Southwest Georgia Ethanol LLC, the
owner of a 100-million gallon-a-year ethanol plant in Mitchell
County, Georgia, filed a Chapter 11 petition on Feb. 1 in Albany, Georgia.
In its petition, the company listed assets of $164.7
million and debt of $134.1 million.
Southwest Georgia Ethanol, or SGE, had revenue of $168.9
million for the fiscal year ended in September. The net loss for
the year was $2.2 million. For three months ended in December,
the net loss was $2 million, the company said.
The company blamed financial problems on the high price of
corn compared with the price for ethanol. The plant also had
operational difficulties, resulting from construction and design
problems, the company said in court filings.
SGE is owned by First United Ethanol LLC. The parent didn’t
file for bankruptcy.
The Chapter 11 case is to be financed with a $10 million
revolving credit provided by a group of existing lenders in
which WestLB AG, New York Branch, serves as agent. From the
loan, $5 million is to be available on an interim basis. The
loan bears interest at 9 percentage points above the London
interbank borrowed rate. Libor will have a 4 percent floor.
The bank group is owed $92 million dating from construction
of the plant. Production began in October 2008.
Other liabilities include $12.6 million owing on two
subordinated notes. The larger, $8.6 million, is owed to the
Mitchell Development Authority.
For other Bloomberg coverage, click here.
SGE is asking for the case to be transferred to the branch
of the court in Macon, Georgia. A court filing says participants
in the case will be flying to Atlanta for hearings. Macon is
closer to Atlanta.
The case is In re Southwest Georgia Ethanol LLC, 11-10145, U.S. Bankruptcy Court, Middle District Georgia (Albany).
Updates
Green Plains First Bidder on Otter Tail Ethanol Plant
Otter Tail AG Enterprises LLC will put its 55-million
gallon-a-year ethanol plant in Fergus Falls, Minnesota, up for
auction on Feb. 16. Initial bids are due Feb. 11. A hearing for
approval of the sale is scheduled for Feb. 17.
At auction, the $62.54 million opening bid will come from Green Plains Renewable Energy Inc., the owner of eight ethanol
plants with a combined capacity of 657 million gallons-a-year.
Green Plains is the fourth-largest ethanol producer in North
America, according to court filings.
The price consists of $55 million in cash and assumed debt,
plus an adjustment for inventories.
Having negotiated a consensual reorganization with most of
its larger creditors, Otter Tail intended to reorganize with a
Chapter 11 plan. When Otter Tail was unable to raise the $12.5
million in required equity, it decided to sell.
The lenders are owed a cumulative $82.8 million, according
to court papers. AgStar Financial Services PCA is owed $34.2
million on a construction loan.
Otter Tail filed for Chapter 11 reorganization in October
in its hometown. The plant began operating in March 2008.
The petition listed assets of $66.4 million and debt of $86
million. Almost all of the debt is secured.
The case is In re Otter Tail AG Enterprises LLC, 09-61250,
U.S. Bankruptcy Court, District of Minnesota (Fergus Falls).
HSBC Bank USA Seeks Dismissal of Awal Bank Chapter 11 Case
The Chapter 11 case begun in October by the administrator
for Awal Bank BSC will be dismissed if the bankruptcy judge in Manhattan agrees with the motion filed yesterday by HSBC Bank
USA NA.
Awal began bankruptcy administration proceedings in Bahrain
in July 2009. It filed a Chapter 15 petition in New York in
September of that year. Later, the bankruptcy judge recognized
Bahrain as home to the so-called foreign main proceeding.
The Awal administrator later filed the Chapter 11 petition,
evidently because the ability to bring lawsuits is limited in
Chapter 15.
Within days of the commencement of the Chapter 11 case, the
bankruptcy judge rejected a structuring of the reorganization in
which there would be no creditors’ committee and no lists of
assets and debt, with distributions made to creditors by the
court in Bahrain and payment to professionals without bankruptcy
court approval.
Since then, according to HSBC, there has been no
significant activity in the case. The bank said dismissal is
proper.
Awal’s Chapter 11 petition said assets were less than $100
million while debt exceeds $1 billion. Although domestic banks
are precluded from filing any form of bankruptcy in the U.S.,
foreign banks like Awal may file for bankruptcy or
reorganization.
The Chapter 11 case is In re Awal Bank BSC, 10-15518, U.S.
Bankruptcy Court, Southern District New York (Manhattan). The
Chapter 15 case is In re Awal Bank BSC, 09-15923, U.S.
Bankruptcy Court, Southern District of New York (Manhattan).
Townsends Loss $2.8 Million in First 12 Days of Chapter 11
Townsends Inc., a vertically integrated chicken producer,
filed an operating report showing the cost of goods sold was
almost $2 million more than the $15.24 million revenue in the
first 12 days of the Chapter 11 case begun Dec. 19.
The net loss in the period was $2.8 million.
Townsends plans to conduct an auction for the business on
Feb. 15. The order approving financing requires a sale this
month and conversion of the case to liquidation in Chapter 7 if
there is no cash remaining after the sale to pay expenses.
Based in Georgetown, Delaware, family-owned Townsends is
capable of producing 700 million pounds of poultry a year and
1.3 million eggs a week. It has four production facilities in Arkansas and North Carolina.
Townsends listed assets of $131 million and liabilities of
$127 million. Liabilities include $20.7 million owing to secured
lenders on a term loan and $40 million on a revolving credit.
Twelve-month revenue was $504 million. Townsends contracts with
over 300 growers who operate 1,200 chicken houses.
The case is In re Townsends Inc., 10-14092, U.S. Bankruptcy
Court, District of Delaware (Wilmington).
Oriental Trading Has $4.7 Million December EBITDA
Oriental Trading Co., the direct marketer of home décor
products, toys, and novelties whose Chapter 11 plan was
confirmed in December, reported a $5 million net loss in
December on $39.7 million in net sales.
Gross profit in the month was $24.9 million. Earnings
before interest, taxes, depreciation and amortization for the
month was $4.7 million. Reorganization items totaled $3.1
million.
OTC confirmed a plan given a settlement with 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. For details on the plan and settlement, click here for
the Nov. 26 Bloomberg bankruptcy report. The plan was mostly
negotiated with the first-lien lenders before the Aug. 25
bankruptcy filing.
The Carlyle Group purchased 68 percent of OTC in July 2006
from private-equity investor Brentwood Associates. Brentwood
continued owning some 24 percent of the equity.
Assets of the Omaha, Nebraska-based company were on the
books for $463 million in April. Liabilities totaled $756.6
million. Net sales for the fiscal year were $485.4 million.
The case is In re OTC Holdings Corp., 10-12636, U.S.
Bankruptcy Court, District of Delaware (Wilmington).
Point Blank Reports $3.1 Million December Net Loss
Point Blank Solutions Inc., whose reorganization plan is
scheduled for approval at a Feb. 14 confirmation hearing,
reported a $3.8 million net loss in December on net sales of
$7.3 million.
The operating loss for the month was $1.4 million.
Reorganization expenses in the period totaled $5.2 million.
Point Blank’s plan is sponsored by Lonestar Partners LP,
Privet Fund Management LLC, and Prescott Group Capital
Management. They will supply $25 million in replacement
financing and are backstopping a $15 million to $25 million
equity rights offering. The offering will be available to
specified unsecured creditors and stockholders. For details on
the plan, click here for the Dec. 14 Bloomberg bankruptcy
report.
Point Blank, based in Pompano Beach, Florida, is a
manufacturer of soft body armor. Revenue in 2009 exceeded $153
million. The former chief executive and chief operating officer
were convicted in September of orchestrating a $185 million
fraud.
The Chapter 11 petition in April listed assets of $64
million and debt of $68.5 million. Debt included a $10.5 million
secured loan paid off by financing for the Chapter 11 case.
Point Blank said it also owes $28.2 million to trade suppliers.
The case is In re Point Blank Solutions Inc., 10-11255,
U.S. Bankruptcy Court, District of Delaware.
One Charlie Brown’s Steakhouse Liquor License Worth $250,000
The owner of Charlie Brown’s Steakhouse is selling another
liquor license. Shack Foods of Dedham LLC is offering $250,000
for a license in Dedman, Massachusetts.
The company wants the sale approved at a March 9 hearing
without holding an auction.
Forty-Seven locations were closed before the Chapter 11
filing in November. Charlie Brown’s already sold the seven The
Office restaurants. There is to be another motion for the sale
of the remaining 32 locations. In addition to Charlie Brown’s
and The Office, the company operates under the name Bugaboo
Creek. The company is controlled by Trimaran Capital Partners.
At the outset of the Chapter 11 case, the lenders were owed
$70.2 million.
In addition to that secured debt at the beginning of the
case, there is $14 million owed on second-lien senior
subordinated notes and $30 million on a mezzanine loan.
The senior secured lenders are Ableco Finance LLC, Wells
Fargo Capital Finance Inc. and Ally Commercial Finance LLC.
The case is CB Holding Corp., 10-13683, U.S. Bankruptcy
Court, District of Delaware (Wilmington).
Bear Island Paper Has $70,000 December Net Loss
Bear Island Paper Co. LLC, a unit of Canada’s White Birch
Paper Co., had a $70,000 net loss in December, according to the
operating report filed with the bankruptcy court.
Net sales in the month were $12.86 million. The gross
profit was $1.34 million.
Bear Island was authorized by the bankruptcy judge in early
November to sell the business to a group consisting of Black
Diamond Capital Management LLC, Credit Suisse Group AG, and
Caspian Capital Advisors LLC. They offered $172.5 million,
comprised of $94.5 million cash and $78 million as a credit
against secured debt. The Black Diamond group estimated that
their offer would generate from $90 million to $94.5 million
cash for assets not representing their collateral. The group
holds 65 percent of the $438 million in first-lien debt.
Based in Nova Scotia, White Birch and U.S. subsidiaries
filed for reorganization simultaneously in the U.S. and Canada
last February. White Birch is the second-largest newsprint maker
in North America.
When the Chapter 11 case began, secured liabilities
included $438 million on a first-lien term loan, $104 million on
a second-lien term loan, $50 million on an asset-backed
revolving credit, and $51.5 million on swap agreements. Trade
suppliers were owed $9.5 million.
The companies had $667 million in sales during 2009, with
$125 million attributable to Bear Island. White Birch had three
pulp and paper mills in the province of Quebec. The Bear Island
plant was in Ashland, Virginia. White Birch is controlled by
Brant Paper Inc.
The case is In re Bear Island Paper Co. LLC, 10-31202, U.S.
Bankruptcy Court, Eastern District Virginia (Richmond).
Daily Podcast
W.R. Grace, Tribune, GM, AmTrust, Evans Oil: Bankruptcy Audio
In today’s bankruptcy podcast, we describe how W.R. Grace
Co. is nearing the end of a 10-year reorganization. We mention
how only two plans remain in competition for the reorganization
of publisher Tribune Co. and use AmTrust Financial Corp. as an
example of loopholes in Congress’ attempt to prevent bank
holding companies from using bankruptcy to evade capital
requirements. We close by looking at how old General Motors
Corp. avoided liability for aiding and abetting apartheid and
describe the opportunity to acquire petroleum distributor Evans
Oil Co. LLC. To listen to the bankruptcy podcast with Bloomberg
Law’s Lee Pacchia and Bloomberg News bankruptcy columnist and
editor-at-large Bill Rochelle, click here.
To contact the reporter on this story:
Bill Rochelle in New York at
wrochelle@bloomberg.net.
To contact the editor responsible for this story:
David E. Rovella at drovella@bloomberg.net.