(This report contains items about companies both in bankruptcy and not in bankruptcy. Adds TBS International, Christ Hospital and Oilsands Quest in New Filings and RitzCamera.com in Updates.)
Feb. 7 (Bloomberg) -- FGIC Corp., whose prepackaged reorganization fell apart, filed a revised plan on Feb. 3, the last day of the insurance holding company's exclusive right to propose a Chapter 11 plan. The hearing to approve the disclosure statement will take place March 13.
With the Chapter 11 filing in August 2010, FGIC filed a proposed plan where unsecured creditors would receive about 3 percent or less in cash plus stock of the bond insurance subsidiary, Financial Guaranty Insurance Co. The plan became infeasible when an exchange offer failed.
The revised plan filed last week has support from the creditors' committee, the insurance subsidiary, and New York insurance regulators. FGIC has the exclusive right to solicit acceptances of the plan until April 3.
The new plan is based on an agreement where the insurance subsidiary will contribute $10 million so the cash distribution to unsecured creditors will increase to the range of 5.5 percent to 6 percent, the disclosure statement says. In addition, creditors will receive the new equity. Existing stock will be extinguished.
The plan will eliminate about $391.5 million in debt, consisting chiefly of $46 million on a revolving credit and $325 million in 6 percent senior notes due 2034. The revolver debt will be treated as unsecured.
The foundation for the plan is a modified tax-sharing agreement where the company responsible for losses will receive tax refunds and other benefits. The agreement obviates the chance that the FGIC parent could contend that the insurance subsidiary has only an unsecured claim for tax refunds.
The disclosure statement shows that the FGIC parent's assets amount to $9.7 million cash, ownership of the insurance subsidiary, and $5.6 billion of net operating losses. About $5.5 billion of the tax losses are attributable to the insurance company. The parent has no employees, no operations and no other assets.
FGIC is losing the exclusive right to propose a Chapter 11 plan because the case is 18 months old, the longest Congress allows a company to retain so-called exclusivity.
The holders of 90 percent of the common stock had agreed to go along with the original plan and waive their $7.2 million unsecured claim. They are supporting the new plan on the same basis.
FGIC's petition in August 2010 listed $11.5 million in assets and $391.5 million in debt. Wilmington Trust FSB is trustee for the bondholders and JPMorgan Chase Bank is agent for the lenders.
The case is In re FGIC Corp., 10-14215, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
New Filings
Shipper TBS Files Prepack for March 12 Confirmation
TBS International Plc, a Dublin-based owner of 41 vessels, filed a prepackaged Chapter 11 petition yesterday in White Plains, New York. The reorganization plan was already accepted by the required majorities of creditors in affected classes.
TBS is asking the bankruptcy court to hold a hearing on March 12 to approve the reorganization plan. The bankruptcy judge must conclude at the confirmation hearing that the disclosure statement adequately explained the plan.
Assets are $143 million while debt totals $220 million, according to the petition. Unsecured debt, totaling $38 million, will be paid in full under the plan. TBS blamed bankruptcy on the oversupply of vessels and the resulting collapse in freight rates.
The Chapter 11 effort will be financed with a $42.8 million loan from existing lenders, including Bank of America Corp.
Four lenders hold the bulk of the debt against the vessels. Bank of America is owed $125.6 million, secured by 28 vessels. Total bank debt is $174.6 million.
TBS says it is attempting to sell some of the vessels.
TBS went through a prepackaged Chapter 11 reorganization once before. The petition was filed in July 2000 and confirmed in October 2000.
The new case is In re TBS International Plc, 12-22224, U.S. Bankruptcy Court, Southern District of New York (White Plains).
Jersey City's Christ Hospital Files to Select Buyer
Christ Hospital, a 367-bed acute-care hospital Jersey City, New Jersey, filed for Chapter 11 protection yesterday in Newark after an acquisition by Prime Healthcare Services fell through.
The not-for-profit institution is the second-largest hospital in Hudson County. Operating revenue in 2011 was $114 million, resulting in a $3.1 million operating loss. Assets are on the books for $38 million, with liabilities totaling $115 million.
Debt includes $6.8 million on a revolving credit and $10.6 million on a term loan. There is $20 million in unsecured debt owing to trade suppliers.
Pension Benefit Guaranty Corp. placed a $25.9 million lien on hospital assets. On termination of existing pension plans, there will be a $130 million liability to the PBGC.
While the sale to Prime was still alive, PBGC agreed to accept $10.5 million for the termination liability. Unsecured creditors agreed to receive 25 percent, assuming the pool of unsecured claims didn't exceed $20 million, according to a court filing.
The sale to Prime may have died on account of opposition from the state, according to a court filing.
There were two unsolicited offers to compete with Prime. One was from Hudson Holdco LLC, the buyer of Bayonne Medical Center and Hoboken University Medical Center. The second offer came from Community Healthcare Associates, the acquirer of Barnert Hospital.
Christ Hospital said it will use the Chapter 11 process to determine who has the best offer to acquire and operate the facility.
The case is In re Christ Hospital, 12-12906, U.S. Bankruptcy Court, District of New Jersey (Newark).
Alberta's Oilsands Quest Files Chapter 15 in New York
Oilsands Quest Inc., an oil sands-exploration company based in Calgary, filed a Chapter 15 petition yesterday in U.S. bankruptcy court in New York to support reorganization in a court in Canada.
Assets are more than $100 million while debt is less than $10 million, according to the petition. Affiliates filed for creditor protection in Alberta in November.
The case is In re Oilsands Quest Inc., 12-10476, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Updates
MF Global Trustee Says Money Began Disappearing Oct. 26
MF Global Inc., the liquidating commodity broker, had a first shortfall in accounts holding customers' property on Oct. 26. The shortage continued to grow until the liquidation began on Oct. 31 under the Securities Investor Protection Act, trustee James W. Giddens said in his first interim report yesterday.
The trustee's best estimate for the aggregate shortage remains at “$1.2 billion or more across all funds that should have been secured or segregated,” the trustee's spokesman Kent Jarrell said in a statement e-mailed to Bloomberg News.
When the first shortfalls occurred on Oct. 26, Giddens said company “personnel may not have been immediately aware of it.” The trustee said money in excess of segregation requirements “were used to fund other daily activities of MF Global,” apparently “with the assumption that funds would be restored by the end of the day.”
The “funds did not return as anticipated,” the trustee said.
In the last few days before liquidation, the number of transactions “escalated to unprecedented volumes,” such that the “computer systems and employees had difficulty keeping up with the unprecedented volume.”
In the final days, transactions “were not always accurately and promptly recorded due to the chaotic situation and the complexity of the transactions.”
Giddens said his staff has now traced a “majority” of the more than $105 billion in transactions during the last week before bankruptcy. In addition, there were $100 billion in securities transactions.
The trustee said he has identified “most of the parties” who were the immediate recipients of transfers. After nailing down where all the money went, Giddens said he will then “determine whether there is a sound and legal basis for recoveries against third parties.”
The recipients of transfers included “banks, exchanges, and clearing houses, MFGI affiliates, counterparties, and customers,” the report says.
The report ends with a recapitulation of the almost $4 billion the trustee already has returned to customers.
The trustee for MF Global Holdings Ltd., the parent, said that directors' and officers' insurance coverage for the policy year ended May 2011 included $70 million from a wholly owned captive insurance company named MFG Assurance Co. Ltd. The subsidiary provided $120 million of coverage for the policy year ended May 2012. For Bloomberg coverage, click here.
The holding company and the commodity broker each went into their separate bankruptcies on Oct. 31. The holding-company parent is under control of a Chapter 11 trustee, while the broker is under control of a separate trustee selected by the Securities Investor Protection Corp.
The MF Global parent's Chapter 11 petition listed assets of $41 billion against debt totaling $39.7 billion. MF Global had been one of 20 primary dealers with the New York Federal Reserve. Liabilities include $1.17 billion on a revolving credit and $300 million on a secured revolving credit. There is another $1.02 billion owing on four issues of unsecured notes.
The holding company's Chapter 11 case is In re MF Global Holdings Ltd., 11-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The liquidation of the broker is In re MF Global Inc., 11-02790, in the same court.
Plum TV Auction Scheduled for March 1 in New York
Plum TV Inc., the operator of television stations in resort markets, filed a Chapter 11 petition on Jan. 3 in New York and was authorized by the bankruptcy judge to hold an auction on March 1 to determine if there's a better offer than a proposal to sell the business for $1 million cash and the assumption of $14 million in liability on secured notes.
A hearing to approve the sale will take place March 7, under sale procedures approved Feb. 2. Unless outbid, the purchaser will be a company formed by Terry Mackin, president of ForesightLab, and Bill Apfelbaum, chairman of Media Ventures Group, the company said in a statement.
The television stations are in Colorado, eastern Long Island, Martha's Vineyard, Nantucket, Miami and Idaho. The Bronx, New York-based company said assets are $8.6 million, with liabilities totaling $19 million.
Revenue for 2011 was $6.4 million, producing an $8.4 million net loss, a court filing said.
The buyers are providing $1 million in financing for the Chapter 11 case.
The case is In re Plum TV Inc., 12-10017, U.S. Bankruptcy Court, Southern District New York (Manhattan).
Rockland Capital Purchasing Beacon Power's Plant
Beacon Power Corp., a developer of flywheel technology for storage of electricity, has a hearing in bankruptcy court today for approval to sell the business to Rockland Capital for $30.5 million in cash and notes. In addition, Rockland will give the U.S. Energy Department $6.6 million in guarantees and funding obligations, Rockland said in a statement.
A sale became necessary after the Energy Department objected to the use of cash in which it was claiming a security interest. The government said that Beacon's plant was losing $1 million a month in cash.
Tyngsboro, Massachusetts-based Beacon filed for Chapter 11 protection on Oct. 30 in Delaware, listing assets of $72 million and debt totaling $47 million, including $39.1 million owing on a government-guaranteed loan. Beacon built a $69 million facility with 20 megawatts of balancing capacity in Stephentown, New York, funded mostly by a U.S. Energy Department loan.
Beacon reported a $17 million net loss for the first half of 2011 on revenue of $970,000. Operating expenses totaled $11.5 million.
The case is In re Beacon Power Corp., 11-13450, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Greenberg Traurig Settles with Syntax-Brillian for $3.3 Million
Syntax-Brillian Corp. received authorization from the bankruptcy court last week to take $3.3 million in settlement of claims against law firm Greenberg Traurig LLP. The settlement ended the threat that the firm would be sued by the creditors' trust created under the company's confirmed, liquidating Chapter 11 plan.
Greenberg was the company's outside general counsel from November 2005 through July 2008, when the Chapter 11 filing took place. The settlement doesn't preclude third parties from bringing suits of their own based on claims they hold directly against the firm.
The company said that the $3.3 million is approximately equal to the firm's pre-bankruptcy fees for restructuring activities. Court papers show the Greenberg firm was paid about $5 million for work in a year before bankruptcy.
Syntax-Brillian confirmed its liquidating Chapter 11 plan in 2009, creating a trust to file lawsuits on behalf of creditors.
Based in Tempe, Arizona, Syntax listed assets of $176 million against debt totaling $259 million. Debt at the time included $113 million owing on the revolving credit and term loan secured by most of the assets.
The Chapter 11 case is In re Syntax-Brillian Corp., 08-11407, in the same court.
Sumo Development Confirms Prepackaged Reorganization Plan
Sumo Development Corp., a golf course and residential development in Colorado, secured the signature of the bankruptcy judge on a Feb. 3 confirmation order approving the Chapter 11 reorganization plan.
The plan gives secured lender Newark Revolving Co. Inc. full payment of its $7 million claim with new debt paying interest at 3.5 percent. The loan matures in 15 years with amortization on a 25-year schedule.
As part of a settlement, Newark Revolving carved out $500,000 for payment to unsecured creditors, with $12,500 being paid every quarter for 10 years. Unsecured creditors include the $6.8 million claim of Royal Golf Course Construction.
Elizabeth, New Jersey-based Sumo filed under Chapter 11 on Nov. 15, listing assets of as much as $10 million and liabilities of as much as $50 million.
The case is In re Sumo Development, 11- 43096, U.S. Bankruptcy Court, District of New Jersey (Newark).
RitzCamera.com Confirms Plan, Ritz Camera Acquires
The owner of RitzCamera.com, WolfCamera.com, BoatersWorld.com, and seven other e-commerce websites persuaded a bankruptcy judge in Santa Ana, California, to approve its reorganization plan at a Feb. 2 hearing, the company said in an e-mailed statement.
Ritz Camera & Image LLC, the main supplier and primary secured creditor owed $3.5 million, acquired the company through the plan by subordinating its own claim and providing cash to make payments to creditors. Ritz Camera & Image owns the trademarks. According to the disclosure statement, no plan could have been confirmed without its approval.
Any unsecured claim for less than $15,000 will be paid 99 percent. Larger claims are to have a 2 percent recovery.
The bankrupt company, Ritz Interactive Inc., said in court papers that its last profitable year was 2008 when revenue was $107 million. The Irvine, California-based company said that the primary asset is the right to use trademarks under license from Ritz Camera & Image.
Assets were listed for $809,000 while liabilities totaled $7.2 million, according to the Chapter 11 petition filed in August.
The company blamed its financial problems on the Chapter 11 filing in 2009 by Ritz Camera & Image, which curtailed the availability of merchandise. For a rundown on the Chapter 11 plan by Ritz Camera & Image, click here for the April 21, 2010, Bloomberg bankruptcy report.
The case is In re Ritz Interactive Inc., 11-21690, U.S. Bankruptcy Court, Central District of California (Santa Ana).
Costa Rica Property Owner Centam Agrees to Dismiss Petition
Centam Partners LLC, a developer of residential property in Costa Rica named Hacienda Matapalo, filed a petition for Chapter 11 protection on Dec. 20 in Fort Lauderdale, Florida, and consented to dismissal of the bankruptcy on Feb. 3.
The secured lender UTA Capital LLC contended that the Chapter 11 petition was a “classic” case of a filing “in bad faith and without any prospect of reorganization.”
The terms of dismissal prohibit Centam from filing another Chapter 11 petition anywhere within the U.S. for one year.
Centam indirectly owns a 625-acre parcel approved for residential development. The company also holds a concession to develop beachfront property. The property is on the west coast of Costa Rica.
The petition says assets are $10 million while liabilities total $7.5 million, including $6.9 million owing to secured lender UTA.
The case is In re Centam Partners LLC, 11-44590, U.S. Bankruptcy Court, Southern District of Florida (Fort Lauderdale).
Versa Completes Acquisition of American Laser Centers
Versa Capital Management LLC completed the acquisition of laser hair-removal clinics owned by American Laser Centers. The bankruptcy court approved the sale on Jan. 31.
The sale was negotiated before American Laser filed under Chapter 11 on Dec. 8. At the time, there were 156 laser locations in 27 states. Versa paid $30 million plus $18 million in new-money financing for the Chapter 11 effort.
The Farmington Hills, Michigan-based company once had 222 stores generating $130.6 million in annual revenue. Court papers showed assets were $80.4 million. Liabilities included $40.3 million owing on a first-lien debt and $51 million in subordinated notes. Some $17.9 million was owing to trade suppliers.
The case is In re ACL Holdings LLC, 11-13853, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Statistics
Refinancings Lower Maturing Junk Debt in 2012 to $27 Billion
Of the $668 billion in junk-rated debt that matures in the next five years, only $27 billion comes due this year, Moody's Investors Service said in a report last week.
Absent refinancing in the meantime, 2013 will have $67 billion in maturing debt. Debt coming due jumps to $168 billion and $161 billion in 2014 and 2015. The most, $246 billion, must be repaid or refinanced in 2016, Moody's said.
The amount of junk debt maturing during a five-year horizon declined only 4 percent during 2011. One year ago, there was $693 billion maturing within five years.
With $16.5 billion, Clear Channel Communications Inc. has the largest pile of maturing debt. Texas Competitive Electric Holdings Co. is in second place with $11.5 billion, followed by Caesar's Entertainment Corp. with $7.7 billion.
Watch List
Aircraft Gear Maker Northstar Negotiates Forbearance
Northstar Aerospace Inc., a manufacturer of gears and transmissions for helicopters and other aircraft, violated covenants and signed the lenders to a forbearance agreement where the creditors won't take action until Feb. 17.
The Chicago-based company said in a statement yesterday that the lenders are receiving increased interest and required appointment of a financial adviser “to assist with direction and management of financial matters.”
Northstar, with plants in the U.S. and Canada, has debt including $26 million outstanding on a revolving credit and $20 million on a term loan, according to data compiled by Bloomberg.
Harrisburg Could End Up Once More in Municipal Bankruptcy
Even though the state of Pennsylvania succeeded in winning dismissal of the Chapter 9 municipal bankruptcy initiated by a majority of the city council members in Harrisburg, the state's capital could end up back in bankruptcy if the receiver can't push through his proposal to raise taxes and fees and sell assets.
Under a specially passed state law, Harrisburg can't file for bankruptcy protection until July.
For the Bloomberg story, click here.
Dismissal of the city's original Chapter 9 petition was upheld in a U.S. District Court.
Default
Tensar's TCO Funding Misses Principal Payment
TCO Funding Corp., a subsidiary of Tensar Corp., didn't make a quarterly principal payment on a first-lien term loan, Standard & Poor's said in a report yesterday based on its understanding. TCO was formed to comply with Islamic Shariah financing regulations, S&P said.
TCO paid interest on the term loan, along with interest and principal on other debt, S&P said.
Atlanta-based Tensar is a provider of materials to stabilize soil and provide roadway foundations. The company said in October that it's looking for $300 million to refinance debt, S&P reported.
Daily Podcast
Jobson, MF Global, Kodak, Mortgage Lenders: Bankruptcy Audio
The prepackaged reorganization for Jobson Healthcare Information LLC is an example of using bankruptcy court to kick the can down the road, as Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their podcast. The podcast continues by describing how CME Group Inc., the owner of the world's largest futures exchanges, is putting $100 million aside to assure farmers and ranchers they won't incur another loss if they hedge crops by buying futures contracts. Rochelle explains how Eastman Kodak Co. is becoming a test case for whether supposedly “critical vendors” will disrupt an otherwise successful reorganization if their pre- bankruptcy unsecured debts aren't paid. The podcast ends with discussion of another appeals court decision demonstrating how federal courts more than state courts are requiring mortgage lenders to comply with law before being permitted to foreclose. To listen, click here.
--With assistance from Linda Sandler and Steve Ludsin in New York; Romy Varghese in Philadelphia; and Steven Church, Dawn McCarty and Michael Bathon in Wilmington, Delaware. Editors: Glenn Holdcraft,