/raid1/www/Hosts/bankrupt/TCR_Public/170224.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, February 24, 2017, Vol. 21, No. 54
Headlines
213 BOND STREET: Taps Friedman-Roth as Real Estate Broker
ACHAOGEN INC: ARCH Venture Ceases to be 5% Shareholder
ACHAOGEN INC: Sphera Funds et al. Have 1.87% Stake as of Dec. 31
ADAMIS PHARMACEUTICALS: Board Approves Raises and Bonus Payments
ADVANCED COLLISION: Seeks Court Approval to Use Cash Collateral
ADVANCED SOLIDS: Freitag Buying Residential Furniture for $12K
AFFINITY GAMING: Moody's Lowers Corp. Family Rating to B2
ALIANZA TRINITY: Court Extends Plan Filing Period Through May 25
ALL SAINTS CARE: Seeks to Hire Lindauer as Legal Counsel
AMAG PHARMA: Moody's Revises Outlook to Stable & Affirms B1 CFR
AMAYA INC: Moody's Changes Outlook to Stable & Affirms B2 CFR
AMPLIPHI BIOSCIENCES: Broadfin Holds 0.4% Stake as of Dec. 31
APOLLO MEDICAL: Issues Promissory Note to Network Medical
ASSOCIATED MATERIALS: Moody's Withdraws Caa2 CFR
ATLAS MF: Macquarie to Auction Holdco Interests on Feb. 27
ATOPTECH INC: Fights Synopsys' Objection to Incentive Plans
AVANTOR INC: S&P Assigns 'B' CCR Following Merger with NuSil
AVANTOR PERFORMANCE: Moody's Assigns B2 Corporate Family Rating
BAUSMAN AND COMPANY: Taps Procopio Cory as Legal Counsel
BCPE EAGLE: Moody's Assigns B3 Corporate Family Rating
BCPE EAGLE: S&P Assigns 'B' CCR; Outlook Stable
BILTMORE 24: To Sell Housing Unit in Phoenix to Pay Creditors
BOOK REVIEW: Competition, Regulation, and Rationing
BURGI ENGINEERS: Court Extends Exclusivity Period by 60 Days
CADIZ INC: Nokomis Capital Holds 9.9% of Shares as of Dec. 31
CAESARS ENTERTAINMENT: Enters Into Financing Agreements
CAMBER ENERGY: Owns 90% Working Interest in the Permian Basin
COLONIAL BANCGROUP: Court OKs Split of Trials Against Crowe, PwC
COMPACTION UNLIMITED: Taps Durand & Associates as Legal Counsel
CONTURA ENERGY: Moody's Assigns (P)B2 Corp. Family Rating
CORECIVIC INC: Fitch Affirms IDR at BB+; Outlook Stable
CREW ENERGY: S&P Assigns 'B' Rating on Proposed Sr. Notes
DIGIPATH INC.: Incurs Losses of $10 Million as of Dec. 31
EIDOLON BRANDS: Has Final OK to $1.4 Mil-DIP Loan, Access to Cash
EMERALD OIL: Asks for Plan Filing Exclusivity Until June 19
ENERGY FUTURE: Wins Chapter 11 Plan Confirmation
FANTASY ACES: Hires Lawyer as Regulator Questions Players' Accounts
FLORIDA FOREST: Unsecureds to Recoup 55% Over 60 Months
FOLTS HOME: Proposes to Use Cash Collateral Until Facilities Sale
FOUR DIA: Disclosures OK'd; Plan Confirmation Hearing on March 30
FRESH & EASY: Wandering Buying Liquor License (No. 539659) for $15K
FUEL PERFORMANCE: Hennessy Holds 7.64% Equity Stake
GARDENS REGIONAL: Bidder Says Purchase Efforts Unfairly Ignored
GLOBAL LEADERSHIP: S&P Lowers Rating on 2010 Revenue Bonds to 'BB'
GRANDE COMMUNICATIONS: S&P Lowers CCR to 'B', Off CreditWatch
HAGGEN HOLDINGS: Plan Exclusivity Deadline Extended Until March 8
HAVEN CHICAGO: Wants Plan Filing Deadline Moved to May 2
HBT JV: Case Summary & 20 Largest Unsecured Creditors
HELIX GEN: S&P Assigns Prelim. 'BB' Rating on $1.54BB Term Loan
HEXION INC: S&P Affirms 'CCC+' CCR & Revises Outlook to Stable
J. G. SOLIS: Has Interim Permission to Use Cash Through March 1
JOHN Q. HAMMONS: Court Moves Plan Filing Deadline to Dec. 26
JORDAN BUILDERS: Seeks Court Permission to Use Cash Collateral
JOSEPH HEATH: Ordered to Amend Sale Motion for Alexandria Property
KIDS ONLY II: RREF Selling 700 La Neuville Road Daycare
KIDS ONLY III: RREF Selling 224 Julian Circle Daycare
LB VENTURES: Can Use Cash Collateral on Interim Basis Thru April 12
LEO AUTO BROKER: Asks Court Permission to Use Cash Collateral
LEVI STRAUSS: Moody's Assigns Ba2 Rating to EUR450MM Notes
LEVI STRAUSS: S&P Assigns 'BB+' Rating on Proposed EUR450MM Notes
LIME ENERGY: Completes Reverse/Forward Stock Split
LIMITED STORES: Has Court's Nod to Obtain $6-Mil. of DIP Financing
LIMITED STORES: Sycamore Partners Wins Auction
LIMITED STORES: Tween Brands Buying De Minimis Assets for $68K
LMCHH PCP: Seeks to Hire Jones Walker as Co-Counsel
MALIBU LIGHTING: Seeks April 10 Plan Filing Period Extension
MAUI LAND: Lemonides Holds 5.8% Equity Stake as of Dec. 31
MCO INDUSTRIES: Seeks to Hire Hector Eduardo as Legal Counsel
MF GLOBAL: March Trial on $3-Bil. Malpractice Lawsuit Against PwC
MICHIGAN SPORTING: Closing All 66 Stores; GOB Sales Underway
MID CITY TOWER: Expects $1.2MM Loan to Pay Creditor Claims
MINERAL RESOURCES: Court Disallows TMR's Claim #22-1
MOTORS LIQUIDATION: Immigon Can't Evade Suit Over $1.5BB Loan
MSES CONSULTANTS: Hearing on Disclosure Scheduled for March 8
MY-WAY TRADING: Has Authorization to Use Cash Collateral
NINJA METRICS: Seeks June Plan Filing Extension Pending Trial
NORTH CENTRAL FLORIDA: ICEC Buying Gainesville Property for $1.1M
NORTH OAKS: S&P Lowers Bond Rating to 'BB+' on Weaker Coverage
OMNICOMM SYSTEMS: Cornelis Wit Holds 43.4% Stake
PARAGON OFFSHORE: Fights Panel's Objection to Plan Filing Extension
PERFORMANCE SPORTS: Completes Sale of INARIA Brand Name
PERFUMANIA HOLDINGS: Explores Strategic Alternatives
PERRY PETROLEUM: Court Won't Enjoin Criminal Raps vs Sheaffer
PIKE CORP: Moody's Rates 2nd Lien Term Loan at Caa1
PUERTO RICO: COFINA Files Motion to Intervene in GO Lawsuit
REAM PROPERTIES: Pickford, et al's Summary Judgment Bids Granted
RENNOVA HEALTH: Steven Sramowicz Has 10.5% Equity Stake
ROCKIES EXPRESS: S&P Affirms 'BB+' CCR & Revises Outlook to Stable
RSF 17872: Pursues Asset Sale, Needs Until March 20 to File Plan
SAILING EMPORIUM: Wants to Move Plan Filing Period to June 29
SEAWORLD PARKS: Moody's Assigns B1 Rating to New Term Loans
SHIV LODGING: Proposes to Use Ciena Capital Cash Collateral
SPORTS AUTHORITY: Under Armour Sued for Hiding Bankruptcy Impact
SRAMPICKAL DEVELOPERS: Taps Gary Thompson as Legal Counsel
STEINY AND COMPANY: Asks More Plan Exclusivity Pending Sale
STEMTECH INTERNATIONAL: U.S. Trustee Forms 3-Member Committee
SUNEDISON INC: Committee Must Support Fraud Allegations
SWORDS GROUP: Eatherly Buying Lebanon Property for $1.1M
TALL CITY WELL: Has Interim OK to Use Cash Collateral Until March 1
TAMARACK DEVELOPMENT: Has Final Authority to Use Cash Collateral
TOISA LIMITED: Regains Control of United Journey Vessel
TOWER AUTOMOTIVE: Moody's Assigns B1 Rating to $361MM Term Loan
TRIDENT BRANDS: LPF (MCTECH) Reports 27.6% Stake as of Sept. 30
TRONOX LIMITED: Moody's Puts B2 Rating on Review for Upgrade
ULTRA PETROLEUM: Reports 4th Quarter, Full-Year 2016 Results
VIACOM INC: Fitch Assigns BB+ Rating to 40-Yr Jr. Subordinated Debt
VIACOM INC: Moody's Assigns Ba1 Rating to New Jr. Sub. Note
VIACOM INC: S&P Assigns 'BB' Rating on Proposed 2057 Jr. Debentures
WET SEAL: Landlords Object to Cash Collateral Use
WINDSTREAM SERVICE: Fitch Assigns BB+ Rating to $580MM Term Loans
WME IMG: Term Loan Addition No Impact on Moody's B2 CFR
XTERA COMMUNICATIONS: Seeks Plan Exclusivity Pending Conversion
ZIO'S RESTAURANT: Disclosures OK'd; Plan Hearing on March 27
ZODIAC INDUSTRIES: Intends to Use JPMorgan Cash Collateral
ZODIAC INDUSTRIES: Taps DelBello Donnellan as Legal Counsel
[*] Ervin Cohen & Jessup Attorneys Included in Super Lawyers List
[^] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS
*********
213 BOND STREET: Taps Friedman-Roth as Real Estate Broker
---------------------------------------------------------
213 Bond Street Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to hire a real estate broker.
The Debtor proposes to hire Friedman-Roth Realty Services LLC in
connection with the sale of its four-storey building in Brooklyn,
New York. The firm will receive a 5% commission upon closing of
the sale.
George Niblock, managing member of Friedman-Roth, disclosed in a
court filing that his firm does not represent any interest adverse
to the Debtor, and that it is a "disinterested person" as defined
in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
George Niblock
Friedman-Roth Realty Services LLC
44 East 32nd Street, 9th floor
New York, NY 10016
Tel: 212-889-4400
About 213 Bond Street Inc.
213 Bond Street Inc. owns 213 Bond St, a commercial located at 213
Bond St, Brooklyn, NY 11217, in the area is commonly known as
Gowanus. 213 Bond Street Inc filed a voluntary petition for relief
under chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
16-45132) oln November 15, 2016, listing under $1 million in both
assets and liabilities.
Lawrence Morrison, Esq., at Morrison Tenenbaum PLLC, serves as
counsel to the Debtor. The Debtor hired Gotham Business
Consultants Ltd. as accountant.
The primary impetus for the Debtor's chapter 11 filing was a
pending foreclosure action commenced by JP Morgan Chase Bank N.A.
on the property located at 213 Bond Street, Brooklyn, New York.
On January 20, 2017, the Debtor filed a Chapter 11 plan of
reorganization, which will be funded from the proceeds generated
from the sale of its property in Brooklyn, New York. The plan
proposes to pay in full general unsecured claims estimated to total
approximately $6,500.
ACHAOGEN INC: ARCH Venture Ceases to be 5% Shareholder
------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, ARCH Venture Fund VI, L.P., ARCH Venture Partners VI,
L.P., ARCH Venture Partners VI, LLC and Keith Crandell, Robert
Nelsen and Clinton Bybee jointly disclosed that as of Dec 31, 2016,
they ceased to beneficially own five percent or more of Achaogen,
Inc.'s outstanding common stock. A full-text copy of the regulatory
filing is
available for free at https://is.gd/yw1jb8
About Achaogen
Achaogen, Inc. is a clinical-stage biopharmaceutical company
passionately committed to the discovery, development, and
commercialization of novel antibacterials to treat multi-drug
resistant gram-negative infections. The Company is developing
plazomicin, its lead product candidate, for the treatment of
serious bacterial infections due to MDR Enterobacteriaceae,
including carbapenem-resistant Enterobacteriaceae. In 2013, the
Centers for Disease Control and Prevention identified CRE as a
"nightmare bacteria" and an immediate public health threat that
requires "urgent and aggressive action."
Achaogen reported a net loss of $27.09 million in 2015, a net loss
of $20.17 million in 2014 and a net loss of $13.11 million in 2013.
As of Sept. 30, 2016, Achaogen had $80.66 million in total assets,
$49.64 million in total liabilities and $31.01 million in total
stockholders' equity.
The Company's independent accounting firm Ernst & Young LLP, in
Redwood City, California, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2015, citing that the Company's recurring losses from operations
and its need for additional capital raise substantial doubt about
its ability to continue as a going concern.
ACHAOGEN INC: Sphera Funds et al. Have 1.87% Stake as of Dec. 31
----------------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Sphera Funds Management Ltd, Sphera Global Healthcare
GP Ltd, Sphera Global Healthcare Management LP and Moshe Arkin
jointly disclosed that as of Dec. 31, 2016, they are the beneficial
owner of 514,342 shares of common stock, representing approximately
1.87 percent of Achaogen Inc.'s outstanding common stock based on
27,451,400 shares of Common Stock outstanding as of Nov. 2, 2016.
The 496,540 shares of Common Stock, representing a total of 1.81%
of the total shares of Common Stock outstanding, are held directly
by Sphera Global Healthcare Master Fund, which has delegated its
investment management authority to Sphera Global Healthcare
Management Ltd.
The 17,802 shares of Common Stock, representing a total of 0.06% of
the total shares of Common Stock outstanding, are held directly by
HFR HE Sphera Global Healthcare Master Trust, which has delegated
its investment management authority to the Management Company.
The Management Company is managed, controlled, and operated by its
general partner, Sphera Global Healthcare GP Ltd., which is
controlled jointly by Sphera Funds Management Ltd. and Moshe
Arkin.
A full-text copy of the regulatory filing is available at:
https://is.gd/KvaWM5
About Achaogen
Achaogen, Inc. is a clinical-stage biopharmaceutical company
passionately committed to the discovery, development, and
commercialization of novel antibacterials to treat multi-drug
resistant gram-negative infections. The Company is developing
plazomicin, its lead product candidate, for the treatment of
serious bacterial infections due to MDR Enterobacteriaceae,
including carbapenem-resistant Enterobacteriaceae. In 2013, the
Centers for Disease Control and Prevention identified CRE as a
"nightmare bacteria" and an immediate public health threat that
requires "urgent and aggressive action."
Achaogen reported a net loss of $27.09 million in 2015, a net loss
of $20.17 million in 2014 and a net loss of $13.11 million in 2013.
As of Sept. 30, 2016, Achaogen had $80.66 million in total assets,
$49.64 million in total liabilities and $31.01 million in total
stockholders' equity.
The Company's independent accounting firm Ernst & Young LLP, in
Redwood City, California, issued a "going concern" qualification on
the consolidated financial statements for the year ended Dec. 31,
2015, citing that the Company's recurring losses from operations
and its need for additional capital raise substantial doubt about
its ability to continue as a going concern.
ADAMIS PHARMACEUTICALS: Board Approves Raises and Bonus Payments
----------------------------------------------------------------
On Feb. 7, 2016, the Compensation Committee of the Board of
Directors of Adamis Pharmaceuticals Corporation approved an
increase in the annual base salaries of its officers in amounts
ranging from 4% to 6% from such officer's previous base salary,
effective as of Jan. 1, 2017. In addition, the Compensation
Committee approved cash discretionary bonus payments under the
Company's 2016 bonus Plan for 2016 as follows: Dr. Carlo, $143,750;
Mr. Marguglio, $62,000; Mr. Hopkins, $45,000; Ms. Daniels, $42,000;
and Dr. Moll, $42,000.
A full-text copy of the regulatory filing is available at:
https://is.gd/SNXNAV
About Adamis
San Diego, Calif.-based Adamis Pharmaceuticals Corporation (OTC QB:
ADMP) is a biopharmaceutical company engaged in the development and
commercialization of specialty pharmaceutical and biotechnology
products in the therapeutic areas of respiratory
disease, allergy, oncology and immunology.
Adamis reported a net loss of $13.6 million on $0 of revenue for
the year ended Dec. 31, 2015, compared to a net loss of $9.31
million on $0 of revenue for the year ended Dec. 31, 2014.
As of Sept. 30, 2016, the Company had $36.74 million in total
assets, $11.98 million in total liabilities and $24.76 million in
total stockholders' equity.
Mayer Hoffman McCann P.C., in San Diego, California, issued a
"going concern" qualification on the consolidated financial
statements for the year ended Dec. 31, 2016, citing that the
Company has incurred recurring losses from operations, and is
dependent on additional financing to fund operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
ADVANCED COLLISION: Seeks Court Approval to Use Cash Collateral
---------------------------------------------------------------
Advanced Collision, Inc. requests the U.S. Bankruptcy Court for the
Western District of New York for authorization to use cash
collateral.
The Debtor intends to expend cash of approximately $14,003 pursuant
to its Emergency Budget through February 12, 2017. The Debtor also
intends to continue using cash collateral the period from February
13, 2017 through February 26, 2017 in the ordinary course of
business in accordance with the Interim Budget, which provides for
total expenses of approximately $31,069.
The Debtor prepared a 13-week budget that covers the period from
February 27, 2017 through May 28, 2017, which projects total
expenses amounting to $156,457.
The Debtor is indebted to Steuben Trust Company in the aggregate
amount of approximately $146,300. Steuben Trust asserts a lien
against all assets of the Debtor, including its cash collateral.
The Debtor is also indebted New York State Department of Taxation
and Finance in the aggregate amount of approximately $214,986. NYS
Tax Dept holds a lien against the Debtor's cash collateral, to the
extent of the unpaid balance of the NYS Tax Dept Warrant.
The Debtor proposes to grant Steuben Trust and the NYS Tax Dept
adequate protection in the form of roll-over or replacement liens,
to the same extent, to the same relative priority, and with respect
to the same assets which served as collateral for its Prepetition
Indebtedness, to the extent the Cash Collateral is actually used,
without the need of any further recordation to perfect such liens
or security interests.
The Debtor will make the following monthly cash payments to
commence no later than February 27, 2017:
(a) $2,920.27 per month to Steuben Trust, representing the
regular monthly principal and interest installments as it would be
due and owing in the ordinary course of business; and
(b) $1,750.00 per month to the NYS Tax Dept.
A full-text copy of the Debtor's Motion, dated February 7, 2017, is
available at https://is.gd/oSHFCn
A full-text copy of the Debtor's Budget, dated February 7, 2017, is
available at https://is.gd/bGx5Lv
About Advanced Collision, Inc.
Advanced Collision, Inc. is a New York corporation formed on or
about August 29, 1996, which has operated since that time, and
continues to operate, as an auto body and collision repair shop,
located at 11251 Route 98, Attica, New York 14011. James Cooley,
its President, holds a one hundred (100%) percent shareholder
interest in Advanced Collision.
Advanced Collision filed a Chapter 11 petition (Bankr. W.D.N.Y.
Case No. 17-10232), on February 7, 2017. The Petition was signed
by James Cooley, President. The case is assigned to Judge Michael
J. Kaplan. The Debtor is represented by Arthur G. Baumeister, Jr.,
Esq. and Scott J. Bogucki, Esq., at Amigone, Sanchez & Mattrey,
LLP.
No trustee, examiner, or statutory committee of creditors has been
appointed in the Debtor's Chapter 11 case.
ADVANCED SOLIDS: Freitag Buying Residential Furniture for $12K
--------------------------------------------------------------
Advanced Solids Control, LLC, asks the U.S. Bankruptcy Court for
the Western District of Texas to authorize the sale of personal
property described as residential furniture from one of the rental
properties located in Carlsbad, New Mexico, to Steven Freitag for
$12,000.
The Debtor's real properties are being sold and the furniture is
being marketed for sale. The Debtor believes that the furniture is
worth approximately $12,000. The residential furniture is not
subject to any liens or claims to creditors to the best of the
Debtor's knowledge.
The Debtor proposes to sell the personal property to the Buyer for
a lump sum cash payment of $12,000.
A copy of the list of furniture to be sold attached to the Motion
is available for free at:
http://bankrupt.com/misc/Advanced_Solids_45_Sales.pdf
The proceeds from the sale will be used by the Debtor in its
reorganization efforts/payment of creditors of the estate.
The Debtor believes that the proposed sale of the furniture
generates a reasonable value based upon the asset proposed to be
sold and its marketability.
The Debtor asks the Court to approve the sale of furniture to the
Buyer free and clear of all liens, claims and encumbrances and
further relief to which the Debtor may show itself entitled.
About Advanced Solids Control
Advanced Solids Control, LLC, is an oilfield service company
specializing in solids control for land-based oil and gas drilling
operations.
Advanced Solids sought Chapter 11 protection (Bankr. W.D. Tex.
Case No. 16-52748) on Dec. 2, 2016. The petition was signed by W.
Lynn Frazier, managing member. The Debtor estimated assets in the
range of $0 to $50,000 and $500,001 to $1,000,000 in debt.
The Debtor tapped William R. Davis, Jr., Esq., at Langley &
Banack, Inc. as counsel.
AFFINITY GAMING: Moody's Lowers Corp. Family Rating to B2
---------------------------------------------------------
Moody's Investors Service downgraded Affinity Gaming Corporation's
Corporate Family rating to B2, its Probability of Default Rating to
B2-PD, its second lien term loan to Caa1 and affirmed the B1 rating
on its first lien term loan and revolver. Moody's also assigned a
Caa1 rating to the company's proposed $50 million add-on to the
existing second lien term loan.
The downgrade reflects the company's decision to increase its
existing $95 million second lien term loan by $50 million which
increases Moody's adjusted gross debt/EBITDA from 5.9x to 6.4x. The
net proceeds of the incremental loan will be used to repay $9.0
million outstanding on the revolver and the remaining $41 million
will be added to existing cash balances as the ultimate use of
proceeds is unknown at this time. However, it is likely net
proceeds will be used for acquisitions to the extent allowed by the
credit agreement. "The decision to increase debt comes on the heels
of its going private transaction which closed in January 2017 and
reflects an aggressive financial policy that warrants a lower
rating", said Moody's Senior Vice President, Peggy Holloway. The
rating outlook is stable. Moody's estimates adjusted debt/EBITDA
will drop to around 5.9x by year-end 2017 -- well above the 5.0x
level required to maintain the current rating. Affinity's
Speculative Grade liquidity rating of SGL-2 is being withdrawn.
Downgrades:
Issuer: Affinity Gaming Corporation
-- Probability of Default Rating, Downgraded to B2-PD from B1-PD
-- Corporate Family Rating, Downgraded to B2 from B1
-- Senior Secured Second Lien Term Loan, Downgraded to Caa1(LGD5)
from B3(LGD6)
Assignments:
Issuer: Affinity Gaming Corporation
-- Senior Secured Second Lien Term Loan, Assigned Caa1(LGD5)
Outlook Actions:
Issuer: Affinity Gaming Corporation
-- Outlook, Revised to Stable from Negative
Affirmations:
Issuer: Affinity Gaming Corporation
-- Senior Secured Bank Credit Facility, Affirmed B1(LGD3)
Withdrawal:
Issuer: Affinity Gaming Corporation
-- Speculative Grade Liquidity Rating SGL-2
RATINGS RATIONALE
Affinity's B2 Corporate Family Rating reflects the company's small
scale in terms of revenue and EBITDA, high financial leverage and
below average profitability of its Primm properties in Nevada that
comprise a large portion of the Nevada segment revenues and EBITDA.
The Nevada segment comprises approximately 50% of consolidated
property EBITDA. The ratings consider the company's geographic
diversification with eleven casino properties across four states
with the largest property EBITDA concentration in Nevada and rising
consolidated EBITDA margins. Moody's expects continued margin
improvement on modest revenue growth as management executes its
plan to continue improving customer profitability, more actively
manage its customer database, and reduce costs. The ratings also
consider Moody's views that additional planned capital investment
will support management's efforts to improve property margins at
Primm properties.
The stable rating outlook reflects favorable market and economic
conditions in the company's largest Las Vegas locals market and
Moody's expectation Affinity will reduce adjusted debt/EBITDA below
6.0x by year end 2017. A rating upgrade will be considered if
adjusted debt/EBITDA drops below 4.5x and appears likely to remain
around this level when considering the operating environment and
management's financial policy. A rating downgrade will be
considered if operating trends in the company's key markets show
signs of deterioration, or if adjusted debt/EBITDA remains above
6.0x
Affinity Gaming Corporation owns and operates casinos in Nevada,
Missouri, Iowa and Colorado. Net revenue for the latest 12-month
period ended September 30, 2016 was $380 million. Affinity recently
completed its going private transactions and 100% owned by
affiliates of Z Capital Partners LLC.
The principal methodology used in these ratings was Global Gaming
Industry published in June 2014.
ALIANZA TRINITY: Court Extends Plan Filing Period Through May 25
----------------------------------------------------------------
Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern
District of Florida extended the exclusive periods during which
Alianza Trinity Development Group, LLC may file a chapter 11 plan
and solicit votes on the plan, through May 25, 2017 and July 24,
2017, respectively.
The Troubled Company Reporter had earlier reported that the Debtor
sought for exclusivity extension because the Debtor was still
finalizing a motion to approve sale procedures for the sale of
substantially all of its real and personal property, which provides
a time table agreed to by the Debtor's secured creditor, Lantern
Business Credit, LLC, the Official Committee of Unsecured Creditors
and the Debtor's Court approved broker, as follows:
-- a stalking horse bidder will be identified by March 30,
2017;
-- a motion to sell the Debtor's assets to the stalking horse
bidder, subject to any higher and better bids, will be filed by
April 3, 2017; and
-- an auction will take place on April 26, 2017.
About Alianza Trinity Development Group
Alianza Trinity Development Group, LLC, filed a Chapter 11 petition
(Bankr. S.D. Fla. Case No. 16-24483) on Oct. 27, 2016, and is
represented by Thomas R. Lehman, Esq., at Levine Kellogg Lehman
Schneider + Grossman LLP, in Miami, Florida. At the time of
filing, the Debtor had estimated assets and liabilities of $10
million to $50 million. The petition was signed by Omar Botero,
manager & CEO of Alianza Holdings, LLC, as managing member of
Alianza Trinity Development Group, LLC.
The Office of the U.S. Trustee appointed a three-member committee
of unsecured creditors in the Debtor's case on Dec. 2, 2016.
ALL SAINTS CARE: Seeks to Hire Lindauer as Legal Counsel
--------------------------------------------------------
All Saints Care Injury & Rehabilitation Clinic Inc. seeks approval
from the U.S. Bankruptcy Court for the Northern District of Texas
to hire legal counsel in connection with its Chapter 11 case.
The Debtor proposes to hire Joyce W. Lindauer Attorney, PLLC to
give legal advice regarding its duties under the Bankruptcy Code,
assist in the preparation of a bankruptcy plan, and provide other
legal services.
The hourly rates charged by the firm are:
Joyce Lindauer $350
Sarah Cox $195
Jamie Kirk $195
Jeffery Veteto $185
Paralegals $85 - $105
Legal Assistants $85 - $105
Joyce Lindauer, Esq., owner of the firm, disclosed in a court
filing that the members of her firm are "disinterested" as defined
in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Joyce W. Lindauer, Esq.
Sarah M. Cox, Esq.
Jamie N. Kirk, Esq.
Jeffery M. Veteto, Esq.
Joyce W. Lindauer Attorney, PLLC
12720 Hillcrest Road, Suite 625
Dallas, TX 75230
Tel: (972) 503-4033
Fax: (972) 503-4034
About All Saints Care Injury
All Saints Care Injury & Rehabilitation Clinic Inc. sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Texas Case No. 17-30481) on February 6, 2017. At the time of the
filing, the Debtor estimated assets and liabilities of less than
$500,000.
AMAG PHARMA: Moody's Revises Outlook to Stable & Affirms B1 CFR
---------------------------------------------------------------
Moody's Investors Service revised the rating outlook on AMAG
Pharmaceuticals, Inc., to stable from positive. At the same time,
Moody's affirmed the company's ratings including the B2 Corporate
Family Rating, B2-PD Probability of Default Rating, Ba2 (LGD2)
senior secured rating, B3 (LGD4) senior unsecured rating, and the
SGL-1 Speculative Grade Liquidity Rating.
The revision in the rating outlook to stable reflects a reduced
likelihood of upward rating pressure until the life cycle
management plans for Makena are more certain. The success of life
cycle management is critical as Makena counts for over 60% of
AMAG's 2016 revenue. Makena's orphan drug exclusivity is expiring
in February 2018.
Ratings affirmed:
Corporate Family Rating, at B2
Probability of Default Rating, at B2-PD
Speculative Grade Liquidity Rating, at SGL-1
$350 million Senior Secured 1st Lien Bank Credit Facility due 2021,
Ba2 (LGD2)
$500 million Senior Unsecured Notes due 2023, B3 (LGD4)
Outlook actions:
Changed to stable from positive
RATINGS RATIONALE
The B2 CFR rating reflects AMAG's small size within the
pharmaceutical industry and its high revenue concentration in
Makena. The rating is also constrained by the risk of substantial
market share erosion in Makena if generic competition enters
following the expiration of Orphan Drug Exclusivity in February
2018.
The rating is supported by AMAG's high profit margins and low
capital requirements which result in very strong cash flow. Moody's
expects that Makena will continue grow rapidly in absence of
generic competition, driven by increased FDA oversight and scrutiny
of compounding pharmacies that distribute competing products. The
company's life cycle management program involves the goal of
launching a sub-cutaneous version of Makena, potentially by
year-end 2017. AMAG is also working on life cycle management of its
anemia drug Feraheme, potentially expanding the market size into
the non-kidney disease population.
Recent product acquisitions include Rekynda and Intrarosa, both in
the women's health category. Moody's believes that AMAG will
continue to be acquisitive. While over time acquisitions will
improve business diversity, the company's acquisitive strategy
raises execution and integration risk. Incorporating acquisitions,
Moody's anticipates that AMAG's debt/EBITDA will remain in the 4.0
to 5.0 times range.
The stable rating outlook reflects Moody's expectation that AMAG
will continue solid financial performance in 2017 and that its
lifecycle management programs will not face any material setbacks.
The ratings could be upgraded if AMAG successfully commercializes a
new version of Makena and sees strong uptake in the product. Other
factors that would contribute to positive rating pressure include
improving revenue diversity through new product introductions,
continuation of good cash flow, and debt/EBITDA sustained below
4.0x. Conversely, the ratings could be downgraded if AMAG is
unsuccessful in the life cycle management effort and Makena faces
significant revenue erosion. In particular, a downgrade could occur
if debt/EBITDA is sustained above 5.0x.
The principal methodology used in these ratings was Global
Pharmaceutical Industry published in December 2012.
Headquartered in Waltham, Massachusetts, AMAG Pharmaceuticals, Inc.
("AMAG") is a specialty pharmaceuticals company with a focus
primarily in maternal health and the treatment of anemia. Revenue
for the year ended in December 31, 2016 was $532 million.
AMAYA INC: Moody's Changes Outlook to Stable & Affirms B2 CFR
-------------------------------------------------------------
Moody's Investors Service revised the ratings outlook of Amaya Inc.
to stable from negative. The company's B2 Corporate Family Rating
and B2-PD Probability of Default Rating ratings were affirmed.
Amaya has an SGL-2 Speculative Grade Liquidity rating.
At the same time, a B1 rating was assigned to the Amaya B.V.'s
(co-issuer) amended USD 1st lien term loan due 2021, and EUR 1st
lien term loan due 2021. The assignment of new ratings to these
term loans reflects the proposed re-pricing of these facilities and
the assignment of a new CUSIP number to these debt items. The B1
rating on Amaya B.V. (co-issuer) USD 1st lien revolver due 2019 and
Caa1 rating on Amaya B.V.'s 2nd lien term loan due 2022 were
affirmed. These instruments were not part of the proposed
re-pricing.
"The rating outlook revision to stable from negative and the
affirmation of Amaya's B2 Corporate Family Rating reflects
continued improvement in the company's operating performance during
the past year, along with Moody's expectation that this trend will
continue despite changes at the senior management level," stated
Keith Foley, a Senior Vice President at Moody's.
"Based on Amaya's financial results since March 2016 when Amaya's
former Chief Executive Officer, David Baazov was charged with
alleged violations of Quebec securities law by Quebec's securities
regulator, it doesn't appear as though the company's operations
have been affected in a manner that would jeopardize its current
ratings," added Foley. Separately, last month, Amaya announced the
retirement of its Chief Financial Officer, Daniel Sebag.
Ratings affirmed at Amaya Inc.:
Corporate Family Rating, at B2
Probability of Default Rating, at B2-PD
Ratings affirmed at Amaya B.V. (co-issuer):
USD 1st lien revolver, at B1 (LGD3)
USD 8.00% 2nd lien term 2022, at Caa1 (LGD6)
Ratings affirmed at Amaya B.V. (co-issuer) and to be withdrawn upon
close:
USD 1st lien term loan 2021, at B1 (LGD3)
EUR 1st lien term loan 2021, at B1 (LGD3)
New ratings assigned to Amaya B.V. (co-issuer):
USD 1st lien term 2021, at B1 (LGD3)
EUR 1st lien term 2021, at B1 (LGD3)
RATINGS RATIONALE
Amaya's B2 Corporate Family Rating considers the company's market
leading position in terms of revenue in online poker, and its
licenses to operate in all major jurisdictions where online poker
has been legalized. The ratings are also supported by the company's
relatively high EBITDA margins at over 30%, along with substantial
reduction in the company's financial obligation related to the 2014
acquisition of Olford Group Limited. Debt/EBITDA for the fiscal
year ended December 31, 2016 was about 5.0 times compared to about
6.5 times at the end of fiscal 2015.
Key credit concerns include Amaya's relatively narrow product focus
-- the company's revenues and earnings are derived entirely from
online gaming activities -- along with the inherent risks related
to the company's strategy of growing through acquisition, and the
uncertainty related to an evolving regulatory environment for
online gaming.
A ratings upgrade could occur if Moody's believes Amaya can achieve
and maintain debt/EBITDA below 4.5 times. Ratings could be lowered
if debt/EBITDA rises above 6.5 times for any reason.
Amaya (TSX and NASDAQ: AYA) provides technology-based products and
services in the global gaming and interactive entertainment
industriesproducts, services and systems to online gaming operators
. The company owns and operates the Poker Stars and Full Tilt Poker
online poker brands. Amaya has two reportable segments: Poker and
Casino & Sports book. The principal methodology used in these
ratings was Business and Consumer Service Industry published in
October 2016.
AMPLIPHI BIOSCIENCES: Broadfin Holds 0.4% Stake as of Dec. 31
-------------------------------------------------------------
Broadfin Capital, LLC, Broadfin Healthcare Master Fund, Ltd., and
Mr. Kevin Kotler disclosed in an amended 13G Schedule filed with
the Securities and Exchange
Commission last Dec. 31, 2016, they beneficially own 68,000 shares
of common stock at $0.01 par value per share, representing 0.40% of
AmpliPhi Biosciences Corporation's Common Shares.
This final amendment reflects that each Reporting Person has ceased
to be the beneficial owner of more than five percent of the Common
Stock of the issuer.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/a9AHnn
About AmpliPhi
AmpliPhi Biosciences Corp. is a biotechnology company focused on
the discovery, development and commercialization of novel phage
therapeutics. Its principal offices occupy approximately 1,000
square feet of leased office space pursuant to a month-to-month
sublease, located at 3579 Valley Centre Drive, Suite 100, San
Diego, California. It also leases approximately 700 square feet of
lab space in Richmond, Virginia, approximately 5,000 square feet of
lab space in Brookvale, Australia, and approximately 6,000 square
feet of lab and office space in Ljubljana, Slovenia.
As of Sept. 30, 2016, the Company had $26.03 million in total
assets, $7.80 million in total liabilities and $18.22 million in
total stockholders' equity.
Ampliphi reported a net loss attributable to common stockholders of
$10.79 million for the year ended Dec. 31, 2015, compared to net
income attributable to common stockholders of $21.82 million.
"[T]he Company has incurred net losses since its inception, has
negative operating cash flows and has an accumulated deficit of
$371.9 million as of September 30, 2016, $56.4 million of which has
been accumulated since January of 2011, when the Company began
its focus on bacteriophage development. As of September 30, 2016,
the Company had cash and cash equivalents of $4.0 million.
Management believes that the Company's existing resources will be
sufficient to fund the Company's planned operations through the
end
of 2016. These circumstances raise substantial doubt about the
Company's ability to continue as a going concern," as disclosed in
the Company's quarterly report for the period ended Sept. 30, 2016.
APOLLO MEDICAL: Issues Promissory Note to Network Medical
---------------------------------------------------------
On Dec. 21, 2016, Apollo Medical Holdings, Inc., a Delaware
corporation, entered into an Agreement and Plan of Merger among the
Company, Apollo Acquisition Corp., a California corporation and
wholly-owned subsidiary of the Company, Network Medical Management,
Inc., a California corporation (NMM), and Kenneth Sim, M.D., not
individually but in his capacity as the representative of the
shareholders of NMM.
On Jan. 3, 2017, NMM provided a loan to the Company in the
principal amount of Five Million Dollars ($5,000,000), which is
evidenced by a Promissory Note.
The Promissory Note has a term of two years, with the Company's
payment obligations commencing on Feb. 1, 2017 and continuing on a
quarterly basis thereafter until January 2019. Under the terms of
the Promissory Note, the Company must pay NMM interest on the
principal balance outstanding at the Prime Rate plus 1 percent.
All outstanding principal and accrued but unpaid interest under the
Promissory Note is due and payable in full on the Maturity Date.
The Company may voluntarily prepay the outstanding principal and
interest in whole or in part without penalty or premium.
Under the Promissory Note, upon the occurrence of any Event of
Default, the unpaid principal amount of, and all accrued but unpaid
interest on, the Promissory Note will become due and payable
immediately at the option of NMM. In such event, NMM may, at its
option, declare the entire unpaid balance of the Promissory Note,
together with all accrued interest, applicable fees, and costs and
charges, including costs of collection, if any, to be immediately
due and payable in cash.
A full-text copy of the regulatory filing is available at:
https://is.gd/s8Va0e
About Apollo Medical
Glendale, Calif.-based Apollo Medical Holdings, Inc. (OTCMKTS:AMEH)
-- http://www.apollomed.net/-- provides hospitalist services in
the Greater Los Angeles, California area.
Apollo Medical reported a net loss of $9.34 million on $44.0
million of net revenues for the year ended March 31, 2016, compared
with a net loss of $1.80 million on $33.0 million of net revenues
for the year ended March 31, 2015.
As of Sept. 30, 2016, Apollo Medical had $14.95 million in total
assets, $9.15 million in total liabilities, $7.07 million in
mezzanine equity, and a total stockholders' deficit of $1.28
million.
ASSOCIATED MATERIALS: Moody's Withdraws Caa2 CFR
------------------------------------------------
Moody's Investors Service withdrew all ratings assigned to
Associated Materials, LLC, as its outstanding debt was refinanced
at the end of 2016. Associated Materials' senior secured notes due
2017 were fully repaid, resulting in no outstanding rated debt.
Ratings Withdrawn:
Corporate Family Rating, Caa3;
Probability of Default Rating, Caa3-PD.
RATINGS RATIONALE
Moody's has withdrawn the ratings due to the obligation being
redeemed. Please refer to the Moody's Investors Service's Policy
for Withdrawal of Credit Ratings, available on its website,
www.moodys.com.
Associated Materials, LLC, is a North American manufacturer and
distributor of exterior residential building products. The
company's core products are vinyl windows, vinyl siding, aluminum
trim coil, and aluminum and steel siding and accessories.
Associated Materials is also a distributor of third party
manufactured products, mainly roofing materials, insulation, and
exterior doors. Hellman & Friedman LLC, ("H&F"), through its
respective affiliates, is the primary owner of Associated
Materials.
ATLAS MF: Macquarie to Auction Holdco Interests on Feb. 27
----------------------------------------------------------
Macquarie Texas Loan Holder LLC will offer for sale at public
auction on Feb. 27, 2017, at 11:00 a.m., at the Offices of Dechert
LLP, 1095 Avenue of the Americas, New York, New York, in connection
with a Uniform Commercial Code sale, all right, title and interests
of Atlas MF Mezzanine Borrower LLC, in, to and under the 100%
limited liability company membership interests in Atlas MF Holdco
LLC.
For further information relating to the sale, contact:
Steve Guberer
CBRE Capital Advisors Inc.
Tel: 212-656-0551
E-mail: steve.guberer@cbrecap.com
ATOPTECH INC: Fights Synopsys' Objection to Incentive Plans
-----------------------------------------------------------
ATopTech, Inc., filed with the U.S. Bankruptcy Court for the
District of Delaware an omnibus response to objections to the
Debtor's key employee retention and key employee incentive plans,
among others.
A copy of the response is available at:
http://bankrupt.com/misc/deb17-10111-151.pdf
In its objection, Synopsys, Inc., contends that the compensation
programs both fail to satisfy Section 501(c)(3) of the U.S.
Bankruptcy Code because (i) the relationship between the
Compensation Programs and results sought is not reasonable; (ii)
the cost and scope of the Compensation Programs; and (iii) evidence
of appropriate diligence and industry standards in developing the
Compensation Programs is insufficient.
The Debtor says that there are overarching considerations which
must color this analysis. Synopsys' multifaceted and adversarial
roles in this bankruptcy case must not be understated. It is
entirely in its foremost interest that the Debtor fails in its
attempt to consummate a Section 363 sale to a third party, and the
most expedient and effective way to cause that failure is to
torpedo the Debtor's workforce. Synopsys' motivation behind its
myriad objections to the Debtor's proposed courses of action in
this bankruptcy case is suspect at best.
Synopsys objects to the KERP/KEIP Motion to deny payments to
employees, almost all of whom are rank-and-file employees, which
were promised almost a year ago and necessitated by the Synopsys
verdict. The Debtor states that if the KERP/KEIP Motion is denied,
the participants of the Compensation Programs would have claims in
the bankruptcy case for their bonus amounts. Clearly, Synopsys'
purported altruistic goal of maximizing recoveries for these
creditors is dubious. Synopsys' self-serving conclusion that the
Debtor's single possible means of selling its assets is in a sale
to Synopsys itself is patently wrong. The Debtor, in its reasoned
business judgment, determined that the stalking horse bid
represents the highest and best bid and that the auction will
create a competitive bidding process among potential purchasers,
including Synopsys if it chooses to qualify and bid, to maximize
value for the estate. There are currently eight different
potential bidders in the data room conducting due diligence, in
addition to the Stalking Horse and Synopsys.
According to the Debtor, Synopsys conveniently fails to take into
account the numerous onerous facts and circumstances of this
particular case, almost all of which were caused by Synopsys.
The Debtor endured years of expensive and draining litigation
against Synopsys before the Synopsys Verdict was returned. While
litigation remained pending, it became evident to the company that
it could not continue to dissipate assets litigating with Synopsys,
a much larger company with considerably more substantial resources.
The company almost immediately attempted to preclude the loss of
one of its most -- if not the single most -- valuable assets, its
employee workforce, to ensure that the company could continue
operations and maintain its value while considering its best course
of action. The fact that the company has been able to retain much
of workforce with the backdrop of the Synopsys verdict and ongoing
litigation and then the bankruptcy case in which Synopsys remains
heavily involved, is nothing short of remarkable and is a credit to
the efficacy and necessity of the Compensation Programs.
About ATopTech
ATopTech, Inc. -- http://www.atoptech.com/-- is in the business
of IC physical design. ATopTech claims its technology offers the
fastest time to design closure focused on advanced technology
nodes. The use of state-of-the-art multi-threading and
distributed processing technologies speeds up the design process,
resulting in unsurpassed project completion times.
ATopTech, Inc., sought Chapter 11 protection (Bankr. D. Del. Case
No. 17-10111(MFW)) on Jan. 13, 2017. The petition was signed by
Claudia Chen, vice president, finance. The case is assigned to
Judge Mary F. Walrath.
The Debtor estimated assets and liabilities in the range of $10
million to $50 million.
ATopTech has retained Dorsey & Whitney as bankruptcy counsel and
Cowen and Company as its investment banker. Wilson Sonsini
Goodrich & Rosati, Professional Corporation, serves as corporate
and transactional counsel to ATopTech. Grant Thornton serves as
tax counsel; and Arnold & Porter serves as litigation counsel.
Epiq Bankruptcy serves as claims and notice agent.
AVANTOR INC: S&P Assigns 'B' CCR Following Merger with NuSil
------------------------------------------------------------
S&P Global Ratings said that it assigned its 'B' corporate credit
rating to Avantor Inc. The outlook is stable.
At the same time, S&P assigned its 'B' issue-level and '3' recovery
rating to the company's proposed $1.425 billion first-lien term
loan and $75 million revolving credit facility. The '3' recovery
rating indicates S&P's expectation of meaningful (50%-70%; rounded
estimate 55%) recovery in the event of a payment default.
S&P is also assigning its 'CCC+' issue-level rating and '6'
recovery rating on the company's proposed $380 million second-lien
term loan. The '6' recovery rating indicates S&P's expectation of
negligible (0%-10%; rounded estimate 5%) recovery in the event of a
payment default. Avantor Performance Materials Holdings LLC will
issue the proposed debt.
Avantor plans to issue a $75 million revolving credit facility,
$1.425 billion first-lien term loan and $380 million second-lien
term loan, to refinance its existing capital structure and to make
a $439 million distribution to shareholders. Despite the increased
leverage resulting from the transaction, S&P expects the company to
generate improved EBITDA and free cash flow, which should bring
credit metrics in line with S&P's expectations at the current
rating, including pro forma weighted-averaged debt to EBITDA in the
5x to 6x range. Following the company's merger with NuSil
Technologies LLC, S&P expects Avantor to benefit from a
higher-margin product mix and potential cost synergies, although
S&P believes there is some integration risk. S&P also expects
EBITDA margins from Avantor's legacy businesses to improve over the
next year as a result of ongoing cost-saving and growth
initiatives. S&P continues to assess the company's business risk
profile as fair and financial risk profile as highly leveraged.
"Our assessment of Avantor's business risk profile as fair reflects
its successful implementation of cost-savings initiatives, which we
believe will continue to improve profitability. Our rating also
reflects our assessment of
the company's position in the fairly stable and resilient
biopharma, research and diagnostics end markets. The addition of
the NuSil business provides the company with exposure to the
recession-resistant specialty silicone market. NuSil has very
solid market positions in the niche markets in which it operates,
producing proprietary silicone raw material compounds primarily for
the health care and defense markets. We expect the company to
benefit from the continued trend in the U.S. toward silicone breast
implants, and away from saline-filled implants. We believe the
need to comply with government regulations in the research and
biopharma end markets provide a key barrier to entry. We also
believe growth prospects in the combined company's end markets are
favorable, particularly in biopharma in which long-term demographic
trends are boosting demand beyond GDP growth levels. We expect the
company to be able to continue to improve its EBITDA margins over
the next year, generating above-average profitability in the
specialty chemicals space. We view customer concentration and
potential integration related challenges as risk factors in the
company's business risk profile assessment," S&P said.
"Our assessment of Avantor's financial risk profile reflects the
increased leverage following the proposed dividend
recapitalization, as well as increases in leverage occurring in
2016 from a prior dividend recapitalization as well as the NuSil
merger. We view financial policies as very aggressive, given the
company's financial sponsor ownership and the two dividends it has
have announced in less than a year. Improving performance driven
by cost-savings and growth initiatives, decreased restructuring
costs, as well as the addition of the higher margin NuSil business
should allow the company to generate positive free cash flow and
improve the company's pro forma debt to EBITDA ratio below 6x on a
sustainable basis," S&P noted.
S&P considers Avantor's liquidity to be adequate. Under S&P's
base-case credit scenario, it expects sources to exceed uses by
more than 1.2x over the next 12 months.
Principal liquidity sources:
-- Approximately $40 million cash pro forma for the
recapitalization;
-- Full availability under the new $75 million revolving credit
facility; and
-- Cash Funds from operations of about $70 million-$80 million
in 2017, increasing by about $50 million in 2018.
Principal liquidity uses:
-- Annual debt amortization of about $14 million;
-- Roughly $25 million in capital spending annually; and
-- Modest working capital outflows.
The stable outlook reflects S&P's view that, despite increased
leverage from the proposed dividend recap, the company will
continue to generate moderate free cash flow that will enable the
company to reduce leverage over the next 12 months. This reflects
S&P's expectation for EBITDA growth from cost-saving and growth
initiatives, as well as the full run rate benefits from the NuSil
merger. S&P expects pro forma adjusted debt to EBITDA to remain
above 6x immediately following the transaction, before improving
and remaining between 5x and 6x on a sustainable basis.
S&P could lower the ratings within the next 12 months if sales to a
major customer dropped unexpectedly, or if a shift in technology
resulted in significantly lower sales of a product (or group of
products), without improvements in other areas to offset them. S&P
could also lower the ratings if the company faces integration
issues related to its merger with NuSil, resulting in unexpected
costs, depressing EBITDA for a prolonged period of time. In such a
scenario, S&P would expect the pro forma debt-to-EBITDA ratio to
remain above 7x on a sustained basis. S&P could also consider a
downgrade if liquidity diminished and covenant compliance became a
risk, or if the company increased debt leverage further to fund an
additional return to shareholders or growth investments.
S&P could raise the ratings within the next 12 months if the
company were to reduce debt significantly, resulting in pro forma
debt to EBITDA improving to below 5x on a sustainable basis. To
consider an upgrade, S&P would also expect the company's business
risk profile to remain what S&P considers fair and for the company
to maintain adequate liquidity. Prior to considering an upgrade,
S&P would need to gain comfort that the company would maintain
supportive financial policies, including a prudent approach to
funding growth initiatives and shareholder rewards while
maintaining debt to EBITDA below 5x.
AVANTOR PERFORMANCE: Moody's Assigns B2 Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service, downgraded the Corporate Family Rating
(CFR) of Avantor Performance Materials Holdings S.A.R.L to B2 from
B1 and the probability of default rating (PDR) to B2-PD from B1-PD;
these ratings will be withdrawn. Moody's assigned a B2 Corporate
Family Rating (CFR) and probability of default rating (PDR) of
B2-PD at Avantor, Inc., the new parent company. Moody's also
assigned a B1 rating to the new first lien senior secured TL and
Caa1 to the new second lien senior secured TL, all issued by
Avantor's subsidiary: Avantor Performance Materials Holdings, LLC.
The proceeds of the $1,425 million and $380 million new first and
second lien TLs, respectively, will be used to refinance the
existing first lien TL, pay a $439 distribution to shareholders and
pay associated fees and expenses. The outlook on the ratings is
stable.
"The company continues to execute well on its growth and
operational strategy. However, the planned $439 million
debt-financed dividend signals a break in financial policy and what
was expected to be an improving trend in leverage following the
last two dividends and until leverage recovered to the low 4x
range," according to Joseph Princiotta, VP- Senior Credit Officer
at Moody's. "This new dividend, which will increase adjusted
leverage to the mid 6x range, comes on the heels of the $702
million and $140 million dividends in the second half of 2016,"
Princiotta added.
Downgrades/Ratings to be WR:
Issuer: Avantor Performance Materials Holdings S.A.R.L.
-- Corporate Family Rating, Downgraded to B2 from B1
-- Probability of Default Rating, Downgraded to B2-PD from B1-PD
Assignments:
Issuer: Avantor Performance Materials Holdings, LLC
-- Gtd Senior Secured 1st Lien Revolving Credit Facility due 2022,
Assigned B1 (LGD3)
-- Gtd Senior Secured 1st Lien Term Loan due 2024, Assigned B1
(LGD3)
-- Gtd Senior Secured 2nd Lien Term Loan due 2025, Assigned Caa1
(LGD6)
Issuer: Avantor, Inc.
-- Corporate Family Rating, Assigned B2
-- Probability of Default Rating, Assigned B2-PD
Outlook Actions:
Issuer: Avantor Performance Materials Holdings S.A.R.L.
-- Outlook, Remains Stable
Issuer: Avantor Performance Materials Holdings, LLC
-- Outlook, Remains Stable
Issuer: Avantor, Inc.
-- Outlook, Assigned Stable
RATINGS RATIONALE
Avantor's B2 CFR reflects the stability and stickiness of the
company's branded and specialty revenue base, long-lived customer
relationships, strong P&L performance in recent quarters, a
relatively new and impressive management team, and the stability of
positive free cash flow generation. Avantor's products are often
specified into customer's processes at various stages of drug
product life cycles contributing to a certain 'stickiness' due to
costs and risks of changing suppliers after regulatory approvals.
The ratings also reflect the recent repositioning of Avantor's
manufacturing footprint, along with other cost and pricing actions
that have resulted in a significant increase in EBITDA margins
since new management team took the helm in mid-2014.
The most significant negative in the credit at this time is the
aggressive financial policies of the private equity owners, which
have increased debt and leverage substantially since the middle of
last year to pay three large dividends. Moody's estimates pro forma
adjusted leverage in the mid-6 times range (including Moody's
adjustments), compared to high-4 times at the time of the CFR
upgrade to B1 in September of last year. (Adjusted debt includes
standard adjustments for unfunded pensions of and capitalized rents
totaling approximately $40 million). Metrics give pro forma
annualized credit to certain actions by management, mainly the
optimization of the U.S. and European manufacturing footprint and
certain cost reduction and pricing actions recently implemented.
Moody's expects leverage to improve going forward, albeit at a
slower pace than in the past given the step up in debt that has
increased interest expense and reduced free cash flow. Moody's
believes leverage can improve, assuming management uses free cash
flow to reduce debt, but only by one turn to a turn-and-a-half by
next year. Moreover, the pace and timing of debt reduction is
uncertain as Moody's anticipates management may pursue bolt-on
acquisitions to build on or add to core strengths.
Other negative factors in the credit include the company's small
scale, limited segment diversification, and significant customer
concentration with large pharma companies and distributors.
However, this risk is mitigated by long term relationships and
ongoing attention to customer service excellence.
Moody's considers Avantor's liquidity position to be good with
expected cash on the balance sheet at close of $40 million. As
mentioned, free cash flow is expected to remain positive, and allow
for modest further debt reduction; the $75 million undrawn
revolving credit facility should cover ongoing cash needs,
including working capital and capital expenditures.
The stable outlook reflects Moody's expectation that metrics will
trend favorably as free cash flow is applied to debt reduction and
as operations benefit from organic growth and the likelihood that
ongoing actions by management further improve operations and
EBITDA. Moody's expects leverage, in the absence of bolt-on
acquisitions, to decline to the low-to-mid 5 times range in the
medium term.
Moody's is unlikely to upgrade the CFR as it is constrained at the
B2 level due to the aggressive financial policies and private
equity ownership, and the risk that future behavior mirrors the
recent past.
Moody's would change the outlook to negative or downgrade the CFR
if metrics fail to trend favorably over the next few quarters,
which could occur if the company were to make near term
acquisitions or if the current favorable trends in operations were
to reverse, which Moody's don't expect to happen. If leverage fails
to trend towards 5 times in the medium term, or if free cash flow
were to deteriorate to neutral or near neutral, Moody's would
consider a downgrade to the ratings.
The principal methodology used in these ratings was Global Chemical
Industry Rating Methodology published in December 2013.
Avantor's operational headquarters are located in Pennsylvania,
USA. The company has approximately 1,900 employees producing over
30,000 products across four broad product categories
(biopharmaceuticals, biomaterials, research and diagnostics, and
advanced technologies). In September 2016, the company completed a
merger with Nusil, a leader in specialty silicone materials used by
medical device manufacturers to produce implantable and
non-implantable medical devices. The combined company on a pro
forma basis has $690 million of sales.
BAUSMAN AND COMPANY: Taps Procopio Cory as Legal Counsel
--------------------------------------------------------
Bausman and Company Incorporated seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
legal counsel.
The Debtor proposes to hire Procopio, Cory, Hargreaves & Savitch
LLP to give legal advice regarding its duties under the Bankruptcy
Code, and provide other legal services related to its Chapter 11
case.
The hourly rates charged by the firm are:
William Smelko Attorney $525
Gerald Kennedy Attorney $525
Zagros Bassirian Attorney $350
Jessica DeCesare Paralegal $225
Procopio does not hold or represent any interest adverse to the
Debtor's bankruptcy estate, according to court filings.
The firm can be reached through:
William A. Smelko, Esq.
Zagros S. Bassirian, Esq.
Procopio, Cory, Hargreaves
& Savitch LLP
525 B Street, Suite 2200
San Diego, CA 92101
Tel: 619-238-1900
Fax: 619-235-0398
About Bausman and Company
Bausman and Company Incorporated, a furniture manufacturer in
California, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Calif. Case No. 17-10724) on January 30, 2017.
At the time of the filing, the Debtor estimated its assets and
debts at $1 million to $10 million.
BCPE EAGLE: Moody's Assigns B3 Corporate Family Rating
------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating to
BCPE Eagle Buyer LLC. Moody's also assigned a B3-PD Probability of
Default Rating, a B2 (LGD 3) rating to the company's first-lien
secured credit facilities, and a Caa2 (LGD 5) rating to its
second-lien secured term loan. The rating outlook is stable.
Proceeds of the bank credit facilities will be used to help finance
the merger of Epic Health Services and PSA Healthcare and the
related purchase of Epic by Bain Capital Private Equity
acquisition. Following the transaction, BCPE's equity owners will
include Bain and J.H. Whitney.
Ratings assigned:
Corporate Family Rating at B3
Probability of Default Rating at B3-PD
$75 million first-lien revolving credit facility expiring 2022 at
B2 (LGD 3)
$585 million first-lien term loan due 2024 at B2 (LGD 3)
$240 million second-lien term loan due 2025 at Caa2 (LGD 5)
RATINGS RATIONALE
The B3 Corporate Family Rating on BCPE Eagle Buyer LLC reflects the
company's very high financial leverage, its highly concentrated
payor mix with significant Medicaid exposure, and its relatively
limited geographic diversity. The company consists of the merger of
two home healthcare companies: Epic Health Services and PSA
Healthcare, doing business under the name "Newco." Moody's
estimates pro forma debt/EBITDA of over 7.0x including synergies.
Despite the critical nature of care provided to patients, including
children who require private duty nursing at home, NewCo has
exposure to state budgetary pressures, which will continue to focus
on healthcare spending. The state of Texas represent 40% of pro
forma revenue. Moody's expects Texas to remain one of the most
aggressive states with regard to cost reductions, recently
implementing $350 million in Medicaid cuts. The rating also
reflects Moody's belief that NewCo will continue to pursue an
aggressive growth strategy, including acquisitions, which will
limit debt repayment.
The rating benefits from NewCo's leading niche position in the
otherwise fragmented market of pediatric home health services and
favorable long-term industry growth prospects. The overall market
has solid growth prospects due to population trends, and its
service offerings will remain critical in nature.
The stable outlook reflects Moody's expectation that organic
revenue growth will remain solid and that acquisition synergies
will enhance earnings growth, but that financial leverage will
remain high.
Factors that could lead to an upgrade include: demonstration that
any adverse reimbursement changes will be manageable without a
major contraction in earnings or cash flow; increased payor and
geographic diversity; and debt/EBITDA sustained below 5.5 times.
Conversely, factors that could lead to a downgrade include:
significant reimbursement reductions or wage pressure; incurrence
of new debt prior to significant progress in integrating PSA and
deleveraging; a material deterioration in liquidity; or debt/EBITDA
sustained above 7.5x.
BCPE Eagle Buyer LLC was formed through the merger of pediatric
home healthcare companies Epic Health Services and PSA Healthcare.
The company is a leading provider of pediatric skilled nursing and
therapy services, as well as adult home health services, including
skilled nursing, therapy, personal care, behavioral health and
Autism. The company is majority-owned by the private equity firms
Bain Capital and J. H. Whitney.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
BCPE EAGLE: S&P Assigns 'B' CCR; Outlook Stable
-----------------------------------------------
S&P Global Ratings assigned its 'B' corporate credit rating to
pediatric home health provider BCPE Eagle Buyer LLC. The outlook
is stable.
Dallas-based pediatric home health provider Epic/Freedom LLC and
Atlanta-based Pediatric Services of America (PSA) are merging to
form BCPE Eagle. The combined company's pro forma capital
structure will include an $825 million senior secured credit
facility, consisting of a $75 million revolver (undrawn at
transaction close), a $585 million first-lien term loan, and a $240
million second-lien term loan. The company is owned by private
equity sponsors Bain Capital Private Equity and J.H. Whitney & Co.
S&P estimates adjusted debt to EBITDA will be 7x or the fiscal-year
ending 2017 (though that incorporates less than a full year of
PSA's EBITDA) and 6.2x for fiscal 2018. S&P will withdraw its 'B'
corporate credit rating on Epic/Freedom LLC once the transaction
closes.
At the same time, S&P assigned its 'B' issue-level rating to the
company's proposed $75 million revolving credit facility and
$585 million term loan. The recovery rating is '3', indicating
S&P's expectation for meaningful (50%-70%; rounded estimate 65%)
recovery in the event of a payment default.
S&P also assigned its 'CCC+' issue-level rating to the company's
proposed $240 million second-lien term loan. The recovery rating
is '6', indicating S&P's expectation for negligible (0%-10%;
rounded estimate 0%) recovery in the event of a payment default.
"The ratings on BCPE Eagle Buyer LLC reflect our assessment of its
business risk profile as weak and our expectation that debt
leverage will remain above 5x, commensurate with an assessment of a
highly leveraged financial risk profile," said S&P Global Ratings
credit analyst Elan Nat.
The company's business risk is characterized by its relatively
narrow focus on the pediatric home health market, its substantial
geographic and payor concentrations, and the highly fragmented
nature of the home-health industry. Conversely, it also reflects
the company's leading market share in several states.
BCPE Eagle has leading market positions in the Texas, Pennsylvania,
and New Jersey pediatric home health private-duty nursing markets.
However, this is offset by the company having 65% of revenues
derived from these three states, about 60% of total revenues
directly from Managed Medicaid reimbursement, and about 20% from
straight Medicaid. Each state runs its Medicaid program
independently, and the company negotiates its contracts with
managed Medicaid payors independently for each state. The exposure
to Medicaid reimbursement cuts from any one of the company's top
states could place material pressure on revenues. This happened
recently when Texas Medicaid cut its reimbursement for pediatric
therapy services, which included a 23% reduction in reimbursement
for speech therapy (from reimbursement levels that were materially
above average).
The stable outlook reflects S&P's expectations that the Medicaid
reimbursement environment for pediatric home-based nurse services
will remain stable, that the company will grow at a
low-single-digit percent organic growth rate supplemented by
acquisitions, and that it will generate modestly positive free cash
flow through 2017. However, S&P believes the company's debt
leverage will remain above 5x over the next two years given
financial sponsor ownership.
S&P could lower the rating over the next year if it anticipates
that a material cut to Medicaid reimbursement will result in a
meaningful contraction of EBITDA, resulting in negligible cash flow
generation. Such a scenario would involve a decline in EBITDA
margins of about 150 basis points (bps).
S&P could consider raising the rating if adjusted debt leverage
declines to below 4x and we are confident that it will remain at
that level. This could occur if the company reduced debt by
approximately 40%. However, given financial sponsor ownership, S&P
believes an upgrade is highly unlikely over the next 12 months.
BILTMORE 24: To Sell Housing Unit in Phoenix to Pay Creditors
-------------------------------------------------------------
Biltmore 24 Investors SPE, LLC, filed with the U.S. Bankruptcy
Court for the District of Arizona a disclosure statement in support
of the Chapter 11 reorganization dated February 2017.
The goal of the proposed Plan is to allow Debtor to realize a fair
market value for its property interest and to pay all allowed
claims, including claims of unsecured creditors and trade vendors
through a sale of all or a portion of its real property located on
the southwest corner of 24th Street and Highland Avenue in Phoenix,
Arizona, which consisted of a multifamily housing unit located on 8
acres of land.
Holders of allowed Class 5 – Unsecured Claims will receive
payment of their allowed claims upon the later of the closing date
of the sale or the Effective Date of the Plan. In the event that a
sale of Property is insufficient to pay all creditors, Class 5
Claims will be paid prorate from proceeds remaining after secured
claims and priority claims are paid in full. Class 5 is impaired
under the Plan.
All payments under the Plan which are due on and after the
Effective Date will be funded by the proceeds of the sale of the
Property or a portion of the Property sufficient to make all plan
payments.
Upon the Effective Date, all Assets of the Debtor will revest in
the Reorganized Debtor, free and clear of all liens, claims and
encumbrances other than as expressly provided for in the Plan. The
Reorganized Debtor will continue to run the Debtor's business in
the ordinary course after the Effective Date. After the Effective
Date, the Reorganized Debtor shall be further responsible for (a)
making all payments contemplated under the Plan, (b) making all
reporting and other filings as required by the U.S. Trustee, and
(c) closing the Chapter 11 case.
The Disclosure Statement is available at:
http://bankrupt.com/misc/azb16-13358-48.pdf
About Biltmore 24 Investors
Biltmore 24 Investors SPE, LLC, was formed for the purpose of real
estate acquisition and ownership. The Debtor is owned by Biltmore
24 Investors, LLC, and is managed by Bruce Gray.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Ariz. Case No. 16-13358) on Nov. 22, 2016. The
petition was signed by Bruce Gray, manager. The case is assigned
to Judge Paul Sala.
The Debtor hires Mesch Clark Rothschild as substitute counsel to
Stinson Leonard Street.
At the time of the filing, the Debtor estimated its assets at $50
million to $100 million and debts at $10 million to $50 million.
BOOK REVIEW: Competition, Regulation, and Rationing
---------------------------------------------------
Author: Greenberg, Warren
Publisher: Beard Group
Paperback: 188 pages
List Price: $34.95
Review by: Gail Hoelscher
Order a personal copy today at http://is.gd/3sdhDD
This book is fundamental reading for those involved directly in
health care as well as those interested and concerned about the
past, present and future of the health care industry in the United
States. Originally published in 1990, Warren Greenberg examined
the U.S. health care sector over the period 1960-1988 using
standard industrial organization economic analysis. He looked at
regulation and competition, antitrust elements, technology, and
rationing, as well as pricing behavior and advertising. Although
some experts claimed the health care industry to be unique and
outside the purview of such analysis, Dr. Greenberg demonstrated
that all industries differ in their own ways, but nonetheless can
be analyzed using these techniques.
Dr. Greenberg's first goal in writing this book was to educate the
layperson about the economics of the health care industry.
Economists have pointed out two major potential differences
between health care and other sectors of the economy: uncertainty
of demand and imperfect and imbalanced information on the part of
providers and consumers. Dr. Greenberg agrees with the first and
less so with the second. Obviously, the timing, extent and length
of future illness and the demand for medical services are
impossible to know. A good deal of the consumer's uncertainty is
smoothed over by health insurance. The uncertainty for insurance
companies in the sector is somewhat different than that for other
industries: while consumers commonly seek more health care than
they would if they were not covered, it is rare for someone to
burn down his own home just to collect the insurance. With regard
to the imbalance in information, physicians do indeed know more
about a particular illness and treatment than the average
potential patient, but Dr. Greenberg asks how that differs from
plumbing, law and accounting!
Dr. Greenberg identified and described the industries that make up
the health care sector: medical services, hospitals, insurance,
and long-term care. He explored market failures and imperfections
in each and detailed some of the measures government has taken to
correct these imperfections. For example, he described the efforts
of the federal government to force competition in the medical
services field and how barriers to entry imposed by physicians'
lobbies to limit the number of physicians in practice were lifted,
physicians were permitted to advertise, and restrictions on the
services of nonphysicians were eased. He recounted efforts to
require hospitals to disclose information on mortality rates,
infections, and medical complications.
Dr. Greenberg's second goal in writing the book was to consider
policy options. Although he claims skepticism of regulation (after
working for the federal government), he believes that ongoing
efforts to devise a more efficient and equitable health care
system will require more competition, regulation, and rationing.
He examined the Canadian, British and Dutch systems, so
fascinating and different from ours, and found the Dutch system
the least regulatory and most equitable.
This book is a primer on the health care industry. Dr. Greenberg
explains economic terms in a straightforward and clear way without
condescension and takes the reader way beyond Economics 101.
Although the sector has changed significantly since this book was
published, Dr. Greenberg's analysis of the past offers valuable
insight into why our system evolved the way it did and what
direction it might take in future.
BURGI ENGINEERS: Court Extends Exclusivity Period by 60 Days
------------------------------------------------------------
Judge Jim D. Pappas of the U.S. Bankruptcy Court for the District
of Montana extended Burgi Engineers, LLC and Burgi Corporation's
exclusive periods for filing their plans of reorganization and
soliciting acceptances to their plans by 60 days.
The Troubled Company Reporter had earlier reported that the Debtor
asked for 60-day extension of their exclusive periods considering
that the hearings on the Disclosure Statement and confirmation of
the Plans of Reorganization were scheduled separately.
The Debtors related that they filed their individual Chapter 11
Plans of Reorganization, as well as a Joint Disclosure Statement
pursuant to the procedures applicable to small business Chapter 11
cases. Pursuant to the procedures applicable to small business
chapter 11 cases, the hearings on the Disclosure Statement and
confirmation of the Plan of Reorganization are generally scheduled
on the same date.
However, the Debtor further related that the Court had scheduled a
hearing on March 9, 2017 for the Disclosure Statement only. The
Debtor contended that the Court's Order and Notice of Hearing on
Disclosure Statement reflected a procedure that is not a small
business case.
About Burgi Engineers, LLC
Burgi Corporation, based in Columbia Falls, Montana, filed a
Chapter 11 petition (Bankr. D. Mont. Case No. 16-60771) on July 28,
2016. In its petition, the Debtor estimated $532,282 in assets and
$1.08 million in liabilities. The petition was signed by Robert
Burgi, president. The Hon. Ralph B. Kirscher presides over the
case. Maggie W Stein, Esq., at Goodrich & Reely, PLLC, serves as
bankruptcy counsel.
No official committee of unsecured creditors has been appointed in
the case.
CADIZ INC: Nokomis Capital Holds 9.9% of Shares as of Dec. 31
-------------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Nokomis Capital, L.L.C. and Brett Hendrickson jointly
disclosed that as of Dec. 31, 2016, they are the beneficial owners
of 2,303,400 shares of common stock of Cadiz Inc., representing
9.9% of Cadiz's outstanding common shares.
This Amendment relates to common stock of Cadiz purchased by
Nokomis Capital through the accounts of certain private funds and
managed accounts. Nokomis Capital serves as the investment adviser
to the Nokomis Accounts and may direct the vote and dispose of the
2,303,400 shares of Common Stock held by the Nokomis Accounts. As
the principal of Nokomis Capital, Mr. Hendrickson may direct the
vote and disposition of the 2,303,400 shares of Common Stock held
by the Nokomis Accounts.
A full-text copy of the regulatory filing is available at:
https://is.gd/ELRwYy
About Cadiz
Cadiz Inc. is a land and water resource development company with
45,000 acres of land in three areas of eastern San Bernardino
County, California. Virtually all of this land is underlain by
high-quality, naturally recharging groundwater resources, and is
situated in proximity to the Colorado River and the Colorado River
Aqueduct, a major source of imported water for Southern California.
The Company's properties are suitable for various uses, including
large-scale agricultural development, groundwater storage and water
supply projects. The Company's main objective is to realize the
highest and best use of its land and water resources in an
environmentally responsible way.
Cadiz Inc. reported a net loss and comprehensive loss of $24.01
million in 2015, a net loss and comprehensive loss of $18.88
million in 2014 and a net loss and comprehensive loss of $22.67
million in 2013.
As of Sept. 30, 2016, Cadiz Inc. had $59.01 million in total
assets, $129.24 million in total liabilities and a total
stockholders' deficit of $70.22 million.
CAESARS ENTERTAINMENT: Enters Into Financing Agreements
-------------------------------------------------------
Caesars Entertainment Corporation and Caesars Entertainment
Operating Company, Inc. ("CEOC") and its Chapter 11 debtor
subsidiaries on Feb. 21, 2017, disclosed that CEOC has entered into
committed financing agreements for proposed new senior secured
credit facilities, comprising up to $1,235 million in the aggregate
principal amount of a seven-year senior secured term loan facility
(the "Term Facility") and up to $200 million in the aggregate
principal amount of a five-year senior secured revolving credit
facility (together with the Term Facility, the "Senior
Facilities").
The receipt of this financing commitment is an important milestone
toward the resolution of CEOC's restructuring. CEOC's plan of
reorganization was confirmed by the Bankruptcy Court in January.
Caesars Entertainment and Caesars Acquisition Company separately on
Feb. 21 disclosed that they have amended the terms of their
previously announced merger, another important milestone in the
restructuring process.
Credit Suisse will serve as sole administrative agent and Credit
Suisse and Deutsche Bank Securities Inc. will serve as joint lead
arrangers for the Senior Facilities.
The proceeds from the Term Facility will be used to finance
transactions in accordance with the Debtors' plan of
reorganization, including to repay existing indebtedness and to pay
related fees and expenses.
The closing of the Senior Facilities is subject to the negotiation
and execution of definitive documentation, receipt of regulatory
approvals and satisfaction of customary closing conditions.
About Caesars Entertainment
Caesars Entertainment Corp., formerly Harrah's Entertainment Inc.,
is one of the world's largest casino companies. Caesars casino
resorts operate under the Caesars, Bally's, Flamingo, Grand
Casinos, Hilton and Paris brand names. The Company has its
corporate headquarters in Las Vegas. Harrah's announced its
re-branding to Caesar's in mid-November 2010.
In January 2015, Caesars Entertainment and subsidiary Caesars
Entertainment Operating Company, Inc., announced that holders of
more than 60% of claims in respect of CEOC's 11.25% senior secured
notes due 2017, CEOC's 8.5% senior secured notes due 2020 and
CEOC's 9% senior secured notes due 2020 have signed the Amended and
Restated Restructuring Support and Forbearance Agreement, dated as
of Dec. 31, 2014, among Caesars Entertainment, CEOC and the
Consenting Creditors. As a result, The RSA became effective
pursuant to its terms as of Jan. 9, 2015.
Appaloosa Investment Limited, et al., owed $41 million on account
of 10% second lien notes in the company, filed an involuntary
Chapter 11 bankruptcy petition against CEOC (Bankr. D. Del. Case
No. 15-10047) on Jan. 12, 2015. The bondholders are represented by
Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP.
CEOC and 172 other affiliates -- operators of 38 gaming and resort
properties in 14 U.S. states and 5 countries -- filed Chapter 11
bankruptcy petitions (Bank. N.D. Ill. Lead Case No. 15-01145) on
Jan. 15, 2015. CEOC disclosed total assets of $12.3 billion and
total debt of $19.8 billion as of Sept. 30, 2014.
Delaware Bankruptcy Judge Kevin Gross entered a ruling that the
bankruptcy proceedings will proceed in the U.S. Bankruptcy Court
for the Northern District of Illinois.
Kirkland & Ellis serves as the Debtors' counsel. AlixPartners is
the Debtors' restructuring advisors. Prime Clerk LLC acts as the
Debtors' notice and claims agent. Judge Benjamin Goldgar presides
over the cases.
The U.S. Trustee has appointed an official committee of second
priority noteholders and an official unsecured creditors'
committee.
The U.S. Trustee appointed Richard S. Davis as Chapter 11 examiner.
The examiner retained Winston & Strawn LLP, as his counsel;
Alvarez & Marsal Global Forensic and Dispute Services, LLC, as
financial advisor; and Luskin, Stern & Eisler LLP, as special
conflicts counsel.
* * *
On Jan. 17, 2017, the U.S. Bankruptcy Court for the Northern
District of Illinois confirmed the Third Amended Joint Plan of
Reorganization of Caesars Entertainment Operating Company, Inc. and
its affiliated debtors.
CAMBER ENERGY: Owns 90% Working Interest in the Permian Basin
-------------------------------------------------------------
Camber Energy, Inc., an independent oil and gas company with
operations in Texas and Oklahoma, announced on Feb. 7, 2017, that
it has completed the previously-announced acquisition of a
leasehold position in the Permian Basin in Texas.
In December 2016, Camber Energy formed an area of mutual interest
with a privately-held, Houston, Texas-based oil and gas holding
company in the Central Basin Platform of the Permian Basin,
targeting approximately twenty thousand (20,000) net mineral acres
for acquisition. The initial leasehold is comprised of 16,322
gross, or 3,630 net, mineral acres. With this transaction, Camber
now owns a 90% working interest in the properties and the ability
to access to the Partner's regional, technical database, including
its core sample and log libraries. The Company paid $1.43 million
for the initial leasehold and will have operation control of the
properties.
"We are pleased to have finalized this transaction for our Company,
which solidifies our entry into the prolific Permian Basin in a way
that is technically consistent with our internal competencies,"
said Anthony C. Schnur, Chief Executive Officer of Camber Energy.
"This transaction positions Camber Energy for a high-growth
trajectory, following the prolonged industry downturn. We remain
committed to building shareholder value through field
re-development, exploitation, drilling and strategic asset
acquisitions." A full-text copy of the Form 10-Q is available for
free at: https://is.gd/SalvXk
About Camber Energy, Inc.
Based in Houston, Texas, Camber Energy (NYSE MKT: CEI) is a
growth-oriented, independent oil and gas company engaged in the
development of crude oil and natural gas in the Austin Chalk and
Eagle Ford formations in south Texas, the Permian Basin in west
Texas, and the Hunton formation in central Oklahoma.
Lucas Energy changed its name to Camber Energy, Inc., effective
Jan. 5, 2017, to more accurately reflect the Company's strategic
shift from its Austin Chalk and Eagleford roots to an expanding
addition of shallow oil and gas reserves with longer-lived,
lower-risk production profiles.
Lucas Energy reported a net loss of $25.4 million for the year
ended March 31, 2016, compared to a net loss of $5.12 million for
the year ended March 31, 2015.
As of Sept. 30, 2016, Lucas Energy had $71.32 million in total
assets, $53.58 million in total liabilities and $17.74 million in
total stockholders' equity.
Hein & Associates LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the year
ended March 31, 2016, citing that the Company has incurred
significant losses from operations and had a working capital
deficit of $9.6 million at March 31, 2015. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
COLONIAL BANCGROUP: Court OKs Split of Trials Against Crowe, PwC
----------------------------------------------------------------
Martin O'Sullivan, writing for Bankruptcy Law360, reports that U.S.
District Judge Barbara J. Rothstein agreed on Feb. 17, 2017, to
split trials for claims by the Federal Deposit Insurance Corp.
accusing Crowe Horwath LLP and PricewaterhouseCoopers LLP of
negligence for failing to catch a $1.8 billion a mortgage fraud
scheme perpetrated by Taylor Bean & Whitaker Mortgage Corp. and
which involved Colonial BancGroup Inc.
Taylor Bean & Whitaker Mortgage Corp. is Colonial BancGroup's
largest client, Law360 states.
About The Colonial BancGroup
Headquartered in Montgomery, Alabama, The Colonial BancGroup,
Inc., (NYSE: CNB) owned Colonial Bank, N.A., its banking
subsidiary. Colonial Bank -- http://www.colonialbank.com/--
operated 354 branches in Florida, Alabama, Georgia, Nevada and
Texas with over $26 billion in assets. On Aug. 14, 2009, Colonial
Bank was seized by regulators and the Federal Deposit Insurance
Corporation was named receiver. The FDIC sold most of the assets
to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T
acquired $22 billion in assets and assumed $20 billion in deposits
of the Bank.
The Colonial BancGroup filed for Chapter 11 bankruptcy protection
(Bankr. M.D. Ala. Case No. 09-32303) on Aug. 25, 2009. W. Clark
Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV,
Esq., at Parker Hudson Rainer & Dobbs LLP, serve as counsel to the
Debtor. The Debtor disclosed $45 million in total assets and $380
million in total liabilities as of the Petition Date.
In September 2009, an Official Committee of Unsecured Creditors
was formed consisting of three members, Fine Geddie & Associates,
The Bank of New York Trust Company, N.A., and U.S. Bank National
Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve
as co-counsel for the Committee.
Colonial Brokerage, a wholly owned subsidiary of Colonial
BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy
Court in the Middle District of Alabama in June 2010. Susan S.
DePaola serves as Chapter 7 trustee.
COMPACTION UNLIMITED: Taps Durand & Associates as Legal Counsel
---------------------------------------------------------------
Compaction Unlimited, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Texas to hire legal counsel in
connection with its Chapter 11 case.
The Debtor proposes to hire Durand & Associates, PC to give legal
advice regarding its duties under the Bankruptcy Code, prepare a
bankruptcy plan, and provide other legal services.
Daniel Durand, III, Esq., the attorney designated to represent the
Debtor, will be paid an hourly rate of $300.
Mr. Durand does not hold or represent any interest adverse to the
Debtor's bankruptcy estate, according to court filings.
Durand & Associates can be reached through:
Daniel C. Durand, III, Esq.
Durand & Associates, PC
522 Edmonds Lane, Suite 101
Lewisville, TX 75067
Tel: 972-221-5655
Fax: 972-221-9569
Email: durand@durandlaw.com
Email: stephanie@durandlaw.com
About Compaction Unlimited
Compaction Unlimited, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E. D. Texas Case No. 17-40314) on February
16, 2017.
The Debtor had previously filed a Chapter 11 petition (Case No.
16-40928) in the same court. The petition was filed on May 24,
2016. The Debtor was represented by Durand & Associates, PC.
CONTURA ENERGY: Moody's Assigns (P)B2 Corp. Family Rating
----------------------------------------------------------
Moody's Investors Service, assigned first-time provisional ratings
to Contura Energy, Inc., including corporate family rating (CFR) of
(P) B2, and a rating on secured term loan of (P) B2. The outlook is
stable.
In July 2016, Contura completed the acquisition of certain core
coal assets from Alpha Natural Resources in connection with Alpha's
restructuring. Formed by a group of Alpha's first lien lenders,
Contura was created to acquire and operate Alpha Natural Resources'
core operations in Northern Appalachia (including the Cumberland
mine complex), all of Alpha's operations in the Powder River Basin
and certain assets in Central Appalachia (the Nicholas mine complex
in Nicholas County, West Virginia, and the McClure and Toms Creek
mine complexes in Dickenson and Wise Counties, Virginia). Contura
also purchased Alpha's 41% interest in the Dominion Terminal
Associates coal export terminal in eastern Virginia.
The proceeds of the $400 million offering are expected to refinance
Contura's existing long-term debt, liabilities and for general
corporate purposes.
The ratings are assigned on provisional basis, pending receipt and
review of the audited financial information for the period from the
company's inception to December 31, 2016.
Issuer: Contura Energy, Inc.
Assignments:
-- Corporate Family Rating, Assigned (P)B2
-- Senior Secured Bank Credit Facility, Assigned (P)B2 (LGD3)
Outlook Actions:
-- Outlook, Assigned Stable
RATINGS RATIONALE
The ratings reflect the company's position as one of the most
diversified coal producers in the United States with operations in
Central Appalachia, Northern Appalachia and the Powder River Basin.
In total, Contura has a reserve base of approximately 1.3 billion
tonnes of proven and probably coal reserves. Contura's operations
in Central Appalachia provide a variety of high quality
metallurgical coal products, destined for domestic and foreign
steel producers. Cumberland, in Northern Appalachia, is a low cost,
high efficient, long-wall operation with 548 million tonnes of
proven and probable coal reserves. The complex produces over 7
million tonnes per year of high quality Pittsburgh 8 seam coal
delivered to domestic and foreign steel producers and utilities
with transportation optionality through river and/or dual rail
access. The company's mines in Wyoming are two large surface mines,
producing over 30 million tons per year of low-sulphur PRB coal,
with approximately 640 million tons of proven and probable
reserves. Additionally, Contura operates a trading and logistics
business which typically purchases coal from various third-party
producers destined for the export market.
The ratings reflect the company's fairly low leverage
post-formation, with $400 million in debt implying Debt/EBITDA
ratio of roughly 1.5x in 2017, based on Moody's expectations and
assuming average metallurgical coal benchmark settlements of $175
per tonne. The ratings further reflect, however, potential
volatility in margin and increase in leverage should coal prices
retreat to the low levels observed in 2015 and 2016.
The (P)B2 rating on the term loan, in line with the CFR, reflects
the preponderance of secured debt in the capital structure.
The company has adequate liquidity, including a cash balance of
roughly $128 million as of December 2016. The company will not have
a revolving credit facility and is expected not to have any
financial covenants on the term loan. Moody's expects positive free
cash flows over the next twelve months at current prices. Moody's
note, however, that free cash flows could turn negative at some of
the pricing levels observed over the past two years while the
industry was in distress.
The stable outlook reflects Moody's expectations of positive free
cash flows and solid contracted position.
The ratings could be upgraded if the rate of secular decline in the
US thermal coal industry were to slow or reverse, and if
metallurgical coal markets were to show more stability and
predictability. The ratings could also be upgraded in the event of
material growth in scale and diversity.
The ratings could be downgraded if Debt/EBITDA, as adjusted, were
to increase above 5x, if free cash flows were to turn negative, or
if liquidity were to deteriorate.
Formed by a group of Alpha's first lien lenders, Contura was
created to acquire and operate selected Alpha Natural Resources'
assets including its core operations in Northern Appalachia
(including the Cumberland mine complex), all of Alpha's operations
in the Powder River Basin and certain assets in Central Appalachia
(the Nicholas mine complex in Nicholas County, West Virginia, and
the McClure and Toms Creek mine complexes in Dickenson and Wise
Counties, Virginia). Contura also purchased Alpha's 41% interest in
the Dominion Terminal Associates coal export terminal in eastern
Virginia. For the period from its inception in July 2016 to the end
of 2016, Contura generated $690 million in revenues.
The principal methodology used in these ratings was Global Mining
Industry published in August 2014.
CORECIVIC INC: Fitch Affirms IDR at BB+; Outlook Stable
-------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' Long-Term Issuer Default
Rating (IDR) assigned to CoreCivic, Inc. (NYSE: CXW). The Rating
Outlook is Stable and all the ratings have been removed from
Negative Watch.
KEY RATING DRIVERS
Fitch's rating action reflects the U.S. Immigration and Customs
Enforcement's (ICE) reaffirmation of its reliance on private
detention facilities and CXW renewing or signing new contracts with
all three federal detention/correction bodies since the August 2016
Department of Justice recommendation to reduce future reliance on
privately-operated prisons.
Fitch's affirmation further incorporates CXW's good credit metrics
offset by steadily declining occupancy rates. CXW's revenues remain
highly reliant on short term three- to five-year contracts with
federal and state government entities that have the ability to
dissolve agreements with the company at any time without cause,
with funding often dependent on annual budget approvals.
GOOD FINANCIAL METRICS
CXW has leverage which is low relative to Fitch's rated U.S. REIT
universe, but in-line with broader corporates at the same rating
level. Leverage was 3.3x for the year-ended Dec. 31, 2016 but Fitch
expects it to rise through 2017 as the full impact of the South
Texas Family Residential Center (STFRC) renegotiated contract is
realized. Fitch expects CXW's leverage to remain in the low- to
mid-3x through 2019 as the reduction of inmate populations due to
California's Proposition 57 is largely offset by additional
contracts at the state level and with ICE.
CXW has a high level of fixed-charge coverage. Coverage was 6.8x
for the year-ended Dec. 31, 2016 versus 7.7x and 8.3x in 2015 and
2014, respectively. This metric is also amongst the strongest in
Fitch's rated U.S. REIT universe and well above-average compared to
broader corporate credits at the same rating level. Coverage has
remained strong in recent years despite additional unsecured bond
issuances as a result of refinancing debt at lower costs and Fitch
projects that coverage will remain strong through the rating
horizon.
FALLING OCCUPANCIES; MARGINS STABILIZE
Average compensated occupancy has declined every year since 2007
and was 78.8% in 2016. While CXW desires a certain level of vacancy
in order to meet demand, occupancy has remained well below its
target range of available beds. CXW has lost multiple contracts in
the last several years, some by choice, and has been unable to
recoup the occupancy losses. Despite declining occupancies,
revenues have rebounded as a result of expanded ICE operations,
particularly at the STFRC. ICE activity could produce occupancy
gains for CXW in the near-term but longer-term trends are shifting
away from imprisonment of non-violent offenders and toward
rehabilitation and re-entry for minor drug offenses and other
misdemeanors.
Fitch expects margins to decline due to the late-2016 renegotiation
of the STFRC contract. Margins had been trending lower in recent
years but levelled off during 2016 at 28% for all facilities.
SOLID COMPETITIVE POSITION
Public prisons are generally overcrowded and the supply of new
public prisons has been modest over the past five years. The cost
for states to build or repair facilities remains significantly
higher than those of the private operators. The private sector
accounts for approximately 10% of the U.S. prison market. CXW is
the market leader with 42% market share of all private prison beds
and CXW's largest competitor, The GEO Group (GEO), controls 37% of
private prison beds.
Relatively high barriers of entry exist for other potential
competitors which has essentially formed a duopoly for private
prison contracts. Despite slight declines in federal prison
populations in three consecutive years for the first time in over
40 years, U.S. private correctional facilities will likely continue
to be a necessary part of the system while federal bodies like ICE
and the US Marshals operate little to none of their own
facilities.
RELATIVELY STABLE CONTRACTUAL INCOME
CXW enters into contracts with federal agencies as well as state
and local governments. These customers typically guarantee
contracts either at a per-inmate-per-day ("per diem") rate or
utilize a "take or pay" arrangement which guarantees minimum
occupancy levels. Contracts with these government authorities are
generally for 3-5 years with multiple renewal terms, but can be
terminated at any time with or without cause. Terms are typically
exposed to legislative bi-annual or annual appropriation of funds
process. Since contracts are subject to appropriation of funds,
strained budget situations at federal, state, and local levels
could pressure negotiated rates.
The company received multiple requests for assistance with
contracts from its government customers throughout the financial
downturn. CXW was able to adjust cost and/or service items in
contracts to compensate for reduced revenue levels such that the
contracted profit and margins did not deteriorate. As a result, the
company had strong relative financial performance through the
recent recession. Despite several contract losses in recent years,
the historical renewal rate at owned and managed facilities is
above 90%.
LIMITED REAL ESTATE VALUE
CXW's real estate holdings provide limited credit support. There
are limited to no alternative uses of prisons and the properties
are often in rural areas. The company has never obtained a mortgage
on any of its owned properties, exhibiting a lack of contingent
liquidity. However, the facilities do provide essential
governmental services, so there is inherent value in the
properties. Additionally, prisons have a long depreciable life of
50 years with a practical useful life of approximately 75 years.
CXW has a young owned portfolio with a median age of approximately
18 years.
LIMITED SECURED DEBT MARKET
The secured debt market for prisons remains undeveloped and is
unlikely to become as deep as that for other commercial real estate
asset classes, weakening the contingent liquidity provided by CXW's
entirely unencumbered asset pool. Fitch would view increased
institutional interest in secured lending for prisons throughout
business cycles as a positive credit characteristic. Fitch expects
that the company will retain strong access to capital through the
bank, bond and equity markets.
TENANT CONCENTRATION GROWING
CXW's customer base is highly credit worthy, but concentrated as
evidenced by the top 10 tenants accounting for 86% of total
revenues in 2016. The company's top three tenants are large federal
correctional and detention authorities, which collectively made up
52% of revenues during the year. ICE accounted for 28%, more than
doubling their 13% revenue contribution in 2014 due primarily to
the STFRC and elevated detention of undocumented individuals in the
last year. The United States Marshals accounted for 15% of revenue,
and the Bureau of Prisons accounted for 9% of revenue. California,
Tennessee, and Georgia are the three largest state customers and
together account for 21% of 2016 revenue.
CONSERVATIVE FINANCIAL POLICIES
CXW demonstrated willingness to protect its liquidity profile from
an unsustainable payout ratio by reducing its quarterly dividend
payment to 42 cents/share from 54 cents/share following the
renegotiation of its STFRC contract. The company generated AFFO of
$304 million in 2016 and reduced the dividend in order to target an
approximate 80% AFFO payout ratio. Excess cash flow supports prison
construction, debt reduction and other corporate activities.
Management has stated a leverage target of approximately 3x, with a
cap at 4x.
STRONG LIQUIDITY PROFILE
CXW's liquidity coverage is strong. CXW benefits from having just
$20 million in debt maturity payments related to its incremental
term loan through 2018, and manageable development and maintenance
and technology capital expenditures.
SECURED CREDIT FACILITY AND TERM LOAN NOTCHING
Fitch affirmed the secured credit facility and incremental secured
term loan at 'BBB-'/RR1, one notch above the IDR. The secured
credit facility and term loan are effectively senior to the
unsecured bonds. CXW's accounts receivables are pledged as
collateral and were $230 million at Dec. 31, 2016. Equity in the
company's domestic operating subsidiaries and 65% of international
subsidiaries are also pledged as collateral. The long-term fixed
assets are not pledged.
The RR1 for CXW's secured credit facility supports a rating of
'BBB-', one notch above the IDR, and reflects outstanding recovery
prospects. The RR4 for CXW's senior unsecured debt supports a
rating of 'BB+', identical to the company's IDR, and reflects
average recovery prospects in a distressed scenario.
KEY ASSUMPTIONS
Fitch's key assumptions within the agency's rating case for the
issuer include:
-- Revenues and margins deteriorate in 2017 due to full year
impact of STFRC renegotiated contract. Modest single-digit revenue
growth follows in 2018 and 2019 as revenue from contract gains
slightly outpaces losses;
-- $60 million in maintenance and technology capex in 2017, and
$55 million in both 2018 and 2019;
-- Acquisitions of $25 million in 2017, and $35 million in both
2018 and 2019;
-- Common dividends of $200 million, $205 million, and $210
million in 2017 - 2019, respectively;
-- No debt or equity issued through the forecast period.
RATING SENSITIVITIES
Although positive rating momentum is unlikely in the near- to
medium-term, considerations for an investment grade IDR include:
-- Increased privatization of the correctional facilities
industry;
-- An acceleration of market share gains and/or contract wins;
-- Adherence to more conservative financial policies (2x leverage
target; 4x minimum fixed charge coverage);
-- Increased mortgage lending activity in the private prison
sector.
Considerations for downward pressure on the IDR/Outlook include:
-- Fitch's projection of leverage sustaining above 3.5x coupled
with continued fundamental business headwinds. Should operating
fundamentals improve, indicating current operating weakness is more
cyclical than secular in nature, leverage sustaining above 4.0x
would be considered for downward pressure on the IDR or Outlook;
-- Increased pressure on per diem rates from customers;
-- Decreasing market share or profitable contract losses;
-- Material political decisions negatively affecting the long-term
dynamics of the private correctional facilities industry;
-- A holistic change in the Federal government's sentiment towards
privately operated prisons.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings:
CoreCivic, Inc.
-- IDR at 'BB+';
-- Secured revolving credit facility at 'BBB-'/RR1;
-- Secured term loan at 'BBB-'/RR1;
-- Senior unsecured notes at 'BB+'/RR4.
CREW ENERGY: S&P Assigns 'B' Rating on Proposed Sr. Notes
---------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating to Crew
Energy Inc.'s proposed new senior unsecured notes due 2024. At the
same time, S&P Global Ratings raised its issue-level rating on
Crew's existing senior unsecured debt due 2020 to 'B' from 'B-' and
revised its recovery rating on the debt to '3' from '5'.
S&P's 'B' long-term corporate credit rating on the company is
unchanged. The outlook is stable.
"The upgrade reflects our view that Crew's senior unsecured
noteholders can expect meaningful recovery in our hypothetical
default scenario," said S&P Global Ratings credit analyst Wendell
Sacramoni. The recovery rating revision reflects S&P's use of a
reserve multiple-based approach to derive an estimated distressed
value for the company based on its reserves as of Dec. 31, 2016.
Crew has announced the issuance of new senior unsecured notes due
2024 to prepay its C$150 million senior unsecured notes outstanding
and pay down the amount drawn under its revolving credit facility.
S&P is incorporating the new issuance and use of proceeds as well
as the recently announced 2016 proved reserves into our recovery
analysis.
DIGIPATH INC.: Incurs Losses of $10 Million as of Dec. 31
---------------------------------------------------------
In its quarterly report on Form 10-Q filed with the Securities and
Exchange Commission, Digipath, Inc., discloses that it has incurred
recurring losses from operations resulting in an accumulated
deficit of ($10,557,691), and as of Dec. 31, 2016, the Company's
cash on hand may not be sufficient to sustain operations. These
factors raise substantial doubt about the Company's ability to
continue as a going concern. Management is actively pursuing new
customers to increase revenues. In addition, the Company is
currently seeking additional sources of capital to fund short term
operations. Management believes these factors will contribute
toward achieving profitability.
Aggregate revenues for the three months ended Dec. 31, 2016 were
$409,751, compared to revenues of $102,136 during the three months
ended Dec. 31, 2015, an increase of $307,615, or 301%.
Cost of sales for the three months ended Dec. 31, 2016 were
$104,602, compared to $69,992 during the three months ended Dec.
31, 2015, an increase of $34,610, or 49%. Cost of sales consists
primarily of labor and supplies consumed in our testing operations.
Their operating loss for the three months ended Dec. 31, 2016 was
$282,660, compared to $827,243 during the three months ended Dec.
31, 2015, a decrease of $544,583, or 66%. Their operating loss
decreased primarily due to increased revenues, decreased legal fees
and decreased bad debts during the three months ended Dec. 31,
2016, compared to the three months ended Dec. 31, 2015.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/9TYX8i
About DigiPath
Incorporated in Nevada on Oct. 5, 2010, DigiPath Inc. and its
subsidiaries support the cannabis industry's best practices for
reliable testing, cannabis education and training, and brings
unbiased cannabis news coverage to the cannabis industry.
Digipath reported a net loss of $3.69 million on $818,583 of
revenues for the year ended Sept. 30, 2016, compared to a net loss
of $4.33 million on $16,084 of revenues for the year ended Sept.
30, 2015.
Anton & Chia, LLP, in Newport Beach, CA, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Sept. 30, 2016, citing that the Company has recurring losses
and insufficient working capital, which raises substantial doubt
about its ability to continue as a going concern.
EIDOLON BRANDS: Has Final OK to $1.4 Mil-DIP Loan, Access to Cash
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
authorized Eidolon Brands, LLC and Ben Hogan Golf Equipment
Company, LLC, to obtain postpetition financing from ExWorks Capital
Fund I, L.P.
ExWorks Capital agreed to provide the Debtors with the
Post-Petition Loan in the amount up to $1,374,000 less the amount
of the cash held by the Debtors at the time of filing, all to be
funded or used according to the approved Budget. The Post-Petition
Loan will accrue interest at a fixed rate of 4.75% and 6.75% upon
the occurrence of an Event of Default.
The Court also authorized the Debtors to use the Post-Petition Loan
and cash collateral solely to fund the expenses provided in the
approved Budget. The approved budget reflects total operating
expenses of approximately $846,645 covering the period from Feb. 3,
2017 through June 2, 2017. To the extent Debtors receive or
generate cash collateral in excess of the amounts needed to fund
the Budget, the excess must be used to repay the Debtors'
Pre-Petition Obligations or the PostPetition Loan.
The Debtors are indebted to ExWorks Capital in the approximate
amount of $2,362,327 as of the Petition Date, secured by a first
priority security interest in all of the Debtors' existing and
after-acquired assets and their proceeds.
The Post-Petition Obligations are granted super-priority
administrative expense status, with priority over all costs and
expenses of administration of the Chapter 11 Cases, subject to the
Carve-Out. To secure advances under the Post-Petition Loan,
ExWorks Capital is granted a perfected lien on, and security
interest in, all property of the Debtors' estates.
ExWorks Capital is also granted replacement liens and security
interests in and liens upon all post-petition collateral to the
same extent, validity, and priority as the security interests held
by ExWorks Capital in the prepetition collateral as of the Petition
Date, subject to the Carve-Out.
The Court established a carve-out for the U.S. Trustee fees and
professionals fees and expenses in the amounts provided for in the
Budget in an amount not to exceed $25,000 in the aggregate,
however, $15,000 of the carve out may be used to investigate
ExWorks Capital's claimed security interest and perfection.
The Post-Petition Loan will be due on the earliest of:
(a) June 1, 2017;
(b) the effective date of any confirmed plan of
reorganization or liquidation; or
(b) the occurrence of any of these Event of Default:
(i) The Debtors materially breach any of the terms
and conditions or covenants of the DIP Order;
(ii) If the Debtors' Chapter 11 Case is converted to
a case under Chapter 7 of the Bankruptcy Code;
(iii) If a Chapter 11 trustee is appointed;
(iv) If any modification is made to the DIP Order
which materially affects ExWorks Capital's rights or remedies
without the ExWorks Capital's consent;
(v) If the Debtors obtain confirmation of a plan of
reorganization or liquidation on terms which alter the terms of the
DIP Order in any manner not acceptable to ExWorks Capital or do not
provide for payment in full of all PostPetition Obligations on the
effective date of the plan; or
(vi) Excluding the Existing Liens, if any third
party is granted a lien or security interest in any of the
Collateral without ExWorks Capital's prior written consent.
A full-text copy of the Final Order, dated Feb. 16, 2017, is
available at
https://is.gd/OEylJH
A copy of the Debtor's Budget is available at https://is.gd/Ac7GPo
About Eidolon Brands, LLC
Eidolon Brands, LLC, and Ben Hogan Golf Equipment Company, LLC,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
N.D. Tex. Case Nos. 17-40300 and 17-40301) on Jan. 28, 2017. The
cases are jointly administered under (Bankr. N.D. Tex. Case No.
17-40300). The petitions were signed by Scott White, chief
executive officer. The Debtors are represented by Hunter Brandon
Jones, Esq. and John Y. Bonds, Esq., at Bonds Ellis Eppich Schafer
Jones LLP. The case is assigned to Judge Russel F. Nelms. At the
time of the filing, the Debtors estimated their assets and
liabilities at $1 million to $10 million.
EMERALD OIL: Asks for Plan Filing Exclusivity Until June 19
-----------------------------------------------------------
Emerald Oil, Inc, and its debtor affiliates request the U.S.
Bankruptcy Court for the District of Delaware to extend the periods
during which the Debtors have the exclusive right to (a) file a
chapter 11 plan, through and including June 19, 2017 and solicit
votes accepting or rejecting a plan, through and including Aug. 16,
2017.
The Debtors relate that since their last request to extend the
Exclusivity Periods, much of their efforts are focused on closing
their sale process, effectuating an orderly wind down of their
operations and their estates, and finalizing the terms of their
Plan and disclosure statement.
The Debtors further relate that their main focus since the
beginning of these chapter 11 cases is to consummate a sale of
substantially all of their assets. While at times that progress
was slowed due to litigation related to the sale, the Debtors
nevertheless has persevered and completed a sale of substantially
all of their assets, and has filed a value-maximizing Plan on Dec.
30, 2016.
While the Debtors have completed one of the largest hurdles of any
chapter 11 case: to file a plan, the Debtors believe that
maintaining the exclusive right to file and solicit votes on a
chapter 11 plan is critical to consummating their chapter 11
strategy.
The Debtor submit that extending the exclusivity periods will
afford the Debtor and their stakeholders time to finalize and
confirm their Plan, finalize the transactions contemplated by the
Flan, and proceed toward liquidation in an efficient, organized
fashion.
A hearing on the Debtors' Motion will be held on March 22, 2017, at
10:00 a.m. Objections are due on March 2, 2017.
About Emerald Oil
Emerald Oil, Inc., is a Denver-based independent exploration and
production company that is focused on acquiring acreage and
developing wells in the Williston Basin of North Dakota.
Emerald Oil, Inc., Emerald DB, LLC, Emerald NWB, LLC, Emerald WB
LLC and EOX Marketing, LLC filed separate Chapter 11 bankruptcy
petitions (Bankr. D. Del. Case Nos. 16-10704 to 16-10708) on March
22, 2016. Ryan Smith signed the petitions as chief financial
officer.
The Debtors have hired Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel, Pachulski Stang
Ziehl & Jones LLP as local counsel, Intrepid Financial Partners,
LLC as investment banker, Opportune LLP as restructuring advisor
and Donlin Recano & Company, Inc., as claims and noticing agent.
Judge Kevin Gross has been assigned the cases.
Andrew Vara, acting U.S. trustee for Region 3, appointed seven
creditors of Emerald Oil, Inc., to serve on the official committee
of unsecured creditors. The Committee retains Whiteford, Taylor &
Preston LLC as Delaware counsel, and Akin Gump Strauss Hauer & Feld
LLP as co-counsel.
Cortland Capital Market Services, LLC is represented by Joseph H.
Smolinsky, Esq., and David N. Griffiths, Esq., at Weil Gotshal &
Manges LLP, and Mark D. Collins, Esq., Zachary I. Shapiro, Esq.,
and Andrew M. Dean, Esq., at Richards Layton & Finger PA.
ENERGY FUTURE: Wins Chapter 11 Plan Confirmation
------------------------------------------------
Peg Brickley and Jonathan Randles, writing for The Wall Street
Journal Pro Bankruptcy, reported that NextEra Energy Inc.'s planned
acquisition of one of the country's largest electricity
transmissions businesses, Oncor, moved to the next phase, when a
judge said he would confirm the bankruptcy-exit plan of Oncor owner
Energy Future Holdings Corp.
According to the report, Judge Sontchi's confirmation ruling is the
second for an Energy Future bankruptcy-exit plan. An earlier
chapter 11 plan built around the planned sale of Oncor to a group
of investors led by Hunt Consolidated Inc. was confirmed last year,
but the deal fell apart after Texas regulators put conditions on
the transaction, the report related.
NextEra will pay $4.4 billion in cash and stock, plus pay off $5.4
billion in financing that helped Energy Future through bankruptcy,
to gain control of Oncor, which carries power to some 10 million
Texans, the report related.
Confirmation came over the protests of lawyers for people claiming
asbestos injuries they say are attributable to Energy Future
affiliates, the report further related. NextEra has set aside $100
million to pay asbestos personal injury claims that were filed in
Energy Future's chapter 11 proceeding, the report said.
The problem, according to asbestos lawyers, is that Energy Future's
chapter 11 plan cut off the legal rights of people who have no way
to know they have grounds for personal injury claims, the report
added.
Judge Sontchi found Energy Future handled its asbestos problems
fairly, and overruled the objection from the asbestos claimants,
the report related. He said there was "clear evidence" that the
reorganization plan was developed in good faith and doesn’t
preclude future asbestos claimants from seeking remedy later, the
report further related.
About Energy Future
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a Portfolio
of competitive and regulated energy businesses in Texas.
Oncor, an 80 percent-owned entity within the EFH group, is the
largest regulated transmission and distribution utility in Texas.
The Company delivers electricity to roughly three million delivery
points in and around Dallas-Fort Worth. EFH Corp. was created in
October 2007 in a $45 billion leverage buyout of Texas power
company TXU in a deal led by private-equity companies Kohlberg
Kravis Roberts & Co. and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS).
As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in
book value and liabilities of $49.7 billion. The Debtors have $42
billion of funded indebtedness.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor,
and Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring
agreement are represented by Akin Gump Strauss Hauer & Feld LLP,
as
legal advisor, and Centerview Partners, as financial advisor. The
EFH equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for
the second-lien noteholders owed about $1.6 billion, is
represented
by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A.
Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq.,
Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey,
Esq., and Howard L. Siegel, Esq. An Official Committee of
Unsecured Creditors has been appointed in the case. The Committee
represents the interests of the unsecured creditors of only Energy
Future Competitive Holdings Company LLC; EFCH's direct subsidiary,
Texas Competitive Electric Holdings Company LLC; and EFH Corporate
Services Company, and of no other debtors. The Committee has
selected Morrison & Foerster LLP and Polsinelli PC for
representation in this high-profile energy restructuring. The
lawyers working on the case are James M. Peck, Esq., Brett H.
Miller, Esq., and Lorenzo Marinuzzi, Esq., at Morrison & Foerster
LLP; and Christopher A. Ward, Esq., Justin K. Edelson, Esq.,
Shanti M. Katona, Esq., and Edward Fox, Esq., at Polsinelli PC.
* * *
In December 2015, the Bankruptcy Court confirmed the Debtors'
reorganization plan, which contemplated a tax-free spin of the
company's competitive businesses, including Luminant and TXU
Energy, and the $20 billion sale of its holdings in non-debtor
electricity transaction unit Oncor Electric Delivery Co. to a
consortium of investors. But the Plan became null and void after
certain first lien creditors notified the occurrence of a "plan
support termination event."
The Debtors filed a new plan of reorganization on May 1, 2016, as
subsequently amended. The new Chapter 11 plan features
alternative options for dealing with the Company's stake in
electricity transmission unit Oncor.
On Aug. 29, 2016, Judge Sontchi confirmed the Chapter 11 exit
plans of two of Energy Future Holdings Corp.'s subsidiaries, power
generator Luminant and retail electricity provider TXU Energy Inc.
(the "T-Side Debtors"). The Plan became effective on Oct. 3,
2016.
On Sept. 21, 2016, the Debtors filed the E-Side Plan and the
Disclosure Statement for the Fourth Amended Joint Plan of
Reorganization of Energy Future Holdings Corp., et al., Pursuant
to Chapter 11 of the Bankruptcy Code as it Applies to the EFH
Debtors and EFIH Debtors.
FANTASY ACES: Hires Lawyer as Regulator Questions Players' Accounts
-------------------------------------------------------------------
Jonathan Randles, writing for The Wall Street Journal Pro
Bankruptcy, reported that daily fantasy-sports site Fantasy Aces
LP, has hired Robert J. DeGroot, who describes himself as a
criminal defense lawyer, after the New York gaming regulator
questioned the bankrupt company about player accounts.
According to the report, citing court documents, players, had an
estimated $1.3 million deposited in Fantasy Aces accounts when the
company filed for chapter 7 bankruptcy liquidation on Jan. 31 with
just $3,539 in cash on hand.
The bankruptcy came the same day that the New York State Gaming
Commission sent a letter to Fantasy Aces seeking information about
the player accounts, which under state law must be kept separate
from a fantasy-sports company's other funds, the report related.
Bankruptcy lawyer Richard Marshack, who has been appointed as an
independent trustee to oversee Fantasy Aces' liquidation, told the
Journal that "it appears to me that players' funds were not
segregated in this case."
Fantasy Aces, in a statement on its website, said "all accounts are
on hold during this time while we work with the bankruptcy court in
finding the fastest possible solution for our players," the Journal
further related.
Gaming commission spokesman Lee Park said regulators have withdrawn
a temporary permit that allowed Fantasy Aces to run fantasy
contests in New York state because the company isn't in compliance
with state gaming laws, though he declined to comment on the nature
of the company's violation, the report added.
"Any further action that might be taken is under review pending
developments in bankruptcy court to protect contest patrons," Mr.
Park told the Journal in an email.
Mr. DeGroot can be reached at:
Robert J. DeGroot
56 Park Place Newark,
NJ 07102
Phone: 973-643-1930
Fax: 973-643-7231
Fantasy Aces LP filed a Chapter 7 petition (Bankr. C.D. Cal. Case
No.
17-10359) on Jan. 31, 2017, disclosing assets of $1.8 million and
debt of just under $3 million. The Trustee is Richard Marshack.
The case judge is the Hon. Erithe Smith.
Mr. Marshack can be reached at:
Richard A. Marshack
Founding Member
Marshack Hays LLP
Tel: 949 333-7777
E-mail: rmarshack@marshackhays.com
FLORIDA FOREST: Unsecureds to Recoup 55% Over 60 Months
-------------------------------------------------------
Florida Forest Products of Cross City, Inc., filed with the U.S.
Bankruptcy Court for the Northern District of Florida a disclosure
statement dated Feb. 17, 2017, referring to the Debtor's plan of
reorganization.
Class 3 General Unsecured Claims are impaired by the Plan. Holders
will receive payments by the last day of each month, which will
start upon confirmation and end after 60 months. Holders are
expected to be paid 55% of their claims.
Payments and distributions under the Plan will be funded by revenue
derived from the operation of the business.
The Disclosure Statement is available at:
http://bankrupt.com/misc/flnb16-10148-129.pdf
As reported by the Troubled Company Reporter on Jan. 6, 2017, the
Debtor filed with the Court a disclosure statement dated Dec. 22,
2016, referring to the Debtor's plan of reorganization, which
proposed that Hugh Keen receive a monthly payment of $3,216 until
paid in full.
About Florida Forest Products
Florida Forest Products of Cross City, Inc., is a Florida
corporation, whose business is primarily retail and wholesale
lumber and hardware sales from its location in Cross City, Florida.
It is a corporation which operates a building supply retail store
in Cross City, Florida. The Debtor has been in business since
2014.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. N.D.
Fla. Case No. 16-10148) on June 28, 2016. The petition is signed
by Russ Allen, president. The Debtor is represented by Angela
M. Ball, Esq., at Angela M. Ball, P.A. The Debtor estimated assets
at $0 to $50,000 and debts at $100,001 to $500,000 at the time of
the filing.
FOLTS HOME: Proposes to Use Cash Collateral Until Facilities Sale
-----------------------------------------------------------------
Folts Home and Folts Adult Home, Inc., seek authorization from the
U.S. Bankruptcy Court for the Northern District of New York to use
cash collateral.
The Debtors, through their duly-appointed receivers HomeLife at
Folts, LLC and HomeLife at Folts-Claxton, LLC, require the use of
cash collateral to fund their day-to-day operations since they have
been unable to obtain unsecured credit sufficient to meet their
operating needs. The Debtors contend that absent such use of cash
collateral, their businesses will be brought to an immediate halt,
with disastrous consequences for the Debtors, their estates and
their creditors.
The Debtors and HomeLife have received consent from Housing and
Urban Development, the Internal Revenue Service and the New York
State Department of Health to utilize the cash collateral in
accordance with the budget. The proposed budget provides total
operating expenses in the aggregate amount of $795,000 for Folts
Home and $91,000 for Folts Adult Home for the period from Feb. 16,
2017 through March 31, 2017.
The HUD, the IRS and the DOH each assert liens covering the
Debtors' cash and accounts receivable, as follows:
(a) the HUD asserts an approximate aggregate amount of
$15,498,900, secured by mortgage liens covering the Debtors' real
property and security interests in all of the Debtors' personal
property, including cash and accounts;
(b) the IRS maintains a priority lien position over the Debtors'
accounts receivable in connection with numerous tax liens filed in
the approximate aggregate amount of $850,000; and
(c) the DOH asserts possessory liens against the Debtors'
Medicaid receivables in the approximate aggregate amount of
$3,700,00 in connection with past due Cash Receipt Assessments and
Medicare/Medicaid overpayment recoupments.
The HUD, the IRS and the DOH have agreed to the Debtors' use of
their cash collateral in consideration for, among other things, the
continuing security interests and liens in the Prepetition
Collateral and in all of such property created, acquired or arising
after the Petition Date. Such Adequate Protection Rights are
limited to the same extent and in the same priority as the security
interests held by each of the HUD, the IRS and the DOH as of the
Petition Date and will be applied only to the extent of the actual
diminution in value of the Prepetition Collateral resulting from
the use thereof by the Debtors and HomeLife after the Petition
Date.
The Debtors tell the Court that they intend to implement the sale
of their Facilities and related assets as going concerns to a
qualified operator. As such, the Debtors require the use of the
cash collateral in order to maximize the value of their assets,
preserve the going concern value, and continue to care for the
residents of the Facilities until a sale can be consummated.
The Debtors ask the Court to hold an interim hearing on March 7,
2017 at 2:00 p.m. with an objection deadline of Feb. 28, 2017. The
Debtor also ask the Court to hold a final hearing on March 28, 2017
at 9:30 a.m. with objection deadline of March 21, 2017.
A full-text copy of the Debtor's Motion, dated Feb. 16, 2017, is
available at https://is.gd/PXrWBF
About Folts Home
Folts Home is a New York not-for-profit corporation and the owner
of a 163-bed long-term residential health care and rehabilitation
facility located at 100-122 North Washington Street, Herkimer, New
York. In addition to long-term skilled nursing and residential
care, Folts Home provides memory care to residents with dementia,
palliative care and respite care and operates an adult day care
program. Folts Home also offers rehabilitation services, such as
physical, occupational and speech therapy, on both inpatient and
out-patient bases. Currently, Folts Home has approximately 218
active employees. Approximately 124 of the employees are
full-time, 60 are part-time and 34 employees are employed on a per
diem basis. None of Folts Home's employees are represented by
labor unions.
Folts Adult Home, Inc. ("FAH"), also known as Folts-Claxton, is a
New York not-for-profit corporation and the owner of an 80-bed
adult residential center that was constructed in 1998 and is
located at 104 North Washington Street, Herkimer, New York. FAH
residents reside in separate apartments and are provided services
such as daily meals, laundry, housekeeping and medication
assistance. FAH has approximately 22 active employees.
Approximately 12 are full-time employees and 10 are part-time
employees. None of FAH's employees are represented by labor
unions.
Folts Home and FAH currently have average daily censuses of 145 and
69, respectively. Folts Home has 3 major payors: Medicare,
Medicaid and Excellus/Blue Cross. The majority of FAH residents
are government subsidized, with 58% covered by Social Security
Insurance and 42% private pay.
Folts Home and Folts Adult Home, Inc. filed separate, voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. N.D.N.Y. Case Nos. 17-60139 and 17-60140, respectively) on
Feb. 16, 2017. The Chapter 11 Cases are being jointly administered
under Bankruptcy Rule 1015(b) pursuant to an order of the Court.
The petitions were signed by Dr. Anthony E. Piana, chairman, Board
of Directors. The case is assigned to Judge Diane Davis. At the
time of filing, the Debtor had both assets and liabilities
estimated to be between $10 million to $50 million each.
The Debtors are represented by Stephen A. Donato, Esq. and Camille
Wolnik Hill, Esq. at Bond, Schoeneck & King, PLLC.
Folts Home and Folts Adult Home, Inc., through duly-appointed
receivers HomeLife at Folts, LLC and HomeLife at Folts-Claxton,
LLC, continue to operate their skilled nursing home and adult
residence businesses, respectively, and manage their properties as
debtors in possession.
FOUR DIA: Disclosures OK'd; Plan Confirmation Hearing on March 30
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
entered an agreed order approving Four Dia, LLC's first amended
disclosure statement describing the Debtor's plan of
reorganization.
A hearing to consider the confirmation of the Plan is scheduled for
March 30, 2017, at 9:00 a.m. (CST).
The deadline for all objections to the Plan and to cast all ballots
is 5:00 p.m. (CST), March 23, 2017.
The Debtor will file a tally of all ballots received on or before
5:00 p.m. (CST) on March 27, 2017.
About Four Dia
Four Dia, LLC, filed a Chapter 11 petition (Bankr. N.D. Tex. Case
No. 16-33459-11) on Sept. 2, 2016. The petition was signed by
Sagar Ghandi, vice president. The Debtor is represented by Russell
W. Mills, Esq., at Hiersche, Hayward, Drakeley & Urbach, P.C. The
case is assigned to Judge Harlin DeWayne Hale. The Debtor
estimated assets and liabilities at $1 million to $10 million at
the time of the filing.
Four Dia, a Texas limited liability company, operates a 62-room
hotel located at 5750 Sherwood Way in San Angelo, Texas, which is
operated under a Wyndham Hotel Group franchise. Four Dia employs
approximately 16 persons on a full or part-time basis.
FRESH & EASY: Wandering Buying Liquor License (No. 539659) for $15K
-------------------------------------------------------------------
Fresh & Easy, LLC, filed with the U.S. Bankruptcy Court for the
District of Delaware a notice that it will sell its Liquor License
(No. 539659) to Wandering Still Inc. for $15,000.
The objection deadline is Feb. 24, 2017 at 5:00 p.m. (ET).
On Dec. 3, 2015, the Court entered a Miscellaneous Asset Sale
Order, authorizing the Debtor to sell or transfer certain
miscellaneous assets pursuant to the procedures set forth in the
Miscellaneous Asset Sale Order. Pursuant to the Miscellaneous
Asset Sale Order, the Debtor proposes to sell the Liquor License to
the Buyer pursuant to the Purchase Agreement.
The Debtor proposes to sell the Liquor License to the Buyer on an
"as is, where is" basis, free and clear of all liens, claims,
interests, and encumbrances.
A copy of the Purchase Agreement and Miscellaneous Asset Sale Order
attached to the Notice is available for free at:
http://bankrupt.com/misc/Fresh_&_Easy_1894_Sales.pdf
The known parties holding liens or other interest in the Liquor
License are: (i) Wells Fargo Bank, National Association; (ii)
Womble Carlyle Sandridge & Rice LLP; (iii) California Department of
Alcoholic Beverage Control Headquarters; (iv) California State
Board of Equalization; (v) State of California Franchise Tax Board;
(vi) Moulton Plaza, SPE, LLC, and Laguna Woods SPE, LLC, and (vii)
Peter Impala.
If no objections are received by the Debtor by the Objection
Deadline, then the Debtor may proceed with the proposed sale in
accordance with the terms of the Miscellaneous Asset Sale Order.
About Fresh & Easy
Fresh & Easy, LLC, a chain of grocery stores in the Southwest
United States, filed a Chapter 11 bankruptcy petition (Bankr. D.
Del. Case No. 15-12220) on Oct. 30, 2015. The petition was signed
by Peter McPhee, the CFO. The Debtor estimated assets of $10
million to $50 million and liabilities of at least $100 million.
Judge Christopher S. Sontchi is assigned to the case.
The Debtor has engaged Norman L. Pernick, Esq., Kate J. Stickles,
Esq., and David W. Giattino, Esq., at Cole Schotz P.C. as counsel;
Epiq Bankruptcy Solutions, LLC, as claims and noticing agent; DJM
Realty Services, LLC; and CBRE Group, Inc., as real estate
consultants; and FTI Consulting, Inc., as restructuring advisors.
The Official Committee of Unsecured Creditors hired Fox Rothschild
LLP and ASK LLP as counsel.
* * *
The Debtor has undertaken the process of liquidating the estate's
assets located at its retail locations and distribution center
with the assistance of Hilco Merchant Resources, LLC, and
Industrial Assets Corp., respectively, has engaged DJM Realty
Services, LLC, and CBRE, Inc., to market its leasehold interests,
and has recently engaged Hilco Streambank to assist with the
disposition of its intellectual property.
As part of the claims process, a bar date of Feb. 19, 2016, was
established by the Court for creditor claims.
FUEL PERFORMANCE: Hennessy Holds 7.64% Equity Stake
---------------------------------------------------
In an amended 13G Schedule filed with the Securities and Exchange
Commission, Mr. John M. Hennessy disclosed that as of March 8,
2016, he beneficially owns 17,999,573 of common stock, representing
7.64% of Fuel Performance Solutions, Inc.'s common shares
outstanding.
Percent of class was determined by dividing 17,999,573 by the sum
of 224,258,698 shares of common stock outstanding as of Dec. 31,
2016, 1,456,293 shares issuable upon conversion of a note and
9,980,780 shares issuable upon exercise of warrants, held directly
by John M. Hennessy as of Dec. 31, 2016.
A full-text copy of the regulatory filing is available at:
https://is.gd/rmSI7j
About Fuel Performance
Fuel Performance Solutions, Inc., was incorporated in Nevada on
April 9, 1996, by a team of individuals who sought to address the
challenges of reducing harmful emissions while at the same time
improving the operating performance of internal combustion
engines, especially with respect to fuel economy and engine
cleanliness. After the Company's incorporation, its initial focus
was product research and development, but over the past few years,
the Company's efforts have been directed to commercializing its
product slate, primarily DiesoLiFTTM and the PerfoLiFTTM BD-Series,
for use with diesel fuel and bio-diesel fuel blends, by focusing on
marketing, sales and distribution efforts in conjunction with our
distribution partners. On Feb. 5, 2014, the Company changed its
name from International Fuel Technology, Inc., to Fuel Performance
Solutions, Inc.
Fuel Performance reported a net loss of $1.92 million on $456,000
of net revenues for the year ended Dec. 31, 2015, compared to a net
loss of $1.65 million on $1.72 million of net revenues for the year
ended Dec. 31, 2014.
As of June 30, 2016, the Company had $2.26 million in total assets,
$4.42 million in total liabilities and a total stockholders'
deficit of $2.16 million.
In its audit report dated June 30, 2016, the Company's independent
registered public accounting firm expressed substantial doubt about
the Company's ability to continue as a going concern.
MaloneBailey, LLP, in Houston, Texas, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that the Company has suffered recurring
loss from operations and has a working capital deficit. This
factor raises substantial doubt about the Company's ability to
continue as a going concern.
GARDENS REGIONAL: Bidder Says Purchase Efforts Unfairly Ignored
---------------------------------------------------------------
Katy Stech, writing for The Wall Street Journal Pro Bankruptcy,
reported that Le Summit Healthcare LLC, a health-care firm that
offered to buy Gardens Regional Hospital and Medical Center Inc., a
Los Angeles-area hospital that cared for low-income residents
before shutting down, told a bankruptcy judge that its purchase
efforts were unfairly ignored.
According to the report, Le Summit officials told Bankruptcy Judge
Ernest Robles that they are still willing to operate the nonprofit
hospital while they obtain the new licensing and permits to restart
its operations. They say Gardens Regional Hospital's lawyers
closed the 137-bed hospital unnecessarily, the Journal said.
"It is time for everyone to recognize that the best bidder will be
[Le Summit Healthcare] as it is the only bidder that can open an
acute care hospital with an [emergency room]" and fulfill
requirements set by state health-care regulators, Le Summit
Healthcare lawyer Steven Polard, Esq., said in a filing in U.S.
Bankruptcy Court in Los Angeles, the report further related.
Mr. Polard said he was told by Gardens Regional Hospital officials
that his client didn't provide enough proof that it would
financially be able to carry out the purchase, the report added.
The Journal said that Gardens Regional lawyer, Sam Maizel, Esq., of
Dentons US LLP, agreed with that characterization. Mr. Maizel told
the Journal that, "[t]he board of directors explored every
opportunity to keep the hospital open and decided to close the
hospital with court permission only because of financial
hardship."
About the Hospital
Gardens Regional Hospital and Medical Center, Inc., fka Tri-City
Regional Medical Center, dba Gardens Regional Hospital and Medical
Center leases a 137- bed, acute care hospital doing business at
21530 South Pioneer Boulevard, Hawaiian Gardens, Los Angeles,
California. It provides a full range of inpatient and outpatient
services, including, but not limited to, medical acute care,
general surgical services, bariatric surgery services (for weight
loss), spine surgery services, orthopedic and sports medicine and
joint replacement services, wound care and pain management
services, physical therapy, respiratory therapy, outpatient
ambulatory services, diagnostic services, radiology and
inpatient/outpatient imaging services, laboratory and pathology
services, geriatric services, and community wellness and education
programs.
The Debtor filed for Chapter 11 bankruptcy protection (Bankr. C.D.
Calif. Case No. 16-17463) on June 6, 2016, estimating its assets
at
between $1 million and $10 million, and liabilities at between $10
million and $50 million. The petition was signed by Brian Walton,
chairman of the Board. Judge Ernest M. Robles presides over the
case. Samuel R Maizel, Esq., and John A Moe, Esq., at Dentons US
LLP serves as the Debtor's bankruptcy counsel.
GLOBAL LEADERSHIP: S&P Lowers Rating on 2010 Revenue Bonds to 'BB'
------------------------------------------------------------------
S&P Global Ratings lowered its rating on Philadelphia Authority For
Industrial Development, Pa.'s series 2010 revenue bonds, issued for
the Global Leadership Academy Charter School (GLA), to 'BB' from
'BBB-'. The outlook is stable.
"The two-notch downgrade reflects our view of the school's
deteriorating financial performance and deficit operations in
fiscal 2016 caused by a declining and unstable state funding
environment, which could further pressure finances in fiscal 2017,"
said S&P Global Ratings credit analyst James Gallardo.
Although S&P's calculations indicate that the school's debt service
coverage fell below 1x in fiscal 2016, management has indicated
that the school is not in violation of its bond covenant to
maintain 1.1x coverage due to its ability to include its cash
accounts in its coverage calculations. Management expects state
funding to stabilize, which should allow the school to sustain a
higher coverage level. In S&P's view, management's failure to
stabilize operations or a covenant violation could result in
downward pressure on the rating.
S&P assessed GLA's financial profile as vulnerable, with negative
operating margins, very weak maximum annual debt service (MADS)
coverage, and a moderately high debt burden, which is partially
offset by the school's healthy liquidity position for the rating
category. S&P assessed GLA's enterprise profile as adequate
characterized by stable demand with an excellent waiting list,
solid academics, and a good charter standing with the authorizer.
Combined, S&P believes these credit factors lead to an indicative
stand-alone credit profile of 'bb' and a final long term rating of
'BB'.
The rating reflects S&P's assessment of:
-- Slim MADS coverage of about 0.27x based on fiscal 2016
operations;
-- Recent declines in operating performance, with a full
accrual deficit of about $1.1 million in fiscal 2016;
-- The continued volatility of state funding that pressure
financial operations; and
-- The inherent risks associated with charter schools,
including possible revocation of the charter.
The stable outlook reflects S&P's view that, over the one
year-outlook period, the school will begin to stabilize its
operations, its liquidity levels will remain at levels commensurate
with the rating, and the school will remain in compliance with all
of its covenants. S&P further anticipates the school's demand
profile will continue to reflect sufficient academics, a superb
wait list, and maintenance of current enrollment levels.
GRANDE COMMUNICATIONS: S&P Lowers CCR to 'B', Off CreditWatch
-------------------------------------------------------------
S&P Global Ratings said that it lowered its corporate credit rating
on San Marcos, Texas-based cable TV overbuilder Grande
Communications Networks LLC to 'B' from 'B+' and removed all of its
ratings on the company from CreditWatch, where S&P placed them with
negative implications on Aug. 16, 2016. The rating outlook is
stable.
S&P subsequently withdrew all its ratings on the company, including
the 'B' corporate credit rating. The downgrade follows the
announcement that Radiate HoldCo LLC has successfully closed its
acquisition of Grande and redeemed all of the company's debt, and
it brings S&P's corporate credit rating on Grande in-line S&P's
rating on its new parent, Radiate.
HAGGEN HOLDINGS: Plan Exclusivity Deadline Extended Until March 8
-----------------------------------------------------------------
Judge Kevin Gross of the U.S. Bankruptcy Court for the District of
Delaware further extended the periods during which only HH
Liquidation, LLC, f/k/a Haggen Holdings, LLC, and its affiliated
debtors may file a chapter 11 plan and solicit acceptances through
and including March 8, 2017 and May 8, 2017, respectively.
The Troubled Company Reporter had earlier reported that the Debtors
requested the Court to further extend their plan exclusive periods
up to the latest deadline permitted by the Bankruptcy Code.
The Debtors related that since commencing the Chapter 11 cases,
their management and professionals have devoted significant
resources to preserving and maximizing the value of their estates,
stabilizing business operations, and ensuring a smooth transition
of the Debtors' operations into chapter 11, while also pursuing a
strategic divestiture of their assets, a multi-step sale process of
their business operations, for the benefit of all stakeholders.
The Debtors told the Court that they have not had sufficient time
to capitalize on their work with interested parties to determine
whether the Debtors can propose a viable chapter 11 plan due to the
tasks that they have been consumed with to date in furtherance of
such divestitures and other circumstances of these chapter 11
cases.
The Debtors also related that all throughout the Chapter 11
process, they have endeavored to establish and maintain cooperative
working relationships with their primary creditor constituencies.
Currently, they were focusing their efforts on working with
interested parties to bring these chapter 11 cases to an orderly
conclusion. At this stage, however, the Debtors told the Court
that an extension of the Exclusive Periods will allow them to work
with these parties to determine whether they can pursue a
consensual chapter 11 plan, which will ultimately be to the benefit
of all of the various constituencies.
The Official Committee of Unsecured Creditors supported the
Debtors' final extension of the Exclusive Periods.
About Haggen Holdings
Headquartered in Bellingham, Washington, Haggen was founded in 1933
as a single grocery store. From 1933 to 2014, Haggen grew into a
30 store family-run grocery chain, with stores located in the
northwestern United States. From 2011 to 2014, Haggen reduced its
store base to 18, including a stand-alone pharmacy location.
Haggen rapidly expanded in 2014 and 2015, and, as of the Petition
Date, Haggen owned and operated 164 stores through three operating
companies: Haggen, Inc., Haggen Opco North, LLC and Haggen Opco
South, LLC.
Haggen Holdings, LLC, and its affiliates filed Chapter 11
bankruptcy petitions (Bankr. D. Del. Case Nos. 15-11874 to
15-11879) on Sept. 8, 2015, with the intention of reorganizing, or
selling as a going concern, their stores for the benefit of their
creditors. The petitions were signed by Blake Barnett, the chief
financial officer. The Debtors estimated assets of $50 million to
$100 million and estimated liabilities of $10 million to $50
million.
Young, Conaway, Stargatt & Taylor, LLP, is serving as the Debtors'
local counsel. Stroock & Stroock & Lavan LLP serves as the
Debtors' general counsel. Alvarez & Marsal North America, LLC,
acts as the Debtors' financial advisor. Kurtzman Carson
Consultants LLC serves as the Debtors' claims and noticing agent.
T. Patrick Tinker, assistant U.S. Trustee for Region 3, appointed
seven creditors to the official committee of unsecured creditors.
Pachulski Stang Ziehl & Jones LLP serves as counsel to the
Committee. Giuliano, Miller & Company, LLC, serves as tax advisors
to the Committee.
* * *
Following the sale of core assets, Haggen Holdings LLC changed its
name to HH Liquidation, LLC.
HAVEN CHICAGO: Wants Plan Filing Deadline Moved to May 2
--------------------------------------------------------
Haven Chicago LP filed with the U.S. Bankruptcy Court for the
Northern District of Illinois a motion to extend to May 2, 2017,
the time to file a plan and disclosure statement.
The Court has set a deadline of March 2, 2017, for the Plan and
Disclosure Statement.
The Debtor's management has been requested by the counsel for Sehoy
Energy LP and Dean Ketcham to provide documents and submit to
examination under Bankruptcy Rule 2004. The Debtor has responded
to the request. Negotiations with the counsel for Sehoy Energy
regarding their request are ongoing. The claims bar date is March
10, 2017.
To avoid additional cost and expense of preparing the Plan and
Disclosure Statement that may be opposed, the Debtor requests an
extension to and including May 2, 2017, to file the Plan and
Disclosure Statement.
The Debtor is current with its reporting obligations and other
obligations under the Bankruptcy Code. The Debtor's monthly
operating reports indicate that the Debtor has a positive cash
position since filing. The Debtor requests a continuance to
prepare and file the appropriate Plan and Disclosure Statement.
About Haven Chicago LP
Haven Chicago LP sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N. D. Ill. Case No. 16-35506) on Nov. 7,
2016. The petition was signed by Albert Adriani, manager.
The case is assigned to Judge Jack B. Schmetterer.
At the time of the filing, the Debtor estimated assets of less than
$50,000 and liabilities of $1 million to $10 million.
Richard G. Larsen, Esq., at Springer Brown, LLC, serves as the
Debtor's bankruptcy counsel.
HBT JV: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------
Debtor affiliates filing separate Chapter 11 bankruptcy petitions:
Debtor Case No.
------ --------
HBT JV, LLC 17-40659
dba Honda of Burleson
350 Phelps Dr.
Irving, TX 75038-6507
DK8 LLC 17-30621
11 Greenway Plz, Ste. 3100
Houston, TX 77046-1143
Type of Business: Operator of automobile retail franchise
Chapter 11 Petition Date: February 20, 2017
Court: United States Bankruptcy Court
Northern District of Texas
Judge: Hon. Mark X. Mullin (17-40659)
Hon. Stacey G. Jernigan (17-30621)
HBT's Counsel: Jeff P. Prostok, Esq.
Robert J. Forshey, Esq.
Lynda L. Lankford, Esq.
FORSHEY & PROSTOK, LLP
777 Main St., Suite 1290
Ft. Worth, TX 76102
Tel: 817-877-8855
E-mail: jpp@forsheyprostok.com
jprostok@forsheyprostok.com
bforshey@forsheyprostok.com
llankford@forsheyprostok.com
DK8 LLC's
Counsel: Stephen A. McCartin, Esq.
GARDERE WYNNE SEWELL LLP
2021 McKinney Avenue, Ste. 1600
Dallas, TX 75201
Tel: (214) 999-4945
Fax: (214) 999-3945
E-mail: smccartin@gardere.com
- and -
Mark C. Moore, Esq.
Nicole L. Hay, Esq.
GARDERE WYNNE SEWELL LLP
2021 McKinney Avenue, Ste. 1600
Dallas, TX 75201
Tel: (214) 999-4150
Fax: (214) 999-3150
E-mail: mmoore@gardere.com
nhay@gardere.com
Estimated Estimated
Assets Liabilities
--------- -----------
HBT JV, LLC $10M-$50M $10M-$50M
DK8 LLC $10M-$50M $1M-$10M
The petitions were signed by Kenneth L. Schnitzer, manager.
A. HBT JV's List of 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
HBT Land, LLC $1,159,590
11 Greenway Plaza
Suite 3100
Houston, TX 77046
DK 8 LLC $794,732
11 Greenway Plaza
Suite 3100
Houston, TX 77046
Park Place Motorcars, Ltd. $502,025
350 Phelps Dr.
Irving, TX 75038
America Honda Motor Trade Debt $46,244
Company, Inc.
1919 Torrence Blvd.
Torrance, CA 90501
Allstate Dealer Services Trade Debt $7,665
National Automotive Experts Trade Debt $3,041
Raphael Vela Due to Customer $959
David Randall Manly Due to Customer $863
Andrea Rosales de Martinez Due to Customer $763
Aaron Ralph Bazile Due to Customer $605
Martine Iniguez Due to Customer $429
ABIC Warranty Trust Trade Debt $375
Caroline Marie Scamp Due to Customer $370
Gail Ellen Clark Due to Customer $367
John Edward Wilson Due to Customer $334
Christy L. Gerken Due to Customer $291
Lenders & Members Trade Debt $284
Ralph Stephen McCoy Due to Customer $263
Cesar Gonzalez Due to Customer $263
Calvin Albright Lange Due to Customer $263
B. DK8 LLC's List of Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Victor Bernal Unknown
308 Hidden Cove Ct.
Keller, TX 76248
James D. Shields
SHIELDS LEGAL GROUP
16301 Quorum Drive, Suite 250B
Addison, Texas 75001
Tel: (972) 788-2040
Fax: (972) 788-4332
Email: jshields@shieldslegal.com
HELIX GEN: S&P Assigns Prelim. 'BB' Rating on $1.54BB Term Loan
---------------------------------------------------------------
S&P Global Ratings said it assigned its preliminary 'BB' rating and
preliminary '2' recovery rating to Helix Gen Funding LLC's $1.54
billion term loan B and $175 million revolver. The outlook is
stable. The preliminary '2' recovery rating reflects S&P's
expectation of substantial (70%-90%; rounded estimate 70%) recovery
in the event of default.
The preliminary 'BB' rating on Helix Gen Funding is based on
geographic, fuel, and technological diversity in the portfolio in
an ongoing weak power pricing environment with uncertain future
NYISO capacity revenues. Funds owned by LS Power are acquiring
four assets from TransCanada to form the 3.9 gigawatt (GW) power
portfolio Helix Gen Funding LLC. This portfolio is made up of four
assets as:
-- Ravenswood: 2.4 GW gas-fired facility in NYISO Zone J,
-- Ironwood: 800 megawatt (MW) gas-fired facility located in
-- Pennsylvania-Jersey-Maryland Interconnection (PJM),
-- Ocean State Power: 560 MW gas-fired facility in ISO-New
England (ISO-NE), and
-- Kibby Wind: 132 MW wind farm in ISO-NE.
"The stable outlook reflects our expectation for sound operational
performance at all four plants and power prices that do not decline
materially from our current expectations, resulting in minimum
DSCRs above 1.3x throughout the life of the assets," said S&P
Global Ratings credit analyst Kimberly Yarborough.
S&P could lower the rating if DSCRs fall below 1.2x on a sustained
basis over the assumed refinance tenor. This would likely be
caused by operational outages at the plants, NYISO capacity prices
that fail to meet S&P's forward-looking assumptions, and higher
debt outstanding at refinancing.
While unlikely in the near term, S&P could raise the rating if
DSCRs materially improve above 1.4x on a sustained basis (including
post-maturity) and the downside performance improved materially.
This could be due to higher-than-expected capacity payments in
uncleared periods or higher spark spreads.
HEXION INC: S&P Affirms 'CCC+' CCR & Revises Outlook to Stable
--------------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' corporate credit rating on
Ohio-based Hexion Inc. and revised the rating outlook to stable
from negative.
At the same time, S&P affirmed its 'CCC+' issue rating on the
company's senior secured first-lien notes and 'CCC' rating on the
remainder of the company's debt issues. The recovery rating on the
first-lien notes remains '3', indicating S&P's expectation of
meaningful (50%-70%; rounded estimate 55%) recovery in the event of
a default scenario. The recovery rating on the remainder of the
company's debt issues remains '5', indicating modest (10%-30%;
rounded estimate 15%) recovery in a default scenario.
"The outlook revision to stable reflects our belief that some of
the company's liquidity pressures have been temporarily reduced as
a result of its recent capital market activity," said S&P Global
Ratings credit analyst Allison Schroeder.
The stable outlook on Hexion reflects S&P's expectation that,
despite currency headwinds, slight improvement in the company's
oilfield service and base epoxy businesses could lead to modest
improvement in the company's leverage metrics. On a weighted
average of projected and historical numbers, S&P expects the
company's FFO to debt to be in the low- to mid-single-digit
percentage range and debt to EBITDA of slightly less than 10x over
the next 12 months. S&P's ratings assume that the company's
liquidity position will not further deteriorate from current
levels.
S&P could lower the ratings during the next year if liquidity
weakens from current levels, increasing the likelihood that Hexion
might not meet its payment obligations. This could occur if
macroeconomic or industry conditions worsen materially, raw
material costs spike and Hexion is unable to pass cost increases on
to its customers, capital spending exceeds S&P's expectations,
there are additional sizable acquisitions, or if the shared
services agreement with MPM is terminated or significantly amended.
S&P could also lower ratings should quarterly earnings weaken
relative to S&P's expectations, including the first quarter of
2017. S&P could also lower the ratings if it believes that a debt
restructuring is likely. Although S&P did not view the company's
2016 debt repurchases as distressed, it could lower the rating if
S&P views any subsequent buybacks as distressed exchanges.
S&P could increase the rating on Hexion if improvement to operating
performance causes operating cash flow to consistently remain
positive and liquidity strengthens to adequate so that the ratio of
sources to uses is 1.2x or higher on a forward-looking basis.
Although unlikely within the next year, S&P could raise the ratings
slightly if Hexion achieves and maintains metrics so that S&P no
longer views debt to EBITDA as unsustainable and the financial
sponsor appears unlikely to re-leverage the company.
J. G. SOLIS: Has Interim Permission to Use Cash Through March 1
---------------------------------------------------------------
Judge Tony M. Davis of the U.S. Bankruptcy Court for the Western
District of Texas permitted J G Solis, Inc., to use cash collateral
on an interim basis.
The Debtor is permitted to use cash collateral for a period not to
exceed the earlier of the Effective Date of the Debtor's Plan of
Reorganization confirmed by the Court on Jan. 24, 2017 or March 1,
2017.
Judge Davis directed the Debtor to maintain its
debtor-in-possession bank account at Wells Fargo Bank, N.A. He
also directed that any remaining funds currently held by Wells
Fargo Bank in the Debtor's prepetition operating account to be
released into the DIP Account for use by the Debtor in accordance
with the Budget and the Order. In addition, Judge Davis directed
the Debtor to pay monthly adequate protection payments of $10,000
to Wells Fargo Bank and $14,000 to Wells Fargo Equipment.
The approved Budget reflects total cost of sales in the aggregate
sum of 853,000 and administrative costs of approximately $238,000
covering the month of February 2017.
Judge Davis further directed the Debtor to deliver to Wells Fargo
Bank all monthly financial information for the preceding month,
such monthly financial information to include a balance sheet, an
income statement, and a statement of cash flows.
The Debtor is also directed to deliver the following reports and
other documentation to Wells Fargo Bank and Wells Fargo Equipment
Finance:
(i) the business unit number and the VIN and/or the serial
number of the equipment collateral that the Debtor intends to use
to generate the revenues shown in the Budget;
(ii) the location and/or job site of each such piece of
equipment collateral, including but not limited to, information
regarding the well location and operator name for such well and/or
job site; and
(iii) each Master Service Agreement, or such other services
contract, under which the Debtor is operating to generate revenues
shown in the Budget.
Wells Fargo Bank and Wells Fargo Equipment are granted, replacement
liens and security interests in and on all property of the Debtor
and its bankruptcy estate, including all property acquired by the
Debtor and its bankruptcy estate after the Petition Date. Wells
Fargo Bank and Wells Fargo Equipment are also granted
super-priority administrative expense claim necessary to fully
compensate them to such extent that the replacement liens granted
do not provide them adequate protection of their interests in the
cash collateral.
A full-text copy of the Eighth Interim Order, dated Feb. 16, 2017,
is available at https://is.gd/vp5WWG
About J.G. Solis, Inc.
J G Solis, Inc., filed a chapter 11 petition (Bankr. W.D. Tex. Case
No. 16-70080) on May 17, 2016. The petition was signed by Joel G.
Solis, president. The Debtor is represented by Jesse Blanco Jr.,
Esq., in San Antonio, Texas. The Debtor estimated assets and
liabilities at less than $50,000 at the time of the filing.
This chapter 11 proceeding is related to (but not jointly
administered with) In re all City Well Service, LP (Bankr. W.D.
Tex. Case No. 16-70079) also filed on May 17, 2016.
JOHN Q. HAMMONS: Court Moves Plan Filing Deadline to Dec. 26
------------------------------------------------------------
Judge Robert D. Berger of the U.S. Bankruptcy Court for the
District of Kansas extended the period during which John Q. Hammons
Fall 2006, LLC and its affiliated debtors hold the exclusive right
to file a plan to Dec. 26, 2017, and the period during which they
hold the exclusive right to solicit acceptance of such a plan to
Feb. 26, 2018.
The Troubled Company Reporter had earlier reported that the Debtors
sought for exclusivity extension relating that they have obtained a
Court order to reject a Sponsor Entity Right of First Refusal
Agreement with JD Holdings, L.L.C The Debtors further related that
JD Holdings had taken an appeal from the Court Order before the
Bankruptcy Appellate Panel for the Tenth Circuit Court of Appeals.
The Debtors asserted that the resolution of the rejection issues
would be an important precursor to any plan that they might file.
The Debtors told the Court that they have also responded to and
commenced discovery with respect to the motion filed by JD Holdings
seeking to dismiss these cases or obtain relief from the automatic
stay, and the Debtors have also filed five motions for partial
summary judgment as to each of the contested matters set forth in
the Dismissal Motion. These summary judgment motions are still
pending before the Court, and resolution of these issues as well
are an important precursor to any plan.
In addition, the Debtor told the Court that UBS had been proceeding
forward with its work to market assets owned by the Debtors. The
Debtors also told the Court that they were still in the process of
reviewing and reconciling the claims and making significant
progress toward a resolution of disputed claims. The Debtors added
that there were more than 600 claims filed in the Debtors' cases
and more than 5,000 claims had been identified in the Debtors'
schedules, some of which have significant amount, will aid in the
formulation of a plan.
About John Q. Hammons Fall 2006
Springfield, Mo.-based John Q. Hammons Hotels & Resorts (JQH) --
http://www.jqhhotels.com/-- is a private, independent owner and
manager of hotels in the United States, representing brands such
as: Marriott, Hilton, Embassy Suites by Hilton, Sheraton, IHG,
Chateau on the Lake Resort / Spa & Convention Center, and Plaza
Hotels Collection. It has portfolio of 35 hotels representing
approximately 8,500 guest rooms/suites in 16 states.
John Q. Hammons Fall 2006, LLC, and its affiliated debtors filed
chapter 11 petitions (Bankr. D. Kan. Case Nos. 16-21139 to
16-21208) on June 26, 2016. The petitions were signed by Greggory
D. Groves, vice president.
At the time of filing, the Debtors estimated assets at $100 million
to $500 million and liabilities at $100 million to $500 million.
The Debtors are represented by Mark A. Shaiken, Esq., Mark S.
Carder, Esq., and Nicholas Zluticky, Esq., at Stinson Leonard
Street LLP. The Debtors' conflicts counsel is Victor F. Weber,
Esq., at Merrick Baker and Strauss PC.
The Debtors engaged BMC Group, Inc. as their notice, claims, and
balloting agent; and Alvarez & Marsal Valuation Services, LLC as
appraiser.
JORDAN BUILDERS: Seeks Court Permission to Use Cash Collateral
--------------------------------------------------------------
Jordan Builders, Inc. and Mtg., seeks permission from the U.S.
Bankruptcy Court for the Middle District of Florida to use cash
collateral.
The Debtor intends to use its pledged cash collateral in order to
meet postpetition obligations related to its rental business.
Specifically, the Debtor will pay a small salary, as a dividend to
the majority shareholder, and utilizes the remaining funds to pay
repairs, property taxes, insurance and other necessary operating
expenses until the Debtor can effectively reorganize debts through
the Chapter 11 case.
The proposes to use approximately $10,403 per month, as reflected
in the Debtor's proposed monthly cash collateral budget.
Commerce National Bank and Trust/Challenged Investments, LLC, holds
a claim secured by a blanket mortgage on 16 parcels of real
property located in Duval and Nassau County, FL. The Debtor uses
the real property for rental units and storage.
There is currently owing to Commerce National the approximate
amount of $311,966 on the blanket mortgage. The Debtor has also
executed an Assignment of Rents in relation to the Commerce
National Mortgage.
The Debtor proposes to pay interest only payments to Commerce
National as adequate protection, commencing on March 1, 2017 and
continue until the confirmation of any Plan -- the mortgage is not
escrowed.
The Debtor is willing to enter into an agreement with Commerce
National and other secured creditors to provide a post-petition
replacement lien, in the same priority and extent of any
prepetition lien, without determining the extent or existence of
such lien.
A full-text copy of the Debtor's Motion, dated Feb. 16, 2017, is
available at https://is.gd/OJ3aVs
Jordan Builders is represented by:
Bryan K. Mickler, Esq.
Law Offices of Mickler & Mickler, LLP
5452 Arlington Expressway
Jacksonville, FL 32211
Telephone: (904) 725-0822
Facsimile: (904) 725-0855
E-mail: bkmickler@planlaw.com
About Jordan Builders
Jordan Builders, Inc. and Mtg. filed a Chapter 11 petition (Bankr.
M.D. Fla. Case No. 17-00495), estimating less than $1 million in
assets and debt. The Debtor is represented by Bryan K. Mickler,
Esq., at Law Offices of Mickler & Mickler, LLP.
JOSEPH HEATH: Ordered to Amend Sale Motion for Alexandria Property
------------------------------------------------------------------
Judge Klinette H. Kindred of the U.S. Bankruptcy Court for the
Eastern District of Virginia ordered Joseph F. Heath to file an
amended sale motion in connection with his sale of real property
known as 2449 Huntington Park Drive, Alexandria, Virginia, to Andy
Zhang for $550,000, with a $5,000 credit to the Buyer.
The Debtor should amend its Motion to provide further information
on the settlement distributions, and that this matter should be
reset for a hearing on Feb. 28, 2017 at 11:00 a.m.
The Debtor will file the Amended Sale Motion and serve notice to
all interested parties no later than the close of business on Feb.
17, 2017, and that the time for such notice to accommodate the
hearing on Feb. 28, 2017 is shortened accordingly.
About Joseph F. Heath
Joseph F. Heath sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 07-14107) on Dec. 27, 2007. The Debtor estimated assets in
the range of $0 to $50,000 and $100,001 to $500,000 in debt. The
Debtor tapped Bennett A. Brown, Esq., at The Law Office of Bennett
A. Brown, as counsel.
KIDS ONLY II: RREF Selling 700 La Neuville Road Daycare
-------------------------------------------------------
RREF II PEBP-LA, LLC, asks the U.S. Bankruptcy Court for the
Western District of Louisiana to be authorized to enforce the Plan
filed by the Kids Only II of Lafayette, LLC, by setting an auction
date of the Debtor's daycare located at 700 La Neuville Road,
Lafayette, Louisiana, together with the improvements and fixtures
thereon ("Daycare").
Debtors Kids Only II and Kids Only III of Lafayette, LLC, each
filed a small business chapter 11 case on Oct. 20, 2015. They
confirmed their plans on Nov. 20, 2016.
Kids Only II's primary asset consists of the Daycare. RREF has a
first mortgage against the Daycare in the approximate amount of
$268,932.
Kids Only III's primary asset consists of another daycare located
at 224 Julian Circle, Lafayette, Louisiana, together with the
improvements and fixtures thereon ("Daycare 2"). RREF has a first
mortgage against Daycare 2 in the approximate amount of $124,285.
Under the confirmed Plans, the Debtors agreed to these pertinent
terms:
a. The Debtors must list the Properties for sale until March 13,
2017.
b. In the event the Debtors fail to sell or fails to refinance
the Properties, the Debtors agreed to sell the Properties at a
public auction on or around March 13, 2017.
c. RREF is permitted to employ an auction broker to assist with
the auction of the Properties.
As of today's date, the Debtors have failed to sell or to refinance
the Properties. Accordingly, RREF asks that the Court authorize a
public auction for May 2, 2017 at 10:00 a.m. ("Sale Date"), or soon
thereafter so that the Properties may be sold to the highest
bidders.
In accordance with the Debtors' plans, RREF is also engaging the
Auctioneer/Broker to assist with the auction of the Properties, as
agreed to by the Debtors. RREF asks the Court to permit Lamar P.
Fisher and Fisher Auction Co. the exclusive right to market and
sell the Properties. RREF also seeks to auction and sell the
Properties free and clear of all liens, claims, encumbrances, and
any and all interests of any kind ("Interests"). RREF or the
Debtors are not aware of any Interests on the Properties, but RREF
seeks this finding out of an abundance of caution.
The auction of the Properties will occur in front of the Daycare on
the Sale Date. The Auctioneer/Broker will have the exclusive right
to market and sell the Properties from March 13, 2017 through the
Sale Date. The Auctioneer will schedule and advertise the proposed
auction pending the Court's approval of the Motion.
The Properties will be sold "as is, where is," without any warranty
whatsoever, even for the return of the purchase price, by auction
free and clear of all Interests. The Properties will be auctioned
off to the highest bidders for cash or certified funds, 10% due at
auction and remainder due at closing. The sale of the Properties
would be free and clear of liens, claims, encumbrances and
Interests.
RREF is permitted to credit bid the full amount of its claim on the
Sale Date at the auction of the Properties.
The sale of the Properties will be confirmed with the Court at 2:00
p.m. on May 2, 2017, or at a date and time convenient for the
Court.
RREF also seeks authority, without further order of the Court, to
sell any of the Properties at a separate auction if any of the
Properties do not sell at the May 2, 2017 auction.
The Auctioneer/Broker's marketing and advertising costs, up to
$9,500, will be advanced by Auctioneer/Broker with all such
advances being a super priority lien and repaid from the first
proceeds of the sale of the Properties or from RREF. The
Auctioneer/Broker will charge a 6% Buyer's Premium to the final bid
prices on the Properties and said Buyer's Premium will be added to
the contract prices. The Buyer's Premium will be distributed at
the time of closing as follows: (i) 4% of the final bid prices will
be retained by the Auctioneer/Broker as their fee; (ii) 2% will be
retained by a "buyer's broker" as their fee and if no buyer's
broker, then the Auctioneer/Broker will retain an additional 2%.
Upon completion of the auction, the Auctioneer/Broker will file
with the Court a report summarizing the results of the auction and
stating the fees and expenses which will be paid to
Auctioneer/Broker. The fees and expenses will be paid without the
necessity of further notice or hearing unless any party in interest
files an objection within 4 business days of the sale hearing.
The Debtors consent to the filing of the Motion.
RREF asks the Court to authorize the auction of the Properties on
the terms and conditions set forth free and clear of all Interests.
RREF also asks the Court to permit Auctioneer/Broker to
exclusively sell the Properties from March 13, 2017 on the Sale
Date and to conduct a public auction of the Properties with
compensation and reimbursement of expenses to be paid out of the
gross proceeds of the sale as set forth.
Kids Only II of Lafayette, LLC, and Kids Only III of Lafayette,
LLC, provide childcare services. Kids Only II of Lafayette, LLC
(Bankr. W.D. La. Case No. 15-51354) and Kids Only III of
Lafayette,
LLC (Bankr. W.D. La. Case No. 15-51355) filed separate Chapter 11
petitions on Oct. 20, 2015. Both Debtors are represented by
Thomas
E. St. Germain, Esq. -- ecf@weinlaw.com -- at Weinstein Law Firm.
KIDS ONLY III: RREF Selling 224 Julian Circle Daycare
-----------------------------------------------------
RREF II PEBP-LA, LLC ("RREF"), asks the U.S. Bankruptcy Court for
the Western District of Louisiana to be authorized to enforce the
Plan filed by the Kids Only III of Lafayette, LLC, by setting an
auction date of the Debtor's daycare located at 224 Julian Circle,
Lafayette, Louisiana, together with the improvements and fixtures
thereon ("Daycare").
Debtors Kids Only III and Kids Only II of Lafayette, LLC, each
filed a small business chapter 11 case on Oct. 20, 2015. They
confirmed their plans on Nov. 20, 2016.
Kids Only III's primary asset consists of the Daycare. RREF has a
first mortgage against Daycare 2 in the approximate amount of
$124,285.
Kids Only II's primary asset consists of another daycare located at
700 La Neuville Road, Lafayette, Louisiana, together with the
improvements and fixtures thereon ("Daycare 2"). RREF has a first
mortgage against the Daycare in the approximate amount of $268,932.
Under the confirmed Plans, the Debtors agreed to these pertinent
terms:
a. The Debtors must list the Properties for sale until March 13,
2017.
b. In the event the Debtors fail to sell or fails to refinance
the Properties, the Debtors agreed to sell the Properties at a
public auction on or around March 13, 2017.
c. RREF is permitted to employ an auction broker to assist with
the auction of the Properties.
As of today's date, the Debtors have failed to sell or to refinance
the Properties. Accordingly, RREF asks that the Court authorize a
public auction for May 2, 2017 at 10:00 a.m. ("Sale Date"), or soon
thereafter so that the Properties may be sold to the highest
bidders.
In accordance with the Debtors' plans, RREF is also engaging the
Auctioneer/Broker to assist with the auction of the Properties, as
agreed to by the Debtors. RREF asks the Court to permit Lamar P.
Fisher and Fisher Auction Co. the exclusive right to market and
sell the Properties. RREF also seeks to auction and sell the
Properties free and clear of all liens, claims, encumbrances, and
any and all interests of any kind ("Interests"). RREF or the
Debtors are not aware of any Interests on the Properties, but RREF
seeks this finding out of an abundance of caution.
The auction of the Properties will occur in front of the Daycare 2
on the Sale Date. The Auctioneer/Broker will have the exclusive
right to market and sell the Properties from March 13, 2017 through
the Sale Date. The Auctioneer will schedule and advertise the
proposed auction pending the Court's approval of the Motion.
The Properties will be sold "as is, where is," without any warranty
whatsoever, even for the return of the purchase price, by auction
free and clear of all Interests. The Properties will be auctioned
off to the highest bidders for cash or certified funds, 10% due at
auction and remainder due at closing. The sale of the Properties
would be free and clear of liens, claims, encumbrances and
Interests.
RREF is permitted to credit bid the full amount of its claim on the
Sale Date at the auction of the Properties.
The sale of the Properties will be confirmed with the Court at 2:00
p.m. on May 2, 2017, or at a date and time convenient for the
Court.
RREF also seeks authority, without further order of the Court, to
sell any of the Properties at a separate auction if any of the
Properties do not sell at the May 2, 2017 auction.
The Auctioneer/Broker's marketing and advertising costs, up to
$9,500, will be advanced by Auctioneer/Broker with all such
advances being a super priority lien and repaid from the first
proceeds of the sale of the Properties or from RREF. The
Auctioneer/Broker will charge a 6% Buyer's Premium to the final bid
prices on the Properties and said Buyer's Premium will be added to
the contract prices. The Buyer's Premium will be distributed at
the time of closing as follows: (i) 4% of the final bid prices will
be retained by the Auctioneer/Broker as their fee; (ii) 2% will be
retained by a "buyer's broker" as their fee and if no buyer's
broker, then the Auctioneer/Broker will retain an additional 2%.
Upon completion of the auction, the Auctioneer/Broker will file
with the Court a report summarizing the results of the auction and
stating the fees and expenses which will be paid to
Auctioneer/Broker. The fees and expenses will be paid without the
necessity of further notice or hearing unless any party in interest
files an objection within 4 business days of the sale hearing.
The Debtors consent to the filing of the Motion.
RREF asks the Court to authorize the auction of the Properties on
the terms and conditions set forth free and clear of all Interests.
RREF also asks the Court to permit Auctioneer/Broker to
exclusively sell the Properties from March 13, 2017 on the Sale
Date and to conduct a public auction of the Properties with
compensation and reimbursement of expenses to be paid out of the
gross proceeds of the sale as set forth.
Kids Only II of Lafayette, LLC, and Kids Only III of Lafayette,
LLC, provide childcare services. Kids Only II of Lafayette, LLC
(Bankr. W.D. La. Case No. 15-51354) and Kids Only III of
Lafayette,
LLC (Bankr. W.D. La. Case No. 15-51355) filed separate Chapter 11
petitions on Oct. 20, 2015. Both Debtors are represented by
Thomas
E. St. Germain, Esq. -- ecf@weinlaw.com -- at Weinstein Law Firm.
LB VENTURES: Can Use Cash Collateral on Interim Basis Thru April 12
-------------------------------------------------------------------
Judge Joan N. Feeney of the U.S. Bankruptcy Court for the District
of Massachusetts authorized LB Ventures, LLC, to use cash
collateral on an interim basis through April 12, 2017.
Judge Feeney directed the Debtor to pay any outstanding real estate
tax shortage to the City of Quincy for current taxes due. She also
directed the Debtor to submit an actual income and expense
statement reconciled to its budget by April 10, 2017 for the period
between Feb. 16, 2017 and April 1, 2017.
A continued hearing on the Debtor's use of cash collateral will be
held on April 12, 2017 at 11:00 a.m.
A full-text copy of the Order, dated Feb. 16, 2017, is available at
https://is.gd/lV5QuP
About LB Ventures
LB Ventures, LLC, based in Quincy, MA, filed a Chapter 11 petition
(Bankr. D. Mass. Case No. 16-13840) on Oct. 4, 2016. The petition
was signed by Luis M. Barros, manager. Judge Joan N. Feeney
presides over the case. The Debtor is represented by Joseph G.
Butler, Esq., at Law Office of Joseph G. Butler. At the time of
the filing, the Debtor estimated $1 million to $10 million in
assets and $500,000 to $1 million in liabilities.
No official committee of unsecured creditors has been appointed in
the case.
LEO AUTO BROKER: Asks Court Permission to Use Cash Collateral
-------------------------------------------------------------
Leo Auto Broker, Inc., seeks authorization from the U.S. Bankruptcy
Court for the Northern District of Georgia to use cash collateral.
The Debtor needs to use the cash collateral to meet its ordinary
operating expenses and maintain the current state of its business
since the Debtor has no other source of income than the cash
collateral.
The Debtor's proposed budget projects revenues and expenses for the
next six months, from March through August 2017. The proposed
budget provides total monthly expenses of approximately $147,676.
The Debtor is unaware of any other party asserting an interest in
the cash collateral, except for NextGear Capital, Inc., which may
claim an interest in the cash collateral. NextGear Capital asserts
a first priority lien on specific vehicles as well as the entire
inventory of the Debtor in an amount in excess of $500,000.
The Debtor proposes to grant NextGear Capital replacement liens in
revenues generated post-petition of the same kind, extent, and
priority as those existing pre-petition, and to such extent that
the Debtor uses the cash collateral.
A full-text copy of the Debtor's Motion, dated Feb. 16, 2017, is
available at https://is.gd/FsEU33
About Leo Auto Broker
Leo Auto Broker, Inc., owns and operates a car dealership located
at 7372 Tara Boulevard, Jonesboro, GA. Leo Auto Broker filed a
Chapter 11 petition (Bankr. N.D. Ga. Case No. 17-52777) on Feb. 13,
2017. The case is assigned to Judge C. Ray Mullins. At the time
of the filing, the Debtor estimated assets of less than $1 million
and liabilities of less than $500,000. The Debtor is represented
by James R. Jones, Esq., at Macey, Wilensky & Hennings, LLC.
LEVI STRAUSS: Moody's Assigns Ba2 Rating to EUR450MM Notes
----------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Levi Strauss &
Co.'s proposed EUR450 million 10-year senior unsecured notes. The
company's existing ratings are unchanged, including its Ba1
Corporate Family Rating, Ba1-PD Probability of Default Rating and
Ba2 senior unsecured rating. The rating outlook is stable.
Proceeds from the notes and balance sheet cash will be used to
refinance the company's 6.875% senior unsecured notes due 2022. The
assigned ratings are subject to review of final documentation. "The
transaction is a credit positive because it will extend the
company's debt maturity profile and provide for a natural currency
hedge for operations in Europe," stated Moody's analyst, Mike
Zuccaro.
The following ratings were assigned:
Issuer: Levi Strauss & Co.
EUR450 million Senior Unsecured Notes at Ba2 (LGD4)
RATINGS RATIONALE
LS&Co's Ba1 rating reflects its moderate leverage, with
lease-adjusted debt/EBITDA at around 2.8 times for the company's
latest fiscal year ended November 27, 2016, and good profitability
with low double-digit EBITDA margins. Moody's expects the company's
recent cost saving initiatives will enable it to maintain strong
margins in the near to intermediate term as it navigates a
challenging apparel environment, while continuing to invest in
future growth, particularly in its Direct-to-Consumer channels. The
ratings reflect the iconic nature of the Levi's brands, its global
reach with sales in over 110 countries and meaningful scale with
net revenues approaching $4.6 billion. Moody's expects the company
to maintain a commitment to strong financial metrics and balanced
financial policies, and that it will maintain dividend payouts
consistent with recent levels. The 2014 extension of its
stockholders' agreement to 2019 is also viewed favorably. The
rating is constrained by the company's limited brand and product
diversification with Levi's brand men's slacks accounting for the
significant majority of net revenues, and exposure to volatile
input costs which can have a meaningful impact on earnings and cash
flows.
The stable rating outlook reflects Moody's expectation that LS&Co
will continue to maintain solid metrics over the next 12 to 18
months as it continues to execute on key growth initiatives.
Ratings could be upgraded if the company can show sustained
constant-currency revenue growth, which would evidence that it is
maintaining its market share and has stabilized areas such as its
women's business, and profit margins remain stable, indicating that
cost savings measures are effective. Quantitatively, ratings could
be upgraded if debt/EBITDA was sustained below 2.75 times and
EBITA/interest expense was sustained above 4.25 times, while
maintaining a very good liquidity profile and balanced financial
policies.
Ratings could be downgraded if the company were to experience
negative revenue trends, which would indicate that it is losing
market share, or margins were to erode, which would indicate that
its cost saving programs are not having the expected impact on
profitability. Ratings could be downgraded if the company's
financial policies were to become more aggressive such as utilizing
debt to fund shareholder distributions. Quantitatively the ratings
could be downgraded if debt/EBITDA is sustained above 3.25 times or
interest coverage sustained below 3.25 times.
Headquartered in San Francisco, California, Levi Strauss & Co. ("LS
& CO") designs and markets jeans, casual wear and related
accessories under the "Levi's", "Dockers", "Signature by Levi
Strauss & Co." and "Denizen" brands. The company sells product in
more than 110 countries through chain retailers, department stores,
online sites and franchised and company-owned stores. Levi Strauss
& Co.'s net revenues approach $4.6 billion.
The principal methodology used in this rating was Global Apparel
Companies published in May 2013.
LEVI STRAUSS: S&P Assigns 'BB+' Rating on Proposed EUR450MM Notes
-----------------------------------------------------------------
S&P Global Ratings said that it assigned its 'BB+' issue-level and
'3' recovery ratings to San Francisco-based Levi Strauss & Co.'s
proposed senior unsecured up to EUR450 million notes due in 2027.
S&P views the transaction as leverage neutral and expects the
company will use the proceeds to redeem its existing $525 million
senior unsecured notes due in 2022. S&P plans to withdraw its
ratings on the $525 million unsecured notes when redeemed. The
'BB+' issue-level rating and '3' recovery rating for the existing
$500 million senior unsecured notes due in 2025 are also unchanged.
Pro forma for the transaction, reported debt is about $1.1
billion.
Levi Strauss & Co. is the issuer for each tranche of the existing
and proposed senior unsecured notes and the borrower for the
unrated $850 million asset-based revolving facility expiring in
April 2019.
S&P's ratings on Levi Strauss reflect its leading global market
position in denim bottoms, strong brand awareness from its
well-known Levi's brand, steady demand for denim products that S&P
considers a staple component of consumers' wardrobes, and its
ongoing efforts to improve operating efficiency in its global
supply chain that supports solid working capital management and
healthy cash flow. S&P's assessment also reflects its view that
debt-to-EBITDA leverage will improve slightly in 2017 to near 2x
from about 2.2x in 2016, and funds from operations (FFO) to debt to
about 33% from 31%. S&P assumes no material acquisitions and that
the company will maintain its focus on further strengthening its
balance sheet over meaningful shareholder distributions.
RATINGS LIST
Levi Strauss & Co.
Corporate Credit Rating BB+/Stable/--
New Rating
Levi Strauss & Co.
Senior Unsecured
EUR sr notes due 2027 BB+
Recovery Rating 3 (60%)
LIME ENERGY: Completes Reverse/Forward Stock Split
--------------------------------------------------
On Feb. 10, 2017, Lime Energy Co. completed its previously
announced reverse/forward stock split by filing two Certificates of
Amendment with the office of the Secretary of State of Delaware: A
Certificate of Amendment to the Company's Certificate of
Incorporation to effect the reverse stock split at 6:00 p.m.
Eastern Time on February 10, 2017 and a Certificate of Amendment to
the Company's Certificate of Incorporation to effect the forward
stock split at 6:01 p.m. Eastern Time on February 10, 2017.
As a result of the filing of the two Certificates of Amendment each
holder of record of fewer than 300 shares of the Company's Common
Stock immediately prior to the effective time of the reverse stock
split will receive a cash payment equal to $2.49, subject to any
applicable U.S. federal, state and local withholding tax, without
interest, per pre-split share. Such holders of record will no
longer be stockholders of the Company with respect to such shares;
and Each stockholder of record owning at least 300 shares of Common
Stock immediately prior to the effective time of the reverse stock
split will continue to hold the same number of shares of Common
Stock after completion of the reverse stock split and the forward
stock split.
A full-text copy of the regulatory filing is available at:
https://is.gd/tLXxNL
About Lime Energy
Headquartered in Huntersville, North Carolina, Lime Energy Co. --
http://www.lime-energy.com/-- is engaged in planning and
delivering clean energy solutions that assist its clients in their
energy efficiency and renewable energy goals. The Company's
solutions include energy efficient lighting upgrades, energy
efficient mechanical and electrical retrofit and upgrade services,
water conservation, building weatherization, on-site generation and
renewable energy project development and implementation. The
Company provides energy solutions across a range of facilities,
from high-rise office buildings, distribution facilities,
manufacturing plants, retail sites, multi-tenant residential
buildings, mixed use complexes, hospitals, colleges and
universities, government sites to small, single tenant facilities.
Lime Energy reported a net loss available to common stockholders of
$4.44 million on $113 million of revenue for the year ended Dec.
31, 2015, compared to a net loss available to common stockholders
of $5.60 million on $58.8 million of revenue for the year ended
Dec. 31, 2014.
As of Sept. 30, 2016, Lime Energy had $49.72 million in total
assets, $42.87 million in total liabilities, $11.78 million in
contingently redeemable series C preferred stock, and a total
stockholders' deficit of $4.93 million.
LIMITED STORES: Has Court's Nod to Obtain $6-Mil. of DIP Financing
------------------------------------------------------------------
Ryan Boysen, writing for Bankruptcy Law360, reports that the U.S.
Bankruptcy Court for the District of Delaware granted The Limited
Co. LLC on Feb. 16, 2017, permission to obtain a $6 million
debtor-in-possession financing spearheaded by DIP agent Cerberus
Business Finance.
According to Law360, the Debtor said that it needs the financing to
continue selling off its remaining assets, although it has already
liquidated most of its stock and shuttered the 250 or so retail
locations it recently operated. Law360 relates that a bankruptcy
auction is scheduled for Feb. 21.
About Limited Stores
Limited Stores Company, LLC, et al., comprise a multi-channel
retailing company operating under the name "The Limited," which
specializes in the sale of women's clothing.
Founded in 1963 as a single store, Limited Stores expanded over
the
past five decades to become a household name throughout the United
States for women's apparel. At its peak, Limited Stores operated
approximately 750 retail brick and mortar store locations in the
United States as well as an e-commerce channel, which was
accessible through the Web site at http://www.TheLimited.com/
Limited Stores Company, LLC, Limited Stores, LLC, and The Limited
Stores GC, LLC, filed voluntary petitions under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 17-10124) on Jan.
17,
2017, blaming, among other things, the shift of consumer
preference
from shopping at brick and mortar stores to online shopping. The
petitions were signed by Timothy D. Boates, authorized signatory.
Limited Stores Company estimated $10 million to $50 million in
assets and $100 million to $500 million in liabilities.
The Debtors tapped Klehr Harrison Harvey Branzburg LLP as counsel;
and Donlin, Recano & Company, Inc., as notice, claims and
balloting
agent.
On Jan. 24, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. Kelley Drye & Warren
LLP is the proposed counsel to the Official Committee of Unsecured
Creditors.
LIMITED STORES: Sycamore Partners Wins Auction
----------------------------------------------
Lillian Rizzo, writing for The Wall Street Journal Pro Bankruptcy,
reported that Limited Stores Co. kicked off an auction for its
brand name, with private-equity firm Sycamore Partners walking away
as the winning bidder, according to people familiar with the
matter.
According to the report, citing the people, the only bidders
chasing after the women's apparel chain's brand name were Sycamore
and Sunrise Brands LLC, which showed earlier interest. After a
short morning of bidding, Sycamore prevailed with a $26.75 million
offer, the people added, the report related.
The Limited's proposed buyer, Sycamore, acquired the brand name of
women's apparel retailer Coldwater Creek Inc. in 2014, maintaining
its website and catalog, the report further related.
About Limited Stores
Limited Stores Company, LLC, et al., comprise a multi-channel
retailing company operating
under the name "The Limited," which specializes in the sale of
women's clothing. Founded in 1963 as a single store, Limited
Stores operated at its peak 750 retail brick and mortar store
locations in the United States as well as an e-commerce channel
http://www.TheLimited.com/.
Limited Stores Company, LLC, Limited Stores, LLC, and The Limited
Stores GC, LLC, filed voluntary petitions under Chapter 11 of the
Bankruptcy Code in the U.S. Bankruptcy Court for the District of
Delaware (Bankr. D. Del. Lead Case No. 17-10124) on Jan. 17, 2017,
after closing all 250 remaining stores. The petitions were signed
by Timothy D. Boates, authorized signatory.
Limited Stores Company estimated $10 million to $50 million in
assets and $100 million to $500 million in liabilities.
The Debtors tapped Klehr Harrison Harvey Branzburg LLP as counsel.
Donlin, Recano & Company, Inc., serves as the Debtors' notice,
claims and balloting agent.
Andrew Vara, acting U.S. trustee for Region 3, on Jan. 24, 2017,
appointed
five creditors to serve on an Official Committee of Unsecured
Creditors. The Committee tapped Kelley Drye & Warren LLP, and
Pachulski Stang Ziehl & Jones LLP, as its attorneys.
LIMITED STORES: Tween Brands Buying De Minimis Assets for $68K
--------------------------------------------------------------
Limited Stores Co., LLC, and affiliates filed with the U.S.
Bankruptcy Court for the District of Delaware a notice of the
proposed sale of de minimis assets to Tween Brands Services Co. for
$67,860.
On Feb. 17, 2017, the Court approved an Order Establishing
Procedures for De Minimis Asset Transactions ("Transaction Order"),
whereby the Court authorized the Debtors to use, sell, transfer, or
acquire certain non-core assets ("De Minimis Assets").
Pursuant to the Transaction Order, the Debtors propose to sell or
acquire the De Minimis Assets set for in the Transaction Assets.
A copy of the Transaction Assets attached to the Notice is
available for free at:
http://bankrupt.com/misc/Limited_Stores_266_Sales.pdf
Pursuant to the Transaction Order, any recipient of the Notice may
object to the proposed transaction within 7 calendar days of
service of the Notice. Objections must be filed within 7 calendar
days of service of the Notice to the proposed counsel to the
Debtors, Klehr Harrison Harvey Branzburg LLP.
The Purchaser can be reached at:
TWEEN BRANDS SERVICES CO.
8323 Walton Parkway
New Albany, OH 43054.
About Limited Stores
Limited Stores Company, LLC, et al., comprise a multi-channel
retailing company operating under the name "The Limited," which
specializes in the sale of women's clothing.
Founded in 1963 as a single store, Limited Stores expanded over
the
past five decades to become a household name throughout the United
States for women's apparel. At its peak, Limited Stores operated
approximately 750 retail brick and mortar store locations in the
United States as well as an e-commerce channel, which was
accessible through the Web site at http://www.TheLimited.com/
Limited Stores Company, LLC, Limited Stores, LLC, and The Limited
Stores GC, LLC, filed voluntary petitions under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 17-10124) on Jan.
17,
2017, blaming, among other things, the shift of consumer
preference
from shopping at brick and mortar stores to online shopping. The
petitions were signed by Timothy D. Boates, authorized signatory.
Limited Stores Company estimated $10 million to $50 million in
assets and $100 million to $500 million in liabilities.
The Debtors tapped Klehr Harrison Harvey Branzburg LLP as counsel;
and Donlin, Recano & Company, Inc., as notice, claims and
balloting
agent.
On Jan. 24, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. Kelley Drye & Warren
LLP is the proposed counsel to the Official Committee of Unsecured
Creditors.
LMCHH PCP: Seeks to Hire Jones Walker as Co-Counsel
---------------------------------------------------
LMCHH PCP LLC and Louisiana Medical Center and Heart Hospital LLC
seek approval from the U.S. Bankruptcy Court for the Eastern
District of Louisiana to hire Jones Walker LLP.
Jones Walker will serve as co-counsel with Alston & Bird LLP, the
Debtors' lead bankruptcy counsel. The services to be provided by
the firm include advising the Debtors regarding issues of Louisiana
law.
The hourly rates charged by the firm are:
R. Patrick Vance $475
Elizabeth Futrell $425
Mark Mintz $350
Laura Ashley $285
Stephanie McClarty $235
Kilby Brabston $160
Elizabeth Futrell, Esq., at Alston & Bird, disclosed in a court
filing that her firm is a "disinterested person" as defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Elizabeth J. Futrell, Esq.
Jones Walker LLP
201 St. Charles Avenue, 49th Floor
New Orleans, LA 70170-5100
Tel: 504-582-8000
Fax: 504-582-8583
About LMCHH PCP
LMCHH PCP LLC and Louisiana Medical Center and Heart Hospital, LLC
currently operate a state-of-the-art 213,000 square facility and
two medical office buildings.
Originally licensed for 58 beds in 2003, as a result of its
physical and strategic expansion in 2007, the Hospital is now a
full-service 132-bed acute care hospital with seven operating
rooms, three catheterization laboratories, and a 24-hour heart
attack intervention center dedicated to providing advanced medical
treatment and compassionate care to patients and families
throughout the North Shore area.
LMCHH PCP and LHH sought bankruptcy protection in the U.S.
Bankruptcy Court for the District of Delaware on Jan. 30, 2017.
The Debtors are currently seeking joint administration of their
Chapter 11 cases under the main case, 17-10201. The cases have
been assigned to the Hon. Judge Laurie Selber Silverstein.
LMCHH estimated assets in the range of $1 million to $10 million
and liabilities of up to $500 million. LHH estimated assets in the
range of $10 million to $50 million and liabilities of $100 million
to $500 million.
The Debtors have hired Young, Conaway, Stargatt & Taylor LLP as
local counsel, Alston & Bird LLP as legal counsel, Solic Capital
Advisors, LLC, as financial advisor and The Garden City Group,
Inc., as claims and noticing agent.
MALIBU LIGHTING: Seeks April 10 Plan Filing Period Extension
------------------------------------------------------------
Malibu Lighting Corporation and its affiliated debtors request the
U.S. Bankruptcy Court for the District of Delaware to extend the
exclusive periods for filing a plan of reorganization through and
including April 10, 2017 and for soliciting acceptances to a plan
through and including June 8, 2017.
Without the requested extension, the deadline for which only the
Debtors may file a plan would have been on February 21, 2017 and
the deadline for which only the Debtors may solicit acceptances of
such plan would have been on April 19, 2017. The Debtors seek an
extension of the Exclusivity Periods for the remainder of the
statutory maximum permitted under the Bankruptcy Code.
The Debtors tell the Court that their cases are complex with three
separate businesses, and the assets of each Debtors had to be sold
and/or liquidated during the pendency of their chapter 11 cases.
The Debtors further tell the Court that they have diligently
administered these cases by, among ether things, expeditiously
concluding and closing these asset sales and reconciling and
successfully prosecuting multiple objections to claims.
The Debtors relate that to date, they have filed multiple omnibus
objections to over 75 proofs of claims totaling approximately $4.5
million. As a result of these objections, the Debtors also relate
that over 400 scheduled and filed claims totaling over $15 million
have been expunged from the official claims register pursuant to
orders entered by this Court. In addition, the Debtors have filed
individual objections to several priority tax claims by State
taxing authorities that have been sustained by orders entered by
the Court.
Moreover, the Debtors tell the Court that they are currently
preparing a draft disclosure statement and related plan, and have
been in discussions with the Committee and other non-debtor parties
over the structure of a potential chapter 11 plan that would
conclude these chapter 11 cases. However, the Debtors assert that
they require additional time to advance and hopefully conclude
these discussions, and then propose a consensual chapter 11 plan
that would have the support of the major economic constituencies.
A hearing to consider the Debtors' Motion will be held on March 22,
2017 at 2:00 p.m. Any response or objection to the entry of an
order with respect to the Debtor's Motion must be filed on or
before March 3, 2017.
About Malibu Lighting Corporation
Malibu Lighting Corporation, Outdoor Direct Corporation, National
Consumer Outdoors Corporation, Beam Corporation, Smoke 'N Pit
Corporation, Treasure Sensor Corporation and Stubbs Collections
Inc. filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead
Case No. 15-12080) on Oct. 8, 2015. The petition was signed by
David M. Baker as chief restructuring officer. Judge Kevin Gross
is assigned to the case.
MLC was a manufacturer and supplier of outdoor and landscape
lighting products, such as solar and low voltage lights and home
security lights, including the parts and accessories associated
with these products.
ODC was a manufacturer and supplier of a variety of consumer goods,
including (a) outdoor cooking products, such as outdoor gas grills,
charcoal grills, smokers and fryers, (b) hand held lighting
products, like flashlights and spotlights, (c) landscape lighting
products, and (d) parts and accessories associated with the
foregoing products.
MLC and ODC are winding down operations as a result of the
termination of a business relationship with principal customer,
Home Depot.
NCOC is a manufacturer and supplier of both branded and private
label pet bedding and pet accessory products. NCOC manufactures
beds, accessories, and deodorizers for dogs as well as beds,
scratching posts, and toys for cats. In addition, NCOC markets and
sells boat covers manufactured primarily from Chinese suppliers.
Malibu estimated assets and liabilities of $10 million to $50
million in its bankruptcy petition.
The Debtors have engaged Michael Seidl, Esq., Jeffrey N. Pomerantz,
Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl & Jones
LLP as counsel, Piper Jaffray Co. as investment banker, and
Kurtzman Carson Consultants as claims and noticing agent.
On Oct. 20, 2015, an official committee of unsecured creditors was
appointed by the Office of the United States Trustee. The
Committee has retained Lowenstein Sandler LLP as its counsel, Blank
Rome LLP as its Delaware co-counsel and BDO USA, LLP, as its
financial advisors.
No request has been made for the appointment of a trustee or an
examiner in these cases.
MAUI LAND: Lemonides Holds 5.8% Equity Stake as of Dec. 31
----------------------------------------------------------
ValueWorks, LLC and Charles Lemonides disclosed in an amended 13G
Schedule filed with the Securities and Exchange Commission that as
of Dec. 31, 2016, that they beneficially own 1,111,895 of Maui Land
& Pineapple Company, Inc's Common Stock, representing 5.8% of Maui
Land's Common Shares. A full-text copy of the filing is available
for free at: https://is.gd/PjSPwH
About Maui Land & Pineapple Co.
Maui Land & Pineapple Company, Inc. (NYSE: MLP) --
http://mauiland.com/-- develops, sells, and manages residential,
resort, commercial, and industrial real estate. The Company owns
approximately 23,000 acres of land on Maui and operates retail,
utility operations, and a nature preserve at the Kapalua Resort.
The Company's principal subsidiary is Kapalua Land Company, Ltd.,
the operator and developer of Kapalua Resort, a master-planned
community in West Maui.
Maui Land reported net income of $6.81 million for the year ended
Dec. 31, 2015, compared to net income of $17.63 million for the
year ended Dec. 31, 2014.
Maui Land reported net income of $17.6 million on $33 million of
total operating revenues for the year ended Dec. 31, 2014, compared
with a net loss of $1.16 million on $15.2 million of total
operating revenues in 2013.
Accuity LLP, in Honolulu, Hawaii, issued a "going concern"
qualification on the consolidated financial statements for the year
ended Dec. 31, 2015, citing that:
"The Company had outstanding borrowings under two credit facilities
totaling $40.6 million as of December 31, 2015. The Company has
pledged a significant portion of its real estate holdings as
security for borrowings under its credit facilities, limiting its
ability to borrow additional funds. Both credit facilities mature
on August 1, 2016.
"Absent the sale of some of its real estate holdings, refinancing,
or extending the maturity date of its credit facilities, the
Company does not expect to be able to repay its outstanding
borrowings on the maturity date.
"The credit facilities have covenants requiring among other things,
a minimum of $3 million in liquidity (as defined), a maximum of
$175 million in total liabilities, and a limitation on new
indebtedness. The Company's ability to continue to borrow under
its credit facilities to fund its ongoing operations and meet its
commitments depends upon its ability to comply with its covenants.
If the Company fails to satisfy any of its loan covenants, each
lender may elect to accelerate its payment obligations under such
lender’s credit agreement.
"The Company's cash outlook for the next twelve months and its
ability to continue to meet its loan covenants is highly dependent
on selling certain real estate assets at acceptable prices. If the
Company is unable to meet its loan covenants, borrowings under its
credit facilities may become immediately due, and it would not have
sufficient liquidity to repay such outstanding borrowings.
"The Company's credit facilities require that a portion of the
proceeds received from the sale of any real estate assets be repaid
toward its loans. The amount of proceeds paid to its lenders will
reduce the net sale proceeds available for operating cash flow
purposes.
"The aforementioned circumstances raise substantial doubt about the
Company's ability to continue as a going concern."
MCO INDUSTRIES: Seeks to Hire Hector Eduardo as Legal Counsel
-------------------------------------------------------------
MCO Industries Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Puerto Rico to hire legal counsel in connection
with its Chapter 11 case.
The Debtor proposes to hire The Law Offices of Hector Eduardo
Pedrosa Luna to give legal advice regarding its duties under the
Bankruptcy Code, conduct examinations related to the administration
of its case, prepare a bankruptcy plan, and provide other legal
services.
The firm will charge an hourly rate of $150 for its services.
Hector Eduardo does not represent any interest adverse to the
Debtor's bankruptcy estate, and is a "disinterested person" as
defined in section 101(14) of the Bankruptcy Code, according to
court filings.
The firm can be reached through:
Hector Eduardo Pedrosa, Esq.
Law Offices of Hector Eduardo Pedrosa Luna
P.O. Box 9023963
San Juan, PR 00902
Tel: 787-920-7983
Fax: 787-754-1109
Email: hectorpedrosa@gmail.com
About MCO Industries Inc.
MCO Industries Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. P.R. Case No. 17-00961) on February 15,
2017. The petition was signed by John McComas Miro, president.
The case is assigned to Judge Edward A. Godoy.
At the time of the filing, the Debtor estimated assets of less than
$500,000 and liabilities of $1 million to $10 million.
MF GLOBAL: March Trial on $3-Bil. Malpractice Lawsuit Against PwC
-----------------------------------------------------------------
Patrick Fitzgerald, writing for The Wall Street Journal Pro
Bankruptcy, reported that PricewaterhouseCoopers LLP faces a
professional malpractice lawsuit over claims that the accounting
giant's advice helped bring the collapse of MF Global Holdings Ltd.
more than five years ago after its risky bets on European sovereign
debt came to light and spooked investors fled the commodities
brokerage.
According to the report, the malpractice case could lead to more
than $3 billion in damages against PwC if a jury agrees the
auditor's advice to MF Global over how to account for its purchase
of European bonds was faulty.
Daniel Fetterman, Esq., a lawyer from Kasowitz Benson Torres &
Friedman LLP who is representing MF Global, said public auditors
such as PwC serve an essential watchdog role in the U.S. financial
system, the report related. If they don't do their job, disaster
can occur, the report further related.
"PwC had a duty to get the accounting right for MF Global. It
failed," Mr. Fetterman told the Journal.
PwC's lawyers say the official spearheading the lawsuit, MF Global
lead director Nader Tavakoli, is simply trying to hold the Big Four
accounting firm responsible for the faulty investment strategy
championed by former Chief Executive Jon Corzine, the report said.
Richard Marooney, Esq., a lawyer for PwC, said the accounting firm
stands by its work for MF Global, and that the commodity broker
correctly accounted for the transactions at issue in the lawsuit,
the report added.
U.S. District Judge Victor Marrero pushed back the trial's start to
March 6 so that the two sides could engage in a last-ditch attempt
at mediation, the report said. Those talks are off the record, but
both sides are publicly committed to taking the case to a jury, the
report added.
About MF Global
New York-based MF Global -- http://www.mfglobal.com/-- was one of
the world's leading brokers of commodities and listed derivatives.
MF Global provides access to more than 70 exchanges around the
world. The firm also was one of 22 primary dealers authorized to
trade U.S. government securities with the Federal Reserve Bank of
New York. MF Global's roots go back nearly 230 years to a sugar
brokerage on the banks of the Thames River in London.
On Oct. 31, 2011, MF Global Holdings Ltd. and MF Global Finance
USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y.
Case Nos. 11-15059 and 11-5058), after a planned sale to
Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF
Global had $41,046,594,000 in total assets and $39,683,915,000 in
total liabilities.
On Nov. 7, 2011, the United States Trustee appointed the statutory
creditors' committee in the Debtors' cases. At the behest of the
Statutory Creditor's Committee, the Court directed the U.S.
Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the
Bankruptcy Court entered an order approving the appointment of
Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC,
as Chapter 11 trustee.
On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services
LLC and MF Global FX Clear LLC filed voluntary Chapter 11
petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and
11-15810). On Dec. 27, the Court entered an order installing Mr.
Freeh as Chapter 11 Trustee of the New Debtors.
On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr.
Freeh also was installed as its Chapter 11 Trustee.
Judge Honorable Martin Glenn presides over the Chapter 11 case.
J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric
Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve
as bankruptcy counsel. The Garden City Group, Inc., serves as
claims and noticing agent. The petition was signed by Bradley I.
Abelow, Executive Vice President and Chief Executive Officer of MF
Global Finance USA Inc.
The Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan
LLP, as investigative counsel; (ii) FTI Consulting Inc., as
restructuring advisors; (iii) Morrison & Foerster LLP, as
bankruptcy counsel; and (iv) Pepper Hamilton as special counsel.
The Official Committee of Unsecured Creditors has retained
Capstone Advisory Group LLC as financial advisor, while lawyers at
Proskauer Rose LLP serve as counsel.
The Securities Investor Protection Corporation commenced
liquidation proceedings against MF Global Inc. to protect
customers. James W. Giddens was appointed as trustee pursuant to
the Securities Investor Protection Act. He is a partner at Hughes
Hubbard & Reed LLP in New York.
Jon Corzine, the former New Jersey governor and co-CEO of
Goldman Sachs Group Inc., stepped down as chairman and chief
executive officer of MF Global just days after the bankruptcy
filing.
In April 2013, the Bankruptcy Court approved MF Global Holdings'
plan to liquidate its assets. Bloomberg News reported that the
court-approved disclosure statement initially told
creditors with $1.134 billion in unsecured claims against the
parent holding company why they could expect a recovery of 13.4%
to 39.1% from the plan. As a consequence of a settlement with
JPMorgan, supplemental materials informed unsecured creditors
their recovery was reduced to the range of 11.4% to 34.4%. Bank
lenders will have the same recovery on their $1.174 billion claim
against the holding company. As a consequence of the settlement,
the predicted recovery became 18% to 41.5% for holders of $1.19
billion in unsecured claims against the finance subsidiary,
one of the companies under the umbrella of the holding company
trustee. Previously, the predicted recovery was 14.7% to 34% on
bank lenders' claims against the finance subsidiary.
MICHIGAN SPORTING: Closing All 66 Stores; GOB Sales Underway
------------------------------------------------------------
MC Sports is closing all 66 of its stores across the Midwest,
providing shoppers in seven states with significant discounts on
over $110 million of top-name sporting goods and apparel brands. A
joint venture between Tiger Capital Group and Great American Group
will conduct the going-out-of-business sale, which is now
underway.
Founded in Grand Rapids in 1946, MC Sports was one of the few
remaining privately held sporting goods chains in the country.
The company currently operates 24 stores in Michigan; 11 in Ohio;
seven in Indiana; eight in Illinois; seven in Wisconsin; five in
Missouri, and four in Iowa. To see a list of locations, please
visit:
http://www.tigergroup.com/mc-sports-stores-closing-list-state/
MC Sports' large-format stores brim with sporting goods and apparel
in virtually every category -- from hunting, fishing and camping
equipment, to running shoes, kayaks, treadmills, workout clothes,
team sports equipment, and much more. During the liquidation
event, shoppers will find discounts of up to 60 percent off the
original prices on dozens of top brands (with some exceptions, most
notably firearms).
Available brands include Nike, Under Armour, Adidas, Century,
Everlast, Fitbit, Merrell, Mizuno, K-Swiss, Asics, Cleveland,
Calloway, Adams Golf, Dunlop, Titleist, Wilson, Coleman, CamelBak,
Shakespeare, Daiwa, Igloo, Diamond, Easton and Louisville Slugger,
to name a few.
For bargain-conscious shoppers in the Midwest, the sale represents
a rare value opportunity, said Michael McGrail, COO of Tiger Group,
which provides asset valuation, advisory and disposition services
to a broad range of retail, wholesale, and industrial clients. "We
are witnessing a unique era of consolidation in sporting goods
retailing due in part to the rapid growth of ecommerce," he said.
"But stabilization is an inevitability; chain-wide store-closure
events such as this won't continue forever in sporting goods."
"Across the Midwest, MC Sports became a fabric of the community,"
stated Scott K. Carpenter, President of GA Retail Solutions, a
leading provider of asset disposition and auction solutions, and a
subsidiary of B. Riley Financial, Inc. For example, local sports
teams frequently received discounts from the chain. MC Sports also
prided itself on its diverse offering of top brands, Carpenter
noted. "For a region in which sports and outdoor activities are
incredibly popular," he said, "this is a truly compelling event."
Offering everything from men's clothing to military surplus, the
company was launched as Michigan Clothiers in 1946 but changed its
name to MC Sports in 1962 to reflect a growing focus on sports
equipment, footwear, and apparel. Over the years, MC Sports'
growth trajectory included snapping up competing regional chains
such as Morrie Mages' Sports, as well as Browns Sporting Goods,
both in Illinois.
About Michigan Sporting Goods Distributors
Michigan Sporting Goods Distributors, Inc., based in Grand Rapids,
MI, filed a Chapter 11 petition (Bankr. W.D. Mich. Case No.
17-00612) on Feb. 14, 2017. The Hon. John T. Gregg presides over
the case. The petition was signed by Bruce Ullery, president and
chief executive officer.
Robert Michael Azzi, Esq., Stephen B. Grow, Esq., and Elisabeth M.
Von Eitzen, Esq., at Warner Norcross & Judd LLP, serves as
bankruptcy counsel to the Debtor. The Debtor hired Stout Risius
Ross Advisors, LLC as financial advisor.
In its petition, the Debtor estimated $50 million to $100 million
in both assets and liabilities.
MID CITY TOWER: Expects $1.2MM Loan to Pay Creditor Claims
----------------------------------------------------------
Mid City Tower, LLC filed with the U.S. Bankruptcy Court for the
Middle District of Louisiana an amended disclosure statement in
support of its plan of reorganization, dated Feb. 12, 2017.
The Chapter 11 plan proposes to pay its debts in full. The plan
provides for lump sum payments of allowed secured and unsecured
claims with no necessity of amortization over a repayment term of
debt existing as of the petition date of the case. A portion of
the equity interest has been restructured by providing for a
buy-out of the interest of Dr. Bobby Joseph, Erat S. Joseph, and
Dr. George A. Mamphilly.
The debtor is in the final stage to close on a court-approved loan
with a 3-year fixed interest rate of 9.7% and adjustable rate
thereafter, to refinance the secured debt to MidSouth Bank and pay
allowed creditor claims. The debtor has provided all requested
information to the lender, will continue with the same title
closing firm to avoid delay, and is anticipating a closing date
within the next few weeks. The loan application is for $1,200,000
with a 360-month term and amortization with a conditional approval
up to $1,430,000 based on the loan to value ratio as determined by
the lender based upon its appraisal that has been conducted on-site
at the debtor's location on Feb. 2, 2017.
The Amended Disclosure Statement is available at:
http://bankrupt.com/misc/lamb16-10877-192.pdf
About Mid City Tower
Mid City Tower, LLC, based in Baton Rouge, Louisiana, is an entity
formed in 2013 by Mathew S. Thomas with the assistance of his
family. The entity has always been operated from its business
location at 5700 Florida Boulevard, Rouge Rouge, Louisiana.
The Debtor filed a Chapter 11 petition (Bankr. M.D. La. Case No.
16-10877) on July 26, 2016. The Hon. Douglas D. Dodd presides
over
the case. The petition was signed by Mr. Thomas, manager.
In its petition, the Debtor estimated $1 million to $10 million in
assets and $1 million to $10 million in liabilities.
Brandon A. Brown, Esq., and Ryan James Richmond, Esq., at Stewart
Robbins & Brown, LLC, serve as bankruptcy counsel.
MINERAL RESOURCES: Court Disallows TMR's Claim #22-1
----------------------------------------------------
In the adversary proceeding captioned Mineral Resources
International, Inc., Plaintiff, v. Trace Minerals Research, L.C.,
Defendant, Adversary Proceeding No. 15-2151 (Bankr. S.D. Utah),
Judge R. Kimball Mosier of the United States Bankruptcy Court for
the Southern District of Utah disallowed in its entirety claim
#22-1 filed by Trace Minerals Research, L.C.
On January 20, 2014, TMR filed proof of claim #22-1 in the amount
of $350,000. The asserted basis for the claim is [d]amages for
defamation/unfair competition. Mineral Resources International,
Inc., filed an objection to that proof of claim on August 11,
2014.
The alleged instances of defamation are limited to three
publications: a paper written by Wade C. Roberts, Ph.D., called
Extracting Minerals from the Great Salt Lake: Great Find or Great
Fraud? (Roberts Paper) and two videos featuring John Heinerman
posted to YouTube called Trace Minerals Research: The Truth
Revealed and Trace Minerals Research: The Truth Revealed Part II
(Heinerman Videos).
MRI's complaint sought disallowance of TMR's claim under 11 U.S.C.
section 502(b)(1). MRI argued that TMR's proof of claim is
unenforceable and should be disallowed for two reasons: (1) TMR
previously agreed to release and waive the damage claims asserted
in its proof of claim; and (2) the claim is barred by the
applicable statute of limitations.
Judge Mosier was not convinced that the Unfair Practices Act
supports TMR's unfair competition claim because the Act was enacted
to cover a different kind of conduct than the one TMR complained of
-- namely, the kind of economic behavior that one typically
encounters in the realm of antitrust law. Further, Judge Mosier
concluded that the unfair competition claim is based on the same
operative facts that would support a defamation action.
Consequently, the judge held that the statute of limitations for
defamation governs the unfair competition claim.
Judge Mosier also concluded that the single publication rule
applies to the Roberts Paper and the Heinerman Videos, and that
accordingly, the one-year statute of limitations began to run from
the date they were originally published on the Internet.
For the Roberts Paper, which was published in July 2010 and
republished in August 2010, the statute expired in August 2011. For
the First Heinerman Video, which was published in April 2011, and
the Second Heinerman Video, which was published in August 2011, the
statute expired in April 2012 and August 2012, respectively.
Absent any evidence of additional republication, Judge Mosier held
that TMR's proof of claim was filed outside the applicable
limitations period under Utah law, and therefore time-barred.
The bankruptcy case is In re: Mineral Resources International,
Inc., Chapter 11, Debtor, Bankruptcy Case No. 13-30606 (Bankr. S.D.
Utah).
A full-text copy of Judge Mosier's January 13, 2017 memorandum
decision is available at https://is.gd/mLgfXx from Leagle.com.
Mineral Resources International Inc. is represented by:
Zane S. Froerer, Esq.
FROERER & ASSOCIATES, PLLC
2661 Washington Blvd, Ste 201
Ogden, UT 84401
Tel: (801)621-2690
-- and --
Tyler Hawkes, Esq.
Sean Wood, Esq.
THE RUDD FIRM, PC
201 S. Main Street, Suite 275
Salt Lake City, UT 84111
Tel: (801)676-5337
Fax: (801)532-8400
Email: tyler@ruddfirm.com
sean@ruddfirm.com
-- and --
George B. Hofmann, Esq.
Adam H. Reiser, Esq.
COHNE KINGHORN PC
111 E. Broadway Eleventh Floor
Salt Lake City, UT 84111
Tel: (801)363-4300
Fax: (801)363-4378
Email: ghofmann@cohnekinghorn.com
areiser@cohnekinghorn.com
United States Trustee, U.S. Trustee, is represented by:
Laurie A. Cayton, Esq.
John T. Morgan, Esq.
US TRUSTEES OFFICE
405 South Main Street, Suite 300
Salt Lake City UT 84111
Tel: (801)524-5734
Fax: (801)524-5628
About Mineral Resources International
Mineral Resources International Inc., filed a Chapter 11 bankruptcy
petition (Bankr. D. Utah Case No. 13-30606) on September 16, 2013.
The debtor is represented by Tyler Hawkes, Esq.
MOTORS LIQUIDATION: Immigon Can't Evade Suit Over $1.5BB Loan
-------------------------------------------------------------
Rick Archer, writing for Bankruptcy Law360, reports that the Hon.
Martin Glenn of the U.S. Bankruptcy Court for the Southern District
of New York has not allowed Vienna-based Immigon Portfolioabbau AG
to use jurisdictional arguments to escape a lawsuit trying to
recover transfers to hundreds of General Motors' former bank
lenders related to a $1.5 billion term loan.
Law360 recalls that Immigon Portfolioabbau's predecessor OEVAG
received payment from the Company on a term loan that the Company
made prior to its 2009 bankruptcy sale. Law360 says that Immigon
Portfolioabbau is bound to New York by the loan agreement.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on
June 1, 2009. The Honorable Robert E. Gerber presides over the
Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin,
Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP,
assist the Debtors in their restructuring efforts. Al Koch at AP
Services, LLC, an affiliate of AlixPartners, LLP, serves as the
Chief Executive Officer for Motors Liquidation Company. GM is also
represented by Jenner & Block LLP and Honigman Miller
Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is
providing legal advice to the GM Board of Directors. GM's
financial advisors are Morgan Stanley, Evercore Partners and the
Blackstone Group LLP. Garden City Group is the claims and notice
agent of the Debtors.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Unsecured Creditors
Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis
& Frankel LLP served as bankruptcy counsel to the Creditors
Committee. Attorneys at Butzel Long served as counsel on supplier
contract matters. FTI Consulting Inc. served as financial advisors
to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin &
Drysdale, Chartered, represented the Asbestos Committee. Legal
Analysis Systems, Inc., served as asbestos valuation analyst.
The Bankruptcy Court entered an order confirming the Debtors'
Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan
was declared effect on March 31.
On Dec. 15, 2011, Motors Liquidation Company was dissolved. On the
Dissolution Date, pursuant to the Plan and the Motors Liquidation
Company GUC Trust Agreement, dated March 30, 2011, between the
parties thereto, the trust administrator and trustee
-- GUC Trust Administrator -- of the Motors Liquidation Company GUC
Trust, assumed responsibility for the affairs of and certain claims
against MLC and its debtor subsidiaries that were not concluded
prior to the Dissolution Date.
MSES CONSULTANTS: Hearing on Disclosure Scheduled for March 8
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of West
Virginia will hold on March 8, 2017, at 9:30 a.m. a hearing to
consider the adequacy of MSES Consultants, Inc.'s second amended
disclosure statement referring to the Debtor's plan of
reorganization.
Objections to the Disclosure Statement must be filed by March 6,
2017.
Headquartered in Clarksburg, West Virginia, MSES Consultants, Inc.,
filed for Chapter 11 bankruptcy protection (Bankr. N.D. W.V. Case
No. 15-01204) on Dec. 14, 2015, estimating its assets at between
$50,000 and $100,000 and liabilities at between $1 million and $10
million. The petition was signed by Lawrence M Rine, president.
Judge Patrick M. Flatley presides over the case.
Richard R. Marsh, Esq., at McNeer, Highland, McMunn And Varner, LC,
serves as the Debtor's bankruptcy counsel.
MY-WAY TRADING: Has Authorization to Use Cash Collateral
--------------------------------------------------------
Judge James M. Carr of the U.S. Bankruptcy Court for the Southern
District of Indiana authorized My-Way Trading, Inc., d/b/a
Diversified Green Solutions, to use cash collateral.
The Debtor's customers pay with cash, personal checks, debit cards,
and credit cards. The cash and personal checks are deposited into
the Debtor's bank accounts at First Merchants Bank, and the
Debtor's debit and credit card servicers wire funds every day into
the Debtor's bank accounts at First Merchants.
The Debtor also maintains a bank account at First Bank Richmond for
the sole purpose of accepting incoming wire transfers from a
foreign customer. First Bank may have valid, enforceable and
non-avoidable, first-priority liens and security interests in
substantially all of the personal property as well as general
intangibles owned by the Debtor including cash collateral. First
Bank consented to the Debtor's use of Cash Collateral.
First Bank is granted replacement liens over cash collateral to the
same extent, validity and priority of First Bank's prepetition
liens. In addition, the Debtor will pay First Bank as adequate
protection $3,500 per month.
The Debtor was also directed to maintain insurance coverage at all
times on the all of the assets of the bankruptcy estate.
A full-text copy of the Order, dated Feb. 16, 2017, is available at
https://is.gd/SRrwMx
About My-Way Trading
My-Way Trading, Inc., doing business as Diversified Green
Solutions, is a plastics recycling business located in Richmond,
Indiana.
My-Way Trading filed a Chapter 11 petition (Bankr. S.D. Ind. Case
No. 16-09324) on Dec. 9, 2016. The petition was signed by Seth
Smith, President. The Debtor is represented by David R. Krebs,
Esq., at Hester Baker Krebs LLC. The Debtor estimated assets and
liabilities at $500,000 to $1 million at the time of the filing.
An official committee of unsecured creditors has not yet been
appointed in the Chapter 11 case of My-Way Trading as of Jan. 12,
2017.
NINJA METRICS: Seeks June Plan Filing Extension Pending Trial
-------------------------------------------------------------
Ninja Metrics, Inc. requests the U.S. Bankruptcy Court for the
Central District of California to extend the exclusive periods
during which the Debtor may file a Chapter 11 plan of
reorganization and solicit acceptances thereof, through and
including June 21, 2017, and August 20, 2017, respectively.
The Debtor relates that its Board of Directors had removed Mark
Kolokotrones as member of its Board. Consequently, Mr. Kolokotrones
sued the Debtor and its Board of Directors in the Los Angeles
Superior Court. In turn, the Debtor filed a cross-complaint against
Mr. Kolokotrones.
In addition to the litigation, Mr. Kolokotrones filed an action in
the Delaware Chancery Court seeking an "Advancement of Fees"
incurred in connection with defending the Debtor's cross-complaint.
The Delaware Court issued an oral ruling granting Mr. Kolokotrones'
request, which at that time was between $1.4 million and $2
million. In addition, the Debtor had other liabilities in the
amount of $218,448 to other creditors.
The Debtor contends that the single largest claim against it is the
contingent claim of Mr. Kolokotrones. The Debtor further contends
that the Summary Judgment Motions on both Mr. Kolokotrones'
Complaint and the Debtor's Cross-Complaint are scheduled for March
2 and the trial is scheduled for March 22, 2017.
The Debtor asserts that the trial will determine what monies are
owed by the Debtor or the Non-Debtor/Defendants to Mr.
Kolokotrones. As such, until such claims are fully liquidated, it
will be almost impossible for the Debtor to propose a Plan of
Reorganization.
About Ninja Metrics Inc.
Ninja Metrics Inc. filed a Chapter 11 bankruptcy petition (Bankr.
C.D.Cal. Case No. 16-24013) on October 24, 2016. The petition was
signed by Dmitri Williams, president. Judge Sheri Bluebond
presides over the case. In its petition, the Debtor estimated $10
million to $50 million in assets and $500,000 to $1 million in
liabilities.
The Debtor is represented by Andrew Goodman, Esq. at the Goodman
Law Offices. The Debtor taps Adam Grant, Esq. of Alpert Barr &
Grant, PLC as special litigation counsel.
NORTH CENTRAL FLORIDA: ICEC Buying Gainesville Property for $1.1M
-----------------------------------------------------------------
The North Central Florida YMCA, Inc., asks the U.S. Bankruptcy
Court for the Northern District of Florida to authorize the sale of
real property located at 5201 NW 34th Blvd., Gainesville, Florida,
Tax Parcel #06083-005-000, to India Cultural and Educational
Center, Inc. ("ICEC") for a gross sales price of $1,100,000.
On its Schedule A, the Debtor listed ownership fee simple in the
property.
Wells Fargo Bank, N.A., has a first priority lien on the property
securing an indebtedness as of the Petition Date in the principal
amount of $3,312,294, together with accrued but unpaid interest of
$202,715, plus late charges, attorneys' fees and costs.
Prior to the Petition Date, the Debtor has attempted and is still
attempting to raise funds to obtain the satisfaction of the
indebtedness owed to Wells Fargo and other obligations, but has
also marketed the property for sale to try to maximize the value to
the estate should the Debtor be unable to raise the funds necessary
to satisfy the indebtedness.
ICEC submitted a Commercial Contract for the purchase of the
property free and clear of liens, claims, and encumbrances for a
gross sales price of $1,100,000.
A copy of the Commercial Contract attached to the Motion is
available for free at:
http://bankrupt.com/misc/North_Central_50_Sales.pdf
The Debtor has determined that, if it is unsuccessful in raising
the required funds to keep the YMCA operational, it will proceed
with the Commercial Contract with ICEC subject to the approval of
Wells Fargo and the Court. If both these options fail to occur on
April 4, 2017, the Debtor will voluntarily convert the case to a
Chapter 7 bankruptcy liquidation.
Additionally, the Debtor has agreed to these terms with Wells Fargo
Bank, N.A. regarding any sale: (i) Wells Fargo will receive
$1,000,000 out of the net proceeds immediately at closing; (ii) any
sale must close on April 4, 2017, unless extended by Wells Fargo,
or the case will be converted to a Chapter 7 proceeding; (iii) any
other interested bidders for the real Property, may appear in
person and submit competitive bids, which must be above and beyond
the ICEC offer at an auction that will be conducted live at Court;
(iv) Wells Fargo expressly retains the right under Section 363(k)
of the Bankruptcy Code, to credit bid at such auction at any time,
up to the full amount of the outstanding indebtedness owed by the
Debtor on its loans with Wells Fargo; (v) in the event that the net
sale proceeds which remain after the payment to Wells Fargo Bank of
the first $1,000,000 in sale proceeds at closing, are insufficient
to pay any other expenses of the sale, the Debtor will use, if and
to the extent necessary, its cash on hand, including unrestricted
donations, to make up any shortfalls needed to cover any such
expenses of the sale; and (vi) the Debtor represents that there are
no other offers on the property at the present time, and the
Buyer's offer is the highest offer to date.
About The North Central Florida YMCA
The North Central Florida YMCA, Inc., based in Gainesville,
Florida, filed a Chapter 11 petition (Bankr. N.D. Fla. Case No.
16-10293) on Dec. 14, 2016. The petition was signed by Michele F.
Martin, vice-chair. The Debtor is represented by the Law Offices
of Jason A. Burgess, LLC. The case is assigned to Judge Karen K.
Specie. The Debtor disclosed $3.49 million in assets and $4.30
million in liabilities.
NORTH OAKS: S&P Lowers Bond Rating to 'BB+' on Weaker Coverage
--------------------------------------------------------------
S&P Global Ratings lowered its long-term rating and underlying
rating (SPUR) to 'BB+' from 'BBB-' on the Tangipahoa Parish
Hospital Service District No. 1, La.'s series 2009A taxable
hospital revenue bonds and series 2003A hospital revenue bonds,
issued for North Oaks Health System. The outlook is negative.
"The rating action reflects our view of the deterioration of North
Oaks' operations in 2016 and through the first six months of fiscal
2017, which have resulted in maximum annual debt coverage below
1.5x," said S&P Global Ratings credit analyst James Neville.
The negative outlook reflects S&P's view of North Oaks' thin
operating profile and existing high debt burden.
OMNICOMM SYSTEMS: Cornelis Wit Holds 43.4% Stake
------------------------------------------------
In an amended 13D Schedule filed with the Securities and Exchange
Commission, Cornelis Wit disclosed that as of January 21, 2016, he
beneficially owns 74,848,050 shares of OmniComm Systems Inc.'s
Common Stock, $0.001 par value.
The aggregate number of securities includes 183,334 shares of
common stock held directly, 49,724,716 shares of common stock held
by the Trust, 13,290,000 shares issuable upon exercise of currently
exercisable common stock purchase warrants, and 11,650,000 shares
issuable upon conversion of Convertible Debentures. The foregoing
constitutes approximately 43.4% of the outstanding shares of common
stock of the Issuer based on 147,686,917 shares of common stock
outstanding as of Nov. 10, 2016.
A full-text copy of the regulatory filing is available at:
https://is.gd/B03GmR
About OmniComm Systems
Ft. Lauderdale, Fla.-based OmniComm Systems, Inc., is a healthcare
technology company that provides Web-based electronic data capture
("EDC") solutions and related value-added services to
pharmaceutical and biotech companies, clinical research
organizations, and other clinical trial sponsors principally
located in the United States and Europe.
OmniComm reported net income attributable to common stockholders of
$2.40 million on $20.7 million of total revenues for the year ended
Dec. 31, 2015, compared to a net loss attributable to common
stockholders of $4.66 million on $16.5 million of total revenues
for the year ended Dec. 31, 2014.
As of Sept. 30, 2016, OmniComm Systems had $7.36 million in total
assets, $30.76 million in total liabilities and a total
shareholders' deficit of $23.40 million.
PARAGON OFFSHORE: Fights Panel's Objection to Plan Filing Extension
-------------------------------------------------------------------
Paragon Offshore plc and its affiliated debtor filed with the U.S.
Bankruptcy Court for the District of Delaware a response to the
objection filed by the Official Committee of Unsecured Creditors to
the Debtors' motion to extend the exclusive periods to file a plan
of reorganization and solicit acceptances of that plan.
The Response is available at:
http://bankrupt.com/misc/deb16-10386-1125.pdf
Matt Chiappardi, writing for Bankruptcy Law360, reports that the
Debtors argue that it would be less expensive to spend extra time
to come up with a consensual bankruptcy strategy than to litigate
two competing ones.
The Debtors say in their response to the objection that the
progress they have made in these cases negotiating a plan of
reorganization that provides the framework for a global deal, but
does not require the consent of all parties, demonstrates the need
for them to maintain exclusivity. The Debtors have been integral
to bringing the term lenders, revolving lenders and noteholders
together for negotiations, facilitating multiple sessions in person
and by phone. The Debtors are coordinating the plan process,
continuing to provide all three parties with the diligence and
information they've requested to determine the merits of each
other's respective positions and settlement boundaries. Permitting
the Debtors to maintain this coordination in an environment free of
the distractions of a competing plan or plans will enable the
Debtors to continue to work towards narrowing the divide that
separates their secured lenders and the noteholders in a controlled
and orderly manner, an outcome no one wants more than the Debtors.
Global peace translates to less time in Chapter 11 and less
litigation, which equals a greater chance of a successful
reorganization, a result the Debtors fully support.
The Debtors state that Committee's dissatisfaction with the terms
of the deal that the Debtors, their term lenders and revolving
lenders agreed upon does not provide a basis to deny the Debtors'
request for a further extension of exclusivity. In fact, the
Committee's dissatisfaction with the New Plan, without more, is not
even a relevant factor. There is an appropriate forum for airing
the Committee's grievances regarding the New Plan, and that forum
is the plan confirmation process.
The Committee, according to the Debtors, laments that it will be
prejudiced by a further extension of exclusivity but provides no
evidence that this will be the case. The Debtors here do not seek
to use exclusivity to delay these cases to their tactical
advantage, which the Committee fully admits in its objection when
it complains that the Debtors are moving faster than the Committee
would like with obtaining approval of the New Disclosure Statement
and New Plan.
Ari Lefkovits, managing director in the Restructuring Group of
Lazard Freres & Co. LLC, which has served as financial advisor to
the Debtors since September 2015, says in a declaration filed with
the Court that the Debtors have engaged with the term lenders, the
revolving lenders, and the noteholders, including certain of the
noteholders who are now members of the Committee, on developing a
consensual plan of reorganization. Ultimately, when the parties
could not reach a resolution after months of discussions, the
Debtors determined to move forward with a term sheet supported by
the secured lenders, which led to the Debtors' current plan of
reorganization.
Cortland Capital Market Services LLC, as Successor Administrative
Agent for the lenders under that certain Term Loan Agreement dated
as of July 18, 2014, and JPMorgan Chase Bank, N.A., as
administrative agent for the lenders under the certain Senior
Secured Revolving Credit Agreement dated as of June 17, 2014,
submitted with the Court a statement -- a copy of which is
available at
http://bankrupt.com/misc/deb16-10386-1124.pdf-- in support of the
Debtors' motion to extend the Exclusive Periods.
According to Cortland Capital and JPMorgan Chase, the Committee's
objection relies on two flawed arguments -- one, that the Third
Joint Chapter 11 Plan of Paragon Offshore plc and its affiliate
debtors dated Feb.7, 2017 is not confirmable and two, that the
Debtors failed to engage in "hard bargaining" and exerted
insufficient effort to reach a fully consensual deal with the
unsecured bondholders. The Committee's arguments regarding the
confirmability of the Plan do not serve as a basis for denying the
Debtors' requested extension of the exclusive periods and instead
those arguments should be considered in the context of the hearing
to confirm the Plan at which time the (flawed) factual premises for
the Committee's arguments can be properly evaluated, Cortland
Capital and JPMorgan Chase state.
JPMorgan Chase is represented by:
Jeremy W. Ryan, Esq.
Ryan M. Murphy, Esq.
D. Ryan Slaugh, Esq.
POTTER ANDERSON & CORROON LLP
1313 North Market Street, Sixth Floor
P.O. Box 951
Wilmington, DE 19899-0951
Tel: (302) 984-6000
Fax: (302) 658-1192
E-mail: jryan@potteranderson.com
rmurphy@potteranderson.com
rslaugh@potteranderson.com
-- and --
Madlyn Gleich Primoff, Esq.
Benjamin Mintz, Esq.
Scott D. Talmadge, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
250 West 55th Street
New York, NY 10019-9710
Tel: (212) 836-8000
Fax: (212) 836-8689
E-mail: madlyn.primoff@apks.com
benjamin.mintz@apks.com
scott.talmadge@apks.com
-- and --
Adam G. Landis, Esq.
Kerri K. Mumford, Esq.
Kimberly A. Brown, Esq.
LANDIS RATH & COBB LLP
919 Market Street, Suite 1800
Wilmington, Delaware 19801
Tel: (302) 467-4400
Fax: (302) 467-4450
E-mail: landis@lrclaw.com
mumford@lrclaw.com
brown@lrclaw.com
-- and --
SIMPSON THACHER & BARTLETT LLP
Sandeep Qusba, Esq.
Kathrine A. McLendon, Esq.
425 Lexington Avenue
New York, New York 10017-3954
Tel: (212) 455-2000
Fax: (212) 455-2502
E-mail: squsba@stblaw.com
kmclendon@stblaw.com
About Paragon Offshore
Paragon Offshore plc -- http://www.paragonoffshore.com/-- is a
global provider of offshore drilling rigs. Paragon's operated
fleet includes 34 jackups, including two high specification heavy
duty/harsh environment jackups, and six floaters (four drillships
and two semi-submersibles). Paragon's primary business is
contracting its rigs, related equipment and work crews to conduct
oil and gas drilling and workover operations for its exploration
and production customers on a dayrate basis around the world.
Paragon's principal executive offices are located in Houston,
Texas. Paragon is a public limited company registered in
England and Wales and its ordinary shares have been trading on the
over-the-counter markets under the trading symbol "PGNPF" since
Dec. 18, 2015.
Paragon Offshore Plc, et al., filed Chapter 11 bankruptcy petitions
(Bankr. D. Del. Case Nos. 16-10385 to 16-10410) on Feb. 14, 2016,
after reaching a deal with lenders on a reorganization plan that
would eliminate $1.1 billion in debt.
The petitions were signed by Randall D. Stilley as authorized
representative. Judge Christopher S. Sontchi is assigned to the
cases.
The Debtors reported total assets of $2.47 billion and total debt
of $2.96 billion as of Sept. 30, 2015.
The Debtors engaged Weil, Gotshal & Manges LLP as general counsel,
Richards, Layton & Finger, P.A. as local counsel, Lazard Freres &
Co. LLC as financial advisor, Alixpartners, LLP, as restructuring
advisor, and Kurtzman Carson Consultants as claims and noticing
agent.
No request has been made for the appointment of a trustee or an
examiner in the cases.
On Jan. 27, 2017, the United States Trustee appointed the
three-member Official Committee of Unsecured Creditors. Subsequent
to its appointment, the Committee selected Paul, Weiss, Rifkind,
Wharton & Garrison LLP as its counsel.
PERFORMANCE SPORTS: Completes Sale of INARIA Brand Name
-------------------------------------------------------
Performance Sports Group Ltd., a developer and manufacturer of high
performance sports equipment and apparel, on Feb. 16, 2017,
disclosed that it has completed the previously announced sale of
its soccer uniforms assets marketed under the INARIA brand name to
an acquisition vehicle controlled by Saverio Michielli, Inaria's
co-founder and general manager, for approximately CDN $2.07 million
or approximately U.S. $1.58 million, subject to certain
adjustments, and the assumption of related operating liabilities.
Established in 1999, INARIA designs and manufactures a full-line of
soccer and active apparel, including pro-style jerseys, practice
jerseys, socks, warm-up suits and training apparel.
The INARIA business is not included in the previously announced
sale of substantially all of the assets of the Company and its
North American subsidiaries to an acquisition vehicle co-owned by
affiliates of Sagard Holdings Inc. and Fairfax Financial Holdings
Limited. The Company anticipates that the completion of the sale
to Sagard and Fairfax will occur on or about Feb. 23, 2017, but not
later than Feb. 27, 2017, subject to the receipt of applicable
regulatory approvals and the satisfaction or waiver of other
customary closing conditions.
Performance Sports Group anticipates that its operations will
continue uninterrupted in the ordinary course of business and that
day-to-day obligations to its employees, suppliers of goods and
services and customers will continue to be met through to closing
of the sale to Sagard and Fairfax.
About Performance Sports
Exeter, N.H.-based Performance Sports Group Ltd. (NYSE: PSG)
(TSX:PSG) -- http://www.PerformanceSportsGroup.com/-- is a
developer and manufacturer of ice hockey, roller hockey, lacrosse,
baseball and softball sports equipment, as well as related apparel
and soccer apparel. Its products are marketed under the BAUER,
MISSION, MAVERIK, CASCADE, INARIA, COMBAT and EASTON brand names
and are distributed by sales representatives and independent
distributors throughout the world. In addition, the Company
distributes its hockey products through its Burlington,
Massachusetts and Bloomington, Minnesota Own The Moment Hockey
Experience retail stores.
On Oct. 31, 2016, Performance Sports Group Ltd. and certain of its
affiliates have filed voluntary petitions under Chapter 11 of the
Bankruptcy Code in the District of Delaware and commenced
proceedings under the Companies' Creditors Arrangement Act in the
Ontario Superior Court of Justice.
The U.S. Debtors are: BPS US Holdings Inc.; Bauer Hockey, Inc.;
Easton Baseball/Softball Inc.; Bauer Hockey Retail Inc.; Bauer
Performance Sports Uniforms Inc.; Performance Lacrosse Group Inc.;
BPS Diamond Sports Inc.; and PSG Innovation Inc.
The Canadian Debtors are: Performance Sports Group Ltd.; KBAU
Holdings Canada, Inc.; Bauer Hockey Retail Corp.; Easton Baseball
/Softball Corp.; PSG Innovation Corp. Bauer Hockey Corp.; BPS
Canada Intermediate Corp.; BPS Diamond Sports Corp.; Bauer
Performance Sports Uniforms Corp.; and Performance Lacrosse Group
Corp.
Ernst & Young Inc., serves as monitor to the Company in the
Canadian Proceedings.
The Debtors have hired Paul, Weiss, Rifkind, Wharton & Garrison LLP
as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel;
Stikeman Elliott LLP as Canadian legal counsel; Centerview LLP as
investment banker to the special committee; Alvarez & Marsal North
America, LLC, as restructuring advisor; Joele Frank, Wilkinson,
Brimmer, Katcher as communications & relations advisor; KPMG LLP as
auditors; Ernst & Young LLP as CCAA monitor; and Prime Clerk LLC as
notice, claims, solicitation and balloting agent.
Andrew R. Vara, Acting U.S. Trustee for Region 3, has appointed
three creditors of BPS US Holdings, Inc., parent of Performance
Sports, to serve on the official committee of unsecured creditors.
The Creditors' Committee retained by Blank Rome LLP as counsel,
Cassels Brock & Blackwell LLP as Canadian co-counsel, and Province
Inc. as financial advisor.
The U.S. Trustee also has appointed a official committee of equity
security holders. The equity committee is represented by Natalie
D. Ramsey, Esq., and Mark A. Fink, Esq., at Montgomery, McCracken,
Walker & Rhoads, LLP; and Robert J. Stark, Esq., Steven B. Levine,
Esq., James W. Stoll, Esq., and Andrew M. Carty, Esq., at Brown
Rudnick LLP.
PERFUMANIA HOLDINGS: Explores Strategic Alternatives
----------------------------------------------------
The American Bankruptcy Institute, citing Jessica DiNapoli of
Reuters, reported that Perfumania Holdings Inc (PERF.O), a U.S.
retailer with exclusive distribution rights to several
Trump-branded colognes, has hired advisers to explore strategic
alternatives, including a debt restructuring, people familiar with
the matter said.
According to the report, the move comes as Perfumania, a major U.S.
fragrance retailer, looks to address its debt pile amid declining
traffic at malls.
The Bellport, New York-based company is working with legal and
financial advisers to explore options, including addressing its
capital structure, the report said, citing the sources.
Reuters noted that Perfumania recorded debt of approximately $164
million at Oct. 29 and $2.1 million in cash and cash equivalents.
The company also plans to negotiate with landlords to exit some of
its 313 standalone Perfumania shops in the United States, the
sources said, the report related.
Perfumania's wholesale businesses, Parlux, holds the exclusive
distribution rights to U.S. President Donald Trump's fragrances
Empire and Success, as well as daughter Ivanka Trump's fragrance,
the report further related. The company's portfolio also includes
fragrances from celebrities such as Rihanna, Jessica Simpson and
Jay Z, the report added.
PERRY PETROLEUM: Court Won't Enjoin Criminal Raps vs Sheaffer
-------------------------------------------------------------
Judge Mary D. France of the United States Bankruptcy Court for the
Middle District of Pennsylvania denied the motion for preliminary
injunction filed by Perry Petroleum Equipment Ltd., Inc., in the
adversary proceeding captioned PERRY PETROLEUM EQUIPMENT LTD, INC.,
and BRIAN D. SHEAFFER, Plaintiffs, v. COMMONWEALTH OF PENNSYLVANIA
and E.O. HABHEGGER CO., INC., Defendants, Adv. No. 1:16-AP-00169
MDF (Bankr. M.D. Pa.).
On July 22, 2016, a criminal complaint was filed in Delaware County
charging Brian D. Sheaffer, President of Perry Petroleum, with five
counts of violating 18 Pa. C.S. section 4105(a)(1) (bad checks),
five counts of violating 18 Pa. C.S. section 4105(a)(2) (bad checks
with the drawee in Pennsylvania); five counts of violating 18 Pa
C.S. section 3921 (theft by unlawful taking or disposition of
moveable property); and five counts of violating 18 Pa. C.S.
section 3925 (receiving stolen property). Trial was set before the
Honorable James P. Bradley on January 17, 2017.
After the criminal complaint was bound over for trial, Perry
Petroleum filed an adversary proceeding on December 1, 2016 and a
motion for preliminary injunction On December 16, 2017, seeking to
enjoin the Commonwealth and the complaining party, E.O. Habhegger
Co., Inc., from pursuing the charges against Sheaffer.
Sheaffer argued that he will be irreparably harmed if he is
required to defend himself in state court, which will draw his
attention away from his personal and corporate cases. Further, if
he is incarcerated, he will be unable to participate in the
administration of his Chapter 13 case and Perry Petroleum's Chapter
11 case.
Judge France, however, stated that these types of potential harms
do not support injunctive relief because irreparable injury does
not arise from the "'cost, anxiety, and inconvenience' of defending
oneself in a good faith criminal prosecution.'"
Judge France also held that Perry Petroleum has failed to show that
the Commonwealth is pursuing the criminal action against Sheaffer
in bad faith or for purposes of harassment. Further, the judge
found that Sheaffer, the subject of the prosecution, has an
adequate remedy at law. The judge noted that at the preliminary
injunction hearing, Sheaffer offered a variety of defenses to the
prosecution, which he will be permitted to advance in the criminal
proceedings.
The bankruptcy case is IN RE: PERRY PETROLEUM EQUIPMENT LTD, INC.,
Chapter 11, Debtor-in-Possession, Case No. 1:16-BK-02449 MDF
(Bankr. M.D. Pa.).
A full-text copy of Judge France's January 12, 2017 opinion is
available at https://is.gd/GNfaDv from Leagle.com.
Perry Petroleum Equipment LTD, Inc. is represented by:
Lawrence G. Frank, Esq.
212 Locust Street, Suite 600
Harrisburg, PA 17108-9500
Tel: (717)234-7455
Fax: (717)236-8278
Email: lawrencegfrank@gmail.com
About Perry Petroleum
Perry Petroleum Equipment Ltd., Inc., filed a Chapter 11 bankruptcy
petition (Bankr. M.D. Penn. Case No. 16-02449) on June 9, 2016.
Hon. Mary D. France presides over the case. Law Offices of Lawrence
G. Frank represents the Debtor as counsel.
In its petition, the Debtor listed $500,000 to $1 million in assets
and $1 million to $10 million in liabilities. The petition was
signed by Brian D. Sheaffer, president.
PIKE CORP: Moody's Rates 2nd Lien Term Loan at Caa1
---------------------------------------------------
Moody's Investors Service, affirmed the existing ratings of Pike
Corporation, including its B2 Corporate Family Rating and B2-PD
Probability of Default Rating. In addition, Moody's assigned B1
ratings to the company's proposed $590 million 1st lien credit
facilities, which includes a $100 million revolver and a $490
million term loan, and Caa1 rating to the proposed $130 million 2nd
lien term loan. The proceeds of the term loans will be partially
used by Pike management and other investors to purchase ownership
of the company from the current controlling equity sponsor, Court
Square Capital Partners, as well as to refinance the outstanding
amount remaining on the company's existing term loans (originally
$310 million 1st term loan and $130 million 2nd lien term loan).
The rating outlook remains stable.
"The debt recapitalization is aggressive, as it substantially
increases leverage, but the company has cash flow capacity to
reduce it over the next 12 months," said Moody's Analyst, Inna
Bodeck. Moody's affirmed the ratings as expectations for continued
strong margins and positive projected free cash flow will likely
allow the company to gradually pay down its debt. Moody's projects
that Moody's adjusted debt-to-EBITDA leverage (pro-forma for the
transaction 5.4x LTM 9/30/2016 incorporating Moody's standard
adjustments) will decline to the low 5.0x range in the next 12
months.
Moody's took the following specific actions on Pike Corporation:
Corporate Family Rating, Affirmed at B2
Probability of Default Rating, Affirmed at B2-PD
$100 Million Senior Secured First-Lien Revolving Credit Facility
due 2022, Assigned at B1 (LGD3)
$490 Million Senior Secured First-Lien Term Loan due 2024, Assigned
at B1 (LGD3)
$130 Million Senior Secured Second-Lien Term Loan due 2024,
Assigned at Caa1 (LGD5)
Outlook is Stable
RATINGS RATIONALE
The B2 CFR reflects Pike's modest size, lack of geographic and
end-market diversification versus other rated engineering and
construction companies and uncertainty surrounding financial
policies under management-controlled ownership. The company is
primarily focused on providing services to one industry, electric
utilities, and its operations are concentrated in the southeastern
and western parts of the US. The company has little exposure to
other end-markets (telecom is approximately 5% of revenue) and to
other geographic regions, creating dependence on local weather,
economic and competitive conditions. Storm-related restoration work
is typically additive and can create volatility in year-to-year
results, but has declined to less than 5% of Pike's total revenue
(as of FYE 6/28/2016) as compared to 18% three years ago.
Pike's ratings are supported by the recurring nature of the repair
and maintenance services it provides. The rating also benefits from
favorable industry dynamics due to the need to replace aging
distribution power lines and other transmission infrastructure, and
the trend towards outsourcing of maintenance work by electric
utilities. Debt-to-EBITDA leverage, estimated at 5.4x LTM 9/30/2016
(pro-forma for the transaction and incorporating Moody's standard
adjustments), is high for the rating, but Moody's expects this
measure to decline to low 5.0x range in the next 12 months through
top line growth and through debt repayment via free cash flow
generation of over $20 million. The company has recently
demonstrated a willingness to apply free cash flow towards debt
repayment, as evidenced by the repayment of $79 million of its
first lien term loan in 2016 from asset sale proceeds, existing
cash and free cash flow, which further supports expectations for
near term debt reduction
The stable rating outlook presumes that the company's operating
results will improve modestly in the next 12 to 18 months. It also
assumes that the company will carefully balance its leverage with
its growth strategy.
The ratings could be upgraded if the company significantly
increases its scale and geographic diversification and improves its
free cash flow while maintaining strong margins and debt-to-EBITDA
leverage below 4.0x.
A downgrade could occur if deteriorating operating results, debt
financed acquisitions or shareholder dividends result in the
debt-to-EBITDA leverage ratio rising above 5.5x or weaker free cash
flow. A significant reduction in borrowing availability or
liquidity could also result in a downgrade.
Headquartered in Mount Airy, North Carolina, Pike Corporation is a
domestically focused provider of installation, repair and
maintenance and storm restoration services for investor-owned,
municipal, and cooperative electric utilities in the United States.
The company provides engineering and design services and constructs
and maintains substations, underground and overhead distribution
networks and transmission lines. Revenue for the last twelve months
ended September 30, 2016 was approximately $897 million.
The principal methodology used in these ratings was Construction
Industry published in November 2014.
PUERTO RICO: COFINA Files Motion to Intervene in GO Lawsuit
-----------------------------------------------------------
The COFINA Seniors Coalition on Feb. 22, 2017, filed a motion to
intervene in Lex Claims, LLC et al. v. Garcia-Padilla et al. for
the purposes of exposing the meritless, self-serving claims brought
by a litigious faction of General Obligation ("GO") bondholders.
"Although our group preferred to respect PROMESA's litigation stay
and use this valuable time window to pursue a voluntary
restructuring agreement, we now welcome the opportunity to
successfully defend our constitutionally-protected property rights
and ultimately assert our strong legal standing over these
unsecured creditors," the COFINA Seniors Coalition said.
"While the Plaintiffs clearly view their litigation campaign as a
means of holding Puerto Rico's economy hostage, our group
understands this baseless action threatens the island's ability to
re-access the capital markets through securitized finance
mechanisms and also puts countless local bondholders at risk. The
fact that COFINA bonds are the most widely held on-island issuance
by a seven-to-one margin compared to GO bonds means retail
investors and retirees are in the crosshairs. Preventing these
individuals from receiving their coupon payments and depressing
COFINA bond values will translate to a further reduction in
commerce and another uptick in outmigration.
"We hope Puerto Rico's leaders and citizens do not overlook this GO
bondholder group's startling level of comfort with inflicting
economic collateral damage on the island. If the Plaintiffs
achieve their desired outcome, the Government's historic financing
challenges will be compounded by a loss of access to the
securitization channel and very limited capacity to issue new GO
debt without violating Puerto Rico's constitutional debt limits.
"This strategy of obstruction first came to light during the
Plaintiffs' failed attempt to lobby against PROMESA and has
reappeared in the form of hostile litigation and deceptive
on-island ads that attack COFINA. In contrast, we look forward to
being heard in court and prevailing on the legal merits of our
case."
About the COFINA Seniors Coalition
The coalition of creditors is made up of retirees and individual
investors in Puerto Rico and throughout the United States, as well
as asset managers GoldenTree Asset Management LP, Merced Capital
LP, Tilden Park Capital Management LP, Whitebox Advisors LLC, and
others.
REAM PROPERTIES: Pickford, et al's Summary Judgment Bids Granted
----------------------------------------------------------------
Judge Mary D. France of the United States Bankruptcy Court for the
Middle District of Pennsylvania granted the defendants' motions for
summary judgment in the adversary proceedings captioned REAM
PROPERTIES, LLC, Plaintiff, v. THOMAS HAMILTON and THERESA
HAMILTON, SUSAN K. PICKFORD, Defendants, Adv. No. 1:16-ap-00037
MDF., 1:16-ap-00090 MDF (Bankr. M.D. Pa.).
Ream Properties LLC filed two adversary proceedings against Thomas
and Theresa Hamilton and their state court attorney, Susan K.
Pickford. Both adversaries addressed actions taken by the
defendants in the Court of Common Pleas of Dauphin County against
Ream's principal, Robert L. Pauletta, Jr. The defendants have
filed motions for summary judgment in both adversaries pursuant to
Fed. R. Civ. P. 56.
In Adv. No. 1-16-ap-00037 (the "Injunction Complaint"), Ream
claimed that Pickford and the Hamiltons had violated the automatic
stay by filing against Pauletta a contempt petition on August 2015
and a motion to proceed with the contempt hearing in a state court
civil action, and by filing a criminal complaint against Pauletta.
Ream sought to enjoin Pickford from pursuing the criminal complaint
and the civil contempt action against Pauletta as being violative
of the automatic stay in the Ream bankruptcy. Alternatively, Ream
argued that if the proceedings are not subject to the automatic
stay, an injunction should be imposed on further prosecution to
avoid imminent harm to Ream and its reorganization efforts.
In Adv. No. 1-16-ap-00090 (the "Stay Violation Complaint"), Ream
claimed that by filing the August 2015 contempt petition and the
subsequent motion to proceed, the Hamiltons and Pickford violated
the automatic stay imposed by section 362(a).
Judge France found that clearly, both the criminal complaint and
the contempt motions in the state court civil action address
Pauletta's actions and not the assets or reorganization efforts of
Ream. The judge explained that the automatic stay was not violated
for two reasons:
-- First, section 362(a)(1) only stays actions against the
debtor.
-- Second, the actions Ream has argued were commenced in
violation of the automatic stay -- the contempt petition,
the motion to proceed and the criminal complaint -- were
all brought against Pauletta individually seeking relief
only against him and not against Ream.
The judge held that the possibility that Pauletta may be convicted
or forced to pay restitution is insufficient to justify imposing
injunctive relief.
Further, Judge France stated that, as the Third Circuit observed,
the Supreme Court has explained on numerous occasions that
principles of comity and federalism bar a federal court from
issuing an injunction that interferes with a state courts' ability
to enforce judicial orders and judgments.
Judge France thus concluded that Ream's argument that if the civil
contempt proceeding and the criminal proceeding are allowed to
proceed against Pauletta, Ream's reorganization efforts will be
hampered must cede to the specific limitations of section 362 and
considerations of comity.
The bankruptcy case is IN RE: REAM PROPERTIES, LLC, Chapter 11,
Debtor-in-Possession, Case No. 1:15-bk-02980 MDF (Bankr. M.D.
Pa.).
A full-text copy of Judge France's January 30, 2017 opinion is
available at https://is.gd/xucGpH from Leagle.com.
Ream Properties, LLC is represented by:
Craig A. Diehl, Esq.
3464 Trindle Road
Camp Hill, PA 17011
Tel: (717)303-3037
Fax: (717)763-8293
About Ream Properties
Ream Properties, LLC, was formed in 2008 for the purpose of
rehabbing and renting affordable properties in the greater
Harrisburg area resulting in the restoration of properties to the
tax and utility roles.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Pa. Case No. 15-02980) on July 15, 2015, listing
under $1 million in assets and liabilities.
Craig A. Diehl, Esq., at the Law Offices of Craig A. Diehl serves
as the Debtor's bankruptcy counsel.
RENNOVA HEALTH: Steven Sramowicz Has 10.5% Equity Stake
-------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, Steven Sramowicz reported that as of Sept. 21, 2016, he
may be deemed to beneficially own 6,032,802 shares of common stock
(or approximately 10.5% of the total number of Shares then deemed
outstanding), of Rennova Health, Inc. which consists of (i)
3,517,625 Shares; (ii) 2,000,000 stock options owned of record by
Mr. Sramowicz to purchase a like number of Shares; and (iii)
515,177 warrants owned of record by Mr. Sramowicz to purchase a
like number of Shares, all as to which Mr. Sramowicz has sole
dispositive and voting power.
The amendment No. 3 to Schedule 13D was filed to report the
issuance to Mr. Sramowicz on Sept. 21, 2016, of 1,146,789 Shares
upon conversion of 1,000 shares of Rennova's Series B Convertible
Preferred Stock owned of record by Mr. Sramowicz.
A full-text copy of the regulatory filing is available at:
https://is.gd/3sdDCQ
About Rennova
Rennova Health, Inc., is a vertically integrated provider of a
suite of healthcare related products and services. Its principal
lines of business are diagnostic laboratory services, and
supportive software solutions and decision support and informatics
operations services.
The Company reported a net loss attributable to the Company's
common shareholders of $36.4 million for the year ended Dec. 31,
2015, following net income attributable to the Company's common
shareholders of $2.81 million for the year ended Dec. 31, 2014.
As of Sept. 30, 2016, Rennova Health had $10.19 million in total
assets, $20.23 million in total liabilities and a total
stockholders' deficit of $10.03 million.
The Company said in its annual report for the year ended Dec. 31,
2015, that "Although our financial statements have been prepared on
a going concern basis, we have recently accumulated significant
losses and have negative cash flows from operations, which raise
substantial doubt about our ability to continue as a going
concern.
"If we are unable to improve our liquidity position we may not be
able to continue as a going concern. The accompanying consolidated
financial statements do not include any adjustments that might
result if we are unable to continue as a going concern and,
therefore, be required to realize our assets and discharge our
liabilities other than in the normal course of business which could
cause investors to suffer the loss of all or a substantial portion
of their investment."
ROCKIES EXPRESS: S&P Affirms 'BB+' CCR & Revises Outlook to Stable
------------------------------------------------------------------
S&P Global Ratings said it affirmed its 'BB+' corporate credit and
senior unsecured debt ratings on Rockies Express Pipeline LLC
(REX). S&P also revised the outlook to stable from negative.
The '3' recovery rating on the senior unsecured notes is unchanged
and reflects S&P's expectation for meaningful (50% to 70%; rounded
estimate 65%) recovery in the event of a payment default.
Rockies Express recently increased capacity across the Zone 3
section of its pipeline, which now allows for the bidirectional
transportation of up to 2.6 billion cubic feet per day (bcf/d) of
natural gas. The completion of this project helps partially offset
the potential cash flow decline in 2019 from its legacy west to
east contracts.
"The stable outlook reflects our view of adequate liquidity and
steady volumes resulting in adjusted debt leverage of about 4x,"
said S&P Global Ratings credit analyst Mike Llanos. "In the event
the company opportunistically renegotiates a portion of its legacy
west to east contracts and the renegotiated rates are similar to
the Encana rates, we would expect adjusted debt leverage of about
5x, with the expectation that adjusted debt leverage will return to
the 4x to 4.5x area by 2019."
S&P could lower the ratings if adjusted debt to EBITDA is sustained
above 4.75x. This could occur if shippers with lower credit
quality are unable to meet their contractual commitments and if REX
is unable to remarket those volumes, or if additional contracts for
the legacy west-to-east volumes are renegotiated at rates below
that of Encana and the company does not opportunistically reduce
debt.
S&P could consider higher ratings if market fundamentals notably
strengthen or if the pipeline is successful in completely
offsetting the 2019 recontracting risk. Under this scenario, S&P
would expect adjusted debt to EBITDA to be sustained below 4.5x
after 2019.
RSF 17872: Pursues Asset Sale, Needs Until March 20 to File Plan
----------------------------------------------------------------
RSF 17872 Via Fortuna LLC requests the U.S. Bankruptcy Court for
the Southern District of California to extend the exclusive periods
for the Debtor to file and obtain acceptance of a plan of
reorganization to July 18, 2017 and Sept. 18, 2017, respectively.
The Debtor has previously sought for and the Court granted an
additional 120 days extension of its exclusive periods to file and
obtain acceptance of a plan of reorganization, to March 20, 2017,
and May 19, 2017, respectively.
The Debtor submits that Steven Marshall, through various entities,
owns and controls the Debtor. Mr. Marshall and his related
entities have substantial equity in a number of different highly
valuable assets, including a thoroughbred farm in Kentucky, and a
majority ownership interest in approximately 6,500 acres of land
located in Colorado near Denver International Airport -- that is on
the market for $15,250 per acre, which would result in total gross
sales proceeds in excess of $99,000,000.
The Debtor relates that Mr. Marshall and his related entities are
currently in the process of marketing and selling various assets,
including the Colorado Property and the Kentucky thoroughbred farm,
in order to generate the cash needed to cure and reinstate the
Debtor's loan from Union Savings Bank, and to provide the Debtor
with funds sufficient to enable it to propose a Plan that is
anticipated to pay all creditors in full.
The Debtor further relates that Mr. Marshall and his related
entities have been engaged in protracted negotiations with the
minority owner of the Colorado Property and a related lienholder in
order to market the Colorado Property. These negotiations have
been successfully concluded, the existing lien has been satisfied
by the grant of a TIC interest to the former lienholder, and the
Colorado Property is now being actively marketed for sale, as is
the thoroughbred farm.
The Debtor intends, through this bankruptcy case, to pay all
creditors in full. Under these circumstances, the Debtor's
substantial equity interest in the property is worthy of protection
and the Debtor should be allowed ample opportunity to raise the
funds required to pay the creditors in full and protect its equity
investment.
Accordingly, the Debtor cannot put forward a plan and disclosure
statement until one or more of its related entities has
successfully consummated the sale of sufficient assets to provide
the financing needed by the Debtor to propound and perform a plan
that is anticipated to pay creditors in full.
A hearing on the Debtor's motion will be held on March 16, 2017, at
2:30 p.m.
About RSF 17872 Via De Fortuna LLC
RSF 17872 Via De Fortuna LLC sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Cal. Case No. 16-04436) on July
22, 2016. The petition was signed by Black Rock Thoroughbreds,
LLLP, manager. The Debtor is represented by Todd Ringstad, Esq. at
Ringstad & Sanders LLP. At the time of the filing, the Debtor
estimated its assets at $10 million to $50 million and debts at $1
million to $10 million.
The Office of the U.S. Trustee disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of RSF 17872 Via De Fortuna LLC.
SAILING EMPORIUM: Wants to Move Plan Filing Period to June 29
-------------------------------------------------------------
The Sailing Emporium, Inc., asks the U.S. Bankruptcy Court for the
District of Maryland to extend the periods within which the Debtor
retains the exclusive right to file a plan of reorganization or
liquidation and to solicit votes in favor of such plan, through and
including June 29, 2017, and Aug. 28, 2017, respectively.
The Debtor relates that just recently, on Feb. 6, 2017, the Court
approved the employment of Marcus & Millichap Real Estate
Investment Services as its Broker. The Debtor further relates that
it is still in the initial stages of working with Marcus &
Millichap to market and sell its Property -- a full-service marina
located on the picturesque Eastern Shore of Maryland on Rock Hall
Harbor in Rock Hall, MD.
The Debtor asserts that the potential sale transaction is critical
to the direction that the Debtor intends to take in reorganizing
its affairs. As such, the Debtor needs additional time to pursue a
sale of the Property in order to effectively negotiate and prepare
adequate information necessary for a plan.
About The Sailing Emporium
The Sailing Emporium, Inc., owns and operates a full service marina
located on the picturesque Eastern Shore of Maryland on eight acres
on Rock Hall Harbor in Rock Hall, Maryland. Services include boat
sales, boat repair and restoration, electronics sales and service
and sailboat charters. The Property also includes a marine store
and nautical gift shop. The Property has 155 deep water slips and
20 transient slips, and the landscaped grounds and other amenities
have made this marina a point of interest in Rock Hall.
The Sailing Emporium, Inc., filed a chapter 11 petition (Bankr. D.
Md. Case No. 16-24498) on November 1, 2016. The petition was signed
by William Arthur Willis, president. The case is assigned to Judge
Thomas J. Catliota. The Debtor estimated assets and liabilities at
$1 million to $10 million at the time of the filing. The Debtor is
represented by Lisa Yonka Stevens, Esq., at Yumkas, Vidmar, Sweeney
& Mulrenin, LLC.
The Debtor employs Andrew Cantor and Marcus & Millichap Real Estate
Investment Services as broker.
SEAWORLD PARKS: Moody's Assigns B1 Rating to New Term Loans
-----------------------------------------------------------
Moody's Investors Service assigned a B1 rating to SeaWorld Parks
and Entertainment, Inc.'s proposed $400 million five year term loan
B-4 and $400 million seven year term loan B-5. The new five year
revolver was also assigned a B1 rating. SeaWorld's B1 Corporate
Family Rating (CFR) and stable outlook are unchanged.
The use of proceeds of the proposed term loan B-4 and B-5 is to
refinance approximately $544 million of the $1.328 billion term
loan B-2 and all of the $246 million term loan B-3 as well as pay
transaction expenses. The transaction is expected to increase debt
by $10 million and extend out a portion of its debt schedule to
2022 and 2024 from 2020. The rating on the term loan B-3 will be
withdrawn upon repayment.
A summary of Moody's actions are:
SeaWorld Parks and Entertainment, Inc.
New $400 million 1st lien term loan B-4 due 2022, assigned B1
(LGD3)
New $400 million 1st lien term loan B-5 due 2024, assigned B1
(LGD3)
New revolving credit facility due 2022, assigned B1 (LGD3)
Corporate Family Rating, unchanged at B1
Existing term loan B-2 due May 2020, unchanged at B1 (LGD3)
Existing term loan B-3 due May 2020, unchanged at B1 (LGD3)
Outlook: unchanged at stable
RATINGS RATIONALE
SeaWorld's B1 corporate family rating (CFR) reflects the portfolio
of twelve regional and destination theme and water parks. The
leverage level of 6.1x as of Q3 2016 (including Moody's standard
lease adjustments) is very high for the rating, although Moody's
expects improvements in adjusted EBITDA due to reduced expenses as
well as modest debt repayment to reduce leverage over the next
twelve months. The company has been impacted over the last several
years by negative publicity due to its killer whale shows and from
competitive conditions in Orlando, FL. The change of its killer
whale show to a natural based encounter and the ending of breeding
in captivity has helped reduce negative publicity, but it is
uncertain how customers will respond to the new natural based orca
exhibit that will be launched in the spring of 2017 at its San
Diego park. Moody's expects capex directed to new rides and
attractions to help support attendance and higher season pass
sales. The parks are highly seasonal and sensitive to cyclical
discretionary consumer spending, weather conditions, changes in
fuel prices, terrorism, public health issues as well as other
disruptions outside of the company's control. Despite lower
adjusted EBITDA over the past three years, the company still
generates meaningful annual attendance (approximately 22 million in
2016) and benefits from cash flows to fund a significant ongoing
capital program of up to $175 million. The value of its portfolio
of parks is also substantial and provides considerable asset
protection.
SeaWorld has an adequate liquidity position as reflected in Moody's
SGL-3 rating supported by cash of $56 million as of Q3 2016 and
cash flow to cover expected capital spending of approximately $165
to $175 million in 2017 in addition to required debt service. The
company benefits from existing NOLs and is expected to be have
minimal cash tax payments. In September 2016, SeaWorld suspended
its dividend payment of approximately $72 million annually to
increase flexibility to deploy its capital. The company has not
made any share repurchased YTD as of September, 2016, but
repurchased $51 million of equity in 2015 ($6 million of the amount
was purchased in 2014, but settled in 2015) and Moody's expects the
company to consider additional buybacks going forward. In addition
to the 1% debt amortization payment, SeaWorld is expected to make
an excess free cash flow payment in the beginning of the year.
Moody's expects seasonal reliance during the first half of the year
on the proposed revolver that will be extended to 2022 (with a
springing maturity 91 days ahead of the maturity of the term loan
B-2 due in May 2020). The revolver was undrawn (with $17 million of
L/Cs outstanding) as of Q3 2016. There are currently $90 million in
restricted payments allowed for dividends or equity repurchases as
long as total leverage is below 5x.
Moody's anticipates the company will maintain access to the
revolver and remain in compliance with the credit facility
covenants. The total leverage covenant is set at 5.75x and the
interest coverage ratio is set at 2.05x for the life of the loan
(based on credit agreement definitions). As of Q3 2016, the total
leverage ratio as defined in the credit agreement is 4.73x and the
interest coverage ratio is 5.67x. The parks are divisible and could
be sold individually, but all of the company's assets are pledged
to the credit facility and asset sales trigger 100% mandatory
repayment if proceeds are not reinvested within 12 months.
The stable rating outlook reflects Moody's expectations that
revenue will be largely unchanged in 2017 although adjusted EBITDA
will improve due to reduced stock compensation expense as well as
additional cost saving measures so that Moody's calculated leverage
will decline to approximately 5.5x by the end of 2017. Competitive
conditions in its Orlando, FL market, uncertain international
tourist visitation, brand perceptions, and the appeal of its new
orca show in San Diego are risks to performance, but new rides and
attractions, easier yoy comparisons, and improved season pass sales
are anticipated to be supportive of performance. Expectations that
leverage will not decline to the 5.5x level during the 2017 season
may lead to a downgrade of the corporate family rating.
An upgrade is unlikely given the high leverage level for the
existing rating. However upward rating pressure would occur if the
company generates positive revenue, attendance and EBITDA growth
that caused leverage to decline below 4.25x (as calculated by
Moody's) on a sustained basis. Comfort that the new killer whale
exhibits were being well received and that there were not any
significant legislative, regulatory, or activist actions that would
materially impact operations would also be required.
Downward rating pressure would result from poor operating
performance due to negative publicity, economic weakness, weak
customer appeal of new attractions, competitive conditions, or
regulatory/legislative changes so that leverage failed to decline
to 5.5x (as calculated by Moody's). A weakened liquidity profile or
failure to maintain an adequate cushion of compliance with
covenants could also lead to a downgrade.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
SeaWorld Entertainment, Inc., through its wholly-owned subsidiary,
SeaWorld Parks & Entertainment, Inc. (SeaWorld), own and operate
twelve amusement and water parks located in the US. Properties
include SeaWorld (Orlando, San Diego and San Antonio), Busch
Gardens (Tampa and Williamsburg) and Sesame Place (Langhorne, PA).
The Blackstone Group (Blackstone) acquired SeaWorld in December
2009 in a $2.4 billion (including fees) leveraged buyout. SeaWorld
completed an initial public offering in April 2013 and Blackstone
has reduced its ownership position to 22% as of Q4 2016. SeaWorld's
revenue was approximately $1.3 billion as of LTM Q3 2016.
SHIV LODGING: Proposes to Use Ciena Capital Cash Collateral
-----------------------------------------------------------
Shiv Lodging LLC requests the U.S. Bankruptcy Court for the
Northern District of Texas for authority to use the cash collateral
of Ciena Capital Funding, LLC.
Ciena Capital is claiming liens on the Debtor's personal property
including rents. As such, the Debtor proposes to provide Ciena
Capital with postpetition liens, a priority claim in the Chapter 11
bankruptcy case, and cash flow payments.
The Debtor intends to use cash collateral to continue its ongoing
operations of the Best Western Decatur Inn located in Decatur,
Texas. The Debtor's proposed One-Month Budget provides total
operating expenses in the aggregate amount of $27,997.
A full-text copy of the Debtor's Motion, dated Feb. 16, 2017, is
available at https://is.gd/FlIkOM
About Shiv Lodging LLC
Shiv Lodging LLC, operator of the Best Western Decatur Inn in
Decatur, Texas, filed a Chapter 11 petition (Bankr. N.D. Tex. Case
No. 17-40470) on Feb. 6, 2017. The petition was signed by Prakash
Patel, president. The case is assigned to Judge Russell F. Nelms.
The Debtor is represented by Joyce W. Lindauer, Esq., at Joyce W.
Lindauer Attorney, PLLC. At the time of filing, the Debtor
estimated assets and liabilities between $1 million to $10 million
each.
The Debtor operating its business and managing its property as a
debtor in possession. No request has been made for the appointment
of a trustee or examiner and no official committee has yet been
appointed.
SPORTS AUTHORITY: Under Armour Sued for Hiding Bankruptcy Impact
----------------------------------------------------------------
Matthew Perlman, writing for Bankruptcy Law360, reports that
shareholder Jodie Hopkins filed on Feb. 16, 2017, a lawsuit against
Under Armour Inc. in Maryland federal court for allegedly
concealing the impact of Sports Authority's bankruptcy from
investors in order to artificially inflate its stock price.
Law360 relates that Under Armour founder and CEO Kevin Plank and
Lawrence "Chip" Molloy, the company's chief financial officer
before stepping down on Jan. 31, 2017, are included in the
lawsuit.
About TSAWD Holdings Inc.
TSAWD Holdings Inc., formerly known as Sports Authority Holdings,
and its affiliates are sporting goods retailers with roots dating
back to 1928. The Debtors currently operate 464 stores and five
distribution centers across 40 U.S. states and Puerto Rico. The
Debtors offer a broad selection of goods from a wide array of
household and specialty brands, including Adidas, Asics, Brooks,
Columbia, FitBit, Hanesbrands, Icon Health and Fitness, Nike, The
North Face, and Under Armour, in addition to their own private
label brands. The Debtors employ 13,000 people.
TSAWD and six of its affiliates filed Chapter 11 bankruptcy
petitions (Bankr. D. Del. Case Nos. 16-10527 to 16-10533) on March
2, 2016. The petitions were signed by Michael E. Foss as chairman
& chief executive officer.
The Debtors have engaged Robert A. Klyman, Esq., Matthew J.
Williams, Esq., Jeremy L. Graves, Esq., and Sabina Jacobs, Esq.,
at Gibson, Dunn & Crutcher LLP as general counsel; Michael R.
Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq.,
at Young Conaway Stargatt & Taylor, LLP as co-counsel; Rothschild
Inc. as investment banker; FTI Consulting, Inc., as financial
advisor; and Kurtzman Carson Consultants LLC as notice, claims,
solicitation, balloting and tabulation agent.
Andrew Vara, Acting U.S. trustee for Region 3, appointed seven
creditors of Sports Authority Holdings Inc. to serve on the
official committee of unsecured creditors. Lawyers at Pachulski
Stang Ziehl & Jones LLP represent the Official Committee of
Unsecured Creditors.
* * *
In May 2016, the Delaware Court allowed Sports Authority to
Proceed with the liquidation of all of its roughly 450 stores
across the country after the Debtors resolved or beat out about 100
objections to the sale. Judge Mary F. Walrath approved an
agreement for a joint venture of Gordon Brothers Retail Partners
LLC, Hilco Merchant Resources LLC and Tiger Capital Group LLC to
conduct going out of business sales. The Joint Venture won an
auction for the Debtors' inventory. The Debtors failed to obtain a
winning going-concern bid at a May 17, 2016 auction.
In July 2016, Judge Walrath approved the sale of the Debtors'
intellectual property and more than two dozens of property leases
to Dick's Sporting Goods Inc. A Wall Street Journal report,
citing anonymous sources, said Dick's bid was for $15 million.
SRAMPICKAL DEVELOPERS: Taps Gary Thompson as Legal Counsel
----------------------------------------------------------
Srampickal Developers, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania to hire legal
counsel.
The Debtor proposes to hire Gary Thompson, Esq., at Carosella &
Associates, P.C. to give legal advice regarding its duties under
the Bankruptcy Code, and provide other legal services related to
its Chapter 11 case.
Mr. Thompson will receive an initial retainer of $7,000 for his
services.
Mr. Thompson maintains an office at:
Gary E. Thompson, Esq.
Carosella & Associates, P.C.
882 South Matlack Street, Suite 101
West Chester, PA 19382
Phone: 610-431-3300
About Srampickal Developers
Srampickal Developers, LLC sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Pa. Case No. 17-10781) on February
3, 2017. The petition was signed by Elizabeth Thomas, member. The
case is assigned to Judge Magdeline D. Coleman.
At the time of the filing, the Debtor disclosed $2.02 million in
assets and $865,200 in liabilities.
STEINY AND COMPANY: Asks More Plan Exclusivity Pending Sale
-----------------------------------------------------------
Steiny and Company, Inc., requests the U.S. Bankruptcy Court for
the Central District of California to extend by 90 days the
exclusivity periods for the Debtor to file a plan of reorganization
to June 26, 2017 and to obtain acceptances of such plan to Aug. 25,
2017.
The Debtor relates that at the initial case status conference held
on Jan. 26, 2017, the Court established a claims bar date of March
20, 2017, and continued the case status conference to March 30,
2017.
The Debtor also relates that it has devoted substantial time in
analyzing potential exit strategies that would be in the best
interest of its creditors. Based upon its analysis, the Debtor has
determined that the best exit strategy is to continue to operate
its business to maintain its value as a going concern in order to
obtain the highest price possible in a sale of substantially all of
its assets.
In order to aid the Debtor in marketing its assets for sale, the
Debtor tells the Court that it has engaged the services of an
investment banker. The Debtor further tells the Court that since
the employment of the investment banker, several interested parties
have signed non-disclosure agreements in order to gain access and
additional information about the Debtor's assets and potential
purchase thereof.
The Debtor represents that there are at least 5 of the parties that
executed NDAs are still interested in potentially purchasing some
or all of the Debtor's assets. The Debtor believes that it will be
able to present an offer to the Court for approval of the sale of
its assets within the next 30-60 days.
Additionally, the Debtor contends that after the sale of its
assets, the Debtor may propose a liquidating plan. However, to the
extent that the Debtor does not receive an acceptable offer for the
purchase of its assets, or if the Debtor determines that
reorganization is in the best interests of its estate, the Debtor
may propose a plan of reorganization.
As such, the Debtor believes that extending its plan exclusivity
periods will enable the Debtor to complete its sale process and
attempt to confirm a plan of liquidation or reorganization.
About Steiny and Company
Steiny and Company, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 16-25619) on Nov. 28,
2016. The petition was signed by Vincent P. Mauch, chief financial
officer. The case is assigned to Judge Julia W. Brand. At the time
of the filing, the Debtor estimated its assets and debts at $10
million to $50 million.
The Debtor tapped Ron Bender, Esq., Jacqueline L. James, Esq., and
Lindsey L. Smith, Esq., at Levene, Neale, Bender, Yoo & Brill LLP,
as bankruptcy counsel and Edward Barron, Esq. and Barron &
Associates as special counsel.
STEMTECH INTERNATIONAL: U.S. Trustee Forms 3-Member Committee
-------------------------------------------------------------
Guy Gebhardt, acting U.S. Trustee for Region 21, on Feb. 22
appointed three creditors of Stemtech International, Inc., to serve
on the official committee of unsecured creditors.
The committee members are:
(1) Wilhelm Keller
9 Obstgarten
Merlischachen
CH-6402 Switzerland
Tel: 011-41-79-509-7911
Email: a.kees@medmix.ch
(2) Greg Newman, CEO
Cerule, LLC
735 Commercial Street
Klamath Falls, OR 97601
Tel: 541-205-0148
Email: gnewman@cerule.com
(3) Andrew P. Leonard
APL Microscopic, LLC
379 West St. #4A
New York, NY 10014
Tel: 212-741-7328
Email: andrew@aplmicro.com
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at a debtor's
expense. They may investigate the debtor's business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.
About Stemtech International Inc.
Stemtech International, Inc. filed a Chapter 11 bankruptcy petition
(Bankr. S.D.Fla. Case No. 17-11380) on February 2, 2017. The Hon.
Raymond B. Ray presides over the case.
SEESE, PA represents the Debtor as counsel. GlassRatner Advisory &
Capital Group, LLC serves as its financial advisor.
In its petition, the Debtor estimated $1 million to $10 million in
both assets and liabilities. The petition was signed by Ray C.
Carter. chief executive officer.
SUNEDISON INC: Committee Must Support Fraud Allegations
-------------------------------------------------------
Alex Wolf, writing for Bankruptcy Law360, reports that the Official
Committee of Unsecured Creditors in SunEdison, Inc.'s Chapter 11
case was pressed multiple times during a hearing held in the U.S.
Bankruptcy Court for the Southern District of New York on Feb. 16
to support its accusations of fraudulent transfer and conveyance it
has levied against dozens of banks and financiers.
Law360 relates that the unsecured creditors were challenged over
the durability of their allegations that the Debtor's secured
lenders benefited from hundreds of millions of dollars in
fraudulent transfers used to hide the Debtor's deteriorating
finances, finding themselves forced to defend a lack of specific
details.
About SunEdison, Inc.
SunEdison, Inc. (OTC PINK: SUNEQ), is a developer and seller of
photovoltaic energy solutions, an owner and operator of clean power
generation assets, and a global leader in the development,
manufacture and sale of silicon wafers to the semiconductor
industry.
On April 21, 2016, SunEdison, Inc., and 25 of its affiliates each
filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case Nos.
16-10991 to 16-11017). Martin H. Truong, the senior vice
president, general counsel and secretary, signed the petitions. The
Debtors disclosed total assets of $20.7 billion and total debt of
$16.1 billion as of Sept. 30, 2015.
The Debtors have hired Skadden, Arps, Slate, Meagher & Flom LLP as
counsel, Togut, Segal & Segal LLP as conflicts counsel, Rothschild
Inc. as investment banker and financial advisor, McKinsey Recovery
& Transformation Services U.S., LLC, as restructuring advisors and
Prime Clerk LLC as claims and noticing agent. The Debtors employed
PricewaterhouseCoopers LLP as financial advisors; and KPMG LLP as
their auditor and tax consultant.
SunEdison also has tapped Eversheds LLP as its special counsel for
Great Britain and the Middle East. Cohen & Gresser LLP has also
been retained as special counsel.
The Debtors retained Ernst &Young LLP to provide tax-related
services. Keen-Summit Capital Partners LLC has been hired as real
estate advisor. Binswanger of Texas, Inc. also has been retained
as real estate agent.
Sullivan & Cromwell LLP serves as counsel to TerraForm Power, Inc.,
and TerraForm Global, Inc.
An official committee of unsecured creditors has been appointed in
the case. The Committee tapped Weil, Gotshal & Manges LLP as its
general bankruptcy counsel and Morrison & Foerster LLP as special
counsel. Togut, Segal & Segal LLP and Kobre & Kim LLP serve as
conflicts counsel. Alvarez & Marsal North America, LLC, serves as
the Committee's financial advisors.
Counsel to the administrative agent under the Debtors' prepetition
first lien credit agreement are Richard Levy, Esq., and Brad
Kotler, Esq., at Latham & Watkins.
Counsel to the administrative agent under the postpetition DIP
financing facility are Scott Greissman, Esq., and Elizabeth Feld,
Esq. at White & Case LLP.
Counsel to the Tranche B Lenders (as defined in the DIP credit
agreement) and the steering committee of the second lien creditors
are Arik Preis, Esq., and Naomi Moss, Esq., at Akin Gump Strauss
Hauer & Field, LLP.
Counsel to the administrative agent under the Debtors' prepetition
second lien credit agreement is Daniel S. Brown, Esq., at Pillsbury
Winthrop Shaw Pittman LLP.
The collateral trustee under the Debtors' prepetition second lien
credit agreement and the indenture trustee under each of the
Debtors' outstanding bond issuances, is represented by Marie C.
Pollio, Esq., at Shipman & Goodwin LLP.
Counsel to the ad hoc group of certain holders of the Debtors'
convertible senior notes is White & Case LLP's Tom Lauria, Esq.
SWORDS GROUP: Eatherly Buying Lebanon Property for $1.1M
--------------------------------------------------------
Swords Group, LLC, asks the U.S. Bankruptcy Court for the Middle
District of Tennessee to authorize the sale of real property
located at 207 Hartmann Drive, Lebanon, Tennessee, to J.D. Eatherly
for $1,100,000.
The Debtor is the owner of the Property. The Property is subject
to a recorded security interest in favor of Simmons Bank, and
Debtor owes back taxes on the property to the Wilson County,
Tennessee Tax Assessor for 2014 through year-to-date 2017.
Simmons Bank filed a proof of claim in the case (Claim No. 2) in
the amount of $3,438,992. The Simmons Bank claim is also secured
by other properties owned by the Debtor, which the Debtor is also
marketing during the Chapter 11 proceeding.
Wilson County filed a proof of claim in the case (Claim No. 5),
reflecting that the Debtor owed approximately $18,885 in taxes with
respect to the Property as of September 2016.
The Debtor has filed a Chapter 11 plan that proposes to satisfy the
Debtor's primary non-insider debt -- secured debt owed to Simmons
Bank and property tax debt owed on the Debtor's real estate --
through the sale of real property owned by Debtor. While awaiting
a final hearing on the Debtor's Plan, the Debtor has located and
secured a buyer on one of the Debtor's properties.
On Feb. 18, 2017, the Debtor and the Buyer signed the Contract for
Sale of Real Estate to sell the Property, the closing of which is
expressly subject to approval by the Court.
The salient terms of the Agreement are:
a. Purchase Price: $1,100,000
b. Earnest Money: $100,000
c. Closing Date: Within 30 days of closing of the
Inspection Period
d. Inspection Period: 45 days from contract execution
e. Brokers' Commission: 6%, upon Court approval
A copy of the Agreement attached to the Motion is available for
free at:
http://bankrupt.com/misc/Swords_Group_121_Sales.pdf
The Buyer understands that the Court must approve the sale as a
condition to closing. The parties are ready to commence the
inspection period upon filing of the Motion.
The Debtor believes that the sale is for fair market value. The
Debtor is not aware of any actual or potential higher or better
offers.
Assuming a commission to Charter Development Co. ("Broker"), the
listing agent whose employment approval has been sought in a
separately filed motion, of 3%, plus split brokerage commissions to
Buyer’s agents of a total of 3%, the estate will net an estimated
recovery of approximately $1,034,000, which amounts will enable the
Debtor to satisfy outstanding property tax debt on the Property and
pay down a significant amount of the secured debt owed to Simmons
Bank.
The Debtor will satisfy the entire tax liability on the Property at
closing, leaving approximately $1,015,000 in remaining sale
proceeds, which amounts will be transferred to Simmons Bank,
thereby reducing the Bank's secured claim. Simmons Bank would
retain its liens on the other three properties still owned by the
Debtor's estate.
The Debtor asks authority to use the proceeds from the sale of the
Property to pay at closing (i) the lien of the Lender; (ii) any
other claims that constitute liens on the Property, to include the
tax claims of Wilson County, Tennessee; and (iii) allowed
commissions to the Broker.
The Debtor has determined in its business judgment that a sale of
the Property as set forth is in the best interest of creditors and
the estate. The offer is the highest and best offer for the
Property presented to the Debtor. Accordingly, the Debtor asks the
Court to approve the sale of the Property to the Buyer free and
clear of all liens, claims interests and encumbrances.
The Purchaser can be reached at:
J.D. Eatherly
1720 West End Ave., Suite 600
Nashville, TN 37203
E-mail: serena@vastland.com
The Purchaser is represented by:
Brian Mitchell, Esq.
2012 21st Ave.
Nashville, TN 37212
Telephone: (615) 383-2903
E-mail: bmitchell@rudytitle.com
About Swords Group
Swords Group, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 16-03837) on May 26,
2016. The petition was signed by Jerry Swords, president.
The Debtor is represented by Griffin S. Dunham, Esq., at Dunham
Hildebrand, PLLC. The case is assigned to Judge Marian F.
Harrison.
At the time of the filing, the Debtor estimated its assets and
liabilities at $1 million to $10 million.
TALL CITY WELL: Has Interim OK to Use Cash Collateral Until March 1
-------------------------------------------------------------------
Judge Tony M. Davis of the U.S. Bankruptcy Court for the Western
District of Texas authorized Tall City Well Service, LP, to use
cash collateral on an interim basis.
The Debtor is authorized to use cash collateral for a period not to
exceed the earlier of the Effective Date of the Debtor's Plan of
Reorganization confirmed by the Court on
Jan. 24, 2017 or March 1, 2017.
Judge Davis directed the Debtor to maintain its
debtor-in-possession bank account at Wells Fargo Bank, N.A. He also
directed that any remaining funds currently held by Wells Fargo
Bank in the Debtor's prepetition operating account to be released
into the DIP Account for use by the Debtor in accordance with the
Budget and the Order.
The approved Budget for the month of February 2017 reflects total
cost of sales in the aggregate sum of 630,000 and administrative
costs of approximately $310,000.
The Debtor will deliver to Wells Fargo Bank all monthly financial
information for the preceding month, such monthly financial
information to include a balance sheet, an income statement, and a
statement of cash flows.
The Debtor was also directed to deliver the following reports and
other documentation to Wells Fargo Bank and Wells Fargo Equipment
Finance:
(i) the business unit number and the VIN and/or the serial
number of the equipment collateral that the Debtor intends to use
to generate the revenues shown in the Budget;
(ii) the location and/or job site of each such piece of
equipment collateral, including but not limited to, information
regarding the well location and operator name for such well and/or
job site; and
(iii) each Master Service Agreement, or such other services
contract, under which the Debtor is operating to generate revenues
shown in the Budget.
In addition, Judge Davis directed the Debtor to pay monthly
adequate protection payments of $10,000 to Wells Fargo Bank and
$14,000 to Wells Fargo Equipment.
Wells Fargo Bank and Wells Fargo Equipment are granted, replacement
liens and security interests in and on all property of the Debtor
and its bankruptcy estate, including all property acquired by the
Debtor and its bankruptcy estate after the Petition Date.
Wells Fargo Bank and Wells Fargo Equipment were also granted
super-priority administrative expense claim necessary to fully
compensate Wells Fargo Bank and Wells Fargo Equipment to the extent
that the replacement liens granted do not provide them adequate
protection of their interests in the cash collateral.
A full-text copy of the Eighth Interim Order, dated Feb. 16, 2017,
is available at https://is.gd/ZMvBzq
About Tall City Well Service
Tall City Well Service, LP, is a well service company providing
mostly water hauling and pump services for new and existing oil and
gas wells that owns trucks and trailers that it uses in its
business.
The Debtor filed a chapter 11 petition (Bankr. W.D. Tex. Case No.
16-70079) on May 17, 2016, and is represented by Jesse Blanco Jr.,
Esq. The petition was signed by Joel G. Solis, partner. The Debtor
estimated its assets and liabilities to be less than $50,000 at the
time of the filing.
The Debtor's Chapter 11 proceeding is related to (but not jointly
administered with) In re: J G Solis, Inc. (Bankr. W.D. Tex. Case
No. 16-70080) also filed on May 17, 2016.
An official committee of unsecured creditors has not yet been
appointed.
TAMARACK DEVELOPMENT: Has Final Authority to Use Cash Collateral
----------------------------------------------------------------
Judge James W. Boyd of the U.S. Bankruptcy Court for the Western
District of Michigan authorized Tamarack Development Associates,
LLC, to use cash collateral on a final basis.
Judge Boyd acknowledged that the Debtor does not have sufficient
available sources of working capital and financing to maintain its
properties without the use of cash collateral. He further
acknowledged that in the absence of the use of cash collateral, the
Debtor would not be able to continue operating its business that
would result in serious and irreparable harm to the Debtor, its
creditors and its estates.
The Debtor was authorized to use cash collateral in the ordinary
course of business for working capital and general operating
purposes. The Debtor may also use the cash collateral for the
payment of Professional Fees and other fees and expenses, to the
extent of the Carve Out, and may be used for the payment of
expenses not incurred in the ordinary course of business.
The Prepetition Lenders: PNC Bank, National Association; American
Express Bank, FSB and RCH Delaware Investments #1, LLC were granted
additional and replacement continuing, valid, and automatically
perfected postpetition security interest in and liens on any and
all presently owned and hereafter acquired personal property, real
property and all other assets of the Debtor, together with any
proceeds thereof. Such additional and replacement security
interest and liens will have the same extent, validity and priority
as they existed on the Petition Date on the Prepetition
Collateral.
Judge Boyd also approved the cash collateral Stipulation between
the Debtor and PNC Bank, N.A.
A full-text copy of the Final Order, dated Feb. 16, 2017, is
available at
https://is.gd/sU1Gx7
About Tamarack Development Associates
An involuntary Chapter 11 petition was filed against Tamarack
Development Associates, LL (Bankr. W.D. Mich. Case No. 16-06117) on
Dec. 6, 2016. The petition was filed by Comodore Homes LLC, FC
Real Estate Retirement Plan, and Howard Melam Family Limited. The
petitioning creditors are represented by Frederick R. Bimber, Esq.,
at Frederick R. Bimber, P.C.
On Jan. 3, 2017, the Debtor filed its response to the involuntary
petition, essentially consenting to the relief sought. On Jan. 4,
2017, the Court entered its order for relief converting the Debtor
to a debtor under Chapter 11 of the Bankruptcy Code.
The case is assigned to Judge James W. Boyd.
The Debtor is operating its business as a debtor-in-possession
pursuant to Sec. 1107(a) and 1108 of the Bankruptcy Code. No
request for appointment of a trustee or examiner has been made in
the Chapter 11 case and no statutory committees have been appointed
or designated.
The Debtor is represented by Robert F. Wardrop II, Esq., and Denise
D. Twinney, Esq. at Wardrop & Wardrop, P.C.
TOISA LIMITED: Regains Control of United Journey Vessel
-------------------------------------------------------
Toisa Limited on Feb. 21, 2017, disclosed that it has regained
control of its vessel United Journey, through a negotiated court
order with Citibank N.A., which seized the tanker in the Caribbean
Netherlands on Dec. 24, 2016.
The Company plans for United Journey, which has been idled in St.
Eustatius since its arrest, to resume full operations as soon as
possible. The cargo the ship was hauling upon seizure was
off-loaded to another vessel.
The Company welcomes this outcome as it continues to work
cooperatively with its stakeholders on a financial restructuring
plan following its voluntary Chapter 11 filing last month in the
United States Bankruptcy Court for the Southern District of New
York. Toisa remains grateful to its vendors and customers for
their ongoing support and is pleased that all of its operations
continue uninterrupted amid the restructuring process.
In addition to United Journey's return, the court order included
provisions for the consensual use of Citibank's cash collateral by
the Company. The Company is continuing to actively work with the
lender steering committee on a consensual debt restructuring.
At this time all 46 of Toisa's vessels are free to undertake all
business already contracted and are available to enter into
additional relationships.
About Toisa Limited
Toisa Limited filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y. Case No. 17-10184) on Jan. 29, 2017. Togut, Segal & Segal
LLP serves as counsel to the Debtor.
In its petition, the Debtor estimated $1 billion to $10 billion in
both assets and liabilities. The petition was signed by Richard W.
Baldwin, deputy chairman.
TOWER AUTOMOTIVE: Moody's Assigns B1 Rating to $361MM Term Loan
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Tower Automotive
Holdings USA, LLC's proposed $361 million new term loan. Holdings
USA is a wholly-owned indirect subsidiary of Tower International,
Inc. (Tower). In a related action, Moody's affirmed Holdings USA's
Corporate Family and Probability of Default Ratings, at B1 and
B1-PD, respectively. The Speculative Grade Liquidity Rating was
upgraded to SGL-2 from SGL-3. The rating outlook is stable.
Holdings USA is amending and extending the maturities of its
existing $361 million senior secured term loan due 2020 to February
2024 and amending and extending its $200 million senior secured
revolving credit facility due 2019 to February 2022.
Moody's assigned the following rating:
Tower Automotive Holdings USA, LLC
New $361 million senior secured term loan due 2024, at B1 (LGD3)
Moody's upgraded the following rating:
Speculative Grade Liquidity Rating, to SGL-2 from SGL-3
Moody's affirmed the following ratings:
Tower Automotive Holdings USA, LLC
Corporate Family Rating, at B1;
Probability of Default Rating, at B1-PD
Rating Outlook, Stable
The following rating is unchanged and will be withdrawn at the
close of proposed senior secured new term loan.
Existing $361 million (remaining amount) senior secured term loan
due 2020, at B1 (LGD3)
The revolving credit facility is not rated by Moody's.
RATINGS RATIONALE
The affirmation of Holdings USA's B1 Corporate Family Rating
incorporates the strong leverage metrics of the company's
continuing operations and solid position as a supplier of
engineered structural metal components and assemblies for the
automotive industry. Moody's estimates that Tower's EBITA/interest
and Debt/EBITDA for the fiscal 2016 continuing operations were
approximately 3.8x and 2.6x (inclusive of Moody's adjustments),
respectively. The company used cash balances to reduce debt, and
free cash flow generation returned to positive levels as a result
of business wins and lower launch costs. The company recast its
operations in China and Brazil as discontinued operations and
expects to complete the sale of these non-core operations in 2017.
The ratings also benefit from a balanced geographic profile
following the decision to retain the European operations (about 33%
of 2016 net sales). This benefit is balanced by high customer
concentrations (the top 5 customers represent about 73% of 2016 net
sales) and an EBITA Margin at about 6.2% for continuing operations
which is consistent with the assigned ratings. The affirmation also
reflects the company's recent history of considering various
strategic actions, and recent inconsistent track record of free
cash flow generation as it has deployed capital for growth.
The stable rating outlook reflects Moody's expectations of modest
improvement in the company's revenues over the intermediate-term
supported by new business wins balanced by the execution risk
around launch costs of this new business. Continued progress with
free cash flow generation resulting in further sustained debt
reduction could support a positive rating action.
Tower is anticipated to have a good liquidity profile over the
near-term supported by cash on hand and availability under the new
$200 million revolving credit facility maturing in 2022. The
upgrade of the liqudity profile to SGL-2 reflects the prospect of
continued positive free cash flow generation. Cash on hand as of
December 31, 2016 was about $62.8 million while the existing $200
million revolving credit facility was unfunded with about $10.1
million letters of credit outstanding. The financial covenants
under the new revolving credit facility are expected to be the same
as the existing revolver, which includes a total net leverage ratio
test and a minimum interest coverage test. The new senior secured
term loan is expected to have a total net leverage coverage ratio
test. Moody's anticipates that the company will have ample cushion
under these covenants over the near-term.
Future events that have the potential to drive the outlook or
rating higher include: consistent free cash flow generation,
improvement in operating performance resulting in Debt/EBITDA
maintained below 3.0x, and EBITA/Interest coverage inclusive of
restructuring charges above 3.0x.
Future events that have the potential to drive the outlook or
rating lower include regional weaknesses in global automotive
production which are not offset by successful restructuring
actions, or profit pressures from revisions to the U.S. Tax Code or
trade agreement resulting in Debt/EBITDA above 4.0x, EBITA/Interest
being maintained at 2.0x, or deterioration in the company's
liquidity position.
The principal methodology used in these ratings was Global
Automotive Supplier Industry published in June 2016.
Tower International, Inc. headquartered in Livonia, Michigan, is a
leading integrated global manufacturer of engineered structural
metal components and assemblies primarily serving automotive
original equipment manufacturers. The company manufactures
body-structure stampings, frame and other chassis structures, as
well as complex welded assemblies, for small and large cars,
crossovers, pickups and SUVs. Revenues in 2016 approximated $1.9
billion.
TRIDENT BRANDS: LPF (MCTECH) Reports 27.6% Stake as of Sept. 30
---------------------------------------------------------------
In a Schedule 13G filed with the Securities and Exchange
Commission, LPF (MCTECH) Investment Corp. a Schedule 13G on
Feb. 16, 2017, to reflect positions which, as a result of an
administrative error, were not identified as requiring a filing on
Schedule 13G at the time those reports were due. Upon discovering
this oversight, the reporting person promptly took steps to file
this Schedule 13G, which reflects information that should have been
included at Jan. 31, 2015, the year ending Dec. 31, 2015, and at
Sept. 30, 2016.
As of Sept. 30, 2016, LPF (MCTECH) Investment Corp. had voting and
dispositive power over 12,399,940 shares of Trident Brands, Inc.'s
common stock, representing approximately 27.6% of the class, held
in the form of 2,000,000 shares of common stock and three
convertible promissory notes which, as of Sept. 30, 2016, were
convertible into 10,399,940 shares of common stock. (All
percentages based on 34,534,719 shares outstanding as of September
30, 2016, per Form 8-K dated Oct. 4, 2016, plus 10,399,940 shares
of common stock into which the aforementioned convertible notes may
be converted.)
As of Dec. 31, 2015, LPF (MCTECH) Investment Corp. had voting and
dispositive power over 5,405,680 shares of the issuer's common
stock, representing approximately 17.2% of the class, held in the
form of 2,000,000 shares of common stock and in 2 convertible
promissory notes which, as of Dec. 31, 2015, were convertible into
3,405,680 shares of common stock.
As of Jan. 31, 2015, LPF (MCTECH) Investment Corp. had voting and
dispositive power over 4,535,211 shares of the Company's common
stock, representing approximately 14.9% of the class, held in the
form of 2,000,000 shares of common stock and a convertible
promissory note which, as of Jan. 31, 2015, was convertible into
2,535,211 shares of common stock.
A full-text copy of the regulatory filing is available at:
https://is.gd/UPPdCW
About Trident Brands
Trident Brands Incorporated (f/k/a Sandfield Ventures Corp.) was
initially formed to engage in the acquisition, exploration and
development of natural resource properties, but has since
transitioned and is now focused on branded consumer products and
food ingredients.
The Company maintains a compelling portfolio of branded consumer
products including nutritional products and supplements under the
Everlast(R) and Brain Armor(R) brands, and functional food
ingredients under the Oceans Omega brand. These brands are focused
on the fast growing supplements and nutritional product and heart
and brain health categories, supported by an established contract
manufacturing, supply chain and research and development
infrastructure, and a solid and proactive management team, board
of directors and advisors with many years of experience in related
categories.
The Company's balance sheet at Aug. 31, 2016, showed total assets
of $3.01 million, total liabilities of $4.74 million and
stockholders' deficit of $1.73 million.
"The Company has had minimal revenues during the period from
November 5, 2007 (date of inception) to August 31, 2016 and has a
working capital deficit as of August 31, 2016. These conditions
raise substantial doubt about the Company's ability to continue as
a going concern. The Company is currently in the early growth
stage at product introduction phase and expenses are increasing.
The Company has secured financing to cover these expenses. The
current cash of $4,484 is insufficient to cover the expenses the
Company will incur during the next twelve months. The Company is
currently pursuing various financing alternatives in order to
address this issue and as detailed in note 9 entered
into a securities purchase agreement on September 26, 2016 for
proceeds of $4,100,000. The proceeds of this financing are to be
used for general working capital purposes, including without
limitation, settlement of accounts payable and repayment of mature
debt," as disclosed in the Company's quarterly report for the
period ended Aug. 31, 2016.
TRONOX LIMITED: Moody's Puts B2 Rating on Review for Upgrade
------------------------------------------------------------
Moody's Investors Service, placed the B2 ratings of Tronox Limited
on review for upgrade following the company's announcement that it
has entered into a letter of intent to acquire the titanium dioxide
business of Cristal, the Saudi-based titanium dioxide producer, for
$1.67 billion in cash plus 38.75 million Tronox shares (or 24% of
Tronox's equity, pre-deal announcement) and that it intends to
divest its soda ash business, with the proceeds to be used towards
acquiring Cristal. The transaction is expected to close by year end
2017 and might require additional borrowings to complete, the
amount of which will largely depend on the divestiture price of the
soda ash business, as well as the company's cash balance and high
value inventory at the time of closing. The outlook on the ratings
is changed to rating under review from negative.
"In terms of production scale, the acquisition of Cristal would put
Tronox just ahead of the global leader, Chemours," according to
Joseph Princiotta, Senior Credit Officer at Moody's. "Cristal would
add roughly 858k metric tons per annum production capacity to
Tronox's roughly 465k metric tons."
On Review for Upgrade:
Issuer: Tronox Limited
-- Corporate Family Rating, Placed on Review for Upgrade,
currently B2
-- Probability of Default Rating, Placed on Review for Upgrade,
currently B2-PD
Issuer: Tronox Finance LLC
-- Senior Unsecured Regular Bond/Debenture, Placed on Review for
Upgrade, currently Caa1 (LGD5)
Issuer: Tronox Pigments (Netherlands) B.V.
-- Senior Secured Bank Credit Facility, Placed on Review for
Upgrade, currently B1 (LGD3)
Outlook Actions:
Issuer: Tronox Finance LLC
-- Outlook, Changed To Rating Under Review From Negative
Issuer: Tronox Limited
-- Outlook, Changed To Rating Under Review From Negative
Issuer: Tronox Pigments (Netherlands) B.V.
-- Outlook, Changed To Rating Under Review From Negative
RATINGS RATIONALE
The review for upgrade reflects the likelihood that the two part
portfolio transformation has the potential to moderately deleverage
Tronox's balance sheet, while at the same time providing synergy
and integration benefits to Tronox's TiO2 operations and greatly
enhancing the company's scale and presence in the industry.
The review will focus on the extent to which the combined
transactions de-lever the balance sheet and the outlook for the
combined company's earnings and cash flow. The review will also
focus on the historical performance and profitability of the
Cristal assets, particularly during different points in the TiO2
cycle.
Given what is known currently about the Cristal assets, the
targeted integration and synergy benefits, and the current
conditions and near-term outlook for the TiO2 industry; as well as
the range of potential valuations of the soda ash business to be
sold, Moody's anticipates any upgrade of Tronox's ratings would
likely be limited to one or two notches.
Tronox currently has adequate liquidity with balance sheet cash of
$248 million at September 30, 2016 and roughly $190 million
available under the $500 million revolver, plus another $95 million
USD equivalent in its South African revolver, all of which should
be sufficient to finance working capital needs and periods where
free cash flow is negative. The revolver has no maintenance
covenants (except for a springing coverage test when usage exceeds
$450 million) and there are no debt maturities until 2020, other
than the $16 million annual amortization of the term loan. Tronox
cut its dividend early last year so that cash used for dividends is
expected to be $45 million in 2016, compared to $117 million in
2015. Tronox's $202 million in cash consists of $121 million held
in foreign jurisdictions.
The principal methodology used in these ratings was Global Chemical
Industry Rating Methodology published in December 2013.
Tronox Limited (Tronox), with corporate offices in Stamford, CT, is
currently the world's sixth largest producer of titanium dioxide
(TiO2) and is backward integrated into the production of titanium
ore feedstocks. It also produces electrolytic chemicals and
byproducts of titanium ore processing (principally zircon). It
operates three pigment plants located in Hamilton, Mississippi;
Botlek, The Netherlands; and Kwinana, Australia; as well as mines
and processing plants in South Africa and Australia. Tronox
acquired the Exxaro mineral sands business (predominately titanium
ore feedstocks) in a mostly equity-financed transaction in June
2012. Exxaro owned approximately 44% of Tronox as of September 30,
2016. Tronox also acquired FMC Corporation's soda ash business in
April 2015 for $1.6 billion in balance sheet cash and raised debt.
Tronox's revenues were $2.1 billion for the twelve months ended
September 30, 2016.
ULTRA PETROLEUM: Reports 4th Quarter, Full-Year 2016 Results
------------------------------------------------------------
Ultra Petroleum Corp. reported fourth quarter and full-year 2016
operating and financial results. Highlights include:
-- Reduced lease operating expense to $0.32 per Mcfe during
2016, a 14% reduction from 2015,
-- Increased cash balance to $401.5 million at Dec. 31, 2016,
-- Produced 281.7 Bcfe of natural gas and crude oil, and
Generated operating cash flow(1) of $346.7 million during 2016.
Fourth Quarter Results
Ultra Petroleum reported adjusted net income of $119.2 million, or
$0.77 per diluted share for the quarter ended Dec. 31, 2016.
Operating cash flow was $145.1 million for the quarter ended Dec.
31, 2016.
During the fourth quarter of 2016, Ultra Petroleum produced 68.2
billion cubic feet equivalent (Bcfe) of natural gas and crude oil.
The company's fourth quarter production was comprised of 64.0
billion cubic feet (Bcf) of natural gas and 706.5 thousand barrels
of crude oil and condensate (MBbls).
During the fourth quarter of 2016, Ultra Petroleum's average
realized natural gas price was $2.87 per thousand cubic feet (Mcf).
The company's average realized oil and condensate price was $45.27
per barrel (Bbl).
Year-to-Date 2016 Results
Ultra Petroleum reported adjusted net income of $245.2 million, or
$1.59 per diluted share for the year ended Dec. 31, 2016.
Operating cash flow was $346.7 million for the year ended Dec. 31,
2016.
For the year ended Dec. 31, 2016, production of natural gas and oil
was 281.7 Bcfe. For 2016, production is comprised of 264.3 Bcf of
natural gas and 2.9 million barrels of crude oil and condensate.
The company's average realized natural gas price during 2016 was
$2.31 per Mcf. The Company's average realized crude oil and
condensate price was $38.24 per Bbl.
Wyoming – Operational Highlights
During the fourth quarter, Ultra Petroleum and its partners drilled
32 gross (24.1 net) Pinedale wells and placed on production 24
gross (17.9 net) wells. The fourth quarter average initial
production (IP) rate for new operated wells brought online was 6.0
million cubic feet equivalent (MMcfe) per day. Quarterly
production averaged 687.6 MMcfe per day. Production is comprised
of 656.7 million cubic feet per day of gas and 5,155 barrels per
day of condensate. Total production during the fourth quarter was
63.3 Bcfe.
Year to date, Ultra Petroleum and its partners drilled 110 gross
(78.4 net) Pinedale wells and placed on production 136 gross (97.7
net) wells. Annual production averaged 710.8 MMcfe per day.
Production is comprised of 678.4 million cubic feet per day of gas
and 5,399 barrels per day of condensate. The company produced
260.2 Bcfe from Wyoming during the year ended December 31, 2016.
Since the end of the third quarter, the Company has added a third
and fourth rig to the field. These additions, which were at very
attractive day rates, include a high-spec AC rig as well as a rig
and crew with significant Pinedale experience. By returning rigs
to the Company's fleet which have worked for them in the past, it
obtains equipment that is fit-for-purpose to its specifications
without any of the cost for new build or refurbishment.
Utah – Operational Highlights
During the fourth quarter, net production in Utah averaged 3,062
barrels of oil equivalent per day.
Pennsylvania – Operational Highlights
The company averaged 35.6 MMcf per day during the fourth quarter.
YEAR-END 2016 RESERVES
For the year-ended December 31, 2016, the Company's reserves
totaled 2.5 trillion cubic feet equivalent (Tcfe) of total proved
reserves with pre-tax estimated future net cash flows discounted at
ten percent (PV-10) of $1.7 billion. Natural gas represents 93
percent of the Company's proved reserves, with 95 percent of those
reserves in Wyoming.
Due to the Company' chapter 11 filing and the related uncertainty
of its ability to finance the development of its proved undeveloped
reserves (PUDs) over a five year period, the Company's year-end
2016 reserve report includes only proved developed reserves. All
locations that could have been booked as PUDs based on technical
criteria other than certainty of financing have been booked in the
probable category as of December 31, 2016," the Company said.
Reorganization Update
The Company continues to make progress in its in-court financial
restructuring process. If the current plan is confirmed in
mid-March, the following will occur:
-- Operating company private placement notes of $1.46 billion
will be repaid in full in cash;
-- Operating company credit facility of $999.0 million will be
repaid in full in cash;
-- The Company's $1.3 billion in senior notes will be repaid in
full in common equity;
-- The Company's existing equity holders will receive at least
41% of the reorganized equity.
Recent key developments in the restructuring process are as
follows:
As previously disclosed in a Current Report on Form 8-K filed with
the Securities and Exchange Commission on Nov. 22, 2016, on Nov.
21, 2016, the Company and each of its subsidiaries entered into (1)
a Plan Support Agreement with holders of at least 66.67% of the
principal amount of the outstanding 5.750% Senior Notes due 2018
and 6.125% Senior Notes due 2024 and shareholders who own at least
a majority of our outstanding common stock or the economic
interests therein (collectively, the "Plan Support Parties") and
(2) a Backstop Commitment Agreement ("BCA") with the Plan Support
Parties pursuant to which the Plan Support Parties agreed to
backstop the Rights Offering. The Bankruptcy Court approved the
BCA on Jan. 19, 2017.
In accordance with the Plan, the Company will offer eligible
holders of the Company's debt and equity securities, including the
Commitment Parties, the right to purchase shares of new common
stock in the Company ("Rights Offering") upon effectiveness of the
Plan for an aggregate purchase price of $580.0 million.
The Company filed its Second Amended Joint Chapter 11 Plan of
Reorganization (the "Plan") and its Disclosure Statement for the
Debtors' Second Amended Joint Chapter 11 Plan of Reorganization
(the "Disclosure Statement"):
The Plan provides for the payment in full of all allowed claims
against the Company and its subsidiaries and will be effectuated
by:
-- A debt financing of $2.4 billion; As previously disclosed
in a Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 9, 2017, on February 8, 2017, the
Company obtained the commitment of Barclays Bank PLC to provide
secured and unsecured financings to the Company to fund, in part,
the Plan, in an aggregate amount of up to $2.4 billion; and
-- A $580.0 million equity financing described in the Plan.
The Disclosure Statement was approved by the court on February 13,
2017, and a hearing to consider confirmation of the Plan is
scheduled for March 14, 2017.
The company negotiated with counterparties and settled the
following claims:
-- On January 20, 2017, the Company reached an agreement with
Big West Oil LLC ("Big West") to settle Big West's claims.
Pursuant to the settlement, the Company agreed to make a cash
payment to Big West of $17.35 million. Additionally, in connection
with the settlement, the Company and Big West agreed to enter into
two, new two-year contracts for the purchase and sale of condensate
and crude oil we produce in Wyoming and Utah; and
-- On January 12, 2017, Rockies Express Pipeline LLC ("REX")
and the Company entered into a settlement agreement resolving REX's
proof of claim. Pursuant to the settlement, the Company agreed to
make a cash payment to REX of $150.0 million and the Company agreed
to enter into a new seven-year agreement with REX, commencing
December 1, 2019, for west-to-east firm transportation service on
Rockies Express Pipeline of 200,000 dekatherms per day at a rate of
approximately $0.37 per dekatherm, or approximately $26.8 million
annually.
About Ultra Petroleum
Houston, Texas-based Ultra Petroleum Corp. (OTC Pink Marketplace:
"UPLMQ") is an independent oil and gas company engaged in the
development, production, operation, exploration and acquisition of
oil and natural gas properties.
On April 29, 2016, Ultra Petroleum Corp. and seven subsidiary
companies filed petitions (Bankr. S.D. Tex.) seeking relief under
Chapter 11 of the United States Bankruptcy Code. The Debtors'
cases have been assigned to Judge Marvin Isgur. The cases are
being jointly administered for procedural purposes, with all
pleadings filed in these cases will be maintained on the case
docket for Ultra Petroleum Corp. Case No. 16-32202.
Ultra Petroleum disclosed total assets of $1.28 billion and total
liabilities of $3.91 billion as of March 31, 2016.
James H.M. Sprayregen, P.C., David R. Seligman, P.C., Michael B.
Slade, Esq., Christopher T. Greco, Esq., and Gregory F. Pesce,
Esq., at Kirkland & Ellis LLP; and Patricia B. Tomasco, Esq.,
Matthew D. Cavenaugh, Esq., and Jennifer F. Wertz, Esq., at Jackson
Walker, L.L.P., serve as co-counsel to the Debtors. Rothschild
Inc. serves as the Debtors' investment banker; Petrie Partners
serves as their investment banker; and Epiq Bankruptcy Solutions,
LLC, serves as claims and noticing agent.
The Office of the U.S. Trustee has appointed seven creditors of
Ultra Petroleum Corp. to serve on an Official Committee of
Unsecured Creditors. The Committee tapped Weil, Gotshal & Manges
LLP as its legal counsel; Opportune LLP as advisor; and PJT
Partners LP as its financial advisor.
VIACOM INC: Fitch Assigns BB+ Rating to 40-Yr Jr. Subordinated Debt
-------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Viacom Inc.'s (Viacom)
issuance of 40-year junior subordinated debentures. The rating
reflects standard notching for a hybrid instrument with its risk
characteristics. In addition, Fitch affirmed Viacom's 'BBB' Issuer
Default Rating (IDR). The Rating Outlook is Negative.
Proceeds from the offering are expected to be used to repay the
October 2017 and September 2018 maturities. The issuance is
modestly deleveraging given the equity-like characteristics of the
junior subordinated debentures and Fitch's 50% equity treatment of
this type of hybrid instrument.
The Negative Outlook reflects that while Fitch views the company's
hybrid issuance and resulting modest debt reduction positively, pro
forma leverage will remain elevated above our 3.5x threshold level,
weakly positioning the company in the 'BBB' rating category. The
Negative Outlook also incorporates Viacom's continued weaker than
anticipated operating performance and the significant execution
risk regarding its turnaround strategy amid increasing secular
challenges. Fitch recognizes the company's planned de-leveraging
efforts; however, Fitch would consider a negative rating action if
incremental debt reduction or improved operating trends fail to
bring gross leverage down to levels more consistent with the 'BBB'
rating category.
Viacom's new management team has recently taken actions to address
operating performance and define a turnaround strategy.
Specifically Viacom will re-focus on its "flagship" cable networks
(Nick, Nick Jr., MTV, Comedy Central, BET and the re-branded
Paramount Network) and re-allocate content spending toward these
core brands. Viacom also intends to manage content and talent more
cohesively across its properties and use IP and talent from Media
Networks segment to bolster its film slate at Paramount. This
follows Viacom's Jan. 19 announcement that Chinese film companies,
Shanghai Film Group (SFG) and Huahua Media, will provide an
estimated $1 billion cash investment to fund 25% of Paramount's
film slate costs over the next three years.
Fitch believes that Viacom has outlined a more coherent strategy to
reinvigorate content and talent and deploy it more rationally
across its media properties, and Fitch views this positively as the
appropriate strategy to take given persistent operational woes.
However, Fitch remains concerned about the significant risk
surrounding execution of these efforts to stabilize performance.
Positive momentum in Media Networks will take time as Viacom works
to re-vitalize its core brands with improved content that resonates
with audiences and there will be a lag between improved ratings at
Viacom's cable networks in key demos and the potential for improved
advertising and affiliate fee growth.
Fitch expects the shift in focus towards the six "flagship" cable
networks could relieve some pressure in affiliate renegotiations
with multichannel programming video providers (MPVDs) as existing
contracts expire. However, Fitch think this strategy shift, which
de-emphasizes Viacom's other cable networks, reflects the
increasing secular pressure in the pay-TV ecosystem and the impact
this is having on content providers.
KEY RATING DRIVERS
Appropriate Financial Strategy: The changes to Viacom's capital
allocation policy, namely the reduction of its dividend, suspension
of its share repurchase program and the reallocation of free cash
flow (FCF) to reduce debt coupled with changing its strategic focus
to its six "flagship" cable networks, are appropriate given the
current operating environment. Fitch also views positively Viacom's
efforts to de-risk Paramount's film slate through an estimated $1
billion cash investment from Chinese film companies SFG and Huahua
Media, which will provide some modest improvement to Paramount's
operating performance and Viacom's consolidated operating cash
flow.
Leadership Transition: On Dec. 12, 2016, National Amusements Inc.
(NAI) announced that it ended its exploration of a possible merger
between CBS Corp. and Viacom. Concurrently, Viacom named Bob Bakish
as its permanent CEO. While Fitch would have considered a possible
re-combination with CBS Corp. a positive for Viacom's credit
profile, the removed uncertainty regarding Viacom's leadership
transition is a positive development for Viacom as an independent
company. Since Bakish was named permanent CEO, he has taken a
number of steps to change internal management in an effort to break
down silos within the organization and has outlined a more coherent
strategy and restructuring for the overall company.
Limited Financial Flexibility: While the recently announced hybrid
issuance, the de-risking of the Paramount film slate and the
reduction of the dividend will improve overall financial
flexibility, operational headwinds, elevated leverage combined with
ongoing investment in original programming and production are still
expected to pressure FCF generation and limit the company's overall
financial flexibility.
Cable Network Portfolio Anchors Ratings: The dual-stream,
recurring, high-margin revenue base of the cable networks remains
the foundation for Viacom's ratings. While a level of viewership
ratings volatility at any given cable network is factored into the
current ratings, Fitch remains concerned about the weakened TV
ratings at Viacom's cable networks. Fitch expects that management's
newly outlined turnaround strategy will take time to show
improvements. While Fitch does not expect Viacom to lose any
distribution deals, continued ratings softness could weaken its
negotiating position. However, this may be mitigated by the
company's focus on the six "flagship" networks and the resulting
de-emphasis on Viacom's less prominent networks, which could
improve Viacom's efforts to renegotiate affiliate agreements.
Growing Secular Risks Present: The ongoing secular threats
presented by changing media consumption, emerging distribution
platforms and technology evolution and adoption have had a negative
effect on Viacom's operating performance. Fitch recognizes the
risks inherent in the company's strategies to address the secular
threats and adapt to changing industry dynamics, monetize changing
viewing habits, and recapture a target audience that continues to
shift away from viewing media in a linear, measured environment.
Advertising Revenue Exposure Highlights Risks: Rating concerns
include exposure to cyclical advertising revenues (at 37% of
revenues, moderate relative to peer group) and the company's
capacity to adapt to ever-changing media consumption patterns and
technology platforms. Fitch's ratings recognize the volatility
within Viacom's operating profile given the exposure to cyclical
advertising revenues and the hit-driven nature of its cable
networks and film studio; however, there is minimal tolerance
within the current ratings for further weakening of Viacom's
operating profile.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case include:
-- Media Networks: Flat revenues in 2017 approaching low
single-digit growth in the years following.
-- Filmed Entertainment: Low- to mid-single-digit growth.
-- Near-term EBITDA margin pressure in both Media Networks and
Filmed Entertainment.
-- Dividend remains at half of FY 2016 for the ratings horizon.
-- Share buyback activity remains suspended.
-- Fiscal 2017 borrowings include $1.4 billion senior unsecured
October 2016 issuance and proceeds from junior subordinated
debentures.
-- Fiscal 2017 debt repayments include 2017, 2018 maturities.
-- Leverage under 3.5x by FYE 2018 approaching 3x by 2019.
RATING SENSITIVITIES
Positive: Upward ratings momentum is unlikely during the current
ratings horizon given Viacom's persistent weak operating
performance and the secular pressures on its business model.
Negative: Fitch notes that gross leverage was high at 4.2x for the
TTM period ending Dec. 31, 2016. While the proposed junior
subordinated notes will slightly reduce leverage, Fitch expects pro
forma leverage will remain elevated above Fitch 3.5x threshold
level, weakly positioning the company in the 'BBB' rating category.
Fitch recognizes the company's planned de-leveraging efforts,
however Fitch would consider a negative rating action if
incremental debt reduction or improved operating trends fail to
bring gross leverage down to levels which Fitch views as more
consistent with the 'BBB' rating category. Failure to gain traction
from the turnaround strategy, particularly in regard to ratings and
advertising momentum at Media Networks, could also result in
negative pressure on the ratings, notwithstanding the company's
commitment to more conservative fiscal policies.
LIQUIDITY
Viacom's weakening operating profile is diminishing its financial
flexibility. In step with the company's weakened operating results,
FCF generation, margin and FCF leverage metrics have also
deteriorated. Led by its Media Networks segment, the company
generated approximately $903 million of FCF (defined as cash flow
from operations less capital expenditures and dividends) during the
LTM period ended Dec. 31, 2016, reflecting a 44% decline relative
to company's reported FCF generation during its fiscal year end
2015. Fitch expects that the estimated $1 billion cash investment
in Paramount by Chinese film companies, which will fund 25% of
Paramount's film slate costs over the next three years will provide
some upside to operating cash flow over the ratings horizon.
However, operational headwinds, higher cash taxes along with higher
programming costs are expected to continue hindering FCF generation
through fiscal 2017. Fitch expects FCF generation after dividends
during fiscal 2017 to approximate roughly $900 million.
In Fitch's view, Viacom's liquidity is adequate and supported by
expected FCF generation. Additional financial flexibility is
provided by the company's $2.5 billion revolving credit facility
(fully available as of Dec. 31, 2016 and there was no outstanding
commercial paper) and $443 million of cash on hand as of Dec. 31,
2016. Viacom has deemed substantially all of the cash held by its
foreign subsidiaries as permanently reinvested in its foreign
operations and does not intend or foresee a need to repatriate any
of this cash. Commitments under Viacom's revolver expire on Nov.
18, 2019. The credit facility contains an interest coverage
covenant requiring coverage for the most recent LTM period to be at
least 3x.
FULL LIST OF RATING ACTIONS
Fitch assigns the following ratings:
-- Junior subordinated debentures 'BB+'
Fitch currently rates Viacom:
Viacom Inc.
-- Long-Term IDR 'BBB';
-- Senior unsecured notes and debentures 'BBB';
-- Senior unsecured bank facility due 2019 'BBB';
-- Short-Term IDR 'F2';
-- CP 'F2'.
The Rating Outlook remains Negative.
VIACOM INC: Moody's Assigns Ba1 Rating to New Jr. Sub. Note
-----------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Viacom Inc.'s
proposed benchmark junior subordinated note offering due 2057, with
proceeds being used to retire debt and for general corporate
purposes. Given certain terms, Moodys' will treat the proposed
offering as having a 25% equity component, in accordance with
Moody's Methodology on Hybrid Equity. The proposed notes will rank
one notch lower than the company's Baa3 senior unsecured debt
ratings due to its junior ranking in the capital structure.
Viacom's Baa3 senior unsecured rating and Prime-3 short term
rating, were affirmed. The outlook remains stable.
A summary of action follows:
Assignments:
Issuer: Viacom Inc.
-- Junior Subordinated Regular Bond/Debenture, Assigned Ba1
Affirmations:
Issuer: Viacom Inc.
-- Senior Unsecured Commercial Paper, Affirmed P-3
-- Senior Unsecured Regular Bond/Debenture, Affirmed Baa3
RATINGS RATIONALE
The Baa3 senior unsecured rating continues to be supported by
Viacom's strong and narrowly focused demographic brands and its
valuable portfolio of media assets. These factors, along with
continued investments in programming support its strong contractual
affiliate revenue base, but if the company is unable to improve the
performance of its programming, there is risk that its networks
could be dropped and/or renewals could occur at unfavorable terms
in the next round of carriage renewals in 2018. The Baa3 also
considers the company's position as one of only a handful of major
global film studios and distributors. In Moody's views, the
nationally recognized and, in some cases, internationally
recognized brands supported by superior creative content, provide
the company with flexibility to leverage its content using multiple
distribution channels including digital and mobile devices . The
rating also factors Viacom's scale, diversification and moderate
exposure to cyclical advertising spending, with advertising
accounting for approximately 38% of total revenues. Moderating
these favorable rating factors however, are the inherent volatility
of the film business and the significant programming investment
required by both its film and media network businesses to deliver
the engaging content necessary to support its distribution and
advertising revenues.
As stated above, the new subordinated debt has some equity-like
characteristics such as the ability to defer interest, a stopper on
payments to any instruments that rank pari passu or junior to this
subordinated debt while its payments are in deferral, and the lack
of material step up on coupon payment at the call date which does
not provide Viacom with an incentive to call in the notes and
shorten the debt's maturity. However, in accordance with Moody's
methodology, this equity treatment applies only to investment-grade
companies. Therefore, if Viacom were downgraded one notch or more,
it would lose this equity treatment benefit, which could add over
0.1 times to leverage.
The stable outlook reflects Moody's views that even though adjusted
leverage is currently high for the Baa3 rating, expected increase
in EBITDA and cash flows in fiscal 2017, together with asset sales
with proceeds will allow the company financial flexibility to
reduce gross debt and bring Moody's adjusted leverage to
comfortably under 4.0x within the next 12 months.
Considering the pressure on its businesses, an upgrade of the
credit rating is unlikely over the near term. However, a positive
rating action could occur if there is remarkable improvement in the
performance of the company's programming and Moody's adjusted
leverage is sustained at or under 3.0x. This level could be
expanded if the company demonstrates that it can return to
sustained competitive viewer ratings on its major branded networks,
and that it can transition well within the evolving network
distribution ecosystem. Management's commitment and a strong
liquidity profile will also be necessary for a ratings upgrade.
The company's ratings could be downgraded if it does not reduce
adjusted leverage within the next twelve months and it remains
sustained at or above 4.0x. Viacom's ratings could also be
downgraded if it does not show material traction in the performance
of its programming and advertising revenues or management deviates
from its plans of strengthening the balance sheet and allows
liquidity to deplete. The threshold for a downgrade could be
lowered over the medium-term if it experiences secular pressures
due to poor execution within the evolving ecosystem.
The principal methodology used in these ratings was Global
Broadcast and Advertising Related Industries published in May
2012.
Viacom Inc. is a global media company, with large scale positions
in cable television networks, theatrical film content production,
distribution and library product. Revenue for the LTM ended
December 31, 2016 was approximately $12.8 billion.
VIACOM INC: S&P Assigns 'BB' Rating on Proposed 2057 Jr. Debentures
-------------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating to New York
City-based Viacom Inc.'s proposed fixed- to floating-rate junior
subordinated debentures due 2057 (junior debentures). S&P
attributes "intermediate" equity content to the proposed
debentures, reflecting their junior position in the capital
structure, the debentures' long-dated maturity, and their relative
size compared to the pro forma capital structure. As a result, S&P
will only include 50% of the debentures in its leverage
calculation.
S&P expects that Viacom may issue up to $1.3 billion in one or more
issues and will use all proceeds to repay upcoming debt maturities.
As a result, S&P estimates that the company's adjusted leverage,
pro forma for both the proposed issuance and expected future debt
repayment, will decline to about 4.4x from 4.6x, as of Dec. 31,
2016. As of Dec. 31, 2016, S&P's adjusted debt was $13.93 billion
and its adjusted EBITDA was $3.04 billion.
Although leverage will still remain high for the ratings, S&P's
'BBB-' corporate credit rating and negative rating outlook on
Viacom is unaffected by the proposed transaction. Viacom's
maintaining the corporate credit rating will depend on its ability
to reduce its adjusted leverage close to 3.25x by the end of the
fiscal year ending Sept. 30, 2017. However, S&P don't believe that
Viacom can achieve this target purely through earnings improvement.
It will also need to resort to additional measures to reduce
leverage toward the 3.25x target. S&P views the proposed junior
subordinated debt issuance as one of these additional measures,
which could also include the possible sale of noncore assets.
RATINGS LIST
Viacom Inc.
Corporate Credit Rating BBB-/Negative/--
New Rating
Viacom Inc.
Junior Subordinated Debentures due 2057 BB
Junior Subordinated Debentures due 2057 BB
WET SEAL: Landlords Object to Cash Collateral Use
-------------------------------------------------
Landlords GGP, Inc., Rouse Properties Inc., and Turnberry
Associates filed with the U.S. Bankruptcy Court for the District of
Delaware an omnibus objection to The Wet Seal, LLC, and its
affiliated debtors' postpetition use of cash collateral, among
others.
A hearing to consider the approval of the cash collateral use was
slated for Feb. 22, 2017.
For the Landlords, the proposed cash collateral budget fails to
provide funds for the payment of "Stub Rent" owed to the Landlords
for the use of their property from Feb. 2 to Feb. 28 -- the likely
duration of the store closing sales.
A copy of the Omnibus Objection is available at:
http://bankrupt.com/misc/deb17-10229-147.pdf
The Landlords are opposed to the allowance of GOB Sales and
approved use of cash collateral where there is no plan, no funds
available, and no Court authorization to pay the Landlords' Stub
Rent claims for the Debtors' and secured lenders' postpetition use
of the Landlords' leased premises to liquidate the Secured Lenders'
collateral.
The only remaining objection that the Landlords have to the GOB
Motion and Cash Collateral Motion is the Debtors' refusal and
inability to pay the Landlords for the use of their premises while
liquidating the secured lenders' collateral in the GOB Sales. If
the Debtors and the secured lenders want to liquidate their
collateral in Chapter 11, with the attendant benefit of GOB Sales
authorized by a Federal Bankruptcy Court, they must pay to play,
including immediately paying the Landlords' Stub Rent for the
stores where they are conducting GOB Sales.
The Taubman Landlords and Castle & Cooke Corona Crossings, LLC,
also filed objections to the Debtors' cash collateral use. Their
objections are available at:
http://bankrupt.com/misc/deb17-10229-140.pdf
http://bankrupt.com/misc/deb17-10229-141.pdf
According to Castle & Cooke, the Debtors had been conducting
post-petition liquidation sales at the Premises.
The usage of the Premises to sell the secured lenders' collateral
allows for the continued operation of the Debtors, and benefits the
secured lenders by preserving and disposing of the secured lenders'
collateral in an orderly sale process. However, the proposed
budget attached to the Cash Collateral Motion fails to include a
line item to pay any amounts owing to Corona Crossings, or any
other landlord, for Stub Rent and related charges. Further, it
appears that the Debtors' estates may be administratively
insolvent.
Castle & Cook is represented by:
Christopher A. Ward, Esq.
POLSINELLI PC
222 Delaware Avenue, Suite 1101
Wilmington, Delaware 19801
Tel: (302) 252-0920
Fax: (302) 252-0921
E-mail: cward@polsinelli.com
-- and --
Eve H. Karasik, Esq.
Jeffrey S. Kwong, Esq.
LEVENE, NEALE, BENDER, YOO & BRILL L.L.P.
10250 Constellation Boulevard, Suite 1700
Los Angeles, California 90067
Tel: (310) 229-1234
Fax: (310) 229-1244
E-mail: ehk@lnbyb.com; jsk@lnbyb.com
The Taubman Landlords are represented by:
Susan E. Kaufman, Esq.
LAW OFFICE OF SUSAN E. KAUFMAN, LLC
919 North Market Street, Suite 460
Wilmington, DE 19801
Tel: (302) 472-7420
Fax: (302) 792-7420
E-mail: skaufman@skaufmanlaw.com
-- and --
Andrew S. Conway, Esq.
The Taubman Company
200 East Long Lake Road, Suite 300
Bloomfield Hills, MI 48304
Tel: (248) 258-7427
E-mail: aconway@taubman.com
GGP, Rouse Properties, and Turnberry Associates are represented
by:
Robert L. LeHane, Esq.
Gilbert R. Saydah Jr., Esq.
KELLEY DRYE & WARREN LLP
101 Park Avenue
New York, New York 10178
Tel: (212) 808-7800
Fax: (212) 808-7897
E-mail: rlehane@kelleydrye.com
gsaydah@kelleydrye.com
About The Wet Seal
The Wet Seal, LLC, and its affiliates are a national multi-channel
specialty retailer selling fashion apparel and accessory items
designed for female customers aged 18 to 24 years old. They are
currently comprised of two primary units: the retail store business
and an e-commerce business. Through their retail store business,
they operate approximately 142 retail locations in 37 states,
principally in lease-based mall locations. They also have
historically sold gift cards, which business has been primarily
operated through The Wet Seal Gift Card, LLC.
The Wet Seal, LLC, also known as The Wet Seal (2015), LLC, sought
Chapter 11 protection (Bankr. D. Del. Case No. 17-10229) on Feb. 2,
2017. The case is assigned to Judge Christopher S. Sontchi.
The Debtor tapped Robert S. Brady, Esq., Michael R. Nestor, Esq.,
Jaime Luton Chapman, Esq., Andrew L. Magaziner, Esq., of the Young
Conaway Stargatt & Taylor, LLP as counsel.
The Debtor estimated assets in the range of $10 million to $50
million and $50 million to $100 million in debt.
The petitions were signed by Judd P. Tirnauer, executive vice
president and chief financial officer.
WINDSTREAM SERVICE: Fitch Assigns BB+ Rating to $580MM Term Loans
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+/RR1' rating to Windstream
Service, LLC's (Windstream; NASDAQ: WIN) issuance of $580 million
of senior secured term loans due 2024. Term loan proceeds were used
to repay the $572 million amount outstanding under its senior
secured tranche B5 term loan due 2019. Windstream's Issuer Default
Rating (IDR) is 'BB-', and the Rating Outlook is Stable.
KEY RATING DRIVERS
Merger with EarthLink: Windstream reached an agreement to merge
with EarthLink Holdings Corp. (EarthLink) in an all-stock
transaction with a total value, including debt, of approximately
$1.1 billion. Windstream will refinance approximately $436 million
of EarthLink's outstanding debt with $450 million of incremental
senior secured tranche B6 term loans that will be drawn at the
transaction's close. Fitch expects EarthLink to become a guarantor
of Windstream's credit facilities and senior unsecured notes. The
transaction is expected to close in the first half of 2017,
following customary shareholder and regulatory approvals.
Windstream anticipates realizing more than $125 million of annual
run-rate synergies three years after the close of the merger: $110
million in operating cost savings and $15 million in capital
spending savings. Windstream expects to realize $50 million in
synergies in each of the first two years following the merger, with
the remaining $25 million to be realized by the end of year three.
In its base case assumptions for Windstream, Fitch has assumed
moderately lower cost savings in each of the three years following
the merger. Windstream also expects to benefit from net operating
loss carryforwards that are estimated to have a net present value
of approximately $95 million at the close of the transaction.
Fitch believes there are strategic benefits to the transaction,
with both companies focused on growing their enterprise services
business. The combined network of the company will consist of
approximately 145,000 route miles of fiber, positioning the company
as one of the largest network providers in the U.S.
Fitch believes there are potential execution risks to achieving the
operating cost and capital expenditure synergies following the
close of the merger. Initial savings are expected to be realized
from reduced selling, general and administrative savings as
corporate overheads and other public company cost savings arise.
Over time, the company is expected to realize the benefits of lower
network access costs as on-network opportunities lower third-party
network access costs. Finally, cost savings are gradually expected
to be realized by IT and billing system cost savings.
In Fitch's view, the transaction is beneficial to Windstream's
credit profile, as the transaction will reduce the company's
leverage modestly following the close of the transaction, with
further potential improvements arising as synergies are realized.
Synergies are also expected to contribute to an improving FCF
profile in 2017 and beyond.
Near-Term Pressures: In the first nine months of 2016, Windstream
experienced a decline of less than 3% in adjusted service revenue
(adjusted for disposed businesses). Since the beginning of the
year, sequential revenues have been relatively stable in the
consumer and small/medium business segment, and the enterprise
segment. The company has experienced some pressure in the wholesale
segment, as well as the small/medium business competitive local
exchange carrier segment. Fitch's base case (excluding the
EarthLink acquisition) assumes EBITDAR returns to growth in 2018
and revenue growth turns positive in 2019.
Revenue Mix Changes: Windstream derives approximately two-thirds of
its revenues from enterprise services, consumer high-speed internet
services and its carrier customers (core and wholesale), which all
have growing or stable prospects in the long term. Certain legacy
revenues remain pressured, but Windstream's revenues should
stabilize gradually as legacy revenues dwindle in the mix.
Leverage Metrics: Fitch estimates total adjusted debt/EBITDAR was
approximately 5.4x in 2016 and will be 5.1x in 2017. Fitch's
estimates include the debt reduction associated with the June 2016
monetization of Windstream's remaining 19.6% stake in
Communications Sales & Leasing (CSAL) via two debt-for-equity
exchanges. The disposition of shares retired approximately $672
million in debt. In calculating total adjusted debt, Fitch applies
an 8x multiple to the sum of the annual rental payment to CSAL plus
other rental expenses.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- In 2016, Fitch estimates service revenues were approximately
the mid-point of Windstream's guidance of $5.275 billion to $5.425
billion. Fitch assumes revenues decline in the 1% to 2% range in
2017, with revenues flat in 2018.
-- 2017 EBITDA margins are in the range of 23% to 24%, including
the annual rental payment as an operating expense.
-- Fitch assumes capital spending in 2016 was in line with company
guidance ranging from $1 billion to $1.05 billion, including $200
million for Project Excel. Cash taxes are not expected to be
material. Capital intensity is expected to range from 15%-16% in
2017, including Connect America Fund II spending and a partial-year
amount for EarthLink at the low end of its 2016 capital expenditure
guidance (no guidance has been provided for 2017).
-- The EarthLink acquisition closes July 1, 2017 and that
EarthLink's revenues and EBITDA continued to be pressured in 2017
before stabilizing in 2018. Fitch assumes Windstream will benefit
from synergies post-acquisition, and has moderately reduced the
amount of operating cost synergies from the $110 million
anticipated by Windstream and that it will be achieved over a
three-year period. Windstream estimates the cost to achieve
synergies will total $125 million, and Fitch has assumed
approximately $75 million in 2017 and $50 million in 2018.
RATING SENSITIVITIES
Positive Trigger: A positive action could occur if total adjusted
debt/EBITDAR, which will be used as the primary metric, is
sustainable under 5.2x to 5.3x. Additionally, revenues and EBITDA
would need to stabilize or demonstrate a return to growth on a
sustained basis. Fitch would also need to see progress on execution
of the integration of the two companies prior to taking a positive
rating action.
Negative Trigger: A negative rating action could occur if total
adjusted debt/EBITDAR is 5.7x to 5.8x or higher for a sustained
period, or if competitive and business conditions were such that
the company no longer makes progress toward revenue and EBITDA
stability.
LIQUIDITY
The rating is supported by the liquidity provided by Windstream's
$1.25 billion revolving credit facility (RCF). At Sept. 30, 2016,
approximately $601 million was available. The revolver availability
was supplemented with $61 million in cash at the end of 3Q16.
The $1.25 billion senior secured RCF is in place until April 2020.
Principal financial covenants in Windstream's secured credit
facilities require a minimum interest coverage ratio of 2.75x and a
maximum leverage ratio of 4.5x. The dividend is limited to the sum
of excess FCF and net cash equity issuance proceeds subject to pro
forma leverage of 4.5x or less.
The new terms will refinance the $572 million of tranche B5 term
loans maturing in 2019. As such, Windstream does not have any
material maturities until 2020.
In 2016, Fitch estimates post-dividend FCF ranged from negative
$200 million to negative $250 million, including expected spending
of $200 million in 2016 on Windstream's Project Excel. In 2017,
Fitch expects capital spending to return to normal levels on the
completion of Project Excel, and for the company to return to
positive FCF in 2017, including the effect of the merger with
EarthLink.
WME IMG: Term Loan Addition No Impact on Moody's B2 CFR
-------------------------------------------------------
Moody's Investors Service says WME IMG, LLC's B2 corporate family
rating is unchanged following the proposed $100 million add on term
loan. Both the B1 rating on the first lien credit facility and Caa1
rating on the second lien term loan are also unchanged. The outlook
remains stable. The add on term loan is expected to be fungible
with the existing 1st lien term loan, with the proceeds used to
fund acquisitions in addition to general corporate purposes.
WME IMG, LLC. (WME IMG) is a diversified global company with
operations in client representation, event operations, distribution
of media, sponsorship and licensing rights, as well as marketing
and other services. William Morris Endeavor Entertainment, LLC.
bought IMG Worldwide Holdings, Inc. (IMG) in May 2014 for
approximately $2.4 billion dollars with equity financing from
Silver Lake Partners in the amount of $461 million. Reported
revenue as of the LTM ending September 30, 2016 is approximately
$2.5 billion.
XTERA COMMUNICATIONS: Seeks Plan Exclusivity Pending Conversion
---------------------------------------------------------------
Xtera Communications, Inc. and its affiliated debtors request the
U.S. Bankruptcy Court in Delaware to extend each of the exclusivity
periods within which to file and solicit acceptances of a plan of
liquidation to May 15, 2017 and July 14, 2017, respectively.
The Debtors relate that they have recently consummated a sale of
substantially all of their assets to H.I.G. Europe – Neptune,
Ltd., as stalking horse purchaser, for a total purchase price of
$10,591,446. In connection with consummation of the sale, the
Debtors terminated all of their employees and ceased to operate.
As of the closing of the sale, the Debtors' postpetition financing
obligations were satisfied.
The Debtors further relate that they have filed a motion to convert
their chapter 11 cases to cases under chapter 7 of the Bankruptcy
Code immediately after the consummation of the sale.
Since filing the Motion to Convert, the Debtors have begun to make
good-faith progress towards an orderly liquidation process, and
have engaged in discussions and negotiations with the Official
Committee of Unsecured Creditors; Square 1 Bank, as senior
prepetition lender; Horizon Funding Trust 2013-1, LLC as
subordinated prepetition lender and various parties in interest to
determine whether an orderly liquidation process through a plan of
liquidation could be agreed upon.
While the parties continue to explore such discussions, the Debtors
ask the Court for exclusivity extension out of abundance of caution
while they continue to engage in good faith negotiations. The
Debtors contend that if the Motion to Convert is granted on Feb.
21, 2017, the Debtors' Exclusivity Motion will be deemed moot and
withdrawn.
About Xtera Communications
Xtera Communications and seven affiliated debtors filed for Chapter
11 protection (Bankr. D. Del. Lead Case No. 16-12577) on Nov. 15,
2016. The company sells telecommunications-related optical
transport solutions. The company disclosed $50.47 million in
assets and $66.45 million in total debt as of the bankruptcy
filing.
Xtera tapped DLA Piper LLP as legal counsel; Cowen & Company as
investment banker; and Epiq Systems Inc. as claims agent.
On Nov. 23, 2016, the Office of the U.S. Trustee appointed five
creditors to serve on the official committee of unsecured
creditors. Lawyers at Bayard P.A., and Lowenstein Sandler LLP
serve as counsel to the committee while BDO USA, LLP (BDO) serves
as its financial advisor.
HIG Neptune, the postpetition lender, is represented by Allen &
Overy LLP; and Morris, Nichols, Arsht & Tunnell LLP. Counsel to
Wilmington Trust, N.A., the DIP Agent, is Kaye Scholer LLP.
Counsel to the prepetition senior lender are Levy, Small & Lallas
and Chipman Brown Cicero & Cole, LLP. Counsel to Horizon
Technology Finance Corp., the prepetition subordinated lender, is
K&L Gates LLP.
ZIO'S RESTAURANT: Disclosures OK'd; Plan Hearing on March 27
------------------------------------------------------------
The Hon. Ronald B. King of the U.S. Bankruptcy Court for the
Western Districct of Texas has approved Zio's Restaurant Company,
LLC, et al.'s disclosure statement referring to the Debtors' joint
plan of reorganization, dated Jan. 5, 2017.
These deadlines are approved (all times stated in prevailing
Central Time):
Deadline to file Cure Notice March 3, 2017
Deadline to file Rule 3018 Motions March 10, 2017
Deadline to Object to Cure Amounts March 17, 2017
Deadline to Object to Confirmation of Plan March 20, 2017
Voting Deadline March 20, 2017, at
5:00 p.m.
Confirmation Hearing March 27, 2017, at
2:00 p.m.
The Plan proposes the substantive consolidation of the Debtors'
estates for purposes of the Plan and distributions. Accordingly,
creditors who filed proofs of claim against multiple Debtors on
account of the same liability shall be permitted to submit a single
ballot on account of a single claim against the consolidated
estate.
About Zio's Restaurant
Zio's Restaurant Company, LLC, and 16 of its subsidiaries commenced
Chapter 11 cases on Sept. 7, 2016, in the U.S. Bankruptcy Court for
the Western District of Texas (Bankr. W.D. Tex. Proposed Lead Case
No. 16-52041). The cases are assigned to Judge Ronald B. King.
Founded in 1994 in Oklahoma City, Oklahoma, Zio's Restaurant
Company, LLC, et al., have operated a full-service chain restaurant
since 2007. Zio's focuses on providing Italian cuisine in a casual
and comfortable open-aire piazza. Zio's offers appetizers, soups
and salads, pastas, specialties, calzones and sandwiches, pizzas,
drinks, wine, desserts, kid's menu, pronto lunches, and gluten free
menu options.
As of the Petition Date, there were 15 stores, all of which operate
in leased premises located in Texas, Oklahoma, Missouri, Kansas,
New Mexico and Colorado. The Debtors employ 875 personnel. At one
time, the Zios' concept was expanded to 21 locations.
The Debtors' business operations are, and have been, managed by FMP
SA Management Group, LLC pursuant to a management agreement. FMP,
a privately held company based in Hollywood Park, Texas, is a
multi-concept developer and operator of independent restaurant
chains.
Zio's Restaurant is the sole member of each of Debtors FMPRG # 601,
LLC, FMPRG # 602, LLC, FMPRG # 603, LLC, FMPRG # 604, LLC, FMPRG #
605, LLC, FMPRG # 606, LLC, FMPRG # 607, LLC, FMPRG # 608, LLC,
FMPRG # 609, LLC, FMPRG # 610, LLC, FMPRG # 611, LLC, FMPRG # 613,
LLC, FMPRG # 615, LLC, FMPRG # 618, LLC, FMPRG # 623, LLC, and
FMPRG # 624, LLC.
ZODIAC INDUSTRIES: Intends to Use JPMorgan Cash Collateral
----------------------------------------------------------
Zodiac Industries Inc. requests the U.S. Bankruptcy Court for the
Southern District of New York for authority to use cash collateral
in which JPMorgan Chase Bank, N.A., is likely to assert a security
interest.
The Debtor is indebted to JPMorgan in the approximate amount of
$240,000, as of the Petition Date, and has been current on its
monthly debt service obligations. The Debtor agrees and
acknowledges that JPMorgan has a valid lien and security interest
in the Collateral. The Debtor believes that JPMorgan is the only
party that may have a perfected security interest in the its
property which may constitute cash collateral.
The Debtor proposes to JPMorgan replacement liens in all of the
Debtor's prepetition and postpetition assets and proceeds,
including the cash collateral and the proceeds of the foregoing, to
the extent that JPMorgan had a valid security interest in said
prepetition assets on the Petition Date and in the continuing order
of priority that existed as of the Filing Date. Such replacement
liens will be with the same nature, extent and validity of their
prepetition liens.
The replacement liens will be subject and subordinate only to:
(a) the U.S. Trustee fees;
(b) professional fees of duly retained professionals in the
Debtor's Chapter 11 case;
(c) fees and expenses of a hypothetical Chapter 7 trustee to
the extent of $10,000; and
(d) the recovery of funds or proceeds from the successful
prosecution of avoidance actions.
In addition to the proposed liens and security interests, the
Debtor proposes to continue making the monthly debt service
payments as provided for in the Note and in accordance with the
terms set forth therein.
A full-text copy of the Debtor's Motion, dated Feb. 16, 2017, is
available at https://is.gd/jpo5wJ
About Zodiac Industries Inc.
Zodiac Industries Inc. is a family-owned sheet metal manufacturing
business in Port Chester, New York, operating for over thirty five
years.
Amid a dispute with the Trustees of Sheet Metal Workers
International Association Local 38 Insurance and Welfare Fund, et
al., Zodiac Industries filed a Chapter 11 petition (Bankr. S.D.N.Y.
Case No. 17-22236) on Feb. 16, 2017. The petition was signed by
Frank Pasqualini, president. The case is assigned to Judge Robert
D. Drain. At the time of filing, the Debtor had total assets of
$242,908 and total liabilities of $1.04 million.
The Debtor is represented by Dawn Kirby, Esq., at DelBello
Donnellan Weingarten Wise & Wiederkehr, LLP.
The Debtor has continued in possession of its property and the
management of its business affairs as a debtor-in-possession. No
trustee, examiner or statutory committee has been appointed.
ZODIAC INDUSTRIES: Taps DelBello Donnellan as Legal Counsel
-----------------------------------------------------------
Zodiac Industries Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to hire legal counsel
in connection with its Chapter 11 case.
The Debtor proposes to hire DelBello Donnellan Weingarten Wise &
Wiederkehr, LLP to give legal advice regarding its duties under the
Bankruptcy Code, negotiate with creditors, give advice regarding
any potential sale of its business, prepare a bankruptcy plan, and
provide other legal services.
The hourly rates charged by the firm are:
Attorneys $375 - $620
Law Clerks $200
Paraprofessionals $150
Dawn Kirby, Esq., at DelBello, disclosed in a court filing that the
firm is a "disinterested person" as defined in section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Dawn Kirby, Esq.
DelBello Donnellan Weingarten
Wise & Wiederkehr, LLP
One North Lexington Avenue
White Plains, NY 10601
Phone: (914) 681-0200
Fax: 914-681-0288
Email: dkirby@ddw-law.com
About Zodiac Industries Inc.
Zodiac Industries Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 17-22236) on February 16,
2017. The petition was signed by Frank Pasqualini, president.
The case is assigned to Judge Robert D. Drain.
At the time of the filing, the Debtor disclosed $242,908 in assets
and $1.04 million in liabilities.
[*] Ervin Cohen & Jessup Attorneys Included in Super Lawyers List
-----------------------------------------------------------------
It's not every day that 15 attorneys at a full-service firm like
Ervin Cohen & Jessup are selected to a Super Lawyers(R) List. Only
five percent of attorneys statewide are selected to the list. It
is truly extraordinary when 15 lawyers at a 50 lawyer firm receive
such a prestigious designation.
"We are honored and humbled to receive such a high level of
recognition. These distinctions reflect the high standard of
excellence that the firm's attorneys provide our clients," said ECJ
Managing Partner Barry MacNaughton. "We're particularly honored
when this praise comes from our peers at other firms."
The national rating service annually identifies outstanding lawyers
from more than 70 practice areas who attained a high degree of peer
recognition and professional achievement.
The following ECJ lawyers were selected in their practice areas for
2017:
-- Colleen D. Calkins, Estate and Probate;
-- Howard I. Camhi, Creditor and Debtor Rights;
-- Reeve E. Chudd, Estate and Probate;
-- Allan B. Cooper, Business Litigation;
-- Peter A. Davidson, Creditor and Debtor Rights;
-- Patrick Fraioli, Jr., IP Litigation;
-- Jeffrey R. Glassman, Business and Corporate;
-- Geoffrey M. Gold, Business Litigation;
-- Vanja Habekovic, Tax;
-- Rodney C. Lee, Estate and Trust Litigation;
-- Byron Z. Moldo, Creditor and Debtor Rights;
-- Kelly O. Scott, Employment and Labor;
-- Ellia Thompson, Land Use and Zoning;
-- Albert Valencia, Real Estate;
-- Pantea Yashar, Real Estate Litigation.
About Ervin Cohen & Jessup LLP
Ervin Cohen & Jessup LLP -- http://www.ecjlaw.com/-- is a
full-service firm that provides a broad range of business-related
legal services including corporate law; litigation; intellectual
property & technology law; real estate transactions and finance;
construction & environmental law; tax planning and controversies;
employment law; health care law; bankruptcy, receivership and
reorganization; and estate planning.
[^] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS
------------------------------------------
Authors: Teresa A. Sullivan, Elizabeth Warren,
& Jay Westbrook
Publisher: Beard Books
Softcover: 370 Pages
List Price: $34.95
Review by: Susan Pannell
Order your personal copy today at
http://www.beardbooks.com/beardbooks/as_we_forgive_our_debtors.html
So you think you know the profile of the average consumer
debtor: either deadbeat slouched on a sagging sofa with a three-
day growth on his chin or a crafty lower-middle class type
opting for bankruptcy to avoid both poverty and responsible debt
repayment.
Except that it might be a single or divorced female who's the
one most likely to file for personal bankruptcy protection, and
her petition might be the last stage of a continuum of crises
that began with her job loss or divorce. Moreover, the dilemma
might be attributable in part to consumer credit industry that
has increased its profitability by relaxing its standards and
extending credit to almost anyone who can scribble his or her
name on an application.
Such are among the unexpected findings in this painstaking study
of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors
use data contained in the actual petitions. In so doing, they
offer a unique window into debtors' lives.
The authors conclude that people who file for bankruptcy are, as
a rule, neither impoverished families nor wily manipulators of
the system. Instead, debtors are a cross-section of America. If
one demographic segment can be isolated as particularly debt-
prone, it would be women householders, whom the authors found
often live on the edge of financial disaster. Very few debtors
(3.7 percent in the study) were repeat filers who might be
viewed as abusing the system, and most (70 percent in the study)
of Chapter 13 cases fail and become Chapter 7s. Accordingly, the
authors conclude that the economic model of behavior--which
assumes a petitioner is a "calculating maximizer" in his in his
decision to seek bankruptcy protection and his selection of
chapter to file under, a profile routinely used to justify
changes in the law--is at variance with the actual debtor
profile derived from this study.
A few stereotypes about debtors are, however, borne out. It is
less than surprising to learn, for example, that most debtors
are simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer
debts are off the charts. Petitioners seem particularly
susceptible to the siren song of credit card companies. In the
study sample, creditors were found to have made between 27
percent and 36 percent of their loans to debtors with incomes
below $12,500 (although the loans might have been made before
the debtors' income dropped so low). Of course, the vigor with
which consumer credit lenders pursue their goal of maximizing
profits has a corresponding impact on the number of bankruptcy
filings.
The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
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the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
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affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
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liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
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The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Editors.
Copyright 2017. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
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firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***