Troubled Company Reporter - March 15, 2011
The TCR reports New Stream Capital LLC and three affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-10753) on March 13, 2011, together with a prepackaged plan of reorganization.
Michael Buenzow, of FTI Consulting, Inc., and currently chief restructuring officer of the Debtors, say the Chapter 11 cases have been filed to resolve claims relating to New Stream's investors, who provided New Stream's capital by making secured loans through three feeder funds.
Before seeking bankruptcy protection, New Stream negotiated a plan of reorganization with creditors. The prepackaged plan was "overwhelmingly approved" by investors.
The Debtors have proposed that the Court hold a combined hearing on adequacy of disclosure statement and prepetition solicitation procedures, and the confirmation of the Prepackaged Plan. The Debtors propose that the combined hearing be set as soon as practicable between the dates of April 21, 2011 and May 3, 2011.
In order to meet the timeline in a Plan Support Agreement and the post-petition financing, the hearing to consider confirmation must take place not later than May 12, 2011.
New Stream Entities
New Stream is an inter-related group of companies that collectively comprise an investment fund, headquartered in Ridgefield, Connecticut. Founded in 2002, New Stream focuses on providing non-traded private debt to the insurance, real estate and commercial finance sectors.
Debtor New Stream Secured Capital, LLC – NSSC -- is the "master fund" and the primary operating entity of New Stream. All of the working capital for the investments made by NSSC was provided by investors that invested through one of three "feeder funds."
Debtor New Stream Secured Capital, Inc. -- NSCI -- is a holding company through which the US/Cayman Funds hold the limited partnership interests in NSSC.
Two of the feeder funds, one in Bermuda (New Stream Capital Fund Limited) and the other in the Cayman Islands, were vehicles for investments made by nonresident aliens and foreign entities. The third feeder fund is the vehicle through which U.S. residents made investments.
The Bermuda Fund is not a debtor in the Chapter 11 cases. However, it is in a judicial liquidation proceeding in Bermuda. None of the Cayman Funds is a debtor in the Chapter 11 cases; however, on March 8, 2011, an involuntary Chapter 11 petition was filed against two of the Cayman Funds
New Stream Capital, LLC -- NSC -- a Delaware limited liability company, is an unregistered investment adviser and asset management company that serves, among other roles, as the general partner and investment manager for NSSC. It is also the sole member of New Stream Capital Services LLC.
Each of eight first-tier subsidiaries of NSSC owns a portfolio of particular investments. Debtor New Stream Insurance, LLC ("NSI"), one of the subsidiaries, owns a portfolio consisting of insurance-related investments, primarily interests in companies and partnerships that invest in life settlements.
NSC is the general partner of, and acts as the investment manager of, NSSC. NSC is indirectly owned and managed by three individuals, David Bryson, Bart Gutekunst and Donald Porter, who had jointly constituted the Debtors' senior management team.
ROAD TO CHAPTER 11
In an affidavit in support of customary first day motions,
Mr. Buenzow said that since 2005, NSSC and its subsidiaries have invested in a specialized portfolio that yielded positive returns for investors.
Mr. Buenzow relates that in late September 2008, a series of fund failures (most notably, the allegedly fraudulent "Ponzi Scheme" funds run by Thomas Petters and by Bernard Madoff) had an adverse effect on many of the Debtors' investors even though there was no connection to New Stream. Other events during September 2008, including the collapse of Lehman Brothers and the near failure of several other financial institutions, compounded this negative effect, resulting in a substantial number of redemption requests by the Debtors' investors, comprising 60% of the value of the Debtors' feeder funds (40% during just the month of September, 2008).
In October 2008, the Debtors took actions in the US Fund and the Cayman Funds to reject all the redemption requests.
On Nov. 28, 2008, AVS Underwriting LLC, the largest rating agency for life settlements, extended its views on mortality and life expectancies, which reduced the implicit value of the life settlements held by NSI. Over the following three months, secondary sales of life settlements progressively dried up.
By late February 2009, the combination of the uncertainty around policy values and the general market illiquidity effectively shut down the life settlement market.
The Debtors took a markdown against the NSI Insurance Portfolio, which was valued at $194 million in November 2008, resulting in $71 million of unrealized losses for NSSC at Dec. 31, 2008.
2009 Restructuring
During April and May 2009, the Debtors attempted to negotiate a restructuring of their relationships with investors. The Debtors, however, were unable to liquidate assets and distribute available funds in the manner anticipated by the 2009 Restructuring after two Bermuda Fund investors who had not consented to the 2009 Restructuring commenced litigation in the Supreme Court of Bermuda.
On June 8, 2010, one of those Bermuda Fund investors obtained a judgment declaring that the terms of the 2009 Restructuring did not apply to Segregated Account Class C or Segregated Account Class I. The Bermuda Court appointed a receiver, John McKenna, to act on behalf of Segregated Account Class C and Segregated Account Class I. As a result, NSC, in its capacity as the investment manager for the Bermuda Fund, caused the Bermuda Fund to petition the Bermuda Court for the appointment of a receiver to act on behalf of the other Bermuda Segregated Account Classes. The Bermuda Court appointed Michael Morrison and Charles Thresh of KPMG Advisory Limited, as interim joint receivers for Segregated Account Classes B, E, H, K, L, N and O of the Bermuda Fund. On Sept. 13, 2010, acting by ex parte summons, the Bermuda Fund
Receivers asked the Bermuda Court to order the winding-up of the Bermuda Fund under the provisions of the Bermuda Companies Act. That same day, the Bermuda Court appointed Messrs. Morrison, Thresh and McKenna as the Joint Provisional Liquidators of the Bermuda Fund. On October 7, 2010, the Bermuda Court ordered that the Bermuda Fund be wound up under the provisions of Bermuda Companies Act and confirmed the appointment of the Joint
Provisional Liquidators.
Financing, Sale of NSI Portfolio
On May 3, 2010, NSI engaged Guggenheim Securities, L.L.C., an independent investment bank with extensive experience in the life settlement market, to help the Debtors explore financing opportunities for the NSI Insurance Portfolio. However, solicitation for a $200 million financing was suspended after entry of the Bermuda Judgment.
Since the appointments of the Bermuda Fund Receivers, the Debtors have been in negotiations with them, as the court-appointed representatives of the Bermuda Fund Segregated Account Classes, concerning an orderly liquidation of the Debtors.
The Bermuda Judgment made it impossible for the Debtors to obtain financing for the insurance premiums from a third-party lender on commercially reasonable terms. On July 20, 2010, a meeting was held among the Debtors, the Bermuda Fund Receivers and representatives of Bermuda Fund investors, at which a decision was reached to cease efforts to obtaining financing and instead to explore an outright sale of NSI's life settlements.
Between July 23, 2010 and July 28, 2010, Guggenheim worked with each of the parties who had expressed interest in, or made offers for, the NSI Insurance Portfolio, including MIO Partners, Inc., a Delaware corporation and an affiliate of several investors in the US Fund and Cayman Funds. On July 29, 2010, the evaluation process concluded with Guggenheim recommending the acceptance of the offer made by MIO (who assigned its rights as purchaser to Limited Life Assets Master Limited and Limited Life Assets Holdings Limited) to purchase the entire portfolio for a cash payment of $127.5 million.
After parties failed to close on the sale by Sept. 30, 2010, the Purchaser agreed to (i) extend the timeline for closing, (ii) increase the principal amount of the "price neutral" bridge financing from $25 million to $39,480,269, which has been used to finance the premiums and maintain the value of the NSI Insurance Portfolio pending the filing of these cases, and (iii) offer
$15 million of postpetition financing under a "price neutral" debtor-in-possession credit facility.
The Debtors have already received the benefit of prepetition financing of $39,480,269 plus an additional $1,815,184 (both used for to fund on-going premium payments pending the sale of the NSI Insurance Portfolio). In addition, the Purchaser has committed to fund up to an additional $15,000,000 during the pendency of the Chapter 11 Cases. In order for a sale to any party other than the Purchaser to be of greater value to the Debtors' estates, it would require a purchase price of up to $184,350,000, the effective purchase price to be paid by the Purchaser.
DEBT OBLIGATIONS
Over the last eight years, NSSC has invested primarily by making loans and equity investments. The aggregate indebtedness secured by the investment portfolio of NSSC is approximately $688,412,974. This debt is divided into two tranches. The secured claims of the
NSSC Bermuda Lenders, in the approximate amount of $369,066,322, have first priority over the secured claims of the Cayman Fund and US Fund, which are parri passu; the claims of the Cayman Fund and US Fund aggregate $319,346,652.
NSI is indebted to certain segregated account classes of the Bermuda Fund in the approximate amount of $81,573,376.
PREPACKAGED PLAN
According to Mr. Buenzow, differing perspectives on the allocation of asset value among these investors lie at the heart of these cases. "These differences brought the Debtors' activities to a standstill and surrounded the Debtors with an aura of uncertainty that made it impossible to raise capital and perpetuated an escalating cycle of redemption requests, all of which undermined the Debtors' ability to operate."
Over the last several months, the Debtors negotiated the details of the reorganization centered on a closing of the Insurance Portfolio Sale and an allocation of the net proceeds among the Debtors' creditors.
The Debtors have successfully negotiated the prepackaged reorganization that is embodied in the Debtors' Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated January 24, 2011. The Debtors concluded a solicitation of all of the impaired classes of creditors, and these creditors have voted in favor the Plan.
The Plan is predicated on a rapidly executed sale of NSI's portfolio of life settlement contracts on the terms set forth in the asset purchase agreement. The Plan provides for both the implementation of this asset sale and the allocation of the net proceeds among the Debtors' secured creditors.
"Although many of the Debtors' investors, primarily hedge funds and other sophisticated investors, will recover only a portion of their investment, the vast majority have agreed to accept the Plan since the alternatives to confirmation are far less attractive," Mr. Buenzow says.
The Plan provided for the sale of the NSI Insurance Portfolio either pursuant to a "Consensual Process" or a "Cramdown Process". However, since Class 3 (which is described more fully in 104, infra) has voted to accept the Plan, the sale will take place pursuant to the Consensual Process and the Debtors do not presently intend to seek approval of the Insurance Portfolio Sale pursuant to Section 363 of the Bankruptcy Code prior to seeking confirmation of the Plan.
The Plan treats creditors as follows:
-- NSI Bermuda Lenders under Class 1, owed $81,573,376, which
have voted to accept the plan, will receive less than the
full amount owed. Payment will be from the net proceeds of
the Insurance Portfolio Sale
-- NSSC Bermuda Lenders under Class 2, owed $396,066,322,
which hold a first lien on the investment portfolio of
NSSC, will (1) receive will receive a distribution from the
remaining proceeds of the Insurance Portfolio Sale and (2)
substantially all of the remainder of NSSC's assets, except
for certain assets that are being released for the benefit
of the Class 3 Claims. They voted in favor the Plan.
-- All holders of US-Cayman Claims, under Class 3, in the
aggregate amount of $319,346,653, will each receive a
percentage share of periodic distributions of the net
proceeds from the liquidation of the common stock of North
Star Financial Services Limited and specific assets and
certain real estate and commercial loans (collectively
identified as USC Wind Down Assets). In addition, holders
of Class 3 Claims who voted to accept the Plan, and thereby
grant the third-party releases provided for in section 12.5
of the Plan, will be entitled to receive a cash payment
from the Global Settlement Fund upon the Plan's Effective
Date. Under the Global Settlement, the Purchaser and
Creditors in Classes 1 and 2, in exchange for the "yes"
vote and the third-party releases, have agreed to provide
funding for cash payments (expected to aggregate
$15 million) to Class 3 claimants.
-- Holders of general unsecured claims against NSI and NSCI,
under Classes 4(a) and (d), will be paid in full and are
not impaired under the Plan. Each holder of allowed
general unsecured claim against NSC, in Class 4(c), will
share, on a pro rata basis, in a cash distribution of.
Holders of general unsecured claims against NSSC, in Class
4(b), will not receive any distribution or retain any
property on account of such Claims and pursuant to
Bankruptcy Code Sec. 1126(g) this Class is deemed not to
have accepted the Plan.
-- Holders of the Class 5(a) Interests in NSI that are
currently held by NSSC will continue to be held by NSSC and
the Class 5(d) Interests in NSCI that are currently held by
the Cayman Funds will continue to be held by the Cayman
Funds. Class 5(b) Interests in NSSC and Class 5(c)
Interests in NSC will be extinguished and the Holders of
Interests in Class 5(b) and Class 5(a) shall not receive or
retain any property on account of such Interests.
Each holder of a claim in Classes 1, 2, 3 and 4(c) was entitled to vote either to accept or reject the Plan
A copy of the Plan is available for free at:
http://bankrupt.com/misc/NewStream_Plan.pdf
A copy of the Disclosure Statement explaining the terms of the Plan is available for free at:
http://bankrupt.com/misc/NewStream_DS.pdf
The Debtor is represented by Kurt F. Gwynne, Esq., at Reed Smith LLP, in Wilmington, Delaware, as counsel.
Kurtzman Carson Consultants LLC is the Notice, Claims and Solicitation Agent.
Three U.S./Cayman Funds Involuntaries
On March 7, 2011, when New Stream was still soliciting votes on the Chapter 11 plan, certain investors filed a petition (Bankr. D. Del. Lead Case No. 11-10690) seeking to force three new stream funds -- New Stream Secured Capital Fund (U.S.) LLC, New Stream Secured Capital Fund P1 (Cayman), Ltd. and New Stream Secured Capital Fund K1 (Cayman), Ltd. -- to Chapter 11 bankruptcy.
The petitioning investors in the New Stream investment enterprise say they are collectively owed over $90 million, representing roughly 28% of the approximately $320 million owed to all U.S. and Cayman investors.
The Investors filed together with the petitions a request for an immediate appointment of a Chapter 11 trustee to take over management of the assets. The prepackaged plan offered by New Stream, according to the Investors, "offers a mere pittance to the
US/Cayman Investors, funded primarily with 'gifts' from allegedly
senior classes traceable to funds supplied by the US/Cayman
Investors in the first place; gives the Bermuda feeder fund, the
purported senior lien holder, the vast majority of all plan
distributions; and grants releases to all wrongdoers; this after
admitting to losing almost $500 million on assets that the Fund
Manager valued at $800 million less than three years ago."
The Petitioners are represented by (i) Joseph H. Huston, Jr., Esq., Maria Aprile Sawczuk, Esq., Meghan A. Cashman, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, and Beth Stern Fleming, Esq., at Stevens & Lee, P.C., in Philadelphia, Pennsylvania, and Nicholas F. Kajon, Esq., David M. Green, Esq., and Constantine Pourakis, Esq., at Stevens & Lee, P.C., in New York, (ii) Edward Toptani, Esq., at Toptani Law Offices, in New York, and (iii) John M Bradham, Esq., and David Hartheimer, Esq., at Mazzeo Song & Bradham LLP, in New York.
Showing posts with label debtor. Show all posts
Showing posts with label debtor. Show all posts
Tuesday, March 15, 2011
Sunday, February 27, 2011
STATE INSULATION: Files for Chapter 11 Due to Mesothelioma Claims
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The TCR reported Friday that State Insulation Corporation filed for Chapter 11 protection (Bankr. D. N.J. Case No. 11-15110) in Trenton, New Jersey, on Feb. 23 to reorganize and provide for payment of its asbestos and other liabilities and preserve its business for the benefit of all creditors and other stakeholders.
State Insulation is a distributor of insulation products and accessories for the installation of insulation. It has never manufactured any products. The Debtor employs 24 people and its sales are focused in New York, New Jersey, Pennsylvania and certain foreign markets. The Debtor delivers the products it sells using its own fleet of trucks and by common carriers, including shipping product overseas via steamship.
The Debtor estimated assets and debts of $1 million to $10 million as of the Chapter 11 filing.
"During 2008, the Debtor grew to approximately $24 million in sales, however, due to the downturn in the world economy, the Debtor's sales for 2010 are forecast to be $14 million. The Debtors do not anticipate returning to the revenue levels of 2008 in the near future as the economy recovers from the recession of 2009," relates George Lionikis, Jr., chief executive officer of State Insulation.
The Debtor owes $500,000 under a secured loan provided by I&G, an entity owned by its CEO, George Lionikis, Sr.
From its formation through 1977, the Debtor distributed many different insulation products, a small percentage of which contained asbestos as an ingredient. Hundreds of asbestos suits were filed against the Debtor in the 80s and 90s but the Debtor was able to have many cases dismissed as a result of the Debtor's production of evidence demonstrating it had not sold asbestos containing products to the claimant's employers or jobsite. There are still currently approximately 90 asbestos-related actions against the Debtor pending. At the rate the asbestos claims were being filed against and being settled by the Debtor and its insurance carrier, it appeared that the Debtor would be able to address all of the claims through (a) the insurance currently in place (approximately $1.3 million remains) and (b) after exhaustion of the insurance proceeds, with cash flow from operations, Mr. Lionikis relates.
"However, in recent years, there has been an increase in the number of mesothelioma claims, which often result in larger settlements than other asbestos-related claims. Up until 2009, with over 5000 claims either settled or dismissed, the Debtor had only paid a handful of settlements in excess of $100,000, but in 2009 the Debtor had to settle a single claim for $525,000. As of the Petition Date, there are a number of mesothelioma cases that are scheduled for trial or likely to be in the near future," Mr. Lionikis explains.
"While there are fewer and fewer defendants as time passes, the claims are now much larger and the Debtor will be unable to sustain the defense of the remaining and anticipated claims out of the remaining insurance or cash flow, particularly in light of the decline in the Debtor's operating revenues that began in 2009 and is expected to continue for the foreseeable future."
The TCR reported Friday that State Insulation Corporation filed for Chapter 11 protection (Bankr. D. N.J. Case No. 11-15110) in Trenton, New Jersey, on Feb. 23 to reorganize and provide for payment of its asbestos and other liabilities and preserve its business for the benefit of all creditors and other stakeholders.
State Insulation is a distributor of insulation products and accessories for the installation of insulation. It has never manufactured any products. The Debtor employs 24 people and its sales are focused in New York, New Jersey, Pennsylvania and certain foreign markets. The Debtor delivers the products it sells using its own fleet of trucks and by common carriers, including shipping product overseas via steamship.
The Debtor estimated assets and debts of $1 million to $10 million as of the Chapter 11 filing.
"During 2008, the Debtor grew to approximately $24 million in sales, however, due to the downturn in the world economy, the Debtor's sales for 2010 are forecast to be $14 million. The Debtors do not anticipate returning to the revenue levels of 2008 in the near future as the economy recovers from the recession of 2009," relates George Lionikis, Jr., chief executive officer of State Insulation.
The Debtor owes $500,000 under a secured loan provided by I&G, an entity owned by its CEO, George Lionikis, Sr.
From its formation through 1977, the Debtor distributed many different insulation products, a small percentage of which contained asbestos as an ingredient. Hundreds of asbestos suits were filed against the Debtor in the 80s and 90s but the Debtor was able to have many cases dismissed as a result of the Debtor's production of evidence demonstrating it had not sold asbestos containing products to the claimant's employers or jobsite. There are still currently approximately 90 asbestos-related actions against the Debtor pending. At the rate the asbestos claims were being filed against and being settled by the Debtor and its insurance carrier, it appeared that the Debtor would be able to address all of the claims through (a) the insurance currently in place (approximately $1.3 million remains) and (b) after exhaustion of the insurance proceeds, with cash flow from operations, Mr. Lionikis relates.
"However, in recent years, there has been an increase in the number of mesothelioma claims, which often result in larger settlements than other asbestos-related claims. Up until 2009, with over 5000 claims either settled or dismissed, the Debtor had only paid a handful of settlements in excess of $100,000, but in 2009 the Debtor had to settle a single claim for $525,000. As of the Petition Date, there are a number of mesothelioma cases that are scheduled for trial or likely to be in the near future," Mr. Lionikis explains.
"While there are fewer and fewer defendants as time passes, the claims are now much larger and the Debtor will be unable to sustain the defense of the remaining and anticipated claims out of the remaining insurance or cash flow, particularly in light of the decline in the Debtor's operating revenues that began in 2009 and is expected to continue for the foreseeable future."
Friday, February 18, 2011
OCEAN PLACE: Resort Files for Chapter 11 in New Jersey
(Troubled Company Reporter - Feb. 18, 2011)
The TCR reports that Ocean Place Development LLC, owner of the Ocean Place Resort & Spa in Long Branch, New Jersey, filed for Chapter 11 protection (Bankr. D. N.J. Case No. 11-14295) on Feb. 15, 2011.
William R. Dixon, JR., vice-president of TLC New Jersey Corp., a Delaware corporation, manager of the Debtor, relates that the Debtor has generated positive earnings from operations every year since its acquisition of the resort in 2000. Like many similar properties, the economic declines from 2007 through April 2010 severely harmed revenues and the net operating income from the property. However, since April 2010, revenues have begun to recover and "trailing 12 months" net operating income of the property has more than doubled. Net operating income of the property for 2010 was $3,546,729.
In connection with city of Long Branch's long-term plan to establish itself as a premier resort destination, the Debtor signed a Redevelopment Agreement with the city in August 2007, promising to add 60 new hotel rooms, 200 condo-hotel units and increase square footage of the property to 1,496,163 square feet. The redevelopment would make Ocean Place Resort "the centerpiece of the entire Long Branch Oceanfront Redevelopment and the largest oceanfront resort and conference center on the New Jersey shore between New York City and Atlantic City," Mr. Dixon said.
Dispute with Lender
The Debtor owes $56,606,400 pursuant to two promissory notes held by AFP-104 Corp, secured by the Debtors' resort property. The Debtor also has unsecured debts totaling $60 million.
The secured notes matured and became due on Jan. 9, 2008. The lender refused to grant an extension at maturity of the secured loans and immediately imposed late payment penalties and the default rate of interest, approximately doubling the required debt service payments.
From inception of the secured loans, operating expenses for the property under the terms of the loan documentation have been paid from a "lockbox" under the control of the Lender and its loan servicer.
"Within the last several weeks, the Lender has refused to approve the payment of property and liability insurance premiums from the lockbox for coverage placed by the Debtor beginning on December 1, 2010, which leaves the property and the Debtor severely exposed to loss from possible property damage and liabilities incurred in operating the business," Mr. Dixon said.
According to Mr. Dixon, prior and subsequent to the date of maturity of the secured loans, OPD solicited a full refinance of the secured obligations from over 100 prospective lenders without success due to the withdrawal of virtually the entire lending community from the business of making commercial loans triggered by the global financial meltdown and economic chaos.
Accordingly, the Debtor sought Chapter 11 protection.
"There is substantial value to the existing hotel and resort including the modest value-added improvements which could be made to the property prior to consideration of the value of major redevelopment opportunities," Mr. Dixon said.
First Day Motions
The Debtor has filed "first day" motions aimed at maintaining existing operations at the property and full employment of its employee base in a manner such that "resort guests will generally be unaware of any operational changes or any change in conditions due to the contemplated financial reorganization of the Debtor."
The first day motions include proposals to use cash collateral, maintain existing bank accounts, and pay wages owed to employees.
About Ocean Place Development
Ocean Place Development owns the Ocean Place Resort & Spa, a resort property is located on the Atlantic beachfront in Long Branch, New Jersey, just 55 miles south of New York City and
82 miles north of Atlantic City.
The existing resort is sited on 17-acres featuring approximately 1,000 feet of ocean frontage and is improved with a 254-room hotel that includes 40,000 square feet of meeting space, three restaurants, a bar/lounge, a full-service spa, and numerous resort
amenities.
West Paces Hotel Group LLC is the resort's managing agent.
The number of people employed full time at the Debtor's property ranges, depending on the season, between approximately 95 and 340.
The TCR reports that Ocean Place Development LLC, owner of the Ocean Place Resort & Spa in Long Branch, New Jersey, filed for Chapter 11 protection (Bankr. D. N.J. Case No. 11-14295) on Feb. 15, 2011.
William R. Dixon, JR., vice-president of TLC New Jersey Corp., a Delaware corporation, manager of the Debtor, relates that the Debtor has generated positive earnings from operations every year since its acquisition of the resort in 2000. Like many similar properties, the economic declines from 2007 through April 2010 severely harmed revenues and the net operating income from the property. However, since April 2010, revenues have begun to recover and "trailing 12 months" net operating income of the property has more than doubled. Net operating income of the property for 2010 was $3,546,729.
In connection with city of Long Branch's long-term plan to establish itself as a premier resort destination, the Debtor signed a Redevelopment Agreement with the city in August 2007, promising to add 60 new hotel rooms, 200 condo-hotel units and increase square footage of the property to 1,496,163 square feet. The redevelopment would make Ocean Place Resort "the centerpiece of the entire Long Branch Oceanfront Redevelopment and the largest oceanfront resort and conference center on the New Jersey shore between New York City and Atlantic City," Mr. Dixon said.
Dispute with Lender
The Debtor owes $56,606,400 pursuant to two promissory notes held by AFP-104 Corp, secured by the Debtors' resort property. The Debtor also has unsecured debts totaling $60 million.
The secured notes matured and became due on Jan. 9, 2008. The lender refused to grant an extension at maturity of the secured loans and immediately imposed late payment penalties and the default rate of interest, approximately doubling the required debt service payments.
From inception of the secured loans, operating expenses for the property under the terms of the loan documentation have been paid from a "lockbox" under the control of the Lender and its loan servicer.
"Within the last several weeks, the Lender has refused to approve the payment of property and liability insurance premiums from the lockbox for coverage placed by the Debtor beginning on December 1, 2010, which leaves the property and the Debtor severely exposed to loss from possible property damage and liabilities incurred in operating the business," Mr. Dixon said.
According to Mr. Dixon, prior and subsequent to the date of maturity of the secured loans, OPD solicited a full refinance of the secured obligations from over 100 prospective lenders without success due to the withdrawal of virtually the entire lending community from the business of making commercial loans triggered by the global financial meltdown and economic chaos.
Accordingly, the Debtor sought Chapter 11 protection.
"There is substantial value to the existing hotel and resort including the modest value-added improvements which could be made to the property prior to consideration of the value of major redevelopment opportunities," Mr. Dixon said.
First Day Motions
The Debtor has filed "first day" motions aimed at maintaining existing operations at the property and full employment of its employee base in a manner such that "resort guests will generally be unaware of any operational changes or any change in conditions due to the contemplated financial reorganization of the Debtor."
The first day motions include proposals to use cash collateral, maintain existing bank accounts, and pay wages owed to employees.
About Ocean Place Development
Ocean Place Development owns the Ocean Place Resort & Spa, a resort property is located on the Atlantic beachfront in Long Branch, New Jersey, just 55 miles south of New York City and
82 miles north of Atlantic City.
The existing resort is sited on 17-acres featuring approximately 1,000 feet of ocean frontage and is improved with a 254-room hotel that includes 40,000 square feet of meeting space, three restaurants, a bar/lounge, a full-service spa, and numerous resort
amenities.
West Paces Hotel Group LLC is the resort's managing agent.
The number of people employed full time at the Debtor's property ranges, depending on the season, between approximately 95 and 340.
CONSTAR INT'L: Has $10-Mil. L/C Facility from Wells Fargo
Constar International Inc. and its units seek authority from the U.S. Bankruptcy Court for the District of Delaware to obtain a postpetition letter of credit facility in the amount of $10,000,000 from Wells Fargo Capital Finance, LLC.
Jamie L. Edmonson, Esq., at Bayard, P.A., said in a court filing that the continuing availability of letters of credit to guarantee, where necessary, Debtors' obligations to its vendors and suppliers is critical to Debtors' operations. However, according to Mr. Edmonson, by entering into a the L/C facility agreement, the Debtors are not taking new debt, they are simply replacing one prepetition letter credit facility that was provided by General Electric Capital Corp.
While the Debtors' revolving credit facility with GE Capital -- of which $29.4 million was outstanding as of the bankruptcy filing -- was refinanced and paid shortly with the DIP facility provided by noteholders that are supporting the pre-negotiated plan, the Debtors kept in place those undrawn letters of credit outstanding under the prepetition credit facility. The first of the prepetition L/Cs will shortly mature and GECC is unwilling to reissue the L/Cs when they mature.
Wells Fargo -- who the Debtors intend will serve as their exit financier -- is willing to step in and replace GE Capital as the provider of letters of credit. Accordingly, Debtors now seek to
replace the letter of credit facility under the Prepetition Facility with a letter of credit facility provided by Wells Fargo.
The Debtors will pay to Wells Fargo on the first business day of each calendar month the rate of 1% percent per annum on the aggregate face amount of all LCs outstanding.
Pre-Negotiated Chapter 11 Plan
Constar International filed for Chapter 11 in January with a Chapter 11 plan negotiated with 75% of holders of senior secured floating rate notes.
The restructuring plan calls for, among other things, a reduction
of the Company's current debt level of $220 million by roughly
$135 million to $150 million, with a significant corresponding
reduction in cash interest.
The Restructuring Support Agreement can be terminated by noteholders if the Debtors failed to obtain confirmation of the Chapter 11 plan by May (130 days after the Chapter 11 filing).
As of the Petition Date, the Debtors had outstanding debt in the
aggregate principal amount of roughly $251 million, consisting
primarily of roughly (a) $29.4 million under their senior
secured credit facility, including accrued and unpaid interest,
and (b) $221.4 million in secured floating rate notes due 2012
(including accrued interest).
Pursuant to the proposed Plan of Reorganization, Noteholders will
convert 100% of the face amount of the current notes into new term
debt in the face amount of US$70 million and convertible preferred
stock of US$30 million, and will become the majority owners of the
new common stock. Under the proposed plan, the Company's general
unsecured claims will be converted to equity, and the current
equity will be cancelled. The Company anticipates that the
restructuring will be completed by late spring of 2011, subject to
court approval.
A copy of the Pre-Arranged Plan is available for free at:
http://bankrupt.com/misc/Constar_Disc_Statement_2011.pdf
A copy of the disclosure statement explaining the Plan is available for free at:
http://bankrupt.com/misc/Constar_Prearranged_Plan_2011.pdf
About Constar International
Philadelphia, Pennsylvania-based Constar International Inc. --
http://www.constar.net/ -- produces and supplies polyethylene
terephthalate plastic containers for food and beverages.
Constar filed for Chapter 11 protection in December 2008 (Bankr.
D. Del. Lead Case No. 08-13432), with a pre-negotiated Chapter 11
plan. The plan, which reduced Constar's debt load by roughly
$175 million, became effective on May 29, 2009. Attorneys at
Bayard P.A., and Wilmer Cutler Pickering Hale and Dorr LLP
represented the Debtor in the case.
Due to operating losses caused by a significant decline in demand
for its products from Pepsi-Cola Advertising and Marketing Inc.
and other customers, Constar and its affiliates returned to
Chapter 11 on January 11, 2011 (Bankr. D. Del. Case No. 11-10109),
with a Chapter 11 plan negotiated with holders of 75% of the
holders of $220 million in senior secured floating-rate notes.
Andrew Goldman, Esq., and Dennis Jenkins, Esq., at Wilmer Cutler
Pickering Hale and Dorr LLP, serve as the Debtors' general
bankruptcy counsel. Jamie Lynne Edmonson, Esq., and Neil B.
Glassman, Esq., at Bayard, P.A., serve as co-counsel to the
Debtors. PricewaterhouseCoopers serves as the Debtors'
independent auditors and accountants. Kurtzman Carson Consultants
LLC serves as the Debtors' claims agent.
Patrick J. Nash Jr., Esq., and Paul Wierbicki, Esq., at Kirkland &
Ellis LLP, serve as counsel to the noteholders that have signed
that plan support agreement.
The Debtors disclosed $418 million in total assets and
$414 million in total debts as of Sept. 30, 2010.
============================================
For a FREE 30-day trial of the TCR, CLICK
Jamie L. Edmonson, Esq., at Bayard, P.A., said in a court filing that the continuing availability of letters of credit to guarantee, where necessary, Debtors' obligations to its vendors and suppliers is critical to Debtors' operations. However, according to Mr. Edmonson, by entering into a the L/C facility agreement, the Debtors are not taking new debt, they are simply replacing one prepetition letter credit facility that was provided by General Electric Capital Corp.
While the Debtors' revolving credit facility with GE Capital -- of which $29.4 million was outstanding as of the bankruptcy filing -- was refinanced and paid shortly with the DIP facility provided by noteholders that are supporting the pre-negotiated plan, the Debtors kept in place those undrawn letters of credit outstanding under the prepetition credit facility. The first of the prepetition L/Cs will shortly mature and GECC is unwilling to reissue the L/Cs when they mature.
Wells Fargo -- who the Debtors intend will serve as their exit financier -- is willing to step in and replace GE Capital as the provider of letters of credit. Accordingly, Debtors now seek to
replace the letter of credit facility under the Prepetition Facility with a letter of credit facility provided by Wells Fargo.
The Debtors will pay to Wells Fargo on the first business day of each calendar month the rate of 1% percent per annum on the aggregate face amount of all LCs outstanding.
Pre-Negotiated Chapter 11 Plan
Constar International filed for Chapter 11 in January with a Chapter 11 plan negotiated with 75% of holders of senior secured floating rate notes.
The restructuring plan calls for, among other things, a reduction
of the Company's current debt level of $220 million by roughly
$135 million to $150 million, with a significant corresponding
reduction in cash interest.
The Restructuring Support Agreement can be terminated by noteholders if the Debtors failed to obtain confirmation of the Chapter 11 plan by May (130 days after the Chapter 11 filing).
As of the Petition Date, the Debtors had outstanding debt in the
aggregate principal amount of roughly $251 million, consisting
primarily of roughly (a) $29.4 million under their senior
secured credit facility, including accrued and unpaid interest,
and (b) $221.4 million in secured floating rate notes due 2012
(including accrued interest).
Pursuant to the proposed Plan of Reorganization, Noteholders will
convert 100% of the face amount of the current notes into new term
debt in the face amount of US$70 million and convertible preferred
stock of US$30 million, and will become the majority owners of the
new common stock. Under the proposed plan, the Company's general
unsecured claims will be converted to equity, and the current
equity will be cancelled. The Company anticipates that the
restructuring will be completed by late spring of 2011, subject to
court approval.
A copy of the Pre-Arranged Plan is available for free at:
http://bankrupt.com/misc/Constar_Disc_Statement_2011.pdf
A copy of the disclosure statement explaining the Plan is available for free at:
http://bankrupt.com/misc/Constar_Prearranged_Plan_2011.pdf
About Constar International
Philadelphia, Pennsylvania-based Constar International Inc. --
http://www.constar.net/ -- produces and supplies polyethylene
terephthalate plastic containers for food and beverages.
Constar filed for Chapter 11 protection in December 2008 (Bankr.
D. Del. Lead Case No. 08-13432), with a pre-negotiated Chapter 11
plan. The plan, which reduced Constar's debt load by roughly
$175 million, became effective on May 29, 2009. Attorneys at
Bayard P.A., and Wilmer Cutler Pickering Hale and Dorr LLP
represented the Debtor in the case.
Due to operating losses caused by a significant decline in demand
for its products from Pepsi-Cola Advertising and Marketing Inc.
and other customers, Constar and its affiliates returned to
Chapter 11 on January 11, 2011 (Bankr. D. Del. Case No. 11-10109),
with a Chapter 11 plan negotiated with holders of 75% of the
holders of $220 million in senior secured floating-rate notes.
Andrew Goldman, Esq., and Dennis Jenkins, Esq., at Wilmer Cutler
Pickering Hale and Dorr LLP, serve as the Debtors' general
bankruptcy counsel. Jamie Lynne Edmonson, Esq., and Neil B.
Glassman, Esq., at Bayard, P.A., serve as co-counsel to the
Debtors. PricewaterhouseCoopers serves as the Debtors'
independent auditors and accountants. Kurtzman Carson Consultants
LLC serves as the Debtors' claims agent.
Patrick J. Nash Jr., Esq., and Paul Wierbicki, Esq., at Kirkland &
Ellis LLP, serve as counsel to the noteholders that have signed
that plan support agreement.
The Debtors disclosed $418 million in total assets and
$414 million in total debts as of Sept. 30, 2010.
============================================
For a FREE 30-day trial of the TCR, CLICK
Wednesday, February 16, 2011
Borders Group's FAQs for Customers about Reorganization
Borders Group Released FAQs for Customers about Borders' Reorganization:
Why did Borders file for chapter 11?
Chapter 11 provides Borders with the best route to have the opportunity to reorganize and, in turn, reposition the Company to be successful for the long-term. Under chapter 11, Borders has the opportunity to put in place a proper infusion of capital in order to operate its business while it seeks to reorganize.
Is Borders going out of business?
No – Borders is not going out of business. We are continuing normal business operations. We are in the process of repositioning Borders to be the absolute destination of choice for shoppers who wish to purchase books and related products whether in the store or online.
Will the filing affect the selection of books and other goods and services that Borders offers?
We do not expect this to be the case.
I understand you are closing stores nationwide – is this true?
Borders will continue to maintain its strong national presence. Our nationwide network of stores is foundational to the Borders brand. Borders, however, will be closing underperforming stores within our network over the next several weeks. Should your local store be affected, please visit Borders.com to find another Borders store near you, or to purchase from our vast selection of books and other merchandise online.
Will I be told if my local store is closing?
Yes, customers will be notified of closing stores in their general area.
Where can I find another store in my area?
Visit Borders.com, click on the Store Locator tab at the top of the page, and search by zip code or city.
What’s the impact on Borders Gift Cards? Are they still valid?
Customers can redeem their Borders’s gift cards as usual in all stores and Borders.com. They can also purchase gift cards online and in many stores nationwide. Note: customers can redeem but not buy gift cards in closing stores.
Is my Borders Rewards Plus membership still valid?
Yes, our Borders Rewards programs, including Borders Rewards Plus, are still in effect. Participating customers will continue to earn Rewards, which they may redeem in all stores and online at Borders.com. They may also sign up for the Rewards program online and in most stores. Note: customers cannot sign up for the Rewards program in closing stores.
Can I still order books and eBooks from Borders.com?
Yes! Borders.com is up and running and will be significantly improved in the coming weeks to enhance our customers’ online shopping experience.
Will the filing impact my eBook library?
No, the filing has no impact on your eBook library.
=================================================================
BORDERS GROUP BANKRUPTCY NEWS covers the bookstore chain's journey
into Chapter 11 as the Ann Arbor-based bookseller attempts to
restructure its operations. From the first FREE four issues of BORDERS GROUP BANKRUPTCY NEWS, a $180 value being given away for free.
To receive BORDERS GROUP BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to:
Bankruptcy Creditors' Service, Inc.
572 Fernwood Lane
Fairless Hills, PA 19030
Telephone (215) 945-7000
Fax (215) 945-7001
E-mail: peter@bankrupt.com
BORDERS GROUP BANKRUPTCY NEWS is distributed to paying
subscribers by electronic mail. New issues are published on an
ad hoc basis as significant activity occurs (generally every 10
to 20 days) in the Debtor's cases. The subscription rate is
US$45 per issue.
Newsletters are delivered via e-mail; invoices, transmitted
following publication of each newsletter issue, arrive by fax.
Re-mailing of BORDERS GROUP BANKRUPTCY NEWS is prohibited.
Distribution to multiple individuals at the same firm is provided
at no additional charge; folks outside of your firm should set-up
and pay for their own subscriptions. Subscriptions may be
canceled at any time without further obligation.
We have published similar newsletters tracking
billion-dollar insolvency proceedings since 1990, starting
with Federated Department Stores. Currently, we provide
similar coverage about most billion-dollar corporate
restrucutring proceedings.
We also co-publish the TROUBLED COMPANY REPORTER, tracking
more than 3,000 experiencing financial distress or
restructuring their balance sheets in a judicial proceeding.
You can request a free 30-day trial subscription to the
TROUBLED COMPANY REPORTER at http://bankrupt.com/freetrial/.
=================================================================
[ ] YES! Please enter my personal subscription to
BORDERS GROUP BANKRUPTCY NEWS at US$45 per
issue until I tell you to cancel my subscription.
Name:
----------------------------------------------
Firm:
----------------------------------------------
Address:
----------------------------------------------
----------------------------------------------
Phone:
----------------------------------------------
Fax:
----------------------------------------------
E-Mail:
----------------------------------------------
(Distribution to multiple professionals at the
same firm is provided at no additional cost.)
BORDERS GROUP BANKRUPTCY NEWS is distributed to paying
subscribers by electronic mail. New issues are published on an ad
hoc basis as significant activity occurs (generally every 10 to 20
days) in the Debtors' cases. The subscription rate is US$45 per
issue. Newsletters are delivered via e-mail; invoices, transmitted
following publication of each newsletter issue, arrive by fax.
Re-mailing of BORDERS GROUP BANKRUPTCY NEWS is prohibited.
Why did Borders file for chapter 11?
Chapter 11 provides Borders with the best route to have the opportunity to reorganize and, in turn, reposition the Company to be successful for the long-term. Under chapter 11, Borders has the opportunity to put in place a proper infusion of capital in order to operate its business while it seeks to reorganize.
Is Borders going out of business?
No – Borders is not going out of business. We are continuing normal business operations. We are in the process of repositioning Borders to be the absolute destination of choice for shoppers who wish to purchase books and related products whether in the store or online.
Will the filing affect the selection of books and other goods and services that Borders offers?
We do not expect this to be the case.
I understand you are closing stores nationwide – is this true?
Borders will continue to maintain its strong national presence. Our nationwide network of stores is foundational to the Borders brand. Borders, however, will be closing underperforming stores within our network over the next several weeks. Should your local store be affected, please visit Borders.com to find another Borders store near you, or to purchase from our vast selection of books and other merchandise online.
Will I be told if my local store is closing?
Yes, customers will be notified of closing stores in their general area.
Where can I find another store in my area?
Visit Borders.com, click on the Store Locator tab at the top of the page, and search by zip code or city.
What’s the impact on Borders Gift Cards? Are they still valid?
Customers can redeem their Borders’s gift cards as usual in all stores and Borders.com. They can also purchase gift cards online and in many stores nationwide. Note: customers can redeem but not buy gift cards in closing stores.
Is my Borders Rewards Plus membership still valid?
Yes, our Borders Rewards programs, including Borders Rewards Plus, are still in effect. Participating customers will continue to earn Rewards, which they may redeem in all stores and online at Borders.com. They may also sign up for the Rewards program online and in most stores. Note: customers cannot sign up for the Rewards program in closing stores.
Can I still order books and eBooks from Borders.com?
Yes! Borders.com is up and running and will be significantly improved in the coming weeks to enhance our customers’ online shopping experience.
Will the filing impact my eBook library?
No, the filing has no impact on your eBook library.
=================================================================
BORDERS GROUP BANKRUPTCY NEWS covers the bookstore chain's journey
into Chapter 11 as the Ann Arbor-based bookseller attempts to
restructure its operations. From the first FREE four issues of BORDERS GROUP BANKRUPTCY NEWS, a $180 value being given away for free.
To receive BORDERS GROUP BANKRUPTCY NEWS, please complete the form below and return it by fax or e-mail to:
Bankruptcy Creditors' Service, Inc.
572 Fernwood Lane
Fairless Hills, PA 19030
Telephone (215) 945-7000
Fax (215) 945-7001
E-mail: peter@bankrupt.com
BORDERS GROUP BANKRUPTCY NEWS is distributed to paying
subscribers by electronic mail. New issues are published on an
ad hoc basis as significant activity occurs (generally every 10
to 20 days) in the Debtor's cases. The subscription rate is
US$45 per issue.
Newsletters are delivered via e-mail; invoices, transmitted
following publication of each newsletter issue, arrive by fax.
Re-mailing of BORDERS GROUP BANKRUPTCY NEWS is prohibited.
Distribution to multiple individuals at the same firm is provided
at no additional charge; folks outside of your firm should set-up
and pay for their own subscriptions. Subscriptions may be
canceled at any time without further obligation.
We have published similar newsletters tracking
billion-dollar insolvency proceedings since 1990, starting
with Federated Department Stores. Currently, we provide
similar coverage about most billion-dollar corporate
restrucutring proceedings.
We also co-publish the TROUBLED COMPANY REPORTER, tracking
more than 3,000 experiencing financial distress or
restructuring their balance sheets in a judicial proceeding.
You can request a free 30-day trial subscription to the
TROUBLED COMPANY REPORTER at http://bankrupt.com/freetrial/.
=================================================================
[ ] YES! Please enter my personal subscription to
BORDERS GROUP BANKRUPTCY NEWS at US$45 per
issue until I tell you to cancel my subscription.
Name:
----------------------------------------------
Firm:
----------------------------------------------
Address:
----------------------------------------------
----------------------------------------------
Phone:
----------------------------------------------
Fax:
----------------------------------------------
E-Mail:
----------------------------------------------
(Distribution to multiple professionals at the
same firm is provided at no additional cost.)
BORDERS GROUP BANKRUPTCY NEWS is distributed to paying
subscribers by electronic mail. New issues are published on an ad
hoc basis as significant activity occurs (generally every 10 to 20
days) in the Debtors' cases. The subscription rate is US$45 per
issue. Newsletters are delivered via e-mail; invoices, transmitted
following publication of each newsletter issue, arrive by fax.
Re-mailing of BORDERS GROUP BANKRUPTCY NEWS is prohibited.
BORDERS GROUP: Chapter 11 Is Next Chapter for Borders
"It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company's lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy to reposition itself successfully for the long term. To position Borders to remedy this condition, Borders Group, with the authorization of its board of directors, has filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code. This decisive action will give Borders the opportunity to achieve a proper infusion of capital in order to have the opportunity to have the time to reorganize in order to reposition itself to be a successful business for the long term," said Mike Edwards, Borders Group President.
"In this regard, operating under Chapter 11, Borders has received commitments for $505 million in Debtor-in-Possession (DIP) financing led by GE Capital, Restructuring Finance. This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience. It also affords Borders the opportunity to move forward in implementing the appropriate business strategy designed to reposition Borders to be a potentially vibrant, national retailer of books and other products," Mr. Edwards emphasized.
The company said that it is serving customers in the normal course, including honoring its Borders Rewards program, gift cards and other customer programs. Additionally, the company expects to make employee payroll and continue its benefits programs for its employees.
Borders said that it has many strengths upon which to build a solid plan of reorganization and implement a new business model for Borders to address the changing needs of the American reader. "For decades, Borders has been a beacon of engagement - a highly frequented destination for consumers and a significant venue for authors and vendors to showcase new books and merchandise. We have the ability, based on our brick and mortar presence nationally; the on-line capabilities we have in place; the loyalty of, and access to, our customers; and the products and services we offer to be an important and easy access destination of exploration and purchase for readers across the country," commented Mr. Edwards.
The company noted that, among other initiatives and subject to court approval, Borders plans to undertake a strategic Store Reduction Program to facilitate reorganization and its repositioning. Borders has identified certain underperforming stores -- equivalent to approximately 30 percent of the company's national store network -- that are expected to close in the next several weeks. At the same time, the company noted that a major strength of Borders is its national presence, and its extensive network of remaining stores as well as Borders.com, will continue to run in normal course. The company emphasized that the closings were a reflection of economic conditions, cost structures and viability of locations, among other factors, and not on the dedication and productivity of the workforce in these stores.
"We are confident that, with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors, and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller," concluded Mr. Edwards.
"We are very pleased to be able to make this commitment to Borders as support for their plan to re-organize the company," said Tim Tobin, Managing Director, Retail Restructuring, GE Capital, Restructuring Finance.
The Chapter 11 petition for relief was filed in the U.S. Bankruptcy Court, Southern District of New York. Completion of the company's DIP financing arrangements is subject to approval of the Bankruptcy Court and the satisfaction of certain conditions provided in the financing commitments received by the company from the lenders providing such financing.
Additional information about the reorganization is available at http://www.bordersreorganization.com/ or by telephone at (877) 906-7675.
About Borders Group, Inc.
Headquartered in Ann Arbor, Mich., Borders Group, Inc. (NYSE: BGP) is a leading specialty retailer of books as well as other educational and entertainment items. Online shopping is offered through borders.com. Find author interviews and vibrant discussions of the products we and our customers are passionate about online at facebook.com/borders, twitter.com/borders and youtube.com/bordersmedia. For more information about the company, visit borders.com/media.
"In this regard, operating under Chapter 11, Borders has received commitments for $505 million in Debtor-in-Possession (DIP) financing led by GE Capital, Restructuring Finance. This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience. It also affords Borders the opportunity to move forward in implementing the appropriate business strategy designed to reposition Borders to be a potentially vibrant, national retailer of books and other products," Mr. Edwards emphasized.
The company said that it is serving customers in the normal course, including honoring its Borders Rewards program, gift cards and other customer programs. Additionally, the company expects to make employee payroll and continue its benefits programs for its employees.
Borders said that it has many strengths upon which to build a solid plan of reorganization and implement a new business model for Borders to address the changing needs of the American reader. "For decades, Borders has been a beacon of engagement - a highly frequented destination for consumers and a significant venue for authors and vendors to showcase new books and merchandise. We have the ability, based on our brick and mortar presence nationally; the on-line capabilities we have in place; the loyalty of, and access to, our customers; and the products and services we offer to be an important and easy access destination of exploration and purchase for readers across the country," commented Mr. Edwards.
The company noted that, among other initiatives and subject to court approval, Borders plans to undertake a strategic Store Reduction Program to facilitate reorganization and its repositioning. Borders has identified certain underperforming stores -- equivalent to approximately 30 percent of the company's national store network -- that are expected to close in the next several weeks. At the same time, the company noted that a major strength of Borders is its national presence, and its extensive network of remaining stores as well as Borders.com, will continue to run in normal course. The company emphasized that the closings were a reflection of economic conditions, cost structures and viability of locations, among other factors, and not on the dedication and productivity of the workforce in these stores.
"We are confident that, with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors, and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller," concluded Mr. Edwards.
"We are very pleased to be able to make this commitment to Borders as support for their plan to re-organize the company," said Tim Tobin, Managing Director, Retail Restructuring, GE Capital, Restructuring Finance.
The Chapter 11 petition for relief was filed in the U.S. Bankruptcy Court, Southern District of New York. Completion of the company's DIP financing arrangements is subject to approval of the Bankruptcy Court and the satisfaction of certain conditions provided in the financing commitments received by the company from the lenders providing such financing.
Additional information about the reorganization is available at http://www.bordersreorganization.com/ or by telephone at (877) 906-7675.
About Borders Group, Inc.
Headquartered in Ann Arbor, Mich., Borders Group, Inc. (NYSE: BGP) is a leading specialty retailer of books as well as other educational and entertainment items. Online shopping is offered through borders.com. Find author interviews and vibrant discussions of the products we and our customers are passionate about online at facebook.com/borders, twitter.com/borders and youtube.com/bordersmedia. For more information about the company, visit borders.com/media.
Tuesday, February 15, 2011
NORTHGATE PROPERTIES: Files for Chapter 11 in Reno
The TCR reports that Reno, Nevada-based Northgate Properties Inc. filed a Chapter 11 petition in its hometown (Bankr. D. Nev. Case No. 11-5-451) in, estimating assets of $10 million to $50 million and debts of up to $10 million. Attorneys at Darby law Practice, Ltd., represent the Debtor.
DONG-IN DEVELOPMENT: Files for Chapter 11 in Chicago
The TCR reports that Barrington, Illinois-based Dong-In Development USA LLC filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 11-05508) in Chicago, estimating assets of $10 million to $50 million and debts of up to $10 million. Attorneys at MC Law Group 135 represent the Debtor.
CARTER'S GROVE: Files for Chapter 11 in San Francisco
The TCR reports that Carter's Grove, LLC, filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-30554), estimating assets and debts of $10 million to $50 million. Attorneys at Pachulski, Stang, Ziehl, and Jones LLP represent the Debtor.
Monday, February 14, 2011
TRONOX INC: Emerges From Chapter 11
Tronox Incorporated has successfully emerged from its Chapter 11
proceedings.
"Our emergence from bankruptcy and our new capital structure is a
significant accomplishment and makes Tronox a much stronger
company for the benefit of our stakeholders, including our
customers, vendors, employees, joint venture partner and
shareholders," said Dennis L. Wanlass, Chief Executive Officer of
Tronox. "We have successfully restructured our balance sheet
while maintaining our business relationships and significantly
improving our operating performance." Having addressed its
substantial legacy environmental and other liabilities through a
comprehensive settlement, Tronox is now well-positioned to compete
in the titanium dioxide and specialty chemical industries.
Wanlass added: "We emerge with a portfolio of world class
titanium dioxide and mineral sands assets and our electrolytic
business units strategically positioned to provide our customers
around the globe with a reliable supply of high quality products
and services. On behalf of the management team, I would like to
thank the Tronox and Tiwest joint venture employees worldwide for
their hard work and dedication throughout this process, and our
customers and suppliers for their continued support."
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders were appointed in the cases.
The Creditors Committee retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Until September 30, 2008, Tronox was publicly traded on the New
York Stock Exchange under the symbols TRX and TRX.B. Since then,
Tronox has traded on the Over the Counter Bulletin Board under the
symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox
had 19,107,367 outstanding shares of class A common stock and
22,889,431 outstanding shares of class B common stock.
On November 17, 2010, the Bankruptcy Court confirmed the Debtors'
First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated November 5, 2010. Under the Plan, Tronox
reorganized around its existing operating businesses, including
its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi;
Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia.
proceedings.
"Our emergence from bankruptcy and our new capital structure is a
significant accomplishment and makes Tronox a much stronger
company for the benefit of our stakeholders, including our
customers, vendors, employees, joint venture partner and
shareholders," said Dennis L. Wanlass, Chief Executive Officer of
Tronox. "We have successfully restructured our balance sheet
while maintaining our business relationships and significantly
improving our operating performance." Having addressed its
substantial legacy environmental and other liabilities through a
comprehensive settlement, Tronox is now well-positioned to compete
in the titanium dioxide and specialty chemical industries.
Wanlass added: "We emerge with a portfolio of world class
titanium dioxide and mineral sands assets and our electrolytic
business units strategically positioned to provide our customers
around the globe with a reliable supply of high quality products
and services. On behalf of the management team, I would like to
thank the Tronox and Tiwest joint venture employees worldwide for
their hard work and dedication throughout this process, and our
customers and suppliers for their continued support."
About Tronox Inc.
Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates
filed for Chapter 11 protection on January 13, 2009 (Bankr.
S.D.N.Y. Case No. 09-10156). The case is before Hon. Allan L.
Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and
Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York,
represent the Debtors. The Debtors also tapped Togut, Segal &
Segal LLP as conflicts counsel; Rothschild Inc. as investment
bankers; Alvarez & Marsal North America LLC, as restructuring
consultants; and Kurtzman Carson Consultants serves as notice and
claims agent.
An official committee of unsecured creditors and an official
committee of equity security holders were appointed in the cases.
The Creditors Committee retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Until September 30, 2008, Tronox was publicly traded on the New
York Stock Exchange under the symbols TRX and TRX.B. Since then,
Tronox has traded on the Over the Counter Bulletin Board under the
symbols TROX.A.PK and TROX.B.PK. As of December 31, 2008, Tronox
had 19,107,367 outstanding shares of class A common stock and
22,889,431 outstanding shares of class B common stock.
On November 17, 2010, the Bankruptcy Court confirmed the Debtors'
First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated November 5, 2010. Under the Plan, Tronox
reorganized around its existing operating businesses, including
its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi;
Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia.
ORLEANS HOMEBUILDERS: Completes Financial Reorganization
Orleans Homebuilders, Inc., announced Feb. 14 it has completed its financial reorganization and emerged from Chapter 11 protection as a newly reorganized company. Orleans emerged with $160 million in new financing, including a $30 million revolving credit facility.
Orleans, which was publicly traded for many years, will now be privately owned. All of the old shares in the company have been cancelled. As part of the new corporate structure, a new board of directors was appointed. One of the new board’s first actions is expected to be the appointment of homebuilding veteran George E. Casey, Jr. as chief executive officer. Mr. Casey has served as a special assistant to the Chief Restructuring Officer of the company since November.
“I am proud to take the helm of this terrific company and look forward to leading an energized team of professionals in the creation of quality homes and outstanding neighborhoods for our customers,” Mr. Casey acknowledged.
Casey went on to say that, “there are many people to thank when a company completes a reorganization. The truth is that Orleans would not be where it is today without our employees and trade partners who have given their all through many challenging days over the past year. They continued to build the great homes and neighborhoods that are our true passion and to satisfy our customers despite the uncertain events surrounding the company.”
Orleans and most of its operating subsidiaries filed voluntary petitions to commence the Chapter 11 process on March 1, 2010. Information about the reorganization, including copies of the Plan and the Court Order confirming the Plan, and links to other Court filings can be found at
Orleans, which was publicly traded for many years, will now be privately owned. All of the old shares in the company have been cancelled. As part of the new corporate structure, a new board of directors was appointed. One of the new board’s first actions is expected to be the appointment of homebuilding veteran George E. Casey, Jr. as chief executive officer. Mr. Casey has served as a special assistant to the Chief Restructuring Officer of the company since November.
“I am proud to take the helm of this terrific company and look forward to leading an energized team of professionals in the creation of quality homes and outstanding neighborhoods for our customers,” Mr. Casey acknowledged.
Casey went on to say that, “there are many people to thank when a company completes a reorganization. The truth is that Orleans would not be where it is today without our employees and trade partners who have given their all through many challenging days over the past year. They continued to build the great homes and neighborhoods that are our true passion and to satisfy our customers despite the uncertain events surrounding the company.”
Orleans and most of its operating subsidiaries filed voluntary petitions to commence the Chapter 11 process on March 1, 2010. Information about the reorganization, including copies of the Plan and the Court Order confirming the Plan, and links to other Court filings can be found at
OTC HOLDINGS: Oriental Trading Emerges from Chapter 11
For a 30-day trial of the Troubled Company Reporter, CLICK
Oriental Trading Company, Inc., on February 14 announced the completion of its reorganization efforts and successful exit from bankruptcy. The Company says emerged with a significantly improved capital structure and strong liquidity, having reduced its debt by nearly 70%.
Oriental Trading won confirmation of its reorganization plan on
Dec. 16, 2010. OTC was able to confirm the plan following a settlement between first- and second-lien lenders. The plan gives the new stock plus cash or a new $200 million second-lien note to senior lenders owed $403 million. Second lien lenders will receive five-year warrants for 5% of the stock based on a $422 million enterprise value. They will also receive five-year warrants for 4.5% based on a $447 million enterprise value.
First-lien lenders are providing $1.1 million for unsecured creditors with $6.8 million in claims.
“Today marks the beginning of a new era of growth for Oriental Trading Company. Our new capital structure provides us with a sustainable, long-term financial foundation from which we will drive the future growth of the business,” said Sam Taylor, CEO of Oriental Trading, in a Feb. 14 statement. “Business performance has stabilized over the last twelve months with revenues growing, continued double-digit operating margins, and record-high customer satisfaction.”
Oriental Trading received court approval of its plan of reorganization and secured exit financing in less than six months. The swift emergence from bankruptcy reflects the company's strength and ensured that the restructuring process did not interfere with the smooth operation of the company's business – a priority for the organization. New ownership is comprised of a group of investors that formerly held the company's senior debt.
“We appreciate the support of our customers, business partners, and lenders during the past six months as we worked through the restructuring process,” Taylor said. “In particular we want to thank our dedicated and talented employees who remained focused on delivering the same exceptional customer service and quality products that our customers have come to expect from Oriental Trading Company.”
About OTC Holdings Corporation
Omaha, Nebraska-based OTC Holdings Corporation filed for
Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No.
10-12636). Affiliates OTC Investors Corporation (Bankr. D. Del.
Case No. 10-12637), Oriental Trading Company, Inc. (Bankr. D. Del.
Case No. 10-12638), Fun Express, Inc. (Bankr. D. Del. Case No.
10-12639), and Oriental Trading Marketing, Inc. (Bankr. D. Del.
Case No. 10-12640), filed separate Chapter 11 petitions on
August 25, 2010. The Debtors disclosed $463 million in assets and
$757 million in liabilities as of the Chapter 11 filing.
Richard Hahn, Esq., My Chi To, Esq., Jae-Sun Chung, Esq., Huyue
Angela Zhang, Esq., and Jessica Katz, Esq., at Debevoise &
Plimpton LLP, represent the Debtors. Joel A. Waite, Esq., and
Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor, serve
as the Debtors' local counsel. Jefferies & Company, Inc., is the
Debtors' financial advisor. Protiviti, Inc., is the Debtors'
restructuring consultant. Kurtzman Carson Consultants LLC is the
Debtors' claims agent.
The Official Committee of Unsecured Creditors' counsel is Ashby &
Geddes, P.A.
Oriental Trading Company, Inc., on February 14 announced the completion of its reorganization efforts and successful exit from bankruptcy. The Company says emerged with a significantly improved capital structure and strong liquidity, having reduced its debt by nearly 70%.
Oriental Trading won confirmation of its reorganization plan on
Dec. 16, 2010. OTC was able to confirm the plan following a settlement between first- and second-lien lenders. The plan gives the new stock plus cash or a new $200 million second-lien note to senior lenders owed $403 million. Second lien lenders will receive five-year warrants for 5% of the stock based on a $422 million enterprise value. They will also receive five-year warrants for 4.5% based on a $447 million enterprise value.
First-lien lenders are providing $1.1 million for unsecured creditors with $6.8 million in claims.
“Today marks the beginning of a new era of growth for Oriental Trading Company. Our new capital structure provides us with a sustainable, long-term financial foundation from which we will drive the future growth of the business,” said Sam Taylor, CEO of Oriental Trading, in a Feb. 14 statement. “Business performance has stabilized over the last twelve months with revenues growing, continued double-digit operating margins, and record-high customer satisfaction.”
Oriental Trading received court approval of its plan of reorganization and secured exit financing in less than six months. The swift emergence from bankruptcy reflects the company's strength and ensured that the restructuring process did not interfere with the smooth operation of the company's business – a priority for the organization. New ownership is comprised of a group of investors that formerly held the company's senior debt.
“We appreciate the support of our customers, business partners, and lenders during the past six months as we worked through the restructuring process,” Taylor said. “In particular we want to thank our dedicated and talented employees who remained focused on delivering the same exceptional customer service and quality products that our customers have come to expect from Oriental Trading Company.”
About OTC Holdings Corporation
Omaha, Nebraska-based OTC Holdings Corporation filed for
Chapter 11 protection on August 25, 2010 (Bankr. D. Del. Case No.
10-12636). Affiliates OTC Investors Corporation (Bankr. D. Del.
Case No. 10-12637), Oriental Trading Company, Inc. (Bankr. D. Del.
Case No. 10-12638), Fun Express, Inc. (Bankr. D. Del. Case No.
10-12639), and Oriental Trading Marketing, Inc. (Bankr. D. Del.
Case No. 10-12640), filed separate Chapter 11 petitions on
August 25, 2010. The Debtors disclosed $463 million in assets and
$757 million in liabilities as of the Chapter 11 filing.
Richard Hahn, Esq., My Chi To, Esq., Jae-Sun Chung, Esq., Huyue
Angela Zhang, Esq., and Jessica Katz, Esq., at Debevoise &
Plimpton LLP, represent the Debtors. Joel A. Waite, Esq., and
Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor, serve
as the Debtors' local counsel. Jefferies & Company, Inc., is the
Debtors' financial advisor. Protiviti, Inc., is the Debtors'
restructuring consultant. Kurtzman Carson Consultants LLC is the
Debtors' claims agent.
The Official Committee of Unsecured Creditors' counsel is Ashby &
Geddes, P.A.
Sunday, February 13, 2011
CONSOLIDATED HORTICULTURE: To File Plan After Sale of Assets
Troubled Company Reporter - Feb. 14, 2011
Consolidated Horticulture Group LLC, et al., doing business as Hines Nurseries LLC, ask the U.S. Bankruptcy Court for the District of Delaware to extend the Debtors' exclusive period to file a Chapter 11 plan and solicit acceptance of the plan approximately four months to June 9, 2011 and August 8, 2011, respectively. CLICK
Consolidated Horticulture Group LLC, et al., doing business as Hines Nurseries LLC, ask the U.S. Bankruptcy Court for the District of Delaware to extend the Debtors' exclusive period to file a Chapter 11 plan and solicit acceptance of the plan approximately four months to June 9, 2011 and August 8, 2011, respectively. CLICK
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