue as a going concern.
The ability of the Company to continue as a going concern is
dependent on management's plans which include implementation of its
business model to generate revenue from development contracts,
licenses and product sales, and continuing to raise funds through
debt or equity raises. The Company will also likely continue to
rely upon related-party debt or equity financing."
A full-text copy of the Form 10-Q is available for free at
https://is.gd/kMEpS1
About Cyclone Power
Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink
Sheets: CYPW) is a clean-tech engineering company, whose business
is to develop, commercialize and license its patented Rankine cycle
engine technology for applications ranging from renewable power
generation to transportation. The Company is the successor entity
to the business of Cyclone Technologies LLLP, a limited liability
limited partnership formed in Florida in June 2004. Cyclone
Technologies LLLP was the original developer and intellectual
property holder of the Cyclone engine technology.
CYCLONE POWER: Late Form 10-Q Shows $277K Net Loss in Q2 of 2016
----------------------------------------------------------------
Cyclone Power Technologies, Inc., on March 20, 2017, filed its Form
10-Q for the quarter ended June 30, 2016.
The Company reported a net loss of $277,222 for the quarter ended
June 30, 2016 compared with a net loss of $290,640 for the quarter
ended June 30, 2015
For the six months ended June 30, 2016, the Company reported a net
loss of $537,832 compared with a net loss of $878,277 for the six
months ended June 30, 2015.
As of June 30, 2016, the Company had $747,703 in total assets,
$3,137,239 in total liabilities, and a $2,389,536 total
stockholders' deficit.
The Company had $0 revenue in the quarters ended June 30, 2016 and
June 30, 2015.
Operating expenses incurred for the quarter ended June 30, 2016
were $234,595 as compared to $210,852 for the same period in the
previous year, an increase of $23,743 (11%). R&D expenses for the
three months ending June 30 2016 were $39,157 or $42,080 or 52%
lower versus 2015 on reduced staff and expenses. General and
administrative expenses increased by $65,453 (51%) primarily from
higher consulting expenses and increased patent maintenance fees
(renewal timing), offset by lower staff and related expenses.
The net loss for the quarter ended June 30, 2016 was $277,222,
compared with a net loss of $290,640 for the same period in the
previous year, a favorable variance of $13,418 or 4.6%.
A full-text copy of the Form 10-Q is available for free at
https://is.gd/ZXNGky
About Cyclone Power
Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink
Sheets: CYPW) is a clean-tech engineering company, whose business
is to develop, commercialize and license its patented Rankine cycle
engine technology for applications ranging from renewable power
generation to transportation. The Company is the successor entity
to the business of Cyclone Technologies LLLP, a limited liability
limited partnership formed in Florida in June 2004. Cyclone
Technologies LLLP was the original developer and intellectual
property holder of the Cyclone engine technology.
DANA CORP: Moody's Affirms Ba3 Corp. Family Rating
--------------------------------------------------
Moody's Investors Service assigned a B1 rating to Dana Financing
Luxembourg S.a r.l.'s (DFLS Notes) proposed $400 million of senior
unsecured notes. Dana Financing Luxemburg S.a r.l., a subsidiary of
Dana Holding Corporation (Dana), is a private limited liability
company establish in Luxembourg. The DFLS Notes will be fully and
unconditionally guaranteed by Dana Holding Corporation (Dana).
There are no operating subsidiaries owned by the Issuer.
In a related action, Moody's affirmed Dana's Corporate Family
Rating (CFR) at Ba3, its Probability of Default Rating (PDR) at
Ba3-PD, and affirmed B1 ratings on the existing senior unsecured
debt. Moody's affirmed the Speculative Grade Liquidity (SGL) Rating
at SGL-1. The rating outlook is stable.
The proceeds from the proposed notes are expected to be used to
repay certain of Dana' existing Brazilian debt, refinance debt from
newly acquired Brevini Group, S.p.A.(Brevini), refinance a portion
of Dana's existing 5.375% $450 million senior unsecured notes due
2021, and general corporate purposes. Brevini, acquired by Dana in
February 2017, is a leading global manufacturer of mechanical and
hydraulic off-highway power conveyance systems.
The following rating was assigned:
Assignments:
Issuer: Dana Financing Luxembourg Sarl
-- Backed Senior Unsecured Regular Bond/Debenture, Assigned B1
(LGD5)
Outlook Actions:
Issuer: Dana Financing Luxembourg Sarl
-- Outlook, Remains Stable
Issuer: Dana Holding Corporation
-- Outlook, Remains Stable
Affirmations:
Issuer: Dana Financing Luxembourg Sarl
-- Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5)
Issuer: Dana Holding Corporation
-- Probability of Default Rating, Affirmed Ba3-PD
-- Speculative Grade Liquidity Rating, Affirmed SGL-1
-- Corporate Family Rating, Affirmed Ba3
-- Senior Unsecured Shelf, Affirmed (P)B1
-- Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5)
RATINGS RATIONALE
Dana's Ba3 Corporate Family Rating is supported by the company's
strong competitive position as a diverse axle parts supplier to the
automotive and commercial vehicle end markets. While Dana's credit
metrics have weakened somewhat due to deteriorating demand in Class
8 commercial vehicle and off-highway markets, the company's
automotive exposure and operating improvement actions have had a
mitigating impact. As a result, Dana's EBITA margin for 2016 was
7.3% (inclusive of Moody's standard adjustments), compared to 7.5%
in the prior year. Debt/EBITDA deteriorated to 3.7x at year-end
2016 compared to 3.4x for the prior year period. Pro forma for the
Brevini acquisition (and related performance) and the acquisition
of U.S. Manufacturing Corporation's Michigan Operations (completed
in March 2017), debt/EBITDA is estimated at 3.7x. Moody's expects
these acquisitions, combined with new business wins and a second
half 2017 recovery in the
commercial vehicle markets, to result in debt/EBITDA at about 3.7x
at year-end.
Dana is expected to maintain a very good liquidity profile over the
next 12-13 months, supported by substantial cash on its balance
sheet, positive free cash flow generation and availability under
its $500 million cash flow revolving credit facility due June 2021.
As of December 31, 2016, Dana had $707 million of cash and
equivalents (with $153 million held in the U.S.) and another $30
million of marketable securities. Pro forma for the acquisition of
Brevini and the U.S. Manufacturing Corporation's Michigan
Operations (in March 2017), cash balances were about $532 million.
Moody's expects Dana's nominal level of free cash flow generation
to continue through 2017 as working capital is used to support
growth in its automotive business. Dana maintains an extended debt
maturity profile, with each of its four tranches of bonds maturing
during the period from 2021 to 2026. As of December 31, 2016,
Dana's cash flow revolver was unfunded with $22
million of outstanding letters of credit. The revolver contains a
minimum first lien leverage ratio test, under which were anticipate
ample cushion over the near-term.
Factors that could lead to higher ratings for Dana include
sustained revenue growth leading to improved operating performance,
generating EBITA/interest coverage consistently over 3.5x,
debt/EBITDA of 3.0x or lower, and consistent positive free cash
flow generation, while maintaining a very good liquidity profile.
Other factors supporting an upgrade would be cost structure
improvements, better positioning the company to contend with the
cyclicality in its industry, and continued discipline in return of
capital to shareholders.
Future events that have potential to drive Dana's outlook or
ratings lower include the failure to maintain win rates on new
contracts, production volume declines at the company's OEM
customers, or material increases in raw materials costs that cannot
be passed on to customers or mitigated by restructuring efforts
resulting in EBITA/interest coverage approaching 2.0x, or
debt/EBITDA over 4.0x. Other developments that could lead to a
lower outlook or ratings include deteriorating liquidity or
aggressive shareholder return policies resulting in increased
leverage.
The principal methodology used in these ratings was Global
Automotive Supplier Industry published in June 2016.
Dana Holdings Corporation, headquartered in Maumee, Ohio, is a
global manufacturer of driveline, sealing and thermal management
products serving OEM customers in the light vehicle, commercial
vehicle and off-highway markets. Revenue for the 2016 was
approximately $5.8 billion.
DAVID'S BRIDAL: S&P Lowers CCR to 'CCC+' on Capital Structure
-------------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on the
Conshohocken, Pa. -based bridal gown and related apparel store
operator David's Bridal Inc. to 'CCC+' from 'B-'. The outlook is
negative.
At the same time, S&P lowered the issue-level rating on the
company's secured term loan facility to 'CCC+' from 'B-' and the
issue-level rating on the company's unsecured senior unsecured
notes to 'CCC-' from 'CCC'. S&P's '3' recovery rating on the term
loan facility reflects its expectation for meaningful (50%-70%;
rounded estimate: 60%) recovery in the event of a payment default.
S&P's '6' recovery rating on the unsecured notes reflects its
expectation for negligible (0%-10%; rounded estimate: 0%) recovery
prospects in the event of a payment default.
"The downgrade reflects our growing liquidity concerns and
uncertainty around identifying a path to meaningfully higher
earnings growth that can support David's Bridal's onerous capital
structure, even though the company does not face any debt
maturities with the next 12 months," said credit analyst Mathew
Christy. "We view the company's financial obligations as
unsustainable over the long term, and project operating performance
will worsen and lead to weaker credit protection metrics and
negative free operating cash flow. In addition, we think weak
operating performance could potentially hinder the company's
ability to refinance the $520 million term loan maturing in 2019."
The negative rating outlook indicates an at least a one-in-three
chance S&P could lower the ratings in the next 12 months. S&P
believes the apparel retail market will continue to be weak and
that David's operating performance will remain pressured, with a
low-single-digit comparable sales declines and margin deterioration
leading to weakened credit metrics including adjusted leverage in
the low-7x range.
S&P could lower the ratings if it envisions a specific default
scenario occurring over the next 12 months. This could arise if
operating performance deteriorates beyond S&P's forecast and
results in mounting possibility of risk of a proactive effort to
restructure the significant balance sheet debt obligations with a
distressed exchange or another restructuring action, or it becomes
increasingly likely that the company is unable to refinance its
2019 maturity. This could also occur if cash use accelerates and
the company generated meaningfully negative free operating cash
flow, increasing its reliance on ABL borrowings.
Although unlikely in the next 12 months, S&P could revise the
outlook to stable or raise the rating if the company can restore
consistent revenue and profit growth and generate positive free
operating cash flow. Such a scenario would most likely be a result
of improved operating performance such that leverage appears
manageable and S&P do not anticipate the company would consider a
restructuring of its obligations. S&P estimates that EBITDA would
need to rise more than 15% versus our 2017 projections to drop
adjusted leverage to 6.5x or better.
DIGICERT HOLDINGS: Moody's Rates New $260MM 1st Lien Term Loan B2
-----------------------------------------------------------------
Moody's Investors Service affirmed DigiCert Holdings, Inc.'s B3
Corporate Family Rating (CFR), assigned a B2 rating to the new $260
million first lien term loan and downgraded the rating for its
existing first lien revolving credit facility to B2 from B1. The
ratings outlook is stable. DigiCert will use the proceeds of the
new term loan and a portion of its cash on hand to refinance the
existing $218 million first lien term loan and repay a portion of
the existing second lien term loan. The transactions will yield a
modest reduction in interest expense. Moody's will withdraw the
rating for the existing first lien term loans upon the close of the
financing.
RATINGS RATIONALE
The downgrade of the first lien revolving credit facility to B2 and
the B2 rating for the new first lien term loan reflect the change
in the capital structure and the resulting lower recovery
expectations for the first lien debt. The new capital structure
will have a higher amount of first lien debt and a reduced
loss-absorption layer of second lien debt.
The B3 CFR reflects DigiCert's modest scale resulting from its
niche focus in the Secure Socket Layer encryption certificates
market. The company operates in a fragmented market which is
dominated by Symantec and there is limited differentiation in the
product offerings among providers due to the standardization of the
certificates. The rating is supported by DigiCert's good growth
prospects and high revenue retention rates that drive very good
free cash flow generation. Moody's expects revenues to grow in the
high single digit rates and free cash flow of about 10% of total
debt over the next 12 to 18 months. DigiCert has adequate
liquidity.
The stable ratings outlook reflects DigiCert's good revenue growth
and free cash flow relative to total debt.
Given DigiCert's modest scale, a ratings upgrade is not expected in
the near term. The ratings could be upgraded if operating scale
increases from strong revenue growth or business diversification
and if DigiCert sustains leverage below 6.5x (Moody's adjusted,
total debt to EBITDA) and free cash flow in excess of 10% of total
debt. Conversely, Moody's could downgrade the ratings if revenue
growth declines significantly and free cash flow to debt falls to
the low single digit percentages of total debt. In addition,
deterioration in liquidity or aggressive financial policies could
trigger a ratings downgrade.
Affirmations:
Issuer: DigiCert Holdings, Inc.
-- Corporate Family Rating, B3
-- Probability of Default Rating, B3-PD
Downgrade:
Issuer: DigiCert Holdings, Inc.
-- $15 million Senior Secured Revolving Credit Facility, B2
(LGD3) from B1 (LGD3)
Assignments:
-- New Senior Secured Term Loan, B2 (LGD3)
Outlook Actions:
Issuer: DigiCert Holdings, Inc.
-- Outlook, Stable
DigiCert Holdings, Inc. is a Secure Sockets Layer Certificate
Authority and a leading provider of digital certificate lifecycle
management solutions.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
DIGICERT INC: S&P Assigns 'B-' Rating on New $260MM 1st Lien Loan
-----------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B-' issue-level
rating to DigiCert Inc.'s proposed $260 million first-lien term
loan. The recovery rating is '3', which indicates S&P's
expectation of meaningful recovery (50%-70%; rounded estimate: 55%)
recovery in the event of a payment default.
At the same time, S&P affirmed its 'CCC+' issue-level rating on the
company's second-lien term loan, and S&P lowered its rating on the
company's $15 million revolver to 'B-' from 'B'. S&P's corporate
credit rating on the company is unchanged at 'B-'. S&P will
withdraw its rating on the existing $220 million first-lien term
loan after the transaction closes.
DigiCert is planning to put all of the proceeds from the issuance
toward paying down the existing first-lien loan and a portion of
the second-lien loan. S&P views this as a leverage-neutral
transaction that will lower the company's interest expense going
forward.
RECOVERY ANALYSIS
-- S&P's simulated default scenario assumes a default in 2019
due to a combination of execution missteps as well as
increased industry competition from software security
companies that are already operating in this market. Any of
these events could result in loss of business and margin
declines, eventually triggering a default.
-- S&P believes that DigiCert would be a good acquisition
target in default as a result of its brand and its
longstanding contracts. A multiple of 6x is consistent with
the multiple S&P uses for other high-tech software services
companies. S&P also assumes bankruptcy administrative
expenses of 5%.
Simulated Default and Valuation Assumptions:
-- Simulated year of default: 2019
-- EBITDA at emergence: $30 million
-- EBITDA multiple: 6x
Simplified Waterfall:
-- Net enterprise value (after 5% administrative costs):
$171 million
-- Obligor/nonobligor valuation percentage split: 65%/35%
-- Secured first-lien debt claims: $277 million
-- Value available to first-lien secured creditors:
$164 million
-- Recovery expectations: 50%-70% (rounded estimate: 55%)
-- Secured second-lien debt claims: $58 million
-- Value available to second-lien secured creditors: $7 million
-- Recovery expectations: 10%-30% (rounded estimate: 10%)
Note: All debt amounts include six months of prepetition interest.
Collateral value equals asset pledge from obligors after priority
claims plus equity pledge from nonobligors after nonobligor debt.
RATINGS LIST
Ratings Affirmed
DigiCert Inc.
Corporate Credit Rating B-/Stable/--
Senior Secured CCC+
Recovery Rating 5 (10%)
Downgraded
To From
DigiCert Inc.
Senior Secured
$15mil revolver bank ln due 2020 B- B
Recovery Rating 3 (55%) 2 (70%)
New Rating
DigiCert Inc.
Senior Secured
$260mil 1st lien term loan due 2024 B-
Recovery Rating 3 (55%)
DON GREEN FARMS: Seeks to Hire J.J. Luckey as Accountant
--------------------------------------------------------
Don Green Farms, Inc. seeks approval from the U.S. Bankruptcy Court
for the Northern District of Florida to hire an accountant.
The Debtor proposes to hire J.J. Luckey & Company, CPA's PLLC to
give tax-related advice, prepare its tax returns, budgets and
financial statements, and provide other accounting services.
Cameron Luckey, a certified public accountant employed with J.J.
Luckey, will charge an hourly rate of $175. Staff working under
his supervision will charge $125 per hour.
Mr. Luckey disclosed in a court filing that the firm does not have
any interest adverse to the Debtor or its bankruptcy estate.
The firm can be reached through:
Cameron Luckey
JJ Luckey & Co. CPA, PLLC
4045 NW 43rd St., Suite A
Gainesville, FL 32606
Phone: (352) 377-7171
Fax: (352) 379-2705
About Don Green Farms
Don Green Farms, Inc. operates a farming business in Newberry,
Florida. Donald R. Green, is the principal, and he owns farmland
and farm equipment subject to the claims of secured creditors.
The Debtor filed a Chapter 11 petition (Bankr. N.D. Fla. Case No.
16-10261), on Nov. 16, 2016. The petition was signed by Donald R.
Green, president. The Debtor disclosed $13,987 in assets and $3.95
million in liabilities. Seldon J. Childers, Esq., at ChildersLaw,
LLC represents the Debtor as bankruptcy counsel.
No committee of unsecured creditors has been appointed in the
case.
On March 20, 2017, the Debtor filed a Chapter 11 plan that proposes
to pay general unsecured claims from the proceeds generated from
the liquidation of its assets in excess of Regions Bank's secured
claim.
DPL INC: S&P Lowers ICR to 'BB-' on Coal Plant Retirements
----------------------------------------------------------
S&P Global Ratings lowered its issuer credit ratings on DPL Inc.
and subsidiary Dayton Power & Light Co. (DP&L) to 'BB-' from 'BB'.
The outlook is negative.
At the same time, S&P lowered the rating on DPL's senior unsecured
debt to 'B+' from 'BB' and revised the recovery rating on this debt
to '5' from '4'. The '5' recovery rating reflects S&P's
expectation for modest (10%-30%; rounded estimate: 15%) recovery in
the event of a payment default.
In addition, S&P affirmed its 'BBB-' rating on DP&L's senior
secured debt. S&P revised the recovery rating on this debt to '1+'
from '1', indicating its expectation for full (100%) recovery.
The downgrade on DPL and DP&L reflects S&P's base-case scenario
that over the next few months the Public Utilities Commission of
Ohio (PUCO) will most likely approve the distribution modernization
rider (DMR) in line with the settlement proposal. Under the
settlement proposal, the utility will recover $105 million annually
under the DMR for the next three years and will commit to commence
a sale process to sell its ownership interest in its Conesville,
Miami Fort, and Zimmer stations. In conjunction with the company's
recent announcement of its plans to retire the J.M. Stuart and
Killen coal-generating plants by June 1, 2018, the utility will
most likely exit the vast majority of its higher-risk merchant
operations in the next 15 months.
"As a result, we expect significantly reduced cash flow
contributions from the merchant business to create an over-reliance
on the DMR to sustain the company's credit quality," said S&P
Global Ratings credit analyst Obioma Ugboaja. This significantly
heightens event risk for DPL that S&P expects will continue to
pressure the issuer credit rating, despite any potential
improvement to the company's business risk.
Importantly, from 2019 through 2022, more than 90% or about
$1.7 billion of DPL's consolidated debt will mature. Without a
high degree of certainty that the DMR will be in effect for the
long term, DPL faces significant refinancing risks over this
four-year period. Absent the DMR, the company's financial measures
will materially weaken, likely resulting in further downgrades. The
negative outlook for DPL and DP&L reflects S&P's expectations for
persistently weak financial measures for consolidated DPL, with FFO
to debt that averages about 9.6% and that is now highly dependent
on the long-term sustainability of the DMR to avoid further
deterioration. Additionally, the company faces refinancing risks
for its approximate $1.7 billion of outstanding debt, maturing
2019-2022. S&P expects that these risks will offset any potential
improvement to DPL's business risk assessment over the near term
following its strategic decision to shrink its higher-risk merchant
generation assets.
S&P could lower the ratings on DPL and DP&L over the next few
quarters if the company's financial ratios further weaken,
including FFO to debt that is consistently at 9% or below. This
could occur if the implementation of the DMR becomes unsustainable,
and as a result, the company's credit quality does not improve in
light of longer-term refinancing risks.
S&P could affirm the ratings and revise the outlook to stable
within the next few quarters if the company develops a strategy to
address its long-term refinancing risks, the implementation of the
DMR proves durable and sustainable, and it maintains FFO to debt
above 10%.
DRUMM CORP: S&P Lowers CCR to 'B-', On CreditWatch Negative
-----------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on Plano,
Texas-based Drumm Corp. to 'B-' from 'B' and placed the rating on
CreditWatch with negative implications.
At the same time, S&P lowered its rating on Drumm's senior secured
debt to 'B-' from 'B' and placed the rating on CreditWatch with
negative implications. The recovery rating on this debt remains
'3', reflecting S&P's expectation for meaningful (50%-70%; rounded
estimate: 55%) recovery in the event of payment default.
"The rating actions reflect Drumm's failure to secure an amendment
or waiver from its lenders and avert a covenant violation on the
senior secured leverage covenant of 6.75x, which steps down to
4.75x at quarter ending March 31, 2017," said S&P Global Ratings
credit analyst Elan Nat. The company's failure to alleviate
imminent covenant pressure reflects an aggressive financial policy
and risk appetite. Additionally, while S&P expects sources of
liquidity to continue covering uses by more than 1.2x over the near
term, S&P believes the substantial amount of debt maturing in May
2018, without a definitive plan to refinance at this time, is
inconsistent with the 'B' rating and reflects a weakened liquidity
position.
S&P is revising its assessment of liquidity to less than adequate
from adequate to reflect S&P's view that the company's delay in
securing an amendment indicates a higher tolerance for risk and
weaker banking relationships than what S&P views as consistent with
adequate liquidity. The company has a grace period of 45 days from
the end of the quarter to report on covenants, before lenders can
accelerate on the debt.
Drumm is in the process of separating and divesting its nursing
home operations and its ancillary businesses, with plans to retain
ownership of its real estate and for the pro forma entity to
survive as a health care REIT operator. While S&P thinks that the
asset sales are still on track to close, its divestiture plan is
taking longer to complete than previously expected.
S&P believes that the value of Drumm's assets substantially exceeds
its total debt outstanding, given that the company has a stable,
annual rent revenue stream from its skilled nursing portfolio of
about $150 million. In S&P's view, the economic incentives support
the likelihood that the company and its lenders will come to an
agreement and avoid a liquidity event. Still, S&P believes that
the company's failure to secure an agreement this close to the
filing date, coupled with an unaddressed, aging capital structure
(the term loan will become a current maturity in May) reflects a
meaningful escalation in credit risk.
S&P expects to resolve our CreditWatch as more information becomes
available regarding the company's plans to address its covenant
issues. If the company is able to resolve these issues (through an
amendment), S&P could affirm the rating and assign a stable
outlook. If the company is unable to reach an agreement to resolve
the covenant issues by the end of April, S&P could lower the
rating, potentially by multiple notches.
DUN & BRADSTREET: S&P Lowers CCR to 'BB+' on Slow Turnaround
------------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on Short
Hills, N.J.-based information services company The Dun & Bradstreet
Corp. to 'BB+' from 'BBB-'. The outlook is stable.
At the same time, S&P lowered its rating on the company's senior
unsecured debt to 'BB+' from 'BBB-' and assigned a '3' recovery
rating to the debt, which reflects S&P's expectation for meaningful
recovery (50%-70%; rounded estimate: 50%) in the event of default.
"The downgrade reflects our expectation that D&B's turnaround will
take longer than we previously expected, and that competition and
ongoing investment needs will hurt profitability and keep leverage
elevated until 2019," said S&P Global Ratings analyst Minesh Patel.
"Although we believe the company is well positioned to capitalize
on industry trends, we believe operational risk will remain
elevated over the next few years as the company corrects for
historical business under-investments, and executes on its
corporate renewal and turnaround program."
The ratings reflect the company's well recognized brand; the
relatively high barriers to entry in D&B's markets due to the size
and quality of its commercial database and geographic reach; its
good revenue visibility due to a high percentage of
subscription-based revenue; industry requirements for D&B's DUNS
Number (which uniquely identifies businesses); and D&B's market
position in commercial credit and third-party business information
services, despite having a number of niche and established
competitors. The availability of business data and analytics
online is growing, and the growth of the company's legacy trade
credit and prospecting business is under pressure, which has caused
the company to underperform the industry and raised the bar for D&B
to add value for clients and price its products accordingly.
D&B provides commercial information on more than 265 million
business records in more than 220 countries that customers use to
manage risk exposure and enhance sales and marketing efforts. Its
business model, given the fixed cost nature of the technology and
data assets, has the potential for good operating leverage and high
incremental sales to cash flow conversion. However, in 2014, after
years of stagnant revenue performance, the company embarked on a
business transformation and turnaround strategy. Key elements of
the strategy are to enhance data quality and the depth of its
commercial database, to modernize the delivery of its data and
analytics, and to change the firm's culture to be more forward
leaning. As part of the strategy, in 2015 D&B acquired Credibility
Corp. to address challenges in its small business operation and to
leverage its technology platform for new product development; and
NetProspex Inc., to enhance the firm's business-to-business (B2B)
professional contacts database and cross selling opportunities.
More recently, D&B acquired Avention Inc. to address challenges in
the Hoover's product and declining sales growth with the
Saleforece.com partnership, and to strengthen the company's sales
automation capabilities. Furthermore, the company has divested
from certain foreign markets, such as Australia, Benelux, and Latin
America, while creating new partnership agreements, to improve
strategic focus and profitability.
In S&P Global Ratings' opinion, D&B has made good progress
executing on its turnaround program and has positioned itself for
long-term growth. However, S&P believes the company is in the
early to middle stage of a complex plan that will demand constant
restructuring, reorganization and systems and infrastructure
reengineering. In the short term, S&P sees high execution risk and
revenue slowdown with the Saleforce.com partnership, which uses
D&B's new generation of DaaS capabilities, highlighting the
difficulty of a turnaround in a competitive market. It also
reinforces our opinion that the intensity and pace of industry
change and innovation has increased, which could further delay
revenue growth or margin expansion.
The stable outlook incorporates S&P's expectation that leverage
will remain elevated for the next 12-18 months but will decline to
the mid- to high-3x area in 2018. It assumes the company will make
steady progress on its business turnaround initiatives, grow its
customer bases and revenues, and stabilizes the declines in its
traditional prospecting and trade credit solutions.
EARL DURON: Nordwicks Buying Rockport Property for $60K
-------------------------------------------------------
Earl L. Duron and Kirsten A. Duron ask the U.S. Bankruptcy Court
for the Western District of Texas to authorize the sale of real
property with improvements locally known as 234 Retreat Dr., Taft,
Texas, also known as Lot 13 Bay Retreat, Rockport, Texas, to Brant
J. and Judith K. Nordwick and/or assigns for $60,000.
The sale contemplates that a closing will occur on or before 15
days after the title company issues a commitment.
At the time of filing of the petition, the Debtor's Schedules and
Statement of Affairs identified that the Debtor owned the
Property.
The Debtor desires to sell the Property to the Buyer for the sum of
$60,000. The sale will be made "as is, where is," with no
representations or warranties of any kind, except as set forth in
the Contract, and free and clear of all liens and encumbrances.
The Debtor and the Buyer's obligations to consummate the
transactions contemplated in the Agreement will be conditioned upon
the Court's entry of the Approval Order.
The sale is part of a funding mechanism for the Plan. The Debtor
seeks to sell the Property prior to confirmation of the Plan. The
test is whether there is a sound business reason for the sale;
adequate and reasonable notice to interested parties has been
provided; the sale price is fair and reasonable and the Buyer is
proceeding in good faith.
A copy of the Commercial Contract attached to the Motion is
available for free at:
http://bankrupt.com/misc/Earl_Duron_64_Sales.pdf
These entities assert a lien on the Property:
a. Bank of America holds a lien on the Property to secure a debt
in the approximate amount of $10,657.
b. Building Specialties, a division of L and W Supply Corp.,
asserts a lien recorded on Sept. 15, 2009 to secure a debt in the
amount of $240,944.
c. Aransas County will be owed prorated taxes for 2017.
Texas Heritage Brokers is the Court appointed Realtors for the
Debtor who will receive a 5% commission.
The Debtor proposes that the first proceeds of sale be used to pay
all normal and customary cost of closing including survey cost,
title policy, and Realtor Fees, if any. After these claims, costs,
any ad valorem taxes, the Debtor seeks authority to pay the allowed
claim of Bank of America and the remaining funds will be held
pending further order of the Court.
In the exercise of its business judgment, the Debtor has determined
that the proposed sale to the Purchaser is, at present, the highest
and best offer under the circumstances and will maximize the value
of the Estate. Accordingly, the Debtor asks the Court to approve
the proposed sale of Property to the Buyer.
Counsel for the Debtors:
Dean William Greer, Esq.
2929 Mossrock, Suite 117
San Antonio, TX 78230
Telephone: (210) 342-7100
Facsimile: (210) 342-3633
E-mail: dwgreer@sbcglobal.net
Earl L. Duron and Kirsten A. Duron sought Chapter 11 protection
(Bankr. W.D. Tex. Case No. 16-51161) on May 20, 2016. The Debtor
tapped Dean William Greer, Esq., as counsel.
ENERGY FUTURE: Settlement of Noteholders' Makewhole Claims Okayed
-----------------------------------------------------------------
Energy Future Holdings Corp. and its debtor-affiliates sought and
obtained approval by the U.S. Bankruptcy Court for the District of
Delaware for Entry of an Order Approving the EFIH Settlement
Between the Debtors, Certain Holders of EFIH First Lien Note
Claims, Certain Holders of EFIH Second Lien Note Claims, and
Certain Holders of EFIH Unsecured Note Claims.
The EFIH Settlement provides, among other things:
(a) EFIH First Lien Claims
The Debtors will pay (a) 95% of (i) the Makewhole Claims
in respect of the EFIH First Lien Notes, and (ii) the
interest, at the contract rate, on the EFIH First Lien
Makewhole Claims accrued as of the date of repayment;
(b) pursuant to section 506(b) of the Bankruptcy Code,
100% of the documented fees, expenses, and indemnification
claims, if any, incurred by the EFIH First Lien Notes
Trustee and Supporting EFIH First Lien Creditors; and
(c) 100% of any additional accrued and unpaid interest,
again at the contract rate.
(b) EFIH Second Lien Claims
The Debtors will pay (a) 87.5% of (i) the Makewhole
Claims
in respect of the EFIH Second Lien Notes, and (ii) the
interest, at the contract rate, on the EFIH Second Lien
Makewhole Claims accrued as of the date of repayment;
(b) pursuant to section 506(b) of the Bankruptcy Code,
100% of the documented fees, expenses, and indemnification
claims, if any, incurred by the EFIH Second Lien Notes
Trustee and Supporting EFIH Second Lien Creditors;
(c) 100% of accrued and unpaid principal amount of EFIH
Second Lien Notes and interest thereon accrued as of the
date of repayment, and (d) 100% of any additional accrued
and unpaid interest, again at the contract rate.
(c) Temporary Stay and Ultimate Termination of Makewhole
Litigation
The Debtors will seek a temporary stay of litigation
regarding the Makewhole Claims and, upon entry of the
Order, file a notice or pleading withdrawing the request
for rehearing currently pending with the Third Circuit.
Upon remand to the Bankruptcy Court, the Debtors and the
EFIH Secured Trustees will enter a stipulation of
dismissal of the Makewhole Litigation with prejudice.
(d) Vote to Accept the Plan
The Supporting Secured Creditors shall be deemed by
entry of the EFH Confirmation Order to have changed any
vote to reject the Plan to a vote to accept the Plan.
Objections to the Motion were due March 21, and a hearing to
consider any objections was set for March 28. No objections were
filed by the deadline and the Court approved the settlement in an
order dated March 24.
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 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'
reorganization plan, which contemplated a tax-free spin of the
company's competitive businesses, including Luminant and TXU
Energy, and the $20 billion sale of its holdings in non-debtor
electricity transaction unit Oncor Electric Delivery Co. to a
consortium of investors. But the Plan became null and void after
certain first lien creditors notified the occurrence of a "plan
support termination event."
The Debtors filed a new plan of reorganization on May 1, 2016, as
subsequently amended. The new Chapter 11 plan features
alternative
options for dealing with the Company's stake in electricity
transmission unit Oncor.
On Aug. 29, 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.
(the "T-Side Debtors"). The Plan became effective on Oct. 3,
2016.
On Sept. 21, 2016, the Debtors filed the E-Side Plan and the
Disclosure Statement for the Fourth Amended Joint Plan of
Reorganization of Energy Future Holdings Corp., et al., Pursuant
to
Chapter 11 of the Bankruptcy Code as it Applies to the EFH Debtors
and EFIH Debtors.
ETON PARK: To Shut Down as $3 Trillion Fund Industry Faces Turmoil
------------------------------------------------------------------
Matthew Goldstein, writing for The New York Times' DealBook,
reported that Eton Park Capital Management, well-known money
manager founded by Eric Mindich, former partner at Goldman Sachs,
is shutting down after a year of disappointing results -- the
latest sign of turmoil in the $3 trillion hedge fund industry.
According to the report, in a letter to investors reviewed by The
New York Times, Mr. Mindich said a mix of challenging market
conditions and Eton Park's poor performance had led to the
decision. The firm's assets under management have fallen by half
since 2011, the report related.
"A combination of industry headwinds, a difficult market
environment and, importantly, our own disappointing 2016 results
have challenged our ability to continue to maintain the scale and
scope we believe necessary to pursue our investment program," Mr.
Mindich wrote, the report further related.
The report noted that Eton Park is the first big hedge fund to shut
down this year, but the closure comes as other well-known money
managers are struggling to post the kind of double-digit returns
that their investors have come to expect, and that justify their
firms' hefty fees.
William A. Ackman's Pershing Square Capital Management, for
instance, is still reeling from its $4 billion losing bet on shares
of Valeant Pharmaceuticals International, the embattled drug
company that has seen its stock plunge over concern about its
accounting practices, the report pointed out.
And John Paulson, who made billions betting on the collapse of the
housing market during the financial crisis, has struggled to find a
consistent winning formula since that time, the report also pointed
out.
At the same time, state pension funds led by the California Public
Employees' Retirement System are dumping their hedge fund
portfolios, contending many strategies are too complex and costly
-- especially at a time when many firms are underperforming, the
report said.
Eton Park, based in Manhattan, will begin returning its roughly $7
billion in capital to investors, and anticipates returning about 40
percent of its outside money by the end of April, the report added.
EXGEN TEXAS: Moody's Lowers Rating on Term Loan B Due 2021 to Caa3
-------------------------------------------------------------------
Moody's Investors Service downgraded ExGen Texas Power, LLC's
(ExGen Texas or EGTP) senior secured term loan B due September 2021
to Caa3 from Caa1 ($659.6 million outstanding). Concurrent with
this rating action, Moody's downgraded EGTP's $20 million senior
secured revolving credit facility due September 2019 ($4 million
currently drawn) to B3 from B2. The rating outlook is negative.
RATINGS RATIONALE
The Caa3 term loan B rating reflects an expectation that ExGen
Texas will likely face a payment default within the next twelve
months owing to weak liquidity and sustained challenging power
markets within ERCOT. The rating incorporates recovery prospects
for term loan B lenders that are likely to be at the lower end of
the Caa3 range (65-80%) should ExGen Texas default. Moody's
recovery analysis is based on comparable asset sales in the region
along with the recent earnings profile of the portfolio. EGTP is
anticipated to use much of its available liquidity, including most
of its debt service reserve funds, to meet the March 31, 2017
principal and interest payments.
That said, EGTP continues to have $16 million of availability under
its revolving credit facility and EGTP's Security Agreement has a
provision for a $20 million Contingency Reserve Guarantee that can
be funded one time by EGTP's parent at the parent's sole
discretion. Combined, these two sources of liquidity would likely
enable EGTP to meet plant operating expenses and cover its June 30,
2017 debt service payments of around $13.5 million, allowing the
project to reach the third quarter earnings period. EGTP earns all
of its positive cash-flow in the third quarter, allowing it to
largely refill its liquidity baskets used during the course of the
year. Revolver borrowings are however currently restricted and
absent an agreement with lenders to allow additional borrowings or
the use of a one-time Contingency Reserve, then EGTP will most
likely face a payment default on June 30, 2017. Exelon Generation
Company LLC (ExGen: Baa2 stable) has provided short-term liquidity
needs to EGTP by extending payment terms of certain monthly fuel
and operations and maintenance (O&M) costs. Moody's rating action
incorporates limited on-going support given the non-recourse nature
of ExGen Texas' debt obligations to the parent.
Moody's recovery analysis principally reflects EGTP's most valuable
assets, Wolf Hollow I and Colorado Bend I (separate and legally
distinct from Exelon's Wolf Hollow II and Colorado Bend II
facilities), which represent about 1,200 MWs of combined cycle gas
turbines (CCGTs). Moody's approximated $300/kW of value to these
assets and ascribed modest incremental value to the remaining steam
and peaking units. The age of EGTP's assets, high level of
available power supply in ERCOT, and weak power prices also
factored into Moody's recovery expectations.
The B3 revolving credit facility rating reflects substantially
higher recovery prospects in a distressed scenario vis-à-vis the
secured term loan B given the size of the outstanding amount
relative to the term loan B as well as the seniority position of
the revolving commitment in the event of a bankruptcy as outlined
in the Inter-Creditor agreement. Current outstanding amounts under
the revolver is $4 million and future borrowings are restricted
owing to the project's inability to satisfy certain representations
in the Credit Agreement.
The negative rating outlook on the secured revolving credit
facility and secured term loan B considers the probability of a
payment default over the next year and that recovery prospects
could be lower than incorporated in the Caa3 rating owing to a weak
power market in ERCOT.
In light of recent negative rating actions and the challenges
facing the issuer, a rating upgrade is unlikely. The rating could
be stabilized if EGTP averts a payment default and generates enough
free cash-flow to replenish the liquidity buckets by the end of the
third quarter 2017, EGTP's peak positive earnings quarter.
EGTP owns a portfolio of five electric generating assets in Texas:
the 738 MW Wolf Hollow combined-cycle facility in Granbury; the 510
MW Colorado Bend combined cycle facility in Wharton; the 1,265 MW
Handley natural gas-fired steam boiler in Ft. Worth; the 808 MW
Mountain Creek natural gas-fired boiler in Dallas; and the 156 MW
simple cycle facility in La Porte. EGTP is 100% indirectly, wholly
owned by ExGen, which is in turn a wholly-owned subsidiary of
Exelon Corporation (Baa2 stable).
The principal methodology used in these ratings was Power
Generation Projects published in December 2012.
EXTERRAN ENERGY: Moody's Rates Proposed $300MM Sr. Unsec. Notes B3
------------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the proposed $300
million senior unsecured notes due 2025 of Exterran Energy
Solutions, L.P. (EESLP or Exterran) and co-issuer EES Finance
Corp., wholly-owned subsidiaries of Exterran Corporation (unrated).
Proceeds from the notes offering will be used to repay outstanding
indebtedness under EESLP's senior secured term loan. Moody's also
assigned a B1 Corporate Family Rating (CFR), B1-PD Probability of
Default Rating (PDR) and SGL-2 Speculative Grade Liquidity Rating
to EESLP. The outlook is stable. All indebtedness, including the
proposed offering, are fully and unconditionally guaranteed by
Exterran Corporation.
"The B1 CFR and stable outlook are supported by Exterran's scale,
global diversification, relatively stable gross margins, and
management's commitment to maintain relatively low financial
leverage," stated RJ Cruz, Vice President and Senior Analyst.
"These strengths are tempered by the company's reliance on contract
renewals, Latin America concentration and if there were weak
development activity because of slowing global demand for natural
gas."
Rating Assignments:
Issuer: Exterran Energy Solutions, L.P.
-- Corporate Family Rating, assigned B1
-- Probability of Default rating, assigned B1-PD
-- US$300 million Senior Unsecured Notes, assigned B3 (LGD 5)
-- Speculative Grade Liquidity Rating, assigned SGL-2
Outlook Action:
-- Outlook, assigned Stable
RATINGS RATIONALE
The B1 CFR reflects Exterran's scale, business mix and geographic
diversity, fairly stable gross margins, and low leverage. The
company participates largely in the midstream space, where natural
gas demand is expected to grow in regions where it operates.
Falling commodity prices in 2016 took their toll across all
segments and despite the drag from Belleli, Exterran was able to
expand gross margins year-over-year. Thus far, customers have
proven to be sticky given high switching costs, but these benefits
are offset by the risks of the company's sizeable Latin America
contract exposure. Project backlog in Contract Operations segment
provides stable recurring cash flows where contracts have benefited
from 85% renewal rates over the past six years. Backlog in Oil and
Gas Product Sales has picked up from 2Q16 trough levels with almost
$400 million in backlog expected at the end of 1Q17.
With CEO Andrew Way at the helm, the company focused on working
capital initiatives and cost reductions in 2016, and reaped
benefits with a $239 million working capital cash inflow and a 25%
reduction in SG&A during the year. Moody's expects the company to
generate negative free cash flow of about $80 million in 2017 as it
ramps up on growth capital spending driven by project wins in the
Middle East. Moody's also expects the company's total leverage to
trend towards 2.5x by YE17, thereafter declining modestly towards
2x by YE19. Beyond 2017, Moody's projects annual negative free cash
flow caused by capital investments to be less than $40 million that
will be funded by revolver draws. In addition to the aforementioned
Latin America exposure, other key risks for Exterran include the
company's dependence on contract renewals, capital intensity of the
business, and commodity price cyclicality as demonstrated in 2016
when backlog and earnings contracted due to the energy market
downturn.
The proposed $300 million senior notes are unsecured and guaranteed
by substantially all of Exterran Corporation's U.S. subsidiaries.
The senior notes are rated B3, or two notches below the B1 CFR,
reflective of their junior position relative to the potentially
large priority claim of the $680 million senior secured revolving
credit facility.
The SGL-2 Speculative Grade Liquidity Rating reflects good
liquidity supported by $36 million cash balance as of year-end 2016
and access to a senior secured revolving credit facility. This $680
million committed facility matures on November 2020, with $82
million drawn at year-end 2016 pro-forma for the senior notes
offering. Current applicable financial covenants include a minimum
interest coverage ratio of 2.25x, a maximum total leverage ratio of
3.75x, with step up to 4.50x upon completion of the senior notes
offering, and a maximum senior secured leverage ratio of 2.75x,
upon completion of the senior notes offering. Moody's expects the
company to remain in covenant compliance through 2017. Alternate
sources of liquidity are limited as its assets are pledged as
collateral to the revolver.
The stable outlook reflects Moody's expectation that gross margins
will stay relatively flat at 30% and leverage metrics remain
consistent with management's stated targets. The ratings could be
considered for an upgrade if Exterran is able to grow EBITDA above
$250 million while sustaining Total Debt/EBITDA under 2.5x. If
Exterran's total leverage rises above 3.5x or backlog contracts
materially, then the ratings could be downgraded.
Exterran Corporation is headquartered in Houston, Texas and
provides midstream infrastructure solutions comprising of
production, processing and treating services throughout the world.
The company was spun off in 2015 from Exterran Holdings, now known
as Archrock, Inc., a company primarily focused on U.S. contract
compression rental. EESLP is a Delaware limited partnership and an
indirect wholly owned subsidiary of Exterran Corporation. EES
Finance Corp. is a Delaware corporation and a direct wholly owned
subsidiary of EESLP formed to serve as co-issuer of certain debts.
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in December 2014.
EXTERRAN ENERGY: S&P Assigns 'BB-' CCR, Outlook Stable
------------------------------------------------------
S&P Global Ratings said it assigned its 'BB-' corporate credit
rating to Exterran Energy Solutions L.P. The outlook is stable.
S&P also assigned its 'B+' issue-level rating and '5' recovery
rating to Exterran's $300 million senior notes due 2025. The '5'
recovery rating indicates that lenders can expect modest (10%-30%;
rounded estimate: 15%) recovery in the event of a payment default.
At the same time, S&P assigned its 'BB+' issue-level rating and '1'
recovery rating to Exterran's $680 million revolving credit
facility. The '1' recovery rating indicates that lenders can
expect very high (90%-100%; rounded estimate: 95%) recovery in the
event of a payment default.
Exterran Energy is issuing $300 million of senior notes due 2025.
The company expects to use the proceeds from this offering to repay
the existing term loan and a portion of borrowings outstanding on
the revolving credit facility.
"The stable outlook reflects our expectation that Exterran will
maintain debt to EBITDA below 3x in 2017, in addition to
maintaining adequate liquidity," said S&P Global Ratings credit
analyst Jacqueline Fay.
S&P could consider a negative rating action if Exterran's debt to
EBITDA exceeded 3.5x for an extended period. This could occur if
its counterparties failed to renew contract operation and
aftermarket services contracts due to lower natural gas prices.
S&P could consider a positive rating action if the company's scale
improved or if its contract profile strengthened. Scale could
improve through natural gas price improvement, leading to demand
for additional global natural gas processing and compression
services.
FOREST PARK FORT WORTH: May 1 Plan Confirmation Hearing Set
-----------------------------------------------------------
A hearing to consider confirmation of the First Amended Plan of
Liquidation for Forest Park Medical Center at Fort Worth, LLC will
be held on May 1, 2017, at 9:30 a.m. (Central Time) before the
Honorable Russell F. Nelms, United States Bankruptcy Judge at the
United States Bankruptcy Court for the Northern District of Texas,
Fort Worth Division, Courtroom 204, U.S. Courthouse 501 W. Tenth
Street, Fort Worth, Texas 76102.
The Confirmation Hearing may be continued from time to time by the
Court without further notice other than by such adjournment being
announced in open court to parties actually present.
The Debtor's First Amended Plan of Liquidation addresses, among
other things, the implementation of a Liquidating Trust, the
procedures for treating all Claims against or interests in the
Debtor and its estate, the liquidation of Assets of the Debtor and
its distribution, the retention of claims and defenses by the
Debtor's Estate, the rejection of all executory contracts to which
the Debtor is a party, the administration and handling of the
records of former patients of the Debtor, and the procedures for
the dissolution of the Debtor.
The deadline for filing and serving objections to the confirmation
of the Plan is April 20, 2017 at 5:00 p.m. (Central Time). Any
objection must be written and filed with the Clerk of the
Bankruptcy Court, and a copy must be concurrently served on counsel
for the Debtor, the Official Unsecured Creditors Committee
("Committee") and the United States Trustee, as well as any other
party-in-interest filing a notice of appearance.
About Forest Park Medical Center at Fort Worth
Forest Park Medical Center at Fort Worth, LLC, is a doctor-owned
Texas limited liability company that owns and operates the Forest
Park Medical Center, a state of the art medical facility,
including private rooms, family suites and intensive care rooms
located in West Fort Worth, Texas. The hospital employs 175
persons on a full-time or part-time basis. The hospital offers a
broad range of surgical services.
Forest Park Medical Center at Fort Worth filed a Chapter 11
bankruptcy petition (Bankr. N.D. Tex. Case No. 16-40198) in Ft.
Worth, Texas, on Jan. 10, 2016. Judge Russell F. Nelms presides
over the case.
The Debtor estimated assets of $10 million to $50 million and debt
of $50 million to $100 million.
J. Robert Forshey, Esq., and Jeff P. Prostok, Esq., at Forshey &
Prostok, LLP, serve as the Debtor's Chapter 11 counsel. Ronald
Winters at Alvarez & Marsal Healthcare Industry Group, LLC serves
as the Debtor's CRO. The Debtor tapped SSG Advisors, LLC and
Chiron Financial Group, Inc. as co-investment bankers.
Vibrant Healthcare Fort Worth, LLC, and FPMC Services, LLC run the
Debtor's hospital in Forth Worth. Vibrant is the manager of the
hospital operations of Debtor, and FPMC Services employs the
employees at Debtor's hospital and those dedicated to servicing
the hospital's "back office" operations. They are represented by
William A. Brewer III, Esq., Michael J. Collins, Esq., and Robert
M. Millimet, Esq., at Brewer, Attorneys & Counselors.
An Official Committee of Unsecured Creditors has been appointed in
this case by the United States Trustee, and is represented by Cole
Schotz PC and Arent Fox, LLP lawyers.
FR DIXIE: S&P Lowers CCR to 'CCC+' on Elevated Debt Leverage
------------------------------------------------------------
S&P Global Ratings said that it has lowered its corporate credit
rating on FR Dixie Acquisition Corp. to 'CCC+' from 'B-'. The
outlook is stable.
At the same time, S&P lowered its issue-level rating on the
company's senior secured revolver and term-loan to 'CCC+' from
'B-'. S&P's '3' recovery rating on the debt remains unchanged,
indicating its expectation for meaningful (50%-70%; rounded
estimate: 50%) recovery in a payment default scenario.
"The rating action reflects that, despite our forecast for higher
oil prices in 2017 and an improved operating performance for Dixie,
it appears likely that the company's FOCF will remain negative for
a sustained period," said S&P Global credit analyst Robyn Shapiro.
Although S&P expects the company's credit measures to improve in
2017, it believes that its debt leverage will remain elevated and
its FOCF will stay negative. Therefore, in S&P's view, the
company's financial commitments are unsustainable over the
long-term, even if S&P believes that Dixie may not face a credit or
payment crisis in the next 12 months. With its already weak credit
measures and an increasing level of end-market demand, the risk
that Dixie will suffer an executional misstep has increased as the
company flexes its operating structure to meet the elevated
demand.
The stable outlook on Dixie reflects that, although S&P believes
the company's credit measures will remain weak in 2017, S&P expects
that it will maintain adequate liquidity. Additionally, S&P
anticipates that Dixie's EBITDA-to-cash interest metric will remain
over 1x in 2017.
S&P could lower its ratings on Dixie if S&P come to believe that
the company will default without an unforeseen positive development
and S&P envisions that a specific default scenario is likely over
the next 12 months. This could occur if the company faces a
near-term liquidity crisis or if S&P determines that it will likely
consider a distressed exchange offer or redemption in the next 12
months. S&P could also take a negative rating action on Dixie if,
in S&P's view, the company's liquidity deteriorated, which could
occur if it experiences a greater-than-expected FOCF deficit,
forcing it to draw materially on its revolving credit facility.
S&P views an upgrade over the next 12 months as unlikely given
Dixie's very weak credit measures. However, S&P could consider
upgrading the company if its sales and EBITDA increase due to an
improvement in the oil and gas end markets such that its adjusted
debt-to-EBITDA improved materially and S&P came to expect that
Dixie would generate positive FOCF on a sustained basis.
GABEL LEASE: Unsecureds to Be Paid in Full Over Five Years
----------------------------------------------------------
Gabel Lease Service, Inc., filed with the U.S. Bankruptcy Court for
the District of Kansas a disclosure statement submitted in
conjunction with the Debtor's reorganization plan dated March 20,
2017.
Class 4 consists of the general unsecured claims -- totaling
$1,335,791.33. The Debtor plans to pay all allowed unsecured
claims in full over the next five years. Based on GLS's analysis,
unsecured creditors would receive approximately $558,469.10 if
GLS's assets were liquidated in a Chapter 7 case.
Initially, Brian L. Gabel proposes to re-purchase his equity
interest in GLS with the cash contribution of $250,000.00. After
the administrative claims are paid in full, the unsecured creditors
will receive their Pro Rata share of Brian's cash contribution;
unless the Court determines that GLS has an executory contract with
Larson. If the Court rules in GLS's favor, GLS intends to use the
capital contribution to provide Larson Engineering, Inc., with
adequate assurance of performance. This would eliminate Larson's
large unsecured claim and allow the other remaining unsecured
creditors to be paid in full from GLS's disposable income over the
next five years.
Classes 1 and 2 consist of the secured claims of First State Bank
and JDF. GLS seeks to re-amortize these secured claims over a
period of years and make monthly payments to these creditors until
the debt is satisfied.
Class 3 consists of the priority claim of the IRS. GLS intends to
pay the IRS's claim within 120 days from the Effective Date of the
Plan from available cash flow.
Class 5 consists of general, unsecured claims of statutory
insiders; specifically, SPMC, Barracuda, Piranha, G.A.B.S., Alex
Gabel Family Trust, the Alex Gabel Jr. Testamentary Trust #1, and
Carolyn Gabel. GLS does not propose to distribute any funds under
the Plan to these statutory insiders.
Finally, Class 6 consists of the Interest Holders in GLS. Brian is
the sole Interests Holder of GLS. Brian proposes to retain his
interest in GLS by making a cash contribution of $250,000.00. Other
than his regular, ongoing wages, Brian will not receive a
distribution under the Plan, but will retain his interest in GLS.
The Disclosure Statement is available at:
http://bankrupt.com/misc/ksb16-11948-163.pdf
About Gabel Lease Service
Gabel Lease Service, Inc., operates as a roustabout company in and
around Ness City, Kansas. GLS also sells pumping units to
customers. Due to the current economic climate, GLS's business
suffered a significant decrease in cash flow. The drop in
oil-and-gas prices has decreased the frequency in which GLS
provides roustabout services to customers and decreased the number
of customers willing to purchase pumping units from GLS.
Early 2016, Larson Engineering, Inc., dba Larson Operating Co.,
filed suit against GLS in Ness County District Court, alleging that
it purchased 28 Gabel pumping units in 2008 and 2009 from GLS and
took delivery of only 5 pumping unit over a 5-year period.
Eventually, on Dec. 7, 2015, Larson claims it demanded the delivery
of the remaining units and filed suit when GLS failed to do so.
Facing the Larson Suit and other cash-flow problems, Gabel Lease
Service filed a Chapter 11 petition (Bankr. D. Kan. 16-11948) on
Oct. 5, 2016. The case is assigned to Judge Robert E. Nugent. The
petition was signed by Brian Gabel, president. At the time of
filing, the Debtor estimated assets at $100,000 to $500,000 and
liabilities at $1 million to $10 million in estimated liabilities.
The Debtor is represented by Nicholas R. Grillot, Esq., at Hinkle
Law Firm, LLC. The Debtor hired Keenan Law Firm, P.A., as special
counsel; and Adams, Brown, Beran & Ball, Chtd., as its accountant.
The Office of the U.S. Trustee appointed three creditors of Gabel
Lease Service, Inc., to serve on the official committee of
unsecured creditors. The committee members are: (1) Amerijet; (2)
Larson Engineering, Inc.; and (3) McDonald Tank Co. The Committee
hired Tom R. Barnes II, Esq., at Stumbo Hanson, LLP, as its legal
counsel.
The U.S. Trustee Samuel K. Crocker on Jan. 31, 2017, appointed two
additional members: Insurance Planning, Inc., and Dayton Security,
to serve on the official committee of unsecured creditors.
GRAND TRAVERSE: S&P Affirms BB- Rating on 2007 Public School Bonds
------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' rating on Grand Traverse
Academy (GTA), Mich.'s series 2007 public school academy revenue
and refunding bonds. At the same time, S&P removed the rating from
CreditWatch with negative implications, where it had placed it on
Dec. 29, 2016. The outlook is stable.
"The CreditWatch resolution and stable outlook reflect our opinion
of the school's decision to indefinitely suspend its plans to enter
into a $4 million direct loan for the purchase of a new charter
school facility," said S&P Global Ratings credit analyst Melissa
Brown. In S&P's view, the halted expansion plans mitigate
contingent liability risk for the school given GTA's already-thin
reserves and the unclear terms of the previously proposed debt.
S&P understands management has tabled these expansion plans and
instead plans to focus on solidifying current financial operations.
Given that management anticipates growing its reserves and does
not plan to issue additional debt over the next few years, S&P
anticipates that the school's credit profile will remain stable
over the next year.
The bonds are a general obligation (GO) of the academy secured by
20% of per-pupil state aid and a first-mortgage lien on the land
and facilities, including future improvements, financed with the
bond proceeds.
Initially chartered in 1999 by Lake Superior State University, GTA
is a public charter school in Traverse City. It serves 1,177
students in grades K-12, with expectations to grow to about 1,300
over the next few years.
"The stable outlook reflects our view of GTA's solid enterprise
profile, including its healthy enrollment and demand metrics,
stable management, and good charter standing," added Ms. Brown.
S&P expects that the school will continue improving its financial
metrics in the next few years.
GRAY TELEVISION: $85MM Loan Add-on No Impact on Moody's Ba2 Rating
------------------------------------------------------------------
Moody's Investors Service says Gray Television, Inc.'s senior
secured term loan rated Ba2-LGD 2, remains unchanged following a
proposed $85 million add-on to the Term Loan B. The proceeds from
the offering will primarily be used to fund Gray's purchase of
Diversified Communication's two TV stations which approximates the
purchase price. The transaction, announced in February, is
scheduled to close in the second quarter of 2017, subject to
regulatory and other approvals. Moody's expects Gray to repay the
$85 million borrowing upon receipt of approximately $91 million in
spectrum auction proceeds later in the year. The B1 Corporate
Family Rating, B1-PD Probability of Default, B2 (LGD4) Senior
Unsecured, and Ba1 (LGD1) Senior Secured Revolving Credit Facility
remain unchanged. The stable outlook also remains unchanged.
Gray's B1 Corporate Family Rating reflects elevated leverage of
approximately 6.0x at the end of 2016 (Moody's adjusted debt-to-2
year average EBITDA, pro forma for pending transactions). With much
weaker than expected political revenue in 2016, and spectrum
proceeds used for acquisitions rather than debt repayment, Moody's
expects leverage will improve more slowly than expected, and is
likely to remain above Moody's leverages tolerance longer than
anticipated. In addition, the company's recent announcement of a
$75 million share repurchase program, despite elevated leverage,
reflects a commitment to shareholder returns.
Despite the negative pressure, ratings are supported by the
company's long track record of #1 and #2 ranked positions in the
vast majority of its 54 markets (pro forma for acquisitions).
Coupled with low syndication costs and top ranked news programming,
the company generates high EBITDA margins exceeding 38% (including
Moody's standard adjustments). The company also benefits from scale
and diversification (both geographic and network) that are more
indicative of a stronger credit profile. Gray's television stations
and associated digital properties also benefit from its strategy of
operating in collegiate markets or state capitals which generally
have more stability and generate higher demand for political
advertising during election years.
The stable rating outlook reflects Moody's views that organic
growth in core ad sales will be in the flat to low single digit
percentage range over the next 12 months. Pro forma for completed
and announced acquisitions, Moody's estimates leverage
(debt-to-2-yr average EBITDA) will be elevated but improve towards
5.5x (including Moody's standard adjustments) in 2017, despite
additional debt-financed acquisitions. Moody's also expects high
single digit percentage 2 year average free cash flow-to-debt.
Moody's could consider an upgrade if core revenue and EBITDA track
to expectations and free cash flow is applied to debt repayment
resulting in Moody's adjusted leverage (Debt-to-2 year average
EBITDA) sustained below 4.0x and coverage (2 year average free cash
flow-to-debt) sustained above high single-digit percentage. A
positive rating action would also be conditional on the maintenance
of good liquidity, the low probability of near-term event risks,
and favorable developments in regulation, scale, market position,
business model, financial policies, or key performance measures.
Gray's ratings could be downgraded if Moody's adjusted leverage
(debt-to-2 year average EBITDA) is sustained above 5.0x or coverage
(2 year average free cash flow-to-debt) is sustained below the
mid-single digit percentage. A negative rating action would also be
considered if the company adopted more aggressive financial
policies or Moody's anticipates the possibility of a material and
adverse change in scale, market position or share, regulation, key
performance measures, or the operating model.
Gray Television, Inc., headquartered in Atlanta, GA, is a
television broadcaster that owns and/or operates 100 television
stations serving 54 mid-sized markets covering roughly 10.1% of US
households, pro forma for announced acquisitions. The portfolio of
stations include #1 and or #2 rankings in almost every one of its
markets. Network affiliations include CBS, NBC, ABC, and FOX
channels. Gray is publicly traded and its shares are widely held
with the family and affiliates of the late J. Mack Robinson
controlling the majority (44%) of the voting shares through a dual
class equity structure. Reported annual revenue for year ended 2016
was $812 million.
GREENSPRINGS HEALTHCARE: April 25 Receivership Claims Bar Date Set
------------------------------------------------------------------
The Hon M. Nawaz Wahla Judge of the Superior Court for the Judicial
District of Hartford entered orders on Feb. 14, 2017, granting
receivership and appointing Attorney Katharine B. Sacks, as
receiver of Greensprings Healthcare and Rehabilitation Center, LLC
d/b/a Greensprings Healthcare and Rehabilitation Center.
Atty. Sacks' obligations as receiver to the Court include, broadly,
the operation of all aspects of the Receivership's business. Her
functions as a receiver are overseen by the Court.
The Receiver cannot be deemed to have assumed responsibility for
any claim or obligation of any kind, including any lease contract,
which was incurred prior to February 14, 2017, the date upon which
this Receivership became effective, unless she has consented in
writing thereto; been so directed by this Court; or unless
applicable law compels such an assumption.
The Court restrains and enjoins the commencement, prosecution, or
continuance of the prosecution, of any action, suit, arbitration
proceeding, hearing, or any foreclosure, reclamation, or
repossession proceeding, both judicial and non-judicial, or any
other proceeding, in law, or in equity, or under any statute, or
otherwise, against the Receiver or any of the assets or property in
the custody and or control of the Receiver, in any Court, agency,
tribunal, or elsewhere, or before any arbitrator, or otherwise, by
any creditor, stockholder, corporation, partnership or other
person, or the levy of any attachment, execution or other process
upon or against any property in the custody or control of the
Receiver, or the taking or attempting to take into possession of
any property in the possession, custody or control of the Receiver,
or of which the Receiver has the right to possession, or the
cancellation at any time during this Receivership proceeding of any
insurance policy, lease or other contract with the facility in
Receivership, or the termination of telephone, electric, gas or
other utility service to the Facility by any public utility,
without obtaining prior approval thereof from the Court.
The Court directs the Receiver to give timely notice of this claims
adjudication procedure to all known Pre-Receivership creditors by
mailing a copy of this order to each at their last known address,
and to publish the order in the Hartford Courant newspaper, no
later than two weeks after the entry of this order.
The Receiver shall make a return of compliance with the notice
provisions of this order at the next Receivership hearing scheduled
after the Bar Date passes.
Any person or entity claiming a financial or property interest of
any kind that arose prior to the Effective Date of the
Receivership, with respect to the entity named in the caption to
this notice, must provide written notice to:
Pre-Receivership Claims
Greensprings Healthcare and
Rehabilitation Center Receivership
P.O. Box 6409
Hamden, CT 06517
for delivery no later than noon on Tuesday, April 25, 2017, the Bar
Date.
The written notice must include a full and complete description of
the facts and circumstances which gave rise to the asserted claimed
interest.
Original claims must be submitted by mail and may not be faxed or
delivered by private overnight delivery services. No special claims
form is necessary.
All Pre-Receivership claims submitted must include a full and
complete description of the claim, supported by detailed back-up
materials describing the nature and quantity of the goods or
services sold, as well as the dates of all such transactions. Any
persons or entities claiming a security interest, lien or other
right with respect to property owned by the Receivership or located
in the Facility, should indicate the collateral with respect to
which a security interest or lien is claimed, as well as notice of
their intention, if any, to retrieve their collateral.
The Receiver shall rely exclusively on the documentation submitted
by claimants with each Pre-Receivership claim, and is not obligated
to inform any Pre-Receivership claimant if the documentation
submitted is inadequate to support any alleged claim.
Claims received after the Bar Date and claims that do not comply
with the substantive requirements described shall not be considered
by the Court.
Any creditor or other person or entity asserting a leasehold
interest, security interest or lien upon property owned by or
leased to the defendant entity that fails to comply with the
provisions of this notice on or before the Bar Date shall be deemed
to have abandoned its collateral.
The Court shall hold a claims hearing on a date to be determined
and properly noticed at Connecticut Superior Court, 95 Washington
Street, Hartford, Connecticut 06106. At this hearing, the Receiver
shall report to the Court a list of Pre-Receivership claimants who
filed timely claims, the amount of each asserted claim, and
recommended actions relative to claims recognition. The Receiver's
recommendations for claims recognition shall relay on standards
derived from appropriate legal and commercial parameters for
expenditures; and shall acknowledge those claimants with perfected
security interests in receivership assets. The Receiver shall
provide notice to claimants of the hearing date and time when she
mails her report to them.
Given the scale of the liabilities to secured creditors,
notwithstanding the Receiver's recommendations relative to claims
recognition, the claims process is not expected to result in
distributions to unsecured Pre-Receivership creditors. The
Receivership estate is administratively insolvent.
The Receivership case is STATE OF CONNECTICUT COMMISSIONER OF
SOCIAL SERVICES, PLAINTIFF v. GREENSPRINGS HEALTHCARE AND
REHABILITATION CENTER, LLC OF EAST HARTFORD CT d/b/a GREENSPRINGS
HEALTHCARE AND REHABILITATION CENTER, DEFENDANT, Docket No. HHD
CV17-6075464S, Superior Court for the Judicial District of
Hartford.
HEALTHIER CHOICES: Posts $12.3 Million Net Income for 2016
----------------------------------------------------------
Healthier Choices Management Corp. announced financial results for
the twelve-month period ended Dec. 31, 2016. During 2016 the
company completed the sale of its wholesale business and, through
its subsidiary, Healthy Choice Markets, Inc. acquired a natural and
organic supermarket.
Per Jeffrey Holman, chief executive officer of Healthier Choices
Management Corp., "Our results reflect our strategic decision to
exit the vapor wholesale distribution business and close
underperforming vapor stores. This was a difficult decision and
the exit costs have been substantial. We believe, however, these
transactions will significantly improve our consolidated financial
performance and streamline our business going forward. The exit
process is now largely complete and has positioned us to focus on
growing the overall performance of our business."
Mr. Holman went on to comment that through a series of agreements
with HCMC's warrant holders the company was able to shed its going
concern classification.
For the 12 months ended Dec. 31, 2016, Healthier Choices reported
net income of $12.27 million on $10.56 million of total sales
compared to net income of $8 million on $5.25 million of total
sales for the 12 months ended Dec. 31, 2015.
Gross margin from continuing operations increased by approximately
$2.1 million for the year resulting in a year-end amount of
approximately $5.2 million. Gross margin percent remained strong
for the year ending at 50%.
Operating loss for the year amounted to $8.9 million; an
improvement of approximately $13.7 million from prior year.
As of Dec. 31, 2016, Healthier Choices had $17.23 million in total
assets, $14.77 million in total liabilities and $2.45 million in
total stockholders' equity.
A full-text copy of the press release is available for free at:
https://is.gd/hKXAZF
About Healthier Choices
Healthier Choices Management Corp., formerly Vapor Corp, is a
holding company focused on providing consumers with healthier daily
choices with respect to nutrition and other lifestyle alternatives.
One segment of the Company's business is a U.S. based retailer of
vaporizers and e-liquids. The other segment is our natural and
organic grocery operations in Ft. Myers, Florida. Healthier
Choices Management Corp. sells direct to consumer via company-owned
brick-and-mortar retail locations operating under "The Vape Store"
and "Ada's Natural and Organic" brands.
Vapor Corp reported a net loss allocable to common shareholders of
$36.26 million in 2015 following a net loss allocable to common
shareholders of $13.85 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, citing that Company has incurred net losses and needs to
raise additional funds to meet its obligations and sustain its
operations. In addition, the Company currently does not have
enough authorized common shares to settle all of its outstanding
warrants if those warrants were exercised pursuant to their
cashless exercise provisions. As a result, the Company could be
required to settle a portion of these warrants with cash. These
conditions, the auditors said, raise substantial doubt about the
Company's ability to continue as a going concern.
HEALTHIER CHOICES: Takes Steps to Enter Marijuana Industry in Fla.
------------------------------------------------------------------
Healthier Choices Management Corp. disclosed on March 24, 2017,
that it has engaged three firms specializing in the marijuana
industry to assist in obtaining Medical Marijuana licensure in
Florida. Two of the engagements involve specialists that are law
firms, Hoban Law Group on a national level, and Medical Marijuana
Business Lawyers, LLC on the local level. The third firm retained
by HMCM is Slee 3 Consulting, specialists in mergers and
acquisitions, and identifying investment and partnership
opportunities in both hands on and off the plant companies.
"HCMC is well positioned in Florida to use its 9 long standing Vape
Stores as a springboard to rapid success in the medical marijuana
dispensary and accessory business. By converting portions of our
existing stores into dispensaries, we will have the opportunity to
leverage our loyal customer base, many of whom we believe will come
to us to fulfill their medical marijuana needs," said Jeff Holman,
CEO of HCMC.
For more detailed information, please see the Investor
Informational Deck on the company's website at www.hcmc1.com in the
investors section.
About Healthier Choices
Healthier Choices Management Corp., formerly Vapor Corp, is a
holding company focused on providing consumers with healthier daily
choices with respect to nutrition and other lifestyle alternatives.
One segment of the Company's business is a U.S. based retailer of
vaporizers and e-liquids. The other segment is our natural and
organic grocery operations in Ft. Myers, Florida. Healthier
Choices Management Corp. sells direct to consumer via company-owned
brick-and-mortar retail locations operating under "The Vape Store"
and "Ada's Natural and Organic" brands.
For the 12 months ended Dec. 31, 2016, Healthier Choices reported
net income of $12.27 million on $10.56 million of total sales
compared to net income of $8 million on $5.25 million of total
sales for the 12 months ended Dec. 31, 2015.
As of Dec. 31, 2016, Healthier Choices had $17.23 million in total
assets, $14.77 million in total liabilities and $2.45 million in
total stockholders' equity.
HEBREW HEALTH: Asks Court to Extend Exclusivity through May 30
--------------------------------------------------------------
Hebrew Health Care, Inc., et al., filed an Amended Motion with the
Bankruptcy Court on March 25, 2017, seeking a further extension of
their exclusivity periods.
The Debtors seek to extend their exclusive period to file a Chapter
11 plan and their exclusive period to solicit acceptances of that
plan through March 31, 2017 and May 30, 2017, respectively.
As previously reported by The Troubled Company Reporter, the
Debtors related that in connection with negotiations with TD Bank
relative to the restructuring of a mortgage on Debtor Hebrew Life
Choices, Inc., also known as Hoffman SummerWood Community (HLCI),
it was determined that the parties did not quite have a meeting of
the minds and additional time, albeit a short time, was needed to
come to a consensus and as resolution of same is necessary before a
plan of reorganization may be finalized.
The Debtors now update the Court that negotiations with TD Bank at
this time are ongoing. The Debtors thus are amending their
Exclusivity Motion for a further extension of the exclusive plan
filing and exclusive solicitation periods.
About Hebrew Health Care, Inc.
Hebrew Health Care, Inc. provides management, human resources and
payroll services to its three subsidiaries Hebrew Life Choices
Inc., Hebrew Community Services Inc., and Hebrew Home and
Hospital, Incorporated. The three provides rehabilitation
services.
The Debtors filed Chapter 11 petitions (Bankr. D. Conn. Case Nos.
16-21311, 16-21312, 16-21313, and 16-21314, respectively) on Aug.
15, 2016. The petitions were signed by Bonnie Gauthier, CEO.
Their cases are assigned to Judge Ann M. Nevins.
At the time of the filing, Hebrew Health Care estimated assets at
$1 million to $10 million and liabilities at $100,000 to $500,000;
Hebrew Life Choices estimated assets at $10 million to $50 million
and liabilities at $10 million to $50 million; Hebrew Community
Services estimated assets at $500,000 to $1 million and
liabilities
at $100,000 to $500,000; and Hebrew Home and Hospital estimated
assets at $1 million to $10 million and liabilities at $10 million
to $50 million.
The Debtors are represented by Elizabeth J. Austin, Esq., at
Pullman and Comley, LLC. Altman and Company, LLC and Marcum, LLP
serve as financial advisor and auditor, respectively. Kroll
McNamara Evans & Delehanty LLP has been tapped to perform
collection services. Zangari Cohn Cuthbertson Duhl & Grello P.C.
has been tapped to replace Siegel O'Connor O'Donnell Beck P.C. as
labor counsel.
On August 30, 2016, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors. The committee hired
Zeisler & Zeisler, P.C. as its legal counsel and EisnerAmper LLP
as its financial advisor.
Anne Cahill Kluetsch, director and senior consultant of
Kluetsch & Associates, LLC, was appointed as patient care
ombudsman. Ms. Kluetsch is represented by Coan, Lewendon,
Gulliver & Miltenberger, LLC.
IFM US: Fitch Affirms BB+ LT Issuer Default Rating, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed IFM (US) Colonial Pipeline 2 LLC's (IFM
Colonial) Long-Term Issuer Default Rating (IDR) at 'BB+' with a
Stable Outlook and the senior secured notes rating at 'BBB-'. The
senior secured notes have a Recovery Rating of 'RR1' indicating
outstanding recovery prospects in the event of a default. The notes
are secured by a first priority security interest in a debt service
reserve account which holds cash, the receipt account which holds
cash received from Colonial Pipeline LLC (Colonial), and all of
IFM's Colonial shares in Colonial.
The rating action affects $250 million of long-term debt. The
'BBB-/RR1' rating for IFM Colonial's senior secured notes reflects
its substantial collateral coverage and outstanding recovery
prospects in a distressed scenario.
The Rating Outlook remains Stable.
KEY RATING DRIVERS
The ratings are supported by dividends from Colonial's stable,
FERC-regulated operations that provide solid cash flows and
relatively predictable dividends to its owners, including IFM
Colonial. Furthermore, IFM Colonial's rating is supported by its
debt service reserve cash account which currently holds six months
of interest payments to service the secured IFM Colonial notes.
Concerns include cash flow concentration from a non-controlling,
minority interest in Colonial which recently had two incidents on
its pipeline system. Furthermore, Colonial is a single-asset
business, which exposes Colonial and the dividends it pays its
owners to concentrated regulatory, economic, and operating risk.
Fitch is also concerned about Colonial's recent pipeline incidents
which remain under investigation by regulatory agencies. In
September and October 2016, Colonial Pipeline experienced two major
incidents in Alabama. These events resulted in operational
disruptions and a temporary shutdown of its pipeline in the
affected region, leading to an earnings decrease for the year. As a
result, the financial underperformance led to reduction in cash
flow to Colonial's shareholders, including IFM Colonial in the
second half of 2016.
Minority Interest in Colonial:
The primary rating concern for IFM Colonial is that its sole source
of cash flow is quarterly dividend payments from a non-controlling,
minority interest in Colonial. Some of this concern is lessened by
the fact that each of Colonial's five ultimate owners is entitled
to appoint one of the five directors to Colonial's board, and by a
supermajority requirement of a 75% shareholder vote for asset
sales, and the issuance of debt greater than one year. Shareholders
have the right of first refusal on any stock sales.
IFM Colonial's limited control of Colonial is further balanced by
the nature of Colonial's other owners, which are either long-term
investment companies or subsidiaries of major oil & gas companies.
These companies and their ownership interest in Colonial are as
follows:
-- Koch Capital Investments Co. LLC (28.09%);
-- KKR-Keats Pipeline Investors LP (23.44%);
-- Caisse de depot et placement du Quebec (16.55%);
-- Shell Pipeline Co. LP (10.12%);
-- Shell Midstream Partners, LP (6%; a subsidiary of Shell
Pipeline Co. LP);
-- IFM Colonial (15.8%).
Single-Asset Entity
Colonial is a single-asset pipeline company, which exposes it to a
greater amount of regulatory, economic, and operating risk than a
company with multiple assets.
Recent Pipeline Incidents
As previously discussed, Fitch remains concerned about Colonials'
two pipeline incidents which occurred in late 2016. However,
Colonial has historically maintained a high standard for
operational safety and meeting regulatory requirements. Fitch views
the 2016 incidents as one-off events that temporarily impacted
financial results including dividends paid to IFM Colonial. The
reduced dividend was not cut meaningfully enough to affect IFM's
credit profile, and going forward, Fitch expects Colonial's
financial profile to remain solid under normal operation.
Predictable Dividends
Colonial's FERC-regulated tariffs and high utilization rates have
generated robust cash flows. EBITDA margins have averaged
approximately 55% between 2012 and 2015. Overall, management has
prudently managed the balance sheet and dividends. Between 2012 and
2015, Colonial has paid dividends in the range of $308 million and
$352 million.
Fitch expects Colonial's financial profile to remain solid over the
next few years, enabling it to continue the payment of predictable
quarterly dividends to its shareholders, including IFM Colonial.
Strong Market Position
IFM Colonial benefits from Colonial's key position as the leading
shipper of refined liquid petroleum products in the Southeast,
Mid-Atlantic, and Northeast. It is the largest refined liquid
petroleum products pipeline in the U.S., and the lowest-cost method
of moving refined product from the Gulf Coast to the East Coast.
Refinery closures on the East Coast would enable Colonial Pipeline
to maintain its competitive position.
Debt Service Reserve Account
The secured notes have a debt service reserve account which holds
cash to meet at least the next six months of interest expense
payments.
KEY ASSUMPTIONS
Fitch key assumptions within the rating case for IFM Colonial
include:
-- IFM's cash flow is reduced in FY2017 (fiscal year ends
June 30) due to the two Colonial incidents that occurred
in the latter part of 2016;
-- Steady and moderate growth in IFM's cash flow resumes in
FY2018, driven by a higher dividend distribution from
Colonial;
-- No debt issuance assumed in the forecasted years;
-- IFM's interest coverage is projected to remain strong,
requiring the debt service reserve account to hold six
months of debt service coverage over the forecasted years,
which extend through FY2020.
RATING SENSITIVITIES
Positive: Future developments that may, individually or
collectively, lead to positive rating action include:
-- Positive rating action is not viewed as likely given
the structure of the issuer, which limits the current rating.
Negative: Future developments that may, individually or
collectively, lead to a negative rating action include:
-- Significant operational issues at the pipeline which reduce
Colonial's operating cash flow and its cash available for
shareholders;
-- Changes in the structure of IFM Colonial which results in a
weakened credit profile;
-- Dividends cut from Colonial which would reduce the debt
service coverage ratio;
-- Debt service coverage ratio below 2.0x for a sustained period
of time.
LIQUIDITY
IFM Colonial is expected to have adequate liquidity to service its
debt over the next few years. Its sources of liquidity are
restricted to cash on the balance sheet and cash held in the debt
service reserve account.
FULL LIST OF RATINGS
Fitch has affirmed the following ratings:
IFM (US) Colonial Pipeline 2 LLC:
-- Long-Term IDR at 'BB+';
-- Senior secured at 'BBB-'/RR1.
The Rating Outlook is Stable.
III EXPLORATION: Kimmel Buying City Ranch Property for $30K
-----------------------------------------------------------
III Exploration II, LP, asks the U.S. Bankruptcy Court for the
District of Utah to authorize the sale of a small parcel of land
located in Walsenburg, Huerfano County, Colorado ("City Ranch
Property") to Paul Kimmel for $30,000.
Prior to the Petition Date, the Debtor obtained financing from
First Lien Lenders pursuant to a senior secured credit facility
evidenced by that certain Credit Agreement dated Feb. 19, 2013
among the Debtor, as borrower, Wilmington Trust, National
Association ("First Lien Agent"), as successor administrative agent
to KeyBank, National Association, and the First Lien Lenders
("First Lien Facility"). The Debtor also obtained a second
priority secured financing from KeyBank National Association,
acting as administrative agent ("Second Lien Agent") for the Second
Lien Lenders. The obligations owing to the First Lien Lenders and
Second Lien Lenders are secured by a pledge of substantially all of
the assets of the Debtor, including the City Ranch Property.
The Debtor is not currently aware of any Interests in the City
Ranch Property other than the liens of the First Lien Lenders and
Second Lien Lenders. The First Lien Lenders and Second Lien
Lenders consent to the Sale.
The Debtor is in the process of selling substantially all of its
assets.
Prior to the Petition Date, the Debtor employed Fuller Real Estate,
LLC, as its realtor with respect to the City Ranch Property.
Fuller marketed the City Ranch Property using its customary
marketing practices, including listing it publicly on applicable
real estate websites and publications.
Roughly contemporaneous with the filing of the Motion, the Debtor
has also filed its Motion to Approve Fuller as Realtor for the
Debtor, solely with respect to Fuller's efforts to sell the City
Ranch Property.
On Feb. 28, 2017, the Debtor entered into a Contract to Buy and
Sell Real Estate (together with subsequent amendments thereto),
whereby the Debtor has agreed to sell the City Ranch Property to
Buyer for $30,000. Fuller will be paid a 10% commission under the
Sale Agreement, subject to Court approval.
A copy of the Sale Agreement attached to the Motion is available
for free at:
http://bankrupt.com/misc/III_Exploration_328_Sales.pdf
The Debtor has sound business reasons for the proposed sale of the
City Ranch Property to Buyer. The Debtor has marketed the City
Ranch Property since well before the Petition Date, and Buyer is
the first party to express interest in purchasing the City Ranch
Property. The Debtor believes it is highly unlikely that it will
receive any higher or better offers to purchase the City Ranch
Property. Accordingly, the Debtor asks the Court to approve the
sale to the Buyer free and clear of any Interests.
The Debtor asks that, under the circumstances of the case, time is
of the essence, and the Court should waive the 14-day stay
otherwise imposed by Fed. R. Bankr. P. 6004(h). In particular,
Buyer and the Debtor originally intended to close the Sale on March
27, 2017. The Buyer has a significant interest in closing the Sale
as soon as possible, and the Debtor has a significant interest in
ensuring the Buyer close the Sale as soon as possible, since it
appears that the Buyer is the only party interested in purchasing
the City Ranch Property at this time.
About III Exploration II LP
III Exploration II LP and its general partner, Petroglyph Energy,
Inc., are headquartered in Boise, Idaho. III Exploration II is
engaged in the exploration and production of oil and natural gas
deposits, primarily in the Uinta Basin in Utah. III Exploration
also has an interest in approximately 42,100 undeveloped acres in
the Raton Basin located in Colorado, and participates in joint
ventures with respect to properties in the Williston Basin in
North Dakota.
III Exploration filed a chapter 11 petition (Bankr. D. Utah Case
No. 16-26471) on July 26, 2016. The petition was signed by Paul
R. Powell, president. The Debtor estimated assets at $50 million
to $100 million and debt at $100 million to $500 million.
The case is assigned to Judge R. Kimball Mosier.
The Debtor tapped George Hofmann, Esq., Steven C. Strong, Esq.,
and Adam H. Reiser, Esq., at Cohne Kinghorn, P.C., to serve as its
general counsel; and A. John Davis, Esq., at Holland & Hart LLP to
serve as special counsel. Tudor Pickering Holt & Co. is the
Debtor's investment banker. Donlin Recano & Company Inc. acts as
claims and noticing agent.
INTERNATIONAL AUTOMOTIVE: S&P Affirms 'B' CCR; Outlook Negative
---------------------------------------------------------------
S&P Global Ratings said that it has affirmed all of its ratings on
International Automotive Components Group S.A., including S&P's 'B'
corporate credit rating. The outlook is negative.
"We believe that IAC made operational improvements in 2016 to
reduce the losses associated with plant capacity and quality issues
that adversely affected its product launches," said S&P Global
credit analyst Nishit Madlani. "However, in our view, the company
will have to incur significant cash costs to sustain and improve
its profitability." The negative outlook reflects S&P's view of
the risks associated with IAC's ability to control these cash
outflows and its ability to refinance its upcoming 2018 bond
maturity over the next 12 months.
The negative outlook on IAC reflects the ongoing operational
execution risks and cash restructuring costs the company faces,
which will increase its reliance on its credit facilities over the
next 12 months.
S&P could lower its ratings on IAC over the next 12 months if the
company is unable to successfully refinance its upcoming 2018 bond
maturity, or if there is a delay in the receipt of the expected
proceeds from the sale of its soft trim joint venture. S&P could
also downgrade IAC if the company is unable to control the costs
associated with its planned restructuring such that its EBITDA
margins (including S&P's adjustments) remain below 5.5% on a
sustained basis. In S&P's view, this would heighten the risk that
the company's FOCF-to-debt would remain negative and its
debt-to-EBITDA would exceed 5x on a sustained basis rather than
remain flat or decline.
S&P could revise its outlook on IAC to stable if it appears likely
that the company will generate positive FOCF approaching 5% on a
sustained basis following its multi-year restructuring efforts.
Specifically, S&P would expect the company to demonstrate this by
steadily expanding its EBITDA margins to 5.5% or above. In
addition, S&P would expect IAC to refinance its upcoming debt
maturity, continue to reduce its costs, and improve its ability to
recover raw material costs with its customers.
J TIMOTHY SHELNUT: Ex-Wife OK'd to Pursue Claims in Superior Court
------------------------------------------------------------------
In the case captioned IN RE: J. Timothy Shelnut, Debtor, Case
Number 17-40113 (Bankr. S.D. Ga.), Judge Susan D. Barrett of the
U.S. Bankruptcy Court for the Southern District of Georgia
abstained and granted Virginia "Sam" Pannill, f/k/a Virginia P.
Shelnut relief from the automatic stay pursuant to 11 U.S.C.
section 362(d)(1).
In April 2010, J. Timothy Shelnut and Pannill were divorced with
the final divorce decree incorporating the settlement terms.
Shelnut failed to fulfill his obligations under the final divorce
decree and the Superior Court entered an interim contempt order in
July 2014, and a final order in October 2016.
Shelnut filed a chapter 11 bankruptcy petition on January 24, 2017.
Pannill filed an "Emergency Motion to Abstain, or in the
Alternative, for Modification of the Automatic Stay, or a
Determination that the Automatic Stay is Not Applicable Under 11
U.S.C. section 362(b)(1) and (2)."
At the hearing on the emergency motion, Shelnut agreed that the
second contempt order is res judicata in the bankruptcy proceeding
and establishes the amount of Pannill's claim at $375,086.59.
Shelnut acknowledged that the contempt order and arrest warrant
were the impetus for filing his bankruptcy.
Pannill's emergency motion asked the court to abstain from the
matter to allow her to pursue her claim in the Superior Court.
Pannill also sought a determination that the 11 U.S.C. section
362(a) automatic stay is inapplicable to her claim pursuant to 11
U.S.C. section 362(b)(1). Alternatively, if the court finds the
section 362 stay applicable, Pannill requested relief from the stay
for cause pursuant to 11 U.S.C. section 362(d)(1).
Judge Barret held that the Superior Court has a strong state
interest in domestic relations matters and given the facts and
circumstances of the case, it is appropriate for the bankruptcy
court to abstain from considering the matter in the interest of
justice and comity with the state courts and out of respect for
state law. The judge also found that the Superior Court's findings
as to the nature of Shelnut's conduct favor abstention. The
Superior Court had found that Shelnut had the ability to pay
Pannill but chose not to pay her.
As to the relief sought from the automatic stay, Pannill argued
that the stay does not apply to the enforcement of the arrest
warrant because the Superior Court found Shelnut in criminal
contempt and therefore the matter is excepted from the stay by 11
U.S.C. section 362(b)(1).
Judge Barret, however, found that the second contempt order allowed
Shelnut to purge himself of criminal and civil contempt by paying
the money by a date certain and thus the judge concluded that the
second contempt order is more civil in nature. As a result, Judge
Barrett concluded found the criminal proceeding exception of 11
U.S.C. section 362(b)(1) does not apply and therefore the section
362 automatic stay applies to Pannill's enforcement action.
In the alternative, Pannill sought relief from the stay pursuant to
11 U.S.C. section 362(d)(1), arguing "cause" to lift the stay
exists based upon Shelnut's behavior in the divorce proceedings.
Judge Barrett found that Shelnut is using his bankruptcy as a
weapon in an ongoing domestic battle with his former spouse. The
judge found that lifting the stay also allows the Superior Court to
uphold the dignity of its own orders. Judge Barrett thus found
that cause exists to lift the automatic stay pursuant to 11 U.S.C.
section 362(d)(1).
A full-text copy of Judge Barrett's March 21, 2017 opinion and
order is available at:
http://bankrupt.com/misc/gasb17-40113-47.pdf
J. COPELLO INTERNATIONAL: Taps McGuigan & McGuigan as Accountant
----------------------------------------------------------------
J Copello International Corp. seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to hire an
accountant.
The Debtor proposes to hire McGuigan & McGuigan CPAs to prepare its
tax returns, and provide other accounting services related to its
Chapter 11 case.
The hourly rates charged by the firm are:
Partners $250
Managers $220
Supervisors $190
Staff $160
McGuigan & McGuigan has no connection with the Debtor, its
bankruptcy estate and creditors, according to court filings.
The firm can be reached through:
Michael J. McGuigan
McGuigan & McGuigan CPAs
345 Lorton Avenue, Suite 205
Burlingame, CA 94104
Tel: 650-348-7073
Fax: 650-348-8309
Email: mike@mcguigancpa.com
About J. Copello International
J Copello International Corp. operates as an electrical contractor
from leased premises in South San Francisco.
Based in Millbrae, California, the Debtor filed a Chapter 11
petition (Bankr. N.D. Cal. Case No. 16-31345) on Dec. 16, 2016.
The petition was signed by Jack Copello, president. In its
petition, the Debtor disclosed $744,622 in assets and $2.90 million
in liabilities.
Judge Dennis Montali presides over the case. Stephen D.
Finestone, Esq., at Finestone Hayes LLP, to serve as bankruptcy
counsel. The Debtor hires Richard N. Hill, Esq. at Littler
Mendelson, PC as special counsel.
JAMES A. CRIPE: BF Adventures Buying 26 Mobile Homes for $500K
--------------------------------------------------------------
James A. Cripe asks the U.S. Bankruptcy Court for the Western
District of Pennsylvania to authorize the private sale of 26 mobile
homes located on the premises of Wilderness Mobile Home Park, 33
Wilderness Park, Pleasant Township, Warren County, Pennsylvania, to
BF Adventures, LLC, for $25,000, the elimination of the Deferred
Rent of approximately $25,000, and Colfin MF5 Funding, LLC's or the
Receiver's payment of all property taxes, current and delinquent,
which the Debtor would otherwise need to pay on the mobile homes,
subject to higher and better offers.
Colfin has or may have a lien on the subject mobile homes under the
mortgage recorded at Inst. No. 2006-5667 in the Office of the
Recorder of Deeds of Warren County, Pennsylvania. It is not
believed that the said mortgage extends to the mobile homes at
issue, and it is listed as a safeguard.
Warren County Tax Claim Bureau has or may have a lien on the
subject mobile homes for delinquent property taxes.
Subject to the Court's approval, the Debtor has agreed to convey
the said mobile homes through a transaction or series s of
transactions (likely involving M Shapiro Development Co., LLC, the
Court appointed Receiver) to the Buyer in consideration of (i) cash
to the Debtor in the amount of $25,000; (ii) the elimination of the
Deferred Rent of approximately $25,000as described in the Agreed
Order issued on Sept. 20, 2016, in the action in mortgage
foreclosure docketed at Doc. No. 277-2016 in the Court of Common
Pleas of Warren County, Pennsylvania; and (iii) Colfin's or the
Receiver's payment of all property taxes, current and delinquent,
which the debtor would otherwise need to pay on the mobile homes
upon the closing on the conveyance to the Buyer.
The conveyance sought to be authorized is part of an overall
Purchase Agreement whereby the Receiver would sell or facilitate
the sale of the real estate and the said mobile homes to the Buyer
for the gross sale price of $500,000. The mobile homes are owned
by the Debtor, are an integral part of the conveyance to the Buyer,
and cannot be sold without the Court's authorization.
The funds to be paid to the Debtor and the surcharge will be paid
at the overall closing at which the real estate of Wilderness
Mobile Home Park and the mobile homes will be transferred to the
Buyer.
Adele Cripe, the Debtor's wife, is the owner of the one unit on Lot
No. 37, a 1991 Marlette, V.I.N. T004126, and will also convey that
mobile home to the Buyer in order to effectuate the overall sale of
Wilderness to the Buyer. At the closing for the sale of Wilderness
to the Buyer, the Receiver or Colfin, as appropriate, will also pay
the debtor $26,400, which is the surcharge directed by the Court's
order of Sept. 16, 2016. These funds will be paid from the
$500,000, the gross sale price, which the Buyer will pay at the
closing.
A copy of the list of mobiles homes to be sold attached to the
Motion is available for free at:
http://bankrupt.com/misc/James_Cripe_637_Sales.pdf
The Debtor proposes that the said mobile homes be conveyed "as is,
where is,"free and clear of any interest of Colfin under its. The
property taxes and usual closing costs will be paid in full at
closing. The Buyer will bear the expense of transferring title to
its name.
The Debtor asks the Court to approve the relief sought.
The Purchaser can be reached at:
BF ADVENTURES LLC
50 Corvette Drive
Warren, PA 16365
About James A. Cripe
James A. Cripe (Bankr. W.D. Pa. Case No. 15-10070) filed a Chapter
11 petition on Jan. 21, 2015. The case is assigned to Judge
Thomas P. Agresti. The Debtor is represented by Gary Skiba, Esq.
JEVIC TRANSPORTATION: S.C. Rejects Structured Bankruptcy Dismissals
-------------------------------------------------------------------
Peg Brickley, writing for The Wall Street Journal Pro Bankruptcy,
reported that the U.S. Supreme Court on March 22 rejected an
increasingly popular bankruptcy-court tactic, structured dismissals
of bankruptcy cases by way of settlements that override payment
priority rules.
According to the report, the ruling came in the closely watched
case of Jevic Transportation, a New Jersey trucking company that
shut down suddenly, throwing thousands of drivers out of work, and
filed for bankruptcy in 2008.
Jevic's chapter 11 bankruptcy ran out of money and ended with a
court-approved deal that meant some cash for junior creditors, but
nothing for drivers that had priority claims, the report related.
Instead of a chapter 11 plan, Jevic wrapped up its affairs with a
settlement and dismissed its bankruptcy case, the report further
related. A six-justice majority of the high court found that ran
afoul of rules set out by Congress, the report said.
"Bankruptcy courts may not approve structured dismissals that
provide for distributions that do not follow ordinary priority
rules without the consent of affected creditors," said Justice
Stephen Breyer, writing for the majority, the report cited.
Robert Feinstein, Esq., a lawyer who helped put together the
settlement, said creditors "are reviewing the opinion and
considering its implications" when the Jevic case heads back to
bankruptcy court for more work, the report said. Over 1,000
unsecured creditors received checks years ago as the result of the
settlement that has now been vacated, Mr. Feinstein told the
Journal.
Jack Raisner, Esq., lawyer for the unpaid truck drivers, told the
Journal he was grateful the court "preserved and reaffirmed the
important right on which employees have long relied: to get paid"
instead of allowing a bankrupt company to pay off lower ranked
creditors.
"That no longer can happen without the employees' consent," he
further told the Journal.
The ruling overturned the Jevic dismissal, on the grounds that
beleaguered companies cannot do in a settlement what they couldn't
do in chapter 11 or chapter 7, ignore the payment priority scheme
set out by Congress, the report said.
As long as priority creditors don’t consent to the deal, such
settlements can't be approved, the high court said, the report
added.
Jevic's deal didn't save the company as a business or promote the
possibility a chapter 11 exit plan could be confirmed, a
six-justice majority of the high court noted, the Journal related.
"It's an important case because it clarifies that the
bankruptcy-court priority rules are guardrails that powerful
claimants cannot evade just because it serves their interests,"
Jonathan Lipson, a professor at Temple University Beasley School of
Law, who co-authored an amicus brief signed by more than a dozen
bankruptcy scholars, told the Journal.
Mr. Lipson further told the Journal that lower courts treated
cash-strapped Jevic as a "rare case, when it was anything but rare.
Companies frequently enter bankruptcy with little or no
unencumbered assets and there's no reason to think that that's
going to change." Allowing a "rare case" exception, he told the
Journal, invited litigation, while keeping the priority scheme
clear promotes settlements that bring all creditors on board.
Bankruptcy lawyer Chris Ward, Esq., who isn't involved in the Jevic
case, noted that the Supreme Court didn't rule out structured
dismissals. "You can still use structured dismissals as a tool to
dismiss a bankruptcy case. You just need to follow the absolute
priority rule," Mr. Ward told the Journal.
The U.S. Supreme Court case is CZYZEWSKI ET AL. v. JEVIC HOLDING
CORP. ET AL., No. 15–649 (U.S.).
A full-text copy of the Supreme Court's Decision dated March 22,
2017, is available at:
http://bankrupt.com/misc/us15-649_k53m.pdf
About Jevic Transportation
Based in Delanco, New Jersey, Jevic Transportation Inc. --
http://www.jevic.com/-- provided trucking services. Two
affiliates -- Jevic Holding Corp. and Creek Road Properties-- have
no assets or operations. Jevic et al. sought Chapter 11
protection (Bankr. D. Del. Case No. 08-11008) on May 20, 2008.
Domenic E. Pacitti, Esq., and Michael W. Yurkewicz, Esq., at Klehr
Harrison Harvey Branzburg & Ellers, in Wilmington, Del.,
represented the Debtors.
The U.S. Trustee for Region 3 appointed five creditors to
serve on an Official Committee of Unsecured Creditors. Robert J.
Feinstein, Esq., Bruce Grohsgal, Esq., and Maria A. Bove, Esq., at
Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent
the Official Committee of Unsecured Creditors.
Before filing for bankruptcy, the Debtors initiated an orderly
wind-down process. As a part of the wind-down process, the
Debtors ceased substantially all of their business and
terminated roughly 90% of their employees. The Debtors continue
to manage the wind-down process in an attempt to deliver all
freight in their system and to retrieve their assets.
When the Debtors sought protection from their creditors, they
estimated assets and debts between $50 million and $100 million.
At Oct. 31, 2010, the Debtor had total assets of $425,000, total
liabilities of $12.2 million, and a stockholders' deficit of
$11.8 million.
JOLIVETTE HAULING: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Jolivette Hauling Inc.
W15223 Kelly Rd
Taylor, WI 54659
Case No.: 17-11005
About the Debtor: Jolivette Hauling is a licensed and bonded
freight shipping and trucking company running freight hauling
business from Taylor, Wisconsin.
Chapter 11 Petition Date: March 27, 2017
Court: United States Bankruptcy Court
Western District of Wisconsin (Eau Claire)
Debtor's Counsel: Evan M. Swenson, Esq.
MART W. SWENSON, S.C.
118 E. Grand Avenue
Eau Claie, WI 54701
Tel: 715/835-7779
E-mail: evan@swensonlawgroup.com
court@swensonlawgroup.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by James Jolivette, registered agent.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/wiwb17-11005.pdf
KIMBALL HILL: F&D Ordered to Dismiss Claims vs TG
-------------------------------------------------
In the case captioned In re: Kimball Hill, Inc., et al., Debtors,
Case No. 08bk10095 (Bankr. N.D. Ill.), Judge Timothy A. Barnes of
the United States Bankruptcy Court for the Northern District of
Illinois, Eastern Division, ordered Fidelity and Deposit Company of
Maryland to dismiss its state court claims against TRG Venture Two,
LLC.
F&D had filed 10 proofs of claims against an equal number of debtor
entities. Each of the claims not only expressly asserted claims
under F&D's indemnity agreements with Kimball Hill, Inc. (KHI), but
also asserted claims under "principals of common law" and
"suretyship." The court sustained the debtors' objection to eight
of F&D's claims.
On March 12, 2009, the court entered an order confirming the
debtors' joint plan of liquidation. The plan and confirmation
order discharged and released all claims of parties that voted in
favor of the plan against the debtors, the KHI Trust and other
indentified parties. In furtherance of the release, both the plan
and the confirmation order contained an injunction against
commencing or continuing in any manner any action or proceeding
with respect to the released claims.
F&D had voted the remainder of its claims in favor of the plan.
TRG is the successor to a purchaser of assets from the bankruptcy
case.
At or about the tim that F&D was seeking recovery from the
bankruptcy court on its claims, it also began to seek recovery
against TRG on essentially the same basis in the Illinois state
courts. Over the course of each individual suit, F&G interpleaded
TRG as the successor to KHI. TRG subsequently moved for its
dismissal from each of the state court lawsuits, and was successful
in each of the lawsuits. Though TRG was dismissed, the dismissal
did not appear to have become final because appeals were taken or
reconsiderations were sought.
TRG asked the bankruptcy court to:
(i) enforce the confirmation order against F&D;
(ii) direct F&D to dismiss its claims against TRG in the
state court lawsuits, and
(iii) award TRG damages.
TRG alleged that in bringing the claims against TRG, F&D has
violated the plan injunction and failed to respect the release
contained in the plan.
Judge Barnes concluded that the claims asserted by F&D in the state
court lawsuits were released and enjoined under the plan and
confirmation order. As such, the judge held that, in bringing the
claims against TRG in the state court lawsuits, F&D has violated
the terms of the plan injunction, and in so doing, has subjected
itself to further order of the bankruptcy court and civil contempt
damages.
A full-text copy of Judge Barnes' March 20, 2017 memorandum is
available at:
http://bankrupt.com/misc/ilnb08-10095-4051.pdf
About Kimball Hill
Headquartered in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- was one of the largest
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues, before filing for bankruptcy. The company operated
within 12 markets, including, among others, Chicago, Dallas, Fort
Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions:
Florida, the Midwest, Nevada, the Pacific Coast and Texas.
Kimball Hill, Inc., and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts. The Debtors'
consolidated financial condition as of Dec. 31, 2007, reflected
total assets of $795,473,000 and total debts $631,867,000.
Kimball Hill filed a Chapter 11 plan of liquidation on Dec. 2,
2008, which provides for the winding down of the Debtors' business
through a liquidation trust. With the support of the official
committee of unsecured creditors and the company's senior lenders
(estimated to recover 37% to 48% of their claims), the plan was
confirmed on March 12, 2009, and took effect 12 days later. U.S.
Bank National Association was appointed as trustee for the
Liquidation Trust.
MCELRATH LEGAL: Proposes Private Sale of 39 Filing Cabinets
-----------------------------------------------------------
McElrath Legal Holdings, LLC, asks the U.S. Bankruptcy Court for
the Western District of Pennsylvania to authorize the private sale
of 39 filing cabinets which are stored at 116 Smithfield Street,
Pittsburgh, Pennsylvania, without advertising.
A hearing on the Motion is set for April 18, 2017 at 1:30 p.m. The
objection deadline is April 9, 2017.
The Debtor owns the filing cabinets which are stored at the
property owned by JOEJ, LLC, and formerly leased to the Debtor.
The JOEJ lease was rejected in the Chapter 11. The Debtor has not
removed the Property from the JOEJ location and is incurring a
postpetition user fee on a quantum merit basis for storing the
Property at the location. The Debtor needs to remove the Property
to end its liability for using the space. The Debtor has no use
for the Property. The cost to have the Property moved and stored
exceeds it value.
The Debtor has advertised the Property for sale "as is" to test the
market but has not completed any sales yet. It received inquiries
of between $25 to $75 per cabinet for a couple of cabinets. No one
expressed interested in a bulk purchase.
The Debtor believes the administrative costs of a court supervised
advertised auction may exceed the value of the Property (which may
be less than $2,500), the sale value can be maximized by selling
items piecemeal by private sale, and the sales can be completed by
April 15, 2017, or earlier thus enabling the Debtor to cease
incurring liability for use of the space.
Once the cabinets are liquidated the Debtor will file a Report of
Sale with an itemization of the names the buyers, number of
cabinets purchased, and sale prices.
The Debtor asks that all advertising, publication, and internet
exposure requirements be waived as a potential for competitive
bidding does not exist and cost of advertising would serve no
purpose.
The Debtor asks authorization to sell the Property by private sale
without advertising free and clear of liens for the best offers.
About McElrath Legal Holdings
Headquartered in Pittsburgh, Pennsylvania, McElrath Legal Holding,
LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa.
Case No. 16-22568) on July 11, 2016, estimating its assets at up
to
$50,000 and its liabilities at between $1 million and $10 million.
The petition was signed by Paul McElrath, president. Judge
Carlota
M. Bohm presides over the case.
Gary William Short, Esq., who has an office in Pittsburgh,
Pennsylvania, serves as the Debtor's bankruptcy counsel. The
Debtor hires Elder Law Management, as an accountant.
The U.S. Trustee informs the U.S. Bankruptcy Court for the Western
District of Pennsylvania that a committee of unsecured creditors
has not been appointed in the Chapter 11 case of McElrath Legal
Holding, LLC, due to insufficient response to the U.S. Trustee
communication/contact for service on the committee.
MELI INVESTMENTS: Seeks to Hire Leiderman as Legal Counsel
----------------------------------------------------------
Meli Investments, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire Leiderman Shelomith Alexander +
Somodevilla, PLLC to give legal advice regarding its duties under
the Bankruptcy Code, negotiate with creditors in the preparation of
a bankruptcy plan, and provide other legal services.
Zach Shelomith, Esq., and Ido Alexander, Esq., the attorneys
designated to represent the Debtor, will charge $425 per hour and
$325 per hour, respectively. The hourly rates of other Leiderman
professionals range from $120 to $425.
Mr. Alexander disclosed in a court filing that the firm is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Zach B Shelomith, Esq.
Leiderman Shelomith Alexander +
Somodevilla, PLLC
2699 Stirling Rd # C401
Ft. Lauderdale, FL 33312
Tel: (954) 920-5355
Fax: (954) 920-5371
Email: zbs@lsaslaw.com
-- and --
Ido J. Alexander, Esq.
2 S. Biscayne Blvd., Suite 2300
Miami, FL 33131
Tel: 305-894-6163
Fax: 305-503-9447
Email: ija@lsaslaw.com
About Meli Investments LLC
Based in Miami, Florida, Meli Investments, LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
17-12870) on March 9, 2017. The petition was signed by Luis
Taveras, managing member. The case is assigned to Judge Robert A
Mark.
At the time of the filing, the Debtor estimated its assets and
debts at $1 million to $10 million.
METRO NEWSPAPER: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Metro Newspaper Advertising Services, Inc.
28 Wells Avenue
Building 3, 4th Floor
Yonkers, NY 10701
Case No.: 17-22445
Type of Business: Metro Newspaper Advertising Services, Inc. --
http://www.metrosn.com-- is a comprehensive
advertising resource that specializes in
newspapers and all newspaper related products,
both print and digital.
Chapter 11 Petition Date: March 27, 2017
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Judge: Hon. Robert D. Drain
Debtor's Counsel: Jonathan S. Pasternak, Esq.
DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR,
LLP
One North Lexington Avenue
White Plains, NY 10601
Tel: (914) 681-0200
Fax: (914) 684-0288
E-mail: jpasternak@ddw-law.com
Estimated Assets: $1 million to $10 million
Estimated Debts: $10 million to $50 million
The petition was signed by Phyllis Cavaliere, chairman & CEO.
Debtor's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
MJS Communications $1,368,623
358 Chestnut Hill Avenue
Suite 201
Brighton, MA 02135
Chicago Tribune Company $960,079
c/o Tribune Company Blue Lynx
2501 S State Hwy
Lewisville, TX 75067
San Francisco Chronicle $740,741
c/o Hearst Corporation
4747 Southwest Freeway
Houston, TX 77002
Los Angeles Times $633,858
c/o Tribune Company Blue Lynx
2501 S State Hwy
Lewisville, TX 75067
Doodad Printing $544,788
Attn: Ed Klemmer
1842 Colonial Village Lane
Suite 101
Lancaster, PA 17601
Dow Jones/Wall St. Journal $410,138
P.O. Box 4137
New York, NY 10261
Boston Globe Newspapers $386,249
135 William T. Morrissey Blvd
Dorchester, MA 02125
San Diego Union Tribune $372,784
c/o Tribune Blue Lynx
2501 S State Hwy
Lewisville, TX 75067
Seattle Times $279,473
PO Box C34805
Seattle, WA 98142
Pittsburgh Post Gazette $264,377
Attn: Amy McCay Credit Dept.
P.O. Box 566
Pittsburgh, PA 15230
Nili Seren Loan $240,000
Kathy Jahns $192,976
San Antonio Express $159,856
Philadelphia Inquirer $139,912
Chicago Sun Times $139,794
Atlanta Journal Constitution $137,324
Milwaukee Journal Sentinel $135,317
San Jose Mercury News $129,198
New York Daily News $127,608
Florida Times-Union $124,142
MICRON TECHNOLOGY: S&P Affirms 'BB' CCR; Outlook Stable
-------------------------------------------------------
S&P Global Ratings said it affirmed all of its ratings, including
the 'BB' corporate credit rating, on Boise, Idaho-based Micron
Technology Inc. and revised the outlook to stable from negative.
"The outlook revision follows a significant recovery in Micron's
operating performance largely driven by improvement in both dynamic
random access memory (DRAM) and NAND (flash memory) market
conditions, pricing, and technology transitions to lower line width
and 3D memory solutions," said S&P Global Ratings credit analyst
Jenny Chang.
The stable outlook reflects S&P's expectation that Micron will
demonstrate substantial improvement in free cash flow and maintain
leverage below 3x over the coming year, based on healthy industry
fundamentals, solid end-market demand, and further cost reduction
expected in the next phase of technological transition.
MILLENNIUM SUPER: 786 May Purchase Leased Property, Court Says
--------------------------------------------------------------
Judge Dennis R. Dow of the United States Bankruptcy Court for the
Western District of Missouri denied Millennium Super Stop II, LLC's
Motion to Approve Contract for Sale and Motion to Reject Executory
Contract. Judgment was entered for 786 Enterprises, Inc., on the
Adversary Complaint to Compel Turnover of Property, and on the
Adversary Complaint for Declaratory Relief and Specific
Performance.
In June 2010, Millennium and 786 entered into a lease agreement in
which Millennium leased a gas station and convenience store at
1601-03 W. 12th Street, Kansas City, Missouri, named Millennium
Super Stop II to 786. 786 paid a fixed monthly rent to Millennium
of $16,500. The lease gave 786 the exclusive right to purchase the
Property for the appraised value at a future date. 786 paid
Millennium a non-refundable, good-faith $75,000 deposit towards the
Option.
In April 2015, 786 notified Millennium that it intended to exercise
the Option to purchase the Property. The appraiser reported the
Property's value was $1,400,000.
On October 23, 2015, 786 gave timely written notice to Millennium
of its election to purchase the Property for $1,4000,000 and
included a signed purchase agreement in the form required by the
lease. Millennium refused to execute the purchase agreement.
On October 30, 2015, Millennium commenced a lawsuit in the Circuit
Court of Jackson County, Missouri, to challenge the valuation of
the Property alleging the language in the lease was vague. 786
sought specific performance of the Option among other things. On
June 27, 2016, Millennium sent 786 a letter giving notice of intent
to terminate the lease on August 1, 2016.
Millennium asserted that an amendment previously made to the Option
is ambiguous as applied because it leads to an absurd result in
that the fair market value of the Property is substantially greater
that the appraisal amount.
Judge Dow disagreed, explaining that the appraisal result is not
the type of absurdity envisioned by the courts. The judge found
that the terms of the contract were plain and clear that the agreed
appraiser will determine a value and 786 will tender that amount
and Millennium will convey the Property. The judge pointed out
that the option language does not provide a mechanism to contest
the appraised value. Furthermore, there is no persuasive evidence
that the result is absurd.
786 argued that it exercised its option to purchase the Property as
required under the terms of the lease and the amended Option terms
and should be granted specific performance allowing it to purchase
the Property for the price established by the appraisal.
Judge Dow found that the elements necessary for the option to be
considered a contract subject to specific enforcement under
Missouri law were clearly met and 786 is entitled to specific
performance -- the conveyance of title to the Property under the
Option. The judge also noted that Millennium's refusal to perform
was clearly in bad faith, a false reason having been given for
refusal to close. The judge further observed that Millennium's
efforts since then have all been in furtherance of a sort of
seller's remorse and unwillingness to abide by the terms of the
Option in hopes of securing a higher price.
Millennium asserted that the Option is an executory contract and
may be rejected by it. 786 argued that Millennium breached the
Option before attempting to reject it, that its performance was
therefore excused, and that the Option was no longer executory, and
Millennium is thus unable to reject it.
Judge Dow found that 786 had fully performed under the Option to
the extent possible given Millennium's failure to perform and
breach of the option. The judge thus held that 786 has no further
duty to perform but rather holds a claim against Millennium and the
contract is no longer executory for purposes of section 365.
In addition, Judge Dow held that notwithstanding any of the above
discussion, even if the contract option is executory and subject to
rejection, 786 is entitled to the protection of section 365(i)
which provides that 786 has the right to retain possession of the
Property.
Millennium has filed a Motion to Approve Contract for Sale and
attached a proposed Contract of Sale to the buyer Alliance
Petroleum, LLC. Judge Dow, however, noted that Millennium failed,
in its motion, at trial and it its post-trial brief, to identify
what parts of section 363(f) would permit the sale free and clear
of the Option under these circumstances. Thus, Millennium's motion
was denied.
The adversary proceedings are 786 Enterprises, Inc., Plaintiff, v.
Millenium Super Stop II, LLC, Debtor/Defendant, Adversary
Proceeding No. 16-4094 (Bankr. W.D. Mo.) and Millenium Super Stop
II, LLC, Debtor/Plaintiff, v. 786 Enterprises, Inc., Defendant,
Adversary Proceeding No. 16-4096 (Bankr. W.D. Mo.).
The bankruptcy case is IN RE: MILLENnIUM SUPER STOP II, LLC,
Debtor, Case No. 16-41972 (Bankr. W.D. Mo.).
A full-text copy of Judge Dow's March 7, 2017 memorandum opinion is
available at:
http://bankrupt.com/misc/mowb16-41972-61.pdf
About Millennium Super Stop II
Millennium Super Stop II, LLC, based in Kansas City, MO, filed a
Chapter 11 petition (Bankr. W.D. Mo. Case No. 16-41972) on July 26,
2016. The Hon. Dennis R. Dow presides over the case. Nancy S.
Jochens, Esq., at Jochens Law Office, serves as bankruptcy
counsel. In its petition, the Debtor disclosed $3.01 million in
assets and $1.90 million in liabilities. The petition was signed
by Ray A. Perrin, member/manager.
N&B INDUSTRIES: S&P Affirms 'B' CCR on Proposed LBO
---------------------------------------------------
S&P Global Ratings said that it affirmed its 'B' corporate credit
rating on Austin, Texas-based N&B Industries Inc. The outlook is
stable.
At the same time, S&P assigned its 'B' corporate credit rating to
its parent holding company, KNB Holdings Corp., which is also the
issuer of the new loans. Initially, the issuing entity will be NBG
Acquisition Inc., which will be collapsed into KNB Holdings Corp.
at the close of the transaction. The outlook is stable.
Affiliates of Sycamore Partners Management LLC are buying N&B
Industries Inc. (N&B) in a leveraged buyout (LBO). The transaction
is expected to close by the end of April 2017. Pro forma for the
transaction and full year effect from the 2016 Plantation Patterns
acquisition, S&P expects leverage to be about 5x.
S&P also assigned a 'B' issue-level rating to the proposed
$265 million first-lien term loan maturing in 2024 and a '3'
recovery rating, indicating S&P's expectation for meaningful
recovery (50%-70%; rounded value: 60%) in the event of a payment
default. The proposed capital structure also includes a
$75 million asset-based lending revolving credit facility (ABL) due
in 2022 and a $70 million second-lien term loan due in 2024, both
of which are unrated.
The company expects to use proceeds from the debt offering along
with common equity contributed by Sycamore Partners to fund the
acquisition. S&P estimates the company will have about
$370 million of adjusted debt at close.
All ratings are based on preliminary terms and are subject to
review upon receipt of final documentation. S&P will withdraw its
existing issue-level and recovery ratings at Nielsen & Bainbridge
LLC at the close of the transaction.
The rating affirmation reflects leverage of about 5x at transaction
close for the year ended Dec. 31, 2016. While S&P expects the
company to reduce leverage over the next few quarters, S&P believes
its new financial sponsor and majority owner will largely shape the
company's financial policies. That is likely to prevent the
company from permanently reducing leverage to levels commensurate
with a better financial risk profile assessment over the next 12
months. S&P also believes the company could continue to make
acquisitions to increase its scale in the highly fragmented
affordable home decor market.
S&P's ratings reflect its view of the company's narrow business
focus within a niche market, the sector's fragmented markets, some
channel concentration within the specialty and independent stores
segment, and the discretionary nature of the company's products.
The company has expanded its product offerings, diversified its
customer base, and increased its operating scale by completing one
acquisition in each of the past three years. N&B has traditionally
designed and manufactured custom and ready-made framing products,
but with the acquisition of Home Decor, DSI, and Plantation
Patterns, its offerings also now include portable lighting, wall
art, accent furniture, and soft goods. S&P believes this broader
product portfolio and increased scale will help reduce earnings
volatility, although the company could still be vulnerable to
reduced consumer spending in an economic downturn, as S&P believes
many N&B items are impulse purchases. Because of the discretionary
nature of the products within fragmented markets S&P expects N&B
will pursue small acquisitions to maintain growth.
While pro forma leverage is lower than what S&P typically sees in
other LBOs for consumer durables companies, S&P believes that
future financial policies under the new sponsor owner is uncertain.
S&P estimates the company's pro forma leverage of about 5x for the
estimated 12 months ended Dec. 31, 2016, and S&P expects the
company to use FOCF to reduce leverage to closer to 4x during the
next 12 to 24 months. However, S&P believes that future
acquisition growth or dividend decisions could restrict the company
from sustaining leverage below 5x. Owners who are financial
sponsors typically focus on generating short-term investment
returns and operate the companies they buy with high debt levels.
S&P's base-case forecast for N&B reflects continued modest economic
growth and these assumptions:
-- U.S. real GDP growth of 2.4% in 2017 and 2.3% in 2018, which
S&P believes will lead to more discretionary spending;
-- Low-single-digit percent revenue growth in fiscal years 2017
and 2018, reflecting growth from both new and existing
customers in the Home Decor, Soft Home, and Wall Decor
categories. S&P expects some softness to continue in the
Custom Framing category because of promotions by larger
retailers are shifting business away from smaller
independent framers.
-- EBITDA margin in the low-teens and slightly expanding, as
N&B realizes cost savings and operating leverage from
facility consolidation and supply chain optimization;
-- Slight increase in working capital use in line with revenue
growth;
-- Positive FOCF of more than $35 million, allowing for debt
prepayment beyond required amortization;
-- Capital expenditures in the $4 million-$5 million range; and
-- No large, debt-financed acquisitions or dividends.
Based on these assumptions, S&P estimates these credit measures:
-- Adjusted debt to EBITDA of about 4.5x for 2017 and 4.1x in
2018; and
-- Funds from operations (FFO) to debt of 11%-12% for 2017 and
2018.
S&P assess the company's liquidity as adequate. S&P estimates the
company's sources of liquidity will exceed uses by more that 1.5x
the next 12 months, even if EBITDA were to decline 30%. As a
speculative-grade debt issuer, S&P do believe the company has
satisfactory standing in credit markets and sound banking
relationships. Because of its small size, however, S&P believes
the company may need to refinance if a low-probability, high-impact
event (such as another housing market downturn or the loss of a key
supplier) were to occur. S&P also believes that the company is
unlikely to sustain stronger liquidity over the long term because
of possible acquisitions or dividends to its sponsor owner.
Principal liquidity sources:
-- Negligible cash balances at the close of the transaction;
-- Cash FFO of at least $35 million; and
-- Full availability of the proposed $75 million ABL due in
2022, supported by full coverage on its accounts receivable
payables and inventory.
Principal liquidity uses:
-- Capital expenditures of roughly $4 million-$5 million;
-- Peak seasonal working capital use of $30 million; and
-- $2.7 million of annual amortization on the proposed first-
lien term loan due in 2024.
Covenant
The proposed term loans are not subject to any financial
maintenance covenants. The ABL is subject to a springing fixed
charges covenant of 1x if excess availability falls below
$7.5 million.
The stable outlook on N&B reflects S&P's expectation that it will
not make a large debt-financed acquisition or dividend.
Furthermore, S&P expects that the company will sustain adequate
liquidity, continue to maintain good EBITDA margins, and generate
sufficient cash flow to sustain adjusted debt to EBITDA at around
5x and below, and FFO to debt of about 11%.
S&P could lower the rating if shifting consumer taste leads to
lower sales. That could weaken operating performance and lead to
an increase in adjusted leverage to about 7x. S&P could also lower
the rating if the company does not generate sufficient cash flow to
maintain adequate liquidity or adds debt to pay a dividend or make
an acquisition. S&P estimates that current EBITDA levels would
need to decline about 30% from 2016 pro forma levels for leverage
to reach 7x.
While unlikely in the next 12 months, S&P could raise the ratings
if the company's new sponsor owner commits to a conservative
financial policy that would support leverage to be sustained below
5x. This could occur if the company does not make large
debt-financed acquisitions or dividends and applies excess cash
flow beyond S&P's expectation to debt reduction.
NEPHROS INC: Incurs $3.03 Million Net Loss in 2016
--------------------------------------------------
Nephros, Inc., filed with the Securities and Exchange Commission
its annual report on Form 10-K disclosing a net loss of $3.032
million on $2.320 million of total net revenues for the year ended
Dec. 31, 2016, compared with a net loss of $3.088 million on $1.944
million pg total net revenue for the year ended Dec. 31, 2015.
As of Dec. 31, 2016, the Company had $2.7 million in total assets,
$2 million in total liabilities and $667,000 of total stockholders'
equity.
The increase of approximately $376,000, or 19%, in revenue was
primarily driven by an increase in the number of filters sold in
2016 versus in 2015.
At Dec. 31, 2016, the Company had an accumulated deficit of
approximately $120,285,000, and they expect to incur additional
operating losses from operations in the foreseeable future at least
until such time, if ever, that they are able to increase product
sales or licensing revenue.
Net cash used in operating activities was approximately $2,112,000
for the year ended Dec. 31, 2016 compared with $3,815,000 for the
year ended Dec. 31, 2015. The Company's net loss was approximately
$3,027,000 for the year ended Dec. 31, 2016, compared with a net
loss of $3,426,000, excluding the noncash impacts of the change in
fair value of the warrant liability and the warrant modification,
for the year ended Dec. 31, 2015, a decrease of approximately
$399,000.
Moody, Famiglietti & Andronico, LLP, in Tewksbury, MA, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2016. It said, "[T]he
Company has incurred negative cash flow from operations and
recurring net losses. These conditions, among others, raise
substantial doubt about its ability to continue as a going
concern."
A full-text copy of the Form 10-K is available for free at:
https://is.gd/DhPWwK
About Nephros, Inc.
River Edge, N.J.-based Nephros, Inc., is a commercial stage medical
device company that develops and sells high performance liquid
purification filters. Its filters, which it calls ultrafilters,
are primarily used in dialysis centers and healthcare facilities
for the production of ultrapure water and bicarbonate.
NETWORK CREATIVE: Selling Assets Valued at $25K Below
-----------------------------------------------------
Judge Marian F. Harrison of the U.S. Bankruptcy Court for the
Middle District of Tennessee will convene a hearing on April 25,
2017, at 9:00 a.m. to consider Network Creative Group, LLC
("NCG")'s sale of assets having a value of less than $25,000
outside the ordinary course of business.
Objection deadline is April 13, 2017.
NCG was formed in June 2003 for the purpose of launching a
television channel featuring family friendly programming and
Americana music on cable and satellite programming services. NCG
launched BlueHighways TV and its first video-on-demand service in
2005 and launched as a 24/7 linear television service in March
2007.
Throughout its existence, NCG produced original content including
audio-visual recordings of various musicians performing songs live
in its studios ("Video Assets"). The Video Assets were aired as
part of NCG's programming.
At the present time, NCG is not producing any original content for
its programming but it has retained possession of the Video Assets
pursuant to license agreements between NCG and the musicians.
However, any re-publication of the Video Assets by anyone would be
unlawful and in violation of copyright license agreements with the
musicians.
At least one musician has approached NCG about purchasing some of
the Video Assets from NCG for $5,000. NCG wishes to sell the Video
Assets, which have little or no value to anyone but the holders of
the underlying copyrights in the songs without renewal of a license
agreement.
The Debtor desires to liquidate certain assets, specifically
including some of the Video Assets, but pursuant to 11 U.S.C.
Section 363(b), such sales must be approved by the Court. In order
to provide the Debtor with the flexibility to sell its assets
outside the ordinary course of business, the Debtor asks authority
to sell assets having a value of less than $25,000 without further
Court approval.
There are no liens on the Debtor's personal property assets. All
net proceeds collected from such sales will be deposited into the
DIP account utilized for ordinary course operating expenses. The
Debtor's DIP lender holds a super-priority claim for all amounts
funded under the DIP Loan. The DIP lender consents to the proposed
sale procedure.
The Debtor has personal property assets that it no longer uses in
the business. The Debtor desires the ability to sell those assets
and utilize the proceeds for ordinary course expenses. Due to the
relatively low value of such assets, the Debtor's ability to close
the sales would be hampered by the time that would be required to
notice such sales each time that an offer was made. The Debtor
asserts that it is in the best interest of the estate for the Court
to grant this Motion, and permit the Debtor to sell assets,
including the Video Assets, having a value of less than $25,000,
and provide the Court with notice of each sale after its
occurrence. Accordingly, the Debtor asks the Court to approve the
relief sought.
About Network Creative Group
Network Creative Group, LLC was formed in June 2003 for the purpose
of launching a television channel featuring family friendly
programming and Americana music on cable and satellite programming
services. It launched BlueHighways TV and its first
video-on-demand service in 2005 and launched as a 24/7 linear
television service in March 2007.
Network Creative Group, LLC sought Chapter 11 protection (Bankr.
M.D. Tenn. Case No. 16-05024) on July 15, 2016. Judge Marian F
Harrison is assigned to the case.
The Debtor tapped David W Houston, IV, Esq., at Burr & Fomran LLP,
as counsel.
The petition was signed by Alan McLaughlin, COO.
NEW ENGLAND HEALTH: Chapter 7 Trustee to Destroy Patient Records
----------------------------------------------------------------
In the Chapter 7 bankruptcy case, In re: New England Health &
Wellness, LLC, Case No. 16-42174-CJP (D. Mass.), Chapter 7 Trustee
Janice G. Marsh advised that patient records will be destroyed if
not claimed by March 21, 2018.
"If patient records are not claimed by the patient or an insurance
provider by the date that is 365 days after the date of this
notification, the trustee will destroy the patient records,"
according to a notice dated March 21.
The Chapter 7 Trustee may be reached at:
Janice G. Marsh, Trustee
Janice G. Marsh, LLC
446 Main Street, 19th Floor
Worcester, MA 01608
Telephone 508-797-5500
E-mail: janicemarsh1@gmail.com
NEWFIELD EXPLORATION: S&P Affirms 'BB+' CCR; Outlook Stable
-----------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' corporate credit rating for
Newfield Exploration Co. The 'BB+' issue-level rating and '3'
recovery rating on the company's debt are unchanged. The '3'
recovery indicates S&P's expectation of meaningful (50%-70%;
rounded estimate: 65%) recovery in the event of a payment default.
"The stable outlook reflects our view that Newfield Exploration's
credit measures will remain appropriate for the rating over the
next two years, with FFO to debt in the mid-30% range, supported by
increasing cash flows from growing production as the company
develops its Anadarko Basin acreage," said S&P Global Ratings
credit analyst Michael Tsai.
S&P could downgrade the company if S&P expected FFO to debt to fall
and remain below 20% for a sustained period. This would most
likely occur if capital spending exceeded cash flows (including
asset sale proceeds) by more than S&P's current estimates, if
production was weaker than our projections, or if the company
pursued a heavily debt-financed acquisition.
S&P could raise the rating if it expected FFO to debt to improve
and remain above 45% for a sustained period. This would most
likely occur if average commodity prices were higher than S&P's
current price deck assumptions, or if the company increased its
proved reserves more in line with higher-rated peers while
maintaining current credit measures.
NEXXLINX CORP: Seeks More Time to Confirm Plan Through April 30
---------------------------------------------------------------
Nexxlinx Corporation, et al., are asking the U.S. Bankruptcy Court
for the Northern District of Georgia to extend their exclusive
right to solicit acceptances of their Chapter 11 Plan through April
30, 2017.
The Debtors filed their original Plan of Reorganization and
Disclosure Statement in October 2016. Subsequent amendments on the
Plan were filed. On February 13, 2017, the Court approved the
Second Amended Disclosure Statement to accompany the Debtors'
Second Amended Plan.
In an effort to address potential objections to confirmation, the
Debtors and the Official Committee of Unsecured Creditors filed a
joint motion seeking a continuance of the confirmation hearing. On
March 15, 2017, the Court entered an order which continued the
confirmation hearing to April 3, 2017. Thus, the Debtors need
additional time and request that the exclusive solicitation period
be extended through the end of April.
About NexxLinx Corporation
NexxLinx Corporation, Inc. provides cloud-based outsourced business
process and marketing services. The company designs custom
solutions for inbound and outbound customer care, telemarketing and
data collection, help desk, e-mail processing, live Web and voice
interaction, and back-end data processing. It also provides
multichannel communication, customer retention, inbound sales
conversion, government contact center, back office support,
technical support, and fulfillment solutions.
NexxLinx sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Ga. Case No. 16-61225) on June 28, 2016. The
petition was signed by D. Alan Quarterman, CEO. The Company has
estimated assets and liabilities of $10 million to $50 million.
These affiliates also sought Chapter 11 protection on June 28:
CustomerLinx of North Carolina, Inc., Microdyne Outsourcing, Inc.,
NexxLinx Global, Inc., NexxLinx of New York, Inc., and NexxLinx of
Texas, Inc.
The court on June 30, 2016, entered an order jointly administering
the Chapter 11 cases.
NexxPhase, Inc. filed a Chapter 11 petition (Bankr. N.D. Ga. Case
No. 16-62269) on July 14, 2016.
The cases are assigned to Judge Paul Baisier. The Debtors are
represented by Ashley Reynolds Ray, Esq., and J. Robert Williamson,
Esq., at Scroggins & Williamson, P.C. GGG Partners, LLC serves as
the Debtors' financial consultant.
Guy Gebhardt, acting U.S. trustee for Region 21, on July 11, 2016,
appointed five NexxLinx creditors to serve on the official
committee of unsecured creditors. The committee has retained Mark
I. Duedall, Esq., at Bryan Cave LLP, as counsel. QueensGate
Corporate Finance LLC has also been tapped as valuation advisor.
NORTH PHILADELPHIA: Sale of Former Hospital Property for $8.1M OK'd
-------------------------------------------------------------------
Judge Magdeline D. Coleman of the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania authorized North Philadelphia
Health System ("NPHS")'s sale of premises known as 1600-50 W.
Girard Avenue, Philadelphia, Pennsylvania, to MMP Hospital
Partners, LLC, for $8,117,000.
The sale is free and clear of all liens, claims, interests and
encumbrances of any kinds whatsoever.
The Property consists of approximately 74,655 square feet, and
comprises an entire city block. It was utilized as a hospital and
parking lot. It is zoned as RM-4. Located on the Property is the
building which housed the former St. Joseph's Hospital ("SJH").
SJH is no longer operating and the building is vacant.
The proceeds of the Sale may be used to pay the normal and
customary costs associated with a sale, including the closing
adjustments set forth in Section 5 of the Sales Contract; and any
portions (estimated to be less than $250,000) of liens of the Water
Bureau and PGW associated with the Property that are not disputed
by the Debtor. The remainder of the proceeds of the Sale ("Net
Proceeds") will be immediately paid to Hunt Mortgage Group, LLC as
sewicer on behalf of BNYM from which Net Proceeds $300,000 will be
placed into the insurance escrow held by the mortgage servicer and
the balance of which will be applied to pay down the mortgage
according to the Loan Documents. BNYM will (at the request of the
Debtor) apply the funds received on account of the pay down of the
Mortgage to redeem the bonds to the fullest extent allowed under
the indenture and related documents.
BNYM is also authorized to apply to the Bonds the payment received
from the Debtor with respect to the payment due on Jan. 1, 2017.
BNYM, HUD and Hunt are further authorized to apply the amounts held
in escrow from the prior sale of the parking lot and equipment to
pay down the mortgage in the approximate amount of $1,495,323.
Notwithstanding the possible applicability of Bankruptcy Rules
4001(d), 6004(h), 7062, 9014, or otherwise, the Order is
immediately effective and enforceable upon its entry and the 14-day
stay set forth in Bankruptcy Rule 600401) is waived.
The Closing of the sale will occur on April 6, 2017.
Nothing in the Order affects the Debtor's rights to challenge any
fees and costs asserted by the HUD Group.
About North Philadelphia Health System
North Philadelphia Health System, a Pennsylvania non-profit,
non-stock, non-member corporation, operates the Girard Medical
Center, a state-licensed 65-person private psychiatric hospital,
and the Goldman Clinic, a medically assisted treatment center
located Philadelphia, Pennsylvania.
North Philadelphia Health System sought protection under Chapter
11
of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 16-18931) on
Dec. 30, 2016. The petition was signed by George Walmsley III,
president & CEO.
The case is assigned to Judge Magdeline D. Coleman.
At the time of the filing, the Debtor estimated its assets and
liabilities at $10 million to $50 million.
The Debtor have hired Dilworth Paxson LLP as counsel and Buzby &
Kutzler, Attorneys at Law, as special counsel.
The Office of the U.S. Trustee on Jan. 23, 2017, appointed four
creditors of North Philadelphia Health System to serve on the
official committee of unsecured creditors.
NOUVELLE FOODS: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
Nouvelle Foods International Ltd. 17-10733
188 Connaught Road West
Rooms 3201-3210
Hong Kong Plaza
Hong Kong
Republic of China
Golden Target Pacific Limited 17-10734
188 Connaught Road West
Rooms 3201-3210
Hong Kong Plaza
Hong Kong
Republic of China
About the Debtors: Nouvelle Foods's aggregate noncontingent
liquidated debts (excluding debts owed to
insiders or affiliates) are less than
$2,566,050 (amount subject to adjustment on
4/01/19 and every 3 years after that).
Golden Target is not a publicly traded
company. The only entity that directly owns
10% or more of the equity interests in Golden
Target is Richtown Development Limited (BVI).
The only entities that indirectly own 10% or
more of the equity interests in Golden Target
are Pacific Andes Resources Development
Limited (Bermuda), Clamford Holding Limited
(BVI), Pacific Andes International Holdings
Limited (Bermuda), N.S. Hong Investment (BVI)
Limited, R&J Investment Limited, JCNG
Investment Limited, NJK Investment Ltd., and
Pacific Innovation (BVI) Limited.
Nouvelle Food and Golden Target are members
of the Pacific Andes group of companies.
China Fishery Group Limited (Cayman), et al.
filed bankruptcy protection on June 30, 2016,
and Sept. 29, 2016. A motion will be filed
with the Court requesting that the Chapter 11
cases of the Debtors and China Fishery, et
al., be consolidated for procedural purposes
only and jointly administered pursuant to
Rule 1015(b) of the Federal Rules of
Bankruptcy Procedure with the Initial Debtors
Cases. The initial Debtors' cases have been
consolidated under Case Number 16-11895.
One of the primary reasons the Initial
Debtors commenced the affiliates Chapter 11
cases was to bring the Pacific Andes Group's
many creditors into a single forum so that
its financial difficulties could be resolved
in an efficient and transparent process and
the entire group's capital structure could be
reorganized to maximize value for all
stakeholders.
Chapter 11 Petition Date: March 27, 2017
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. James L. Garrity Jr.
Debtors' Counsel: Matthew Scott Barr, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Tel: 212 310 8000
Fax: 212 310 8007
Email: Matt.Barr@weil.com
Debtors'
Financial
Consultant: RSR CONSULTING, LLC
Debtors'
Financial
Advisor: GOLDIN ASSOCIATES, LLC
Estimated Estimated
Assets Liabilities
------------ -----------
Nouvelle Foods $500M-$1-Bil. $10M-$50M
Golden Target $500M-$1-Bil. $10M-$50M
The petition was signed by Ng Puay Yee, authorized representative.
A. Nouvelle Foods's Largest Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
KBC Bank N.V., $1,954,589
Hong Kong Branch
39/F. Central Plaza
18 Harbour Road
Hong Kong
B. Golden Target's Largest Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sahara Investment $6,494,779
Group Private Limited
#12-51 Anson Centre,
51 Anson Road.
Singapore 079904
The following table sets forth a consolidated list of creditors
(excluding insiders) who hold the 30 largest unsecured claims
against the Debtor and its affiliated Debtors jointly administered
under case number 16-11895.
Entity Nature of Claim Claim Amount
------ --------------- ------------
Rabobank Intl, HK 32/F $96,503,494
3 Pacific Place I
Queens Road East Hong Kong
DBS Bank (HK) Ltd $96,503,494
16th Fl, The Center
99 Queens Road
Central Hong Kong
HSBC $96,503,494
L16, HSBC Main Bldng
1 Queen's Road
Central, Hong Kong
Standard Chartered Bnk (HK) Ltd $96,503,494
15/F, Stndrd Charter Bnk Bldng
4-4A Des Voeux Road
Central Hong Kong
China CITIC Bnk Intl Ltd $32,167,831
80th Fl, Intl Commerce Cntr
1 Austin West
Kowloon
Hong Kong
TMF Trustee Ltd $296,000,000
Corporate Trust
5th Fl, 6 St. Andrew St
London, EC4A 3AE
United Kingdom
Rabobank NFS Finance $102,000,000
32/F, 3 Pacific Place
1 Queens Road East
Hong Kong
Maybank $95,000,000
18/F CITIC Tower
1 Tim Mei Avenue
Central Hong Kong
Rabobank $94,375,235
Pickenpack Facility Agmnt
32/F, Three Pacific Place
1 Queens Road East
Hong Kong
Tapei Fubon Com Bk Co Ltd $72,000,000
12F 169, Sec 4, Ren Ai Rd
Taipei, 106886
Taiwan
CITIC $70,900,000
61-65 Des Voeux Road
Central Hong Kong
DBS $58,000,000
16th Floor, The Center
99 Queens Road
Central Hong Kong
Maybank $40,000,000
18/F CITIC Tower
1 Tim Mei Avenue
Central Hong Kong
Bank of America, N.A. $30,000,000
52/F. Cheung Kong Center
2 Queen's Road Central
Central Hong Kong
Bank of America $30,000,000
52/F, Cheung Kong Center
2 Queens Rd Central
Central Hong Kong
Rabobank $22,000,000
32/F, 3 Pacific Place
1 Queens Road East
Hong Kong
Brndbrg Mrt Invst Hldng $15,558,581
L8, Medine Mews
La Chaussee
Port Louis, Mauritius
Andes Int'l Qingdao Ship $13,651,769
N67 Yin Chuan Xi Rd, BID
Qingdao Amintn Ind Pk 4F1
Qingdao City 266000
Shandong Province, China
Rabobank $12,000,000
32/F, 3 Pacific Place
1 Queens Road East
Hong Kong
Fubon $11,000,000
Fubon Bank
38 Des Voeux Road
Central Hong Kong
Standard Charter Bank $8,000,000
Standard Charter Bank Building
5/F 4-4A Des Voeux Rd
Central Hong Kong
Sahara Investment Group Private Limited $6,494,779
#12-51 Anson Centre, 51 Anson Road.
Singapore 079904
KBC Bank N.V., $1,954,589
Hong Kong Branch
39/F. Central Plaza
18 Harbour Road
Hong Kong
DLA PIPER HONG KONG $1,789,232
17th Flr, Edinburgh Twr
The Landmark
15 Queen's Road Central
Hong Kong
Grant Thornton Recovery $907,427
Level 12, 28 Hennessy Rd
Wanchai
Hong Kong
Brndbrg Nam Invt Co $783,559
Erf 2347 10th St E
Industrial Area
PO Box 658 Walvisbay
Republic of Namibia
Deloitte Touche Tohmatsu $682,261
35/F One Pacific Place
88 Queensway
Hong Kong
Baraka Seari Ltd $657,200
Rm 1401-2
Easey Comercial Bldng
253-261 Hennessy Rd
Wanchai, Hong Kong
Meridian Invst Group Pte $442,001
138 Cecil Street
#12-01 A Cecil Court
Singapore 069538
Singapore
Taishin $400,000
No. 118, Sec 4, Ren-ai Rd
Da-an District
Taipei City 106
Taiwan
OCEAN RIG UDW: Chapter 15 Case Summary
--------------------------------------
Chapter 15 Debtors:
Ocean Rig UDW Inc. 17-10736
6 New Street Square
London, United Kingdom
Drill Rigs Holdings Inc. 17-10737
c/o Ocean Rig Cayman Management Svc.
SEZC Limited, 3rd Fl. Flagship Building
Harbour Drive
Grand Cayman, Cayman Islands
Drillships Financing Holding Inc. 17-10738
c/o Ocean Rig Cayman Management Svc.
SEZC Limited, 3rd Fl. Flagship Building
Harbour Drive
Grand Cayman, Cayman Islands
Drillships Ocean Ventures Inc. 17-10739
c/o Ocean Rig Cayman Management Svc.
SEZC Limited, 3rd Fl. Flagship Building
Harbour Drive
Grand Cayman, Cayman Islands
Business Description: Ocean Rig is an international offshore
drilling contractor providing oilfield
services for offshore oil and gas
exploration, development and production
drilling, and specializing in the ultra-
deepwater and harsh-environment segment of
the offshore drilling industry.
Ocean Rig's common stock is listed on the
NASDAQ Global Select Market where it trades
under the symbol "ORIG."
Its registered office is c/o Maples
Corporate Services Limited, PO Box 309,
Ugland House, Grand Cayman, KY1-1104,
Cayman Islands.
The Company's Web site:
http://www.ocean-rig.com.
Authorized
Representatives: Simon Appell and Eleanor Fisher of
AlixPartners, LLP, in their capacities as
the joint provisional liquidators and
authorized foreign representatives
Chapter 15 Petition Date: March 27, 2017
Court: United States Bankruptcy Court
Southern District of New York (Manhattan)
Judge: Hon. Martin Glenn
Debtors' U.S. Counsel: Evan C. Hollander, Esq.
Raniero D'Aversa Jr., Esq.
ORRICK, HERRINGTON & SUTCLIFFE LLP
51 West 52nd Street
New York, New York 10019
Tel: (212) 506-5000
Fax: (212) 506-5151
E-mail: echollander@orrick.com
rdaversa@orrick.com
Estimated Assets: Not Indicated
Estimated Debt: Not Indicated
ONTARIO CENTURY: Marc Realty Buying Chicago Condo Unit for $884K
----------------------------------------------------------------
Judge Timothy A. Barnes of the U.S. Bankruptcy Court for the
Northern District of Illinois will convene a hearing on March 28,
2017, at 10:30 a.m. to consider Ontario Century Property, LLC's
sale of commercial condominium unit (#200, "Commercial Unit")
located at 182 West Lake Street, Chicago, Illinois, to Marc Realty
Capital, LLC, for $884,000.
At the date of filing, the Debtor was the record title owner of the
Commercial Unit, and three residential condominium units (#304,
#311 and #404, collectively, "Residential Units") located at 182
West Lake Street, Chicago, Illinois.
On Jan. 13, 2016, an order was entered authorizing the Debtor to
employ Daniel J. Hyman and Millenium Properties R/E to list and
market for sale the Commercial Unit. On March 22, 2016, an order
was entered authorizing the Debtor to employ Hyman and Millenium to
list and market for sale the Residential Units. On March 22, 2016,
an order was entered setting May 31, 2016, as the bar date for the
filing of claims against the Debtor.
On July 13, 2016, an order was entered authorizing the Debtor to
sell the Residential Units to Anthony Ferro in the gross amount of
$315,000.
Pursuant to the order, usual and customary closing costs, legal
fees and commissions due Hyman and Millenium were authorized to be
paid at closing and the remaining net sales proceeds were held by
escrowee, Chicago Title and Trust Co. ("CTT") pursuant to further
order of Court.
On Sept. 13,2016, an order was entered authorizing CTT to make
these disbursements of the net sales proceeds:
a. To Hoogendoorn Talbot, LLP (secured creditor) - $13,478;
b. To U.S. Trustee (accrued quarterly fees) - $2,925; and
c. To Century Tower Private Residences Condominium Association
("Association") - $252,808.
On Dec. 12, 2016, an order was entered authorizing Hyman and
Millenium to conduct an auction sale of the Commercial Unit with
reserve price of $815,000. The reserve price was set in
anticipation of selling the Commercial Unit in an amount which
would have paid all creditors in full. The claims register reveals
these claims: (i) Association - $503,938; (ii) Natel Matschulat -
$15,000; (iii) Hoogendoom Talbot, LLP - $13,478; (iv) Karl T. Muth
- $706,871; and Humberto Alfonso - $399,556.
In addition to the claims filed, the Debtor scheduled claims on
Schedules D, as follows, which claims were not scheduled as
disputed: (i) Murphy Hourihane - $20,000; (ii) b. Cook County
Treasurer - $64,547; (iii) Commonwealth Edison $72; and (iv) Novack
Macey, LLP - $50,000.
In order to set the reserve price for the auction sale, in addition
to the pre-petition claims remaining unpaid after disbursement of
the sales proceeds of the Residential Units, included in the
reserve price was approximately $309,246 in unpaid real estate
taxes, $174,652 in post-petition assessments due the Association,
$30,000 for the Association's attorneys' fees, $10,000 for Debtor's
counsel's fees, and $4,875 for quarterly fees due the U.S. Trustee.
No bid at the auction was received for the Commercial Unit and the
Debtor's counsel instructed Hyman and Millenium to contact those
parties who had expressed an interest in the Commercial Unit to see
if any of those parties would submit written offer. One written
offer was subsequently received, but the offer would have required
the Association to accept less than the amount of its claim secured
by the Commercial Unit.
Thereafter, the Debtor received an offer from the Association to
purchase the Commercial Unit by credit bidding the amount of its
claim. In addition, the Association offered to pay certain
administrative expenses and dividend to specified unsecured
creditors in an amount equal to 10% of the specified claims.
Although the Debtor filed motion for authority to sell the
Commercial Unit to the Association based upon its offer ("Motion"),
the Motion was continued from March 21, 2017 to March 28, 2017.
Subsequent to the filing of the Motion, but prior to its
presentment, the Debtor received letter of intent ("LOI") from Marc
Realty to purchase the Commercial Unit for the sum of $884,000.
The Debtor signed off on the LOI, subject to bankruptcy court
approval and, thereafter, received draft of the Agreement. The
Agreement is still being reviewed by special counsel, Howard
Teplinsky and William Woloshin, who were previously retained by
Court order to handle real estate transactions on behalf of the
Debtor. Although there may be changes to the Agreement suggested
by special counsel, the Debtor's counsel desires to file the Motion
for hearing on March 28, 2017, in light of the Court's comments on
March 21, 2017, and in light of the pending motions for that day.
The Debtor believes that the offer of Marc Realty is higher and
better offer than submitted by the Association.
A copy of the Agreement attached to the Motion is available for
free at:
http://bankrupt.com/misc/Ontario_Century_106_Sales.pdf
Assuming sale price of $884,000, these are estimates of the
payments to be made from the proceeds of sale in order to close the
transaction:
a. To Hyman and Millenium (5% commission) - $44,200
b. 2014 real estate taxes-2nd inst. (through 6/1/17) - $80,998
c. 2015-real estate taxes-(as of 4/1/17) - $74,824
d. 2016-real estate taxes-1 st inst. (through 6/1/17) - $38,393
e. 2016-real estate taxes-2nd inst (not billed yet) - $42,232
f. 2017-real estate taxes-prorated at closing $43,979
g. City of Chicago transfer tax - $2,652
h. State/County transfer tax - $1,326
In addition to the foregoing, there will be title charges assessed
against the Debtor and legal fees associated with representing the
Debtor in connection with the Agreement and the closing. These fees
and expenses are estimated at $7,500. The net sales proceeds are
estimated to be $547,896, assuming the sale price and expenses
associated with the sale.
Through Jan. 26, 2017, the amount claimed by the Association,
including post-petition assessments, was $381,317. Additional
post-petition assessments through June, 2017, total approximately
$51,781. The total amount of claims against the estate (other than
the Association and those claims that are objectionable pending
voluntary withdrawal) is $65,072. The quarterly fees due the U.S.
Trustee have not yet been ascertained, but are estimated at $5,525
through June 30, 2017. Accordingly, based upon the estimates
contained, the offer from Marc Realty will pay all anticipated
administrative expenses and all creditors in full.
The Debtor believes that the offer by Marc Realty is fair and
reasonable and the sale constitutes sound exercise of Debtor's
business judgment.
Accordingly, the Debtor asks the Court to (i) approve the sale of
the Commercial Unit to Marc Realty in accordance with the Agreement
free and clear of liens, claims and encumbrances; (ii) reduce
notice of the instant motion to all creditors to 5 days; and (iii)
grant such other relief as is just and equitable.
The Purchaser:
MARC REALTY CAPITAL, LLC
c/o Cindy Harwardt
55 E. Jackson Boulevard, #500
Chicago, IL 60604
E-mail: Charwardt@marcrealty.com
The Purchaser is represented by:
Barnett P. Ruttenberg, Esq.
824 Judson Ave.
Highland Park, IL 60035
Telephone: (312) 884-5422
E-mail: bruttenberg@marcrealty.com
About Ontario Century Property
Ontario Century Property, LLC, sought Chapter 11 protection
(Bankr. N.D. Ill. Case No. 15-34713) on Oct. 13, 2015. At the
Date of filing, the Debtor was the recorded title owner of one
Commercial condominium unit and three residential condominium
units.
The Debtor estimated assets of $0 to $50,000 and $500,001 to $1
million in liabilities.
Joel A. Schechter, Esq., at Law Offices of Joel Schechterm, serves
as the Debtor's counsel.
PENN TREATY: Deadline to File Claims Set for August 31
------------------------------------------------------
The Commonwealth Court of Pennsylvania ordered Penn Treaty Network
America Insurance Company (in liquidation)(Penn Treaty) into
liquidation effective March 1, 2017.
Teresa D. Miller, Insurance Commissioner of the Commonwealth of
Pennsylvania, was appointed the Statutory Liquidator, and was
ordered to take possession of Penn Treaty's property, business and
affairs. Deputy Insurance Commissioner Laura Lyon Slaymaker
oversees the liquidation on her behalf. A copy of the Court's
order can be found at http://www.penntreaty.com/
If you have a claim against Penn Treaty (other than a claim for
policy benefits) that you intend to pursue, you must file a proof
of claim in order to have your claim considered. Proofs of claim
must be postmarked -- or if submitted via facsimile or email, bear
a transmission date -- on or before Aug. 31, 2017.
All completed, signed proof of claim forms and supporting
documentation may be submitted by mail, facsimile or email at:
Penn Treaty Network America Insurance
Attn: Legal Department - Proof of Claim
P.O. Box 7066
Allentown, PA 18105-7066
Fax: (610) 967-1098
Email: poc@penntreaty.com
For more information about the proof of claim process, contact Penn
Treaty's legal department at (800) 222-3469 ext. 3635.
About Penn Treaty American
Penn Treaty American Corporation -- https://www.penntreaty.com/ --
through its wholly owned direct and indirect subsidiaries, Penn
Treaty Network America Insurance Company, American Network
Insurance Company, American Independent Network Insurance Company
of New York, Network Insurance Senior Health Division and Senior
Financial Consultants Company, is engaged in the underwriting,
marketing and sale of individual and group accident and health
insurance products, principally covering long term nursing home and
home health care.
On Oct. 2, 2009, the Insurance Commissioner of the Commonwealth of
Pennsylvania filed in the Commonwealth Court of Pennsylvania
Petitions for Liquidation for PTNA and American Network Insurance
Company. PTNA is a direct insurance company subsidiary of Penn
Treaty American Corporation, and ANIC is a subsidiary of PTNA.
PICO HOLDINGS: Bloggers Displeased by Unnecessary UCP Incentives
----------------------------------------------------------------
Activist bloggers at http://www.ReformPICONow.comnote that UCP
Director Peter H. Lori is out of compliance with the Director Stock
Ownership Guidelines. The activist bloggers are displeased that
PICO proposes to pay certain members of "management" a bonus for
the monetization of the UCP stake.
According to the UCP Director Stock Ownership Guidelines, within
three years of appointment, all UCP Directors must own equity
equivalents equal to at least three times their annual cash
retainer.
According to the activist bloggers, "UCP Director and Univision CFO
Mr. Lori is out of compliance with those Guidelines. Mr. Lori's
third anniversary as a UCP Director passed in July of 2016. Based
on the 2015 UCP Proxy Statement, the latest information available,
Mr. Lori's annual cash retainer was $85,000. Three times this
amount is $255,000. Per Mr. Lori's latest Form 4, he owns 23,273
shares and equity equivalents. With UCP shares currently selling
for $9.90, Mr. Lori's UCP position has a value of $230,000. Mr.
Lori is about $25,000 short of compliance.
Mr. Lori received almost $2.4 million in total compensation at
Univision last year. We find it concerning that a UCP Director with
this level of wealth, who influences the stewardship of our
enterprise, refuses to buy more shares in our company, which
currently sell at a 15% discount to tangible book value."
The bloggers say that Mr. Lori and the UCP Board cannot claim to be
surprised. They say: "Mr. Lori cannot attribute his noncompliance
to surprise. We first wrote about this issue almost a year ago, on
April 8, 2016 in our post entitled 'UCP Directors Cortney, Lori &
Wade Nearly Noncompliant With Director Stock Ownership
Guidelines."
"This situation speaks poorly of UCP Chairman and Chair of the
Compensation Committee, Michael Cortney. We hope Mr. Cortney will
ensure that the 2016 UCP Proxy explains the parameters for the
Stock Ownership Guidelines, both for Directors and Executives. As
we have written about extensively, Mr. Cortney and UCP eliminated
the Guidelines for Executives section last year -- and failed to
tell shareowners.
"Going back to Mr. Lori, if he does not want to purchase more UCP
shares at 85% of net equity, and align his interests with other
owners, he should resign from the Board. If Mr. Lori does not want
to buy more shares and does not want to resign, then the other UCP
Directors should remove him from the Board."
The activist bloggers characterized UCP CFO James Pirrello's
communication on the Q4 earnings call as "deceptive" and
"dishonest." But the bloggers note that this is not the first time
Mr. Pirrello has dispatched questionable communication with
shareholders.
"While we are on the subject of dishonest and deceptive executive
communication, let's go back to the UCP Q3 earnings call. At the
time, we noticed something strange in this exchange between Mr.
Pirrello and Alan Ratner, builder analyst at Zelman & Associates.
On the Q3 call, Mr. Ratner astutely noted that the math in the UCP
press release did not add up; real estate lots were missing. At the
end of Q2 2016, UCP owned 4,919 lots. During Q3 2016, UCP delivered
199 lots. At the end of Q3 2016, UCP owned at 4,361 lots. So lots
declined by 558 but deliveries were only 199. This meant 359 lots
are missing -- what gives? asked Mr. Ratner.
At first, Mr. Pirrello avoided the question by discussing the need
for greater scale in certain markets and providing assurance that
lots had not been moved off the balance sheet. But Mr. Ratner
appropriately pressed on a second time. To which, Mr. Pirrello
responded:
"Alan I wish I knew it off the top of my head. I'd like to get back
to you on that and do the analysis."
Mr. Ratner let the matter go and got off the line. Moving to the
next questioner, Mr. Pirrello can be heard whispering, "I know
where they are."
"What's the deal Jamie? Where are they? Don't the owners of the
business deserve to know? What are you hiding?"
The activist bloggers are upset that PICO proposes to pay certain
members of "management" an incentive bonus for monetization of
PICO's 57% stake in UCP. The press release indicates that
recipients of the bonus will be "management," which the bloggers
take to mean PICO's CEO Max Webb and/or CFO John Perri.
The bloggers observe that Mr. Webb is paid $496,000 per year and
Mr. Perri $440,000. "These executives are paid almost half a
million dollars per year each to implement corporate strategy as
laid out by the PICO Board. That strategy mandates the sale of
assets and return of capital to owners. If UCP is sold outright,
UCP will form its own committee, hire its own investment bankers
and professionals, conduct its own sale process. The executives may
be called upon to shoulder extra work in such a case, but we
operate under the assumption that for $496,000 and $440,000 per
year, shareholders can expect work that isn't subject to special
incentives. Perhaps we are old fashioned."
The bloggers state that neither Mr. Webb nor Mr. Perri can
influence the final sale price of UCP. "Large builders have highly
sophisticated land buying operations. They employ professionals
whose sole job is to buy land in specific markets. Such
professionals employ a regimented and elaborate process for
underwriting land. They start broad, looking at the community, its
regulatory atmosphere, the local economy, population growth,
household income. Then they narrow the analysis to the properties,
the surrounding area, comparable transactions, the logistical
access, proximity to employers and schools. Finally, they examine
the lots, the sizes, the configurations, the infrastructure."
"Then the builder analyzes how the parcels fit into its larger
portfolio. Is this a contiguous acquisition or entry into a new
market? Does the builder already have strong trade relations in the
area? Is the builder familiar with local regulations and municipal
authorities? The list goes on.
"All variables contribute to a purchase price, which is calculated
based on strict criteria and fundamental analysis. There isn't much
a seller can do to cajole larger amounts of cash from a buyer. We
aren't talking about technology or patents or intangible human
assets. We are talking about land. Of all goods and services that
are traded in an economy, land is one of the most readily subject
to valuation.
"As a result, we fail to see where Mr. Webb or Mr. Perri can
shorten the timeline or bring PICO shareholders a higher price for
this transaction.
"Want proof for our opinion that verbiage doesn't influence builder
valuation? Look no further than UCP's stock price. It trades at a
pathetic 85% of tangible net equity and at about 67% of our
estimate of fair market value. This valuation persists in the face
of desperate and deceptive efforts by Messrs. Bogue and Pirrello to
talk up the stock. Zelman & Associates just published a report on
UCP with the words in the title 'Discount Justified.'
"Messrs. Bogue and Pirrello can't convince the investing public to
pay more for UCP. They can't convince builder analysts to pay more
for UCP. They can't convince debt investors to lend money to UCP.
How are they going to convince a sophisticated and experienced
buyer to pay more for UCP? They can't. And neither can Mr. Webb nor
Mr. Perri. No one can.
"In a transaction, will Messrs. Webb and Perri have to work to
bring such a deal to the finish line? Of course. But we go back to
our fundamental question: what are they being paid half-million
dollars a year for? Does half a mil just get a guy to his desk for
40 hours per week? Do shareowners have to pay for every service
rendered, besides visits to the water cooler?"
The bloggers want PICO to look out for shareholder interests. They
state, "We feel that Andrew Cates and the Comp Committee are
underplaying PICO shareholder's hand. The Comp Committee is not
without leverage and, when executive demands for more money are
beyond reason, it should push back. The chances of Mr. Webb walking
out the PICO door and finding another CEO job at $500,000 per year
are zero. Ditto for Mr. Perri. Any abrupt departure by either
gentleman would mean an enormous drop in pay and prestige."
"Further limiting their chances, Messrs. Webb and Perri are stained
by the former PICO CEO John Hart's Legacy. Both men worked at Mr.
Hart's side for many years. They turned a blind eye to abysmal
corporate governance and shareholder abuse in the extreme for
almost two decades each. 'Willingness to ignore corruption and
malfeasance' does not appear on too many job applications. In fact,
most employers seek the opposite character attribute."
The bloggers "feel incentive compensation to monetize the UCP stake
has gone way too far. If Messrs. Webb and Perri are demanding it,
we feel they have crossed the line into inappropriate greed. If the
Comp Committee is offering it, we feel it has crossed the line into
supplication and neglect of shareholder capital."
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. Amundi and River Road Asset Management LLC
collectively own more than 16% of PICO. Other activists at
http://ReformPICONow.com/(RPN) have taken to the Internet to
advance the shareholder cause.
PIZZA PALZ: Seeks to Hire Walding as Legal Counsel
--------------------------------------------------
Pizza Palz, Inc. seeks approval from the U.S. Bankruptcy Court for
the Northern District of Alabama to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire Walding LLC to give legal advice
regarding its duties under the Bankruptcy Code, formulate a
bankruptcy plan, and provide other legal services.
The hourly rates charged by the firm range from $320 to $330 for
its attorneys, and $155 to $195 for paralegals.
Walding does not hold or represent any interest adverse to the
Debtor's bankruptcy estate, and is a "disinterested person" as
defined in section 101(14) of the Bankruptcy Code, according to
court filings.
The firm can be reached through:
Brian R Walding, Esq.
Walding LLC
2227 First Avenue South, Suite 100
Birmingham, AL 35233
Tel: 205-307-5050
Fax: 205-307-5051
Email: bwalding@waldinglaw.com
About Pizza Palz Inc.
Founded in 1994, Pizza Palz Inc is a small organization in the
restaurants industry located in Guntersville, Alabama. It has 24
full-time employees and generates an estimated $928,140 in annual
revenue.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ala. Case No. 17-40556) on March 23, 2017. The
petition was signed by Judy O'Dell, president.
At the time of the filing, the Debtor disclosed $130,073 in assets
and $3.3 million in liabilities.
PRADO MANAGEMENT: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Prado Management LLC
6961 E. First St.
Scottsdale, AZ 85251
Case No.: 17-02989
About the Debtor: Prado Management LLC is a single asset real
estate (as defined in 11 U.S.C. Section
101(51B)) and based in Scottsdale, Arizona.
A meeting of creditors under Section 341(a)
has been scheduled for May 2, 2017, at 9:00
a.m. at US Trustee Meeting Room, 230 N.
First Avenue, Suite 102, Phoenix, Arizona.
Chapter 11 Petition Date: March 27, 2017
Court: United States Bankruptcy Court
District of Arizona (Phoenix)
Judge: Hon. Eddward P. Ballinger Jr.
Debtor's Counsel: Dale C. Schian, Esq.
SCHIAN WALKER, P.L.C.
1850 North Central Avenue, #900
Phoenix, AZ 85004-4531
Tel: 602-277-1501
Fax: 602-297-9633
E-mail: bkdocket@biz.law
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by German Osio, manager.
The Debtor did not include a list of its largest unsecured
creditors when it filed the petition.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/azb17-02989.pdf
PRICO ENTERPRISES: Disclosures OK'd; Plan Hearing on May 2
----------------------------------------------------------
The Hon. John T. Laney, III, of the U.S. Bankruptcy Court for the
Middle District of Georgia has approved Prico Enterprises, Inc.'s
disclosure statement filed on Dec. 6, 2016, referring to the
Debtor's plan of reorganization.
A hearing for the consideration of confirmation of the Plan and any
objections to the confirmation will be held on May 2, 2017, at 2:00
p.m. Any objection to confirmation of the Plan must be filed by
April 26, 2017.
Ballots must be filed by April 26, 2017.
About Prico Enterprises
Prico Enterprises, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Ga. Case No. 15-71004) on Aug. 28,
2015. The petition was signed by Bobby F. Price, Jr., authorized
representative.
The case is assigned to Judge John T. Laney, III.
Wesley J. Boyer, Esq., at Katz, Flatau, & Boyer, L.L.P., serves as
the Debtor's bankruptcy counsel.
At the time of the filing, the Debtor estimated assets and
liabilities of less than $500,000.
RELATIVITY FASHION: Netflix Must Pay $818K in Atty Fees, Expenses
-----------------------------------------------------------------
In the case captioned In re: RELATIVITY FASHION, LLC, et al.,
Reorganized Debtors, Case No. 15-11989 (MEW) (Bank. S.D.N.Y.),
Judge Michael E. Wiles of the United States Bankruptcy Court for
the Southern District of New York held that Netflix, Inc. is
obligated to reimburse the debtors, RML Distribution Domestic, LLC,
Armored Car Productions, LLC and DR Productions, LLC (collectively,
"Relativity") the amount of $818,547.48, consisting of $795,732.50
in reasonable attorneys' fees and $22,814.98 in litigation expenses
incurred during litigation against Netflix. The judge, however,
held that Netflix's obligation to pay is only as to Relativity's
own counsel, and that Ryan Kavanaugh and Relativity are not
entitled to reimbursement of fees and expenses incurred by
Kavanaugh's counsel.
Relativity Media, LLC, entered into a License Agreement with
Netflix dated June 1, 2010. The License Agreement described terms
under which first run, theatrically released films would later be
made available for distribution by Netflix. In exchange, Netflix
agreed to pay license fees that were tied to the theatrical box
office receipts. Amendments to the License Agreement assigned the
licensor's rights to RML Distribution Domestic, LLC and granted
certain rights to affiliates of RML as to films in which they had
interests. Those affiliates include Armored Car Productions, LLC
and DR Productions, LLC, who own rights regarding the films
Masterminds and The Disappointments Room.
Relativity and Netflix later executed "Notices of Assignment" under
which certain of Relativity's rights regarding license fees for
Masterminds and The Disappointments Room were assigned to secured
creditors.
Litigation ensued when Netflix refused to execute proposed
amendments to the Notices of Assignment which were based on the
revised agreements with the secured creditors that had been
incorporated in the confirmed plan, and which postponed the dates
when Netflix was required to make payments to the secured creditors
in light of the new planned theatrical release dates for the two
films.
After trial, the Court held that Netflix's asserted contract rights
were not consistent with the terms of the parties' written
agreements and with the evidence at trial, which made clear that
Netflix had no right to distribute licensed films without a prior
theatrical release.
Paragraph 10.2 of the License Agreement provides that the
"prevailing party" in any litigation "arising out of or relating
to" the agreement is entitled to reimbursement of its reasonable
costs and expenses, including reasonable outside attorneys' fees.
Relativity contended that it was a "prevailing party" in the
litigation against Netflix. Kavanaugh (Relativity's CEO and a plan
proponent) contended that he, too, was a party to the litigation
and that his own attorneys' fees and expenses should be paid by
Netflix.
Relativity sought $795,732.50 in fees and $22,814.98 in expense
reimbursements for periods ending May 27, 2016. Kavanaugh sought
$427,727.50 in fees and $17,775.63 in expense reimbursements for
the same period.
Netflix contended that Relativity may not recover fees and expenses
because the litigation was not an action "on a contract" for
purposes of Civil Code section 1717, but instead was a request for
relief under section 1142 of the Bankruptcy Code.
Judge Wiles explained that if Netflix were right -- if the
invocation of section 1142 meant as a technical matter that the
dispute before the Court was not an action "on a contract" for
purposes of section 1717 -- that would just mean that section 1717
does not apply at all. The judge further stated that, in that
case, Relativity would still have rights to recover fees and
expenses on its section 1142 motion so long as its contract with
Netflix provided for such fees and expenses. The judge thus held
that Netflix's own repeated admissions that the parties' disputes
arose out of and related to the License Agreement would still
entitle Relativity to recover its fees and expenses. Judge Wiles
also found that Relativity's requested fee and expense
reimbursements were reasonable and consistent with market rates.
Netflix further argued that Kavanaugh was not a moving party or a
prevailing party in the underlying litigation; that Kavanaugh is
not a party to the License Agreement and therefore has no rights to
seek fees or expense reimbursements under that agreement; and that
Relativity's obligation to reimburse Kavanaugh for his expenses as
plan proponent does not entitle Relativity to seek those amounts
from Netflix.
Kavanaugh contended that under Civil Code Section 1717 the presence
of an attorneys' fee provision in the License Agreement entitles
him to attorneys' fees based on his participation in the litigation
against Netflix, even though he is not a party to the License
Agreement.
Judge Wiles disagreed. The judge explained that a contractual
right to attorneys' fees normally benefits only the parties to the
contract, and this is true under section 1717 as well.
Alternatively, Kavanaugh and Relativity contended that Relativity
was obligated to reimburse Mr. Kavanaugh for his fees and expenses
and that Mr. Kavanaugh's legal expenses therefore are "expenses" of
Relativity that Netflix is contractually obligated to pay.
Judge Wiles believed that Relativity's request to recover its
indemnification payments, on the theory that they are litigation
expenses covered by the License Agreement, is unfounded. The judge
stated that the License Agreement provides that in the event of
litigation, the prevailing party shall be entitled to recover "its"
reasonable costs and expenses, including reasonable outside
attorneys' fees. The judge explained that in context, that
language must be interpreted as referring to the prevailing party's
own litigation expenses, not someone else's.
A full-text copy of Judge Wiles' March 22, 2017 memorandum opinion
is available at http://bankrupt.com/misc/nysb15-11989-2211.pdf
Debtors are represented by:
Richard L. Wynne, Esq.
JONES DAY
222 East 41st Street
New York, NY 10017
Email: rlwynne@jonesday.com
Ryan Kavanaugh is represented by:
Van C. Durrer II, Esq.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 South Grand Avenue Suite 3400
Los Angeles, CA 90071
Tel: (213)687-5000
Fax: (213)687-5600
Email: van.durrer@skadden.com
Netflix is represented by:
Stephen R. Mick, Esq.
BARNES & THORNBURG LLP
2029 Century Park East, Suite 300
Los Angeles, CA 90067
Tel: (310)284-3880
Fax: (310)284-3894
Email: smick@btlaw.com
About Relativity Fashion
Relativity -- http://relativitymedia.com/-- is a next-generation
global media company engaged in multiple aspects of content
production and distribution, including movies, television, sports,
digital and music. More than just a collection of
entertainment-related businesses, Relativity is a content engine
with the ability to leverage each of these business units,
independently and together, to create content across all mediums,
giving consumers what they want, when they want it.
Relativity Studios, the Company's largest division, has produced,
distributed or structured financing for more than 200 motion
pictures, generating more than $17 billion in worldwide box-office
revenue and earning 60 Oscar nominations. Relativity's films
include Oculus, Safe Haven, Act of Valor, Immortals, Limitless,
and The Fighter.
Relativity Media LLC and its affiliates, including Relativity
Fashion, LLC, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 15-11989) on July 30, 2015. The
case is assigned to Judge Michael E. Wiles.
The Debtors are represented by Craig A. Wolfe, Esq., Malani J.
Cademartori, Esq., and Blanka K. Wolfe, Esq., at Sheppard Mullin
Richter & Hampton LLP, in New York; and Richard L. Wynne, Esq.,
Bennett L. Spiegel, Esq., and Lori Sinanyan, Esq., at Jones Day,
in New York.
Brian Kushner of FTI Consulting, Inc., serves as chief
restructuring officer and crisis and turnaround manager. Luke
Schaeffer of FTI Consulting, Inc., serves as deputy CRO.
Blackstone Advisory Partners L.P. serves as the Debtors'
investment banker. The team is led by Timothy Coleman, Senior
Managing Director, CJ Brown, Senior Managing Director, Paul
Sheaffer, Vice President, and Joseph Goldschmid, Associate.
The Debtors' noticing and claims agent is Donlin, Recano &
Company, Inc.
* * *
An investor group composed of Anchorage Capital Group, L.L.C.,
Falcon Investment Advisors, LLC and Luxor Capital Group, LP on
Oct. 21, 2015, completed its purchase of the assets of Relativity
Television.
After selling their TV business, the Debtors and CEO Ryan C.
Kavanaughfiled a proposed plan of reorganization that will allow
the Debtors to reorganize their non-TV business units with a
substantially de-levered balance sheet utilizing new equity
investments and new financing.
Jim Cantelupe, of Summit Trail Advisors, LLC, assisted the Debtors
in raising up to $100 million of new equity to fund the Plan.
The Bankruptcy Court on Feb. 8, 2016 confirmed the Debtors' Fourth
Amended Plan. A copy of the Fourth Amended Plan is available at
http://is.gd/wZI1gd
REX ENERGY: D. E. Shaw Ceases to be 5% Shareholder
--------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, D. E. Shaw & Co., L.P. and David E. Shaw disclosed that
as of Dec. 31, 2016, they beneficially own 175,251 common shares,
$0.001 par value, of Rex Energy Corporation representing
0.2 percent of the shares outstanding.
David E. Shaw does not own any shares directly. By virtue of his
position as president and sole shareholder of D. E. Shaw & Co.,
Inc., which is the general partner of D. E. Shaw & Co., L.P., which
in turn is the manager and investment adviser of D. E. Shaw Valence
Portfolios, L.L.C., the investment adviser of D. E. Shaw Oculus
Portfolios, L.L.C., and the managing member of D. E. Shaw Adviser,
L.L.C., which in turn is the investment adviser of D. E. Shaw
Asymptote Portfolios, L.L.C., and by virtue of his position as
President and sole shareholder of D. E. Shaw & Co. II, Inc., which
is the managing member of D. E. Shaw & Co., L.L.C., which in turn
is the manager of D. E. Shaw Oculus Portfolios, L.L.C. and the
managing member of D. E. Shaw Manager, L.L.C., which in turn is the
manager of D. E. Shaw Asymptote Portfolios, L.L.C., David E. Shaw
may be deemed to have the shared power to vote or direct the vote
of, and the shared power to dispose or direct the disposition of,
the 175,251 shares constituting 0.2% of the outstanding shares.
David E. Shaw disclaims beneficial ownership of such 175,251
shares.
A full-text copy of the regulatory filing is available at:
https://is.gd/7RHMB6
About Rex Energy Corporation
Headquartered in State College, Pennsylvania, Rex Energy is an
independent oil and gas exploration and production company with its
core operations in the Appalachian Basin. The Company's strategy
is to pursue its higher potential exploration drilling prospects
while acquiring oil and natural gas properties complementary to its
portfolio.
Rex Energy reported a net loss of $176.7 million on $139.01 million
of total operating revenue for the year ended Dec. 31, 2016,
compared to a net loss of $361.03 million on $138.74 million of
total operating revenue for the year ended Dec. 31, 2015.
As of Dec. 31, 2016, Rex Energy had $893.92 million in total
assets, $883.69 million in total liabilities and $10.22 million in
total stockholders' equity.
* * *
As reported by the TCR on April 6, 2016, Standard & Poor's Ratings
Services said that it lowered its corporate credit rating on Rex
Energy Corp. to 'SD' from 'CC'. "The downgrade follows Rex's
announcement that it has closed an exchange offer to existing
holders of its 8.875% and 6.25% senior unsecured notes for a new
issue of 8% senior secured second-lien notes due 2020 (not rated)
and shares of common equity," said Standard & Poor's credit analyst
Aaron McLean.
In April 2016, the TCR reported that Moody's Investors Service
downgraded REX Energy's Corporate Family Rating to 'Ca' from
'Caa3', its Probability of Default Rating to Ca-PD/LD from Caa3-PD,
its senior unsecured notes to 'C' from 'Ca'. "The downgrade
reflects the poor overall recovery prospects as indicated by REXX's
PV-10 value. The negative outlook is driven by the weak commodity
price environment, specifically in natural gas pricing, which could
further erode REXX's recovery value," commented Sreedhar Kona,
Moody's senior analyst.
ROBINSON PREMIUM: Unsecureds to Get Full Payment at 6% in 48 Months
-------------------------------------------------------------------
Robinson Premium Beef, LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Texas a disclosure statement on March
20, 2017, referring to the Debtor's plan of reorganization.
Class 8 General Unsecured Claims -- which total $142,805.10 -- will
be entitled to pro rata distribution of $12,805.10 on the plan
closing date with the balance paid with interest at 6% per annum,
over 48 monthly payments of $3,053.05 with the first payment being
due on the 5th of the next full month after the Plan Closing Date.
There is no pre-payment penalty if the Debtor determines, in the
exercise of its business judgment, to pay the then due principal
balance and accrued interest. This class is impaired.
The Farm Facility will be transferred to the Debtor's lead
investor, Hart Financial, on the Plan Closing Date, subject to Farm
Facility Lease Back with Option, in exchange for (i) satisfaction
of $500,000 of the Allowed Hart DIP Loan-2 Secured Administrative
Claim; and (ii) payment of the Allowed Secured Claim of Stokes
Estate on the Plan Closing Date. Farm Facility shall mean 564
acres of real property in two contiguous tracts used for leased
farming operations (partially irrigated), which provides
appropriate governmental approvals as a waste water facility for
the Debtor pre-confirmation and post confirmation operations at
both the Main Processing Facility and the Ancillary Processing
Facility.
On the Plan Closing Date, upon the transfer of the Farm Facility to
Hart, the Debtor and Hart will execute the Farm Facility Lease
Back, which generally provides the following:
i) the lease will be on a triple net basis for an eight-year
initial term with rent of $12,083 per month;
ii) the first payment is due on or before Jan. 5, 2018 (sum of
post Plan Closing Date Rent [assuming a June, 2017 Plan
Closing Date] for seven months plus rent for January) in
the amount of $96,664. All subsequent payments are due on
or before the 5th day of each succeeding month over the
balance of the initial term;
iii) an option to extend the Lease for four more years at a
triple net rental rate of $16,500 per month; and
iv) an option in favor of the Reorganized Debtor to purchase
the Farm Facility back from Hart for $2,900,000 over the
term of the twelve-year maximum of the Lease. The option
price will increase by 3% each year on the first
anniversary of the Plan Closing Date.
Allowed Hart DIP Loan-2 Secured Administrative Claim (up to
$1,500,000 in principal indebtedness, plus interest and any
attorney's fees associated with same) will be deemed satisfied on
the Plan Closing Date. The rest and residue of the Allowed Hart
DIP Loan-2 Secured Administrative Claim, after the allocation for
the Farm Facility Transfer, as well as any portion of DIP Loan-1
Secured Administrative Claim funded, will be part of the exchanges
provided for in the Plan for Hart to secure Issued Interests that
will accumulate to 35% of the Interests Post Confirmation. All
liens and encumbrances granted to the Allowed Hart DIP Loan-2
Secured Administrative Claim will be deemed released and of no
force or effect thereafter on the Plan Closing Date.
The Disclosure Statement is available at:
http://bankrupt.com/misc/txnb16-60092-142.pdf
About Robinson Premium
Robinson Premium Beef, LLC, filed a Chapter 11 petition (Bankr.
N.D. Tex. Case No. 16-60092) on Sept. 2, 2016, and is represented
by Edwin Paul Keiffer, Esq., in Dallas, Texas.
At the time of filing, the Debtor had $10 million to $50 million in
estimated assets and $10 million to $50 million in estimated
debts.
The petition was signed by Jeremy Robinson, Manager.
ROCKY MOUNTAIN: Reports $2.41 Million Net Loss in Second Quarter
----------------------------------------------------------------
Rocky Mountain High Brands, Inc. filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q disclosing
a net loss of $2.41 million on $24,751 of sales for the three
months ended Dec. 31, 2016, compared to net income of $2.33 million
on $313,116 of sales for the three months ended Dec. 31, 2015.
For the six months ended Dec. 31, 2016, the Company recorded a net
loss of $3.14 million on $320,338 of sales compared to net income
of $8.56 million on $589,687 of sales for the same period during
the prior year.
As of Dec. 31, 2016, Rocky Mountain had $2.33 million in total
assets, $4.39 million in total liabilities, all current, and a
total shareholders' deficit of $2.05 million.
As of Dec. 31, 2016, the Company had current assets of $2,187,384,
consisting of cash of $155,061, accounts receivable of $262,429,
inventory of $218,271, and prepaid expenses and other current
assets of $1,551,623. As of Dec. 31, 2016, the Company had current
liabilities of $4,390,696. These consisted of accounts payable and
accrued liabilities of $655,859, related party convertible notes of
$95,483, convertible notes of $731,434, other notes payable of
$31,767, accrued interest of $236,327, and derivative liability of
$2,639,826. During the six months ended Dec. 31, 2016, the Company
received proceeds of $456,650 related to private offering stock
sales of 41,485,294 shares of common stock. Sales prices ranged
from $.001 to $.05 per share.
"We have experienced recurring losses from operations and to date,
we have not been able to produce sufficient sales to become cash
flow positive and profitable on a consistent basis. The success of
our business plan during the next 12 months and beyond will be
contingent upon generating sufficient revenue to cover our costs of
operations and/or upon obtaining additional financing. For these
reasons, our auditor has raised substantial doubt about our 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/lT1Jwm
About Rocky Mountain
Rocky Mountain High Brands, Inc., (RMHB) is a consumer goods brand
development company specializing in developing, manufacturing,
marketing, and distributing high quality, health conscious,
hemp-infused food and beverage products and spring water. The
Company currently markets a lineup of five hemp-infused beverages.
RMHB is also researching the development of a lineup of products
containing Cannabidiol (CBD). The Company's intention is to be on
the cutting edge of the use of CBD in consumer products while
complying with all state and federal laws and regulations.
Rocky Mountain reported net income of $2.32 million on $1.07
million of sales for the fiscal year ended June 30, 2016, compared
with a net loss of $16.62 million on $489,849 of sales for the
fiscal year ended June 30, 2015.
Paritz & Company, P.A., in Hackensack, New Jersey, issued a "going
concern" qualification on the consolidated financial statements for
the year ended June 30, 2016, citing that the Company has a
shareholders' deficit of $1,477,250, an accumulated deficit of
$16,878,382 at June 30, 2016, and has generated operating losses
since inception. These factors, among others, raise substantial
doubt about the ability of the Company to continue as a going
concern.
RSP PERMIAN: S&P Affirms 'B+' CCR & 'B+' Sr. Unsec. Debt Rating
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' corporate credit rating on
Dallas-based exploration and production (E&P) company RSP Permian
Inc. The outlook is stable.
S&P also affirmed its 'B+' issue-level rating on the company's
senior unsecured debt. S&P is revising the recovery rating on this
debt to '3' from '4', reflecting improved recovery expectations
following receipt of a company-provided year-end 2016 PV10 report
that added meaningful asset value. The '3' recovery rating
indicates S&P's expectation of meaningful (50%-70%; rounded
estimate: 65%) recovery in the event of a payment default.
"The stable outlook reflects our expectation that RSP Permian's
cash balances, operating cash flow, and availability under its
reserve-based lending facility will be sufficient to fund planned
capital spending and increase its production and reserves through
2017, while maintaining average FFO to debt above 20%," said S&P
Global Ratings credit analyst David Lagasse.
S&P could lower the corporate credit rating if RSP Permian's growth
strategy doesn't proceed as expected, and its core ratios
substantially weaken such that S&P expects average FFO to debt to
remain below 12%. This scenario would likely occur due to
lower-than-expected production growth combined with higher
operating costs and a return to oil prices sustained below $40 per
barrel. In addition, S&P could lower the rating if it believes that
company will be unable to maintain adequate liquidity.
S&P could raise the rating if RSP Permian is able to increase its
reserves and production to a level commensurate with 'BB-' rated
oil and gas E&P companies. For an upgrade to occur, S&P would also
expect the company to sustain FFO to debt above 20% and its
liquidity to remain adequate or better.
SAEXPLORATION HOLDINGS: FMR LLC Reports 8.4% Stake as of Feb. 13
----------------------------------------------------------------
FMR LLC and Abigail P. Johnson disclosed in a Schedule 13G filed
with the Securities and Exchange Commission on Feb. 13, 2017, that
they beneficially own 788,877 shares of common stock of
SAExploration Holdings Inc. representing 8.443 percent of the
shares outstanding.
Members of the Johnson family, including Abigail P.
Johnson, are the predominant owners, directly or through trusts, of
Series B voting common shares of FMR LLC, representing 49% of the
voting power of FMR LLC. The Johnson family group and all other
Series B shareholders have entered into a shareholders' voting
agreement under which all Series B voting common shares will be
voted in accordance with the majority vote of Series B voting
common shares. Accordingly, through their ownership of
voting common shares and the execution of the shareholders' voting
agreement, members of the Johnson family may be deemed, under the
Investment Company Act of 1940, to form a controlling group with
respect to FMR LLC.
Neither FMR LLC nor Abigail P. Johnson has the sole power
to vote or direct the voting of the shares owned directly by the
various investment companies registered under the Investment
Company Act advised by Fidelity Management & Research Company, a
wholly owned subsidiary of FMR LLC, which power resides with the
Fidelity Funds' Boards of Trustees. Fidelity Management & Research
Company carries out the voting of the shares under written
guidelines established by the Fidelity Funds' Boards of Trustees.
A full-text copy of the regulatory filing is available at:
https://is.gd/nE19Uv
About SAExploration Holdings
SAExploration Holdings, Inc. (NASDAQ: SAEX) and its subsidiaries
are internationally-focused oilfield services company offering a
full range of vertically-integrated seismic data acquisition and
logistical support services in Alaska, Canada, South America, and
Southeast Asia to its customers in the oil and natural gas
industry. In addition to the acquisition of 2D, 3D, time-lapse 4D
and multi-component seismic data on land, in transition zones
between land and water, and offshore in depths reaching 3,000
meters, the Company offers a full-suite of logistical support and
in-field data processing services. The Company operates crews
around the world that are supported by over 29,500 owned land and
marine channels of seismic data acquisition equipment and other
leased equipment as needed to complete particular projects.
SAExploration reported a net loss attributable to the Company of
$25.03 million on $205.56 million of revenue from services for the
year ended Dec. 31, 2016, compared to a net loss attributable to
the Company of $9.87 million on $228.13 million of revenue from
services for the year ended Dec. 31, 2015. The Company's balance
sheet at Dec. 31, 2016, showed $201.65 million in total assets,
$163.59 million in total liabilities and $38.06 million in total
stockholders' equity.
* * *
In June 2016, S&P Global Ratings lowered its corporate credit
rating on SAExploration Holdings to 'CC' from 'CCC-'. The outlook
remains negative. The downgrade follows SAExploration's
announcement that it plans to launch an exchange offer to existing
holders of its 10% senior secured notes for shares of common equity
and a new issue of second-lien notes.
In September 2016, Moody's Investors Service withdrew
SAExploration's 'Caa2' Corporate Family Rating and other ratings.
SCIO DIAMOND: Incurs $355K Net Loss in Third Quarter
----------------------------------------------------
Scio Diamond Technology Corporation filed with the U.S. Securities
and Exchange Commission its quarterly report on Form 10-Q
disclosing a net loss of $355,188 on $707,194 of net revenues for
the three months ended Dec. 31, 2016, compared to a net loss of
$1.26 million on $125,677 of net revenue for the three months ended
Dec. 31, 2015.
For the nine months ended Dec. 31, 2016, the Company recognized a
net loss of $2.46 million on $1.13 million of net revenue compared
to a net loss of $2.94 million on $534,144 of net revenue for the
nine months ended Dec. 31, 2015.
The Company's balance sheet at Dec. 31, 2016, showed $8.57 million
in total assets, $3.72 million in total liabilities and $4.84
million in total shareholders' equity.
"We expect that working capital requirements will continue to be
funded through a combination of our existing funds, further
issuances of securities, and future credit facilities or corporate
borrowings. Our working capital requirements are expected to
increase in line with the growth of our business.
"As of March 31, 2016, our cash balance was $192,880 and as of
December 31, 2016 our cash balance was reduced to $183,520. This
reduction was due to our operating cash needs. Our cash at
December 31, 2016 is not expected to be adequate to fund our
operations over the current fiscal year ending March 31, 2017. As
of December 31, 2016, we had no additional lines of credit or other
bank financing arrangements ... Generally, we have financed
operations through December 31, 2016 through the proceeds of sales
of our common stock, convertible notes and borrowings under our
existing credit facilities. The Company is pursuing additional
issuances of equity capital or debt to meet operating cash
requirements.
"Additional issuances of equity or convertible debt securities will
result in dilution to our current stockholders. Such securities
might have rights, preferences or privileges senior to our common
stock. Additional financing may not be available upon acceptable
terms, or at all. If adequate funds are not available or are not
available on acceptable terms, we may not be able to take advantage
of prospective new business endeavors or opportunities, which could
significantly and materially restrict our business operations and
could result in the shutdown of operations," the Company said in
the report.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/nBWVH1
About Scio Diamond
Scio Diamond Technology Corporation was incorporated under the laws
of the State of Nevada as Krossbow Holding Corp. on Sept. 17, 2009.
The Company's focus is on man-made diamond technology development
and commercialization.
Scio Diamond reported a net loss of $3.62 million on $616,758 of
revenue for the year ended March 31, 2016, compared to a net loss
of $4.14 million on $726,193 of revenue for the year ended
March 31, 2015.
Cherry Bekaert LLP, in Greenville, South Carolina, issued a "going
concern" qualification on the consolidated financial statements for
the year ended March 31, 2016, citing that the Company has
generated limited revenue, incurred net losses and incurred
negative operating cash flows since inception and will require
additional financing to fund the continued development of products.
The availability of such financing cannot be assured. These
conditions raise substantial doubt about its ability to continue as
a going concern.
SEMLER SCIENTIFIC: Glenhill Advisors et al. Have 9.7% Stake
-----------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Glenhill Advisors, LLC, Glenn J. Krevlin, Glenhill
Capital Advisors, LLC, et al., disclosed that as of Dec. 31, 2016,
they beneficially own 497,864 shares of common stock of Semler
Scientific, Inc., representing 9.7 percent of the shares
outstanding.
Glenn J. Krevlin, is the managing member and control person of
Glenhill Advisors, LLC, and is the sole shareholder of Krevlin
Management, Inc. Krevlin Management, Inc. is the managing member
of Glenhill Capital Advisors, LLC, which is the investment manager
of Glenhill Concentrated Long Master Fund, LLC, which (along with
Mr. Krevlin) is a security holder of the Issuer. Glenhill
Advisors, LLC is the managing member of Glenhill Capital
Management, LLC. Glenhill Capital Management, LLC is the managing
member of Glenhill Concentrated Long Master Fund, LLC.
A full-text copy of the regulatory filing is available at:
https://is.gd/g64NGr
About Semler Scientific
Semler Scientific, Inc., provides diagnostic and testing services
to healthcare insurers and physician groups. The Portland,
Oregon-based Company develops, manufactures and markets
proprietary products and services that assist healthcare providers
in evaluating and treating chronic diseases.
Semler Scientific reported a net loss of $2.55 million on $7.43
million of total revenue for the year ended Dec. 31, 2016, compared
to a net loss of $8.50 million on $7 million of total revenue for
the year ended Dec. 31, 2015.
The Company's balance sheet at Dec. 31, 2016, showed $3.07 million
in total assets, $5.99 million in total liabilities and a total
stockholders' deficit of $2.91 million.
BDO USA, LLP, in New York, New York, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2016, citing that the Company has negative working
capital, a stockholders' deficit, recurring losses from operations
and expects continuing future losses that raise substantial doubt
about its ability to continue as a going concern.
SIAD INC: Seeks to Hire Sender Wasserman as Legal Counsel
---------------------------------------------------------
SIAD, Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Colorado to hire legal counsel in connection with its
Chapter 11 case.
The Debtor proposes to hire Sender Wasserman Wadsworth, P.C. to
give legal advice regarding its duties under the Bankruptcy Code,
represent in any litigation, and provide other legal services.
The hourly rates charged by the firm are:
Harvey Sender $550
David Wadsworth $400
David Warner $300
Aaron Conrardy $285
Katharine Sender $185
Paralegals $115
David Warner, Esq., disclosed in a court filing that his firm is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
David J. Warner, Esq.
Sender Wasserman Wadsworth, P.C.
1660 Lincoln Street, Suite 2200
Denver, CO 80264
Phone: (303) 296-1999
Fax: (303) 296-7600
Email: david.warner@sendwass.com
About SIAD Inc.
Based in Colorado Springs, Colorado, SIAD Inc., Trappers Rendezvous
LLC and Trappers Rendezvous Property LLC sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case Nos.
17-11733, 17-11737 and 17-11741) on March 7, 2017. The petitions
were signed by SIAD CEO Mark Herman. The Debtors have sought joint
administration of the cases.
Judge Michael E. Romero presides over SIAD's bankruptcy case. The
two other cases are assigned to Judge Elizabeth E. Brown.
At the time of the filing, SIAD and TRP estimated their assets and
debts at $1 million to $10 million. Trappers Rendezvous estimated
assets of less than $1 million and liabilities of $1 million to $10
million.
SKYLINE CORP: Venator Capital Reports 6.8% Stake as of Dec. 31
--------------------------------------------------------------
Venator Capital Management Ltd. and Brandon Osten disclosed in a
Schedule 13G filed with the Securities and Exchange Commission that
as of Dec. 31, 2016, they beneficially own 569,633 shares of common
stock, $0.0277 par value per share, of Skyline Corp. representing
6.8 percent of the shares outstanding. A full-text copy of the
regulatory filing is available for free at:
https://is.gd/yHa3TN
About Skyline Corp
Skyline Corporation was originally incorporated in Indiana in 1959,
as successor to a business founded in 1951. Skyline Corporation
and its consolidated subsidiaries designs, produces and markets
manufactured housing, modular housing and park models to
independent dealers and manufactured housing communities located
throughout the United States and Canada. Manufactured housing is
built to standards established by the U.S. Department of Housing
and Urban Development, modular homes are built according to state,
provincial or local building codes, and park models are built
according to specifications established by the American National
Standards Institute.
For the fiscal year ended May 31, 2015, the Company reported a net
loss of $10.41 million compared to a net loss of $11.9 million for
the year ended May 31, 2014. As of Nov. 30, 2016, Skyline had
$57.72 million in total assets, $32.38 million in total liabilities
and $25.34 million in total shareholders' equity.
Crowe Horwath LLP, in Fort Wayne, Indiana, issued a "going concern"
qualification on the consolidated financial statements for the year
ended May 31, 2015, citing that the Company has incurred recurring
operating losses and negative cash flows from operating activities.
The Company has a line of credit in place, however prospective
debt covenant violations may limit the Company's ability to access
these funds which would impact its liquidity. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
SPICE MODERN: Trustee Asks Court to Liquidate Steakhouse
--------------------------------------------------------
The American Bankruptcy Institute, citing Kyle Arnold of the
Orlando Sentinel, reported that the trustee in Spice Modern
Steakhouse's bankruptcy case is asking the court to liquidate the
Orlando restaurant after its third bankruptcy reorganization filing
in seven years.
According to the report, court documents filed in federal
bankruptcy court in Orlando by the trustee said the company might
have been involved in "criminal activity consisting of
underreporting sales and the amount of sales tax due."
The documents say Spice Modern Steakhouse and parent company Level
1 Inc., owe $262,105 to Florida Department of Revenue for back
sales-tax payments, the report related. That number has
accumulated starting with the company's first bankruptcy filing in
2009, court records show, the report further related. The most
recent bankruptcy reorganization petition was filed by Spice
ownership in November, the report added.
Owner Manny Tato said he does not plan to liquidate the company,
the report further related.
"The Debtor in this case, Level 1, Inc. filed its bankruptcy
petition in bad faith," the Chapter 7 motion from acting U.S.
Trustee Guy Gebhardt, said.
If the trustee does manage to convert the case to a Chapter 7
bankruptcy liquidation, Spice Modern Steakhouse business could be
dismantled and sold in pieces, Stetson professor of law Theresa
Pulley Radwan, Esq., told the news agency.
STEVE'S FROZEN: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Steve's Frozen Chillers, Inc.
3020 High Ridge Rd Ste 600
Boynton Beach, FL 33426
Case No.: 17-13690
Business Description: Steve's Frozen Chillers, Inc. --
http://stevesfrozenchillers.com-- is
engaged in the frozen drink machine
business. Founded in 2001, the Company
offers over 20 flavors of frozen drink
mixes, both for alcoholic drinks and non-
alcoholic, including frozen cappuccinos,
frozen energy drinks and skinny iced coffee.
In 2016, the Company recorded gross revenue
of $2.56 million compared to gross revenue
of $3.09 million in 2015.
Chapter 11 Petition Date: March 27, 2017
Court: United States Bankruptcy Court
Southern District of Florida (West Palm Beach)
Judge: Hon. Erik P. Kimball
Debtor's Counsel: Angelo A. Gasparri, Esq.
LAW OFFICE OF ANGELO A GASPARRI
1080 S Federal Highway
Boynton Beach, FL 33435
Tel: 561-826-8986
E-mail: angelo@drlclaw.com
Total Assets: $744,658
Total Liabilities: $1.94 million
The petition was signed by Steven D Schoenberg, CEO.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/flsb17-13690.pdf
STONEMOR PARTNERS: S&P Lowers CCR to 'CCC+' on Delayed 10-K Filing
------------------------------------------------------------------
S&P Global Ratings lowered its corporate credit rating on death
care provider StoneMor Partners L.P. to 'CCC+' from 'B-'. The
outlook is negative.
At the same time, S&P lowered its rating on subsidiary StoneMor
Operating LLC's senior secured debt to 'B' from 'B+'. The recovery
rating on this debt remains '1', reflecting S&P's expectation for
very high (90%-100%; rounded estimate: 95%) recovery in the event
of payment default. In addition, S&P lowered its rating on the
subsidiary's senior unsecured debt to 'CCC+' from 'B-'. The
recovery rating on this debt remains '3', indicating S&P's
expectation for meaningful (50%-70%; rounded estimate: 65%)
recovery in the event of default.
"We lowered the rating on StoneMor because the company is late on
its SEC 10-K filings," said S&P Global Ratings credit analyst Tulip
Lim. Additionally, operating performance has been weak because of
attrition in its sales force. Lastly, in S&P's view, covenant
cushion is still tight.
"We expect the company to continue to have cash flow deficits this
year and in subsequent years. In the past, the company has relied
on raising capital from both the equity and debt markets and on
using its revolver to fund these deficits. Because of the filing
delay, we believe the company's ability to raise equity will be
limited. This year, we expect the company to draw on its revolver.
The company has borrowing availability under its revolver.
However, despite a recent amendment temporarily widening the
headroom the company has against its financial covenants, the
margin of compliance remains tight and not all of the revolver is
available to draw upon. We expect the company to have marginally
enough liquidity for this year, but it may not be able to continue
to secure sufficient liquidity if the filing delay is prolonged.
Also, if operating performance does not improve, the company's
ability to draw under its revolver will decline, especially after
the covenant steps back down," S&P said.
S&P's rating outlook on StoneMor Partners L.P. is negative,
reflecting risk to S&P's base case, the risk of a prolonged filing
delay, and the possibility of a liquidity event.
If the filing delay persists, S&P could consider lowering the
rating. If the risk of a financial covenant violation or other
developments that threaten S&P's estimates of liquidity sources
over the next 12 months arise, S&P could also consider lowering the
rating. Such a scenario would likely accelerate the risk of a
liquidity event.
S&P could revise the outlook to stable if operating performance
stabilizes, margins improve, and the company becomes current with
its financial statements. In addition, the company would need to
have better access to the capital markets and sufficient liquidity
for at least a year.
TOWERSTREAM CORP: Melody Ceases as 5% Shareholder
-------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Melody Capital Partners, LP, Melody Capital Advisors,
LLC, Melody Special Situations Offshore Credit Mini-Master Fund,
L.P., Melody Capital Partners Offshore Credit Mini-Master Fund,
L.P., and Melody Capital Partners Onshore Credit Fund, L.P.,
disclosed that as of Dec. 31, 2016, they have ceased to be the
beneficial owner of more than five percent of the shares of common
stock of Towerstream Corporation. A full-text copy of the
regulatory filing is available for free at https://is.gd/Sknlym
About Towerstream Corporation
Towerstream Corporation (NASDAQ:TWER) offers broadband services in
12 urban markets including New York City, Boston, Los Angeles,
Chicago, Philadelphia, the San Francisco Bay area, Miami, Seattle,
Dallas-Fort Worth, Houston, Las Vegas-Reno, and the greater
Providence area.
The Company reported a net loss of $40.5 million in 2015, a net
loss of $27.6 million in 2014 and a net loss of $24.8 million in
2013. As of Sept. 30, 2016, Towerstream had $36.76 million in
total assets, $43.18 million in total liabilities and a total
stockholders' deficit of $6.42 million.
TOWERSTREAM CORP: Stetson, et al., Have 9.9% Stake as of Dec. 31
----------------------------------------------------------------
John Stetson and HS Contrarian Investments, LLC disclosed in an
amended Schedule 13G filed with the Securities and Exchange
Commission that as of Dec. 31, 2016, they beneficially own
1,865,589 shares of common stock of Towerstream Corporation
representing 9.99% (based on 16,808,980 shares of common stock
outstanding as of Dec. 13, 2016). A full-text copy of the
regulatory filing is available for free at https://is.gd/6PRiAU
About Towerstream Corporation
Towerstream Corporation (NASDAQ:TWER) offers broadband services in
12 urban markets including New York City, Boston, Los Angeles,
Chicago, Philadelphia, the San Francisco Bay area, Miami, Seattle,
Dallas-Fort Worth, Houston, Las Vegas-Reno, and the greater
Providence area.
The Company reported a net loss of $40.5 million in 2015, a net
loss of $27.6 million in 2014 and a net loss of $24.8 million in
2013. As of Sept. 30, 2016, Towerstream had $36.76 million in
total assets, $43.18 million in total liabilities and a total
stockholders' deficit of $6.42 million.
ULTRA PETROLEUM: Fight over OpCo Funded Debt Claims Underway
------------------------------------------------------------
Several parties have replied to Ultra Petroleum Corp's bid to
disallow all or portions of so-called OpCo Funded Debt Claims.
In their request filed early this month, the Debtors said the OpCo
Funded Debt Claims are those claims asserted under:
(i) the Master Note Purchase Agreement executed by Ultra
Resources, Inc. ("OpCo"), and dated as of March 6, 2008, by and
among Ultra Resources, as issuer, and the purchasers party thereto
from time to time -- OpCo Note Claims -- and
(ii) the Credit Agreement dated as of October 6, 2011 -- RCF --
by and among Ultra Resources, as borrower, the lenders party
thereto from time to time, JPMorgan Chase Bank, N.A., as
administrative agent, and certain other parties thereto -- OpCo RCF
Claims.
The OpCo RCF Claims and the OpCo Note Claims are the OpCo Funded
Debt Claims.
The Debtors ask the Court to:
-- disallow each OpCo Funded Debt Claim to the extent it seeks
allowance of the MakeWhole Amount (as defined in the MNPA) or
interest thereon;
-- disallow each OpCo Funded Debt Claim to the extent it seeks
allowance of postpetition interest as part of the claim and to the
extent it seeks postpetition interest at a rate greater than the
federal judgment rate, as prescribed under 28 U.S.C. Sec. 1961, on
the claim, and to the extent it seeks allowance of interest on any
such postpetition interest;
-- preserve the Debtors rights to object to each OpCo Funded
Debt Claim to the extent it seeks allowance of professional fees
not provided for by applicable contract or law; and
-- disallow any other portion of each OpCo Funded Debt Claim
to the extent it seeks allowance of amounts that are not due under
the OpCo Funded Debt or are not allowed under the Bankruptcy Code.
Ultra explained that the Debtors and their advisors have been
working diligently to review these proofs of claim, including any
supporting documentation filed together with any proof of claim. At
the February 13, 2017 hearing, the Court set March 3, 2017 as the
deadline for the Debtors or any other party to object to the OpCo
Funded Debt Claims. The Debtors argued that object to portions of
the OpCo Funded Debt Claims. If those portions of the OpCo Funded
Debt Claims are not formally disallowed and expunged as requested,
the claimants may receive recoveries to which they are not
entitled, to the detriment of the Debtors and their stakeholders.
Thus, the relief requested is necessary to prevent the
inappropriate distribution of estate funds and to facilitate the
administration of the claims allowance process, the Debtors said.
A copy of the Debtors' proposed Order and schedule of OpCo Funded
Debt Claims is available at:
http://bankrupt.com/misc/txsb16-32202
The ad hoc committee -- Senior Creditor Committee -- of unsecured
creditors of OpCo contends that the Objections are consistent with
the Debtors' broader strategy in these Chapter 11 Cases to use
chapter 11 as a sword to drive value to favored constituencies.
"At every turn, the Debtors' actions have been designed and
implemented for the benefit of their equity holders, including
senior management, and structurally junior creditors. The Debtors
had originally attempted to redirect value from OpCo creditors to
their favored constituencies by cramming down the OpCo Funded Debt
Claims with new debt on below-market terms, but abandoned that plan
after the Senior Creditor Committee raised serious concerns about
the lack of independence of OpCo's board and the viability of the
Plan. The Debtors' new efforts to avoid their contractual
obligations should fare no better," the Senior Creditor Committee
tells the Court.
The Ad Hoc group reminds the Court that the operative language in
the applicable agreements is clear and unambiguous and the
Objecting Parties do not contend otherwise: Prior to filing chapter
11 petitions, OpCo, as borrower, and HoldCo and UP Energy, as
guarantors, had agreed, as onsideration for borrowing approximately
$2.5 billion, that, upon any event of default, they would pay
certain amounts to the OpCo Funded Debt Holders, including the
Make-Whole Amount and interest through the date of payment on any
overdue amounts at specified default rates. It is also undisputed
that the Debtors' chapter 11 filings constituted events of default
that caused the principal amounts of the OpCo Funded Debt together
with, among other amounts, the Make-Whole Amount, to become
immediately due and payable on the Petition Date. Yet, despite the
Debtors' self-proclaimed solvency early on in these Chapter 11
Cases, they elected to defer resolution of the OpCo Funded Debt
Claims and allow them to accrue additional amounts, rather than
seek an expedited determination of their validity or seek to
refinance the underlying debt.
The Senior Creditor Committee asserts that the Debtors have
received the full benefit of the loans from the OpCo Funded Debt
Holders. They are now using their Chapter 11 Cases to refinance the
OpCo Notes and the OpCo RCF. Yet, brazenly, the Debtors seek to
accomplish what they could not accomplish outside of chapter 11,
namely, the avoidance of their categorical obligation to pay the
Make-Whole Amount as well as the contractual interest through the
date of payment.
They also point out that, had the Debtors not filed a chapter 11
petition for OpCo, the holders of OpCo Funded Debt Claims would
have been paid all components of their claims (e.g., the Make-Whole
Amount and interest on all unpaid amounts through the date of
payment) that the Debtors now seek to disallow. Instead, the
Debtors chose to file a chapter 11 petition for OpCo, even though
the ultimate restructuring took place at the HoldCo and old equity
levels and not at OpCo. Indeed, the creditors of OpCo will be
cashed out in full. However, the allowed amounts of the OpCo Funded
Debt Holders' claims cannot be lower than the amounts they would
have received outside of chapter 11 for at least two reasons: (1)
under the Plan, OpCo is solvent by billions of dollars, and (2) the
Debtors have chosen to unimpair OpCo creditors.
A copy of the Senior Creditor Committee's Response is available
at:
http://bankrupt.com/misc/txsb16-32202-1393.pdf
Forty-two holders -- OpCo Noteholders -- of senior unsecured notes
issued by Ultra Resources, Inc. tell the Court that Make-whole
disputes typically raise two issues:
(i) whether the creditor's claim is enforceable under
governing state law, and, if so,
(ii) whether it nevertheless should be disallowed on the theory
that it masquerades as a claim for unmatured interest.
The Debtors, they contend, present only the first question. OpCo,
the principal obligor, is solvent by several billion dollars, and
has now confirmed a plan of reorganization in which every OpCo
Noteholder is unimpaired. Thus each OpCo Noteholder is certainly
entitled to all of the contract rights it would have enjoyed
outside of bankruptcy, including the right to be paid the
Make-Whole Amount.
The Debtors' Plan was confirmed on March 14, 2017. It provides
that Class 4, in which the OpCo Noteholders are classified, is
unimpaired. It also provides that on the Effective Date, the OpCo
Noteholders shall receive payment of all outstanding principal of
the Senior Notes, pre-petition interest at the applicable contract
rate and post-petition interest at the Federal Judgment Rate in
effect as of the Petition Date (0.58% per annum), and a forbearance
fee. The Debtors assert that the OpCo Noteholders are entitled to
no more.
The Noteholders remind the Court that to the "impaired" and
structurally-subordinated HoldCo creditors the Plan grants "all
applicable post-petition interest, charges and fees (as determined
by the Bankruptcy Court or as otherwise agreed by the relevant
parties)" as part of their allowed claims. Thus, structurally
junior HoldCo creditors' claims include post-petition interest at
the contract rate, while the structurally senior unimpaired OpCo
Funded Creditors do not.
Likewise, the Debtors are paying only some of the unimpaired OpCo
Noteholders' fees -- i.e., those of Morgan Lewis -- while
apparently paying all fees of the impaired HoldCo creditors.
The OpCo Noteholders objected to confirmation of the Plan, noting
that failure to pay the Make-Whole Amount and post-petition
interest at the relevant default interest rates is impermissible
for an unimpaired class in the case of a solvent debtor.
On March 13, 2017, the OpCo Noteholders and the Debtors entered
into the OpCo Noteholder Group Stipulation, pursuant to which,
among other things, they agreed that the
quantification of post-petition interest would be addressed in
conjunction with the make-whole dispute. The Confirmation Order
expressly preserves the OpCo Noteholders' argument that because the
OpCo Noteholders are "unimpaired" under the Plan, they are entitled
to payment of the Make-Whole Amount and post-petition interest at
the applicable contract rate.
As of the Petition Date, approximately $1.46 billion in principal
amount of Senior Notes was outstanding, of which the OpCo
Noteholders hold more than $770 million.
The OpCo Noteholders also remind the Court that the parties' MNPA
provides that OpCo "will pay to the holder of each [Senior Note] on
demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or
collection [following a default], including reasonable attorneys'
fees, expenses and disbursements." They note that the Debtors have
agreed that (i) on the Effective Date they will pay all documented
fees and expenses incurred through the Effective Date by Morgan
Lewis, as counsel to the group of OpCo Noteholders and (ii) after
the Effective Date, they will pay Morgan Lewis's fees and expenses
incurred as counsel to the OpCo Noteholders in accordance with the
terms of the MNPA. The Debtors have refused to pay any other fees
and expenses incurred by any of the OpCo Noteholders, although
those fees are unambiguously payable by the Debtors under the
MNPA.
A copy of their Response is available at:
http://bankrupt.com/misc/txsb16-32202-1390.pdf
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup
Global Markets Inc. and CO Moore, LP hold OpCo Funded Debt Claims
and assert that they entitled to allowance of (a) the Make-Whole
Amount, which became due and payable as of the Petition Date, and
(b) postpetition interest on their OpCo Funded Debt Claims at the
full contract default rate specified in the applicable agreements
until the full amount of their OpCo Funded Debt Claims have been
paid. They contend that the Debtors' Objections must be overruled
because, as unimpaired creditors under the Plan, Merrill Lynch et
al.'s legal, equitable and contractual rights under the OpCo Notes
MNPA may not be altered, and sustaining the Objections would have
the effect of impairing their rights under the OpCo Notes MNPA and
OpCo Notes.
JPMorgan Chase Bank, N.A. -- as the Administrative Agent under the
Credit Agreement, dated as of October 6, 2011, by and among Ultra
Resources, Inc., as borrower, the
Administrative Agent (in its capacity as both lender and
Administrative Agent), and the lenders from time to time party
thereto -- filed a limited joinder to the Senior Creditors'
Committee's response. JPMorgan joins in the Response solely with
respect to arguments relating to the to OpCo Funded Debt Claims in
connection with the OpCo RCF. JPMorgan does not join in the
Response with respect to arguments relating to the propriety of the
full Make-Whole Amount.
Attorneys for the Ad Hoc Committee of Unsecured Creditors of Ultra
Resources, Inc.:
William R. Greendyke, Esq.
Jason L. Boland, Esq.
Bob B. Bruner, Esq.
NORTON ROSE FULBRIGHT US LLP
Fulbright Tower
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
Telephone: (713) 651-5151
Facsimile: (713) 651-5246
Email: william.greendyke@nortonrosefulbright.com
jason.boland@nortonrosefulbright.com
bob.bruner@nortonrosefulbright.com
- and -
Dennis F. Dunne, Esq.
Evan R. Fleck, Esq.
Andrew M. Leblanc, Esq.
MILBANK, TWEED, HADLEY & McCLOY LLP
28 Liberty Street
New York, New York 10005
Telephone: (212) 530-5000
Facsimile: (212) 530-5219
E-mail: ddunne@milbank.com
efleck@milbank.com
aleblanc@milbank.com
The OpCo Noteholders are represented by:
Sabin Willett, Esq.
Andrew J. Gallo, Esq.
Amelia C. Joiner, Esq.
MORGAN, LEWIS & BOCKIUS LLP
One Federal Street
Boston, MA 02110
Telephone: 617.341.7700
Facsimile: 617.341.7701
E-mail: sabin.willett@morganlewis.com
andrew.gallo@morganlewis.com
amelia.joiner@morganlewis.com
- and -
Renee M. Dailey, Esq.
MORGAN, LEWIS & BOCKIUS LLP
One State Street
Hartford, CT 06103-3178
Telephone: 860.240.2700
Facsimile: 860.240.2701
E-mail: renee.dailey@morganlewis.com
- and -
Chad E. Stewart, Esq.
MORGAN, LEWIS & BOCKIUS LLP
1000 Louisiana Street, Suite 4000
Houston, TX 77002
Telephone: 713.890.5000
Facsimile: 713.890.5001
E-mail: chad.stewart@morganlewis.com
Merrill Lynch et al. are represented by:
Wayne Kitchens, Esq.
Simon Mayer, Esq.
HUGHESWATTERSASKANASE, LLP
Total Plaza
1201 Louisiana Street, 28th Floor
Houston, TX 77002
Telephone: (713) 759-0818
Facsimile: (713) 759-6834
Email: wkitchens@hwa.com
smayer@hwa.com
- and -
MORRISON & FOERSTER LLP
John A. Pintarelli, Esq.
James A. Newton, Esq.
Benjamin W. Butterfield, Esq.
250 West 55th Street
New York, New York 10019
Telephone: (212) 468-8000
Facsimile: (212) 468-7900
Email: jpintarelli@mofo.com
jnewton@mofo.com
bbutterfield@mofo.com
JPMorgan is represented by:
Charles S. Kelley, Esq.
700 Louisiana Street, Suite 3400
Houston, TX 77002-2730
Telephone: 713 238-3000
Facsimile: 713 238-4888
E-mail: ckelley@mayerbrown.com
- and -
Frederick D. Hyman, Esq.
MAYER BROWN LLP
1221 Avenue of the Americas
New York, NY 10020-1001
Telephone: 212 506-2500
Facsimile: 212 262-1910
E-mail: fhyman@mayerbrown.com
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.
On May 5, 2016, the United States Trustee for the Southern District
of Texas appointed an official committee for unsecured creditors of
all of the Debtors. On September 26, 2016, the United States
Trustee for the Southern District of Texas filed a Notice of
Reconstitution of the UCC. The Committee tapped Weil, Gotshal &
Manges LLP as its legal counsel; Opportune LLP as advisor; and PJT
Partners LP as its financial advisor.
Certain other stakeholders have organized for purposes of
participating in the Debtors' chapter 11 cases: (i) on June 8,
2016, an informal ad hoc committee of unsecured creditors of
subsidiary, Ultra Resources, notified the Bankruptcy Court it had
formed and identified its members, most of which are distressed
debt investors and/or hedge funds; (ii) on June 13, 2016, an
informal ad hoc committee of the holders of senior notes issued by
the Company notified the Bankruptcy Court it had formed and
identified its members; (iii) on July 20, 2016, an informal ad hoc
committee of shareholders of the Company notified the Bankruptcy
Court it had formed and identified its members; and (iv) on
January 6, 2017, an informal ad hoc committee of unsecured
creditors of subsidiary, Ultra Resources, notified the Bankruptcy
Court it had formed and identified its members, most of which
are insurance companies.
* * *
As reported by the Troubled Company Reporter, the Bankruptcy Court
for the Southern District of Texas on March 14, 2017, entered an
order confirming the Debtors' Second Amended Joint Chapter 11 Plan
of Reorganization, and determined that Ultra's plan value is $6.0
billion. These orders clear the way for Ultra to exit chapter 11
once the financing transactions to fund its plan of reorganization
are closed, which is expected to occur on or about March 31.
ULTRA PETROLEUM: Hedging Transactions Announced
-----------------------------------------------
Ultra Petroleum Corp. has entered into new NYMEX natural gas swaps
for approximately 119 Bcf for the months of April 2017 through
October 2017. The hedges are at an average price of $3.17 per
MMBtu, or $3.34 per Mcf. The hedged volumes are equivalent to
nearly 50% of remaining forecasted production guidance for the
remainder of the year, assuming the midpoint of guidance, and 100%
of the PDP volumes required to be hedged under the proposed
revolving credit facility. Ultra will continue to evaluate
additional hedging transactions on an opportunistic basis.
Earlier this month, Ultra announced its capital investment program
and financial and operational guidance for 2017. In a statement
dated March 15, the company said its Board of Directors approved
the planned 2017 drilling and completion capital budget of $500.0
million. With this investment, Ultra is targeting production of 795
to 820 million cubic feet equivalent (MMcfe) per day, an increase
of approximately 7% to 10% when compared to 2016 exit production
rates.
The company said it expects to participate in approximately 245
total gross (193 net) Wyoming wells in 2017, compared to 110 total
gross (78 net) wells in 2016. Annual production for 2017 is
expected to grow to 290 to 300 billion cubic feet equivalent
(Bcfe), compared to production of 281.7 Bcfe for 2016. Based on the
company's guidance, approximately 96 percent of the company's
production forecast will come from the Rockies. The company's
realized natural gas price per Mcf is expected to average 4 to 5
percent below the NYMEX price due to regional differentials, before
consideration of any hedging activity. Realized pricing for oil is
expected to be about 5 to 6 percent less than the average NYMEX
crude oil price.
The company intends to enter into hedging agreements for notional
volumes of not less than 50% of the projected volume of total
proved developed producing reserves to be produced over the next
twelve months.
Based on a $3.25 per MMBtu Henry Hub natural gas price and a $50.00
per Bbl NYMEX crude oil price, the projected earnings before
interest, taxes, depreciation, depletion and amortization for
full-year 2017 range between $650.0 million and $700.0 million.
On March 24, Ultra filed with the Securities and Exchange
Commission an amendment to its Current Report on Form 8-K which the
Company previously filed with the SEC on February 28. The sole
purpose of the Amendment is to correct the description of the
volumetric units in the headers to the table presented on Exhibit
99.1 of the Original Filing. The headers were incorrect in that
they referred to Bbls of Oil and NGLs instead of MBbls, and Mcf of
natural gas instead of MMcf, and the totals of Oil, Natural Gas and
NGLs in Mcfe instead of MMcfe. The numbers in the body of the table
in Exhibit 99.1 have not changed. Except as set forth, this
Amendment does not modify or update any other disclosure contained
in the Original Filing.
A copy of the Adjusted Oil and Gas Reserves Estimates is available
at https://is.gd/zb9Fpc
Chapter 11 Exit by March 31
As reported by the Troubled Company Reporter, the Bankruptcy Court
for the Southern District of Texas on March 14 entered an order
confirming the Debtors' Second Amended Joint Chapter 11 Plan of
Reorganization, and determined that Ultra's plan value is $6.0
billion. These orders clear the way for Ultra to exit chapter 11
once the financing transactions to fund its plan of reorganization
are closed, which is expected to occur on or about March 31.
The Debtors filed a revised Plan March 10. The Plan contemplates
the following treatment of claims against and interests in the
Debtors:
* holders of claims under the Company's senior notes will
receive (i) their proportionate share of the new common stock of
the Company ("New Equity"), subject to dilution on account of the
stock incentive plan (the "Incentive Plan"), and (ii) the right to
participate in a rights offering for New Equity (the "Noteholder
Rights Offering"), exclusive of New Equity issued on account of the
commitment premium (the "Commitment Premium") pursuant to the
backstop commitment agreement between the Company and certain
commitment parties party thereto (the "Backstop Commitment
Parties") and subject to dilution on account of the Incentive
Plan;
* holders of the Company's existing shares of common stock
will receive (i) their proportionate share of New Equity, subject
to dilution on account of the Incentive Plan and (ii) the right to
participate in a rights offering for New Equity (the "Equityholder
Rights Offering" and together with the "Noteholder Rights
Offering," the "Rights Offerings"), exclusive of New Equity issued
on account of the Commitment Premium and subject to dilution on
account of the Incentive Plan;
* holders of claims arising under Ultra Resources, Inc.
("OpCo") senior unsecured notes (the "OpCo Notes") and the credit
agreement among OpCo, as borrower, Wilmington Savings Fund Society,
FSB, as successor administrative agent, and the lenders party
thereto (together with the OpCo Notes, the "OpCo Funded Debt") will
receive payment in full, in cash of allowed claims;
* holders of general unsecured claims will receive payment in
full, in cash, or receive such other treatment as determined by the
Bankruptcy Court to ensure that such holder's legal, contractual
and equitable rights are not altered, except to the extent that a
holder of a general unsecured claim agrees to a different treatment
in full satisfaction of such claim;
* holders of certain claims (other than secured tax claims)
that are secured by a lien or collateral will receive either
reinstatement of the claim or payment in full, in cash;
* holders of certain claims (other than secured tax claims and
administrative claims) entitled to priority in right of payment
will receive payment in full, in cash;
* holders of intercompany claims will have their interests
either reinstated, cancelled or treated in a manner determined by
the Ultra Entities;
* holders of intercompany interests will have their interests
either reinstated or cancelled; and
* holders of the Company's equity interests, other than the
existing shares of common stock, will not receive or retain any
distribution and such interests will be cancelled.
Unless otherwise specified, the treatment set forth in the Plan and
the Confirmation Order will be in full satisfaction of all claims
against and interests in the Ultra Entities, which will be
discharged on the Effective Date. All of the Ultra Entities'
existing funded debt and equity (except for certain intercompany
interests) will be extinguished by the Plan.
As determined by the Bankruptcy Court, Settlement Plan Value (as
defined in the Plan) under the Plan is $6.0 billion.
Capital Structure
As of the Effective Date, the Company will issue New Equity to the
holders of claims against and interests in the Company, and the
Company's shares of common stock outstanding prior to the Effective
Date will be cancelled, in each case as provided in the Plan. As of
February 9, 2017, there were 153,418,041 shares of the Company's
common stock outstanding. Under the Plan, the Company's new
organizational documents will become effective on the Effective
Date. The Company's new organizational documents will authorize the
Company to issue shares of New Equity pursuant to the Plan. In
addition, on the Effective Date, the Company will enter into a
registration rights agreement with certain of the Company's
securityholders and the Backstop Commitment Parties.
Exit Financing
The Plan is expected to be funded by the following exit financings,
subject to certain customary conditions:
* $1,400 million in the aggregate principal amount of
unsecured senior notes issued by OpCo (the "New Notes"); however,
to the extent that OpCo is unable to issue the New Notes yielding
at least $1,400 million in gross cash proceeds, OpCo will obtain a
senior unsecured bridge loan under the senior unsecured bridge
facilities in the aggregate principal amount of $1,400 million,
less the aggregate principal amount of the issued New Notes;
* $600.0 million in aggregate principal amount under the new
senior secured first lien term loan credit facility, with OpCo
serving as the borrower;
* up to $400.0 million new senior secured first lien revolving
credit facility with an initial borrowing base of $1.0 billion,
subject to certain conditions, with OpCo serving as the borrower;
and
* $580.0 million in proceeds from the Rights Offerings,
backstopped by the Backstop Commitment Parties.
Incentive Plan
Effective as of the Effective Date, the Company's board of
directors will adopt the Incentive Plan, with a share reserve equal
to 7.5% of the fully-diluted, fully-distributed shares of the
Company as of the Effective Date. The Incentive Plan provides for
the grant of equity-based awards to the Company's key employees and
non-employee Board directors, including the grant of restricted
stock units representing 40% of the total share reserve to be made
as of the Effective Date.
Settlement, Releases and Exculpations
The Plan incorporates an integrated compromise and settlement of
claims to achieve a beneficial and efficient resolution of the
Chapter 11 cases. Unless otherwise specified, the settlement,
distributions, and other benefits provided under the Plan,
including the releases and exculpation provisions included therein,
are in full satisfaction of all claims and causes of action that
could be asserted. The Plan provides releases and exculpations for
the benefit of the Ultra Entities, certain of the Ultra Entities'
claimholders, other parties in interest and various parties related
thereto, each in their capacity as such, from various claims and
causes of action, as further set forth in Article VIII of the
Plan.
A copy of the Order Confirming the Second Amended Joint Chapter 11
Plan of Reorganization is available at https://is.gd/ntazI7
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.
On May 5, 2016, the United States Trustee for the Southern District
of Texas appointed an official committee for unsecured creditors of
all of the Debtors. On September 26, 2016, the United States
Trustee for the Southern District of Texas filed a Notice of
Reconstitution of the UCC. The Committee tapped Weil, Gotshal &
Manges LLP as its legal counsel; Opportune LLP as advisor; and PJT
Partners LP as its financial advisor.
Certain other stakeholders have organized for purposes of
participating in the Debtors' chapter 11 cases: (i) on June 8,
2016, an informal ad hoc committee of unsecured creditors of
subsidiary, Ultra Resources, notified the Bankruptcy Court it had
formed and identified its members, most of which are distressed
debt investors and/or hedge funds; (ii) on June 13, 2016, an
informal ad hoc committee of the holders of senior notes issued by
the Company notified the Bankruptcy Court it had formed and
identified its members; (iii) on July 20, 2016, an informal ad hoc
committee of shareholders of the Company notified the Bankruptcy
Court it had formed and identified its members; and (iv) on
January 6, 2017, an informal ad hoc committee of unsecured
creditors of subsidiary, Ultra Resources, notified the Bankruptcy
Court it had formed and identified its members, most of which
are insurance companies.
ULTRA PETROLEUM: Whitebox Reports 5.1% Equity Stake
---------------------------------------------------
Whitebox Advisors LLC, and Whitebox General Partner LLC, disclosed
in an amended Schedule 13G filing with the Securities and Exchange
Commission that they may be deemed to be the beneficial owner of
7,817,810 shares or roughly 5.1% of the Common Stock of Ultra
Petroleum Corp. as of March 15, 2017.
All of the Common Shares are held in the accounts of WA's clients,
none of which individually own more than 5% of the Common Stock.
Whitebox Advisors may be reached at:
Mark Strefling
Chief Operating Officer
Whitebox Advisors LLC
3033 Excelsior Boulevard, Suite 300
Minneapolis, MN 55416
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.
On May 5, 2016, the United States Trustee for the Southern District
of Texas appointed an official committee for unsecured creditors of
all of the Debtors. On September 26, 2016, the United States
Trustee for the Southern District of Texas filed a Notice of
Reconstitution of the UCC. The Committee tapped Weil, Gotshal &
Manges LLP as its legal counsel; Opportune LLP as advisor; and PJT
Partners LP as its financial advisor.
Certain other stakeholders have organized for purposes of
participating in the Debtors' chapter 11 cases: (i) on June 8,
2016, an informal ad hoc committee of unsecured creditors of
subsidiary, Ultra Resources, notified the Bankruptcy Court it had
formed and identified its members, most of which are distressed
debt investors and/or hedge funds; (ii) on June 13, 2016, an
informal ad hoc committee of the holders of senior notes issued by
the Company notified the Bankruptcy Court it had formed and
identified its members; (iii) on July 20, 2016, an informal ad hoc
committee of shareholders of the Company notified the Bankruptcy
Court it had formed and identified its members; and (iv) on
January 6, 2017, an informal ad hoc committee of unsecured
creditors of subsidiary, Ultra Resources, notified the Bankruptcy
Court it had formed and identified its members, most of which
are insurance companies.
* * *
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas confirmed the second amended Chapter 11 plan of
reorganization of Ultra Petroleum Corp. and its debtor affiliates.
The Plan provides for Ultra to raise $580 million in equity capital
through a rights offering plus another $2.4 billion in exit
financing. Creditors of the company's operating subsidiary, owed
nearly $2.52 billion, will receive new notes and cash under the
plan. Existing shareholders will receive a 41% stake in the
restructured Ultra Petroleum, subject to dilution.
UNITI GROUP: Moody's Affirms B2 Corporate Family Rating
-------------------------------------------------------
Moody's Investors Service has affirmed the ratings for Uniti Group
Inc. (formerly Communications Sales and Leasing, Inc.), including
its B2 corporate family rating (CFR), B2-PD probability of default
rating (PDR), B1 (LGD 3) senior secured rating and Caa1 (LGD 5)
unsecured rating. Uniti's speculative grade liquidity rating is
unchanged at SGL-2, reflecting good liquidity and the outlook
remains stable.
RATINGS RATIONALE
Moody's has maintained Uniti's stable outlook despite changing the
outlook for Windstream Services, LLC to negative. Windstream's B1
rating and negative outlook reflect its unfavorable operating
trends and Moody's view that the downward pressure on EBITDA could
result in sustained higher leverage and negative free cash flow.
The ratings of Uniti and Windstream remain tightly linked, as Uniti
generates about three-fourths of its revenues from its master lease
with Windstream.
The action for Uniti reflects a reassessment of the relative
probability of default (PD) of Windstream and Uniti. Moody's now
ascribes a PD to Uniti which is, at worst, equivalent to that of
Windstream. The change in approach was prompted by a closer
examination of the joint default probability of the two entities,
including consideration of scenarios where Windstream defaults and
Uniti does not. Specifically, two scenarios of default (under
Moody's definition) by Windstream, such as a distressed exchange
(DE) or Windstream's acceptance of the master lease within a
bankruptcy restructuring would not result in a default by Uniti.
While ratings of Uniti and Windstream remain tightly linked because
Uniti generates about 75% of its revenues from its master lease
with Windstream, Moody's now believes that the ratings linkage
weakens in the event that Windstream's probability of default
rating declines below B1-PD. This is because of possible outcomes
in which adverse ratings events at Windstream would not necessarily
be transmitted to Uniti. Accordingly, while earlier on 27 March
2017, Moody's changed Windstream's ratings outlook to negative,
Uniti's outlook remains stable. Moody's does not believe that
Uniti's B2 rating has any near term upward potential due to the
company's high leverage of around 6x, its acquisitive strategy and
the negative trajectory of Windstream's fundamentals.
Uniti's B2 CFR primarily reflects its reliance upon Windstream (B1
negative) for about three fourths of its revenues. Uniti's rating
will remain linked with Windstream unless or until it can diversify
its revenue stream such that Windstream represents meaningfully
less than half of Uniti's total revenues. The rating also
contemplates Uniti's high leverage of around 6x and its limited
retained free cash flow as a result of its high dividend payout and
the growing capital intensity of acquired businesses. Offsetting
these limiting factors are Uniti's stable and predictable revenues,
its high margins and the strong contract terms within the master
lease agreement between it and Windstream. Uniti's recent
acquisitions of PEG, Tower Cloud, NMS and Hunt Telecom represent a
growing degree of revenue diversification which may help to
eventually create some ratings separation from Windstream.
While unlikely given the dependency on Windstream's credit profile,
Moody's could raise Uniti's ratings if leverage were to be
sustained below 4x (Moody's adjusted). Uniti's rating could become
decoupled from Windstream if Uniti achieves sufficient revenue
diversification such that a stand-alone credit assessment is
warranted. Moody's could lower the ratings if leverage were
sustained above 6.5x or if there is any negative change in the
credit profile of Windstream.
The principal methodology used in these ratings was Global
Communications Infrastructure Rating Methodology published in June
2011.
Uniti Group, Inc. is a publicly traded, real estate investment
trust (REIT) that was spun off from Windstream Holdings, Inc. in
April of 2015.
UTILITY ONE: S&P Assigns 'B' CCR & Rates $550MM Facility 'B'
------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B' corporate credit
rating to Utility One Source LP (UOS). The outlook is stable.
At the same time, S&P assigned its 'B' issue-level to the company's
proposed $550 million senior secured credit facility, consisting of
a $100 million revolver due in 2022 and a $450 million term loan
due in 2023. The '3' recovery rating indicates S&P's expectation
for meaningful recovery (50%-70%; rounded estimate: 55%) in the
event of a payment default.
The company will use proceeds from the proposed credit facility to
refinance debt, pay fees and related expenses, and provide cash for
general business purposes.
The 'B' corporate credit rating reflects S&P's expectation that the
company will maintain adjusted debt to EBITDA below 6.5x, providing
it with cushion to absorb potential economic downturns given its
strong position in the competitive, niche specialty equipment
rental industry. The company experienced relatively steady
operating performance in 2016 despite continued project delays in
the U.S. transmission and distribution (T&D) end-market
(representing about 54% of the company's 2016 revenue) and weakness
in oil and gas markets (about 10% of revenue). S&P expects the
company's recent expansion of its fleet in the Canadian market,
benefits from previous cost-saving initiatives and expected
footprint growth in the continental U.S. to allow it to increase
revenue and profitability in both its equipment sales and rental
segments in 2017. As a result, S&P anticipates adjusted debt to
EBITDA will improve from the low-6x area in 2016 to the low- to
mid-5x range by the end of 2017.
UOS was established in February 2015 through the acquisition of
three leading specialty equipment providers, with Custom Truck and
Equipment (CTE) serving as the cornerstone. UOS, which is majority
owned by Blackstone Group, is a leading provider of specialty
equipment rentals, sales, parts, and services focused on the
utility T&D, forestry (primarily right-of-way maintenance for T&D),
rail, infrastructure, and oil and gas markets. S&P believes the
company's moderate end market diversity, customized fleet,
servicing capabilities, and ability to provide new, used, and
rental solutions enables it to maintain its strong and increasing
market share despite delays in the ramp-up of T&D projects and
continued demand softness from oil and gas customers over the last
year.
These positive factors are offset by the company's operations in
the competitive and fragmented equipment rental industry. Its
relatively small scale and scope of operations, limited product
diversity and weak margin profile compares unfavorably to larger,
more diverse general equipment rental providers such as United
Rentals Inc. and HERC Holdings Inc. In addition, S&P believes that
long-term trends in the company's major end markets are positive,
driven by an aging U.S. power grid, changing mix of power
generation, and continued population growth that should drive
increased spending on T&D projects over the long term. But S&P
believes that the company's earnings can be volatile given
potential lumpiness in the timing of project bookings.
The company reported $475 million in revenue in 2016, marking a 17%
increase year over year, mostly due to acquisitions completed in
2015. S&P Global Ratings' adjusted margins were compressed to the
15% area during the year as a result of restructuring initiatives
and integration costs associated with these acquisitions. Free
operating cash flow (FOCF) was negative because of elevated capital
expenditures (capex) as management continued to expand its fleet in
anticipation of higher T&D demand and future infrastructure
spending. Although S&P expects the company to continue to
aggressively spend on capex over the next 12-18 months, S&P
believes that benefits from previous restructuring initiatives,
modest organic growth, and incremental revenue from acquisitions
will allow UOS to expand its EBITDA margin to the high-teens
percentage area and reduce leverage over S&P's forecast period.
S&P's assessment of the company's financial risk includes the
company's financial sponsor ownership and S&P's belief that
financial sponsors frequently extract cash or otherwise increase
the leverage of its owned companies over time. S&P's base-case
forecast does not incorporate significant debt financed dividends
through 2018 as it expects the company to reinvest excess cash flow
into the business.
S&P's base forecast assumes these:
-- U.S. GDP growth of 2.4% in 2017 and 2.3% in 2018.
-- Nonresidential construction growth, including oil and gas
activity, of about 3% in 2017.
-- Organic revenue growth in 2017 in the low- to mid-single–
digit percentages due to fleet growth, as well as modest
increases in pricing and utilization rates during the
period. S&P expects revenue to grow in the mid- to high-
single-digit percentage range in 2018 as end markets
continue to stabilize and T&D projects ramp up.
-- EBITDA margins in the high-teens percentage area through
2018 as the company benefits from pricing increases and
previous restructuring initiatives.
-- Annual gross capex between 15% and 20% of revenues.
-- Cash flow from operations in the $50 million-$60 million
range annually.
-- S&P expects the company to pursue modest bolt-on
acquisitions through 2018.
S&P believes UOS will have adequate liquidity over the next 12
months. The company has no debt maturities until 2022, when the
revolver matures. S&P estimates that sources of liquidity will
exceed uses by at least 1.2x and that net sources will remain
positive even if EBITDA declines by 15%. S&P believes the
qualitative factors relating to UOS' liquidity--such as its ability
to withstand high-impact, low probability events, relationship with
banks, and risk management--all support S&P's adequate assessment.
Principal liquidity sources:
-- Current cash balances of approximately $10 million
-- Full availability under the proposed $100 million cash flow
revolver; and
-- Between $60 million and $70 million in cash funds from
operations (FFO) annually.
Principal liquidity uses:
-- Modest working capital outflows of around $5 million
annually;
-- Capex of about $100 million, including about $35 million of
maintenance capital spending; and
-- Modest bolt-on acquisitions of approximately $10 million in
2017.
The outlook is stable. S&P expects modest growth in the T&D
industry, benefits from previous cost-saving initiatives, and
recent acquisitions to allow the company to increase revenue and
profitability over the next 12 months. S&P estimates that the
company will improve its total debt to EBITDA to the low- to mid-5x
range and maintain FOCF to debt below 5% in 2017. S&P's assessment
of UOS' credit measures includes its expectation for potential
volatility in credit measures during of a business cycle.
S&P could lower the rating if the company significantly
underperforms S&P's forecast, driven by a sizeable decline in
demand in the company's end markets and continued capital spending
that results in adjusted debt to EBITDA above 6.5x on a sustained
basis. S&P could also consider a downgrade if the company pursues
acquisitions or shareholder friendly activity to an extent that
adjusted debt to EBITDA increases to and is likely to remain above
6.5x while generating negligible amounts of FOCF.
S&P could raise its rating on UOS if the company significantly
increases its revenue base and expands its margins in line with
those of its larger equipment rental peers. S&P could also raise
the rating if it expects total debt to EBITDA will remain below 5x
over the economic cycle and believe that the company is committed
to maintaining financial policies that will support this level of
leverage.
VANGUARD NATURAL: Unit to Sell O&G Assets in Glasscock for $78M
---------------------------------------------------------------
Debtor Vanguard Operating, LLC, a wholly owned subsidiary of
Vanguard Natural Resources, LLC, on March 20, 2017, entered into a
purchase and sale agreement with OXY USA, Inc. Pursuant to the
terms of the PSA, the Seller agreed to sell a substantial portion
of its oil and gas properties located in Glasscock County, Texas,
for approximately $78.3 million in cash, subject to certain
customary purchase price adjustments.
The Company has filed the PSA with the Bankruptcy Court along with
a motion seeking, among other relief, the establishment of bidding
procedures for an auction that allows other qualified bidders to
submit higher or otherwise better offers to purchase all or
substantially all of the Assets. Subject to the receipt of
qualified offers from other bidders proposing a Competing
Transaction, the Debtors propose to hold an auction with respect to
the Assets on or about May 2, 2017.
Under the PSA, the Seller is responsible for payments to cure
defaults, if any, under executory contracts that the Buyer elects
to have assumed and assigned to it by the Seller. Following the
entry of the Bidding Procedures Order by the Bankruptcy Court, the
Buyer is obligated to make a deposit to an escrow account and upon
the closing of the transactions contemplated by the PSA, the
deposit will be released to the Seller and credited against the
Purchase Price. The PSA contains customary representations,
warranties and covenants.
The parties expect to close the Asset Sale on May 5, 2017, subject
to customary closing conditions, to the outcome of the proposed
auction (provided that any qualified bids proposing a Competing
Transaction are timely received) and to receipt of Bankruptcy Court
approval. The PSA imposes post-closing indemnification obligations
on the Seller for (i) claims and costs relating to the ownership of
operation of the Assets prior to the closing of the Asset Sale, and
(ii) assets excluded from the transactions contemplated by the
PSA.
The PSA may be terminated, subject to certain exceptions: (i) upon
mutual written consent; (ii) if the closing has not occurred by
June 18, 2017; (iii) for material breaches by a party of
representations and warranties or covenants that remain uncured;
(iv) if the Bankruptcy Court does not enter the Bidding Procedures
Order by April 19, 2017 or if the Bidding Procedures Order is
amended, modified, or vacated in any manner without the Buyer’s
consent; (v) if any governmental authority issues a non-appealable
order restraining, enjoining or otherwise prohibiting the Asset
Sale; (vi) if Seller selects or accepts a Competing Transaction as
the highest or otherwise best bid made in accordance with the
Bidding Procedures Order; (vii) if the Chapter 11 Cases are
converted to Chapter 7, dismissed, or a trustee, receiver or
examiner with expanded powers is appointed ; (viii) if the
Bankruptcy Court does not enter an order authorizing the rejection
of the Midland Basin Prospect Drilling and Development Agreement,
dated May 9, 2014, by and among Vanguard Permian, LLC, Encore
Energy Partners Operators, LLC and Athlon Holdings LP by May 19,
2017; and (ix) if the Bankruptcy Court does not authorize the sale
of the Assets to the Buyer free and clear of certain claims and
causes of action asserted in a complaint filed with the Bankruptcy
Court by Encana Oil & Gas (USA) Inc., or any amended complaint
filed by May 19, 2017 with the Bankruptcy Court by Encana.
About Vanguard Natural Resources
Vanguard Natural Resources, LLC -- http://www.vnrllc.com/-- is a
publicly traded limited liability company focused on the
acquisition, production and development of oil and natural gas
properties. Vanguard's assets consist primarily of producing and
non-producing oil and natural gas reserves located in the Green
River Basin in Wyoming, the Permian Basin in West Texas and New
Mexico, the Gulf Coast Basin in Texas, Louisiana, Mississippi and
Alabama, the Anadarko Basin in Oklahoma and North Texas, the
Piceance Basin in Colorado, the Big Horn Basin in Wyoming and
Montana, the Arkoma Basin in Arkansas and Oklahoma, the Williston
Basin in North Dakota and Montana, the Wind River Basin in
Wyoming,
and the Powder River Basin in Wyoming.
The Debtors listed total assets of $1.54 billion and total debts
of
$2.3 billion as of Feb. 1, 2017.
Paul Hastings LLP is serving as legal counsel and Evercore
Partners
is acting as financial advisor to Vanguard. Opportune LLP is the
Company's restructuring advisor. Prime Clerk LLC is serving as
claims and noticing agent.
Judy R. Robbins, the U.S. Trustee for Region 7, on Feb. 14
appointed three creditors to serve on the official committee of
unsecured creditors appointed in the Chapter 11 case of Vanguard
Natural Resources, LLC.
VANGUARD NATURAL: Wants DIP Loan Hearing Pushed Back to April 13
----------------------------------------------------------------
Vanguard Natural Resources, LLC and its affiliated debtors ask the
U.S. Bankruptcy Court for the Southern District of Texas to
continue to April 13, 2017, the final hearing on their request to
obtain DIP financing.
On March 17, 2017, the Debtors requested that the Court continue
the final hearing on the Debtor-in-Possession Motion to April 5,
2017 at 9:00 a.m. (prevailing Central
Time). The Court granted the requested continuance by order
entered on March 20.
The Debtors continue to be engaged in discussions with certain
parties regarding the relief requested in the Debtor-in-Possession
Financing Motion. Accordingly, the Debtors request entry of an
order further continuing the final hearing on the
Debtor-in-Possession Motion to April 13, 2017 at 1:30 p.m.
(prevailing Central Time), without prejudice to their right to
further adjourn the DIP Financing Motion with notice on the docket
in accordance with the Bankruptcy Code, the Bankruptcy Rules, and
the Local Bankruptcy Rules, as applicable.
Terms of $50-Million DIP Facility
As reported by the Troubled Company Reporter, the Debtors on Feb.
1, 2017, filed a motion seeking, among other things, interim and
final approval of the Debtors' use of cash collateral and
debtor-in-possession financing on terms and conditions set forth in
a proposed DIP Credit Agreement among VNG (the "DIP Borrower"), the
financial institutions or other entities from time to time parties
thereto, as lenders, Citibank N.A., as administrative agent (the
"DIP Agent") and as issuing bank. The initial lenders under the
DIP Credit Agreement include lenders under the Company's existing
first-lien credit agreement or the affiliates of such lenders.
Pursuant to the prepetition First Lien Credit Agreement, the
Debtors are jointly and severally liable to the First Lien Lenders
in the aggregate principal amount of approximately $1.25 billion.
The obligations owing to the First Lien Lenders are secured by
liens on and security interests in substantially all of the
Debtors' assets and properties.
The DIP Facility was approved on an interim basis pursuant to an
Order of the Court, dated Feb. 2, 2017.
The proposed DIP Credit Agreement, if approved by the Bankruptcy
Court, contains these terms:
-- a revolving credit facility in the aggregate amount of up
to $50.0 million, and $15.0 million available on an
interim basis;
-- proceeds of the DIP Credit Agreement may be used by the
DIP Borrower to (i) pay certain costs and expenses
related to the Chapter 11 Cases, (ii) make payments
provided for in the DIP Motion, including in respect of
certain "adequate protection" obligations and (iii) fund
working capital needs, capital improvements and other
general corporate purposes of the DIP Borrower and its
subsidiaries, in all cases subject to the terms of the
DIP Credit Agreement and applicable orders of the
Bankruptcy Court;
-- the maturity date of the DIP Credit Agreement is expected
to be the earliest to occur of November 1, 2017, 45 days
following the date of the interim order of the Bankruptcy
Court approving the DIP Facility on an interim basis, if
the Bankruptcy Court has not entered the final order on
or prior to such date, or the effective date of a plan
of reorganization in the Chapter 11 Cases. In addition,
the maturity date may be accelerated upon the occurrence
of certain events set forth in the DIP Credit Agreement;
-- interest will accrue at a rate per year equal to the
LIBOR rate plus 5.50%;
-- in addition to fees to be paid to the DIP Agent, the DIP
Borrower is required to pay to the DIP Agent for the
account of the lenders under the DIP Credit Agreement,
an unused commitment fee equal to 1.0% of the daily
average of each lender's unused commitment under the DIP
Credit Agreement, which is payable in arrears on the last
day of each calendar month and on the termination date
for the facility for any period for which the unused
commitment fee has not previously been paid;
-- the obligations and liabilities of the DIP Borrower and
its
subsidiaries owed to the DIP Agent and lenders under the
DIP Credit Agreement and related loan documents will be
entitled to joint and several super-priority administrative
expense claims against each of the DIP Borrower and its
subsidiaries in their respective Chapter 11 Cases subject
to limited exceptions provided for in the DIP Motion, and
will be secured by (i) a first priority, priming security
interest and lien on all encumbered property of the DIP
Borrower and its subsidiaries, subject to limited
exceptions
provided for in the DIP Motion, (ii) a first priority
security interest and lien on all unencumbered property of
the DIP Borrower and its subsidiaries, subject to limited
exceptions provided for in the DIP Motion and (iii) a
junior security interest and lien on all property of the
DIP Borrower and its subsidiaries that is subject to (a) a
valid, perfected and non-avoidable lien as of the petition
date (other than the first priority and second priority
prepetition liens) or (b) a valid and non-avoidable lien
that is perfected subsequent to the petition date, in
each case subject to limited exceptions provided for in
the DIP Motion;
-- the sum of unrestricted cash and cash equivalents of the
loan parties and undrawn funds under the DIP Credit
Agreement shall not be less than $25.0 million at any
time; and
-- the DIP Credit Agreement is subject to customary
covenants, prepayment events, events of default and
other provisions.
The DIP Credit Agreement is subject to final approval by the
Bankruptcy Court, which has not been obtained at this time. The
Debtors anticipate closing the DIP Credit Agreement promptly
following final approval by the Bankruptcy Court of the DIP
Motion.
About Vanguard Natural Resources
Vanguard Natural Resources, LLC -- http://www.vnrllc.com/-- is a
publicly traded limited liability company focused on the
acquisition, production and development of oil and natural gas
properties. Vanguard's assets consist primarily of producing and
non-producing oil and natural gas reserves located in the Green
River Basin in Wyoming, the Permian Basin in West Texas and New
Mexico, the Gulf Coast Basin in Texas, Louisiana, Mississippi and
Alabama, the Anadarko Basin in Oklahoma and North Texas, the
Piceance Basin in Colorado, the Big Horn Basin in Wyoming and
Montana, the Arkoma Basin in Arkansas and Oklahoma, the Williston
Basin in North Dakota and Montana, the Wind River Basin in
Wyoming,
and the Powder River Basin in Wyoming.
The Debtors listed total assets of $1.54 billion and total debts
of
$2.3 billion as of Feb. 1, 2017.
Paul Hastings LLP is serving as legal counsel and Evercore
Partners
is acting as financial advisor to Vanguard. Opportune LLP is the
Company's restructuring advisor. Prime Clerk LLC is serving as
claims and noticing agent.
Judy R. Robbins, the U.S. Trustee for Region 7, on Feb. 14
appointed three creditors to serve on the official committee of
unsecured creditors appointed in the Chapter 11 case of Vanguard
Natural Resources, LLC.
Attorneys for Citibank, N.A, as administrative agent under the
Third Amended and Restated Credit Agreement, dated as of September
30, 2011, are Chris Lopez, Esq., Stephen Karotkin, Esq., and
Joseph H. Smolinsky, Esq., at Weil Gotshal & Manges LLP.
VILLAGE AT LAKERIDGE: S.C. to Hear Insider Disputes Appeals Process
-------------------------------------------------------------------
Katy Stech, writing for The Wall Street Journal Pro Bankruptcy,
reported that the country's top court agreed to hear arguments on
how deeply appellate-level judges should investigate disputes that
arise in corporate bankruptcy cases over potentially conflicted
executives and other insiders.
According to the report, U.S. Supreme Court justices on March 27
said they would take on issues that arose in the June 2011
bankruptcy of a Nevada office building, The Village at Lakeridge
LLC. The building's biggest lender, an affiliate of U.S. Bank
N.A., had moved to foreclose on the property after the owners
stopped making payments on a $21.4 million loan, the report said.
Specifically, the justices agreed to hear arguments on what
standard of review courts should use to determine an insider under
the bankruptcy code, the report related.
Federal law designates a person with close ties to a bankrupt
company to be an insider and limits the power that the person has
over the reorganization process, but when a dispute over that
designation arises, appellate courts are divided on whether the
level of inquiry that a reviewing court should use is either
"clearly erroneous" or "de novo," the report further related.
Experts say a ruling from the top court could clarify how much
final say a bankruptcy judge has on that issue, the report noted.
A ruling from Supreme Court justices to use the "clearly erroneous"
standard, for example, would limit the questioning of an appellate
court into a bankruptcy judge's ruling and leave more of that
ruling's findings intact, the Journal pointed out. Appellate
review applying the "clearly erroneous" standard means the court
won't overturn a decision unless a clear mistake was committed by
the lower court, the Journal further pointed out.
"It would give bankruptcy judges a lot more power," Eric Brunstad
Jr., Esq., a Connecticut lawyer who has argued 10 cases before the
U.S. Supreme Court. Mr. Brunstad isn't involved in the case, the
report related.
In court papers, bank officials argued that the property's owner,
MBP Equity Partners 1 LLC, collaborated with a close friend of one
of the property owner's directors to come up with a plan: the
friend would buy the property owner's claim for a roughly $2.8
million loan for a mere $5,000, the report said.
The purchase gave the close friend the power to vote on the
property's reorganization plan, the report said. Under federal
law, insiders don't have the power to vote on reorganization plans,
the report noted.
A bankruptcy judge agreed with bank officials who argued that the
deal wasn't an arm's-length transaction and that the buyer's voting
power should be disallowed, the report added. The building owner
appealed, and the Ninth U.S. Circuit Court of Appeals overturned
the lower court ruling, the report said. The Ninth Circuit
decision, applying the "clearly erroneous" standard, has led to a
split with other appellate courts that have applied the "de novo"
standard, the report added.
Supreme Court justices decided to skip ruling on the issue's
insider voting debate and instead will focus on how appellate level
judges handled the dispute, the report noted.
About The Village at Lakeridge
The Village at Lakeridge LLC, fka Magnolia Village LLC, in Reno,
Nevada, filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No.
11-51994) on June 16, 2011. Judge Bruce T. Beesley oversaw the
case. The Law Offices of Alan R. Smith, served as the Debtor's
counsel. In its petition, the Debtor scheduled $9,480,180 in
assets and $18,957,268 in debts. A list of the Company's three
largest unsecured creditors filed together with the petition is
available for free at http://bankrupt.com/misc/nvb11-51994.pdf.
The petition was signed by Kathie Bartlett.
VITARGO GLOBAL: Taps Kang Spanos & Moos as Litigation Counsel
-------------------------------------------------------------
Vitargo Global Sciences, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Kang Spanos & Moos LLP as litigation counsel.
The firm will represent the Debtor in a lawsuit filed by its former
chief operating officer in the Orange County Superior Court in
September last year.
The hourly rates charged by the firm range from $200 to $275 for
associates, and $125 to $150 for paralegals. Partners charge $350
per hour for their services.
Kang Spanos is not employed by or not connected with any of the
Debtor's creditors or any party involved in its bankruptcy case,
according to court filings.
The firm can be reached through:
Damian Moos, Esq.
Kang Spanos & Moos LLP
300 Spectrum Center Drive, Suite 1090
Irvine, CA 92618
Phone: (949) 501-4872
Email: jkang@ksmllp.com
About Vitargo Global Sciences
Vitargo Global Sciences, Inc., based in Irvine, California, filed a
Chapter 11 petition (Bankr. C.D. Cal. Case No. 17-10988) on March
15, 2017. In its petition, the Debtor estimated $1 million to $10
million in both assets and liabilities.
Judge Theodor Albert presides over the case. Michael Jay Berger,
Esq., at the Law Offices of Michael Jay Berger, serves as its
bankruptcy counsel.
WAGLE LLC: Unsecureds to Get 2% Under Amended Plan
--------------------------------------------------
Wagle, LLC, filed with the U.S. Bankruptcy Court for the Western
District of Pennsylvania an amended small business disclosure
statement to accompany its small business Chapter 11 plan dated
March 20, 2017.
Class 4 General Unsecured Non-Tax Claims -- totaling $758,482.03 --
and General Unsecured Tax Claims -- totaling $3,084.57 -- will get
a dividend of 2%.
Funds for planned payments will be taken from operation of
business.
As reported by the Troubled Company Reporter on Oct. 6, 2016, the
Debtor filed with the Court a small business Chapter 11 plan and
the accompanying Disclosure Statement under which holders of
general unsecured non-tax claims will recover 1% of their total
allowed claim amount.
The Amended Small Business Disclosure Statement is available at:
http://bankrupt.com/misc/pawb16-21169-93.pdf
About Wagle LLC
Wagle LLC, a locksmith, sought protection under Chapter 11 of the
Bankruptcy Code in the Western District of Pennsylvania
(Pittsburgh) (Case No. 16-21169) on March 30, 2016. The petition
was signed by Patricia D. Wagle, member.
The Debtor is represented by Francis E. Corbett, Esq. The case is
assigned to Judge Carlota M. Bohm.
The Debtor estimated both assets and liabilities in the range of $1
million to $10 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 Wagle LLC.
WALNUT CREEK: Committee Taps Baird Holm as Legal Counsel
--------------------------------------------------------
The official committee of unsecured creditors of Walnut Creek
Fertilizer, LLC seeks approval from the U.S. Bankruptcy Court for
the Southern District of Iowa to hire legal counsel.
The committee proposes to hire Baird Holm LLP to give legal advice
regarding its duties under the Bankruptcy Code, and provide other
legal services related to the Debtor's Chapter 11 case.
The hourly rates charged by the firm range from $155 to $365 for
its attorneys and $160 to $185 for paralegals.
Thomas Ashby, Esq., disclosed in a court filing that the firm does
not have any connection with the Debtor or any of its creditors.
The firm can be reached through:
Thomas O. Ashby, Esq.
Baird Holm LLP
1700 Franam Street, Suite 1500
Omaha, NE 68102-2068
Tel: 402-344-0500
Fax: 402-344-0588
About Walnut Creek Fertilizer
Based in Walnut, Iowa, Walnut Creek Fertilizer, LLC sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S. D.
Iowa Case No. 17-00210) on February 17, 2017. The petition was
signed by Peter Horne, Jr., president. At the time of the filing,
the Debtor estimated assets of less than $50,000 and liabilities of
$1 million to $10 million.
The case is assigned to Judge Lee M. Jackwig. The Debtor is
represented by Cutler Law Firm, P.C.
On March 20, 2017, the U.S. trustee for Region 12 appointed an
official committee of unsecured creditors.
WEATHERFORD INT'L: Clearbridge Has 11.45% Stake as of Dec. 31
-------------------------------------------------------------
Clearbridge Investments, LLC reported in an amended Schedule 13G
filed with the Securities and Exchange Commission that as of Dec.
31, 2016, it beneficially owns 112,351,716 shares of common stock
of Weatherford International plc representing 11.45 percent of the
shares outstanding. A full-text copy of the regulatory filing is
available for free at https://is.gd/UWboYZ
About Weatherford
Ireland-based Weatherford International plc (NYSE: WFT) --
http://www.weatherford.com/-- is one of the largest multinational
oilfield service companies providing innovative solutions,
technology and services to the oil and gas industry. The Company
operates in over 100 countries and has a network of approximately
1,000 locations, including manufacturing, service, research and
development, and training facilities and employs approximately
31,000 people.
Weatherford International reported a net loss attributable to the
Company of $3.39 billion on $5.74 billion of total revenues for the
year ended Dec. 31, 2016, compared to a net loss attributable to
the Company of $1.98 billion on $9.43 billion of total revenues for
the year ended Dec. 31, 2015. As of Dec. 31, 2016, Weatherford had
$12.66 billion in total assets, $10.59 billion in total liabilities
and $2.06 billion in total shareholders' equity.
* * *
In November 2016, Fitch Ratings has downgraded the ratings for
Weatherford and its subsidiaries, including the companies'
Long-Term Issuer Default Ratings (IDRs) to 'CCC' from 'B+'.
In November 2016, S&P Global Ratings lowered its corporate credit
rating on Weatherford International to 'B+' from 'BB-'. "The
downgrade reflects our revised free operating cash flow estimates
for Weatherford following weaker-than-anticipated cash inflows in
the third quarter," said S&P Global Ratings credit analyst Carin
Dehne-Kiley.
WEATHERFORD INTERNATIONAL: Will Form OneStim Joint Venture
----------------------------------------------------------
Weatherford and Schlumberger announced an agreement to create
OneStimSM, a joint venture to deliver completions products and
services for the development of unconventional resource plays in
the United States and Canada land markets. The joint venture will
offer one of the broadest multistage completions portfolios in the
market combined with one of the largest hydraulic fracturing fleets
in the industry.
Weatherford will contribute its leading multistage completions
portfolio, cost-effective regional manufacturing capability, and
supply chain. Schlumberger will provide the joint venture with
access to its industry-leading surface and downhole technologies,
efficient operational processes and advanced geo-engineered
workflows.
Schlumberger and Weatherford will have 70/30 ownership of the joint
venture, respectively. The transaction is expected to close in the
second half of 2017, and is subject to regulatory approvals and
other customary closing conditions. Under the terms of the
formation agreement, Schlumberger and Weatherford will contribute
all their respective North America land hydraulic fracturing
pressure pumping assets, multistage completions, and pump-down
perforating businesses. Weatherford will also receive a one-time
$535 million cash payment from Schlumberger.
Schlumberger will manage the joint venture and consolidate it for
financial reporting purposes.
Schlumberger Chairman and CEO Paal Kibsgaard commented, "The
joint-venture creates a new industry leader in terms of hydraulic
horsepower and multistage completions technologies in North America
land, which through its scale offers a cost-effective and highly
competitive service delivery platform. OneStimSM is uniquely
positioned to provide customers with leading operational efficiency
and best-in-class hydraulic fracturing and completions
technologies, while at the same time significantly improving
full-cycle shareholder returns from this market."
Weatherford Chairman William E. Macaulay said, "The OneStimSM joint
venture creates a leading unconventional products and services
provider in North America land. This transaction will allow
Weatherford to deleverage its balance sheet while retaining a
significant exposure to the unconventional market. This
transaction was unanimously approved by the Board of Directors and
will create significant value for both parties."
About Schlumberger
Schlumberger is the world's leading provider of technology for
reservoir characterization, drilling, production, and processing to
the oil and gas industry. Working in more than 85 countries and
employing approximately 100,000 people who represent over 140
nationalities, Schlumberger supplies the industry's most
comprehensive range of products and services, from exploration
through production, and integrated pore-to-pipeline solutions that
optimize hydrocarbon recovery to deliver reservoir performance.
Schlumberger Limited has principal offices in Paris, Houston,
London and The Hague, and reported revenues of $27.81 billion in
2016. For more information, visit www.slb.com.
About Weatherford
Ireland-based Weatherford International plc (NYSE: WFT) --
http://www.weatherford.com/-- is one of the largest multinational
oilfield service companies providing innovative solutions,
technology and services to the oil and gas industry. The Company
operates in over 100 countries and has a network of approximately
1,000 locations, including manufacturing, service, research and
development, and training facilities and employs approximately
31,000 people.
Weatherford International reported a net loss attributable to the
Company of $3.39 billion on $5.74 billion of total revenues for the
year ended Dec. 31, 2016, compared to a net loss attributable to
the Company of $1.98 billion on $9.43 billion of total revenues for
the year ended Dec. 31, 2015. As of Dec. 31, 2016, Weatherford had
$12.66 billion in total assets, $10.59 billion in total liabilities
and $2.06 billion in total shareholders' equity.
* * *
In November 2016, Fitch Ratings has downgraded the ratings for
Weatherford and its subsidiaries, including the companies'
Long-Term Issuer Default Ratings (IDRs) to 'CCC' from 'B+'.
In November 2016, S&P Global Ratings lowered its corporate credit
rating on Weatherford International to 'B+' from 'BB-'. "The
downgrade reflects our revised free operating cash flow estimates
for Weatherford following weaker-than-anticipated cash inflows in
the third quarter," said S&P Global Ratings credit analyst Carin
Dehne-Kiley.
WINDSTREAM SERVICES: Moody's Alters Outlook Neg & Affirms B1 CFR
----------------------------------------------------------------
Moody's Investors Service has changed the ratings outlook for
Windstream Services, LLC to negative from stable following the
company's weak 2016 results and 2017 guidance. Moody's has also
affirmed Windstream's B1 corporate family rating (CFR), B1-PD
probability of default rating, B2 (LGD4) unsecured debt rating, and
B1 (LGD3) senior secured debt rating.
Windstream's revenues and EBITDA both declined by around 4.5% in
2016. Management expects a similar rate of decline in 2017
including the pro forma full year impact of the EarthLink
acquisition. Due to this fundamental weakness, Windstream's
leverage rose to 5.3x (Moody's adjusted) at year end 2016.
Windstream's recently completed acquisition of EarthLink Holdings
Corp. will result in a modest improvement in leverage towards 5.0x
(Moody's adjusted, pro forma for EarthLink), but Moody's believes
that this improvement may be offset over time by the organic decay
of both companies. Moody's believes that Windstream's leverage
could exceed 5.25x (Moody's adjusted) by year end 2017, which would
be above Moody's limit for Windstream's B1 rating. The negative
outlook reflects the risk that Windstream may not be able to
reverse its unfavorable operating trends and incorporates Moody's
view that the downward pressure on EBITDA could result in sustained
negative free cash flow.
Despite the negative overall trajectory, Windstream has improved
the revenue trends of its consumer ILEC and enterprise segments,
which both generated approximately flat revenues for 2016 vs. 2015.
These segments, which represent around 60% of total revenues, are
benefiting from Windstream's investments in network and product
development. In addition, the company has improved the
profitability of the enterprise segment by approximately 400 bps in
2016. Continued margin expansion and revenue growth are the key
factors that could stabilize Windstream's EBITDA.
The company's recently completed all-stock acquisition of EarthLink
will result in a modest improvement in leverage. However, EarthLink
has suffered from a weak competitive position in its small business
and consumer markets and EarthLink's revenues have been steadily
declining for the last several years. Windstream expects to extract
cost synergies by rationalizing the two companies' overlapping
networks and reducing SG&A expenses. Further, EarthLink has
valuable fiber assets which could be used to improve speeds to
Windstream's existing customers and reduce leased transport
expense. EarthLink has also entered the managed services business
with Software Defined Wide Area Networking ("SDWAN") and Unified
Communication as a Service ("UCaaS") offerings. These products
complement services offered by Windstream and could be a source of
future growth for the combined company. Synergies are expected to
be fully realized in 2019. While merger synergies may slow the
decline, Moody's believes the downward trajectory of the business
will persist and pressure Windstream's B1 rating.
The following summarizes the rating action:
Affirmations:
Issuer: Windstream Services, LLC
-- Probability of Default Rating, Affirmed B1-PD
-- Corporate Family Rating, Affirmed B1
-- Senior Secured Bank Credit Facility, Affirmed B1 (LGD 3)
-- Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD 4)
Outlook Actions:
Issuer: Windstream Services, LLC
-- Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Windstream's B1 corporate family rating reflects its scale as a
national wireline operator with a stable, predictable base of
recurring revenues, offset by high leverage, a declining top line
and margin pressure. Moody's believes that Windstream faces a
continued erosion of EBITDA and cash flows as a result of prior
underinvestment. Moody's expects Windstream's pro-forma EBITDA to
decline in the low single digit percentage range for the next
several years, although some of this impact could be offset by
merger synergies and greater investment into the consumer segment.
Moody's views Windstream as having limited leverage tolerance due
to its low asset coverage following the 2015 sale and leaseback
transaction of its outside plant and real estate assets to
Communications Sales and Leasing, Inc. ("CSAL" dba Uniti Group).
Moody's believes Windstream will maintain good liquidity over the
next twelve months with $59 million of cash on hand at 12/31/2016
and $775 million available on its $1.25 billion revolver.
Windstream has been prudent and proactive in redeeming and
refinancing near-term maturities and has no material maturities
before 2020. Following the completion of the merger, Windstream's
common dividend consumes $116 million of cash annually. Moody's
expects this will contribute to near-zero or negative free cash
flow over the next several years.
Moody's could downgrade Windstream's ratings if leverage were to be
sustained above 5.25x (Moody's adjusted) or free cash flow is
negative, on a sustained basis. Additionally, the ratings would
face downward pressure if capital investment is reduced below the
level sufficient to improve the company's competitive position or
cost structure. Moody's could upgrade Windstream's ratings if
leverage were to be sustained below 4.5x (Moody's adjusted) and
free cash flow to debt were in the mid-single digits percentage
range.
The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.
Windstream Services, LLC. (formerly known as Windstream
Corporation) is a pure-play wireline operator headquartered in
Little Rock, AR. The company was formed by a merger of Alltel
Corporation's wireline operations and Valor Communications Group in
July 2006. Windstream completed its acquisition of EarthLink in
February of 2017 and provides services to 48 states.
WPX ENERGY: S&P Raises Rating on Sr. Unsecured Notes to 'B+'
------------------------------------------------------------
S&P Global Ratings raised the issue-level rating on WPX Energy
Inc.'s senior unsecured notes to 'B+' from 'B', and revised the
recovery rating to '4' from '5'. The recovery rating indicates
S&P's expectation of average (30%-50%; rounded estimate: 40%)
recovery in the event of a payment default. The possibility
remains that the borrowing base on reserve-based lending (RBL)
credit facility could increase due to the significant increase in
the company's reserve valuation. However, S&P do not anticipate an
impact to the recovery prospects on the company's senior unsecured
debt as a result of a modest increase in the RBL's borrowing base.
The upgrade on the company's senior unsecured debt follows a
significant increase in its reserve valuation, primarily driven by
an increase in activity in the Permian Basin. Following its
significant acquisition of Permian assets in mid-2015, the company
increased proved reserves in the basin in 2016 through development
drilling. The company has continued to add Permian acreage to its
asset base since 2015, including a sizable Delaware Basin
acquisition in early 2017. S&P used a company-provided year-end
2016 valuation of WPX's reserves in S&P's recovery analysis,
computed at S&P's recovery price deck assumptions $50 per barrel
West Texas Intermediate crude oil and $3.00 per mmbtu Henry Hub
natural gas. The valuation is pro forma for recent acquisitions
made in early 2017.
RATINGS LIST
WPX Energy Inc.
Corporate credit rating B+/Stable/--
Issue-Level Rating Raised; Recovery Rating Revised
To From
WPX Energy Inc.
Senior unsecured B+ B
Recovery rating 4(40%) 5(15)
*********
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