The Distressed Debt Alert

Rising Hotel CMBS Delinquencies Spike Overall Rate, Fitch Says

The delinquency rate on loans on hotel properties, packaged into commercial mortgage-backed securities rose by 7.3% last month, Fitch Ratings said. That helped catapult the overall delinquency rate on U.S. CMBS upward by 1.29 percentage points to 6%.

Source: Press Release

Cross Canyon Energy, a Spring, Texas-based gas and oil exploration and development company, said it filed a prepackaged Chapter 11 bankruptcy.

Source: Press Release

McGrath's Publick Fish House, a Salem, Ore.-based chain of 20 restaurants located in Arizona, Idaho, Oregon, Utah and Washington, filed for Chapter 11 bankruptcy, the Portland Business Journal reported.

Source: News Story

TCW Group cut fees on two distressed debt funds with about $3 billion in assets to satisfy investors, Bloomberg Businessweek reported. The move was reportedly prompted by the firing of investment manager Jeffrey Gundlach.

Source: News Story

Imperial Capital Group, a Los Angeles-based investment bank that specializes in high-yield and distressed debt, postponed its $113 million initial public offering, Bloomberg reported.

Source: News Story

Spheris, a Franklin, Tenn.-based provider of clinical documentation technology and services, filed for Chapter 11 bankruptcy and agreed to be sold to MedQuist Inc. and CBay Inc. in a Section 363 sale.

Source: Press Release

Fifth Third Bank sued thoroughbred horse breeder Zayat Stables in December over an alleged default on a $34 million senior secured facility, and now Zayat says in a Chapter 11 petition that it was forced to file after Fifth Third changed its mind about a proposed restructuring plan.

Owner Ahmed Zayat said in court filing that he invested $40 million of his own capital in the operation, whose Kentucky stable the lender appraised at $37 million. Zayat claims restructuring plans were proceeding until Fifth Third chose to divest itself of its equine lending business, after which Fifth Third proposed a lending structure that would have destroyed Zayat's business.

Source: Chapter 11 Affidavit

Eaglepoint Advisors, a San Francisco-based turnaround, restructuring and crisis management firm focused on middle market retail and consumer goods companies, appointed former Radia International and Polaroid Corp. CEO Gary DiCamillo as a partner.

Source: Press Release

Apollo Global Real Estate Management said it formed a new Asia Pacific group, to be headed by former Holdfast Capital CEO Grant Kelley, which will invest in distressed assets in Australia and Asia.

Source: Press Release

Lawrence E. Rifkin, a former partner with the law firm McGuireWoods in Tysons Corner, Va., joined Greenberg Traurig to lead the firm's new business reorganization and bankruptcy practice for Virginia and Washington, D.C.

John T. Farnum will join Rifkin in Greenberg's Tysons Corner office as an associate, the firm said.

Source: Press Release

The default rate on debt rated speculative-grade by Standard & Poor's will finish 2010 at 5% as financial conditions for leveraged companies appear markedly better, S&P said in its updated quarterly outlook.

Source: Press Release

The Corvus Group, a Largo, Md.-based financial and real estate services firm with $10 billion in real estate assets under management from failed banks, said it formed a troubled asset advisory group that will operate out of its Chicago office.

Source: Press Release

LBC Credit Partners, a provider of financing to middle market companies, said it closed its $645 million LBC Credit Partners II fund, which surpassed its original $400 million target.

Source: Press Release