/raid1/www/Hosts/bankrupt/TCR_Public/181022.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, October 22, 2018, Vol. 22, No. 294
Headlines
190 SOUTH STREET: Examiner Taps McManimon Scotland as New Counsel
199 REALTY: Examiner Taps McManimon Scotland as New Counsel
3920 PARK AVENUE: Examiner Taps McManimon Scotland as New Counsel
999 PRIVATE JET: UniBank Prohibits Use of Aircraft Proceeds
999 PRIVATE JET: UniBank's Bid to Forbid Cash Collateral Use Okayed
A.W. BROWN FELLOWSHIP: S&P Lowers Rating on 2016/2017 Bonds to BB
ADVANTAGE SALES: Bank Debt Trades at 15% Off
ANTHONY SALTER: Proposes a Nov. 17 Online Auction of 19 Tractors
ANTHONY SALTER: Proposes Oct. 9-24 Steffes Auction of Equipment
AREABEATS PROPERTIES: Voluntary Chapter 11 Case Summary
ATD CORP: Taps Kirkland & Ellis as Lead Counsel
ATD CORP: Taps Pachulski Stang as Co-Counsel
ATLANTIC CITY, NJ: S&P Hikes GO Debt Rating to 'B', Outlook Stable
AUTOMEDX LLC: Case Summary & 20 Largest Unsecured Creditors
BALLENGER CONSTRUCTION: Trustee Selling Cameron Property for $35K
BELK INC: Bank Debt Trades at 13% Off
BLACKBOARD INC: Bank Debt Trades at 5% Off
BOWMAN DAIRY: Hunsbergers Buying Hagerstown Property for $30K
BULK EXPRESS: Midpoint Buying 2006 Peterbilt Truck for $55K
CABOT MICROELECTRONICS: Moody's Assigns Ba2 CFR, Outlook Stable
CABOT MICROELECTRONICS: S&P Assigns 'BB' ICR, Outlook Stable
CARDEL CLOCKTOWER: Taps Onsager Fletcher as Legal Counsel
CARDEL MASTER: Taps Onsager Fletcher as Legal Counsel
CHARTER COMMUNICATIONS: Fitch Affirms BB+ Issuer Default Rating
CIT GROUP: Moody's Hikes Sr. Unsec. Rating on Ba1, Outlook Positive
COCRYSTAL PHARMA: LSP Has 6.1% Stake of Oct. 18
CONTANDA LLC: S&P Alters Outlook to Negative & Affirms 'B' ICR
COOL FROOTZ: Seeks Authorization to Use Cash Collateral
CREDIT ACCEPTANCE: Moody's Hikes CFR to Ba3, Outlook Stable
CROWN HOLDINGS: S&P Raises ICR to 'BB+', Outlook Stable
CT TECHNOLOGIES: Bank Debt Trades at 5% Off
CVENT INC: Moody's Affirms B3 CFR & Alters Outlook to Stable
DEL MONTE: Bank Debt Trades at 9% Off
DIXIE ELECTRIC: Moody's Affirms Ca CFR, Outlook Negative
DPW HOLDINGS: Signs $25 Million At-The-Market Offering Agreement
EAST COAST HOMES: Case Summary & 20 Largest Unsecured Creditors
FORTERRA INC: Bank Debt Trades at 4% Off
FRANCIS' DRILLING: U.S. Trustee Forms 3-Member Committee
FRANK INVESTMENTS: May Use Cash Collateral on Interim Basis
GMOFORIS CORPORATION: U.S. Trustee Unable to Appoint Committee
GREEN COUNTRY: Seeks Authority to Use IBC Bank Cash Collateral
GULF FINANCE: Bank Debt Trades at 17% Off
H N HINCKLEY: Authorized to Continue Using Cash Until Nov. 29
HARBORSIDE ASSOCIATES: Tenth Interim Cash Collateral Order Entered
HARLAND CLARKE: Bank Debt Trades at 5% Off
HENDRIX SCHENCK: Case Summary & 3 Unsecured Creditors
HOPE INDUSTRIES: Gets Final Approval on Cash Collateral Use
HOUGHTON MIFFLIN: Bank Debt Trades at 7% Off
ICONIX BRAND: Hires Former Cherokee Chairman as CEO
IMM ON H: Taps Richard Link as Bankruptcy Attorney
INPIXON: Has $2.5-Mil. Note Purchase Agreement with Iliad Research
INTEGRATED DYNAMIC: May Use Cash Collateral Through Nov. 15
INVESTMENT GROUP: Seeks Authorization to Use Cash Collateral
JJ BELLA: U.S. Trustee Unable to Appoint Committee
JLD AUTOMOTIVE: Taps David P. Lloyd as Legal Counsel
JOHN GILMOR: Lindbaeck Buying Millerton Property for $500K
JONES ENERGY: Fitch Lowers LT Issuer Default Rating to CC
JRL TRANSPORTATION: Case Summary & 20 Largest Unsecured Creditors
KEVIN FINNERTY: Oyarzun Buying Auburn Property for $200K
LONG BLOCKCHAIN: Cancels Contribution Agreement with TSLC
MAGEE BENEVOLENT: Authorized to Use Trustmark Cash Collateral
MATTERHORN MERGER: Moody's Puts B3 CFR for Downgrade
MCMAHAN-CLEMIS INSTITUTE: 6th Interim Cash Collateral Order Entered
MEDALLION MIDLAND: Moody's Alters Outlook of B2 CFR to Stable
MEYZEN FAMILY: Seeks Authorization to Use Cash Collateral
MICHAEL MCIVOR: Gets Final Nod on Cash Collateral Use
MONTICELLO 856: Case Summary & Unsecured Creditor
NATURE'S BOUNTY: Bank Debt Trades at 4% Off
NETFLIX INC: S&P Hikes Issuer Credit Rating to BB-, Outlook Stable
OPERATION SIMULATION: Case Summary & 20 Top Unsecured Creditors
OUR TOWN ASSOCIATES: Agreed Cash Collateral Interim Order Entered
PEDRO'S OF MADISON: May Use Cash Collateral Until Nov. 30
PEN INC: Scott Rickert Reports 42.5% Stake as of Oct. 16
PEN INC: Sells 591K Shares, and Appoints New President
PETSMART INC: Bank Debt Trades at 14% Off
PHO TNT: Taps Cohen Baldinger as Legal Counsel
PIER 1 IMPORTS: Moody's Hikes CFR to Caa1, Outlook Stable
PRAGAT PURSHOTTAM: Agreed 2nd Cash Collateral Interim Order Entered
PROCERA I: S&P Affirms 'B-' Issuer Credit Rating, Outlook Stable
PYRAMID QUALITY: Has Authorization on Cash Collateral Use
PYRAMID QUALITY: Seeks Authorization on Cash Collateral Use
QUEST GROUP: Taps Marrero Chamizo as Legal Counsel
RACKSPACE HOSTING: $19MM Bank Debt Trades at 2% Off
RACKSPACE HOSTING: $80MM Bank Debt Trades at 2% Off
REDOX POWER: Case Summary & 20 Largest Unsecured Creditors
RELIABLE GALVANIZING: Case Summary & 20 Top Unsecured Creditors
REMARKABLE HEALTHCARE: Allowed to Use Cash Collateral Until Nov. 30
REMODELING SERVICES: Agreed Final Cash Collateral Order Entered
RESOLUTE ENERGY: KEMC Disappointed with Company's Lack of Progress
RUBY'S FRANCHISE: Has Authority on Interim Use of Cash Collateral
S B BUILDING: Examiner Taps McManimon Scotland as New Counsel
S.A.M. GROUP: U.S. Trustee Unable to Appoint Committee
SABRE INDUSTRIES: Moody's Hikes CFR to B2, Outlook Stable
SAMUELS JEWELERS: Sets Bidding Procedures for All Assets
SANDVINE CORPORATION: Moody's Affirms B3 CFR, Outlook Stable
SEADRILL LIMITED: Bank Debt Trades at 5% Off
SEDGWICK LLP: Taps Armanino LLP as Accountant
SEDGWICK LLP: Taps Development Specialists as Financial Advisor
SEDGWICK LLP: Taps On-Site Associates as Collections Agent
SEDGWICK LLP: Taps Pachulski Stang as Legal Counsel
SERVICE PAINTING: Taps Kurtzman Steady as Legal Counsel
SERVICOM LLC: Case Summary & 20 Largest Unsecured Creditors
SHC LICENSED: Case Summary & 40 Largest Unsecured Creditors
SHREEDEVI AA: May Use Cash Collateral Until Plan Confirmation
SKILLSOFT CORP: Bank Debt Trades at 7% Off
SM NOVELTIES: Seeks Authorization on Interim Cash Collateral Use
SOLBRIGHT GROUP: Incurs $5.05 Million Net Loss in First Quarter
SPICY VINES: Involuntary Chapter 11 Case Summary
SPRING TREE: Trustee May Use Cash Collateral on Final Basis
STEPHANIE N. MAPP: Taps Jason A. Burgess as Legal Counsel
SULTAN FINANCIAL: Aaron's Buying All Assets for $13 Million
SURVITEC GROUP: Bank Debt Trades at 4% Off
SYNCREON GROUP: Bank Debt Trades at 7% Off
TOTAL DEBT RELIEF: Chapter 15 Case Summary
TWIFORD ENTERPRISES: Sharp Buying Cattle for $1.7K Per Head
ULTRA PETROLEUM: Fitch Affirms 'B' LongTerm IDR, Outlook Neg.
ULTRA PETROLEUM: S&P Lowers ICR to 'CC', Outlook Negative
UNIVERSAL HEALTH: Moody's Rates $3.5-Bil. Credit Facilities 'Ba1'
US SILICA: Bank Debt Trades at 3% Off
VERITAS SOFTWARE: Bank Debt Trades at 3% Off
VICTORY SOLUTIONS: Seeks Authority to Use Cash Collateral
VISITING NURSE: Taps Weiland Golden as New Legal Counsel
WOODBRIDGE GROUP: Selling Bishop's Los Angeles Property for $25M
WOODBRIDGE GROUP: Selling Merrimack's Carbondale Property for $100K
WOODBRIDGE GROUP: Selling Springvale's Carbondale Land for $110K
WOODBRIDGE GROUP: Selling Springvale's Carbondale Land for $300K
WPB HOSPITALITY: Taps Lindquist-Kleissler as Legal Counsel
YI GROUP: S&P Affirms 'B' Issuer Credit Rating, Outlook Positive
ZAREMBA GROUP: Taps Warner Norcross as Legal Counsel
[*] T&W Fetes 12 Outstanding Young Restructuring Lawyers Nov. 26
[^] BOND PRICING: For the Week from October 15 to 19, 2018
*********
190 SOUTH STREET: Examiner Taps McManimon Scotland as New Counsel
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Frank Pina, the examiner appointed in the Chapter 11 case of 190
South Street Realty Holdings, LP, seeks approval from the U.S.
Bankruptcy Court for the District of New Jersey to hire McManimon,
Scotland & Baumann, LLC, as his new legal counsel.
The examiner had initially hired Trenk, DiPasquale, Della Fera &
Sodono, P.C. as his legal counsel in connection with the Debtor's
Chapter 11 case. The firm substantially joined McManimon effective
October 1, 2018.
McManimon will charge at these hourly rates:
Partners $400
Associates $250
Paralegals $215
The firm has not received a retainer, according to court filings.
Sam Della Fera, Jr., Esq., at McManimon, disclosed in a court
filing that he and his firm are "disinterested" as defined in
Section 101(14) of the Bankruptcy Code.
McManimon can be reached through:
Sam Della Fera, Jr., Esq.
McManimon, Scotland & Baumann, LLC
75 Livingston Avenue
Roseland, NJ 07068
Phone: (973) 622-1800
Email: sdellafera@msbnj.com
About 190 South Street Realty
190 South Street Realty Holdings, L.P., filed a Chapter 11 petition
(Bankr. D.N.J. Case No. 15-14558) on March 16, 2015, estimating
assets and liabilities of $1 million to $10 million. The petition
was signed by Lawrence S. Berger, president of general partner.
Judge Vincent F. Papalia presides over the case.
Norris McLaughlin & Marcus, PA, is the Debtor's bankruptcy
counsel.
On Oct. 21, 2015, the court approved the Debtor's First Modified
Plan of Reorganization and First Modified Disclosure Statement and
authorized the Debtor to proceed with the solicitation of
acceptances. The confirmation hearing set for Dec. 10, 2015 had
been adjourned because of settlement discussions between the Debtor
and TLR-V, the largest secured creditor.
199 REALTY: Examiner Taps McManimon Scotland as New Counsel
-----------------------------------------------------------
Frank Pina, the examiner appointed in the Chapter 11 case of 199
Realty Corp., seeks approval from the U.S. Bankruptcy Court for the
District of New Jersey to hire McManimon, Scotland & Baumann, LLC,
as his new legal counsel.
The examiner had initially hired Trenk, DiPasquale, Della Fera &
Sodono, P.C. as his legal counsel in connection with the Debtor's
Chapter 11 case. The firm substantially joined McManimon effective
Oct. 1, 2018.
McManimon will charge these hourly rates:
Partners $400
Associates $250
Paralegals $215
The firm has not received a retainer, according to court filings.
Sam Della Fera, Jr., Esq., at McManimon, disclosed in a court
filing that he and his firm are "disinterested" as defined in
Section 101(14) of the Bankruptcy Code.
McManimon can be reached through:
Sam Della Fera, Jr., Esq.
McManimon, Scotland & Baumann, LLC
75 Livingston Avenue
Roseland, NJ 07068
Phone: (973) 622-1800
Email: sdellafera@msbnj.com
About 199 Realty Corp.
199 Realty Corp. filed a Chapter 11 petition (Bankr. D.N.J. Case
No. 13-14776) on March 7, 2013, and is represented by Morris S.
Bauer, Esq., in Bridgewater, New Jersey. In the petition signed by
Lawrence S. Berger, president, the Debtor estimated $1 million to
$10 million in assets and debt.
3920 PARK AVENUE: Examiner Taps McManimon Scotland as New Counsel
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Frank Pina, the examiner appointed in the Chapter 11 case of 3920
Park Avenue Associates, LP, seeks approval from the U.S. Bankruptcy
Court for the District of New Jersey to hire McManimon, Scotland &
Baumann, LLC, as his new legal counsel.
The examiner had initially hired Trenk, DiPasquale, Della Fera &
Sodono, P.C. as his legal counsel in connection with the Debtor's
Chapter 11 case. The firm substantially joined McManimon effective
Oct. 1, 2018.
McManimon will charge at these hourly rates:
Partners $400
Associates $250
Paralegals $215
The firm has not received a retainer, according to court filings.
Sam Della Fera, Jr., Esq., at McManimon, disclosed in a court
filing that he and his firm are "disinterested" as defined in
Section 101(14) of the Bankruptcy Code.
McManimon can be reached through:
Sam Della Fera, Jr., Esq.
McManimon, Scotland & Baumann, LLC
75 Livingston Avenue
Roseland, NJ 07068
Phone: (973) 622-1800
Email: sdellafera@msbnj.com
About 3920 Park Avenue Associates
Morristown, New Jersey-based 3920 Park Avenue Associates, L.P.,
filed for Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No.
16-14923) on March 16, 2016. In the petition signed by Lawrence S.
Berger, authorized agent, the Debtor estimated its assets at
between $1 million and $10 million and liabilities between $10
million and $50 million. Judge Stacey L. Meisel presides over the
case. Morris S. Bauer, Esq., at Norris McLaughlin & Marcus, PA,
serves as the Debtor's bankruptcy counsel.
999 PRIVATE JET: UniBank Prohibits Use of Aircraft Proceeds
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Secured creditor UniBank for Savings asks the U.S. Bankruptcy Court
for the Central District of California to prohibit 999 Private Jet
LLC's use of cash collateral and require the Debtor to segregate
and account for cash collateral.
Specifically, UniBank requests that the Court prohibit the Debtor
from using the proceeds from the sale or use of the Aircraft, and
to segregate and account for the Proceeds. UniBank contends that
the Debtor has not obtained the UniBank's consent or court
authorization to use the cash collateral. Moreover, the Debtor has
failed to account for the cash collateral, or respond to the
UniBank's requests for information.
According to the list of 20 largest creditors filed by the Debtor,
the Debtor has only two creditors: UniBank for Savings, listed as a
secured creditor with a claim in the approximate amount of $4.2
million dollars; and Western Jet, listed as an unsecured creditor
with a claim of $50,000.
Sometime in May 2017, the Debtor, Elina Sargsyan and Edgar Sargsyan
executed a promissory note in favor of UniBank in the original
principal amount of $4,348,334. As security for the Note, the
Debtor executed and delivered to UniBank an aircraft security
agreement granting UniBank a security interest in a Gulfstream
aircraft. Due to the Borrowers' failure to make the required
payments constituted a default under the Note, UniBank accelerated
the full outstanding balance due under the Note without notice.
On August 7, 2018, UniBank filed suit against the Borrowers in the
United States District Court for the District of Massachusetts,
Case No. 4:18-cv-40134. The District Court in Massachusetts issued
Orders granting Plaintiff's Motion for Injunctive Relief. The Court
directed the Borrowers to surrender the Aircraft to UniBank on
September 12, 2018, however, the Debtor commenced this bankruptcy
proceeding, two days before that deadline.
UniBank has not consented to the Debtor's use of its cash
collateral. Therefore, the Debtor must rely on the Court's
authorization, after notice and a hearing, to use the Proceeds. Bur
to date, the Debtor has also not sought authority to use cash
collateral. UniBank believes that the Debtor has been using the
Proceeds without the consent of UniBank or the Court's
authorization.
UniBank asserts that it is entitled to adequate protection for any
use of its cash collateral. Specifically, 11 U.S.C Section 363(e)
provides that "the court, with or without a hearing, will prohibit
or condition such use, sale, or lease of cash collateral as is
necessary to provide adequate protection of such interest in such
cash collateral." Without a showing by the Debtor of such
protection, the Debtor may not use the Proceeds.
UniBank contends that the Debtor has not yet made any protection
payments nor has the Debtor shown any such protection exists.
Therefore, the Debtor may not use the Proceeds.
Attorneys for Creditor UniBank for Savings
Scott E. Blakeley, Esq.
Sean Lowe, Esq.
BLAKELEY LLP
18500 Von Karman Ave, Suite 530
Irvine, California 92612
Telephone: (949) 260-0611
Fax: (949) 260-0613
E-mail: SEB@BlakeleyLLP.com
SLowe@BlakeleyLLP.com
-- and --
Paul W. Carey, Esq.
MIRICK, O'CONNELL, DEMALLIE & LOUGEE, LLP
100 Front Street
Worcester, MA 01608-1477
Telephone: (508) 791-8500
Fax: (508) 791-8502
E-mail: PCarey@mirickoconnell.com
About 999 Private Jet
999 Private Jet, LLC, is a privately held company in Beverly Hills,
California that operates in the aviation industry.
999 Private Jet, LLC filed a Chapter 11 petition (Bankr. C.D. Cal.
Case No. 18-20537), on September 10, 2018. The Petition was signed
by Henrik Mosesi, managing member. The case is assigned to Judge
Sandra R. Klein. The Debtor is represented by Henrik Mosesi, Esq.
of the Law Offices of Henrik Mosesi. At the time of filing, the
Debtor had estimated assets and liabilities of less than $10
million each.
999 PRIVATE JET: UniBank's Bid to Forbid Cash Collateral Use Okayed
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The Hon. Sandra R. Klein of the U.S. Bankruptcy Court of the
Central District of California prohibits 999 Private Jet, LLC, from
using the cash collateral of UniBank for Savings, which includes
any cash on hand, and proceeds from the sale, use, or lease of the
UniBank's collateral -- a Gulfstream aircraft, Model G IVSP, Serial
No. 1315, FAA Registration No. N999SE.
The Debtor will immediately segregate and deposit all of the
Proceeds in a debtor-in-possession titled bank account, which bank
account will be with a depository institution listed on the Office
of the United States Trustee's Approved Depositories for Region 16.
The Debtor is prohibited from use of the Aircraft and will provide
the UniBank's and SBK Holdings USA, Inc.'s counsel with following:
(1) a copy of all of the Debtor's pre- and post-petition bank
account statements and copies of checks written off said bank
accounts covering the time period of August 1, 2018 to the date of
turnover;
(2) a copy of a receivables aging report from August 1, 2018
through the date of turnover;
(3) a report of all cash receipts from August 1, 2018 through
the date of turnover;
(4) a report of all cash disbursements from August 1, 2018
through the date of turnover;
(5) a payables aging report for the time period of August 1,
2018 through the date of turnover;
(6) a copy of any contracts and statements between the Debtor
and Western Jet;
(7) a copy of any contracts and statements between the Debtor
and Mira Vista Aviation;
(8) a copy of any agreements entered into by the Debtor
regarding the sale of the Aircraft;
(9) a copy of all logbooks and manifests for the Aircraft;
and
(10) a copy of any agreements and statements for maintenance
work on the Aircraft.
About 999 Private Jet
999 Private Jet, LLC, is a privately held company in Beverly Hills,
California that operates in the aviation industry.
999 Private Jet filed a Chapter 11 petition (Bankr. C.D. Cal. Case
No. 18-20537) on Sept. 10, 2018. In the petition signed by Henrik
Mosesi, managing member, the Debtor estimated assets and
liabilities of less than $10 million. The case is assigned to
Judge Sandra R. Klein. The Debtor is represented by Henrik Mosesi,
Esq. of the Law Offices of Henrik Mosesi.
A.W. BROWN FELLOWSHIP: S&P Lowers Rating on 2016/2017 Bonds to BB
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S&P Global Ratings lowered its underlying rating to 'BB' from
'BBB-' on Arlington Higher Education Finance Corp., Texas' series
2016 and series 2017 education revenue bonds, issued for A.W. Brown
Fellowship Leadership Academy (A.W. Brown). The outlook is stable.
"The lowered underlying rating reflects a material weakening in
A.W. Brown's credit fundamentals, in our view, based on fiscal 2017
performance and expected fiscal 2018 results, with operating
deficits, below 1x annual debt service coverage, a history of
covenant violations, and declining enrollment for fall 2018,
combined with weakened student retention and overall demand," said
S&P Global Ratings credit analyst Ying Huang.
S&P said, "The 'AAA' enhanced program rating reflects our view of
A.W Brown's participation in the Texas Permanent School Fund (PSF)
Bond Guarantee Program, which provides the security of a permanent
fund of assets that A.W. Brown may tap if necessary to meet its
debt service obligations on the series 2016 and 2017 bonds.
"We understand the school's violation of its coverage covenant,
which resulted in a technical event of default, does not result in
acceleration of the outstanding series 2016 and 2017 bonds
according to the statutory guidance on the Texas PSF Bond Guarantee
Program. However, we view the repeated covenant violations
negatively and more in line with the lower rating. Finally, our
rating action also reflects the potential investigation by Texas
Educational Authority (TEA) relating to the recent management
changes at A.W. Brown and the underlying causes. At this time, we
understand that there is no immediate concern with regard to the
school's charter or operations stemming from this investigation,
but will continue to monitor the progress should there be findings
that result in greater credit pressure. We understand management is
budgeting for improved operating results in fiscal 2019 and a
return to greater than 1x debt service coverage. However, given the
history of uneven operating trends and the significant
deterioration in the school's financial profile in recent years, we
believe there is a greater degree of flexibility at the 'BB' level
to withstand some degree of volatile performance.
"We assessed A.W. Brown's enterprise profile as adequate,
characterized by a somewhat large enrollment base, though the
school is nearing its capacity and the wait list and retention rate
have weakened. The assessment also reflects our opinion of the
recent negative finding on academic performance for one of the
campuses in 2017 and transition risk associated with recent
management, board, and staff turnover. In our opinion, there is
operational risk associated with the breadth of the changes. We
assessed A.W. Brown's financial profile as vulnerable, with
negative operating performance and a covenant violation seen in
fiscal 2017 and projected for fiscal 2018, very weak maximum annual
debt service coverage, but a sufficient unrestricted liquidity
position for the rating level. Combined, these credit factors lead
to an indicative stand-alone credit profile of 'bb' and a final
rating of 'BB.'
"The stable outlook reflects our expectation that during the
one-year outlook period and beyond, the projected results for
fiscal 2018, A.W. Brown will likely make progress toward achieving
closer to break-even, if not surplus, operations; improve DSC to
above 1x; and maintain a near steady liquidity position. Given the
large decline in enrollment in fall 2018, softening demand, and the
competitive landscape, we expect there could be some pressure on
enrollment in the near term, but believe there is some cushion at
the current rating level. In addition, we expect more clarity
around the school's management structure and further information on
the potential investigation by the TEA.
"We would consider a negative rating action if the school's
academic performance weakens, operating deficits or deterioration
in the liquidity position continue beyond fiscal 2018, management
and staff transitions have an unfavorable impact on the school's
enterprise or financial profile, or the potential investigation by
TEA actually occurs and adversely affects A.W. Brown's enrollment,
operations, or charter standing.
"We believe a positive rating action is unlikely during the
one-year outlook period, given the recent deterioration in
financial profile and the resulting covenant violations, the
material turnover in management, and the uncertainty surrounding
the potential investigation by TEA and its outcome. However, we
would consider a positive rating action over a longer time frame if
the charter remains in good standing, enrollment grows and academic
quality continues to improve, the management team remains stable,
and there are sustained improvements in the operating margin and
liquidity position to levels commensurate with a higher rating."
As of Aug. 31, 2017, the school has about $19 million series 2016A
and series 2016B bonds outstanding.
ADVANTAGE SALES: Bank Debt Trades at 15% Off
--------------------------------------------
Participations in a syndicated loan under which Advantage Sales &
Marketing is a borrower traded in the secondary market at 84.55
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.60 percentage points from the
previous week. Advantage Sales pays 650 basis points above LIBOR to
borrow under the $76 million facility. The bank loan matures on
July 25, 2022. Moody's rates the loan 'Caa1' and Standard & Poor's
gave a 'CCC+' rating to the loan. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday,
October 12.
ANTHONY SALTER: Proposes a Nov. 17 Online Auction of 19 Tractors
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Anthony Wayne Salter and Mary Frances Salter ask the U.S.
Bankruptcy Court for the Southern District of Iowa to authorize the
sale of 19 tractors at a live and online public auction on Nov. 17,
2018 with the assistance of Ed Spencer Auction Co.
All sales proceeds, net of commission and advertising
reimbursement, will be paid to Agriland FS, Inc. until Agriland
Accounts 7626819 REG and 1007401 REGULAR are paid in full with
interest and Agriland's Bankruptcy Court approved attorney fees are
paid in full.
Any additional funds, net of commission and advertising
reimbursement, will be paid to Treynor State Bank.
It is in the best interest of the estate that the aforesaid
property be sold.
A copy of the list of tractors to be sold attached to the Motion is
available for free at:
http://bankrupt.com/misc/Anthony_Salter_215_Sales.pdf
Anthony Wayne Salter and Mary Frances Salter sought Chapter 11
protection (Bankr. S.D. Iowa Case No. 18-00194) on Jan. 31, 2018.
The Debtors tapped Nicole B. Hughes, Esq., as counsel.
ANTHONY SALTER: Proposes Oct. 9-24 Steffes Auction of Equipment
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Anthony Wayne Salter and Mary Frances Salter ask the U.S.
Bankruptcy Court for the Southern District of Iowa to authorize the
auction sale of (i) a 2013 CIH 450 Tractor ZDF135768, (ii) Par-Kan
Grain Weight PK-259887 Wagon, (iii) Janzen 1200 Gal Tank, (iv) four
18 Tracks, and (v) Meridian 375RT Seed Tender from Oct. 19, 2018
through Oct. 24, 2018 with the assistance of Steffes Group, Inc.
All sales proceeds, net of commission, will be paid to Agriland FS,
Inc.
It is in the best interest of the estate that the aforesaid
property be sold.
Anthony Wayne Salter and Mary Frances Salter sought Chapter 11
protection (Bankr. S.D. Iowa Case No. 18-00194) on Jan. 31, 2018.
The Debtors tapped Nicole B. Hughes, Esq., as counsel.
AREABEATS PROPERTIES: Voluntary Chapter 11 Case Summary
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Debtor: AreaBeats Properties, LLC, a Delaware LLC
101 Lucas Valley Rd Suite 360
San Rafael, CA 94903
Business Description: AreaBeats Properties, LLC filed as a
Single Asset Real Estate Debtor (as defined
in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: October 18, 2018
Court: United States Bankruptcy Court
Northern District of California (San Francisco)
Case No.: 18-31137
Judge: Hon. Hannah L. Blumenstiel
Debtor's Counsel: Steven M. Olson, Esq.
LAW OFFICES OF STEVEN M. OLSON
100 E St. #104
Santa Rosa, CA 95404
Tel: (707) 575-1800
Fax: 707-575-1867
Email: smo@smolsonlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Laura van Galen, manager.
The Company lists Opus Bank Credit Card as its sole unsecured
creditor holding a claim of $17,876.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/canb18-31137.pdf
ATD CORP: Taps Kirkland & Ellis as Lead Counsel
-----------------------------------------------
ATD Corporation seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to hire Kirkland & Ellis LLP and Kirkland
& Ellis International LLP as its lead bankruptcy counsel.
The firms will advise the company and its affiliates regarding
their duties under the Bankruptcy Code; represent them in
negotiation with their creditors; prosecute actions to protect
their bankruptcy estates; assist them in any potential sale of
their assets or post-petition financing; and provide other legal
services related to their Chapter 11 cases.
The firms will charge these hourly rates:
Partners $965 – $1,795
Of Counsel $575 – $1,795
Associates $575 – $1,065
Paraprofessionals $220 – $440
The Debtors paid the firms $175,000 as an advance payment retainer,
and an additional retainer of $6,879,289.
Chad Husnick, president of Chad J. Husnick, P.C., a partner of the
firms, disclosed in a court filing that both firms are
"disinterested" as defined in section 101(14) of the Bankruptcy
Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Husnick disclosed that the firms have not agreed to a variation of
their standard billing arrangements for their employment with the
Debtors, and that no Kirkland professional has varied his rate
based on the geographic location of the Debtors' bankruptcy cases.
Mr. Husnick also disclosed that the firms represented the Debtors
during the six-month period before the petition date using these
hourly rates:
Partners $965 – $1,795
Of Counsel $575 – $1,795
Associates $575 – $1,065
Paraprofessionals $220 – $440
The Debtors have already approved the firms' budget and staffing
plan for the period October 4, 2018 to January 31, 2019, according
to Mr. Husnick.
Kirkland can be reached through:
James H.M. Sprayregen, P.C.
Anup Sathy, P.C.
Chad J. Husnick, P.C.
Spencer Winters, Esq.
Kirkland & Ellis LLP
Kirkland & Ellis International LLP
300 North LaSalle
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
E-mail: james.sprayregen@kirkland.com
E-mail: anup.sathy@kirkland.com
E-mail: chad.husnick@kirkland.com
E-mail: spencer.winters@kirkland.com
About ATD Corp/American Tire
Headquartered in Huntersville, North Carolina, ATD Corporation and
its subsidiaries -- https://www.atd-us.com -- are distributors of
replacement tires with more than 140 distribution centers and 1,400
delivery vehicles servicing a geographic region covering more than
90 percent of the replacement tire market for passenger vehicles
and light trucks in the United States. ATD offers the broadest
variety of products and value-added services that range from
premium-quality tires and popular custom wheels to business support
services and online platforms that cater to tire retailers and
their potential customers. ATD has its own proprietary
private-label and exclusive tire brands, such as Hercules and
Ironman, to supplement its supply of industry-leading brand-name
tires, including Continental, Michelin, Pirelli, Cooper, Nexen,
Toyo-Nitto, Hankook, Kumho, and Falken among others. The Debtors
and their non-Debtor subsidiaries currently employ approximately
5,500 people in the United States and Canada.
ATD Corporation and eight of its affiliates filed for bankruptcy on
Oct. 4, 2018 (Bankr. D. Del. Lead Case No. 18-12221). In the
petition signed by CFO William Williams, the Debtors estimated
assets and liabilities of $1 billion to $10 billion.
The Hon. Kevin J. Carey presides over the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel; Pachulski Stang
Ziehl & Jones LLP as local bankruptcy counsel; Moelis & Company as
financial advisor; AlixPartners LLP as restructuring advisor; and
Kurtzan Carson Consultants, LLC as notice and claims agent.
ATD CORP: Taps Pachulski Stang as Co-Counsel
--------------------------------------------
ATD Corporation seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to hire Pachulski Stang Ziehl & Jones
LLP.
Pachulski will serve as co-counsel with Kirkland & Ellis LLP and
Kirkland & Ellis International LLP, the firms tapped by ATD and its
affiliates to be their lead counsel in connection with their
Chapter 11 cases.
The firm will charge these hourly rates:
Partners $650 - $1,295
Of Counsel $595 - $1,025
Associates $495 - $595
Paraprofessionals $295 - $395
Pachulski received payment of $115,453 from the Debtors during the
year prior to the petition date for their pre-bankruptcy services.
Laura Davis Jones, Esq., a partner at Pachulski, disclosed in a
court filing that her firm is "disinterested" as defined in Section
101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Ms.
Jones disclosed that her firm has not agreed to a variation of its
standard or customary billing arrangements for its employment with
the Debtors, and that no Pachulski professional has varied his rate
based on the geographic location of the Debtors' bankruptcy cases.
Ms. Jones also disclosed that her firm represented the Debtors in
the 12-month period prior to the petition date, and that the
billing rates and material financial terms for the post-petition
period remain the same as the pre-bankruptcy period.
The Debtors have already approved the firm's budget and staffing
plan for approximately the first 13 weeks of the Debtors' cases,
according to Ms. Jones.
Pachulski can be reached through:
Laura Davis Jones, Esq.
Timothy P. Cairns, Esq.
Joseph M. Mulvihill, Esq.
Pachulski Stang Ziehl & Jones LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Tel: (302) 652-4100
Fax: (302) 652-4400
E-mail: ljones@pszjlaw.com
E-mail: tcairns@pszjlaw.com
E-mail: jmulvihill@pszjlaw.com
About ATD Corp/American Tire
Headquartered in Huntersville, North Carolina, ATD Corporation and
its subsidiaries -- https://www.atd-us.com -- are distributors of
replacement tires with more than 140 distribution centers and 1,400
delivery vehicles servicing a geographic region covering more than
90 percent of the replacement tire market for passenger vehicles
and light trucks in the United States. ATD offers the broadest
variety of products and value-added services that range from
premium-quality tires and popular custom wheels to business support
services and online platforms that cater to tire retailers and
their potential customers. ATD has its own proprietary
private-label and exclusive tire brands, such as Hercules and
Ironman, to supplement its supply of industry-leading brand-name
tires, including Continental, Michelin, Pirelli, Cooper, Nexen,
Toyo-Nitto, Hankook, Kumho, and Falken among others. The Debtors
and their non-Debtor subsidiaries currently employ approximately
5,500 people in the United States and Canada.
ATD Corporation and eight of its affiliates filed for bankruptcy on
Oct. 4, 2018 (Bankr. D. Del. Lead Case No. 18-12221). In the
petition signed by CFO William Williams, the Debtors estimated
assets and liabilities of $1 billion to $10 billion.
The Hon. Kevin J. Carey presides over the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel; Pachulski Stang
Ziehl & Jones LLP as local bankruptcy counsel; Moelis & Company as
financial advisor; AlixPartners LLP as restructuring advisor; and
Kurtzan Carson Consultants, LLC as notice and claims agent.
ATLANTIC CITY, NJ: S&P Hikes GO Debt Rating to 'B', Outlook Stable
------------------------------------------------------------------
S&P Global Ratings has raised its long-term and underlying ratings
on Atlantic City, N.J.'s general obligation (GO) debt and service
contract-backed obligations with the Atlantic City Municipal
Utilities Authority to 'B'. The outlook is stable.
"The upgrade reflects our opinion of the city's improved operating
environment and structural financial improvement following
settlement of outstanding tax appeals and continuation of extensive
state oversight," said S&P Global Ratings credit analyst Timothy
Little.
Since S&P's last review, the city has accomplished the following:
-- Permanent financing of its deferred 2015 state pension and
health benefits program contributions;
-- Implementation of a 10-year payment-in-lieu-of-taxes (PILOT)
program for casino gaming properties and settlement of the share of
payments with Atlantic County;
-- Completion of a study of its distress by the state's special
counsel that provides a path forward for fiscal and economic
recovery; and
-- An adopted fiscal 2018 budget totaling $225.3 million, a less
than 1% increase from the prior year with less reliance on
non-traditional state aid.
The full faith, credit and taxing power of the city secures its GO
bonds payable from ad valorem taxes levied on all real property
within the city without limitation as to rate or amount.
Atlantic City, with an estimated population of 38,380, is in
Atlantic County.
"The stable outlook reflects our opinion we expect the city to
maintain and continue to improve financial performance, increase
reserve levels, and sustain improved liquidity, while political
risk associated with payment of debt service and structural reforms
has improved, further lending support to future stability," added
Mr. Little. S&P said, "As financial factors and liquidity improve,
we may raise our rating. However, we recognize the city's tenuous
position this early in its recovery and second full year of state
intervention. Should its overall financial profile deteriorate or
state support diminish, we may lower our rating."
AUTOMEDX LLC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: AutoMedx LLC
7700 Windrose Ave, Suite G300
Plano, TX 75024
Tel: (972) 586-7500
Business Description: AutoMedx LLC -- http://automedx.com--
manufactures pre-hospital ventilators for
military and civilian applications. The
Company's first product SAVe (Simplified
Automated Ventilators) provides unparalleled
access to high quality mechanical
ventilation in the first critical minutes of
distress. SAVe is an alternative to
bag-valve-masks or transport ventilators,
which are deployed in a pre-hospital
environment by a BLS or ALS provider, a
medic, or a first responder with limited
training. The company is headquartered in
Coppell, Texas. AutoMedx is ISO 13485
certified.
Chapter 11 Petition Date: October 19, 2018
Court: United States Bankruptcy Court
Eastern District of Texas (Sherman)
Case No.: 18-42355
Debtor's Counsel: Eric Soderlund, Esq.
THE LAW OFFICES OF JUDITH W. ROSS
700 North Pearl Street, Suite 1610
Dallas, TX 75201
Tel: 214-377/8850
E-mail: eric.soderlund@judithwross.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by James Evans, president and CEO.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/txeb18-42355_creditors.pdf
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/txeb18-42355.pdf
BALLENGER CONSTRUCTION: Trustee Selling Cameron Property for $35K
-----------------------------------------------------------------
Michael B. Schmidt, the Liquidating Trustee of Ballenger
Construction Co., asks the U.S. Bankruptcy Court for the Southern
District of Texas to authorize him to sell the tract of land
consisting of 2.83 acres (+/-), out of Lot 6, Section 65, Gulf
Coast Irrigation Company's Subdivision, Willacy County, Texas,
according to map thereof recorded in Volume 1, Page 490 transcribed
records from Cameron County, Texas to Willacy County, Texas, to
Jesus H. Salinas for $35,000.
The Trustee intends to sell the Trust's interest in the Property to
the Buyer, free and clear of all liens, claims and interests, as
is, where is, with all faults in accordance with the terms and
provisions of the Contract. To the extent valid, all liens, claims
and interest will attach to the proceeds of the sale.
Further, the Trustee intends to sell the Property to the Buyer,
free and clear of the liens, claims and interests of as set forth
in Schedule C, including, but not limited to, those of Frost
National Bank. All liens, claims and interests will attach to the
proceeds, to the extent valid. The Trustee is simultaneously
paying the $176 filing fee for the Motion.
The Trustee asks, at his discretion, upon his review and
verification of any valid liens, the Court authorizes him to pay
all such liens and broker fees and closing costs, including
attorney documentation fees from the proceeds of the sale or have
such liens and fees (or any portion thereof) withheld and paid by
the title company at closing.
The ad valorem tax liens for the 2018 tax year will be expressly
retained in the Property until the payment by the Purchaser of the
2018 ad valorem taxes. He also asks he be authorized to execute
all necessary documents and take all such further action deemed by
him necessary to transfer ownership to Buyer of the Property,
without further order of the Court. Further, the Trustee asks such
earnest money contract and each of its terms and conditions be
approved and become binding upon all Parties upon the execution of
the Order.
Finally, the Trustee asks the Court to waive the stay provided
under FRBP 6004(h).
Objections, if any, must be filed within 21 days from the date of
Notice.
A copy of the Contract attached to the Motion is available for free
at:
http://bankrupt.com/misc/Ballenger_Construction_1195_Sales.pdf
The Purchaser:
Jesus H. Salinas
4009 Orchid Ave.
McAllen, TX 78504
About Ballenger Construction
Ballenger Construction Co. filed for Chapter 11 bankruptcy
protection (Bankr. S.D. Tex. 12-20645) on Dec. 7, 2012, in Corpus
Christi. In the petition signed by Joe C. Ballenger Jr./Joe C.
Ballinger Sr., president/CEO, the Debtor estimated under $50,000 in
assets and $10 million to $50 million in liabilities. Judge
Richard S. Schmidt oversees the case. The Debtor is represented by
Roderick Glen Ayers, Jr., Esq., at Langley Banack Inc., as counsel.
The Debtor won confirmation of its Plan. Michael B. Schmidt was
appointed as the Liquidating Trustee under the Plan.
BELK INC: Bank Debt Trades at 13% Off
-------------------------------------
Participations in a syndicated loan under which BELK Incorporated
is a borrower traded in the secondary market at 86.68
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.78 percentage points from the
previous week. BELK Incorporated pays 475 basis points above LIBOR
to borrow under the $15 million facility. The bank loan matures on
December 10, 2022. Moody's rates the loan 'B2' and Standard &
Poor's gave a 'B-' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
BLACKBOARD INC: Bank Debt Trades at 5% Off
------------------------------------------
Participations in a syndicated loan under which Blackboard
Incorporated is a borrower traded in the secondary market at 95.25
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.83 percentage points from the
previous week. Blackboard Incorporated pays 500 basis points above
LIBOR to borrow under the $93 million facility. The bank loan
matures on June 30, 2021. Moody's rates the loan 'B3' and Standard
& Poor's gave a 'B-' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
BOWMAN DAIRY: Hunsbergers Buying Hagerstown Property for $30K
-------------------------------------------------------------
Bowman Dairy Farms, LLC, asks the U.S. Bankruptcy Court for the
Southern District of Indiana to authorize the sale of the real
estate located at 16355 Lamar Road, Hagerstown, Indiana to James
and Donna Hunsberger for 30,000.
On the Petition Date, the Debtor was the sole owner of the Real
Estate more particularly described as being part of the NE Quarter
of Section 4 Township 17 North, Range 12 East in Dalton Township,
Wayne County, Indiana. The Real Estate consists of 4.27 acres with
an unfinished house (no internal framing, wiring, plumbing, etc.),
a garage, and an outbuilding. The house is not suitable at this
time for occupancy and is in need of repairs, including a roof
before winter weather. The Real Estate is not encumbered by any
recorded mortgage or liens.
The Purchasers are Jennifer Bowman's parents and Trent Bowman's
in-laws. The Purchasers are intending to purchase the Real Estate
and allow Trent and Jennifer Bowman and their children to occupy
the property following additional investment and labor to make the
improvements habitable. Trent Bowman and Jennifer Bowman are
insiders of the Debtor, and Trent Bowman is a member of the Debtor.
At the Petition Date, Trent and Jennifer and their children
resided in a house adjacent to and on the same parcel as one of the
dairying facilities. All of the Debtor's real estate will be sold,
including the house occupied by the Bowmans to return value to the
Debtor's creditors.
The offered purchase price for the Real Estate is $30,000. The
sale will be on an "as is, where is" basis subject only to an order
from the Court authorizing the sale and holding the sale to be free
and clear of all liens claims and encumbrances.
The Purchasers will be responsible for all costs of closing on and
transferring the Real Estate and will be responsible for the
payment of all property taxes and any other assessments due and
payable after the closing. No commissions on the sale are owed.
A copy of the Purchase Offer attached to the Motion is available
for free at:
http://bankrupt.com/misc/Bowman_Dairy_249_Sales.pdf
The market value of the Real Estate is $30,000, as described in the
certified appraisal report, effective as of Sept. 17, 2018. The
Appraisal was requested and paid for by Trent Bowman. The Purchase
Offer is for the appraised price plus payment of taxes and all
costs of closing and transfer. The Debtor has not undertaken any
formal process to market the property. It has received two
informal offers in the last 12 months, both below the appraised
price. Given the appraised value and the condition of the Real
Estate, the Debtor does not believe that listing or auctioning the
Real Estate will result in a higher value for creditors net of the
costs of commission, closing, and property taxes that are due in
November. The November 2018 property taxes are $433. Estimated 6%
sales or auction commission on $30,000 would be $1,800 and closing
costs are estimated at $500. The property tax and all closing
costs are proposed to be paid by the Purchasers under the Purchase
Offer and no commissions are owed.
Upon approval, the Purchasers are prepared to proceed to closing
with a Quit Claim Deed and an immediate cash payment. The sale of
the Real Estate will be free and clear of all liens, encumbrances,
claims, and interests. The Debtor has no basis to believe that any
entity other than it has an interest in the Real Estate other than
any interest held by Wayne County for taxes not yet due and
payable. The Purchasers have agreed to pay all such property
taxes.
The Debtor asks that the Court waives the 14-day stay under the
Fed. R. Bankr. P. 6004(h), and orders the Order approving the sale
be effective immediately upon entry to allow the Debtor to timely
and expeditiously consummate the proposed transaction.
By separate motion, the Debtor is asking that notice be shortened
on the Motion.
About Bowman Dairy Farms
Bowman Dairy Farms LLC owns a dairy farm in Hagerstown, Indiana.
Bowman Dairy Farms filed a Chapter 11 petition (Bankr. S.D. Ind.
Case No. 17-06475) on Aug. 27, 2017. In the petition signed by
Trent N. Bowman, its member, the Debtor estimated assets and
liabilities at $10 million to $50 million. The Debtor is
represented by Terry E. Hall, Esq., at Faegre Baker Daniels LLP.
BULK EXPRESS: Midpoint Buying 2006 Peterbilt Truck for $55K
-----------------------------------------------------------
Bulk Express Logistics, Inc., asks the U.S. Bankruptcy Court for
the District of New Jersey to authorize the sale of 2006 Peterbilt
truck with VIN 1XP5DU9X36N631871 to Midpoint Transport, LLC, for
$55,000.
The Debtor's business is no longer in need of the Truck. Thus,
subject to the approval of the Court, the Debtor has agreed to sell
the Truck to the Buyer for the total sum of $55,000, as reflected
on the draft Bill of Sale.
In order to obtain the release of the title by the lienholder, from
those funds the Debtor would be required to satisfy in full the
lien of Ascentium Capital, LLC on the Truck. In addition, a
separate truck is also part of the same Equipment Finance Agreement
No. 2210635 with Ascentium. The Debtor intends to satisfy the
entirety of the amount due on this Agreement from the sale
proceeds. The payoff amount valid through Oct. 11, 2018, as
reflected on the payoff statement, is $11,531.
The Debtor has had the Truck appraised by the Court-appointed
appraiser. The amount paid to the Debtor in exchange for the
purchase of the truck ($55,000) would significantly exceed the
value of the Truck ($35,000) as determined by the appraiser.
As a result of the foregoing, the Debtor respectfully asks that the
Court authorizes the Debtor to sell the Truck for the proposed
price of $55,000.
A hearing on the Motion is set for Oct. 30, 2018 at 10:00 a.m.
Objections, if any, must be filed seven days in advance of the
scheduled hearing date.
About Bulk Express Logistics
Headquartered in Monroe Township, New Jersey, Bulk Express
Logistics, Inc. -- http://www.bulkexpressloqistics.com/-- is a
privately held company that provides trucking and warehousing
services.
Bulk Express filed for Chapter 11 bankruptcy protection (Bankr.
D.N.J. Case No. 17-24308) on July 14, 2017, listing $1.97 million
in total assets and $4.51 million in total debts as of July 12.
The petition was signed by Charlene M. Barnett-Lombard, its
president.
Bulk Express sought and obtained joint administration of its case
with the Chapter 11 case of Robert A. Lombard, Jr., and Charlene M.
Barnett-Lombard (Bankr. D.N.J. Case No. 17-23949).
Judge Christine M. Gravelle presides over the Debtors' cases.
Richard Honig, Esq., at Hellring, Lindeman, Goldstein & Siegal LLP,
serves as Bulk Express' bankruptcy counsel.
Gary N. Marks, Esq., at Norris, McLaughlin & Marcus, P.A., serves
as counsel to Charlene M. Barnett-Lombard, and Robert A. Lombard
Jr.
CABOT MICROELECTRONICS: Moody's Assigns Ba2 CFR, Outlook Stable
---------------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba2 Corporate
Family Rating ratings to Cabot Microelectronics Corporation.
Concurrently, Moody's has assigned Ba2 ratings to the company's
proposed $1,065 million first lien term loan and $200 million
revolving credit facility, which is expected to be undrawn at
closing. Proceeds from the term loan, along with 0.20 shares of
Cabot Microelectronics common stock per KMG common share, and
approximately $182 million cash on the balance sheet, will be
applied towards the $1.6 billion acquisition of KMG Chemicals, Inc.
(B1 stable) announced August 2018. Moody's also assigned a
Speculative Grade Liquidity Rating of SGL-2 indicating good
liquidity to support operations in the near-term. The rating
outlook is stable.
"The rating reflects the increased scale and solid industry
positions in key end-markets of the semiconductor industry offset
by the challenges of integrating a transformational acquisition and
modestly elevated leverage for the rating," said Domenick R. Fumai,
Moody's Vice President and lead analyst.
The ratings are subject to the transaction closing as proposed and
receipt and review of the final documentation.
Assignments:
Issuer: Cabot Microelectronics Corporation
Probability of Default Rating, Assigned Ba2-PD
Speculative Grade Liquidity Rating, Assigned SGL-2
Corporate Family Rating, Assigned Ba2
Senior Secured Bank Credit Facility (Local Currency), Assigned Ba2
(LGD4)
Outlook Actions:
Issuer: Cabot Microelectronics Corporation
Outlook, Assigned Stable
RATINGS RATIONALE
In August 2018, Cabot Microelectronics announced the acquisition of
KMG Chemicals for a total consideration of approximately $1.6
billion representing a 10.9x adjusted EBITDA multiple, as defined
by management, including the impact of $25 million in synergies.
The new Cabot Microelectronics will be formed by combining the
existing polishing slurries and polishing pads business, with KMG's
legacy business segments, Electronic Chemicals and Performance
Materials. Moody's estimates that slurries, pads, and HPPC will
account for roughly 85% of sales and nearly 80% of EBITDA. KMG also
adds two unrelated businesses - drag reducing agents (DRAs) and
wood-treatment chemicals.
The rating is supported by its expectation that management will
target leverage approximately 2.0x, the expectation for meaningful
free cash flow generation and debt repayment over the next two
years. Moreover, the expectation for increased consumption of
Cabot's Electronic Chemicals (primarily slurries, pads and HPPC) in
the production of more complex semiconductors, along with the above
GDP growth in semiconductor demand over the next several years,
will ensure that leverage quickly declines to more reasonable
levels. In addition, Cabot's increased scale and enhanced portfolio
of electronic chemicals is a positive contributing factor.
The Ba2 CFR is principally constrained by integration risk,
significant exposure to the semiconductor industry and meaningful
customer concentration. Integration risk is the most significant
issue for the combined company as KMG nearly doubles the company's
size and introduces Cabot into two unrelated businesses.
Fortunately, projected synergies are reasonable and largely limited
to corporate functions, which should limit any negative impact on
the manufacturing or sales staff.
Moody's estimates interest coverage around 6.2x (EBITDA/Interest
Expense) and financial leverage around 3.6x on a pro forma basis
for the four most recent quarters. Management expects to achieve
meaningful deleveraging over the next few years as Cabot
Microelectronics has historically operated with a fairly
conservative debt profile. Moody's expects that the combined Cabot
and KMG will generate roughly $300 million of adjusted EBITDA,
clearly in excess of anticipated cash interest of approximately $50
million and capital expenditures of roughly $60 million. Moody's
forecasts weaker free cash flow generation in 2019 due to one-time
costs associated with the integration of the two entities as well
as transaction expenses, but expects free cash flow ("FCF)" to
improve to approximately $120 million in 2020.
The stable outlook assumes that the company is able to successfully
integrate the KMG acquisition and reduce leverage through a
combination of EBITDA growth and debt repayment over the next two
years, and that future bolt-on acquisitions will only temporarily
delay the deleveraging process. The stable outlook doesn't
incorporate any meaningful change in dividends or share
repurchases..
Moody's could upgrade the rating with expectations for adjusted
financial leverage sustained below 2.5x and retained cash
flow-to-debt (RCF/Debt) sustained above 25%. Furthermore,
increasing the company's scale to over $1.5 billion in revenues and
expanding product diversity would also be important factors in
considering an upgrade. Moody's could downgrade the rating with
expectations for adjusted financial leverage above 4.0x on a
sustained basis, retained cash flow-to-debt below 10%, the lack of
consistent free cash flow generation post 2019, substantial
deterioration in liquidity or unsatisfactory progress integrating
the acquisition.
The Ba2 rating on the first lien term loan and the revolving credit
facility, in line with the Ba2 CFR, reflect the preponderance of
debt in the capital structure and the covenant-lite nature. The
first lien secured term loan contains no financial covenants while
the revolving credit facility has a springing maximum first lien
secured next leverage ratio tested on any amounts outstanding at
quarter-end. The revolving credit facility and first lien secured
term loan are backed by all existing and future wholly-owned
material domestic subsidiaries of Cabot Microelectronics
representing approximately 68% of EBITDA and 65% of assets.
The Speculative Grade Liquidity SGL-2 rating reflects good
liquidity to support operations in the near-term, including
approximately $200-$210 million of cash at the closing of the
transaction and a 5-year $200 million revolving credit facility
maturing 2023 that is expected to be undrawn at closing.
Cabot Microelectronics Corporation headquartered in Aurora,
Illinois will be a leading supplier of electronic chemicals and
performance materials. Following the acquisition of KMG Chemicals,
Inc., Cabot Microelectronics will combine its existing slurries and
pad business, with KMG's legacy HPPC business (high purity process
chemicals) and two unrelated businesses -- drag reducing agents and
wood-treatment chemicals. Cabot Microelectronics will have pro
forma sales of approximately $1.0 billion and adjusted EBITDA of
$300 million upon completion of the transaction.
The principal methodology used in these ratings was Chemical
Industry published in January 2018.
CABOT MICROELECTRONICS: S&P Assigns 'BB' ICR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issuer credit rating to Cabot
Microelectronics Corp. (CMC). The outlook is stable.
S&P said, "At the same time, we assigned our 'BB+' issue-level
rating (one notch above the issuer credit rating) to the proposed
$1.265 billion senior secured credit facility. The recovery rating
on this facility is '2', indicating our expectation of substantial
(70%-90%; rounded estimate: 75%) recovery in the event of payment
default. Cabot Microelectronics is the borrower on the senior
secured credit facility. We based all ratings on preliminary terms
and conditions.
"Our ratings reflect our assessment of the combined entity's
favorable geographic diversification, with a sales split of 45%
Asia, 45% North America, and 10% Europe. In addition, the ratings
reflect our view of the company's modest end-market diversity
because its products extend beyond the semiconductor industry, to
both the energy and industrial wood treatment end markets. We
expect that CMC will continue to generate strong EBITDA margins in
the high-20% to low-30% range due to the high value-added and
low-cost nature of the products offered. In addition, there are
high barriers to entry in which the niche markets the company
operates, given the long qualification process in the electronics
chemical segment, as well as its centrally located facilities
positioned near key customers.
"The stable outlook reflects our expectation that CMC will maintain
operational performance levels and mid-single-digit top-line growth
that will result in pro forma FFO/debt in the range of 20% to 30%
for the next 12 months. Our stable outlook expects the company will
successfully recognize synergies and successfully combine KMG
Chemicals. We expect CMC to continue to maintain strong
profitability measures and increase top-line growth as it continues
to improve volumes slightly more than GDP across all business
segments."
Favorable semiconductor industry dynamics, such as the shift from
2D to 3D NAND and the move to 10-nanometer production in advanced
devices, should underpin growth in the electronic chemicals
segment, while our expectation of rising oil prices and the
increase of aging pipelines will drive growth in the company's
performance-materials segment. S&P's stable outlook does not factor
in any large acquisitions or divestitures, and considers a
favorable economic environment with positive GDP growth of above 2%
in the U.S. and above 5% in the Asia-Pacific region.
S&P said, "We could consider a downgrade within the next 12 months
if there was weaker-than-expected end-market demand and synergies
are not recognized, causing FFO/debt to fall below 20%. This could
occur if the company had difficulties integrating this
transformational acquisition and EBITDA margins were to fall by 500
basis points (bps). Additionally we could lower the rating if CMC
were to lose a key customer, which, given its significant customer
concentration, could significantly hurt earnings. We could also
take a negative rating action if the company pursues any large
debt-funded shareholder rewards or acquisitions.
"We could take a positive rating action on CMC over the next 12
months if its operating performance is significantly better than we
expect such that debt leverage is sustained well below 3x and
FFO/debt is approaching 45%. We might see such improved performance
if the company's electronic chemicals and DRA businesses performed
better than we expect driving with a 1,000 bps margin expansion."
CARDEL CLOCKTOWER: Taps Onsager Fletcher as Legal Counsel
---------------------------------------------------------
Cardel Clocktower, LP, seeks approval from the U.S. Bankruptcy
Court for the District of Colorado to hire Onsager Fletcher
Johnson, LLC, as its legal counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code; prepare a bankruptcy plan; assist the Debtor in
administrative matters; and provide other legal services related to
its Chapter 11 case.
Onsager will charge at these hourly rates:
Christian Onsager $450
J. Brian Fletcher $335
Andrew Johnson $310
Alice White $350
Gabrielle Palmer $225
Charles Scheurich $175
Paralegals $100
Christian Onsager, Esq., at Onsager, disclosed in a court filing
that his firm is "disinterested" as defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Christian C. Onsager, Esq.
J. Brian Fletcher, Esq.
Charles R. Scheurich, Esq.
Onsager Fletcher Johnson, LLC
1801 Broadway, Suite 900
Denver, CO 80202
Phone: (303) 512-1123
Fax: (303) 512-1129
E-mail: consager@OFJlaw.com
E-mail: jbfletcher@OFJlaw.com
E-mail: cscheurich@OFJlaw.com
About Cardel Clocktower
Cardel Clocktower, LP is a Colorado limited partnership formed in
2009. Its only business was the development of a condominium and
townhome project known as the Clocktower at Highlands Ranch Town
Center. The project included the development and construction of
94 townhomes and 224 condominiums. In 2016, the project was
completed and all townhome and condominium units were sold.
Cardel Clocktower sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 18-18947) on Oct. 12,
2018. At the time of the filing, the Debtor estimated assets of $1
million to $10 million and liabilities of $1 million to $10
million. Judge Thomas B. McNamara presides over the case. The
Debtor tapped Onsager Fletcher Johnson, LLC, as its legal counsel.
CARDEL MASTER: Taps Onsager Fletcher as Legal Counsel
-----------------------------------------------------
Cardel Master Builder, Inc., seeks approval from the U.S.
Bankruptcy Court for the District of Colorado to hire Onsager
Fletcher Johnson, LLC, as its legal counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code; prepare a bankruptcy plan; assist the Debtor in
administrative matters; and provide other legal services related to
its Chapter 11 case.
Onsager will charge these hourly rates:
Christian Onsager $450
J. Brian Fletcher $335
Andrew Johnson $310
Alice White $350
Gabrielle Palmer $225
Charles Scheurich $175
Paralegals $100
The firm received a pre-bankruptcy retainer in the sum of $100,000
from the Debtor.
Christian Onsager, Esq., at Onsager, disclosed in a court filing
that his firm is "disinterested" as defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Christian C. Onsager, Esq.
J. Brian Fletcher, Esq.
Charles R. Scheurich, Esq.
Onsager Fletcher Johnson, LLC
1801 Broadway, Suite 900
Denver, CO 80202
Phone: (303) 512-1123
Fax: (303) 512-1129
E-mail: consager@OFJlaw.com
E-mail: jbfletcher@OFJlaw.com
E-mail: cscheurich@OFJlaw.com
About Cardel Master Builder
Cardel Master Builder, Inc., is a privately-held building
contractor in Centennial, Colorado. It is wholly owned by Cardel
Construction Ltd., a Canadian corporation.
Cardel Master Builder sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 18-18945) on Oct. 12,
2018. At the time of the filing, the Debtor estimated assets of
$1 million to $10 million and liabilities of $1 million to $10
million. Judge Thomas B. McNamara presides over the case. The
Debtor tapped Onsager Fletcher Johnson, LLC, as its legal counsel.
CHARTER COMMUNICATIONS: Fitch Affirms BB+ Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' Issuer Default Ratings (IDR)
assigned to CCO Holdings, LLC, Charter Communications Operating,
LLC, Time Warner Cable, LLC and Time Warner Cable Enterprises LLC
(TWCE). Fitch has also affirmed the 'BBB-'/'RR1' senior secured
ratings and 'BB+'/'RR4' senior unsecured ratings. The Rating
Outlook is Stable. Pro forma for recent debt issuances and
redemptions, Charter had approximately $71.1 billion of pro forma
debt outstanding as of June 30, 2018, including $52.2 billion of
senior secured debt. CCOH, CCO, TWC and TWCE are indirect wholly
owned subsidiaries of Charter Communications, Inc.
KEY RATING DRIVERS
M&A Activity Credit Positive: In May 2016, Charter completed its
merger with Time Warner Cable, Inc. (TWC) and acquisition of Bright
House Networks (the transactions), creating the third largest
multichannel video programming distributor (MVPD) in the U.S.
behind Comcast Corp. and AT&T (through its DirecTV subsidiary), and
the second largest cable MVPD behind Comcast. Fitch continues to
view the transactions positively and believes they strengthen
Charter's overall credit profile. Fitch estimates that for the LTM
ended June 30, 2018, total Fitch-calculated gross leverage was 4.6x
while secured leverage was 3.3x, pro forma for recent debt issuance
and repayment.
Integration Key to Success: Charter's ability to continue managing
the simultaneous integration of the transactions and limit
disruption to its overall operations is critical. Charter is also
managing the transition to all-digital services and the
introduction of its interactive IP-based video user interface
across the TWC and Bright House systems. Similar efforts in their
legacy systems boosted ARPU and accelerated growth in revenue,
EBITDA margin and FCF. Although Fitch continues to expect Charter
to realize the full $1 billion of its expected run rate integration
synergies by 2020, system-wide wireless rollout costs are expected
to moderate near term margin benefits.
Credit Profile: Charter's 27.6 million customer relationships as of
June 30, 2018 position it as one of the largest MVPDs in the U.S.,
providing the company with significant scale benefits. LTM revenue
and EBITDA totalled approximately $42.6 billion and $15.6 billion,
respectively.
Improving Operating Momentum: Charter's operating strategies are
positively affecting its operating profile, resulting in a
strengthened competitive position. The market-share-driven strategy
focusing on enhancing the overall competitiveness of its video
service and leveraging its expanding all-digital infrastructure is
improving subscriber metrics, growing revenue and ARPU, and
stabilizing operating margins. Fitch also believes the expanding
soft launch of Charter's mobile services under an MVNO agreement
with Verizon Communications Inc. should offer potential future
bundling benefits, which should eventually offset the near term
infrastructure spending.
Debt Capacity Growth: Charter maintains a target net leverage range
of 4.0x to 4.5x and up to 3.5x senior secured leverage. Fitch
expects Charter to continue creating additional debt capacity and
remain within its target leverage, primarily through EBITDA growth.
Proceeds from prospective debt issuances under additional debt
capacity created are expected to be used for shareholder returns
along with internal investment and accretive acquisitions. Fitch
does not expect Charter to maintain significant cash balances,
resulting in Fitch-calculated total gross leverage roughly equating
to total net leverage over the rating horizon.
DERIVATION SUMMARY
Charter is well positioned in the MVPD space given its size and
geographic diversity. With 27.6 million customer relationships,
Charter is the third largest U.S. MVPD after AT&T Inc. (AT&T),
through its DirecTV and U-verse offerings, and Comcast Corporation
(Comcast). Both AT&T (A-/Stable) and Comcast (A-/Stable) are rated
higher than Charter due primarily to lower target and actual total
leverage levels and significantly greater revenue size, coverage
area and segment diversification. Conversely, Charter is rated
higher than smaller MVPDs such as Cablevision (B+/Stable) given its
lower leverage and significantly larger revenue size and coverage
area.
Charter's ratings should be held in check as the company expects to
continue issuing debt under additional debt capacity created by
EBITDA growth while remaining within its target total net leverage
range of 4.0x to 4.5x. Proceeds from prospective debt issuance
under this additional debt capacity are expected to be used for
shareholder returns along with internal investment and accretive
acquisitions. No country-ceiling, parent/subsidiary aspects impacts
the rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
include:
-- Revenues grow mid-single-digits over the rating horizon driven
by an improvement in overall customer relationships and
mid-single-digit ARPU growth.
-- Continued low-single-digit video customer declines driven by
the increasingly competitive environment.
-- HSD customer growth at 5%-7% annually should more than offset
video losses, with HSD total revenues surpassing video total
revenues for the first time in 2019.
-- Wireless revenues are not expected to comprise a significant
near term revenue source.
-- EBITDA margin shows slow improvement as integration benefits
are offset somewhat by wireless roll out costs.
-- Capex expected to increase to low 20% as a percentage of
revenues due to ongoing near term upgrades to the TWC and Bright
House systems along with system-wide wireless infrastructure
investments.
-- Charter grows FCF from $2.7 billion in 2018 to $4.5 billion by
2021.
-- Charter issues sufficient debt to fund annual maturities and
take advantage of debt capacity created by EBITDA growth.
--Fitch expects Charter to remain at the high end of its target
net leverage of 4.0x to 4.5x creating approximately $4 billion to
$5 billion of additional annual debt capacity for either
shareholder returns or accretive acquisitions.
-- Annual shareholder returns are expected to grow from $6.3
billion in 2018 to $9.6 billion by 2021.
-- Fitch does not include any M&A activity given the lack of
transformational acquisitions opportunities.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
-- Integrating the transactions while limiting disruption in the
company's overall operations and demonstrating continued progress
in closing gaps relative to its industry peers in service
penetration rates and strategic bandwidth initiatives.
-- A strengthening operating profile as the company captures
sustainable revenue and cash flow growth, and the reduction and
maintenance of total leverage below 4.0x.
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
-- A leveraging transaction or adoption of a more aggressive
financial strategy that increases leverage beyond 5.0x in the
absence of a credible deleveraging plan.
-- Perceived weakening of its competitive position; or failure of
the current operating strategy to produce sustainable revenue, cash
flow growth and strengthening operating margins.
LIQUIDITY
Fitch regards Charter's liquidity position and overall financial
flexibility as satisfactory given the rating. Charter's financial
flexibility will improve in step with the continued growth in FCF
generation. Charter generated $2.3 billion of FCF during the LTM
ended June 30, 2018. The company's liquidity position at June 30,
2018 comprised $773 million of cash and was supported by $3.9
billion of borrowing capacity from its $4 billion revolver, which
expires in March 2023, and anticipated FCF generation. Charter has
a manageable maturity schedule over the next three years, with $156
million remaining due in 2018, $3.5 billion in 2019 and $3.7
billion in 2020.
CCO is the public issuer of Charter's senior secured debt and CCOH
is the public issuer of Charter's senior unsecured debt. All
existing and future secured debt of CCO is secured by a first
priority interest in all of the assets of CCO and is guaranteed by
all of CCO's subsidiaries, including those that hold the assets of
Charter, TWC and Bright House, and CCOH. All existing and future
debt of CCOH is structurally subordinated to CCO's senior secured
debt and is neither guaranteed by nor pari passu with any secured
debt.
With Charter's Fitch-calculated secured leverage expected to remain
below 4x over the rating horizon and strong underlying asset value,
Fitch does not view structural subordination as being present to
where recovery prospects at the unsecured level are impaired. Thus,
Charter's unsecured notes are not notched down from the IDR.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings with a Stable Outlook:
CCO Holdings, LLC (CCOH)
-- Long-Term IDR at 'BB+';
-- Senior unsecured at 'BB+'/'RR4'.
Charter Communications Operating, LLC (CCO)
-- Long-Term IDR at 'BB+';
-- Senior secured at 'BBB-'/'RR1'.
Time Warner Cable LLC (TWC)
-- Long-Term IDR at 'BB+';
-- Senior secured at 'BBB-'/'RR1'.
Time Warner Cable Enterprises LLC (TWCE)
-- Long-Term IDR at 'BB+';
-- Senior secured at 'BBB-'/'RR1'.
CIT GROUP: Moody's Hikes Sr. Unsec. Rating on Ba1, Outlook Positive
-------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of CIT Group Inc.
and its subsidiary CIT Bank, N.A. Affected ratings include CIT
Group's senior unsecured, upgraded to Ba1 from Ba2, CIT Bank's
baseline credit assessment and adjusted baseline credit assessment,
upgraded to baa3 from ba1, long-term deposit rating, upgraded to
Baa1 from Baa2, Issuer rating, upgraded to Ba1 from Ba2, and
short-term deposit ratings, affirmed at Prime-2. The outlook for
the ratings is positive.
Affected ratings include:
Affirmations:
Issuer: CIT Bank, N.A.
ST Deposit Rating, Affirmed P-2
Upgrades:
Issuer: CIT Bank, N.A.
Adjusted Baseline Credit Assessment, Upgraded to baa3 from ba1
Baseline Credit Assessment, Upgraded to baa3 from ba1
LT Counterparty Risk Assessment, Upgraded to Baa2(cr) from Baa3(cr)
ST Counterparty Risk Assessment, Upgraded to P-2(cr) from P-3(cr)
LT Counterparty Risk Rating, Upgraded to Baa3 from Ba1
ST Counterparty Risk Rating, Upgraded to P-3 from NP
Issuer Rating, Upgraded to Ba1 from Ba2, Positive
LT Deposit Rating, Upgraded to Baa1 from Baa2, Positive
Issuer: CIT Group Inc.
Pref. Shelf Non-cumulative, Upgraded to (P)Ba3 from (P)B1
Pref. Shelf, Upgraded to (P)Ba2 from (P)Ba3
Senior Unsecured Shelf, Upgraded to (P)Ba1 from (P)Ba2
Subordinate Shelf, Upgraded to (P)Ba1 from (P)Ba2
Pref. Stock Non-cumulative, Upgraded to Ba3 (hyb) from B1 (hyb)
Subordinate Regular Bond/Debenture, Upgraded to Ba1 from Ba2
Senior Unsecured Bank Credit Facility, Upgraded to Ba1 from Ba2,
Positive
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 from Ba2,
Positive
Issuer: CIT Group Inc. (Old)
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 from Ba2,
Positive
Outlook Actions:
Issuer: CIT Bank, N.A.
Outlook, Remains Positive
Issuer: CIT Group Inc.
Outlook, Remains Positive
RATINGS RATIONALE
Moody's upgraded CIT's ratings based on the company's reduced use
of market funds, improved predictability of operating earnings, and
increased emphasis on less risky secured lending. The rating
upgrade also reflects the bank's continued efforts to refine
deposit taking strategy and improve deposit quality. CIT's ratings
are supported by the company's well-established competitive
positioning in multiple commercial finance businesses, revenue and
geographic diversity, well-managed liquidity, and reasonable
capital targets given the risk profile of the firm's earning
assets. The positive outlook is based on Moody's expectation that
CIT's further operating refinements will strengthen its resilience
to downside stresses, including actions to further strengthen
deposit mix, reduce operating costs, and remix C&I lending, and
that the company will transition to a CET1 ratio at the upper end
of its 10%-11% target range over the intermediate term.
On October 5, CIT announced that it sold its European railcar
leasing operation NACCO for net proceeds of $1.1 billion. The
transaction is the latest in a series of sales that have advanced
the firm's transition toward a commercial bank operating strategy.
Proceeds of the sale will facilitate a repayment of certain holding
company debt, including senior unsecured notes, a railcar
securitization and a total return swap (TRS) facility. Repayment of
the TRS will release railcar collateral pledges, allowing the
company to fund more of its North American with lower cost deposits
in CIT Bank.
The costs associated with these transactions will weaken CIT's
fourth quarter earnings, but the actions will reduce CIT's use of
confidence sensitive market funding, lower its cost of funds, and
reduce its exposure to lease residual risks. After the
transactions, Moody's expects that CIT's reliance on market funds
will decline to about 16% from 19% at year-end 2017, narrowing the
difference from the 9% median for US regional banks. The
transactions will also result in a well-distributed debt maturity
profile with minimal near-term debt refinancing risk. Repaying the
high cost TRS facility and holding company unsecured debt and
increasing deposit funding of railcars is expected to lower funding
costs sufficiently over the next few years to more than offset the
charges associated with the debt redemptions, benefiting future
profitability.
CIT has improved deposit quality by reducing rate-sensitive
brokered and time-deposits and has made headway increasing deposit
granularity and the percentage of non-maturity deposits. The
company has been able to retain and attract new non-maturity
savings deposits with deposit betas comparable with other banks,
demonstrating reasonable access and stability. Nevertheless,
Moody's views the bank's relatively low mix of demand deposits and
its less developed retail deposit-taking network as competitive
weaknesses compared to regional bank peers.
CIT's asset quality risks have declined as a result of the
company's remix of its lending volumes toward collateralized
lending. CIT's asset quality performance, like other banks, has
been strong in recent years, but its positioning in specialty
finance businesses exposes it to elevated earnings volatility
during a down cycle. Moody's expects that the firm's efforts to
rebalance toward secured lending will reduce earnings volatility.
CIT ended the second quarter with a strong capital position,
signified by a common equity common equity Tier 1 (CET1) capital
ratio of 13% at the end of the second quarter. CIT aims to reduce
this ratio to 11.5% to 12.0% by the end of 2018 and further to 11%
by the end of 2019, as the company returns the additional $750
million of capital to shareholders under plans approved by its
regulators. Moody's expects that CIT will maintain a CET1 ratio
between 10% and 11% thereafter.
Moody's could upgrade CITs ratings if the company: 1) sustains a
ratio of net income to tangible assets of 1% (annualized) while
demonstrating improved earnings stability based on effective
management of credit and cyclical business challenges, and
achieving targeted reductions in operating costs; 2) strengthens
the stability and quality of deposits; and 3) maintains a CET1
ratio at or above 10.5%, given the anticipated composition of
business risks.
Though not likely, Moody's could downgrade CITs ratings if the
company's net finance margin weakens materially, asset quality
declines materially, and capital position declines to less than 10%
TCE/RWA.
The principal methodology used in these ratings was Banks published
in August 2018.
COCRYSTAL PHARMA: LSP Has 6.1% Stake of Oct. 18
-----------------------------------------------
In a Schedule 13G filed with the Securities and Exchange
Commission, these entities or individual reported beneficial
ownership of Cocrystal Pharma, Inc.'s ordinary shares:
Amount Percentage
Beneficially of Outstanding
Reporting Person Owned Ordinary Shares
---------------- ------------ --------------
LSP Life Sciences Fund N.V. 1,046,294 3.5%
LSP Advisory B.V. 1,827,252 6.1%
LSP Advisory Group B.V. 1,827,252 6.1%
Marcus Wegter 1,827,252 6.1%
The ownership information represents beneficial ownership of shares
of Common Stock of the Issuer as of Oct. 18, 2018, based upon
29,923,076 shares of Common Stock outstanding as of Aug. 9, 2018.
LSP Life Sciences Fund N.V. is the record holder of 1,046,294
shares of Common Stock. LSP Advisory B.V. is the sole director of
the LSP Life Sciences Fund N.V. and in that capacity may be deemed
to beneficially own the shares held of record by LSP Life Sciences
Fund N.V. In addition, LSP Advisory B.V. has the power to vote and
dispose of 780,958 shares of Common Stock held in client accounts
for which it serves as the investment advisor.
LSP Advisory Group B.V. is the sole shareholder of LSP Advisory
B.V., and Marcus Wegter is the director of LSP Advisory Group B.V.
Therefore, each of LSP Advisory Group B.V. and Mr. Wegter may be
deemed to share beneficial ownership of the shares of Common Stock
beneficially owned by LSP Advisory B.V.
Each of LSP Life Sciences Fund N.V., LSP Advisory B.V. and LSP
Advisory Group B.V.is organized under the laws of the Netherlands.
Mr. Wegter is a citizen of the Netherlands.
A full-text copy of the regulatory filing is available at:
https://is.gd/DFjmn1
About Cocrystal Pharma
Cocrystal Pharma, Inc., formerly known as Biozone Pharmaceuticals,
Inc., is a clinical stage biotechnology company discovering and
developing novel antiviral therapeutics that target the replication
machinery of hepatitis viruses, influenza viruses, and noroviruses.
The company is headquartered in Tucker, Georgia.
Cocrystal Pharma reported a net loss of $613,000 on $0 of grant
revenues for the year ended Dec. 31, 2017, compared to a net loss
of $74.87 million on $0 of grant revenues for the year ended Dec.
31, 2016. As of June 30, 2018, Cocrystal had $126.3 million in
total assets, $13.67 million in total liabilities and $112.6
million in total stockholders' equity.
The Company's auditors issued an audit opinion for the year ended
Dec. 31, 2017 which contained what is referred to as a "going
concern" opinion. BDO USA, LLP, in Seattle, Washington, noted that
the Company has suffered recurring losses from operations and has
an accumulated deficit that raise substantial doubt about its
ability to continue as a going concern.
CONTANDA LLC: S&P Alters Outlook to Negative & Affirms 'B' ICR
--------------------------------------------------------------
S&P Global Ratings revised the outlook on Houston-based Contanda
LLC to negative from stable and affirmed the 'B' issuer credit
rating.
S&P said, "At the same time, we affirmed the 'B' issue rating on
Contanda's senior secured debt. The recovery rating remains '3',
indicating our expectation of meaningful recovery.
"The negative outlook primarily reflects our updated view of
Contanda LLC's heightened refinance risk and general lack of
liquidity in light of its approaching term loan B maturity in
February 2020. The increased refinance risk could lead to a lower
rating (of one or more notches) over the next six months in the
absence of a credible plan to refinance or repay its lenders upon
the maturity. We could also consider a lower rating if we believed
Contanda's operating performance or access to capital markets were
likely to weaken materially over the next six to 12 months for any
other reason, which would further complicate its ability to raise
capital and repay lenders.
"The negative outlook reflects our view that we could lower the
rating by one or more notches over the next six to eight months
given that the company has not yet presented a credible strategy
for refinancing its term loan B in February 2020. We also believe
ongoing tight covenant headroom might lead to more covenant
breaches over the next few reporting periods, increasing concerns
of a technical default in the absence of sponsor equity cures.
We assume that expansion projects won't experience material delays
and/or cost overruns and will be backed by agreements with
creditworthy, strategic customers. Our forecast also assumes that
S&P-adjusted leverage should remain around 6.0x over the next few
years and that storage rates and utilization rates will not
materially decline.
"We could consider lowering the rating by one or more notches if
the company is not able to formulate a credible plan over the next
six months for refinancing the term loan B in 2020. We could also
lower the rating if planned capital spending projects incur
significant cost overruns, if weakening demand for storage results
in pricing or utilization pressure, or if we believe access to
capital markets becomes more restricted.
"Importantly, we would also consider a lower rating if we believe
the relationship between EQT and Contanda were to change. This
could be prompted by a reluctance on EQT's part to supply equity to
deal with financial stress.
"While unlikely at this time, we would revise the outlook to stable
if we believe the company has a credible plan to refinance the term
loan B maturity in February 2020. We'd also expect any new debt to
have more relaxed covenants. A stable outlook would also be
dependent on the company executing on its significant growth
projects."
COOL FROOTZ: Seeks Authorization to Use Cash Collateral
-------------------------------------------------------
Cool Frootz, LLC, seeks authorization from the U.S. Bankruptcy
Court for the District of Colorado to use of cash collateral to
fund its ongoing business operations.
The Debtor has three secured creditors who claim liens on inventory
and accounts, namely:
(a) The first secured creditor is CircleUp Credit Advisors
LLC. The amount due to Circle Up is approximately $107,585. Circle
Up holds a first priority security interest on the Debtor's
accounts receivable from most of its main customers including
Walmart, Woodlands/Publix, Kroger and Giant Eagle.
(b) The second secured creditor is DNS-Frootz, LLC, has claim
based upon promissory notes dated in October 2017 and subsequent
notes dated through early 2018 in the collective amount of
approximately $1,595,000. DNS-Frootz claims liens in the Debtor's
assets including inventory and accounts receivable.
(c) S2G Ventures Fund 1, L.P. is also a secured creditor
holding a claim in the amount of approximately $1,600,000 based
upon loans made to the Debtor in 2017 and 2018. S2G Ventures also
holds a security interest encumbering various assets of the
Debtor.
In addition, the Debtor has one claim that has been asserted under
the Perishable Agricultural Commodities Act ("PACA") by the
creditor, Fruitrade International, Inc. The Fruitrade claim is in
the amount of approximately $87,084. The PACA claim holds certain
priority rights with respect to the cash proceeds from the sale of
the Debtor's fruit products.
The Debtor derives its cash collateral from the sale of inventory
which consists of perishable, and generally, frozen fruit products.
It is replaced in the ordinary course of business. The Debtor's
current account receivable balance is approximately $100,625, most
of the are factored through CircleUp. The Debtor also holds cash
in bank accounts in the amount of approximately $50,000.
Given the amount of cash, accounts receivable, and inventory, the
Debtor believes that the three secured creditors are very
under-secured with respect to cash collateral issues. The Debtor
asserts that only CircleUp and DNS-Frootz hold material secured
claim in cash collateral.
In order to provide adequate protection to secured creditors for
the Debtor's use of cash collateral, the Debtor has proposed
adequate protection for secured creditors in the order of their
relative priorities as set forth below:
(a) The Debtor will provide secured creditors with a
post-petition lien on all post-petition inventory, accounts
receivable, and income derived from the operation of the business
and assets, to the extent that the use of the cash results in a
decrease in the value of secured creditor's interest in the
collateral. All replacement liens will hold the same relative
priority to assets as did the prepetition liens;
(b) The Debtor will only use cash collateral in accordance
with the Budget subject to a deviation on line item expenses not to
exceed 15% without the prior agreement of secured creditors or an
order of the Court;
(c) The Debtor will keep all of secured creditor’s
collateral fully insured;
(d) The Debtor will provide secured creditors with a complete
accounting, on a monthly basis, of all revenue, expenditures, and
collections through the filing of the Debtor's Monthly Operating
Reports; and
(e) The Debtor will continue its ongoing operation and
maintain a constant level of inventory which will preserve secured
creditor's collateral position.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/cob18-18234-13.pdf
About Cool Frootz
Cool Frootz, LLC, manufactures frozen fruit and vegetable products.
The company sells its products through a network of retailers. The
company was incorporated in 2003 and is based in Denver, Colorado.
Cool Frootz previously sought bankruptcy protection on Sept. 17,
2012 (Bankr. S.D. Fla. Case No. 12-32169).
Cool Frootz again filed a voluntary Chapter 11 petition (Bankr.
S.D. Fla. Case No. 18-18234) on Sept. 20, 2018. In the petition
signed by David W. Patterson, president and COO, the Debtor
estimated $1 million to $10 million in assets and liabilities. The
Hon. Kimberley H. Tyson presides over the case. Lee M. Kutner,
Esq., at Kutner Brinen, P.C., represents the Debtor.
CREDIT ACCEPTANCE: Moody's Hikes CFR to Ba3, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service upgraded the corporate family and senior
unsecured ratings of Credit Acceptance Corporation to Ba3 from B1.
The rating outlook is stable.
Upgrades:
Issuer: Credit Acceptance Corporation
Corporate Family Rating, Upgraded to Ba3 from B1, Stable From
Positive
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from B1,
Stable From Positive
Outlook Actions:
Issuer: Credit Acceptance Corporation
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Moody's upgraded Credit Acceptance based on the company's strong
performance. CACC's profitability, capital and leverage continue to
be robust in the face of a competitive environment in subprime auto
lending. CACC also continues to proactively manage the maturities
of its financing sources to mitigate the risk of any unexpected
contraction in market funding. Subprime auto lending has faced
significant regulatory scrutiny in the last several years.
Regulatory scrutiny continues but CACC has managed this risk to
date without materially impacting performance.
CACC's solid performance is driven by its disciplined approach to
pricing which continues to produce strong profitability. CACC's
pre-tax pre-provision income to average managed assets for the
first half of 2018 was 13.9%, which is considerably higher than
other specialty finance companies. CACC's tangible common equity as
a percentage of tangible managed assets is strong and effective
leverage is low at 30.8% and 2.0 times as of 30 June 2018,
respectively. CACC routinely utilizes a portion of earnings to
repurchase common stock but has maintained tangible common equity
to tangible managed assets at these strong levels for a
considerable period of time and through challenging market
conditions.
CACC ratings are supported by its unique risk-mitigating business
model with its portfolio program where dealers have first loss risk
in the receivables they have assigned to CACC. The portfolio
program comprises 67% of CACC's originations in dollars. The
remaining 33% of CACC's portfolio is a more traditional auto loan
program where loans are purchased at a discount and CACC has first
loss risk. Consumer credit quality for both of CACC's business
lines is subprime. CACC has demonstrated pricing discipline and the
company benefits from a capable, long-tenured senior management
team. A credit concern is that the subprime auto finance business
is subject to bouts of irrational pricing, as well as supply and
demand imbalances due in part to the availability of wholesale
funding at any given point of the business cycle. Currently,
subprime auto finance is in the midst of a sustained period of
widely accessible wholesale funding and elevated competition which
has placed downward pressure on CACC's profitability. Even at
CACC's lower levels of profitability, 13.9% pre-tax pre-provision
income to average managed assets, this is still well above other
specialty finance companies.
Regulatory inquiries continue to be a risk for CACC and the
subprime auto lending industry. Regulatory activity increased
drastically for the industry beginning more than four years ago and
continues. Similar to prior quarterly financial statements, CACC
disclosed in the 2018 second quarter financial statements the
existence of nine regulatory inquiries, investigations, civil
investigate demands and subpoenas which were initiated between 2014
through 2018. Moody's believes that these matters require
significant management attention and ongoing evaluation of policies
and procedures. To date, CACC has not experienced a material impact
to their operations and business model from regulatory matters.
CACC's rating could be upgraded if the company improves capital,
profitability, the debt maturity profile and can maintain
operations with limited negative impacts from regulatory matters.
CACC's ratings could be downgraded if profitability, asset quality
or liquidity materially deteriorate or if leverage increases beyond
a debt to equity ratio of 2.5 times.
The principal methodology used in these ratings was Finance
Companies published in December 2016.
CROWN HOLDINGS: S&P Raises ICR to 'BB+', Outlook Stable
-------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Crown
Holdings Inc. to 'BB+' from 'BB'. The outlook is stable.
S&P said, At the same time, S&P raised the issue-level ratings on:
-- Crown's senior secured facilities to 'BBB-' from 'BB+'. The
recovery rating remains '2', indicating S&P's expectation of
substantial recovery (70%-90%; rounded estimate: 75%) in the event
of a payment default.
-- Crown European Holdings SA's unsecured notes to 'BB+' from
'BB'. The recovery rating remains '3', indicating S&P's expectation
of meaningful recovery (50%-70%; rounded estimate: 55%) in the
event of a payment default.
-- Crown America's unsecured notes to 'BB-' from 'B+'. The
recovery rating remains '6', indicating S&P's expectation of
negligible recovery (0%-10%; rounded estimate: 0%) in the event of
a payment default.
-- Crown Cork And Seal's unsecured debentures to 'BB-' from 'B+'.
The recovery rating remains '6', indicating S&P's expectation of
negligible recovery (0%-10%; rounded estimate: 0%) in the event of
a payment default.
S&P said, "The upgrade reflects our view that acquiring Signode
Industrial Group Holdings enhances Crown's business, and that the
company has a credible path to maintaining S&P Global
Ratings-adjusted leverage below 5x. Signode manufactures and
distributes protective packaging systems that apply plastic and
steel strappings used in bundling and pallets during transit, with
operations in over 40 countries and sales in over 60 countries.
Signode's transit packaging systems and products add a business
that has relatively low correlation to Crown's legacy metal cans
business. Signode also reduces Crown's reliance on its top 10
customers, which represented about a third of sales in 2017, but
will represent about 20% of revenues going forward. Signode's low
capital intensity requirement should meaningfully boost Crown's
current strong cash flows, and also provide another platform for
organic and acquisitive growth.
"The stable outlook reflects our expectation that Crown will
continue to generate strong cash flows following the Signode
acquisition and will prioritize repaying debt such that the
company's debt-to-EBITDA will approach the mid-4x range by the end
of 2019.
"We could lower the rating if integration challenges, worse
operating performance, or more aggressive financial policies hinder
or delay the company's deleveraging path and we believe adjusted
debt-to-EBITDA will remain above 5x for an extended period.
"Although unlikely over the next 12 months, we could raise the
rating on Crown if the company's strong operating performance and
financial policy supported its adjusted debt-to EBITDA approaching
3x with a firm commitment of maintaining such a policy through the
credit cycle and potential acquisitions."
CT TECHNOLOGIES: Bank Debt Trades at 5% Off
-------------------------------------------
Participations in a syndicated loan under which CT Technologies
Intermediate Holdings Inc. is a borrower traded in the secondary
market at 94.67 cents-on-the-dollar during the week ended Friday,
October 12, 2018, according to data compiled by LSTA/Thomson
Reuters MTM Pricing. This represents an increase of 0.80 percentage
points from the previous week. CT Technologies pays 425 basis
points above LIBOR to borrow under the $15 million facility. The
bank loan matures on December 1, 2021. Moody's rates the loan 'B2'
and Standard & Poor's gave a 'B-' rating to the loan. The loan is
one of the biggest gainers and losers among 247 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday, October 12.
CVENT INC: Moody's Affirms B3 CFR & Alters Outlook to Stable
------------------------------------------------------------
Moody's Investors Service affirmed Cvent Inc.'s Corporate Family
rating at B3, Probability of Default rating at B3-PD and senior
secured first lien revolver and term loan at B3. The rating outlook
was revised to stable from positive.
On Tuesday, Cvent announced it had acquired Social Tables, Inc. in
a debt-financed transaction funded in part by a $53 million
increase in its senior secured 1st lien term loan, bringing the
total outstanding amount to approximately $750 million.
RATING RATIONALE
"The revision of the rating outlook to stable from positive is
driven by Moody's expectations for Cvent to pursue debt-funded M&A,
reversing recent financial leverage declines," said Edmond
DeForest, Moody's Senior Credit Officer.
Cvent's B3 CFR reflects very high debt to EBITDA well above 7 times
and modest or no free cash flow over the next 12 to 18 months.
Expenses associated with acquisition integration and product
enhancements will pressure profits and free cash flow. Cvent has
modest revenue size with less than $500 million in sales expected
in 2018 and its operating scope is limited, with subscription and
other revenues sourced from meeting planners and hotels, mostly in
North America. Subscription revenues paid up front, high customer
retention and renewal rates and solid historical revenue growth
rates make revenues predictable.
All financial metrics cited reflect Moody's standard analytic
adjustments. In addition, Moody's subtracts Cvent's capitalized
software costs and adds increases in deferred revenues to EBITA,
EBITDA and retained cash flow.
Moody's considers Cvent's liquidity profile good but diminished.
Moody's expects limited free cash flow. Liquidity is provided by
over $100 million of available balance sheet cash and the unused
and fully available $40 million revolving credit facility. The
revolver is subject to compliance with a First Lien Leverage Ratio
(as defined in the credit agreement) which is only tested if the
revolver has been over 35% utilized. Moody's does not anticipate
the covenant will be tested, but believes Cvent could comply if it
were tested during the next twelve months.
The B3 rating assigned to the senior secured first lien senior
revolving credit facility due 2021 and term loan due 2024 reflects
both the B3-PD PDR and a Loss Given Default (LGD) assessment of
LGD3. The first lien facilities are secured on a first lien basis
by substantially all property and assets of Cvent.
The stable ratings outlook reflects expectations for high single
digit organic revenue growth, stable and high customer retention
and renewal rates and debt to EBITDA declining toward 7 times.
The ratings could be raised if Moody's expects Cvent will sustain:
1) debt to EBITDA below 6.5 times; 2) free cash flow to debt around
8%; 3) EBITA to interest expense around 2 times; 4) good liquidity;
and 5) balanced financial policies.
The ratings could be lowered if Moody's anticipates: 1) increased
competition or customer losses will drive down revenue growth; 2)
debt to EBITDA remaining above 7.5 times; 3) EBITA to interest
expense below 1 time; or 4) less than adequate liquidity.
Issuer: Cvent, Inc.
Corporate Family Rating, Affirmed at B3
Probability of Default Rating, Affirmed at B3-PD
Senior Secured 1st Lien Bank Credit Facility, Affirmed at B3 (LGD3)
Outlook, Revised To Stable From Positive
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Cvent, based in Tyson's Corner, VA and owned by affiliates of Vista
Equity Partners, provides cloud-based enterprise event management
software to event and meeting planners and venues, mostly in North
America. Social Tables provides cloud-based event seating,
diagramming and request-for-proposal tools to hotels and other
event spaces and event planners. Moody's expects Cvent's 2018
revenues will be less than $500 million.
DEL MONTE: Bank Debt Trades at 9% Off
-------------------------------------
Participations in a syndicated loan under which Del Monte Pacific
Ltd. is a borrower traded in the secondary market at 90.92
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.91 percentage points from the
previous week. Del Monte pays 325 basis points above LIBOR to
borrow under the $71 million facility. The bank loan matures on
February 18, 2021. Moody's rates the loan 'Caa1' and Standard &
Poor's gave a 'CCC+' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
DIXIE ELECTRIC: Moody's Affirms Ca CFR, Outlook Negative
--------------------------------------------------------
Moody's Investors Service considers the expiration of Dixie
Electric, LLC's grace period for the missed September interest
payment of the first lien term loan due 2020 as a limited default.
The Probability of Default rating was downgraded to C-PD/LD (with
the /LD suffix added) from Ca-PD. The Ca corporate family rating
was affirmed along with the Ca ratings on the bank credit
facilities. The ratings outlook remains negative.
While the 5-day grace period on the first lien term loan due 2020
expired in early September, Dixie and certain lenders entered into
a 30 day forbearance agreement which was subsequently extended by
two weeks.
Downgrades:
Issuer: Dixie Electric, LLC
Probability of Default Rating, Downgraded to C-PD /LD from Ca-PD
Outlook Actions:
Issuer: Dixie Electric, LLC
Outlook, Remains Negative
Affirmations:
Issuer: Dixie Electric, LLC
Corporate Family Rating, Affirmed Ca
Senior Secured Bank Credit Facility, Affirmed Ca (LGD3) from (LGD4)
RATINGS RATIONALE
Dixie's Ca CFR reflects its heightened debt restructuring risk.
Moody's expects that activity levels and earnings will gradually
recover in 2018-19 but may not be able to sustainably support debt
service and liquidity needs. The company's revolver is slated to
mature in December 2018 and it had $17 million outstanding along
with $7 million letters of credit issued under the $24 million
facility. Even with improved commodity prices, Moody's expects only
modest earnings improvements into 2019, driven by depressed pricing
and market oversupply. Until the company overcomes these
challenges, weakness in credit metrics, a cash burn, and a high
risk of debt restructuring in the short term remains. The credit
profile also reflects Dixie's modest scale, lack of geographic and
end-market diversification, and its reliance on the highly cyclical
upstream oil & gas sector. Dixie has some ability to shift some of
its employee base of electricians to other industrial work or into
midstream and downstream capacities, albeit at lower margins.
The negative outlook reflects the expectation of a near term
restructuring of Dixie's debt. Moody's also expects weak liquidity
and profitability into 2019.
Should the company execute a formal reorganization under the U.S.
Bankruptcy Code, ratings could be downgraded further. The ratings
are unlikely to be upgraded without successful reduction of debt to
more sustainable levels that does not result in a material loss to
the lenders, as well as meaningful improvement in liquidity.
Headquartered in Houston, Texas, Dixie Electric, LLC is a provider
of well site electrification and automation infrastructure to the
upstream oil industry. Dixie is majority owned by the private
equity firm, First Reserve.
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in May 2017.
DPW HOLDINGS: Signs $25 Million At-The-Market Offering Agreement
----------------------------------------------------------------
DPW Holdings Inc. has entered into an At-The-Market Issuance Sales
Agreement with Wilson-Davis & Co., Inc., as sales agent to sell
shares of its common stock, par value $0.001, having an aggregate
offering price of up to $25,000,000 from time to time, through an
"at the market offering" program.
The offer and sale of the Shares will be made pursuant to the
Company's effective "shelf" registration statement on Form S-3 and
an accompanying base prospectus contained therein (Registration
Statement No. 333-222132) filed with the Securities and Exchange
Commission on Dec. 18, 2017, amended on Jan. 8, 2018, and declared
effective by the SEC on Jan. 11, 2018, and a prospectus supplement
related to the ATM Offering, dated Oct. 15, 2018.
Subject to the terms and conditions of the Sales Agreement, the
Agent will use its commercially reasonable efforts to sell the
Shares, based upon the Company's instructions, consistent with its
normal trading and sales practices and applicable state and federal
laws, rules and regulations and rules of the NYSE American. The
Company will set the parameters for sales of the Shares, including
the number of Shares to be sold, the time period during which sales
are requested to be made, any limitation on the number of Shares
that may be sold in one trading day, and any minimum price below
which sales may not be made. Under the Sales Agreement, the Agent
may sell the Shares by any method permitted by law deemed to be an
"at the market offering," as defined in Rule 415 of the Securities
Act of 1933, as amended. The Company or the Agent may, upon
written notice to the other party in accordance with the terms of
the Sales Agreement, suspend offers and sales of the Shares. The
Company and the Agent each have the right, in its sole discretion,
to terminate the Sales Agreement at any time upon prior written
notice pursuant to the terms and subject to the conditions set
forth in the Sales Agreement.
The Company will pay the Agent a commission in an amount equal to
4.0% of the gross proceeds from each sale of the Shares sold
through it as sales agent under the Sales Agreement. In addition,
the Company has agreed to reimburse the Agent for certain expenses
it incurs in the performance of its obligations under the Sales
Agreement up to a maximum of $40,000. The Company has also agreed
pursuant to the Sales Agreement to indemnify and provide
contribution to the Agent against certain liabilities, including
liabilities under the Securities Act.
About DPW Holdings
Headquartered in Fremont, California, DPW Holdings, Inc., formerly
known as Digital Power Corp. -- http://www.DPWHoldings.com/-- is a
diversified holding company that, through its wholly owned
subsidiary, Coolisys Technologies, Inc., is dedicated to providing
technology-based solutions where innovation is the main driver for
mission-critical applications and lifesaving services. Through its
wholly owned subsidiaries and strategic investments, the company
provides mission-critical products that support a diverse range of
industries, including defense/aerospace, industrial,
telecommunications, medical, crypto-mining, and textiles.
DPW Holdings incurred a net loss of $10.89 million in 2017
following a net loss of $1.12 million in 2016. As of June 30,
2018, DPW Holdings had $53.44 million in total assets, $21.90
million in total liabilities and $31.53 million in total
stockholders' equity.
The report from the Company's independent accounting firm Marcum
LLP, in New York, on the consolidated financial statements for the
year ended Dec. 31, 2017, includes an explanatory paragraph stating
that the Company has a significant working capital deficiency, has
incurred significant losses and needs to raise additional funds to
meet its obligations and sustain its operations. These conditions
raise substantial doubt about the Company's ability to continue as
a going concern.
EAST COAST HOMES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: East Coast Homes of Virgnia, Inc.
2600 Holland Road
Suffolk, VA 23434
Business Description: East Coast Homes of Virgnia, Inc. is a
modular home dealer in Suffolk, Virginia.
Chapter 11 Petition Date: October 18, 2018
Court: United States Bankruptcy Court
Eastern District of Virginia (Norfolk)
Case No.: 18-73683
Debtor's Counsel: Robert V. Roussos, Esq.
ROUSSOS, GLANZER & BARNHART, P.L.C.
580 E. Main Street, Suite 300
Norfolk, VA 23510
Tel: 757-622-9005
Fax: 757-624-9257
Email: roussos@rgblawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Howard S. King, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at:
http://bankrupt.com/misc/vaeb18-73683.pdf
FORTERRA INC: Bank Debt Trades at 4% Off
----------------------------------------
Participations in a syndicated loan under which Forterra
Incorporated is a borrower traded in the secondary market at 96.00
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.80 percentage points from the
previous week. Forterra Incorporated pays 300 basis points above
LIBOR to borrow under the $10 million facility. The bank loan
matures on October 25, 2023. Moody's rates the loan 'B3' and
Standard & Poor's gave a 'B-' rating to the loan. The loan is one
of the biggest gainers and losers among 247 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday, October 12.
FRANCIS' DRILLING: U.S. Trustee Forms 3-Member Committee
--------------------------------------------------------
The Office of the U.S. Trustee on Oct. 17 appointed three creditors
to serve on the official committee of unsecured creditors in the
Chapter 11 cases of Francis' Drilling Fluids, Ltd. and its
affiliates.
The committee members are:
(1) Despino Tire Service
P.O. Box 8798
Alexandria, LA 71306
Attention: Julie Despino
Phone: (318) 445-4564
(2) W. B McCartney Oil. Co., Inc.
P.O. Box 1200
Jena, LA 71342
Attn: Darrel McCartney
Phone: (318) 992-4189
(3) Excalibar Mineral, Inc.
9320 Lakeside Blvd., Suite 100
The Woodlands, TX 77381
Attn: Kara Griffith
Phone: (281) 362-6828
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 Francis' Drilling Fluids Ltd.
Francis' Drilling Fluids, Ltd. -- http://www.fdfenergy.com/--
provides transportation, transloading, drilling fluid, cleaning,
equipment rental and technical services to the oil and gas
industry. Headquartered in Lafayette, Louisiana, the company
conducts its business under the name FDF Energy Services and
employs nearly 500 workers.
Francis' Drilling Fluids and its affiliates, FDF Resources Holdings
LLC and Francis Logistics LLC, sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 18-35441) on
Sept. 29, 2018.
In the petitions signed by Barry Charpentier, president, the
Debtors estimated assets of $10 million to $50 million and
liabilities of $50 million to $100 million.
Judge Marvin Isgur presides over the cases.
The Debtors tapped Norton Rose Fulbright US LLP as their legal
counsel; CR3 Partners LLC as restructuring advisor; SSG Capital
Advisors, LLC, as investment banker; and JND Corporate
Restructuring as claims and noticing agent.
FRANK INVESTMENTS: May Use Cash Collateral on Interim Basis
-----------------------------------------------------------
The Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the
Southern District of Florida has signed an interim order
authorizing Frank Investments, Inc., to use Bancorp Bank's cash
collateral to fund necessary operating expenses of its business.
The Debtor will be entitled to use cash collateral to pay all
ordinary and necessary expenses in the ordinary course of its
business for the purposes contained in the budget for a period of
thirty days from the date the Court grants the Motion. The Debtor
is also authorized: (a) to exceed any line item on the Budget by an
amount equal to 10% of each such line item; or (b) to exceed any
line item by more than 10%t so long as the total of all amounts in
excess of all line items for the Budget do not exceed 10% percent
in the aggregate of the total Budget.
The Budget shows total costs and expenses of approximately $35,757
for the month of October 2018.
The Debtor, however, is prohibited from using cash collateral: (a)
to make any prepayments with respect to services which were not yet
rendered, goods that have not been received, or any other item for
which payment is not currently due, (b) to pay any increases in
salaries or compensation for employees, (c) to pay any part or
portion of pre-petition claims (other than pre-petition wage claims
as approved and Ordered by the Court), or (d) to pay any fees for
professionals.
The Debtor grants in favor of Bancorp Bank, as security for all
indebtedness that is owed by the Debtor to Bancorp Bank, a
post-petition security interest and lien in, to and against any and
all assets of the Debtor, to the same extent and priority that
Bancorp Bank held a properly perfected pre-petition security
interest in such assets, but only to the extent that Bancorp Bank's
cash collateral is used by the Debtor.
The Debtor will provide Bancorp Bank with monthly profit and loss
statements with respect to the Debtor and its affiliates/sister
entities, by the 10th day of the following month. The Debtor will
also provide Bancorp Bank with a month expense report and weekly
income/deposit report for the Debtor and its affiliates/sister
entities, by the 10th day of the following month, which details the
name of each payee/payor, the date of each payment or deposit, and
amount. Moreover, the Debtor will provide Bancorp Bank with any and
all documents and disclosures as required by the loan documents
within five business days of Bancorp Bank's request to counsel for
the Debtor.
A full-text copy of the Interim Order is available at
http://bankrupt.com/misc/flsb18-20019-47.pdf
About Frank Investments
Each of Frank Investments, Frank Theatres and Frank Entertainment
is an affiliate of Rio Mall, LLC, which sought bankruptcy
protection on June 28, 2018 (Bankr. S.D. Fla. Case No. 18-17840).
Rio Mall, LLC owns and operates commercial real property that
comprises the shopping center known as Rio Mall located at 3801
Route 9 South, Rio Grande, New Jersey.
Frank Entertainment Companies, LLC owns, operates, develops and
manages entertainment venues including nickelodeons, motion picture
theatres, arcades, restaurants, nightclubs, water parks, bowling
centers, game centers, skate parks, and other real estate
properties.
Frank Investments, Inc., based in Jupiter, FL, and its
debtor-affiliates, filed a Chapter 11 petition (Bankr. S.D. Fla.
Lead Case No. 18-20019) on Aug. 17, 2018. The Hon. Erik P. Kimball
(18-20019), and Hon. Mindy A. Mora (18-20022 and 18-20023), preside
over the cases. In the petitions signed by Bruce Frank, president,
Frank Investments and Frank Entertainment estimated $10 million to
$50 million in assets and liabilities; Frank Theaters, $10 million
to $50 million in assets and $50 million to 100 million in
liabilities. Bradley S. Shraiberg, Esq., at Shraiberg Landau &
Page, P.A., serves as bankruptcy counsel.
GMOFORIS CORPORATION: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of GMoforis Corporation as of Oct. 17, 2018,
according to a court docket.
About GMoforis Corporation
GMoforis Corporation, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Fla. Case No. 18-20875) on September 4, 2018,
disclosing less than $1 million in both assets and liabilities. The
Debtor is represented by Bart A. Houston, Esq., a partner at The
Houston Firm, P.A.
GREEN COUNTRY: Seeks Authority to Use IBC Bank Cash Collateral
--------------------------------------------------------------
Green Country Filter Manufacturing, LLC, seeks authorization from
the U.S. Bankruptcy Court for the Northern District of Oklahoma to
use cash collateral on an interim emergency basis as set forth in
the budget.
Accordingly to its budget, the Debtor has a cash need of
approximately $238,524 in order to meet necessary expenses incurred
in the ordinary course of operating its business, including, but
not limited to, payroll and all taxes related thereto, overhead and
other post-petition expenses necessary to maintain Debtor's
operations.
The Debtor has communicated with its primary secured lender, IBC
Bank, and attempted to negotiate an agreed interim order for the
use of cash collateral but has not been successful as of the filing
of this Motion. Given the urgent need for the immediate use of cash
collateral, the Debtor requests the Court enter the Order
authorizing the use of cash collateral on an interim emergency
basis.
IBC Bank contends it holds valid, enforceable and allowable claims
against the Debtor in the approximate amount of $410,000, plus any
and all interest, fees, expenses, and other obligations and
liabilities of Debtor pursuant to the Loan Agreement. IBC Bank
contends it holds properly perfected first in priority liens and
security interests in all of Debtor's cash, accounts, equipment,
general intangibles and other personal property including (without
limitation) proceeds. The Debtor does not believe there are any
parties claiming any valid and perfected liens, claims or
encumbrances to be prior in time or superior in priority to any of
the Prepetition Collateral.
The Debtor will grant IBC Bank a continuing, valid, automatically
perfected lien and security interest of a first priority in and
upon Debtor's right, title and interest in and to all of its
property, including the proceeds, products, or profits therefrom,
of every kind and nature, whether real or personal, tangible or
intangible, whether now or hereafter existing and whether owned,
acquired, possessed or controlled before, on or after the Petition
Date, and wherever located, now in existence or hereafter created
and all proceeds, accessions thereto, substitutions and
replacements and all tangible assets acquired by the Debtor
post-petition other than claims or causes of action arising under
Sections 544-550 of the Bankruptcy Code.
The replacement liens granted to IBC Bank upon the Post-petition
Collateral will secure the Prepetition Indebtedness only to the
extent that the Debtor's use of cash collateral is determined to
cause a diminution in the Collateral Value. The Debtor may only use
cash collateral to the extent that the reported Collateral Book
Value exceeds $150,000. In addition, the Debtor will pay to IBC
Bank a monthly cash payment in the amount of $1,000.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/oknb18-11918-6.pdf
About Green Country Filter Manufacturing
Green Country Filter Manufacturing, LLC, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Okla. Case No.
18-11918) on Sept. 24, 2018. At the time of the filing, the Debtor
estimated assets of less than $500,000 and liabilities of less than
$1 million. Judge Dana L. Rasure presides over the case. The
Debtor hired D.R. Payne & Associates, Inc. as financial advisors
and financial accountants for Debtor.
GULF FINANCE: Bank Debt Trades at 17% Off
-----------------------------------------
Participations in a syndicated loan under which Gulf Finance LLC is
a borrower traded in the secondary market at 83.50
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.99 percentage points from the
previous week. Gulf Finance pays 525 basis points above LIBOR to
borrow under the $11 million facility. The bank loan matures on
August 25, 2023. Moody's rates the loan 'B3' and Standard & Poor's
gave a 'B' rating to the loan. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday,
October 12.
H N HINCKLEY: Authorized to Continue Using Cash Until Nov. 29
-------------------------------------------------------------
The Hon. Joan N. Feeney of the U.S. Bankruptcy Court for the
District of Massachusetts authorized H N Hinckley & Sons, Inc.'s
further use of cash collateral through the continued hearing on
Nov. 29, 2018 at 11:15 a.m., subject to the the Debtor's submission
of a further budget for the 2 weeks following Nov. 17.
A copy of the Order is available at
http://bankrupt.com/misc/mab18-10398-132.pdf
About H N Hinckley & Sons
H N Hinckley & Sons, Inc., headquartered in Vineyard Haven,
Massachusetts, is a dealer of building material and supplies. H N
Hinckley & Sons filed a Chapter 11 petition (Bankr. D. Mass. Case
No. 18-10398) on Feb. 6, 2018. In the petition signed by Wayne M.
Guyther III, president, the Debtor estimated assets and liabilities
at $1 million to $10 million. The case is assigned to Judge Joan
N. Feeney. The Debtor tapped Posternak Blankstein & Lund LLP as
its legal counsel. Schlossberg LLC is the special counsel.
HARBORSIDE ASSOCIATES: Tenth Interim Cash Collateral Order Entered
------------------------------------------------------------------
The Hon. Julie A. Manning of the U.S. Bankruptcy Court for the
District of Connecticut has entered a tenth interim order
authorizing Harborside Associates, LLC, to use any cash collateral,
including rental proceeds, in accordance with the budget commencing
Oct. 1, 2018 through Oct. 31, 2018.
A further hearing on the Cash Collateral Motion has been scheduled
for Oct. 23, 2018 at 10:00 a.m.
The approved budget provides total expenses in the aggregate sum of
$9,969 for the month of October 2018.
As of the Petition Date, Sioux, LLC, alleges a first priority
secured claim against certain real property owned by the Debtor and
located at 946 Ferry Boulevard, Stratford, Connecticut, including
the rents arising therefrom.
The Debtor believes that there are multiple other liens covering
the Property which are subsequent in right to the Mortgage
including a lien allegedly held by Bal Harbour LLC, as assignee of
The Salce Companies, LLC. Harbour filed an objection to the
Debtor's use of cash collateral.
The Court, however, finds that it is in the best interest of the
estate, Sioux, Harbour, and all other creditors and
parties-in-interest, and it is necessary to avoid irreparable harm
to the Debtor and its estate, that the preliminary use by the
Debtor of cash collateral on the terms and conditions set forth in
the Tenth Interim Order be approved.
Thus, in exchange for the preliminary use of cash collateral by the
Debtor, Sioux, LLC is granted replacement and/or substitute liens
in post-petition cash collateral, and such replacement liens will
have the same validity, extent, and priority that Sioux possessed
such liens on the Petition Date.
The liens of Sioux, LLC and any replacement thereof pursuant to the
Eighth Interim Order, and any priority to which Sioux, LLC may be
entitled or become entitled under Section 507(b) of the Bankruptcy
Code, will be subject and subordinate to a carve-out of such liens
for amounts payable by the Debtor under Section 1930(a)(6) of Title
28 of the United States Code.
A copy of the Tenth Interim Order is available for free at:
http://bankrupt.com/misc/ctb17-50749-151.pdf
About Harborside Associates
Harborside Associates, LLC, a single asset real estate as defined
in 11 U.S.C. Section 101(51B), owns real property located at 946
Ferry Boulevard, Stratford, Connecticut.
Harborside Associates first sought bankruptcy protection (Bankr. D.
Conn. Case No. 11-50738) on April 12, 2017.
Harborside Associates filed a Chapter 11 petition (Bankr. D. Conn.
Case No. 17-50749) on June 28, 2017. In the petition signed by
Luciano Coletta, duly authorized member of Hermanos, LLC, the
Debtor estimated $1 million to $10 million in assets and
liabilities. Judge Julie A. Manning presides over the case.
Douglas S. Skalka, Esq., at Neubert Pepe & Monteith, P.C., serves
as bankruptcy counsel to the Debtor.
HARLAND CLARKE: Bank Debt Trades at 5% Off
------------------------------------------
Participations in a syndicated loan under which Harland Clarke
Holdings Corporation is a borrower traded in the secondary market
at 95.19 cents-on-the-dollar during the week ended Friday, October
12, 2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.65 percentage points from
the previous week. Harland Clarke pays 475 basis points above LIBOR
to borrow under the $17 million facility. The bank loan matures on
November 3, 2023. Moody's rates the loan 'B1' and Standard & Poor's
gave a 'B+' rating to the loan. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday,
October 12.
HENDRIX SCHENCK: Case Summary & 3 Unsecured Creditors
-----------------------------------------------------
Debtor: Hendrix Schenck Inc.
170 Wilkinson Ave.
Jersey City, NJ 07305-3407
Business Description: Hendrix Schenck Inc. is a privately held
company in the investment pools and funds
industry. The Company owns four properties
in New York and New Jersey having a total
current value of $990,000.
Chapter 11 Petition Date: October 18, 2018
Court: United States Bankruptcy Court
District of New Jersey (Newark)
Case No.: 18-30765
Judge: Hon. John K. Sherwood
Debtor's Counsel: Shmuel Klein, Esq.
BLEICHMAN AND KLEIN
117 South Main
Spring Valley, NY 10977
Tel: 845-425-2510
Email: shmuel.klein@verizon.net
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dov Goldman, officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at:
http://bankrupt.com/misc/njb18-30765.pdf
HOPE INDUSTRIES: Gets Final Approval on Cash Collateral Use
-----------------------------------------------------------
The Hon. Gregory Schaaf of the U.S. Bankruptcy Court for the
Eastern District of Kentucky has entered an order approving Hope
Industries, LLC's interim Agreed Orders with Community Trust Bank,
Inc. and Citizens Guaranty Bank on a final basis.
Judge Schaaf also approved the interim permitted use of the cash
collateral of the objecting creditors First National Bank and Trust
and Cumberland Valley National Bank & Trust Company on a final
basis.
A copy of the Order is available at
http://bankrupt.com/misc/kyeb18-60142-190.pdf
About Hope Industries
Based in London, Kentucky, Hope Industries, LLC, owns and manages
improved and unimproved real properties in Laurel County, Kentucky.
It also has an interest in improved real property in Whitley
County, Kentucky, and in Fayetteville, North Carolina.
Hope Industries sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Ky. Case No. 18-60142) on Feb. 9,
2018. In the petition signed by Star Robbins Kusiak, member, the
Debtor estimated assets and liabilities of $1 million to $10
million. Judge Gregory R. Schaaf presides over the case. DelCotto
Law Group PLLC is the Debtor's legal counsel.
The Debtor filed its Chapter 11 plan of reorganization and
disclosure statement on June 8, 2018.
HOUGHTON MIFFLIN: Bank Debt Trades at 7% Off
--------------------------------------------
Participations in a syndicated loan under which Houghton Mifflin
Harcourt Publishers Inc. is a borrower traded in the secondary
market at 93.42 cents-on-the-dollar during the week ended Friday,
October 12, 2018, according to data compiled by LSTA/Thomson
Reuters MTM Pricing. This represents a decrease of 0.62 percentage
points from the previous week. Houghton Mifflin pays 300 basis
points above LIBOR to borrow under the $80 million facility. The
bank loan matures on May 29, 2021. Moody's rates the loan 'Caa2'
and Standard & Poor's gave a 'B' rating to the loan. The loan is
one of the biggest gainers and losers among 247 widely quoted
syndicated loans with five or more bids in secondary trading for
the week ended Friday, October 12.
ICONIX BRAND: Hires Former Cherokee Chairman as CEO
---------------------------------------------------
Robert Galvin has been appointed chief executive officer, president
and a member of the Board of Directors of Iconix Brand Group, Inc.,
effective Oct. 15, 2018.
Iconix said Mr. Galvin is a proven executive with almost 30 years
of experience leading and turning around global brands. He was
most recently Chairman of Cherokee Inc., and has served as chief
operating officer and European president of Sports Brands
International Ltd., chief executive officer of Elie Tahari, Ltd.
and president of Camuto Group. In these roles Mr. Galvin has had
extensive experience managing global brand licensing activities for
these companies. In addition, Mr. Galvin was instrumental in the
refinancing of material indebtedness and cost restructurings at
Cherokee and SBI.
Mr. Galvin served as an executive vice president and chief
financial officer of Nine West Group Inc., has been an independent
director of Bebe Stores and is currently an independent director of
Big 5 Sporting Goods Corp and Trans World Entertainment. He also
currently serves as an independent director of Lands' End, which he
joined in 2014.
Mr. Galvin is a graduate of Fairfield University and holds an MBA
from the Stern School of Business at NYU.
"Our Board is extremely pleased that Bob has joined Iconix. We
believe that his past leadership experiences in our industry bode
well for Iconix. He will hit the ground running. Bob has also
been very successful when faced with particularly fluid situations.
His unique skills in this regard make him a good match to the
current challenges facing Iconix. He is an adept problem solver.
I look forward to working with Bob in the future," said interim CEO
and Chairman of the Board of Iconix, Peter Cuneo.
Said Mr. Galvin, "I am pleased to assume leadership of Iconix Brand
Group. Iconix maintains a prestigious portfolio of brands and
known stature in the industry. I will be working closely with all
of our partners and our leadership team to broaden our presence and
position our brands to maximize their potential."
Mr. Galvin will receive an annual base salary of not less than
$850,000 per year (to be prorated for any partial calendar year of
employment) and certain other benefits consistent with those
provided to other senior executives of the Company. In addition,
Mr. Galvin is eligible to receive annual cash bonuses of between
100% and 150% of his annual base salary, subject to the achievement
of the applicable performance goals; provided, that, for the
calendar year 2018, he will receive a minimum annual bonus of 100%
of his 2018 annual base salary, prorated for his period of
employment with the Company during that calendar year.
Inducement Equity Grants
As an inducement to accept his appointment with the Company, Mr.
Galvin will be granted a number of restricted stock units equal to
the number of the Company's common shares with a fair market value
on the date of grant of $500,000, and a number of performance stock
units equal to the number of the Company's common shares with a
fair market value on the date of grant of $500,000.
One-third of the RSUs are vested on the date of grant, with the
remaining two-thirds of the RSUs to vest on Oct. 15, 2019, subject
to Mr. Galvin's continued employment with the Company through the
vesting date; provided that, if Mr. Galvin's employment terminates
for any reason before such vesting date, then all of the RSUs
(whether or not then vested) will be forfeited immediately for no
consideration; provided that in the event of a termination by the
Company without cause and unrelated to the Company's or the Mr.
Galvin's performance, all unvested RSUs will vest (and be settled)
on the first anniversary of the grant date. Any vested RSUs will
be distributed to Mr. Galvin in shares of the Company's common
stock within 15 days after the applicable vesting date. Mr. Galvin
has a right to receive dividend equivalents in respect of the RSUs,
which will be subject to the same vesting and other restrictions
applicable to the underlying RSUs.
The PSUs are eligible to vest at the end of a three-year
performance period beginning on Oct. 15, 2018 and ending on Oct.
15, 2021, based on the percentile ranking of the Company's total
shareholder return relative to the TSRs of its peer companies for
such performance period, with 100% of the PSUs to vest if the
Company's TSR ranks 75% or higher, 50% of the PSUs to vest if the
Company's TSR ranks 50%, and 25% of the PSUs to vest if the
Company's TSR ranks 35% (it being the minimum threshold), with
vesting on linear interpolation between 35% and 50% and between 50%
and 75% achievement, in all events, subject to Mr. Galvin's
continued employment with the Company; provided that, if Mr.
Galvin's employment is terminated by the Company without "cause"
(and not due to his death or disability) or by him for "good
reason" (each such term as defined in his employment agreement with
the Company), then he will remain eligible to vest in the pro rata
number of the PSUs, based on the percentage of the performance
period during which he was employed by the Company, provided that
the applicable TSR ranking is achieved on the termination date as
if the termination date had been the last day of the performance
period. Any such pro rata number of PSUs will become vested at the
end of the performance period, subject to Mr. Galvin's continued
compliance with certain restrictive covenants.
In the event of a change in control of the Company occurring prior
to the last day of the performance period, any outstanding and
unvested PSUs will be converted to a number of restricted stock
units equal to the number of PSUs that would have vested on the
date of such change in control based on the Company's TSR ranking
if that change in control had been the last day of the performance
period, and any such restricted stock units will vest on the last
day of the performance period, subject to Mr. Galvin's continued
employment with the Company and his continued compliance with
certain restrictive covenants; provided that, if the PSU award is
not assumed, substituted or otherwise continued in a change in
control, then such restricted stock units will vest immediately
upon such change in control; provided, further, that, if Mr.
Galvin's employment is terminated by the Company without cause (and
not due to his death or disability) or by him for good reason, in
any case, within 18 months after a change in control of the
Company, then any outstanding restricted stock units into which the
PSUs have converted will vest immediately on the termination date
(subject to Mr. Galvin's continued compliance with certain
restrictive covenants). Any PSUs that remain unvested as of the
last day of the performance period will be forfeited immediately
for no consideration. Any vested PSUs will generally be
distributed to Mr. Galvin promptly after the end of the performance
period (or, if applicable, the date of termination of his
employment). Mr. Galvin has a right to receive dividend
equivalents in respect of the PSUs, which will be subject to the
same vesting and other restrictions that apply to the underlying
PSUs.
The RSUs and PSUs are being granted as a material inducement to Mr.
Galvin entering into employment with the Company in accordance with
NASDAQ Listing Rule 5635(c)(4), and are subject to the terms and
conditions of the applicable award agreements.
About Iconix Brand
Broadway, New York-based Iconix Brand Group, Inc. --
http://www.iconixbrand.com/-- is a brand management company and
owner of a diversified portfolio of over 30 global consumer brands
across the women's, men's, entertainment, home and international
segments. The Company's business strategy is to maximize the value
of its brands primarily through strategic licenses and joint
venture partnerships around the world, as well as to grow the
portfolio of brands through strategic acquisitions. Iconix Brand
owns, licenses and markets a portfolio of consumer brands
including: Candie's, Bongo, Joe Boxer, Rampage, Mudd, London Fog,
Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc
Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter,
Waverly, Ecko Unltd/Mark Ecko Cut & Sew, Zoo York, Umbro, Lee
Cooper, and Artful Dodger; and interests in Material Girl, Ed
Hardy, Truth or Dare, Modern Amusement, Buffalo, Hydraulic, and
PONY.
Iconix Brand incurred a net loss attributable to the Company of
$489.3 million in 2017, a net loss attributable to the Company of
$252.1 million in 2016 and a net loss attributable to the Company
of $186.5 million in 2015. As of June 30, 2018, Iconix Brand had
$730.18 million in total assets, $795.19 million in total
liabilities, $29.29 million in redeemable non-controlling interest
and a total stockholders' deficit of $94.30 million.
The Company stated in its 2017 Annual Report that due to certain
developments, including the decision by Target Corporation not to
renew the existing Mossimo license agreement following its
expiration in October 2018 and by Walmart, Inc. not to renew the
existing Danskin Now license agreement following its expiration in
January 2019, and the Company's revised forecasted future earnings,
the Company forecasted that it would unlikely be in compliance with
certain of its financial debt covenants in 2018 and that it may
otherwise face possible liquidity challenges in 2018. The Company
said these factors raised substantial doubt about its ability to
continue as a going concern. The Company's ability to continue as
a going concern is dependent on its ability to raise additional
capital and implement its business plan.
IMM ON H: Taps Richard Link as Bankruptcy Attorney
--------------------------------------------------
IMM ON "H" LLC seeks approval from the U.S. Bankruptcy Court for
the District of Columbia to hire Richard Link, Esq., as its
bankruptcy attorney.
Mr. Link will assist the Debtor in the preparation of a bankruptcy
plan; represent the Debtor in adversary proceedings; and provide
other legal services related to its Chapter 11 case. He will
charge an hourly fee of $300.
The Debtor paid the attorney a pre-bankruptcy retainer of $4,000,
plus the filing fee of $1,717.
Mr. Link disclosed in a court filing that he is "disinterested" as
defined in section 101(14) of the Bankruptcy Code.
Mr. Link maintains an office at:
Richard J. Link, Esq.
77 S. Washington Street, Suite 307
Rockville, MD 20850
Phone: (240) 453-9191
Email: rlinklaw@comcast.net
About IMM ON "H" LLC
IMM ON "H" LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. D.C. Case No. 18-00674) on October 15, 2018. At
the time of the filing, the Debtor disclosed that it had estimated
assets of less than $100,000 and liabilities of less than $1
million. Judge S Martin Teel, Jr. presides over the case. The
Debtor tapped Richard Link, Esq., as its bankruptcy attorney.
INPIXON: Has $2.5-Mil. Note Purchase Agreement with Iliad Research
------------------------------------------------------------------
Inpixon entered into a Note Purchase Agreement with Iliad Research
and Trading, L.P., on Oct. 12, 2018, pursuant to which the Company
agreed to issue and sell to the Holder an unsecured promissory note
in an aggregate principal amount of $2,520,000, which is payable on
or before the date that is 12 months from the issuance date. The
Initial Principal Amount includes an original issue discount of
$500,000 and $20,000 that the Company agreed to pay to the Holder
to cover the Holder's legal fees, accounting costs, due diligence,
monitoring and other transaction costs. In exchange for the Note,
the Holder paid an aggregate purchase price of $2,000,000.
Interest on the Note accrues at a rate of 10% per annum and is
payable on the maturity date or otherwise in accordance with the
Note.
The Company may pay all or any portion of the amount owed earlier
than it is due; provided, that in the event the Company elects to
prepay all or any portion of the outstanding balance, it shall pay
to the Holder 115% of the portion of the outstanding balance the
Company elects to prepay.
Beginning on the date that is six months from the issuance date and
at the intervals indicated below until the Note is paid in full,
the Holder will have the right to redeem up to an aggregate of 1/3
of the initial principal balance of the Note each month by
providing written notice delivered to the Company; provided,
however, that if the Holder does not exercise any Monthly
Redemption Amount in its corresponding month then such Monthly
Redemption Amount will be available for the Holder to redeem in any
future month in addition to such future month's Monthly Redemption
Amount. Upon receipt of any Monthly Redemption Notice, the Company
will pay the applicable Monthly Redemption Amount in cash to the
Holder within five business days of the Company's receipt of such
Monthly Redemption Notice.
The Note include customary event of default provisions, subject to
certain cure periods, and provide for a default interest rate of
22%. Upon the occurrence of an event of default (except a default
due to the occurrence of bankruptcy or insolvency proceedings), the
Holder may, by written notice, declare all unpaid principal, plus
all accrued interest and other amounts due under the Note to be
immediately due and payable at an amount equal to 115% of the
outstanding balance of the Note. Upon the occurrence of a
Bankruptcy-Related Event of Default, without notice, all unpaid
principal, plus all accrued interest and other amounts due under
the Note will become immediately due and payable at the Mandatory
Default Amount.
Pursuant to the terms of the Purchase Agreement, if at any time
while the Note is outstanding, the Company intends to enter into a
financing pursuant to which it will issue securities that (A) have
or may have conversion rights of any kind, contingent, conditional
or otherwise, in which the number of shares that may be issued
pursuant to such conversion right varies with the market price of
the Company's common stock, or (B) are or may become convertible
into common stock (including without limitation convertible debt,
warrants or convertible preferred stock), with a conversion price
that varies with the market price of the common stock, even if such
security only becomes convertible following an event of default,
the passage of time, or another trigger event or condition, then
the Company must first offer such opportunity to the Holder to
provide such financing to the Company on the same terms no later
than five trading days immediately prior to the trading day of the
expected announcement of the Future Offering. If the Holder is
unwilling or unable to provide such financing to the Company within
five trading days from the Holder's receipt of notice of the Future
Offering from the Company, then the Company may obtain such
financing upon the exact same terms and conditions offered by the
Company to the Holder, which transaction must be completed within
30 days after the date of the notice. If the Company does not
receive the financing within 30 days after the date of the notice,
then the Company must again offer the financing opportunity to the
Holder as described above, and the process detailed above will be
repeated. The Right of First Refusal does not apply to an Exempt
Issuance (as defined in the Purchase Agreement) or to a publicly
marketed offering made pursuant to a registration statement on Form
S-1 or Form S-3.
In addition, pursuant to the terms of the Purchase Agreement, so
long as the Note is outstanding, the Holder has the right to
participate in any offering of securities by the Company which
contains any term or condition more favorable to the holder of such
security or with a term in favor of the holder of such security
that was not similarly provided to the Holder. The Participation
Right does not apply in connection with an offering of securities
which qualifies as an Exempt Issuance, a transaction under Section
3(a)(10) of the Securities Act of 1933, as amended, a publicly
marketed offering made pursuant to a registration statement on Form
S-1 or Form S-3, or in connection with the satisfaction of
outstanding trade payables.
The Purchase Agreement also provides for indemnification of the
Holder and its affiliates in the event that they incur loss or
damage related to, among other things, a breach by the Company of
any of its representations, warranties or covenants under the
Purchase Agreement.
The Company intends to use the net proceeds from the sale of the
Note for general working capital purposes.
About Inpixon
Headquartered in Palo Alto, California, Inpixon is a technology
company that helps to secure, digitize and optimize any premises
with Indoor Positioning Analytics (IPA) for businesses and
governments in the connected world. Inpixon Indoor Positioning
Analytics is based on new sensor technology that finds all
accessible cellular, Wi-Fi, Bluetooth and RFID signals anonymously.
Paired with a high-performance, data analytics platform, this
technology delivers visibility, security and business intelligence
on any commercial or government premises world-wide. Inpixon's
products, infrastructure solutions and professional services group
help customers take advantage of mobile, big data, analytics and
the Internet of Things (IoT).
As of Oct. 17, 2018, the Company has issued and outstanding
62,115,129 shares of common stock and 1 share of Series 4
convertible preferred stock which is convertible into 5,622 shares
of common stock.
Inpixon reported a net loss of $35.03 million on $45.13 million of
total revenues for the year ended Dec. 31, 2017, compared to a net
loss of $27.50 million on $53.16 million of total revenues for the
year ended Dec. 31, 2016. As of June 30, 2018, Inpixon had $24.89
million in total assets, $22.27 million in total liabilities and
$2.61 million in total stockholders' equity.
Marcum LLP, in New York, the Company's auditor since 2012, issued a
"going concern" opinion in its report on the Company's consolidated
financial statements for the year ended Dec. 31, 2017, citing that
the Company has a significant working capital deficiency, has
incurred significant losses and needs to raise additional funds to
meet its obligations and sustain its operations. These conditions
raise substantial doubt about the Company's ability to continue as
a going concern.
Nasdaq Noncompliance
Inpixon received a letter from the Listing Qualifications Staff of
The Nasdaq Stock Market LLC on May 17, 2018, indicating that, based
upon the closing bid price of the Company's common stock for the
last 30 consecutive business days beginning on April 5, 2018 and
ending on May 16, 2018, the Company no longer meets the requirement
to maintain a minimum bid price of $1 per share, as set forth in
Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing
Rule 5810(c)(3)(A), the Company has been provided a period of 180
calendar days, or until Nov. 13, 2018, in which to regain
compliance.
INTEGRATED DYNAMIC: May Use Cash Collateral Through Nov. 15
-----------------------------------------------------------
The Hon. Victoria S. Kaufman of the U.S. Bankruptcy Court for the
Central District of California authorized Integrated Dynamic
Solutions, Inc., to use cash collateral through Nov. 15, 2018 in
accordance with the budget.
A further hearing on the Cash Collateral Motion is set for Nov. 15,
2018 at 2:00 p.m. Further, opposition must be filed and served on
Debtor no later than Nov. 1, 2018. Any reply must be filed and
served on the opposing party no later than Nov. 8, 2018.
A full-text copy of the Order is available at
http://bankrupt.com/misc/cacb18-12156-44.pdf
About Integrated Dynamic Solutions Inc.
Founded in 1995, Integrated Dynamic Solutions, Inc. --
http://www.idspage.com-- is a Microsoft Certified Partner
specializing in custom software development, database design, and
systems integration. It offers a full range of services from
office automation, database design, e-commerce, custom software
development and prototyping to wireless solutions, web based
programming, Facilities Management Information Systems, and
simulation modeling.
Integrated Dynamic Solutions sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-11379) on August
22, 2018. On August 24, 2018, the case was transferred from the
Northern Division to the San Fernando Valley Division, and was
assigned Case No. 18-12156.
In the petition signed by CEO Nasrolla Gashtili, the Debtor
estimated assets of less than $50,000 and liabilities of $1 million
to $10 million.
Judge Victoria S. Kaufman presides over the case. The Debtor
tapped The Law Offices of David A. Tilem as its legal counsel.
The Office of the U.S. Trustee on Sept. 21, 2018, appointed two
creditors to serve on an official committee of unsecured creditors
in the Chapter 11 case.
INVESTMENT GROUP: Seeks Authorization to Use Cash Collateral
------------------------------------------------------------
Investment Group, LLC, requests the U.S. Bankruptcy Court for the
Central District of California to authorize its use of cash
collateral through the effective date of a confirmed plan of
reorganization or dismissal or conversion of the case.
A hearing on the Debtor's Cash Collateral Motion is scheduled to
take place on Nov. 6, 2018 at 1:30 p.m.
The Debtor submits that the use of cash collateral will be limited
to the purposes and total amounts set forth in the budget. The
budget contains the projected expenses that the Debtor believes
must be paid in order for the Debtor to operate its business and
avoid immediate and irreparable harm to the bankruptcy estate. In
order to protect Debtor from fluctuations, the Debtor requests that
it be permitted to have the flexibility to increase expenditures by
up to 20% for any particular line item in the budget and 15% in the
aggregate.
In addition to the expenses in the business budget, the Debtor also
requests authority to use the cash collateral to pay the quarterly
fees to the U.S. Trustee, any required fees to the Bankruptcy
Court, and administrative expenses including professionals' fees
but only as approved by the Court upon proper application.
The Debtor owns two parcels of commercial real property located at
305 & 333 S. Waterman Avenue, San Bernardino, California, with a
combined value of approximately $2.1 million. The Real Property is
rented to one tenant.
As of the Petition Date, there are a total of five liens secure by
the Real Property, to wit:
A. 305 S. Waterman Ave. has following liens:
-- The Senior Lien Holder, Community Valley Bank is owed
about $2.9 million.
-- The Holder of the Second Deed of Trust is TD Capital,
LLC. The face value of TD Capital's deed of trust is $560,000,
however the note or prior requested accounting has not been
provided by the creditor;
B. 333 S. Waterman Ave. has following liens:
-- The Senior Lien Holder, Community Valley Bank, is owed
about $2.9 million;
-- The Holder of the Second Deed of Trust is MJ
Enterprises, LLC. The face value of MJE's deed of trust is
$560,000, however the note or prior requested accounting has not
been provided by the creditor;
-- The Holder of the Third Deed of Trust is TD Capital,
LLC. The Third Deed of Trust is cross collateralized by both
properties. The face value of TD Capital's deed of trust is
$500,000, however the note or prior requested accounting has not
been provided by the creditor;
-- The Holder of the Fourth Deed of Trust is Husam Samarah.
The Fourth Deed of Trust is cross collateralized by both
properties. The face value of Samarah's deed of trust is $750,000,
however this deed is not valid and creditor has agreed to cancel
it.
Each of the Deeds of Trust contains an assignment of rents clause.
The rents received by Debtor from its tenants are cash collateral.
Since all of Debtor's receivables are security for the
aforementioned debts, all of Debtor's income is cash collateral.
The Debtor needs to use the cash collateral to maintain the
property and stay post-petition current on mortgage payments,
property taxes, insurance, association dues, common area utilities,
repairs, maintenance and any other property-related expenses.
The Debtor is willing to offer adequate protection in the form of
replacement liens in the same priority and validity as the secured
creditors held pre-petition.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/cacb18-17175-24.pdf
About Investment Group
Investment Group, LLC, is a lessor of real estate based in San
Bernardino, California.
Investment Group sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-17175) on Aug. 24,
2018. In the petition signed by Sam Samarah, manager, the Debtor
disclosed $262,053 in assets and $5,502,998 in liabilities. Judge
Scott C. Clarkson presides over the case. The Turoci Firm serves
as its legal counsel.
JJ BELLA: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------
The Office of the U.S. Trustee on Oct. 17, 2018, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of JJ Bella, Inc.
About J.J. Bella, Inc.
J.J. Bella, Inc. filed for Chapter 11 bankruptcy protection (Bankr.
W.D. Pa. Case No. 18-22722) on July 5, 2018, listing less than $1
million in both assets and liabilities. Robert H. Slone, Esq., at
Mahady & Mahady, serves as counsel.
JLD AUTOMOTIVE: Taps David P. Lloyd as Legal Counsel
----------------------------------------------------
JLD Automotive Services, Inc., seeks approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to hire
David P. Lloyd, Ltd., as its legal counsel.
The firm will represent the Debtor in negotiation with its
creditors; prepare a bankruptcy plan; assist in examining and
resolving claims filed against its bankruptcy estate; assist in
prosecuting adversary cases; and provide other legal services
related to its Chapter 11 case.
The firm will charge an hourly fee of $400.
David Lloyd, Esq., disclosed in a court filing that his firm is
"disinterested" as defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
David P. Lloyd, Esq.
David P. Lloyd, Ltd.
615B S. LaGrange Rd.
LaGrange, IL 60525
Tel: 708 937-1264
Fax: 708 937-1265
E-mail: courtdocs@davidlloydlaw.com
E-mail: info@davidlloydlaw.com
About JLD Automotive Services
JLD Automotive Services, Inc., operates a lube center, auto
maintenance and car wash facility in Fox River Grove, Illinois.
JLD Automotive Services sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 18-24948) on Sept. 4,
2018. In the petition signed by John Derer, president, the Debtor
disclosed $746,140 in assets and $1,051,767 in liabilities. Judge
Deborah L. Thorne presides over the case. The Debtor tapped David
P. Lloyd, Ltd. as its legal counsel.
JOHN GILMOR: Lindbaeck Buying Millerton Property for $500K
----------------------------------------------------------
John D. Gilmor asks the U.S. Bankruptcy Court for the Southern
District of New York to authorize the sale of the real property
located at 2 Main Street, Millerton, New York to Sven Lindbaeck for
$500,000.
The Debtor wishes to sell the Property to Lindbaeck for the agreed
purchase price with no contingencies, pursuant to the Contract of
Sale.
The Property was listed for sale with Elyse Harney Real Estate in
July 2018. A separate application to approve the agreement with
Elyse Hamey Real Estate, nunc pro tunc, is pending before the
Court.
Two offers were received, and the brokers negotiated with each of
the prospective purchasers, until finally, they called for highest
and best offers from each. Thereafter, one of the prospective
purchasers, teh Buyer, made a highest and best offer for $450,000
all cash or $550,000 in installments with contingencies, and the
other offered $487,000 all cash. Thereafter, the Buyer increased
his offer to $500,000 all cash.
Thereafter, each of the prospective purchasers waived the
requirement of a Phase I Environmental Survey, waived the
requirement that the Seller cure the municipal violations that
exist on the Property, and agreed to accept the Property with an
existing tenant. The Debtor has signed a Contract of Sale with the
Buyer, the party who made the highest all cash non-contingent
offer.
The Court will recall that prior to the filing of the petition, the
Property had been taken by Dutchess County for unpaid taxes.
Pursuant to a Stipulation that has been approved by the Court, the
Property is in the process of being returned to the Debtor. The
Court will further recall that the Property was subject to a first
mortgage in the amount of $1,254,925.83, and a second mortgage in
the amount of $35,000. The first mortgage has been discharged by
the Bankruptcy Court in the related adversary proceeding. The
second mortgagee has provided a Release of Mortgage.
Upon the sale to the Buyer, the taxes owed to Dutchess County will
be paid in full, allowed claims will be paid in full,
administrative claims (including legal fees) will be paid in full,
and the Debtor will receive approximately $300,000 from the
proceeds of the sale. Accordingly, the Debtor believes that the
proposed sale to the Buyer is in the best interests of all parties
concerned.
The Debtor does not believe that an auction is necessary or
desirable because the Property has been exposed to the market,
there were competing bids received, the terms of the sale were
vigorously negotiated, and all contingencies removed, and the
creditors will receive no greater distribution than the 100% that
they will receive from the proposed sale.
A hearing on the Motion is set for Oct. 23, 2018 at 12:00 noon.
The objection deadline is Oct. 16, 2018.
The Purchaser:
Svend Lindbaek
17 4th. Street
Brooklyn, NY 11231
Counsel for the Debtor:
Bethany A. Ralph, Esq.
3294 East Main Street
P.O. Box 7
Amenia, NY 12501
Telephone: (845) 373-4000
Facsimile: (845) 373-4900
E-mail: bralph2@aol.com
John D. Gilmor sought Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 17-36681) on Oct. 3, 2017. The Debtor tapped Bethany A. Ralph,
Esq., as counsel.
JONES ENERGY: Fitch Lowers LT Issuer Default Rating to CC
---------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Ratings
(IDRs) of Jones Energy Holdings LLC and Jones Energy, Inc.
(together Jones) to 'CC' from 'CCC-'. Concurrently, Fitch has
downgraded the ratings on the secured revolver and secured bonds to
'CCC+'/'RR1' from 'B-'/'RR1', and the ratings on the senior
unsecured notes to 'C'/'RR5' from 'CC'/'RR5'. The rating reflects
the company's production volume shrinkage, declining liquidity and
elevated leverage. In Fitch's view, these concerns put in question
the long-term viability of Jones' current business model and
highlight the need for strategic alternatives.
The downgrades are a result of information provided in an 8-K filed
by the company on Oct. 15, 2018. Jones announced that the DrillCo
transaction that it was pursuing did not close and that the company
has chosen to defer its pursuit of DrillCo financing at this time.
Fitch believes that the establishment of DrillCo would have
supported the 'CCC-' IDR by reducing cash burn, accelerating
drilling, building reserves over time and ultimately reducing
refinancing risk at the expense of reducing production and
potentially EBITDA at Jones. The failure to reach a DrillCo
agreement could result in further contraction of drilling activity
and ensuing erosion of proved reserves to preserve liquidity.
Failure to delineate the Merge acreage and expand the resource base
would halt operating momentum and heighten medium-term refinancing
risk. Fitch has previously stated that the inability to establish
DrillCo would likely result in a negative rating action.
In addition, Jones disclosed that the company was unable to reach
an agreement with a bondholder group on a potential debt exchange
transaction. Jones had presented an offer to noteholders to
exchange an undisclosed amount of senior unsecured notes for $222
million of new 6% second lien debt and 32% of the common equity.
The bondholder group responded with an offer to exchange an
undisclosed amount of senior unsecured notes for $275 million of
new 13% PIK second lien convertible PIK notes with a 13% PIK
interest rate and 90% of the pro-forma common equity.
Although an agreement has not been reached, Fitch believes that
Jones will continue to pursue a debt exchange. If the company
reaches an agreement with bondholders, Fitch is likely to determine
that the exchange was a distressed debt exchange (DDE), which would
also result in downgrading the IDR to 'C'. After execution of a
DDE, Fitch would assess the post-execution liquidity profile,
capital structure and operating trends to assign the appropriate
IDR.
KEY RATING DRIVERS
Liquidity Concerns Linger: The $450 million debt issuance in
February materially improved Jones' cash profile and should support
funding of the drilling program and other general corporate
purposes over the next 12-18 months. Nonetheless, Fitch anticipates
that liquidity could start becoming constrained in 2019 given the
company's drilling & completion schedule, associated capex
requirements and negative FCF through the forecast.
Elevated Leverage: Following its 2018 debt issuance, Fitch
forecasts Jones' debt/EBITDA will exceed 8.0x in 2018 and remain
above 6.0x through 2020. In its base case scenario, Fitch assumes
the mid-point of Jones' production guidance at 20.4 mboe/day for
2018. The base case also assumes WTI prices that remain flat at
$55/barrel across the forecast, and Henry Hub gas that trends up
from $2.75/mcf in 2018 to a long-term price of $3.00/mcf. Higher
spot liquids prices have little impact on Jones' near-term credit
metrics given the high proportion of hedges in place.
Below Average Growth Profile: Production growth for Jones has been
constrained by several factors, including capex cuts in response to
the oil price downturn in 2015-2016 and the impact of asset
divestitures. Mid-point production guidance for 2018 indicates
modest volume shrinkage, but a favorable skew toward higher-value
liquids. The company had laid down rigs in its core Cleveland (WAB)
acreage to focus on its liquid-rich acreage in the Merge with plans
for the WAB, limited to five held-by-production wells in 2018.
Small Size Relative to Peers: Jones' total production in
second-quarter 2018 was approximately 25.0 mboe/day, which is small
relative to Fitch's actively monitored E&P peer universe. A small
production size can create additional calls on liquidity to fund
drilling & completion activity in order to stem declines in the
existing portfolio, as growing high-yield exploration and
production companies typically require liquidity buffers to manage
commodity price volatility. Production is well hedged for 2018 with
gas swaps at average prices modestly above Fitch's price deck but
oil swaps have average prices below Fitch's price deck at about
$51/bbl. Jones' ability to maintain and execute new hedges may be
affected by the reduced size of the revolving credit facility, a
credit concern in Fitch's view.
Recovery Estimates: The recovery analysis for Jones incorporates a
reserve-based valuation approach, focusing on the Dec. 31, 2017
PV-10 that stood at $626 million. Fitch has the flexibility to
apply a traded asset valuation method in line with Fitch's
corporate notching and recovery criteria for businesses with owned
or operated assets that are actively traded through acquisitions or
dispositions. Fitch reviewed current pricing multiples commonly
used in the E&P sector for acquisitions and dispositions ($/acre
for example), or production based ($/flowing barrel, $/location).
These multiples yielded a value close to the Dec. 31, 2017 PV-10
value. Other Fitch-related standard adjustments were made to the
valuation analysis. After deducting 10% for administrative claims,
Fitch estimates that the $50 million senior secured revolving
credit facility and the $450 million first lien bonds have recovery
prospects of 'RR1'. The recovery value ascribed to the unsecured
bonds of 'RR5' denotes 11%-30% expected recovery upon default.
DERIVATION SUMMARY
Jones Energy's credit profile is weaker than high-yield peers on
several key metrics, including size, operational momentum and
leverage metrics. For second-quarter 2018, Jones' total production
of 25.0 mboe/d was comparable with Resolute Energy Corp (REN, B-;
24.0 mboe/d), and materially less than peers Laredo Petroleum Inc
(LPI; 67.2 mboe/d), Carrizo Oil & Gas Inc (CRZO; 57.1 mboe/d), and
Extraction Oil & Gas, Inc (XOG, B+; 73.6 mboe/d). Fitch expects
that production growth for Jones will lag peers, based primarily on
liquidity constraints after 2018. Jones' netback margin (cash
netback/unhedged revenue per boe) is below peers, driven primarily
by its higher interest costs of $6.6 /boe. Jones' small production
base exacerbates the impact of interest costs when measured on a
$/boe basis. Fitch also anticipates that the company's leverage
will be higher than peers in 2018. Jones' debt/flowing barrel of
$38,203 exceeded that of REN ($22,125), LPI ($13,728), CRZO
($30,587) and XOG ($20,091).
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Base case Henry Hub gas that trends up from $2.75/mcf in 2018
to a long-term price of $3.00/mcf;
-- Production decline of 4% in 2018 followed by stable volume in
2019-2020, with liquids volumes growing faster than natural gas,
reflecting the growing contribution of the liquids-rich Merge
assets to the credit profile;
-- Capex of $150 million in 2018 with modest increment in
following years;
-- Creation of a drillco is not included.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Growth in production volumes, reserves and EBITDA leading to
production approaching 25-35 mboe/day;
-- Maintenance of debt/EBITDA in the 4.5x-5.5x range, and
debt/flowing barrel below $40,000;
-- Sustained operational momentum and improvement in liquidity.
Fitch expects that a resumption of sustained operational momentum
(i.e. volume growth funding in a credit-neutral manner) and an
improved liquidity outlook will be a key factor in positive rating
actions;
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Significant reduction in liquidity, inability to access
capital to fund drilling and completion activity;
-- Commencement of liability management exercises such as
distressed debt exchanges.
LIQUIDITY
Liquidity Concerns Remain: As of June 30, 2018, Jones had $148.1
million in cash and effectively no availability on its revolver.
Fitch anticipates that liquidity could start getting constrained
post 2018 given the company's drilling & completion schedule,
associated capex requirements, higher interest costs and negative
FCF forecast. This could limit incremental capital to be deployed
into the drilling & completion program, which could further delay
the company's ability to de-lever through volume and cash flow
growth. The company's inability to obtain drillco financing could
lead to a contraction in drilling activity, which would further
increase liquidity concerns.
Modest Near-Term Maturities: Jones has modest near-term refinancing
risk. The $409 million of 6.75% senior notes due April 2022 are the
nearest maturity, followed by $150 million of 9.25% senior notes
due March 2023. The first lien bonds due March 2023 have a
springing maturity to about 90 days before each senior unsecured
notes if outstanding under the maturing note exceed $50 million.
FULL LIST OF RATING ACTIONS
Fitch has downgraded the following ratings:
Jones Energy Holdings LLC
-- Long-Term IDR to 'CC' from 'CCC-';
-- Senior secured credit facility and senior secured notes to
'CCC+'/'RR1' from 'B-'/'RR1';
-- Senior unsecured notes to 'C'/'RR5' from 'CC'/'RR5'.
Jones Energy Inc.
-- Long-Term IDR to 'CC' from 'CCC-'.
JRL TRANSPORTATION: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: JRL Transportation Inc.
dba Priority Moving & Storage
43085 Business Park Dr Suite C
Temecula, CA 92590
Business Description: Located in San Diego and Temecula,
California, Priority Moving & Storage --
https://www.prioritymoving.com -- is a
moving company that offers comprehensive
residential and commercial relocation and
packing services locally, nationally and
internationally.
Chapter 11 Petition Date: October 18, 2018
Court: United States Bankruptcy Court
Central District of California (Riverside)
Case No.: 18-18820
Judge: Hon. Scott C. Clarkson
Debtor's Counsel: Illyssa I. Fogel, Esq.
ILLYSSA I. FOGEL & ASSOCIATES
815 N La Brea Ave Ste 78
Inglewood, CA 90302
Tel: 888-570-7220
Fax: 424-288-4370
Email: ifogel@iiflaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by James R. Lovejoy, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/cacb18-18820.pdf
KEVIN FINNERTY: Oyarzun Buying Auburn Property for $200K
--------------------------------------------------------
Kevin Finnerty asks the U.S. Bankruptcy Court for the Northern
District of Ohio to authorize the sale of a parcel of residential
real property located at 16740 Messenger Road, Auburn, Ohio,
Permanent Parcel No. 01-087000, to Carlos F. Oyarzun or his nominee
for $200,000.
The Debtor proposes to sell the estate's interest in Messenger
Property on the terms and conditions set forth in the offer to
purchase from the Buyer. The Buyer has no connection to the Debtor
and the Buyer wants to purchase Messenger in good faith.
Prepetition Messenger was titled in the name of Kevin J. Finnerty.
Also prepetition Messenger was the subject of a foreclosure
proceeding filed in the Geauga County Court of Common Pleas by RBS
Citizen Bank, NA, Case No. 10F001278. In the Foreclosure case RBS
Citizen Bank, NA sought to foreclose the equities of redemption of
all interests in Messenger junior in priority to a mortgage it held
against it in the original amount of $221,000. The fair market
appraisal for Messenger filed in the Foreclosure showed an
estimated sale value of $250,000. The proposed sales price is
therefore fair and reasonable for Messenger considering its current
state of repair.
The only interest superior to the RBS Citizen Bank, NA Mortgage in
Messenger is the lien for real estate taxes payable to the Geauga
County Treasurer in the amount of $2,768. There are two holders,
other than those set forth, of an interest in Messenger. The
interests in Messenger are in not in dispute. As the remaining
interests are junior in priority to the RBS Citizen Bank, NA
Mortgage, the holder of any interest in Messenger may be compelled
in a legal or equitable proceeding to accept a money satisfaction
of such interest.
In order to provide adequate protection of any interest in
Messenger, the Debtor will deposit the sale proceeds into his DIP
account, and disburse from the sale proceeds an amount sufficient
to pay the Real Estate Taxes in full to the Geauga County
Treasurer. The Debtor will hold the amount of proceeds net of the
amount used to pay the Real Estate Taxes pending further order of
the Court.
All other interests in Messenger will be transferred to the Net
Proceeds for distribution pursuant to later order of the Court.
Therefore Messenger may be sold free of any interest of any other
entity.
A copy of the APA attached to the Motion is available for free at:
http://bankrupt.com/misc/Kevin_Finnerty_94_Sales.pdf
Counsel for the Debtor:
Dennis J. Kaselak, Esq.
IBOLD & O'BRIEN
401 South Street
Chardon, OH 44024
Telephone: (440) 285-3511
Facsimile: (440) 285-3363
E-mail: dkaselak@peteribold.com
Kevin Finnerty sought Chapter 11 protection (Bankr. N.D. Ohio Case
No. 18-10515) on Jan. 31, 2018. The Debtor tapped Dennis J.
Kaselak, Esq., as counsel.
LONG BLOCKCHAIN: Cancels Contribution Agreement with TSLC
---------------------------------------------------------
Long Blockchain Corp. and TSLC PTE Ltd. have entered into a
separation and mutual release agreement pursuant to which the
parties mutually terminated their contribution and exchange
agreement effective as of Oct. 16, 2018.
Long Blockchain previously entered into the Agreement with TSLC,
pursuant to which (a) TSLC (i) issued to the Company 1,145,960
shares of its voting capital stock equal to 7.00% of the
outstanding capital stock of TSLC on a fully diluted basis as of
the date of the Agreement and (ii) agreed to grant the Company the
rights to develop TSLC's CASHe business in the Latin American
market, subject to the parties entering into a mutually acceptable
license agreement, and (b) the Company (i) issued to TSLC 1,949,736
shares of the Company's common stock equal to 17.00% of the
outstanding common stock of the Company as of the date of the
Agreement, (ii) issued to TSLC 332,602 additional shares of Company
Common Stock, equal to 2.90% of the outstanding common stock of the
Company as of the date of the Agreement, upon the delisting of the
common stock of the Company from the Nasdaq Capital Market, (iii)
granted TSLC the right to name one person to be appointed to the
Company's board of directors, and (iv) agreed to cover the
expenses, including legal fees, incurred by TSLC in connection with
the Agreement.
Pursuant to the Separation Agreement, TSLC will cancel and/or
redeem the TSLC Capital Stock issued to the Company under the
Agreement and the Company will cancel and/or redeem the Company
Common Stock issued to TSLC under the Agreement. TSLC waived its
right to reimbursement of all expenses incurred by TSLC in
connection with the Agreement, and the parties agreed to release
each other from certain claims and liabilities arising out of or
relating to the Agreement or the transactions contemplated therein
or thereby.
Additionally, pursuant to the Separation Agreement, TSLC's nominee
to the Board, Sanjay Sachdev, resigned from the Board and from each
committee on which he served, effective Nov. 30, 2018. Mr.
Sachdev's resignation was not due to any disagreement with the
Company or its management on any matter relating to the Company's
operations, policies, or practices.
About Long Blockchain Corp.
Headquartered in Hicksville, New York, Long Blockchain Corp. --
http://www.longblockchain.com/-- is focused on developing and
investing in globally scalable blockchain-based financial
technology solutions. It is dedicated to becoming a significant
participant in the evolution of blockchain technology that creates
long-term value for its shareholders and the global community by
investing in and developing businesses that are "on-chain".
Blockchain technology is fundamentally changing the way people and
businesses transact, and the Company will strive to be at the
forefront of this dynamic industry, actively pursuing
opportunities.
Long Blockchain incurred a net loss of $15.21 million in 2017 and a
net loss of $10.44 million in 2016. As of March 31, 2018, the
Company had $11.56 million in total assets, $4.59 million in total
liabilities and $6.96 million in total stockholders' equity.
Marcum LLP, the Company's auditor since 2014, issued a "going
concern" opinion in its report on the consolidated financial
statements for the year ended Dec. 31, 2017, citing that the
Company has a significant working capital deficiency, has incurred
significant losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
MAGEE BENEVOLENT: Authorized to Use Trustmark Cash Collateral
-------------------------------------------------------------
The Hon. Katharine M. Samson of the U.S. Bankruptcy Court for the
Southern District of Mississippi has entered an agreed order
authorizing Magee Benevolent Association, doing business as Magee
General Hospital to use the cash collateral of Trustmark National
Bank.
As of the Petition Date, the Debtor owed Trustmark $3,927,598 on
Bond A and $178,562 on Bond B. Trustmark has a properly perfected
first lien security interest in the hospital property, all
improvements, equipment, fixtures and accounts.
The Court grants Trustmark a replacement security interest in and
lien mortgage upon the pre-petition collateral in favor of
Trustmark with the same validity, extent and priority and grants a
security interest in and lien and mortgage upon all assets of the
Debtor including cash collateral and other proceeds of the
pre-petition collateral generated or acquired after the
commencement date, excluding causes of action under Chapter 5 of
the Bankruptcy Code, with the same validity, extent and priority as
the pre-petition lien.
The Court also grants Trustmark a super-priority administrative
expenses claim under and to the extent set forth in Section 507(b)
of the Bankruptcy Code.
The Debtor is required (a) to allow Trustmark and its
professionals, including accountants, access at the Debtor's
offices access to all books, records, including Quick Books, on a
bi-weekly basis; (b) to provide bi-weekly reconciliation of
disbursements, expenses and costs projected in the budget compared
to the actual disbursements made and collections made on revenue
generated in the budget to the actual revenue certified by an
officer of the Debtor; and (c) to produce any documents required to
be produced under Trustmark's loan documents.
A full-text copy of the Order is available at
http://bankrupt.com/misc/mssb18-03283-67.pdf
About Magee General Hospital
Magee General Hospital serves as a general medical/surgical
facility in Magee, Mississippi. The Hospital offers medical
services in cardiology, audiology, dentistry, general surgery,
internal medicine, oncology, emergency care, and many other medical
services.
Magee General Hospital filed a petition for reorganization under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No.
18-03283) on Aug. 24, 2018. In the petition signed by CEO Sean
Johnson, the Debtor estimated $1 million to $10 million in assets
and liabilities. The case is assigned to Judge Katharine M.
Samson. The Law Offices of Craig M. Geno, PLLC, led by Craig M.
Geno, is the Debtor's counsel.
MATTERHORN MERGER: Moody's Puts B3 CFR for Downgrade
----------------------------------------------------
Moody's Investors Service placed Matterhorn Merger Sub,LLC's now
known as H-Food Holdings ratings on review for downgrade. This
follows the company's announcement on Monday that it signed a
definitive agreement to acquire Greencore USA, a leader in frozen
contract packaging for approximately $1.1 billion. Funding details
were not disclosed, but Moody's expects the acquisition to be
funded with a combination of debt and equity.
Greencore USA is the US unit of Greencore Group plc, an
Ireland-based public company. Greencore USA operates 13 locations
across North America, with 3,500 employees, and 2017 revenues of
$1.4 billion.
Ratings on review for downgrade:
- Corporate Family Rating at B3;
- Probability of Default Rating at B3-PD;
- $150 million first lien senior secured revolving credit
facility expiring 2023 at B2 (LGD3);
- $1,145 million senior secured first lien term loan maturing
2025 at B2 (LGD3)
- $350 million senior unsecured global notes maturing 2026 at
Caa2 (LGD5)
RATINGS RATIONALE
Moody's rating review will focus on Hearthside's operating strategy
and its capital structure following the acquisition. Moody's will
also assess: the company's plan to manage leverage; various synergy
opportunities; and Hearthside's plan to improve Greencore USA
operating performance.
H-Food Holdings owns Hearthside Food Solutions. Hearthside is a
contract manufacturer and packager of packaged food products in
North America and to a lesser extent Europe. It supplies companies
such as General Mills, Kellogg's, Kraft Heinz, PepsiCo, and
Mondelez. Hearthside is owned by an investment group led by
Charlesbank Capital Partners and Partners Group. Pro forma revenue
is approximately $3 billion.
The principal methodology used in these ratings was Global Packaged
Goods published in January 2017.
MCMAHAN-CLEMIS INSTITUTE: 6th Interim Cash Collateral Order Entered
-------------------------------------------------------------------
The Hon. Janet S. Baer of the U.S. Bankruptcy Court for the
Northern District of Illinois authorized McMahan-Clemis Institute
of Otolaryngology, S.C., to use cash collateral upon the terms and
conditions contained in the Sixth Interim Order to avoid immediate
and irreparable harm to the estate.
The Debtor's Motion for Use of Cash Collateral is continued for
further hearing to October 24, 2018 at 10:00 a.m.
The Debtor may use the collateral and cash collateral to the extent
of plus or minus 10% of each line item set forth on its Budget, up
to and including October 31, 2018. The Budget for the month of
October shows total expenses of approximately $163,173.
As partial adequate protection for Lake Forest Bank for the use of
its collateral, Lake Forest Bank:
(a) is granted and will have post-petition replacement liens,
to the extent and with the same priority as held prepetition, in
and to the cash collateral and all postpetition property of the
Debtor of the same type or kind substantially equivalent to the
prepetition collateral, and
(b) will receive, within seven days after the filing of
Debtor's Monthly Operating Report for the particular month, a
payment from the Debtor of an amount equal to 30% of the net cash
income from said month after payment of all expenses provided in
the Budget as determined by Debtor's Monthly Operating Report for
that month.
A full-text copy of the Interim Order is available at
http://bankrupt.com/misc/ilnb18-17563-120.pdf
About McMahan-Clemis Institute
of Otolaryngology S.C.
McMahan-Clemis Institute of Otolaryngology, S.C., d/b/a Physician's
Hearing Aid Services, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ill. Case No. 18-17563) on June
20, 2018. In the petition signed by John T. McMahan, president,
the Debtor estimated assets of less than $50,000 and liabilities of
less than $1 million. Judge Lashonda A. Hunt presides over the
case. The Debtor is represented by Gregory K. Stern, P.C.
MEDALLION MIDLAND: Moody's Alters Outlook of B2 CFR to Stable
-------------------------------------------------------------
Moody's Investors Service changed Medallion Midland Acquisition,
LLC's outlook to stable from positive. Moody's also affirmed its B2
Corporate Family Rating, B2-PD Probability of Default Rating and B2
senior secured term loan rating.
"Medallion's change to stable outlook reflects the company's
continued high leverage and a slower growth in volumes than
initially expected," commented Amol Joshi, Moody's Vice President.
"The rating should ultimately benefit from the location of the
company's assets in the Midland Basin and anticipated deleveraging
due to increasing cash flow following the basin's growth in crude
oil volumes."
Affirmed:
Issuer: Medallion Midland Acquisition, LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Term Loan, Affirmed B2 (LGD4)
Outlook Actions:
Issuer: Medallion Midland Acquisition, LLC
Outlook, Changed to Stable from Positive
RATINGS RATIONALE
Medallion's B2 CFR reflects its very high financial leverage, and
the company's significant reliance on a steep increase in crude oil
transportation volumes through 2019 and 2020 to accomplish leverage
improvement. The rating is also tempered by the company's small
scale, limited operating track record and the volume risk involved
in producer customers ramping up their respective production
volumes. The company's presence primarily in the Permian's Midland
Basin, acreage dedications spread over roughly 800,000 acres with
18 customers, large equity investment by an experienced sponsor and
adequate liquidity support the company's credit profile. The
contracts are 100% fee-based, minimizing direct commodity price
risk, although the absence of material minimum volume commitment
contracts to underpin expected volume growth highlights the volume
risk. The rating also benefits from structural enhancements such as
an excess cash flow sweep and a $20 million debt service reserve
account via a letter of credit.
The stable outlook reflects the slower growth in volumes then
initially expected, leading to a delay in deleveraging.
Medallion's ratings could be upgraded if the company successfully
realizes its anticipated volume and corresponding earnings growth,
reducing debt/EBITDA below 5x while maintaining adequate liquidity.
Ratings could be downgraded if debt/EBITDA is likely to remain
above 6x beyond 2019 or if liquidity weakens substantially.
The $700 million term loan matures in 2024 and is rated B2 (the
same as the CFR) under the Moody's Loss Given Default Methodology.
The $50 million revolver (unrated) maturing in 2022 has a super
priority preference over the term loan; however, because of the
small size of the revolver compared to the term loan, the term loan
is rated the same as the CFR.
Moody's expects that Medallion will maintain adequate liquidity
through the end of 2019. Medallion has a $50 million revolver, in
addition to a $20 million debt service reserve account via a letter
of credit. The revolver had $15.5 million outstanding at June 30.
The company is expected to fund its debt service obligations and
capital expenditures primarily through cash from operations.
Medallion has a mandatory cash flow sweep provision on the term
loan, which will lead to Medallion having a low cash balance while
reducing some debt. The term loan has a minimum debt service
coverage ratio covenant of 1.1x. In addition, the revolver has
financial covenants including a maximum super senior leverage ratio
of 1x. Moody's expects the company will be in compliance with its
covenants through the end of 2019.
The principal methodology used in these ratings was Midstream
Energy published in May 2017.
Medallion Midland Acquisition, LLC is a privately owned crude oil
gathering and intra-basin pipeline transportation system in the
Midland Basin. In October 2017, Global Infrastructure Partners
(GIP) acquired Medallion for about $1.8 billion, plus an additional
cash consideration linked to GIP's realized profits at exit.
MEYZEN FAMILY: Seeks Authorization to Use Cash Collateral
---------------------------------------------------------
Meyzen Family Realty Associates, LLC, requests the United States
Bankruptcy Court for the Southern District of New York for
authority to use cash collateral and approval of the lease by and
between the Debtor and the Restaurant known as La Cremaillere.
The Debtor owns the property located at 46 Bedford-Banksville Road,
Bedford, NY 10506. This Property has been in the Meyzen family for
over forty years and is estimated to be valued at $3,100,000 to
$3,300,000.
The Debtor seeks to utilize the rents it collects to fund its
ongoing operations and to enable it to reorganize. Absent approval
of the Debtor's use of cash collateral (which comprises the source
of all of the Debtor's revenue), the Debtor would be unable to fund
its operations and would be unable to meet its obligations as
landlord to its sole tenant, the Restaurant.
The Debtor's use of the cash collateral pursuant to the proposed
enclosed budget will enable the Debtor to reorganize its operations
while at the same time adequately protecting the senior secured
lender. Furthermore, the Debtor's continued operations will ensure
the continued operation of the Restaurant that is a co-borrower on
and collection of rent post-petition will greatly enhance their
going concern value and their ability to successfully reorganize.
Specifically, the Debtor proposes to use all rental proceeds
derived from the Restaurant to maintain the Property, pay insurance
and property taxes, Celtic Bank $6,874.35 per month and pay L&J
$1,543.29 per month. The Debtor posits that such use affirmatively
and directly benefits the estate and the Debtors' creditors by
enhancing the prospect of a successful outcome of Debtor's case.
Celtic Bank Corporation and the Debtor entered into a first lien
mortgage and note in the amount of $905,000, as well as an
assignment of rents that is recorded in Westchester County, in
favor of Celtic Bank. Purportedly the amount currently owed is in
excess of $1,230,238. Pursuant to the mortgage with Celtic Bank and
the collateral assignment of rents, Celtic Bank has a lien on the
cash the Debtor receives from the Restaurant. The monthly payment
on the mortgage is currently $6,874.35 based upon the August
statement of Celtic Bank.
L&J Smith Investments LLP holds a second mortgage on the Property
that was originally in the amount of $155,000. L&J is owned by Judy
Smith who is Barbara Meyzen's Aunt. The monthly payment on this
loan was $1,543.29.
The Debtor submits that the value of the Secured Lenders liens is
more than adequately protected by the value of the Property as
there is a significant equity cushion. Moreover, the proposed
Budget provides for the maintenance and operation of the Property,
thereby further protecting the Secured Lenders' liens.
The Debtor represents that the cash expenditures proposed in the
Budget will directly serve to preserve and maintain the
pre-petition value of Lenders' secured claim. Moreover, use of the
cash collateral consistent with the Budget will maintain the
overall value of the Debtor and the Restaurant as an ongoing
enterprise and enhance the chances of a successful outcome for
Debtor's case. Further, the Debtor and the Restaurant have good
prospects of refinancing, which would allow for the successful
conclusion of this case.
In order to properly document the arrangements by and between the
Debtor and the Restaurant, the Debtor further requests that the
Court approve the lease agreement by and between the Debtor and the
Restaurant. The Debtor asserts that the Lease is necessary to
reflect the financial agreements being made by the Debtor and the
Restaurant to ensure adequate funding of the Debtor.
The Debtor will grant replacement liens in all of the Debtor's
pre-petition and post-petition assets and proceeds, only to the
extent that the Secured Lenders have a valid security interest in
the pre-petition assets on the Petition Date and in the continuing
order of priority that existed as of the Petition Date.
The Replacement Liens will be subject and subordinate only to: (a)
United States Trustee fees payable under 28 U.S.C. Section 1930 and
31 U.S.C. Section 3717; (b) professional fees of duly retained
professionals in this Chapter 11 case as may be awarded pursuant to
Sections 330 or 331 of the Code or pursuant to any monthly fee
order entered in the Debtor's Chapter 11 case; (c) the 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.
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/nysb18-23419-16.pdf
About Meyzen Family Realty
Meyzen Family Realty Associates, LLC, filed as a Single Asset Real
Estate (as defined in 11 U.S.C. Section 101(51B)). The company
owns in fee simple a real property located at 46 Bedford Banksville
Rd, Bedford, New York, valued by the company at $2.8 million.
Meyzen Family Realty Associates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 18-23419) on Sept.
13, 2018. In the petition signed by Barbara Meyzen, managing
member, the Debtor disclosed total assets of $2,800,000 and
$1,450,000 of total debts. The Hon. Robert D. Drain presides over
the case. Bruce H. Bronson, Jr., Esq. at Bronson Law Office, P.C.
serves as Debtor's counsel.
MICHAEL MCIVOR: Gets Final Nod on Cash Collateral Use
-----------------------------------------------------
The Hon. Laurel M. Isicoff of the U.S. Bankruptcy Court for the
Southern District of Florida has authorized Michael McIvor, M.D.
P.A., Inc., to use the cash collateral on a final basis.
The Debtor is permitted to use the cash collateral as could be
claimed by Bankers Healthcare Group, Regions Bank or First State
Bank of the Florida Keys, including cash or non-cash proceeds of
assets that were not cash collateral on the Petition Date up to the
amounts shown in the Budget. The approved Budget shows total
monthly expenses of approximately $51,447.
As condition of permitting the Debtor to use cash collateral, the
Debtor will operate strictly in accordance with the Budget and
spend cash collateral not to exceed 10% above the amount shown in
the Budget, subject to: the quarterly U.S. Trustee fees which will
be paid and permitted to exceed the budgeted amount.
Bankers Healthcare Group is granted a valid, perfected lien upon,
and security in all cash generated post-petition by the Property to
the extent and in the order of priority of any valid lien
pre-petition.
Unless waived by Bankers Healthcare Group in writing, the Debtor
will immediately cease using cash collateral upon the occurrence of
one of the following events:
(a) If a trustee is appointed in this Chapter 11 Case;
(b) If the Debtor breaches any term or condition of the Order
or any of the Lender's loan documents, other than defaults existing
as of the Petition Date;
(c) If the cash if converted to a case under Chapter 7 of the
Bankruptcy Code;
(d) If the case is dismissed; or
(e) If any violation or breach of any provision of the Order
occurs.
A full-text copy of the Final Order is available at
http://bankrupt.com/misc/flsb18-20496-35.pdf
About Michael McIvor, M.D.
Michael McIvor, M.D. P.A., Inc., a Florida corporation based in Key
West, Florida, is in the business of operating a medical practice
specializing in cardiology. It does business at its principal
office located at 1010 Kennedy Drive, Suite 400 Key West, Florida,
under the trade name The Keys Heart Center. The Debtor's medical
and diagnostic services focus on the functions and disorders of the
heart and its connected circulatory system.
The Debtor is solely owned by its principal and sole physician, Dr.
Michael E. McIvor. Dr. McIvor is board certified in cardiology has
over 39 years of experience in internal medicine and treating
cardiovascular disease.
Michael McIvor, M.D. P.A., Inc., sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-20496) on Aug.
28, 2018. In the petition signed by Michael McIvor, president, the
Debtor estimated assets of less than $1 million and liabilities of
less than $1 million. Judge Laurel M. Isicoff presides over the
case. Michael McIvor tapped Adam Law Group, P.A., as its legal
counsel.
MONTICELLO 856: Case Summary & Unsecured Creditor
-------------------------------------------------
Debtor: Monticello 856, LLC
1825 Ponce De leon Blvd., Suite 629
Miami, FL 33134
Business Description: Monticello 856, LLC is a privately held
company in Miami, Florida.
Chapter 11 Petition Date: October 21, 2018
Court: United States Bankruptcy Court
Southern District of Florida (Miami)
Case No.: 18-23037
Judge: Hon. Laurel M Isicoff
Debtor's Counsel: Julio C. Marrero, Esq.
MARRERO, CHAMIZO, MARCER LAW, LP
3850 Bird Rd. PH 1
Coral Gables, FL 33146
Tel: 305-446-0163
Fax: 305-444-5538
E-mail: Bankruptcy@marrerolawfirm.com
Total Assets: $0
Total Liabilities: $65,980,811
The petition was signed by Omar A. Hernandez, managing member.
The Company lists OH Capital Collections, LLC as its sole unsecured
creditor holding a disputed claim of $65,980,811.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/flsb18-23037.pdf
NATURE'S BOUNTY: Bank Debt Trades at 4% Off
-------------------------------------------
Participations in a syndicated loan under which Nature's Bounty is
a borrower traded in the secondary market at 96.27
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.62 percentage points from the
previous week. Nature's Bounty pays 350 basis points above LIBOR to
borrow under the $15 million facility. The bank loan matures on
September 30, 2024. Moody's rates the loan 'B3' and Standard &
Poor's gave a 'B-' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
NETFLIX INC: S&P Hikes Issuer Credit Rating to BB-, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Los Gatos,
Calif.-based online video service provider Netflix Inc. to 'BB-'
from 'B+'. The rating outlook is stable.
S&P said, "At the same time, we raised our issue-level ratings on
the company's senior unsecured debt by one notch, in line with the
issuer credit rating. The '3' recovery rating is unchanged and
indicates our expectation for meaningful recovery (50%-70%; rounded
estimate: 65%) of principal in the event of a payment default."
The upgrade follows the company's improving EBITDA margin
performance over the last 12 months, driven in part by price
increases instituted by the company and continued and accelerated
subscriber growth. These factors demonstrate the strength of the
company's business model and its ability to expand globally,
increase margins, and manage its increasing debt burden. The
company's significant content investments will likely continue to
generate multibillion-dollar free cash flow deficits over the next
2-3 years, and increasing competition from existing and new
subscription video on demand (SVOD) platforms remain significant
risks. However, Netflix has effectively positioned itself as a
premier video library for online viewers in developed markets and
is well positioned to accelerate growth and capture international
market share.
S&P said, "The stable outlook reflects our expectation that Netflix
will benefit from solid operating performance with revenue growth
around 35% in 2018 and about 25% in 2019 while expanding margins by
close to 300 bps per year. We expect significant content
investments in original programming to continue to result in free
cash flow deficits of about $3 billion in both 2018 and 2019 that
will be financed with new debt issuance.
"We could lower the rating if revenue growth meaningfully decreases
to well below 20%, EBITDA margin expansion slows, and free cash
flow deficits substantially increase. This would likely occur if
increased competition from new and existing over-the-top (OTT)
platforms decreases subscriber growth or if content and marketing
investments are less effective at retaining subscribers.
"We could raise the rating if Netflix maintains a strong leadership
position in the OTT marketplace through robust subscriber, revenue,
and EBITDA growth exceeding our base-case expectations while
significantly reducing free cash flow deficits. This would
demonstrate that the company can leverage its expanding subscriber
base to moderate content spending per user growth."
OPERATION SIMULATION: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Two debtor affiliates that have filed voluntary petitions seeking
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Operation Simulation Associates, Inc. 18-14808
PO Box 1129
Ringgold, GA 30736
Wabash Valley Wood Protection, Inc. 18-14810
700 Fulton Glass Road
Vincennes, IN 47591
Business Description: Founded in 1983, Operation Simulation
Associates provides software and services
for the electric power industry with clients
in the USA and worldwide. OSA is the
developer of the PowrSym family of electric
power system generation, transmission, and
fuel supply models.
Wabash Valley Wood Protection, Inc. is an
Indiana corporation founded in 2017 for the
purpose of purchasing and operating the
Vincennes, Indiana pressure treating plant
and distribution yard formerly operated as a
division of Babb lumber Company. With the
acquisition, Wabash is adding a new product
line of UL fire rated lumber and plywood.
Chapter 11 Petition Date: October 19, 2018
Court: United States Bankruptcy Court
Eastern District of Tennessee (Chattanooga)
Judge: Hon. Shelley D. Rucker
Debtors' Counsel: David J. Fulton, Esq.
SCARBOROUGH & FULTON
620 Lindsay Street, Suite 240
Chattanooga, TN 37403
Tel: 423-648-1880
Fax: (423) 648-1881
E-mail: djf@sfglegal.com
Operation Simulation
Estimated Assets: $500,000 to $1 million
Operation Simulation's
Estimated Liabilities: $1 million to $10 million
Wabash Valley's
Estimated Assets: $1 million to $10 million
Wabash Valley's
Estimated Liabilities: $1 million to $10 million
The petitions were signed by Roger A. Babb, president.
A copy of Operation Simulation's list of 15 unsecured creditors is
available for free at:
http://bankrupt.com/misc/tneb18-14808_creditors.pdf
A copy of Wabash Valley's list of 20 largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/tneb18-14810_creditors.pdf
Full-text copies of the petitions are available for free at:
http://bankrupt.com/misc/tneb18-14808.pdf
http://bankrupt.com/misc/tneb18-14810.pdf
OUR TOWN ASSOCIATES: Agreed Cash Collateral Interim Order Entered
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia has
entered an agreed interim order authorizing Our Town Associates,
LLC, to use cash collateral until the earliest to occur of (a) the
date that the Agreed Order ceases to be in full force and effect,
or (b) the occurrence of a Termination Event.
The interim hearing on the Debtor's use of cash collateral will be
continued to Nov. 27, 2018 at 11:00 a.m. Objections are due no
later than Oct. 19.
The Debtor is authorized to use cash collateral to pay for the
operating expenses and costs of administration actually incurred by
the Debtor in the operation and maintenance of the Real Property
strictly in accordance with the budget. The Debtor will not exceed
any line item on the Budget by an amount exceeding 5%. However, the
Debtor may make expenditures up to 5% in excess of the total
budgeted expenses for the month in the Budget so long as actual
disbursements do not exceed 105% of the budgeted total expenses for
such month of the Budget.
As of the Petition Date, the Debtor is indebted to Secured Lender,
U.S. Bank National Association, as Trustee for the Registered
Holders of LB-UBS Commercial Mortgage Trust 2007-C6, Commercial
Mortgage Pass-Through Certificate, Series 2007-C6, acting by and
through its Special Servicer, LNR Partners, LLC, in outstanding
principal amount of $3,133,375. Secured Lender holds valid, duly
perfected first priority security interests in and liens upon the
Real Property and the rents, revenues, income, proceeds and profits
generated therefrom.
The Debtor and the Secured Lender have reached agreement concerning
the interim use of cash collateral as set forth in the Order.
The Debtor grants in favor of the Secured Lender a first priority
post-petition security interest and lien in, to and against all of
the Debtor's assets, to the same priority, validity and extent that
the Secured Lender held a properly perfected prepetition security
interest in such assets, which are or have acquired, generated or
received by the Debtor subsequent to the Petition Date, as well as
in all presently owned and hereafter acquired property which is not
subject to a prior perfected and enforceable prepetition lien or
security interest but excluding any claims or avoidance recoveries
by or on behalf of the Debtor, its estate or any trustee appointed
in this case arising under Chapter 5 of the Bankruptcy Code.
In addition, the Debtor will make adequate protection payment to
the Secured Lender in the amount of $21,829, commencing Oct. 15,
2018 and thereafter on each Reference Date during the term of the
Cash Collateral Order.
The Secured Lender is granted an allowed, superpriority
administrative expenses claim under Section 507(b) of the
Bankruptcy Code with respect to the Adequate Protection
Obligations.
Within 20 days after the last business day of each month commencing
October 20, 2018, the Debtor will provide the Secured Lender with a
comparison of its actual expenditures in the month then ending to
the Budget, on a line-by-line basis, in a form reasonably
acceptable to the Secured Lender, consistent with the parties'
prepetition practice.
The Debtor will permit any representatives designated by the
Secured Lender, to inspect, copy and take extracts from their
financial and accounting records and all records and files of the
Debtor pertaining to the collateral, and to discuss its affairs,
finances, and accounts with its officers, financial advisors, and
independent public accountants.
A Termination Event will constitute any of the following:
(a) December 14, 2018;
(b) the Debtor fails to make any adequate protection payment
to the Secured Lender;
(c) any order is entered, other than with the consent of the
Secured Lender, reversing, amending, supplementing, staying,
vacating or otherwise modifying the Order in any material respect
or terminating the use of cash collateral by the Debtor pursuant to
the Order;
(d) any application is filed by the Debtor for the approval of
any Superpriority Claim or any lien in the Chapter 11 Case which is
pari passu with or senior to the Adequate Protection Obligations or
Adequate Protection Liens;
(e) any order is entered granting relief from the automatic
stay applicable under Section 362 of the Bankruptcy Code to the
holder or holders of any security interest, lien or right of setoff
other than a security interest, lien or right of setoff of the
Secured Lender, to permit foreclosure (or the granting of a deed in
lieu of foreclosure or the like), possession, set-off or any
similar remedy with respect to any collateral or any assets of the
Debtor necessary to the conduct of its businesses;
(f) any payments made in respect to a prepetition claim;
(g) the Debtor's chapter 11 case is dismissed or converted to
a case under chapter 7 of the Bankruptcy Code, or a trustee, a
responsible officer, or an examiner with enlarged powers relating
to the operation of the business is appointed or elected in the
Chapter 11 case;
(h) the Debtor fails to keep and maintain all property in god
working order and condition, ordinary wear and tear excepted;
(i) the Debtor fails to maintain, with financially sound and
reputable insurance companies, insurance in such amounts and
against such risk as are customarily maintained by companies of
established repute engaged in the same or similar businesses
operating in the same or similar locations and all insurance
required to be maintained pursuant to the Loan Documents, or fails
to furnish to the Secured Lender, upon reasonable request,
information in reasonable detail as to the insurance so
maintained;
(j) The Debtor fails to comply with all laws, rules,
regulations and orders of any governmental authority applicable to
it, its operations or its property, except where the failure to do
so, individually or in the aggregate, would not reasonably be
expected to result in material adverse effect; or
(k) The Debtor fails to comply with any of the terms or
conditions of the Order.
A full-text copy of the Agreed Order is available at
http://bankrupt.com/misc/vaeb18-72950-35.pdf
About Our Town Associates
Our Town Associates, LLC, based in Virginia Beach, VA, filed a
Chapter 11 petition (Bankr. E.D. Va. Case No. 18-72950) on Aug. 22,
2018. In its petition, the Debtor disclosed $3,105,463 in assets
and $3,486,042 in liabilities. The petition was signed by Jon S.
Wheeler, manager of Boulevard Capital, LLC, managing member.
Crowley Liberatore Ryan & Brogan, P.C., serves as counsel to the
Debtor.
PEDRO'S OF MADISON: May Use Cash Collateral Until Nov. 30
---------------------------------------------------------
The Hon. Catherine J. Furay of the U.S. Bankruptcy Court of the
Western District of Wisconsin has signed an interim order
authorizing Pedro's of Madison, Inc., doing business as Pedro's
Mexican Restaurante, to use cash collateral necessary to avoid
immediate and irreparable harm to the estate pending final
hearing.
The Debtor may use cash collateral to pay post-petition expenses
form the Petition Date through Nov. 30, 2018 in accordance with the
monthly budget. The Debtor may only use the cash collateral for
those budgeted items in the amounts set forth on the Approved
Budget. The Debtor is only authorized to use those funds paid to
Debtor that are identified as Revenue on the Approved Budget as the
source of funds to pay those expenses identified on the Approved
Budget. The Debtor understands and acknowledges that attorney and
accountant fees will only be paid after the respective
professional's employment and fees are approved by the Court.
Summit Credit Union, the Debtor's pre-petition secured lender holds
a perfected security interest in the assets of the Debtor as
collateral for obligations owed to it by the Debtor, including but
not limited to, equipment, fixtures, inventory, documents, general
intangibles, accounts and contract rights and specifically
including any and all accounts, deposit accounts and contract
rights of Debtor and proceeds thereof owned by Debtor and related
to Debtor's restaurant operations.
In order to protect Summit's security interest in cash collateral,
Summit is provided with a first position postpetition replacement
lien on the Debtor's personal property, specifically including any
and all accounts, deposit accounts and contract rights of Debtor
and proceeds thereof owned by Debtor and related to Debtor's
restaurant operations, except to the extent that any such
collateral may be subject to valid, properly perfected, priority
liens of prepetition secured creditors other than Summit.
The Debtor will continue to pay its monthly rent payments of $4,000
per month to SME, which rent will be paid by the Debtor on or
before the 21st day of each month, which monthly rent will then be
paid over to Summit. Such monthly rent payments will constitute as
adequate protection payments to Summit.
Moreover, the Debtor is required to continue to insure the personal
property assets used by the Debtor to conduct its business and pay
premiums when due. The Debtor will furnish proof of adequate
insurance on its personal property assets upon request by Summit.
A full-text copy of the Motion is available at:
http://bankrupt.com/misc/wiwb18-13142-27.pdf
About Pedro's of Madison
Pedro's of Madison, Inc., is a privately held company in Madison,
Wisconsin, that operates restaurants. It is a family-friendly
restaurant serving Mexican fare & margaritas in a fiesta-themed
setting.
Pedro's of Madison sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Wis. Case No. 18-13142) on Sept. 14,
2018. In the petition signed by James C. Martine, president/sole
shareholder, the Debtor estimated $50,000 to $100,000 in assets and
$1 million to $10 million in liabilities. Judge Catherine J. Furay
presides over the case. Eliza M. Reyes, Esq. at Krekeler
Strother, S.C. is the Debtor's counsel.
PEN INC: Scott Rickert Reports 42.5% Stake as of Oct. 16
---------------------------------------------------------
Scott E. Rickert, chief executive officer, director and chairman of
PEN Inc., disclosed in a Schedule 13D/A filed with the Securities
and Exchange Commission that as of Oct. 16, 2018, he beneficially
owns 1,594,973 shares of Class A common stock of Pen Inc., which
constitutes 42.5 percent of the shares outstanding.
Mr. Rickert holds 30,474 shares of Class A common stock directly.
The rest of the subject securities are held by Rickert Family,
Limited Partnership an entity for which Mr. Rickert is the general
partner has sole voting and dispositive control.
Some of the common stock held by the Partnership was received on
Aug. 27, 2014 under the Agreement and Plan of Merger and Exchange,
dated March 10, 2014, as amended, among Applied Nanotech Holdings,
Inc., PEN Inc., NanoMerger Sub Inc., NanoHolding Inc., and Carl
Zeiss, Inc. The stock of NanoHolding was received in exchange for
Units of membership interest in Nanofilm, Ltd. that had been held
since the formation of Nanofilm, Ltd. in 1995. Originally Class B
shares, those shares were converted 1:1 for shares of Class A
common stock on Oct. 16, 2018.
The 131,731 shares of Class A common stock were acquired on
May 23, 2017 with personal funds and are held by the partnership;
40,000 shares of Class A common stock were purchased on Oct. 16,
2018 with personal funds and are held by the Partnership.
Other shares were issued for services rendered as a director of PEN
Inc. and in satisfaction of equity credits. Some of the stock was
originally issued as shares of Class B common stock all of which
was converted to Class A common stock on Oct. 16, 2018.
A full-text copy of the regulatory filing is available at:
https://is.gd/Aw8jVm
About PEN Inc.
Headquartered in Miami, Florida, PEN develops, commercializes and
markets consumer and industrial products enabled by nanotechnology
that solve everyday problems for customers in the optical,
transportation, military, sports and safety industries. The
Company's primary business is the formulation, marketing and sale
of products enabled by nanotechnology including the ULTRA CLARITY
brand eyeglass cleaner, CLARITY DEFOGIT brand defogging products
and CLARITY ULTRASEAL nanocoating products for glass and ceramics.
The Company also sells an environmentally friendly surface
protector, fortifier, and cleaner. The Company's design center
conducts product development services for government and private
customers and develops and sells printable inks and pastes, thermal
management materials, and graphene foils and windows.
PEN was formed in 2014, and is the successor to Applied Nanotech
Holdings Inc. that had been formed in 1989. In the combination
that created PEN, Nanofilm, Ltd. acquired Applied Nanotech
Holdings, Inc. The Company's principal operating segments coincide
with its different business activities and types of products sold.
This is consistent with the Company's internal reporting
structure.
As of Dec. 31, 2017, Pen Inc. had $2.18 million in total assets,
$3.27 million in total liabilities and a total stockholders'
deficit of $1.09 million. PEN Inc. incurred a net loss of $687,068
in 2017, compared to a net loss of $556,001 in 2016.
The report from the Company's independent accounting fir Salberg &
Company, P.A., the Company's auditor since 2013, on the
consolidated financial statements for the year ended Dec. 31, 2017,
includes an explanatory paragraph stating that the Company has a
net loss and cash provided by operating activities of $687,068 and
$438,558, respectively, in 2017 and has a working capital deficit,
stockholders' deficit and accumulated deficit of $1,345,095,
$1,096,005 and $6,587,235, respectively, at Dec. 31, 2017. These
matters raise substantial doubt about the Company's ability to
continue as a going concern.
PEN INC: Sells 591K Shares, and Appoints New President
------------------------------------------------------
PEN Inc has sold 590,847 shares of its Class A common stock at a
price of $0.50 per share for aggregate proceeds of $295,423. In
addition, Tom J. Berman was appointed as president of the Company
and joined its Board of Directors.
Dr. Scott Rickert, PEN's chairman and chief executive officer
commented: "I am delighted to have Tom bring his experience and
commitment to lead our team to re-energize all aspects of our
company. This new equity investment to support our business is an
important step in our efforts to continue to commercialize
nanotechnology enabled products."
Mr. Berman was most recently chief administrative officer and
general counsel for Ascion, LLC d/b/a Reverie, a Michigan based
Sleep Technology company. At Ascion he was responsible to help to
develop that company's overall business strategy along with leading
its business development, HR and IT and Legal departments as well
as its real estate management. Mr. Berman will bring this broad
range of operating experience to the board. He was with Ascion
from 2012 until earlier this year. Prior to joining Ascion Mr.
Berman founded Berman Law, PLLC. He is a graduate of Michigan
State University and of the University of Detroit Mercy School of
law. He is 39 years old. Tom Berman is the son of director Ronald
J. Berman.
Tom Berman explained: "PEN is a long-standing leader in
nanotechnology and has a phenomenal product line. I'm excited to
work with the team, the supply chain, and the loyal customers of
PEN Brands to improve its operations, grow its core business, and
open new sales channels in an effort to increase profits."
The limited liability company of which Tom Berman is a manager
purchased most of the stock and purchased options to purchase up to
an additional 550,847 shares at an option exercise price of $1.00
per share, exercisable at any time before June 30, 2019. PEN also
sold warrants to purchase up to 550,847 additional shares at a
warrant exercise price of $1.50. The right to purchase warrant
shares expires on the earlier of (1) 45 days after the day that PEN
shares have been trading at or above 120% of the exercise price for
a period of 90 days, or (2) four years from date of issue. PEN
also sold to investors that purchased the options, additional
"warrant options" to purchase warrants. For each share purchased
under an option, an investor that purchased warrant options can
purchase at a price of $03 per warrant a warrant to purchase an
additional share at an exercise price of $2.00 per share. These
warrants will expire on the earlier of (1) 45 days after the day
that PEN shares have been trading at or above 120% of the exercise
price for a period of 90 days, or (2) four years from date of
issue. Proceeds from these sales were $49,576.
The securities were all sold in a private placement. No
commissions are payable. Proceeds will be used for general
corporate purposes and working capital.
Agreement with PEN Comeback
On Oct. 15, 2018, PEN Inc. entered into an agreement with PEN
Comeback LLC that granted to that investor one demand registration
right if certain warrants issued to the investor result in proceeds
to the Company of $1 million or more. If the demand is exercised,
the investor can register common shares purchased, including common
shares purchased upon exercise of the options or warrants issued to
the investor.
The Company previously reported that on Aug. 8, 2018 its
wholly-owned subsidiary PEN Brands LLC entered into the fifth
amendment to its Loan and Security Agreement with MBank. The
amendment Extended the agreement through July 3, 2019 (not 2018 as
previously stated).
About PEN Inc.
Headquartered in Miami, Florida, PEN develops, commercializes and
markets consumer and industrial products enabled by nanotechnology
that solve everyday problems for customers in the optical,
transportation, military, sports and safety industries. The
Company's primary business is the formulation, marketing and sale
of products enabled by nanotechnology including the ULTRA CLARITY
brand eyeglass cleaner, CLARITY DEFOGIT brand defogging products
and CLARITY ULTRASEAL nanocoating products for glass and ceramics.
The Company also sells an environmentally friendly surface
protector, fortifier, and cleaner. The Company's design center
conducts product development services for government and private
customers and develops and sells printable inks and pastes, thermal
management materials, and graphene foils and windows.
PEN was formed in 2014, and is the successor to Applied Nanotech
Holdings Inc. that had been formed in 1989. In the combination
that created PEN, Nanofilm, Ltd. acquired Applied Nanotech
Holdings, Inc. The Company's principal operating segments coincide
with its different business activities and types of products sold.
This is consistent with the Company's internal reporting
structure.
As of Dec. 31, 2017, Pen Inc. had $2.18 million in total assets,
$3.27 million in total liabilities and a total stockholders'
deficit of $1.09 million. PEN Inc. incurred a net loss of $687,068
in 2017, compared to a net loss of $556,001 in 2016.
The report from the Company's independent accounting firm Salberg &
Company, P.A., the Company's auditor since 2013, on the
consolidated financial statements for the year ended Dec. 31, 2017,
includes an explanatory paragraph stating that the Company has a
net loss and cash provided by operating activities of $687,068 and
$438,558, respectively, in 2017 and has a working capital deficit,
stockholders' deficit and accumulated deficit of $1,345,095,
$1,096,005 and $6,587,235, respectively, at Dec. 31, 2017. These
matters raise substantial doubt about the Company's ability to
continue as a going concern.
PETSMART INC: Bank Debt Trades at 14% Off
-----------------------------------------
Participations in a syndicated loan under which Petsmart
Incorporated is a borrower traded in the secondary market at 86.25
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.29 percentage points from the
previous week. Petsmart Incorporated pays 300 basis points above
LIBOR to borrow under the $42 million facility. The bank loan
matures on March 10, 2022. Moody's rates the loan 'B3' and Standard
& Poor's gave a 'CCC' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
PHO TNT: Taps Cohen Baldinger as Legal Counsel
----------------------------------------------
Pho TNT, Inc., seeks approval from the U.S. Bankruptcy Court for
the District of Maryland to hire Cohen Baldinger & Greenfeld, LLC
as its legal counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code and will provide other legal services related to
its Chapter 11 case.
Cohen Baldinger charges these hourly rates:
Steven Greenfeld, Esq. $475
Merrill Cohen, Esq. $495
Augustus Curtis, Esq. $300
Steven Greenfeld, Esq., a member of Cohen Baldinger and the
attorney who will be handling the case, disclosed in a court filing
that he does not represent any interest adverse to the Debtor and
its bankruptcy estate.
Cohen Baldinger can be reached through:
Steven H. Greenfeld, Esq.
Cohen Baldinger & Greenfeld, LLC
2600 Tower Oaks Boulevard, Suite 103
Rockville, MD 20852
Phone: (301) 881-8300
Email: steveng@cohenbaldinger.com
About Pho TNT Inc.
Pho TNT Inc. owns and operates a restaurant specializing in
Vietnamese food in Frederick, Maryland.
Pho TNT sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Md. Case No. 18-23525) on October 11, 2018. At the time
of the filing, the Debtor estimated assets of less than $50,000
and liabilities of less than $50,000. Judge Thomas J. Catliota
presides over the case. The Debtor tapped Cohen Baldinger &
Greenfeld, LLC as its legal counsel.
PIER 1 IMPORTS: Moody's Hikes CFR to Caa1, Outlook Stable
---------------------------------------------------------
Moody's Investors Service downgraded Pier 1 Imports (U.S.), Inc.'s
Corporate Family Rating to Caa1 from B3 and Probability of Default
Rating to Caa1-PD from B3-PD. Concurrently, Moody's downgraded the
company's senior secured term loan rating to Caa2 from B3, and the
Speculative Grade Liquidity rating to SGL-3 from SGL-2. The ratings
outlook is stable.
"The significant early stumbles of Pier 1's implementation of its
strategic plan, which contributed to a meaningful EBITDA loss in
the most recent quarter, increase the risk that the subsequent
earnings recovery will be considerably weaker and take longer than
originally anticipated," said Moody's analyst Raya Sokolyanska.
"While the company has adequate near-term liquidity, a material
operational turnaround in the next 12-18 months is needed to
achieve a sustainable capital structure," added Sokolyanska.
The CFR, PDR and term loan downgrades reflect the company's
significantly weaker than expected operating performance as a
result of missteps in the early execution of its "New Day"
strategic plan.
The downgrade of the Speculative Grade Liquidity Rating to SGL-3
from SGL-2 incorporates Moody's projections for negative free cash
flow in FY 2019 and FY 2020, but is supported by good excess
revolver availability over the next 12-18 months and the lack of
debt maturities until the April 2021 term loan due date.
Moody's took the following ratings actions for Pier 1 Imports
(U.S.), Inc.:
Corporate Family Rating, downgraded to Caa1 from B3
Probability of Default Rating, downgraded to Caa1-PD from B3-PD
Senior Secured Bank Credit Facility, downgraded to Caa2 (LGD4) from
B3 (LGD4)
Speculative Grade Liquidity Rating, downgraded to SGL-3 from SGL-2
Stable Outlook
RATINGS RATIONALE
Pier 1's Caa1 CFR incorporates the company's weak operating
results, high funded leverage (excluding Moody's standard operating
lease adjustments) and uncertainty with regard to accomplishing a
significant earnings turnaround that would materially improve its
capital structure over the next two years. Moody's expects that the
company's strategic plan will yield earnings improvement from the
FY 2019 heavy investment year, but recovery will be dampened by
profit pressure from growing competition and tariffs on China home
furnishings imports, as well as a high level of execution risk. The
rating also reflects Pier 1's narrow product focus in the highly
cyclical, fragmented and competitive home furnishings sector.
Pier 1's adequate near-term liquidity and relatively low level of
funded debt provide key credit support. In addition, the rating
benefits from the company's well-known brand and geographic reach
across North America, as well as continued progress on its sourcing
and supply chain initiatives and early signs of improvement in some
key customer metrics.
The stable outlook reflects Moody's expectations for adequate
liquidity, decelerating earnings declines in the second half of FY
2019, and top line and EBITDA improvements in FY 2020.
The ratings could be downgraded if Moody's comes to expect that FY
2020 and FY 2021 earnings recovery following the trough of FY 2019
will be weak. The ratings could also be downgraded if liquidity
erodes for any reason, including constrained revolver availability,
or uncertainty with regard to the company's ability to refinance
its capital structure.
The ratings could be upgraded if the company effectively executes
on its strategic plan and achieves substantial revenue and earnings
recovery. Quantitatively, the ratings could be upgraded if
Moody's-adjusted EBIT/interest expense is sustained above 1.0 time.
An upgrade would also require expectations for at least adequate
liquidity, including breakeven of positive free cash flow.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
Pier 1 Imports (U.S.), Inc. is an indirect operating subsidiary of
Pier 1 Imports, Inc., a specialty retailer of imported decorative
home furnishings and gifts. The company operates through 989 stores
throughout the U.S. and Canada, its Pier1.com e-commerce website,
and licensing arrangements with stores in Mexico and El Salvador.
Revenue for the twelve months ended September 1, 2018 was $1.7
billion.
PRAGAT PURSHOTTAM: Agreed 2nd Cash Collateral Interim Order Entered
-------------------------------------------------------------------
The Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the
Northern District of Illinois has authorized Pragat Purshottam,
Inc., to use the cash collateral upon the terms and conditions in
the Agreed Second Interim Order to avoid immediate and irreparable
harm to the estate.
The Debtor's Motion for Use of Cash Collateral is continued for
final hearing to Oct. 25, 2018 at 10:30 a.m.
The Debtor may use collateral and cash to the extent of plus or
minus 10% of each line item set forth on its Budget, up to and
including Oct. 26, 2018. The approved Budget shows total monthly
expenses of in the aggregate amount of $4,639.
Phoenix REO, LLC is granted a post-petition replacement lien, to
the same extent and with the same priority held prepetition
resulting from its recorded mortgage. The liens and security
interests granted to Phoenix REO will have the same validity,
perfection and enforceability as the pre-petition mortgages and
liens of Phoenix REO.
During the interim period, the Debtor will: (a) be authorized to
deposit all cash into its Debtor-in-Possession Accounts or such
other bank as ordered or allowed by the Court; and (b) escrow with
Phoenix REO, 1/12 per month of the annual real estate taxes subject
to a written escrow agreement.
A full-text copy of the Agreed Second Interim Order is available
at
http://bankrupt.com/misc/ilnb18-20221-34.pdf
About Pragat Purshottam
Pragat Purshottam, Inc., is a real estate company that owns a
commercial property located at 270-280 Glen Ellyn Road,
Bloomingdale, Illinois. The company valued the property at
$500,000.
Pragat Purshottam sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 18-20221) on July 19,
2018. In the petition signed by Nikunj Patel, manager, the Debtor
disclosed $505,578 in assets and $1,559,150 in liabilities. Judge
Carol A. Doyle presides over the case.
PROCERA I: S&P Affirms 'B-' Issuer Credit Rating, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
Procera I L.P. The outlook is stable.
S&P said, "At the same time, we assigned our 'B-' issue-level
rating to the company's proposed $30 million revolving credit
facility and proposed $400 million first-lien term loan. The '3'
recovery rating indicates our expectation of meaningful (50%-70%;
rounded estimate: 55%) recovery in the event of a payment default.
"We also assigned our 'CCC+' issue-level rating to the company's
proposed $110 million second-lien term loan. The '5' recovery
rating indicates our expectation of modest (10%-30%; rounded
estimate: 20%) recovery in the event of a payment default.
"The issuer credit rating on Procera I L.P. reflects high S&P
adjusted leverage of about mid-8x (pro forma for the dividend
recap) and our expectation that leverage will drop to around 7x
over the next 12 months, due to cost savings acheived by the
company following the Procera-Sandvine Corp. merger in 2017. We
project the company will generate positive free cash flow of at
least $20 million annually, with free cash flow to debt in the
mid-single-digit percentage area. The rating also reflects
Sandvine's focus on a niche networking segment and a mature
industry, and the presence of very large competitors that provide
"light-weight" solutions. While the dividend recapitalization is
aggressive, occuring a year following the previous transaction, we
give consideration to Sandvine's performance, which has been in
line with its guidance. The company has also improved its cost
structure by executing meaningful cost cuts since the merger in
2017.
"The stable outlook reflects our expectation that the combined
company will generate low-single-digit revenue growth and positive
free cash flow of about $20 million or better annually, while
improving EBITDA margins by lowering operating expenses over the
next 12 to 24 months.
"Although unlikely over the next 12 months, we could lower the
rating if the proposed cost cuts result in customer losses and
revenue declines, such that free cash flow turns negative, and we
no longer view the company's capital structure to be sustainable.
"We would consider an upgrade if leverage falls to about the mid-6x
area and free cash flow to debt is sustained above 5%. While the
company could hit these upside targets over the next 12 months, we
would like to see the company successfully operate with its lowered
operating cost structure for a period of time before we consider an
upgrade."
PYRAMID QUALITY: Has Authorization on Cash Collateral Use
---------------------------------------------------------
The Hon. Mark A. Randon of the U.S. Bankruptcy Court for the
Eastern District of Michigan authorized Pyramid Quality Solutions &
Innovations, Inc., to use up to $225,000 cash collateral on an
emergency basis only.
The Debtor is authorized to receive, collect, and make use of the
cash collateral in its possession and that it receives in the
ordinary course of its business. Such use of the cash collateral
will be as needed for the reasonable and necessary operating
expenses incurred in the ordinary course of the Debtor' business,
including, but not limited to, current taxes incurred after the
Petition Date, personal property taxes whether incurred before or
after the Petition Date, employee salaries, unpaid withholding
taxes for the last pay period before any pay periods after the
Petition Date, property insurance and other insurance, union dues,
utilities and other ordinary course charges necessary for Debtor's
operations, U.S. Trustee quarterly fees and court approved fees and
expenses of professionals retained by the Debtor.
The following creditors will receive monthly adequate protection
payments beginning October 15, 2018, and every 15th of every month
thereafter up through confirmation of any plan:
The Huntington Bank NA. $5,000
On Deck Capital Inc. $500
Forward Financing $500
Funding Metrics LLC d/b/a Lendini $500
LG Funding LLC $500
The Huntington National Bank will be granted a replacement lien to
the extent of the value of its collateral as of the date of the
filing of the petition, in the same priority, and to the extent and
validity of its prepetition security, and believed to be in the
approximate amount of $156,500.
All post-petition retainer funds received by Gudeman & Associates,
P.C. for professional fees will be in trust for the Debtor's
estate.
A full-text copy of the Order is available at
http://bankrupt.com/misc/mieb18-52932-30.pdf
About Pyramid Quality Solutions
& Innovations
Pyramid Quality Solutions and Innovations, Inc., filed a Chapter 11
bankruptcy petition (Bankr. E.D. Mich. Case No. 18-52932) on Sept.
21, 2018, estimating under $1 million in assets and liabilities.
The Debtor is represented by Edward J. Gudeman, Esq., at Gudeman &
Associates, P.C.
PYRAMID QUALITY: Seeks Authorization on Cash Collateral Use
-----------------------------------------------------------
Pyramid Quality Solutions & Innovations, Inc., seeks authorization
from the U.S. Bankruptcy Court for the Eastern District of Michigan
to use cash collateral.
The Debtor needs the use of the funds (which may constitute
receivables) to run its business operations -- including paying
employees, withholding and FICA taxes, insurance, union dues, and
all the other normal business expenses.
The Debtor has prepared its projections for the months of September
2018 through February 2019. The Debtor estimates that its current
cash collateral needs are approximately $225,000 on an interim
emergency basis for the month of October to avoid irreparable
harm.
The creditors who may have lien in cash collateral are Huntington
Bank, On Deck Capital, Inc., Forward Financing, Funding Metrics,
L.L.C. (d/b/a Lendini), and LG Funding L.L.C. all of which appear
to have some sort of collateral in the form of accounts, deposit
accounts, contract rights, cash, etc.
The Debtor proposes to pay the secured creditors the following
amounts as adequate protection:
The Huntington Bank NA. $2,000
On Deck Capital Inc. $500
Forward Financing $500
Funding Metrics LLC d/b/a Lendini $500
LG Funding LLC $500
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/mieb18-52932-8.pdf
About Pyramid Quality Solutions
& Innovations
Pyramid Quality Solutions and Innovations, Inc., filed a Chapter 11
bankruptcy petition (Bankr. E.D. Mich. Case No. 18-52932) on Sept.
21, 2018. In the petition signed by Ossie Nunn, CEO, the Debtor
estimated under $500,000 in assets and under $1 million in
liabilities. Edward J. Gudeman, Esq., at Gudeman & Associates,
P.C., serves as counsel to the Debtor.
QUEST GROUP: Taps Marrero Chamizo as Legal Counsel
--------------------------------------------------
Quest Group Holding, LLC, seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to hire Marrero,
Chamizo, Marcer, Law, LP, as its legal counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code; represent the Debtor in negotiation with its
creditors in the preparation of a bankruptcy plan; and provide
other legal services related to its Chapter 11 case.
The Debtor has agreed to pay the firm a postpetition retainer in
the sum of $5,000.
The firm and its attorney Julio Marrero, Esq., who will be handling
the case, do not represent any interest adverse to the Debtor.
Marrero can be reached through:
Julio C. Marrero, Esq.
Marrero, Chamizo, Marcer, Law, LP
3850 Bird Road, PH1
Coral Gables, FL 33146
Tel: (305) 446-0163
Fax: (305) 444-5538
E-mail: bankruptcy@marrerorealestatelaw.com
About Quest Group Holding
Quest Group Holding, LLC, a privately-held company in Miami,
Florida, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Fla. Case No. 18-21776) on Sept. 25, 2018. In the
petition signed by Eddrian Burciaga, owner, the Debtor estimated
assets of less than $1 million and liabilities of $1 million to $10
million. Judge Jay A. Cristol presides over the case. The Debtor
tapped Marrero, Chamizo, Marcer, Law, LP as its legal counsel.
RACKSPACE HOSTING: $19MM Bank Debt Trades at 2% Off
---------------------------------------------------
Participations in a syndicated loan under which Rackspace Hosting
is a borrower traded in the secondary market at 97.94
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.77 percentage points from the
previous week. Rackspace Hosting pays 300 basis points above LIBOR
to borrow under the $19 million facility. The bank loan matures on
November 3, 2023. Moody's rates the loan 'Ba3' and Standard &
Poor's gave a 'BB-' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
RACKSPACE HOSTING: $80MM Bank Debt Trades at 2% Off
---------------------------------------------------
Participations in a syndicated loan under which Rackspace Hosting
is a borrower traded in the secondary market at 97.94
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.77 percentage points from the
previous week. Rackspace Hosting pays 300 basis points above LIBOR
to borrow under the $80 million facility. The bank loan matures on
November 3, 2023. Moody's rates the loan 'Ba3' and Standard &
Poor's gave a 'BB-' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
REDOX POWER: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Redox Power Systems, LLC
4467 Technology Drive
Suite 2107, Bldg 387
College Park, MD 20742
Business Description: Maryland-based Redox Power Systems, LLC --
www.redoxpowersystems.com -- designs and
manufactures fuel cell products that provide
clean, primary power at a price point that
competes with grid power. Redox develops
distributed generation systems that disrupts
the way energy is delivered for commercial,
industrial, and residential markets. With
advanced solid oxide fuel cell technology
inside every Redox product, the Company is
able to drastically reduce the size, weight,
and most importantly, the cost of reliable
on-site generation of electricity while also
providing high quality heat for combined
heat and power (CHP) applications.
Chapter 11 Petition Date: October 19, 2018
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Case No.: 18-23882
Judge: Hon. Thomas J. Catliota
Debtor's Counsel: Michael J. Lichtenstein, Esq.
SHULMAN, ROGERS, GANDAL, PORDY & ECKER, P.A.
12505 Park Potomac Avenue, 6th Floor
Potomac, MD 20854
Tel: 301-230-5231
301-230-5200
Fax: 301-230-2891
E-mail: mjl@shulmanrogers.com
Total Assets: $209,353
Total Liabilities: $3,866,611
The petition was signed by David J. Buscher, chief operating
officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/mdb18-23882.pdf
RELIABLE GALVANIZING: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Reliable Galvanizing Company
819 W. 88th St.
Chicago, IL 60620
Business Description: Reliable Galvanizing operates as an iron and
steel metal fabrication company. Serving
the Midwest for over 35 years, the Company
offers a process of corrosion protection
consisting of dipping steel into a bath of
molten zinc producing a progressive
zinc/iron alloy layer on the surface.
Chapter 11 Petition Date: October 19, 2018
Court: United States Bankruptcy Court
Northern District of Illinois (Chicago)
Case No.: 18-29503
Judge: Hon. LaShonda A. Hunt
Debtor's Counsel: Jonathan D. Golding, Esq.
THE GOLDING LAW OFFICES, P.C.
500 N. Dearborn St., 2nd Fl.
Chicago, IL 60654
Tel: 312-832-7892
Fax: 312-755-5720
E-mail: jgolding@goldinglaw.net
- and -
Richard N. Golding, Esq.
THE GOLDING LAW OFFICES, P.C.
500 North Dearborn Street
Second Floor
Chicago, IL 60654
Tel: (312) 832-7885
E-mail: rgolding@goldinglaw.net
Total Assets: $914,187
Total Liabilities: $1,022,052
The petition was signed by Michael Eisner, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/ilnb18-29503.pdf
REMARKABLE HEALTHCARE: Allowed to Use Cash Collateral Until Nov. 30
-------------------------------------------------------------------
The Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the
Eastern District of Texas has inked her approval to an agreed order
regarding Remarkable Healthcare of Carrollton, LP's and its
affiliated debtors' Second Motion For Final Order Authorizing the
Continued Use of Cash Collateral.
The Court's prior Final Order Authorizing the Debtors to Use Cash
Collateral and Providing for Adequate Protection entered on April
20, 2018 remains in full force and effect, except that such Order
is modified solely as follows:
(a) The Debtors' authorization to use Cash Collateral to the
extent set forth in the Final Order is extended through and
including November 30, 2018.
(b) The term Budget, as defined under Paragraph 1 of the Final
Order, is modified to include and refer to the budget attached
Agreed Order regarding Debtors' Second Motion. The approved Budget
provides total projected cash disbursements of approximately
$4,752,067 for the period covering October 1, 2018 through November
30, 2018.
(c) The first sentence of Paragraph 2 of the Final Order is
modified and replaced as follows: "Cash Disbursements Testing: The
Debtors will not incur cash disbursements nor use Cash Collateral
in an amount that exceeds by more than 10% of the total cash
disbursements provided in the Budget, pursuant to the testing set
forth below, without first obtaining Comerica's written consent;
provided, however, that expenses and disbursements related to
facility capital repairs that are paid with insurance proceeds will
not be included in calculating such variance. Debtors will identify
any disbursements that are paid with insurance proceeds in the
weekly vendor transaction list and also specifically identify the
receipt of any insurance proceeds as a note in the Standing Agenda
Topics."
(d) Paragraph 5, footnote 3 of the Final Order is modified and
replaced as follows: "As of September 19, 2018, the interest due
and owing under the Prepetition Facility Documents is in the amount
of $35,525 per month."
(e) The first sentence of Paragraph 7 of the Final Order is
modified and replaced as follows: "Kinser Transfers. Nancy Kinser
agrees to pay to the Debtors the sum of $80,000, which amount was
incorrectly paid postpetition to Kinser for prepetition debt, as
follows: (i) within ten days of the Final Order, Kinser agrees to
pay the sum of $40,000 to the Debtors; and (ii) on the 30th day of
each subsequent month, commencing in May 2018 and continuing
through December 2018, Kinser agrees to pay the Debtors the sum of
$5,000."
(f) Paragraph 15, subsection (e) of the Final Order is hereby
modified and replaced as follows: "if the consolidated cash
balance, according to any report provided under Paragraph 23 below,
is actually or projected to be less than $200,000.00 on any day and
Comerica does not consent in writing to such variation from the
Budget or Subsequent Budgets."
(g) Paragraph 19 of the Final Order is hereby modified and
replaced as follows: "Segregation of Cash Collateral. All of the
Debtors' cash and all Cash Collateral will be deposited and held in
the Debtors' DIP account(s) at Regions Bank, provided that each of
the DIP Account(s) not at Comerica will be subject to a deposit
account control agreement ("DACA") in favor of Comerica. The
Debtors have delivered a DACA for each of such DIP Account(s). The
Debtors are prohibited from withdrawing or using funds from the DIP
Account(s) except as provided for in the Budget, the Final Order,
and any further order of the Court."
(h) Paragraph 23, subsection (d) of the Final Order is
modified and replaced as follows: "commencing on March 14, 2018,
monthly accounts receivable and accounts payable aging reports; as
well as the consolidated borrowing base certificate, on a monthly
basis, signed by an officer of the Debtors."
(i) The last sentence of Paragraph 23 of the Final Order is
modified and replaced as follows: "In the event that any such
reporting requirement is not received by Comerica and is not cured
within three business days after emailed notice of the default, the
Debtors’ authorization to continue using Cash Collateral will
immediately terminate pursuant to Paragraph 15(a) of this Final
Order, without the need for a further order from the Court."
(j) Paragraph 24 is modified and replaced as follows: "Parties
to Reporting. All information that the Debtors are obligated to
send to Comerica under this Final Order will be sent by email to:
(a) Comerica's counsel; (b) Comerica's representative, David Jones,
(c) Nick Zaccagnini and David Gorelick of Huron (d) Howard Spector,
counsel for Montgomery Capital Partners I, LP, (e) Jason Searcy,
counsel for the Committee, and (f) Thomas Whalen and Zachary Cohen
with Griffin Financial Group, LLC, with a copy to Debtors' counsel,
Bryan Assink. The Debtors agree that Huron representatives may
contact Laurie Beth McPike directly, and Comerica may contact her
directly via email, with questions regarding the Debtors'
operations and the Debtors will respond to those questions as
promptly as possible (but no later than 72 hours after such
questions are sent)."
Comerica is authorized to withdraw the funds held in escrow by
Comerica and apply such funds toward the principal balance of the
Prepetition Facility Obligations. However, such funds will be
applied only toward the principal balance of Debtors' Prepetition
Facility Obligations, and not to interest, fees, expenses, or other
costs incurred in connection with Debtors' Prepetition Facility
Obligations.
A full-text copy of the Order is available at
http://bankrupt.com/misc/txeb18-40295-187.pdf
About Remarkable Healthcare
Remarkable Healthcare operates skilled nursing facilities in
Dallas, Fort Worth, Prestonwood and Seguin, Texas. All Remarkable
facilities are designed to meet the needs of patients requiring
post-acute recovery and therapy or residents needing a longer-term
stay. Services are tailored to each individual with the goal of
facilitating increased strength and mobility while minimizing pain
and impairment. Remarkable's programs are designed to help
patients recover quickly from surgery, injury, or serious illness
and speed up the recovery process.
Remarkable Healthcare of Carrollton, LP and its affiliates filed
voluntary petitions (Bankr. E.D. Tex. Lead Case No. 18-40295) on
Feb. 12, 2018, seeking relief under Chapter 11 of the Bankruptcy
Code.
In the petitions signed by Laurie Beth McPike, president of LBJM,
LLC, its general partner, Remarkable Healthcare of Carrollton,
Remarkable Healthcare of Dallas, Remarkable Healthcare of Fort
Worth and Remarkable Healthcare of Seguin, each had estimated $1
million to $10 million in assets and liabilities; and Remarkable
Healthcare had $100,000 to $500,000 in estimated assets and $1
million to $10 million in estimated liabilities.
Mark A. Castillo, Esq., at Curtis Castillo PC, serves as the
Debtors' counsel.
The Office of the U.S. Trustee on March 19, 2018, appointed two
creditors to serve on an official committee of unsecured creditors
in the Chapter 11 cases. The Committee tapped Searcy & Searcy,
P.C., as its legal counsel.
REMODELING SERVICES: Agreed Final Cash Collateral Order Entered
---------------------------------------------------------------
The Hon. Robyn L. Moberly of the U.S. Bankruptcy Court for the
Southern District of Indiana has signed an agreed final order
authorizing Remodeling Services & Complete Restoration, Inc. to use
cash collateral.
The Debtor is indebted to Greenfield Banking Company ("GBC") in the
outstanding principal amount of approximately $1,200,000, plus
accrued and unpaid interest and other charges as provided in the
Loan Documents. GBC asserts a valid and properly perfected,
unavoidable, indefeasible security interest and lien in all of the
Debtor's assets.
The Debtor will use GBC Cash Collateral to pay actual expenses of
the Debtor necessary to maintain and preserve the Debtor’s assets
and to continue the Debtor's operations. GBC has consented to the
use of the GBC Cash Collateral upon the terms and conditions set
forth below:
A. The Debtor is authorized on a limited basis to use the GBC
Cash Collateral during the Interim Period. However, the Debtor's
expenditures made under the Agreed Final Order for any category of
expenses included in the Budget may not exceed the expenditures
provided in the Budget for that category by more than 10%, and the
Debtor's net cash flow for any period provided in the Budget must
by equal to or greater than 90% of the net projected cash flow for
such period in the Budget.
B. In order to provide adequate protection in favor of GBC,
the Debtor will:
(a) Grant a perfected security interest and lien in favor
of GBC to the extent the GBC Cash Collateral is used by the Debtor
against all of Debtor's property, including but not limited to, all
cash (including all deposit accounts, checks, and any other cash
equivalents), and all products and proceeds of all of the
foregoing. GBC's Replacement Lien granted in the Agreed Final Order
will constitute a first priority lien and security interest
attaching to the Post-Petition Collateral subject only to
pre-existing, pre-petition, non-voidable, perfected liens or
security interests in favor of third parties that are not otherwise
subject to avoidance or subordination;
(b) Make monthly payments to GBC in the amount of $5,000
on the 15th of each month continuing on the same day of each
month;
(c) Pay reasonable attorneys' fees and expenses incurred
by GBC as and when invoiced to GBC. GBC may debit any post-petition
account of the Debtor with Greenfield to pay the GBC Expenses as
invoiced to the Debtor upon 5 days prior notice to the Debtor; and
(d) Maintain Post-Petition Collateral with a value not
less than the Adequate Protection Claim.
During the Interim Period, to the extent that the replacement liens
granted in the Post-Petition Collateral by the Agreed Final Order
prove to be insufficient adequate protection of GBC's Adequate
Protection Claim, GBC is granted an administrative super-priority
claim, pursuant to 11 U.S.C. Section 507(b), superior to all
administrative expenses to satisfy its claim, subject only to fees
payable to the U.S. Trustee and post-petition employee wages and
salaries as set forth in the Budget and approved by GBC or the
Court.
In addition, the Debtor will maintain and manage its business and
operations in the ordinary course under the current circumstances,
including without limitation the maintenance of adequate insurance
coverage with respect to loss of or damage to the Post-Petition
Collateral with GBC named as a loss payee on all such policies. The
Debtor will make every reasonable effort to preserve, maintain and
protect the Post-Petition Collateral and the proceeds thereof.
The Debtor will pay any and all real estate taxes and personal
property taxes assessed with regard to the Post-Petition
Collateral, as and when such items become due.
The Debtor will in good faith and in a reasonably prompt manner:
(i) provide to GBC the financial reports submitted to the U.S.
Trustee's Office, and such other information as GBC may from time
to time request;
(ii) answer inquiries and requests of GBC and its
professionals for information, and/or documentation;
(iii) provide full cooperation and information to GBC as to
the value and description of the assets of the Debtor and the sale
or liquidation of those assets;
(iv) comply with all reporting requirements and financial
disclosures required by the Loan Documents; and
(v) provide GBC with monthly cash flow detail reports
comparing actual performance to the Budget on or before the 20th
day of each calendar month for the calendar month just ended.
A full-text copy of the Agreed Final Order is available at
http://bankrupt.com/misc/insb18-05638-29.pdf
About Remodeling Services and
Complete Restoration Inc.
Remodeling Services & Complete Restoration, Inc., provides
restoration, remodeling and new construction services. The
Company's corporate headquarters are located in Greenfield,
Indiana.
Remodeling Services & Complete Restoration, Inc., based in
Greenfield, IN, filed a Chapter 11 petition (Bankr. S.D. Ind. Case
No. 18-05638) on July 25, 2018. In the petition signed by Mike
Clark, president, the Debtor estimated up to $50,000 in assets and
$1 million to $10 million in liabilities.
The Hon. Robyn L. Moberly presides over the case.
The Debtor tapped Hester Baker Krebs LLC as its legal counsel; and
Richey Mills & Associates, LLP, as its financial advisor.
RESOLUTE ENERGY: KEMC Disappointed with Company's Lack of Progress
------------------------------------------------------------------
KEMC Fund IV GP, LLC sent a letter to the Board of Directors of
Resolute Energy Corporation on Oct. 19, 2018, expressing its
disappointment with the Company's lack of progress on conducting a
strategic review and failure to improve its financial performance.
As described in the October Letter, KEMC called on the Company to
immediately launch a formal process with the goal of selling or
merging the Company with another Delaware Basin operator before
year end, reduce corporate overhead costs in the interim, and
deliver to shareholders the returns and value accretion that have
been lacking. KEMC also stated it may seek to appoint independent
directors to the Company's Board of Directors if the Company
continues to stall on launching a formal sale or combination
process, cutting overhead costs and delivering shareholder value.
As of Oct. 19, 2018, KEMC beneficially owns 2,254,306 shares of
common stock of Resolute Energy, which represents 9.7 percent based
on the 23,166,491 shares of Common Stock outstanding as of July 31,
2018, as reported in the Issuer's Form 10-Q filed with the
Securities and Exchange Commission on Aug. 6, 2018. The 2,254,306
shares of Common Stock beneficially owned by KEMC were purchased by
the Kimmeridge Funds using the working capital of the Kimmeridge
Funds for a total purchase price of $66,484,842.
"It is of concern to us that, in conversations with other industry
players, we have been left with the impression that Resolute has
employed a passive approach to its strategic review rather than
engaging interested parties in a serious sales process," said
Benjamin Dell, managing partner at Kimmeridge, in the October
Letter. "During the same time, the Company has continued to fail
to achieve the operational targets it set."
"In the event that the Board and management team fail to actively
and exhaustively pursue a sale or combination, Kimmeridge will
consider all options, including seeking to install independent
Board members to act in the best interests of the Company and its
shareholders," he continued.
A full-text copy of the Schedule 13D/A filed with the Securities
and Exchange Commission is available for free at:
https://is.gd/vSaxGl
About Resolute Energy
Based in Denver, Colorado, Resolute Energy Corp. (NYSE:REN) --
http://www.resoluteenergy.com/-- is an independent oil and gas
company focused on the acquisition and development of
unconventional oil and gas properties in the Delaware Basin portion
of the Permian Basin of west Texas.
Resolute incurred a net loss available to common shareholders of
$7.70 million in 2017 following a net loss available to common
shareholders of $161.7 million in 2016. As of June 30, 2018,
Resolute Energy had $826.6 million in total assets, $909.40 million
in total liabilities and a total stockholders' deficit of $82.77
million.
RUBY'S FRANCHISE: Has Authority on Interim Use of Cash Collateral
-----------------------------------------------------------------
The Hon. Catherine Bauer of the U.S. Bankruptcy Court for the
Central District of California authorizing Ruby's Franchise
Systems, Inc.'s interim use of cash collateral.
A final hearing on the Cash Collateral Motion is set for Oct. 22,
2018 at 10:00 a.m. The Debtor is directed to file a supplemental
declaration on Oct. 17, 2018, providing the Court and interested
parties with a cash flow statement similar to the Budget submitted
in support of the Motion, but reflecting Debtor's actual financial
performance since the Petition Date.
A full-text copy of the Interim Order is available at
http://bankrupt.com/misc/cacb18-13324-48.pdf
About Ruby's Franchise Systems
Ruby's Franchise Systems, Inc. -- https://www.rubys.com/franchising
-- is the creator of Ruby's Diner which serves burgers, hand-made
milkshakes, in addition to a wide selection of breakfast, lunch and
dinner entrees. Ruby's Diner operates across California, Nevada
and Texas.
Ruby's Franchise Systems filed its voluntary petition for relief
under chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
18-13324) on Sept. 6, 2018. In the petition signed by Doug
Cavanaugh, president, the Debtor estimated $50,000 in assets and $1
million to $10 million in liabilities. Theodora Oringher PC, led
by Eric J. Fromme, serves as general bankruptcy counsel to the
Debtor.
S B BUILDING: Examiner Taps McManimon Scotland as New Counsel
-------------------------------------------------------------
Frank Pina, the examiner appointed in the Chapter 11 cases of S B
Building Associates Limited Partnership and its affiliates, seeks
approval from the U.S. Bankruptcy Court for the District of New
Jersey to hire McManimon, Scotland & Baumann, LLC, as his new legal
counsel.
The examiner had initially hired Trenk, DiPasquale, Della Fera &
Sodono, P.C. as his legal counsel in connection with the Debtors'
bankruptcy cases. The firm substantially joined McManimon
effective Oct. 1, 2018.
McManimon will charge at these hourly rates:
Partners $400
Associates $250
Paralegals $215
The firm has not received a retainer, according to court filings.
Sam Della Fera, Jr., Esq., at McManimon, disclosed in a court
filing that he and his firm are "disinterested" as defined in
section 101(14) of the Bankruptcy Code.
McManimon can be reached through:
Sam Della Fera, Jr., Esq.
McManimon, Scotland & Baumann, LLC
75 Livingston Avenue
Roseland, NJ 07068
Phone: (973) 622-1800
Email: sdellafera@msbnj.com
About S B Building Associates LP
Morristown, New Jersey-based S B Building Associates Limited
Partnership, SB Milltown Industrial Realty Holdings, LLC, and Alsol
Corporation filed Chapter 11 bankruptcy petitions (Bankr. D.N.J.
Lead Case No. 13-12682) on Feb. 11, 2013. Judge Vincent F. Papalia
presides over the jointly administered cases. Alsol's petition
disclosed $1 million to $10 million in assets and liabilities.
The Debtors S B Building Associates Limited Partnership (Bankr.
D.N.J., Case No. 13-12682) and SB Milltown Industrial Realty
Holdings, LLC (Bankr. D.N.J., Case No. 13-12685) filed on Feb. 11,
2013. The Debtor 190 South Street Realty Holdings, L.P. (Case No.
15-14558), filed on March 16, 2015; 199 Realty Corp., (Case No.
15-14776) filed on March 7, 2013; 3920 Park Avenue Associates, L.P.
(Case No. 16-14923), filed on March 16, 2016.
The Debtors are represented by Morris S. Bauer, Esq. at Norris
McLaughlin & Marcus, in Bridgewater, New Jersey; Joseph R Zapata,
Jr., Esq., at Mellinger, Sanders & Kartzman, LLC; Gregory J Cannon,
Esq., at Berger & Bornstein, LLC; and Elizabeth K. Holdren, Esq.,
at Hill Wallack.
Frank Pina, was duly appointed as the Chapter 11 Examiner in the
case. The Examiner hired Trenk DiPasquale Della Fera & Sodono,
P.C., as attorney.
S.A.M. GROUP: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
No official committee of unsecured creditors has been appointed in
the Chapter 11 case of S.A.M. Group LLC as of Oct. 17, 2018,
according to a court docket.
About S.A.M. Group
S.A.M. Group LLC is a privately-held company engaged in activities
related to real estate. S.A.M. Group sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ark. Case No.
18-15169) on Sept. 24, 2018. In the petition signed by CEO Sam
McFadin, the Debtor estimated assets of less than $50,000 and
liabilities of $1 million to $10 million. Judge Phyllis M. Jones
presides over the case. The Debtor tapped the Bond Law Office as
its legal counsel.
SABRE INDUSTRIES: Moody's Hikes CFR to B2, Outlook Stable
---------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating and
Probability of Default Ratings of Sabre Industries, Inc., to B2 and
B2-PD from B3 and B3-PD, respectively. Concurrently, Moody's
upgraded the company's first-lien senior secured revolver and term
loan by one notch to B1 from B2. The CFR upgrade is based on the
expectation that the company's improvement in credit metrics will
be sustained over the next twelve to eighteen months supported by a
healthy backlog, stable end-market fundamentals and a good
liquidity profile. The ratings outlook changed to stable from
positive.
The following rating actions were taken:
Ratings Upgraded:
Corporate Family Rating, to B2 from B3
Probability of Default Rating, to B2-PD from B3-PD
$45 million senior secured first-lien revolving credit facility due
2020, to B1 (LGD3) from B2 (LGD3)
$255 million (approximately $236 million outstanding) senior
secured first-lien term loan due 2022, to B1 (LGD3) from B2 (LGD3)
Outlook, changed to Stable, from Positive
RATINGS RATIONALE
Sabre's ratings upgrade is driven by the continued growth in the
company's top line, focus on higher margin revenue mix and new
business wins that have contributed to improved credit metrics.
Restructuring actions and operating efficiencies undertaken during
the last two and a half years are reflected in the company's
improved operating performance. Sabre's backlog provides near-term
revenue visibility and stable underlying fundamentals in the
company's end-markets including the ongoing need to replace the
existing utility infrastructure and continued demand for greater
bandwidth in the telecom end-market are also supportive of the
ratings. In addition, due to the company's improved free cash flow
generation during the fiscal year ended April 2018, the company
repaid funded debt beyond the required minimum term loan
amortization due to excess cash flow sweep provisions in its bank
agreement, thereby further contributing to improved leverage
metrics.
The company's B2 CFR reflects its position as one of the leaders in
its niche markets within the utility and telecom industries with
expanded service capabilities. The company possesses a healthy
backlog and new business wins that should support further
improvement. Favorable industry dynamics, particularly in the
utility business, should sustain this improvement. Free cash flow
has improved meaningfully in tandem with the company's improved
operating performance and working capital management. Nevertheless,
the company's free cash flow is sensitive to working capital
variances from quarter to quarter and working capital outflows are
anticipated given projected growth. At the same time, the B2 CFR
also reflects the meaningfully improved but still high leverage,
cyclicality in the company's telecom business as well as the
ongoing need to replace existing maturing long-term contracts with
new ones in order to avoid meaningful swings in operating
performance.
Sabre's good liquidity profile is based on the anticipation that
the company will generate positive annual free cash flow levels
while maintaining access to its revolving credit facility
(currently undrawn) for any intra-quarter needs. In addition, the
company is expected to maintain good covenant headroom under its
springing covenant if triggered over the next twelve to eighteen
months.
The stable outlook is based on the expectation that the company's
backlog will convert to top line growth and EBITDA generation while
maintaining a good liquidity profile.
An upward rating action would be driven by debt/EBITDA improving to
and being sustained at 4.0 times or below, EBITA/interest exceeding
3.5x and free cash flow/debt increasing to the double digit level
while maintaining a good liquidity profile.
A downward rating action could develop if debt/EBITDA were to
exceed 5.75x, EBITA/interest were to fall below 2.0x or if free
cash flow were to turn negative. A more aggressive financial policy
given its private equity ownership structure, including a sizable
debt-financed dividend, would also exert downward ratings pressure.
Sabre Industries, Inc. (Sabre), headquartered in Alvarado, TX,
manufactures towers, poles, shelters and related transmission
structures used in the wireless communications and electric
transmission and distribution industries. The company was acquired
by an affiliate of Kohlberg & Company and several co-investors in a
leveraged transaction in August 2012.
The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.
SAMUELS JEWELERS: Sets Bidding Procedures for All Assets
--------------------------------------------------------
Samuels Jewelers, Inc., asks the U.S. Bankruptcy Court for the
District of Delaware to authorize the bidding procedures in
connection with the sale of substantially all or any portion of
assets at auction.
Since before the commencement of the case and as the case has
progressed, the Debtor has sought to maximize the value of its
estate for its creditors. In the period leading up to the Petition
Date, the Debtor focused on negotiating with its lenders to develop
a consensual path forward that would minimize costs and maximize
value for the benefit of all stakeholders. To that end, the Debtor
explored and pursued multiple avenues, with the support of its
lenders, to (a) stabilize operations and enhance liquidity and (b)
preserve and maximize value. Those efforts culminated in the
Debtor securing a DIP financing facility and obtaining Court
approval of various reliefs that ensured a smooth transition into
the chapter 11 case.
Prior to the Petition Date, the Debtor pursued a potential sale and
received some indication of interest in a going concern sale.
While, following the commencement of the case, the Debtor has
continued excess inventory sales, it continues to believe that
pursuing a sale of substantially all or a portion of its assets
through a robust sale process will maximize value for creditors.
In support of that effort, the Debtor retained SSG Advisors, LLC to
serve as its investment banker in connection with a sale process.
With the assistance of SSG and its other advisors, the Debtor
developed the proposed Bidding Procedures and sale process.
The Debtor will provide a form Asset Purchase Agreement to the
Potential Bidders. The Potential Bidders will be required to
submit a revised Asset Purchase Agreement to the Debtor prior to
the Bid Deadline. The Debtor, with the consent of each of the DIP
Agents, will also entertain the possibility of entering into an
agreement with the "Stalking Horse Purchaser prior to the Bid
Deadline. If the Debtor, with the consent of each of the DIP
Agents, selects a Stalking Horse Purchaser, it will file and serve
notice of the proposed Stalking Horse Agreement no later than two
days after execution of the agreement. The notice will include the
type and amount of the Bid Protections, any necessary modifications
or amendments to the Bid Procedures, as well as a summary of the
key terms of the Stalking Horse Agreement. The Debtor, following
consultation with the Consultation Parties, will request that the
Court sets a hearing to approve the Stalking Horse Agreement no
later than seven days after execution of the Stalking Horse
Agreement. Any Sale Transaction will be on an "as is, where is"
basis and without representations or warranties of any kind.
The Debtor is requesting that the Court approves Bidding Procedures
for the sale of substantially all or any portion of the Assets with
a final sale hearing to occur on Dec. 18, 2018. he Debtor, at
various points throughout the bidding and sale process as set forth
and in the Bidding Procedures, will consult with Wells Fargo Bank,
National Association, the DIP Working Capital Agent, (b) Gordon
Brothers Finance Co., the DIP Term Agent, and (c) the Committee.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Dec. 5, 2018 at 4:00 p.m. (ET)
b. Deposit: 10% of the gross consideration
c. Auction: The Auction will take place at the offices of
Jones Day, 717 Texas, Houston, Texas 77019, at 10:00 a.m. (CT) on
Dec. 11, 2018.
d. Bid Increments: The Debtor will announce the bidding
increments for bids on some or all of the Assets at the outset of
the Auction.
e. Sale Hearing: TBD
f. Closing: no later than Jan. 31, 2019
g. Sale Objection Deadline: Dec. 11, 2018 at 4:00 p.m. (ET)
h. Any Qualified Bidder who has a valid and perfected lien on
any Assets of the Debtor's estates will have the right to credit
bid all or a portion of the value of such Secured Creditor's
claim.
Within two business days after entry of the Bidding Procedures
Order or as soon as practicable thereafter, the Debtor will serve
the Auction and Hearing Notice. Additionally, the Debtor, as part
of the Sale, may assume and assign all or some of the Assumed and
Assigned Agreements. By no later than 10 business days after entry
of the Bidding Procedures Order, the Debtor will file a schedule of
cure obligations for the Assumed and Assigned Agreements. The
Assumption/Assignment Objections Deadline is 4:00 p.m. (ET) on Nov.
20, 2018.
A hearing on the Motion is set for Oct. 22, 2018 at 11:00 a.m.
(ET). The objection deadline is Oct. 15, 2018 at 4:00 p.m. (ET).
A copy of the Bidding Procedures attached to the Motion is
available for free at:
http://bankrupt.com/misc/Samuels_Jewelers_295_Sales.pdf
About Samuels Jewelers
Samuels Jewelers, Inc. -- http://www.samuelsjewelers.com/--
operates a chain of jewelry stores with more than 120 stores in 23
states across the United States. These stores are located
primarily in strip-mall centers, major shopping malls and as
stand-alone stores.
Samuels Jewelers filed for Chapter 11 protection (Bankr. D. Del.
Lead Case No. 18-11818) on Aug. 7, 2018. In the petition signed by
CEO Farhad K. Wadia, Samuels Jewelers estimated assets of $100
million to $500 million and liabilities of $100 million to $500
million.
Jones Day and Richards, Layton & Finger, P.A., serve as counsel to
the Debtor. Berkeley Research Group, LLC, acts as financial
advisor, SSG Advisors, LLC, is the investment banker, and Prime
Clerk LLC serves as claims and noticing agent to the Debtor.
On Aug. 16, 2018, the U.S. Trustee appointed a seven-member panel
to serve as the Official Committee of Unsecured Creditors in the
Debtors' cases. The Committee tapped Foley & Lardner LLP as its
counsel; Whiteford, Taylor & Preston LLC as its co-counsel; and
Province, Inc. as financial advisor.
SANDVINE CORPORATION: Moody's Affirms B3 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service affirmed Sandvine Corporation's B3
Corporate Family Rating and B3-PD Probability of Default Rating
following the company's announcement that it will borrow an
additional $110 million in a refinancing transaction. Moody's
assigned B2 ratings to the company's proposed $30 million first
lien senior secured revolving credit facility and $400 million
first lien senior secured term loan. Sandvine is also issuing a
proposed (unrated) $110 million second lien senior secured term
loan. The ratings outlook is stable.
Proceeds from the offering along with approximately $18 million of
balance sheet cash will be used to repay the existing first lien
term loan and about $8 million of revolver borrowings, as well as
fund a distribution to shareholders and associated fees and
expenses related to the transaction.
Assignments:
Issuer: Sandvine Corporation
Senior Secured Bank Credit Facility, Assigned B2 (LGD3)
Outlook Actions:
Issuer: Sandvine Corporation
Outlook, Changed To Stable From Positive
Affirmations:
Issuer: Sandvine Corporation
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
RATINGS RATIONALE
The B3 CFR broadly reflects Sandvine's high business risk as a
result of its limited portfolio of niche network traffic management
and policy enforcement products, small operating scale relative to
competitors which include major telecom equipment manufacturers,
and an intensely competitive industry. Approximately two-thirds of
the company's revenues are derived from product sales, which are
expected to exhibit variability due to their long sales cycles and
dependence on the capital spending plans of large communications
service providers. Over the past year, Sandvine has actioned the
large majority of its expected $31 million of synergies resulting
from its combination with Procera. With pro forma revenue and
adjusted EBITDA having already grown by about 13% and 15%,
respectively, the company plans to action $9 million of remaining
synergies by the end of 2018. Though substantial headway has been
made in integrating the two businesses and significant synergies
have been actioned, financial risk is now more elevated as a result
of the increase in leverage related to the proposed debt funded
dividend. As of the LTM period ended June 30, 2018,
Moody's-adjusted debt-to-EBITDA was approximately 7.7x on a pro
forma basis, or about 6x incorporating actioned synergies. Absent
any debt funded acquisitions or additional dividend activity,
Moody's expects that the company will continue to grow revenue and
EBITDA organically in the low single digit percent range. According
to the rating agency, organic growth coupled with the realization
of remaining cost synergies will drive leverage below 6x over the
next 12-18 months, and free cash flow-to-debt will increase to the
mid-single digit percent range.
The stable outlook is based on Moody's expectation that Sandvine
will realize its remaining expected cost synergies by the end of
2018, and that debt-to-EBITDA (absent additional leveraging
transactions) will decrease to below 6x over the next 12-18 months.
Moody's could upgrade Sandvine's ratings if the company achieves
projected growth in free cash flow to the high single digit percent
range of total debt and the company sustains debt-to-EBITDA below
6x.
Moody's could downgrade the ratings if operating challenges or
continued aggressive financial policies cause free cash
flow-to-debt to fall to the low single digit percentage range.
Moody's could also downgrade its ratings if leverage was expected
to remain above 7x, or if liquidity weakened.
Moody's expects Sandvine to have good liquidity over the next 12-18
months, supported by a cash balance of approximately $15 million at
the close of the transaction and an undrawn $30 million revolving
credit facility. Moody's expects free cash flow of at least $20
million after restructuring expenses over the next year. Capital
expenditures and working capital requirements are modest. Annual
term loan amortization will be $4 million. The revolving loans will
be subject to a first lien net leverage ratio test if utilization
exceeds 30%. The term loan has no financial maintenance covenants.
The company will have ample cushion relative to the base operating
plan.
The principal methodology used in these ratings was Software
Industry published in August 2018.
Sandvine Corporation is owned by funds affiliated with Francisco
Partners and provides active network intelligence solutions to
communications service providers (CSPs), enterprises and
governments. Sandvine, headquartered in Waterloo, Ontario,
generated pro forma revenue of $233 million in the LTM period ended
June 30, 2018.
SEADRILL LIMITED: Bank Debt Trades at 5% Off
--------------------------------------------
Participations in a syndicated loan under which Seadrill Limited is
a borrower traded in the secondary market at 94.71
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.74 percentage points from the
previous week. Seadrill Limited pays 600 basis points above LIBOR
to borrow under the $11 million facility. The bank loan matures on
February 21, 2021. Moody's rates the loan 'Caa2' and Standard &
Poor's gave a 'CCC+' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
SEDGWICK LLP: Taps Armanino LLP as Accountant
---------------------------------------------
Sedgwick LLP seeks approval from the U.S. Bankruptcy Court for the
Northern District of California to hire an accountant.
The Debtor proposes to employ Armanino LLP to provide accounting
services, including transaction processing and reporting, in
connection with the dissolution and wind down process of its
business.
The firm will be paid a fixed monthly fee of $14,000 starting Oct.
1, 2018, and an additional $700 for administrative fees, which
equals to 5% of the total monthly fees.
Armanino received a retainer in the amount of $14,700.
John Schweisberger, a partner at Armanino, disclosed in a court
filing that his firm is "disinterested" as defined in section
101(14) of the Bankruptcy Code.
The firm can be reached through:
John Schweisberger
Armanino LLP
777 South Figueroa Street, Suite 2600
Los Angeles, CA 90017
Phone: 213-334-7258 / 213-334-7300
About Sedgwick LLP
Sedgwick LLP is a San Francisco, California-based firm that
provides legal advisory services. The firm's focus areas include
antitrust, bankruptcy, business and commercial litigation,
intellectual property, mass tort, reinsurance, surety, and estate
planning. Sedgwick LLP was founded in 1933 and has offices in
Chicago, Dallas, Kansas City, London, Los Angeles, Miami, New York
and Seattle.
Sedgwick LLP filed for bankruptcy protection (Bankr. N.D. Cal. Case
No. 18-31087) on Oct. 2, 2018. The petition was signed by Curtis
D. Parvin, chair of Dissolution Committee. The Debtor estimated
assets and liabilities of $1 million to $10 million. The Hon.
Hannah L. Blumenstiel presides over the case. The Debtor tapped
Pachulski Stang Ziehl & Jones LLP as its counsel.
SEDGWICK LLP: Taps Development Specialists as Financial Advisor
---------------------------------------------------------------
Sedgwick, LLP, seeks approval from the U.S. Bankruptcy Court for
the Northern District of California to hire Development
Specialists, Inc., as its financial advisor.
The firm will provide financial advisory services to the Debtor in
connection with its Chapter 11 case. The standard hourly rates
charged by personnel at Development Specialists range from $295 to
$595.
Development Specialists received a retainer in the amount of
$100,000 from the Debtor prior to the petition date.
Kyle Everett, senior managing director of Development Specialists,
disclosed in a court filing that his firm is "disinterested" as
defined in section 101(14) of the Bankruptcy Code.
Development Specialists can be reached through:
Kyle Everett
Development Specialists, Inc.
150 Post St., Suite 400
San Francisco, CA 94108
Tel: 415.981.2717
Fax: 415.981.2718
Email: keverett@dsi.biz
About Sedgwick LLP
Sedgwick LLP is a San Francisco, California- based firm that
provides legal advisory services. The firm's focus areas include
antitrust, bankruptcy, business and commercial litigation,
intellectual property, mass tort, reinsurance, surety, and estate
planning. Sedgwick LLP was founded in 1933 and has offices in
Chicago, Dallas, Kansas City, London, Los Angeles, Miami, New York
and Seattle.
Sedgwick LLP filed for bankruptcy protection (Bankr. N.D. Cal. Case
No. 18-31087) on October 2, 2018. The petition was signed by
Curtis D. Parvin, chair of Dissolution Committee. The Hon. Hannah
L. Blumenstiel presides over the case.
The Debtor has estimated assets and liabilities of $1 million to
$10 million each.
The Debtor tapped Pachulski Stang Ziehl & Jones LLP as its counsel.
SEDGWICK LLP: Taps On-Site Associates as Collections Agent
----------------------------------------------------------
Sedgwick LLP seeks approval from the U.S. Bankruptcy Court for the
Northern District of California to hire On-Site Associates, LLC, as
its collections agent.
The firm will assist the Debtor in the collection of its accounts
receivable.
For the collection of its U.S. receivables, the Debtor proposes to
pay On-Site commissions based upon the cumulative sum of actual
collections received. Commissions will be earned upon receipt of
all collections based upon fixed percentages that increase upon the
cumulative dollars collected by the firm.
Meanwhile, On-Site will receive a commission of 3% of the net
recovery received by the Debtor after payment of commissions and
fees earned by C & C Fee Collection Services.
On-Site has been managing and directly supporting the collection
efforts of C & C, located in the United Kingdom, to pursue a
defined group of receivables that are owed primarily by members of
the London insurance brokers market.
The recoveries for the London receivables will not be counted
toward the cumulative dollars collected thresholds with respect to
the U.S. receivables, according to court filings.
In addition to the collections services, On-Site may, at the
request of the Debtor, perform arbitration, litigation and
mediation services with respect to certain receivables that the
Debtor deems contested. For such services, the Debtor proposes to
pay the firm, in lieu of commissions, a fee equal to 5% of the net
amount collected with respect to each contested receivable that is
referred to collection counsel.
On-Site received an advance payment of $120,000 as guaranteed
minimum compensation against payment for the collection services,
and two advance payments totaling $50,000 prior to the petition
date.
George Abodeely, president of On-Site, disclosed in a court filing
that his firm is "disinterested" as defined in section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
George Abodeely
On-Site Associates, LLC
505 Montgomery Street, 11th Floor
San Francisco, CA 94111
Tel: 415-874-3055
About Sedgwick LLP
Sedgwick LLP is a San Francisco, California- based firm that
provides legal advisory services. The firm's focus areas include
antitrust, bankruptcy, business and commercial litigation,
intellectual property, mass tort, reinsurance, surety, and estate
planning. Sedgwick LLP was founded in 1933 and has offices in
Chicago, Dallas, Kansas City, London, Los Angeles, Miami, New York
and Seattle.
Sedgwick LLP filed for bankruptcy protection (Bankr. N.D. Cal. Case
No. 18-31087) on October 2, 2018. The petition was signed by
Curtis D. Parvin, chair of Dissolution Committee. The Hon. Hannah
L. Blumenstiel presides over the case.
The Debtor estimated assets and liabilities of $1 million to $10
million.
The Debtor tapped Pachulski Stang Ziehl & Jones LLP as its counsel.
SEDGWICK LLP: Taps Pachulski Stang as Legal Counsel
---------------------------------------------------
Sedgwick LLP seeks approval from the U.S. Bankruptcy Court for the
Northern District of California to hire Pachulski Stang Ziehl &
Jones LLP as its legal counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code; assist in the preparation of a bankruptcy plan;
and provide other legal services related to its Chapter 11 case.
Pachulski will charge these hourly rates:
Richard Pachulski $1,245
Kenneth Brown $925
John Fiero $875
John Lucas $725
Jason Rosell $595
Paralegals $375
The firm received payments from the Debtor in the amount of
$753,586.52, including the filing fee, during the year prior to the
petition date in connection with its pre-bankruptcy representation
of the Debtor. In addition, the firm holds a retainer of
$100,000.
John Lucas, Esq., a partner at Pachulski, disclosed in a court
filing that his firm is "disinterested" as defined in section
101(14) of the Bankruptcy Code.
Pachulski can be reached through:
Richard M. Pachulski, Esq.
John D. Fiero, Esq.
John W. Lucas, Esq.
Pachulski Stang Ziehl & Jones LLP
150 California Street, 15th Floor
San Francisco, CA 94111-4500
Telephone: 415.263.7000
Facsimile: 415.263.7010
E-mail: rpachuslki@pszjlaw.com
E-mail: jfiero@pszjlaw.com
E-mail: jlucas@pszjlaw.com
About Sedgwick LLP
Sedgwick LLP is a San Francisco, California- based firm that
provides legal advisory services. The firm's focus areas include
antitrust, bankruptcy, business and commercial litigation,
intellectual property, mass tort, reinsurance, surety, and estate
planning. Sedgwick LLP was founded in 1933 and has offices in
Chicago, Dallas, Kansas City, London, Los Angeles, Miami, New York
and Seattle.
Sedgwick LLP filed for bankruptcy protection (Bankr. N.D. Cal. Case
No. 18-31087) on October 2, 2018. The petition was signed by
Curtis D. Parvin, chair of Dissolution Committee. The Hon. Hannah
L. Blumenstiel presides over the case.
The Debtor has estimated assets and liabilities of $1 million to
$10 million.
The Debtor tapped Pachulski Stang Ziehl & Jones LLP as its counsel.
SERVICE PAINTING: Taps Kurtzman Steady as Legal Counsel
-------------------------------------------------------
Service Painting, Inc., seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania to hire Kurtzman
Steady, LLC as its legal counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code; assist the Debtor in prosecuting actions to
protect and preserve its bankruptcy estate; and provide other legal
services related to its Chapter 11 case.
Maureen Steady, Esq., and Jeffrey Kurtzman, Esq., the attorneys who
will be handling the case, will charge $350 per hour and $480 per
hour, respectively.
The firm received a pre-bankruptcy retainer in the sum of $10,000.
The Debtor has also agreed to pay the firm an additional $25,000,
which includes a bankruptcy retainer of $21,129.50 and a filing fee
of $2,154.50.
Kurtzman Steady does not represent any interest adverse to the
Debtor, creditors or any other "party-in-interest," according to
court filings.
The firm can be reached through:
Maureen Steady, Esq.
38 N. Haddon Avenue
Haddonfield, NJ 08033
Phone: 856-428-1060
Email: maureen.steady@steadylaw.com
About Service Painting
Service Painting, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Pa. Case No. 18-16843) on Oct. 13,
2018. At the time of the filing, the Debtor estimated assets of
less than $1 million and liabilities of less than $1 million.
Judge Eric L. Frank presides over the case. The Debtor tapped
Kurtzman Steady, LLC, as its legal counsel.
SERVICOM LLC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Three affiliated companies that have filed voluntary petitions
seeking relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
ServiCom LLC (Lead Case) 18-31722
25 Independence Blvd., Suite 103
Warren, NJ 07059
JNET Communications LLC 18-31723
Vitel Communications LLC 18-31724
Business Description: ServiCom -- http://www.servicom-llc.com--
provides a comprehensive suite of call
center outsourcing services. It offers
inbound calls, outbound calls, internet
sales, customer service, customer retention,
customer affairs, market research, help
desk, lead management, interactive services
and fulfillment services. ServiCom's call
center locations are in Machesney Park, IL,
Milford, CT, and Sydney, NS (Canada).
ServiCom was founded by David Jefferson and
is headquartered in Warren, New Jersey.
Chapter 11 Petition Date: October 19, 2018
Court: United States Bankruptcy Court
District of Connecticut (New Haven)
Judge: Hon. Ann M. Nevins
Debtors' Counsel: James Berman, Esq.
ZEISLER & ZEISLER, P.C.
10 Middle Street, 15th Floor
Bridgeport, CT 06604
Tel: (203) 368-4234
Email: jberman@zeislaw.com
- and -
Eric A. Henzy, Esq.
ZEISLER & ZEISLER, P.C.
10 Middle Street, 15th Floor
Bridgeport, CT 06604
Tel: 203-368-5495
Fax: 203-549-0861
Email: ehenzy@zeislaw.com
- and -
Stephen M. Kindseth, Esq.
ZEISLER & ZEISLER, P.C.
10 Middle Street, 15th Floor
Bridgeport, CT 06604
Tel: (203) 368-4234
Fax: 203-367-9678
Email: skindseth@zeislaw.com
- and -
Patrick R. Linsey, Esq.
ZEISLER & ZEISLER, P.C.
10 Middle Street, 15th Floor
Bridgeport, CT 06604
Tel: 203-368-4234
Fax: 203-594-0424
Email: plinsey@zeislaw.com
ServiCom's Estimated Assets: $10 million to $50 million
ServiCom's Estimated Liabilities: $10 million to $50 million
The petition was signed by David Jefferson, manager.
A full-text copy of ServiCom's petition is available for free at:
http://bankrupt.com/misc/ctb18-31722.pdf
List of ServiCom's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Canada Revenue Agency Income Taxes $205,893
Windstream Communications Business Debt $127,155
Email: wci.isg.billing.ques
tions@windstream.com
Aerotek Business Debt $116,796
Email: lscheid@aerotek.com
ATOS IT Solutions and Services Business Debt $95,903
Email: sharonbarcus@atos.net
MASERGY Business Debt $80,516
Crombie REIT Business Debt $76,856
Email: marian.cormier@crombie.ca
Ballard Properties Group I Business Debt $72,550
Email: rballard@ballard-properties.com
Blue Cross Business Debt $71,797
Email: cheryl.skinner@medavie.bluecross.ca
TeleOpti Inc. - Accounting Business Debt $70,400
Email: christy.lovejoy@teleopti.com
Aspen Business Center One LLC Business Debt $66,549
Advanced Janitorial Services Business Debt $62,507
175 Executive, LLC Business Debt $62,191
Computer Alternative Process Business Debt $51,873
Email: smercoun@bluehilldata.co
Mac Murray & Shuster LLP Business Debt $50,156
ITC Telecom Technology, LLC Business Debt $45,857
Email: finance@itctechnology.com
Enterprise Cape Breton Corp Business Debt $43,292
Livevox, Inc. Business Debt $42,250
Email: ian@zencommunications.net
Zen Communications, LLC Business Debt $41,917
Email: ian@zencommunications.net
Varilease Finance, Inc. Business Debt $40,930
Email: mdelgado@vfi.net
Securisea Business Debt $33,985
SHC LICENSED: Case Summary & 40 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: SHC Licensed Business LLC
fka A&E Factory Service
fka Accents for Less
fka Appliance Liquidators
fka American Siding & Deck, Inc.
fka American Windows & Sash, Inc.
333 Beverly Road
Hoffman Estates, IL 60179
Business Description: Based in Hoffman Estates, Illinois, SHC
Licensed Business LLC is an affiliate of
Sears Holdings Corporation, an integrated
retailer focused on seamlessly connecting
the digital and physical shopping
experiences to serve its members. Sears
Holdings operates through its subsidiaries,
including Sears, Roebuck and Co. and Kmart
Corporation, with full-line and specialty
retail stores across the United States.
A motion will be filed with the Court
requesting that the Chapter 11 case of SHC
be jointly administered under Sears Holdings
Corporation case number 18-23538 (RDD).
Visit www.searsholdings.com for more
information.
Chapter 11 Petition Date: October 18, 2018
Court: United States Bankruptcy Court
Southern District of New York (White Plains)
Case No.: 18-23616
Judge: Hon. Robert D. Drain
Debtors' Counsel: Ray C. Schrock, P.C.
Garrett A. Fail, Esq.
Jacqueline Marcus, Esq.
Sunny Singh, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Tel: 212-310-8000
Fax: 212-310-8007
Email: ray.schrock@weil.com
garrett.fail@weil.com
jacqueline.marcus@weil.com
sunny.singh@weil.com
Debtor's
Financial
Advisor: Colin M. Adams
Brian Griffith
M-III ADVISORY PARTNERS, LP
30 Rockefeller
Plaza, New York, NY 10112
Email: cadams@miiipartners.com
bgriffith@miiipartners.com
Debtor's
Investment
Banker: LAZARD FRERES & COMPANY
30 Rockefeller Plaza
New York, NY 10112
Debtor's
Real Estate
Advisor: DLA PIPER LLP
500 Eighth Street, NW
Washington, DC 20004
Debtor's
Claims,
Noticing &
Solicitation
Agent: PRIME CLERK
830 Third Avenue, 9th Floor
New York, NY 10022
https://restructuring.primeclerk.com/sears
Estimated Assets:
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities:
(on a consolidated basis): $10 billion to $50 billion
The petition was signed by Robert A. Riecker, chief financial
officer.
A full-text copy of the Debtor's petition is available for free
at:
http://bankrupt.com/misc/nysb18-23616.pdf
Consolidated List of Debtors' 40 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
The Pension Benefit Pension Benefits Unliquidated
Guaranty Corporation
Attn.: Judith Starr,
General Counsel
Office of the Chief Counsel
1200 K Street, N.W., Suite 300
Washington District of
Columbia 20005‐4026
Tel: 202‐326‐4400 x3083
Email: Starr.Judith@pbgc.gov
SRAC Medium Term Notes Unsecured $2,311,796,000
c/o The Bank of New York Notes
Mellon Trust Co.
Attn.: Mary A. Callahan,
Vice President
2 N. LaSalle Street, Suite 700
Chicago, Illinois 60602
Tel: 312‐827‐8546
Email: mary.callahan@bnymellon.com
Holdings Unsecured Notes (8.00%) Unsecured $410,956,500
c/o Computershare Trust Company, N.A. Notes
Attn.: Michael A. Smith, Vice President
2950 Express Drive South, Suite 210
Islandia, New York 11749
Tel: 303‐262‐0707
Email: michael.smith2@computershare.com
Holdings Unsecured PIK Notes (8.00%) Unsecured $222,580,652
c/o Computershare Trust Company, N.A. Notes
Attn.: Michael A. Smith, Vice President
2950 Express Drive South, Suite 210
Islandia, New York 11749
Tel: 303‐262‐0707
Email: michael.smith2@computershare.com
SRAC Unsecured Notes Unsecured $185,564,300
c/o The Bank of New Notes
York Mellon Trust Co.
Attn.: Mary A. Callahan,
Vice President
2 N. LaSalle Street, Suite 700
Chicago, Illinois 60602
Tel: 312‐827‐8546
Email: mary.callahan@bnymellon.com
SRAC Unsecured PIK Notes Unsecured $107,872,763
c/o The Bank of New York Notes
Mellon Trust Co.
Attn.: Mary A. Callahan,
Vice President
2 N. LaSalle Street, Suite 700
Chicago, Illinois 60602
Tel: 312‐827‐8546
Email: mary.callahan@bnymellon.com
Whirlpool Corporation Trade Payable $22,250,103
Attn.: Aaron Spira
600 West Main Street
Benton Harbor, Michigan 49022‐2692
Tel: 269‐923‐5000
Email: aaron_d_spira@whirlpool.com
WiniaDaewoo Electronics America Trade Payable $15,535,537
Attn.: Hyun Suk Choi, Esq.
c/o Choi & Park, LLC
11 Broadway, Suite 615
New York, New York 10004
Tel: 212‐695‐0010
Email: hchoi@choiandpark.com
Cardinal Health Trade Payable $15,348,095
Attn: Beth J. Rotenberg, Esq.
Scott A. Zuber, Esq.
c/o Chiesa Shahinian & Giantomasi PC
One Boland Drive
West Orange, New Jersey 07052
Tel: 973‐325‐1500
Email: brotenberg@csglaw.com
szuber@csglaw.com
Electrolux (Frigidaire Company) Trade Payable $13,744,679
Attn: Alan Shaw
703 Waterford Way, Suite 300
Miami, Florida 33126
Tel: 786‐388‐6400
Email: alan.shaw@electrolux.com
Icon Health and Fitness Inc. Trade Payable $12,102,200
Attn.: Everett Smith
1500 South 1000 West
Logan, Utah 84321
Tel: 877‐993‐7999
Email: esmith@iconfitness.com
Hangzhou Greatstar Trade Payable $10,354,683
Industrial Co., Ltd.
Attn.: Kiah T. Ford IV, Esq.
c/o Parker Poe Adams & Bernstein LLP
401 South Tryon Street, Suite 3000
Charlotte, North Carolina 28202
Tel: 704‐372‐9000
Email: chipford@parkerpoe.com
Hanesbrands Inc. Trade Payable $8,380,097
Attn: Joia Johnson,
Chief Administrative
Officer and General Counsel
1000 East Hanes Mill Road
Winston Salem, North Carolina 27105
Tel: 336‐519‐5360
Email: Joia.Johnson@hanes.com
Paco (China) Garment Ltd. Trade Payable $7,220,123
Attn: Lily Wang
No 9 Yueyang Road Building B
Qingdao, Shandong 266000 China
Tel: 86‐532‐81978137
Email: lily@pacogarment.com
Apex Tool International LLC Trade Payable $6,585,482
Attn.: Jessica Chang
14600 York Road, Suite A
Sparks, Maryland 21152
Tel: 410‐773‐7800
Email: jessica.chang@apextoolgroup.com
Black & Decker US Inc. Trade Payable $5,925,878
Attn.: Robin Z. Weyand,
Assistant General Counsel
701 E. Joppa Road
Towson, Maryland 21286
Tel: 410‐716‐3625
Email: robin.weyand@sbdinc.com
Tata Consultancy Services Ltd. Trade Payable $5,761,976
Attn.: Ashish Gupta
379 Thornal Street, 4th Floor
Edison, New Jersey 08837
Tel: 847‐286‐6667
Email: ashish.gupta@searshc.com
Active Media Services Inc. Trade Payable $5,424,732
Attn.: Lisa Brown
1 Blue Hill Plaza
Pearl River, New York 10965
Tel: 845‐735‐1700
Email: Lisa.Brown@activeinternational.com
Automotive Rentals Inc. Trade Payable $5,359,201
Attn: Brian S. McGrath, Esq.
Kristen D. Romano, Esq.
c/o McGlinchey Stafford
112 West 34th Street, Suite 1515
New York, New York 10120
Tel: 646‐362‐4000
Email: bmcgrath@mcglinchey.com
kromano@mcglinchey.com
TJ Tianxing Kesheng Leather Trade Payable $4,857,704
Products Co Ltd.
Attn: Power Wang
No. 2 Jianshe Road Baodi District
Tianjin, Tianjin 301200 China
Tel: 86‐22‐29243522
Email: powerwangtxks@vip.126.com
MKK Enterprises Corp. Trade Payable $4,799,163
Attn: President or General Counsel
140 N Orange Avenue
City of Industry, California 91744
Tel: 626‐217‐8245
Email: rose@baldwinsun.com
LG Electronics USA Inc. Trade Payable $4,746,197
Attn: Thomas Yoon
1000 Sylvan Avenue
Englewood Cliffs, New Jersey 07632
Tel: 888‐865‐3026
Email: thomas.yoon@lge.com
Feroza Garments Ltd. Trade Payable $4,614,975
Attn: Nazrul Islam Mazumder
3 Sujat NagarSultan Mansion, 2nd Floor
Mirpur, Dhaka Bangladesh
Tel: 88‐02‐9830348
Email: nassa@nassagroup.org
MTD Products Inc. Trade Payable $4,493,593
Attn: Derek Kaesgen,
Deputy General Counsel
5903 Grafton Road
Valley City, Ohio 44280‐9329
Tel: 330‐558‐7550
Email: derek.kaesgen@mtdproducts.com
Jordache Limited Trade Payable $4,381,183
Attn: Cliff Lelonek, President
1400 Broadway, 14th and 15th Floor
New York, New York 10018‐5336
Tel: 212‐944‐1330
Email: clelonek@jordache.com
City Choice Limited Trade Payable $4,337,049
Attn: Steve Meyers
Unit 5 6/F Hong Leong Ind. Complex
No 4 Wang Kwong Road Kowloon
Hong Kong
Tel: 852‐27576068
Email: sukichan@solarxhk.com
terry@solarxhk.com
Deloitte & Touche LLP Trade Payable $4,177,800
Attn: Jim Berry, Partner
2200 Ross Avenue, Suite 1600
Dallas, Texas 75201
Tel: 214‐840‐7360
Email: jiberry@deloitte.com
Thanh Cong Textile Trade Payable $4,177,341
Garment Investment
Trading Joint Stock Company
Attn: Lee Jong
36 Tay Thanh Street
Tay Thanh Ward
Tan Phu Dist
Ho Chi Minh City 708500 Vietnam
Tel: 84 8 381 53962
Email: leejm@thanhcong.com.vn
Cleva Hong Kong Ltd. Trade Payable $4,151,063
Attn: Tammy Harvey
303 Des Voeux Road
Central Hong Kong
Tel: 0086(0)512 8227 5805
Email: tammy.harvey@cleva‐na.com
International Business Machine Trade Payable $4,067,093
Attn: Bruce E. Frierdich, Counsel
Legal Department ‐ Chicago Office
Global Markets
71 South Wacker Drive, Seventh Floor
Chicago, Illinois 60606
Email: bfrierd@us.ibm.com
Procter & Gamble Distributing Trade Payable $4,065,580
Attn: Deborah P. Majoras
Chief Legal Officer
& Secretary
One Procter & Gamble Plaza
Cincinnati, Ohio 45202
Email: Majoras.DP@pg.com
Mien Co, Ltd. Trade Payable $4,057,082
Attn: Michelle Chan
A5‐B, Blk A,12/F, Hongkong Ind Centre
489‐491 Castle Peak Rd
Lai Chi Kok, Kowloon Hong Kong
Tel: 00 852 93014248
Email: michelle@mien‐co.com
Eastern Prime Textile Limited Trade Payable $3,413,816
Attn: Carol Yim
Unit F 10/F, King Win Fty Bldg
No. 65‐67 King Yip St
Kwun Tong, Kowloon Hong Kong
Tel: 86‐769‐83626002
Email: carol@eastern‐prime.com
Weihai Lianqiao Trade Payable $3,044,370
International Cooperation Group
Attn: Sarah Wong
No. 269, West Wenhua Road
Hi‐Tech Deve Zone Weihai China
Tel: 86 631 5678612
Email: sarah_wong@southocean.com
BST International Fashion Limited Trade Payable $2,966,541
Attn: Emily Nip
Suite 2301B
23/F Skyline Tower
No.39 Wang Kwong Road
Kowloon Bay Hong Kong
Tel: 852‐3471 0600
Email: enip@frontline‐hk.com
Winners Industry Company Limited Trade Payable $2,964,394
Attn.: Kitty Chow
Unit A, Wah Lung Building
49‐53 Wang Lung Street,
Tsuen wan, New Territories
Hong Kong
Tel: 0769‐39016338
Email: kitty@winnersarts.com
SITEL Trade Payable $2,849,008
c/o Frost Brown Todd LLC
Attn: Edward M. King, Esq.
400 West Market Street, Suite 3200
Louisville, Kentucky 40202
Tel: 502‐568‐0359
Email: tking@fbtlaw.com
Coyote Trade Payable $2,734,955
Attn: Jason Rice
2545 W. Diversey Avenue, 3rd Floor
Chicago, Illinois 60647
Tel: 847‐295‐2424
Email: Jason.rice@coyote.com
Chamberlain Manufacturing Corp. Trade Payable $2,716,078
Attn: Colleen M. O'Connor, VP Finance &
Treasurer
300 Windsor Drive
Oak Brook, Illinois 60523‐1510
Tel: 630‐530‐6848
Email: colleen.oconnor@chamberlain.com
Knights Apparel Inc. Trade Payable $2,623,712
Attn: Joia Johnson, Chief Administrative
Officer & General Counsel
1000 East Hanes Mill Road
Winston Salem, North Carolina 27105
Tel: 336‐519‐5360
Email: Joia.Johnson@hanes.com
SHREEDEVI AA: May Use Cash Collateral Until Plan Confirmation
-------------------------------------------------------------
The Hon. Harlin Dewayne Hale of the U.S. Bankruptcy Court for the
Northern District of Texas authorized Shreedevi AA Corporation to
use the cash collateral and proceeds in which Herring Bank asserts
a lien position in accordance with the provisions in the Budget
until confirmation of the Debtor's Plan of Reorganization.
Herring Bank is granted replacement liens to the extent of any
diminishment in the value of Herring Bank's interest in such cash
collateral, in accordance with its existing priority. As further
adequate protection the Debtor will pay Herring Bank the sum of
$750 on the first day of each month.
The Debtor must comply with the deadlines set forth in the Agreed
Scheduling Order entered into between the Debtor and U.S. Trustee.
In addition, the Debtor must maintain inventory at the levels set
forth in its bankruptcy schedules through the term of the Order.
A copy of the Order is available at
http://bankrupt.com/misc/txnb18-70202-28.pdf
About Shreedevi AA Corporation
Shreedevi AA Corporation sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 18-70202) on July 2,
2018. At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $500,000. Judge
Harlin Dewayne Hale presides over the case. Eric A. Liepens, P.C.,
serves as counsel to the Debtor.
SKILLSOFT CORP: Bank Debt Trades at 7% Off
------------------------------------------
Participations in a syndicated loan under which Skillsoft
Corporation is a borrower traded in the secondary market at 93.10
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 1.33 percentage points from the
previous week. Skillsoft Corporation pays 475 basis points above
LIBOR to borrow under the $46 million facility. The bank loan
matures on April 28, 2021. Moody's rates the loan 'B3' and Standard
& Poor's gave a 'CCC+' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
SM NOVELTIES: Seeks Authorization on Interim Cash Collateral Use
----------------------------------------------------------------
SM Novelties LLC, doing business as ABI Auto doing business as ABI
Tires & Services, seeks authorization from the U.S. Bankruptcy
Court for the Central District of California to use cash collateral
on an interim basis.
During the interim period, the Debtor intends to use cash
collateral to pay all the expenses set forth in the operating
Budget and to pay the following: (a) all quarterly fees owing to
the Office of the U.S. Trustee and all expenses owing to the Clerk
of the Bankruptcy Court, and (b) all actual third-party, outside
expenses incurred by the Debtor (or its counsel) directly related
to the administration of the Debtor's bankruptcy estate not to
exceed the total sum of $1,000 per month.
The Debtor further seeks authority to deviate from the line items
contained in the Budget by not more than 10% on both a line item
and aggregate basis, with any unused portions to be carried over
into the following week without the need for any Court approval.
The Debtor has entered into certain agreements with the following
flooring companies: (a) NextGear Capital, Inc.; (b) Westlake
Flooring Company, LLC, and (c) Automotive Finance Corporation, to
finance the acquisition of vehicles. To secure the Debtor's
performance of its obligations to NextGear, Westlake and AFC under
the Flooring Agreements, a security interest was provided in, among
other things, the vehicles the purchase of which was financed or
floorplanned by each of the companies.
The Debtor believes that the total amount that NextGear is owed
approximately $28,398. To the extent NextGear has an interest in
the Debtor's cash collateral, the Debtor contends such interest
should be limited to the cash generate from the sale of the
vehicles financed by NextGear.
According to the Debtor's records, the amount of Westlake's claim
as of Petition Date was approximately $42,000 (not taking into
account the value of the 2 vehicles financed by Westlake that were
repossessed by Westlake prior to bankruptcy filing).
As of the date of the Debtor's bankruptcy filing, the amount of
AFC's claim was approximately $60,000 (not taking into account the
value of the 3 vehicles financed by Westlake that were repossessed
by AFC prior to bankruptcy filing).
In the event it is determined that NextGear, Westlake and AFC have
interest in the Debtor's cash collateral, the Debtor will segregate
such cash collateral from the Debtor's unencumbered funds by
depositing proceeds generated from the sale of the vehicles
financed by NextGear, Westlake and AFC, respectively, into Debtor's
debtor-in-possession cash collateral account established with
Farmers & Merchant Bank.
The Debtor owns and operates an auto dealership located at 1629 and
1645 E. Pacific Coast Hwy, Long Beach, California ("ABI Lot"). The
Debtor leases the ABI Lot from Sirodjiddin Murzaev (the sole member
and manager of the Debtor). Pacific Enterprise Bank as lender, the
Debtor as tenant, and Sirodjiddin Murzaev as landlord, have entered
into a certain Subordination of Landlord's Statutory and
Contractual Liens. Pursuant to the Subordination Agreement,
Sirodjiddin Murzaev has agreed to subordinate his statutory
contractual liens as landlord to a lien and security interest held
by Pacific Enterprise Bank.
As adequate protection, the Debtor proposes that the potential cash
collateral lenders with whom the Debtor has valid agreements
(NextGear, Westlake, AFC and Pacific) will receive replacement
liens against the Debtor's post-petition assets to the extent of
any diminution in the value of their collateral, with such
replacement liens to have the same validity, priority and extent as
the prepetition liens held by the potential cash collateral
lender.
A full-text copy of the Cash Collateral Motion is available at
http://bankrupt.com/misc/cacb18-17880-46.pdf
About SM Novelties
Based in Long Beach, California, SM Novelties, LLC, dba ABI Auto,
d/b/a Tires & Services -- http://www.abiauto.us-- is a dealer of
pre-owned cars. The Company offers a variety of car models
including Audi, Ford, Infiniti, Kia, Lexus, Mercedes-Benz, Nissan,
Toyota and more. SM Novelties filed a voluntary Chapter 11
Petition Date (Bankr. C.D. Calif. Case No. 18-17880) on July 9,
2018. The case is assigned to Judge Hon. Vincent P. Zurzolo. The
Debtor is represented by Ovsanna Takvoryan, Esq. At the time of
filing, the Debtor had estimated assets of $1 million to $10
million and estimated liabilities of $1 million to $10 million. The
petition was signed by Sirodjiddin Murzaev, managing member.
SOLBRIGHT GROUP: Incurs $5.05 Million Net Loss in First Quarter
---------------------------------------------------------------
Solbright Group, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $5.05 million on $845,482 of net sales for the three months
ended Aug. 31, 2018, compared to a net loss of $3.80 million on
$5.27 million of net sales for the three months ended Aug. 31,
2017.
As of Aug. 31, 2018, Solbright had $15.03 million in total assets,
$6.38 million in total current liabilities and $8.64 million in
total stockholders' equity.
As of Aug. 31, 2018, the Company had cash on hand of $72,059 and a
working capital deficiency of $5,297,869, as compared to cash on
hand of $114,128 and a working capital deficiency of $9,586,986 as
of May 31, 2018. The Company said the decrease in working capital
deficiency is mainly due to a decrease in accounts payable and
accrued expenses, as well a decrease in short-term convertible debt
balances as a result of repayments and conversions to common stock
during the three months ended Aug. 31, 2018.
Net cash used in operating activities was $2,369,738 for the three
months ended Aug. 31, 2018 primarily due to the net loss of
$5,056,576 and a decrease in accounts payable and accrued expenses
of $2,355,461, partially offset by common stock issued for
services, financing and inducement; non-cash interest expense, and
an increase in costs in excess of billings and warranty reserve.
For the three months ended Aug. 31, 2017, net cash used in
investing activities was $4,518 from the payment of a security
deposit.
For the three months ended Aug. 31, 2018, net cash provided by
financing activities was $2,327,669, of which $5,150,000 was
received from the issuance of short-term convertible notes from a
related party, partially offset by repayments of convertible notes
totaling $3,630,031.
The Company has accumulated losses from inception through the
period ended Aug. 31, 2018 of approximately $68 million, as well as
negative cash flows from operating activities. Presently, the
Company does not have sufficient cash resources to meet its debt
obligations in the twelve months following its fiscal year ending
May 31, 2018. The Company said these factors raise substantial
doubt about its ability to continue as a going concern.
"Management is in the process of evaluating various financing
alternatives in order to finance the capital requirements of
[SolBright Energy Solutions, LLC], as well as the needs of its
existing Arkados subsidiary and general and administrative
expenses. There can be no assurance that the Company will be
successful with its fund-raising initiatives. If the Company
raises additional funds through the issuance of equity, the
percentage ownership of current shareholders could be reduced, and
such securities might have rights, preferences or privileges senior
to the rights, preferences and privileges of the Company's common
stock. Additional financing may not be available upon acceptable
terms, or at all. If adequate funds are not available or are not
available on acceptable terms, the Company may not be able to take
advantage of prospective business endeavors or opportunities, which
could significantly and materially restrict its future plans for
developing its business and achieving commercial revenues. If the
Company is unable to obtain the necessary capital, the Company may
have to cease operations," Solbright stated in the regulatory
filing.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/IFLcVU
About Solbright Group
Newark, New Jersey-based Solbright Group, Inc., formerly Arkados
Group, Inc. -- https://www.solbrightgroup.com/ -- is an industrial
AI, machine learning and energy management company providing
Internet of Things (IoT) solutions for commercial and industrial
facilities.
Solbright reported a net loss of $15.80 million on $12.06 million
of net sales for the year ended May 31, 2018, compared to a net
loss of $3.34 million on $2.34 million of net sales for the year
ended May 31, 2017. As of May 31, 2018, Solbright had $15.67
million in total assets, $11.25 million in total liabilities and
$4.41 million in total stockholders' equity.
The audit opinion included in the company's Annual Report on Form
10-K for the year ended May 31, 2018 contains a going concern
explanatory paragraph. RBSM LLP, in New York, NY, the Company's
auditor since 2016, stated that the Company has suffered recurring
losses from operations, will require additional capital to fund its
current operating plan, and has stated that substantial doubt
exists about the Company's ability to continue as a going concern.
SPICY VINES: Involuntary Chapter 11 Case Summary
------------------------------------------------
Alleged Debtor: Spicy Vines, LLC
441 Healdsburg Avenue
Healdsburg, CA 95448
Business Description: Spicy Vines produces spiced wines
and offers its products through retailers
and online.
Involuntary
Chapter 11
Petition Date: October 18, 2018
Court: United States Bankruptcy Court
Northern District of California
(Santa Rosa)
Case Number: 18-10715
List of Petitioning Creditors:
Petitioners Nature of Claim Claim Amount
----------- --------------- ------------
Douglas B. Hackett Contract for Services $48,576
157 Sutter Road
Cloverdale, CA 95425
Brush Bernard, CPAs Services Rendered $18,344
101 W. North Street
Healdsburg, CA 95448
Joyce Law Group, APC Promissory Note $11,202
PO Box 9056
La Jolla, CA 92038
Petitioners' Counsel: Steven M. Olson, Esq.
LAW OFFICES OF STEVEN M. OLSON
100 E St. #104
Santa Rosa, CA 95404
Tel: (707) 575-1800
Email: smo@smolsonlaw.com
A full-text copy of the Involuntary Petition is available at:
http://bankrupt.com/misc/canb18-10715.pdf
SPRING TREE: Trustee May Use Cash Collateral on Final Basis
-----------------------------------------------------------
The Hon. Sage M. Sigler of the U.S. Bankruptcy Court for the
Northern District of Georgia has signed a final order authorizing
Mark A. Smith, the Chapter 11 Trustee for Spring Tree Lending, LLC,
to use of cash collateral through December 29, 2018.
The Trustee will operate within a 5% variance of the Operating
Expenses line-items as set forth in the budget. The approved
17-Week Budget provides total operating expenses in the aggregate
sum of $35,790 and total other cash disbursements in the aggregate
sum of $80,755 during the period from Sept. 7 through Dec. 28,
2018. The Budget has been modified to include a payment of $8,610
to Spring Tree Financial in full satisfaction of its final invoice
to the Trustee for servicing the Debtor's loan portfolio.
The Trustee may use the cash collateral that is encumbered by
American Credit Acceptance, LLC's ("ACA") secured claim against the
Debtor and ACA will receive as adequate protection, the following:
(a) Replacement Liens, a security interest in and lien in and
upon all assets of the Estate existing on or after the Petition
Date of the same nature and type, and to the same extent, validity,
amount and priority, as ACA's security interests and lien upon the
Pre-Petition Collateral in which ACA holds a valid, enforceable and
perfected security interest resulting from the imposition of the
automatic stay or the Trustee's use of cash collateral.
(b) Trustee will pay the fees of the U.S. Trustee Office
pursuant to 28 U.S.C. Section 1930 as and when due;
(c) ACA will be permitted to apply to the principal balance
of the Debtor's indebtedness to ACA, the remaining balance in the
Collection Account that is approximately $19,782 and ACA will
notify the Trustee of the exact amount in the Collection Account
that has been so applied;
(d) The Trustee will be authorized to pay to ACA the sum of
$31,280 as additional adequate protection, which represents the
principal payments on loans that are collateral for the ACA Secured
Claim received by the Trustee during the months of June, July and
August 2018, less the $9,250 adequate protection payment made in
June 2018 to ACA, and ACA will apply such payment to the principal
balance of the Debtor's indebtedness to ACA;
(e) The Trustee will be authorized to pay to ACA by the 15th
day of each month beginning October 2018 through the month in which
a plan of reorganization is confirmed in this Case, the total
amount of the principal payments on loans that are collateral for
the ACA Secured Claim received by the Trustee during the prior
calendar month, and ACA will apply such payment to the principal
balance of the Debtor's indebtedness to ACA;
(f) No later than the 15th day of each month, the Trustee
will remit to ACA, if any received during the prior calendar month,
the lesser of: (i) 100% of any net insurance proceeds and/or net
repossession liquidation proceeds paid to the Estate with respect
to vehicles pledged as collateral to ACA, or (ii) the outstanding
principal balance of the consumer loan that relates to such
insurance or repossession liquidation proceeds. ACA will deliver
the original title documents relating to a vehicle for which
Trustee delivers to ACA a borrower payoff or insurance payment,
with its lien marked satisfied upon receipt of a payment as
provided in this paragraph;
(g) Upon request by ACA, the Trustee will provide copies of
any invoices or other documents to substantiate any payments made
by the Trustee; and
(h) The Trustee will allow ACA reasonable access during
normal business hours to the Estate's books and records, and will
otherwise reasonably cooperate in providing any other financial
information requested by ACA.
A full-text copy of the Final Order is available at
http://bankrupt.com/misc/ganb18-55171-96.pdf
About Spring Tree Lending
Spring Tree Lending, LLC, engages in buying and servicing non-prime
auto loans from auto dealers and lenders. The company was founded
in 2015 and is based in Atlanta, Georgia.
On March 28, 2018, creditor Pacific Island Equity Corporation filed
an involuntary proceeding against Spring Tree Lending (Bank. N.D.
Ga. Case No. 18-55171). The case is assigned to Hon. Barbara
Ellis-Monro.
The Debtor hired George M. Geeslin, Esq., as counsel.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case.
Upon the application of the U.S. Trustee, the Court entered its
order approving the appointment of Mark A. Smith as Chapter 11
Trustee on June 19, 2018.
STEPHANIE N. MAPP: Taps Jason A. Burgess as Legal Counsel
---------------------------------------------------------
Stephanie N. Mapp, D.M.D., P.A., seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to hire The Law
Offices of Jason A. Burgess, LLC as its legal counsel.
The firm will advise the Debtor regarding its duties under the
Bankruptcy Code; represent the Debtor in negotiation with its
creditors; assist in the preparation of a plan of reorganization;
and provide other legal services related to its Chapter 11 case.
Jason Burgess, Esq., the attorney who will be handling the case,
charges an hourly fee of $300. Paralegals charge $75 per hour.
The firm received $8,283 as retainer and $1,717 for the filing
fee.
Mr. Burgess disclosed in a court filing that he does not represent
any interest adverse to the Debtor or its estate and creditors.
The firm can be reached through:
Jason A. Burgess, Esq.
The Law Offices of Jason A. Burgess, LLC
1855 Mayport Road
Atlantic Beach, FL 32233
Phone: (904) 372-4791
Fax: (904) 372-4994
E-mail: jason@jasonaburgess.com
About Stephanie N. Mapp
Stephanie N. Mapp, D.M.D., P.A. sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-bk-03612) on
Oct. 15, 2018. At the time of the filing, the Debtor estimated
assets of less than $500,000 and liabilities of less than $1
million. Judge Paul M. Glenn presides over the case. The Debtor
tapped The Law Offices of Jason A. Burgess, LLC, as its legal
counsel.
SULTAN FINANCIAL: Aaron's Buying All Assets for $13 Million
-----------------------------------------------------------
Sultan Financial Corp. asks the U.S. Bankruptcy Court for the
Central District of California to authorize (i) its Settlement
Agreement with Aaron's, Inc., Zions Bancorporation, N.A., doing
business as California Bank & Trust ("CB&T"), and Randall C. Sultan
and Patricia E. Sultan, individually and as the Trustees of the
Randall and Patricia Sultan Family Revocable Trust dated Nov. 5,
1999, dated as of Oct. 3, 2018; (ii) its Asset Purchase Agreement
with Aaron's, dated as of Oct. 3, 2018 and attached to the
Memorandum of Points and Authorities; (iii) its private sale of
assets to Aaron's for $13 million.
On July 16, 2018, the Debtor filed a complaint against Aaron's
initiating an adversary proceeding captioned Sultan Financial
Corporation v. Aaron's, Inc., Case No. 18-01225. The Complaint
asserts six claims, each of which is based on the fact that Aaron's
did not make certain changes or adjustments to the Aaron's System
that the Debtor requested. The Debtor asserts that Aaron's
breached its obligation to negotiate with it in good faith
regarding such requested changes pursuant to the Confidential
Settlement Agreement and Release, dated Oct. 19, 2016, by and
between the Debtor, Aaron's, and the Sultans.
Separate from the Complaint, the Debtor has also asserted that
Aaron's has otherwise violated certain provisions of the Franchise
Agreements, and that Aaron's is not entitled to receive royalty
payments during the pendency of the Debtor' bankruptcy proceeding
in advance of proving that such payments are administrative
expenses of the Debtor's estate. Aaron's denies each claim and
argues, among other things, that (i) the Debtor's assertion that
Aaron's has not acted in good faith is baseless; (ii) the Debtor's
allegations in the Complaint and relating to the Franchise
Agreements do not provide any basis for recovery; and (iii) Aaron's
is entitled to timely royalty payments.
The Debtor also owes Aaron's in excess of $4.6 million, which is
subject to a personal guarantee from the Sultans. In addition, all
obligations of CB&T’s secured loan to the Debtor, which was also
personally guaranteed by the Sultans, came due in June 2018 before
the Debtor's bankruptcy filing.
Following several weeks of settlement discussions and two mediation
sessions before the Hon. Louis M. Meisinger, Los Angeles Superior
Court Judge (ret.), the Debtor, CB&T, the Sultans, and Aaron's have
agreed to resolve their dispute and, in connection therewith, the
Debtor has agreed to sell substantially all of its assets to
Aaron's on the following principal terms, subject to the Court's
approval:
i. Pursuant to the Purchase Agreement, the Debtor will sell
the Purchased Assets to Aaron's free and clear of all Interests for
$13 million;
ii. On the date of the closing of the transactions
contemplated by the Purchase Agreement, Aaron's will pay the
Purchase Price directly to CB&T and the Debtor will pay, or cause
to be paid, to CB&T $300,000 from the Debtor' cash reserves so long
as such $300,000 payment does not render the Debtor
administratively insolvent. If such payment would render the
Debtor administratively insolvent, then the Debtor will only be
required to pay to CB&T on the Closing Date the amount up to
$300,000 that would leave sufficient funds remaining in the
Debtor's estate to allow it to satisfy all estimated allowed
administrative expenses, including ordinary course operating
expenses pursuant to the revised cash collateral budget attached to
the Settlement Agreement or any other cash collateral budget
approved by the Bankruptcy Court. Thereafter, within one business
day after the date that the Debtor satisfies all allowed
administrative expense claims, the Debtor will pay all of its
remaining cash (up to an amount that, including the Purchase Price
and the Initial Payment, does not exceed the amount of the CB&T
Claim) to CB&T. If the amount of the Initial Payment and the
Residual Payment do not equal at least $400,000 in the aggregate,
the Sultans will personally pay to CB&T up to $50,000 to cover any
deficit between the amount of the Payments and $400,000 within five
business days of the payment of the Residual Payment to CB&T.
iii. The Debtor, the Sultans, and Aaron's will provide mutual
releases of all claims; provided, however, that the release will
not apply to any claims arising out of or related to the lawsuit
captioned Michael Winslow and Fonda Winslow v. Sultan Financial
Corporation, et al., Case No. 13-02684 pending in the District
Court for the Central District of California or any outstanding
claims
or lawsuits covered by the Debtor's insurance, which will be
maintained for sufficient duration to cover the termination of any
outstanding claims by third parties against the Debtor and Aaron's;
and
iv. The Debtor, the Sultans (both individually and as trustees
of the Trust), and CB&T will provide mutual releases of all claims;
provided, however, that the release will not apply to any claims
arising out of or related to the debt obligations of any of the
Debtor's affiliates owed to CB&T that are secured by deeds of trust
on real property parcels owned by the Debtor's affiliates,
including without limitation that certain loan designated as Loan
No. XXXXX76-9001 by and between CB&T, as lender, and SFC-Olive-351,
LLC, as borrower, or that certain loan designated as Loan No.
XXXXX17-9001 by and between, CB&T, as lender, and Sultan Financial
Hesperia, LLC, as borrower.
The Purchase Agreement contemplates the sale of the Purchased
Assets, which comprise substantially all of the Debtor's assets, to
Aaron's free and clear of all Interests for $13 million, payable at
the Closing to CB&T.
Subject to the terms and conditions of the Purchase Agreement, the
Purchase Agreement provides that:
i. Aaron's will purchase the Purchased Assets for the Purchase
Price;
ii. The Debtor will assume and assign to Aaron's the Assumed
Contracts, which include, among other contracts and leases, the
Transferred Real Estate Leases (i.e., the real property leases for
fifteen of the Stores), and any personal guaranty of such Assumed
Contracts by the Sultans;
iii. Subject to the results of background checks, drug testing,
and other customary preemployment diligence, following the Closing
Date, Aaron’s will offer employment to all employees of the
Debtor that are based in the Stores (excluding the Sultans and
their family members) in substantially the same job positions as
such employees currently hold with the Debtor, and will offer to
give credit to any such employees that are hired by Aaron's for
existing PTO and vacation accruals, subject to the receipt of
customary releases from such employees;
iv. Aaron's will not acquire the Excluded Assets, including,
among other things, any of the Debtor's cash in excess of the
Customer Deposit Amount, cash equivalents, bank accounts, and
securities of the Debtor, Excluded Contracts, Insurance Deposits,
Tax assets, and avoidance action claims;
v. Aaron's will not assume any of the Debtor's liabilities
other than the Assumed Liabilities;
vi. The Debtor and Aaron's will enter into the Transition
Services Agreement; and
vii. Except for the obligations assumed under the Transition
Services Agreement, Aaron's does not assume any pre-closing wage
and hour, overtime, privacy violation, or any other
employment-related obligations or liabilities of the Debtor owed
under local, California, or federal laws and will not be deemed a
successor to the Debtor pursuant to any employment obligations owed
by the Debtor to its employees
To facilitate and effect the sale of the Purchased Assets, the
Debtor asks authority to assume and assign certain of its executory
contracts and unexpired leases, consistent with the Assumption and
Assignment Procedures.
For the reasons set forth in the Memorandum of Points and
Authorities, the Debtor believes that the Settlement Agreement and
the Purchase Agreement are in the best interest of the Debtor, its
estate, its creditors, its stakeholders, and other parties in
interest and should be approved by the Court. Concurrently with
the Motion, the Debtor will file with the Court and serve on all
non-Debtor counterparties to the Debtor's Contracts, other than the
Customer Contracts a copy of the Assumption and Assignment Notice.
The Objection Deadline is Oct. 17, 2018 at 4:00 p.m. (PST).
Finally, the Debtor asks the Court to waive the 14-day stay periods
set forth in Bankruptcy Rules 6004(h) and 6006(d).
A hearing on the Motion set for Oct. 24, 2018 at 10:00 a.m.
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Sultan_Financial_138_Sales.pdf
The Purchaser:
AARON'S, INC
400 Galleria Parkway S.E., Suite 300
Atlanta, Georgia 30339
Attn: General Counsel
Facsimile: (678) 402-3512
The Purchaser is represented by:
Jeffrey E. Bjork, Esq.
LATHAM & WATKINS, LLP
355 S. Grand Ave., Suite 100
Los Angeles, CA 90071-1560
Facsimile: (213) 891-8763
About Sultan Financial
Sultan Financial Corporation is a privately held company engaged in
the business of consumer goods rental. Since 1997, Sultan
Financial has been operating Aaron's Sales & Lease stores in
California.
Sultan Financial filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
18-18021) on July 13, 2018. In the petition signed by Randall C.
Sultan, CEO, the Debtor estimated $10 million to $50 million in
assets and liabilities. The case is assigned to Judge Ernest M.
Robles. Jeffrey N. Brown, Esq., and David A. Warfield, Esq., at
Thompson Coburn LLP, serve as the Debtor's counsel.
SURVITEC GROUP: Bank Debt Trades at 4% Off
------------------------------------------
Participations in a syndicated loan under which Survitec Group Ltd.
(Hurricanedrift Ltd) is a borrower traded in the secondary market
at 95.60 cents-on-the-dollar during the week ended Friday, October
12, 2018, according to data compiled by LSTA/Thomson Reuters MTM
Pricing. This represents a decrease of 0.68 percentage points from
the previous week. Survitec Group pays 475 basis points above LIBOR
to borrow under the $12 million facility. The bank loan matures on
February 15, 2022. Moody's gave no rating to the loan and Standard
& Poor's gave no rating to the loan. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday,
October 12.
SYNCREON GROUP: Bank Debt Trades at 7% Off
------------------------------------------
Participations in a syndicated loan under which Syncreon Group BV
is a borrower traded in the secondary market at 93.00
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.98 percentage points from the
previous week. Syncreon Group pays 425 basis points above LIBOR to
borrow under the $52 million facility. The bank loan matures on
October 28, 2020. Moody's rates the loan 'Caa2' and Standard &
Poor's gave a 'CCC+' rating to the loan. The loan is one of the
biggest gainers and losers among 247 widely quoted syndicated loans
with five or more bids in secondary trading for the week ended
Friday, October 12.
TOTAL DEBT RELIEF: Chapter 15 Case Summary
------------------------------------------
Chapter 15 Debtor: Total Debt Relief Limited
Broadstone Mill
Broadstone Rd., Suite 328
Stockport, Chesire
5K5 7DL England
Business Description: Total Debt Relief Limited is a privately
held debt management company based in
Stockport, England.
Chapter 15 Petition Date: October 18, 2018
Court: United States Bankruptcy Court
Eastern District of New York (Brooklyn)
Chapter 15 Case No.: 18-46013
Judge: Hon. Carla E. Craig
Foreign
Representative: Stephen John Hunt
c/o Griffins, Tavistock House South
Tavistock Square
London
WC1H 9LG England
Foreign
Proceeding
in Which
Appointment
of the Foreign
Representative
Occurred: Appointment of Provisional Liquidator
pursuant to U.K. Insolvency Act of 1986
Foreign
Representative's
Counsel: Sandra E. Mayerson, Esq.
MAYERSON & HARTHEIMER, PLLC
845 Third Ave, 11th Floor
New York, NY 10022
Tel: (646) 778-4381
Email: sandy@mhlaw-ny.com
Estimated Assets: Unknown
Estimated Debts: Unknown
A full-text copy of the Chapter 15 petition is available at:
http://bankrupt.com/misc/nyeb18-46013.pdf
TWIFORD ENTERPRISES: Sharp Buying Cattle for $1.7K Per Head
-----------------------------------------------------------
Twiford Enterprises, Inc., asks the U.S. Bankruptcy Court for the
District of Wyoming to authorize the private sale of no less than
50 head and up to 100 head of cattle to Sharp Ranch Trust for
$1,680 per head.
The Cattle are subject to cross-collateralized liens held by
Rolling Hills Bank and Trust, which balances totaled as of the
petition date was $5,797,103 and agisters' liens filed by Petsch
Farms, LLC in the amount of at least $245,409.
The parties have executed Bred Heifer Contract for the sale of the
Cattle. Under the Contract, the Cattle will be delivered on Oct.
10 through 15, 2018. The Buyer will pay the truckers at the time
of the deliver. A 10% downpayment is due at execution of the
Contract. All heifers have been ultrasound by Twiford for fetal
age and health. Twiford will brand and tag heifers before loading
at Sharp's own risk.
The sale of the Cattle are necessary for the reorganization of the
Debtor's financial affairs as shown by the budget attached to the
Court's Order Approving Extension of Use of Cash Collateral. It is
in all parties' best interest that the Cattle be sold in the manner
proposed.
The sale proceeds will be held by the Debtor subject to the Court's
order.
A copy of the Contract attached to the Motion is available for free
at:
http://bankrupt.com/misc/Twiford_Enterprises_194_Sales.pdf
The Purchaser:
Dan Sharp
SHARP RANCH TRUST
HC 1 Box 83
Boise City, OK 73933
Telephone: (580) 516-1600
Facsimile: (580) 462-2710
E-mail: dcsharpranch@gmail.com
About Twiford Enterprises
Twiford Enterprises, Inc., is a privately held company in Glendo,
Wyoming in the crop farming industry. The Company owns in fee
simple 2870 acres of land and buildings located at 642 Horseshoe
Creek Road Glendo, Wyoming having an appraised value of $4.65
million. Its gross revenue amounted to $2.23 million in 2017 and
$2.38 million in 2016.
Twiford Enterprises filed a Chapter 11 bankruptcy petition (Bankr.
D. Wyo. Case No. 18-20120) on March 9, 2018. In its petition
signed by its secretary, Jack Twiford, the Debtor disclosed total
assets of approximately $7.68 million and $6.49 million in total
debt. The Hon. Cathleen D. Parker is the case judge. The Debtor
hired Stephen R. Winship, Esq., at Winship & Winship, P.C., as
counsel.
ULTRA PETROLEUM: Fitch Affirms 'B' LongTerm IDR, Outlook Neg.
-------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings of
Ultra Petroleum Corp. and Ultra Resources, Inc. at 'B' with a
Negative Outlook and has affirmed the rating on the secured
revolver and term loan at 'BB'/'RR1'. Fitch has also placed the
'B'/'RR4' senior unsecured notes on Rating Watch Negative. Fitch's
expectation is that the remaining senior unsecured notes will be
downgraded upon completion of the debt exchange.
The Negative Rating Outlook reflects the continued downside risk to
the financial flexibility as availability under the revolving
credit facility could be constrained by the maximum net leverage
covenant and/or redetermination of the borrowing base in light of
lower realized prices. Fitch notes that minimum borrowings are
expected under the revolving credit facility over the coming
quarters under its base case scenario and that further asset
monetization could bolster the liquidity position.
On Oct. 17, 2018, Ultra Petroleum Corp. (NYSE: UPL) announced that
it had entered into an agreement with holders of approximately
$556.4 million aggregate principal amount (or 79.5%) of its 6.875%
senior notes due 2022 and approximately $267.1 million aggregate
principal amount (or 53.4%) of its 7.125% senior notes due 2025 to
exchange all of the old notes held by these noteholders for new
9.00% cash/2.00% PIK senior-secured second lien notes due July 2024
and new warrants entitling each holder to purchase one common share
of the company. Under terms of the exchange agreement, the company
is permitted to exchange up to 80% of the 2022 notes and 55% of the
2025 notes.
Holders of the 2022 notes would receive $720 in aggregate principal
amount of new notes and 14 warrants. Holders of the 2025 notes
would receive $660 in aggregate principal amount of new notes and
14 warrants. Each warrant is exercisable into common shares when
the volume-weighted average price is at least $2.50 for 30
consecutive trading days. If all warrants are exercised, total
shareholder dilution will be approximately 6%.
The exchange agreement is expected to reduce debt by approximately
$250 million, and approximately $560 million of the company's debt
maturing in 2022 will be extended until July 2024. In addition,
cash interest expense will be reduced by $14 million annually for
the notes exchanged. Pro forma for the exchange, Ultra believes its
LTM debt/EBITDA would improve to 3.3x from approximately 3.7x. As
of Sept. 30, 2018, Ultra had approximately $338 million in
available liquidity.
The company also announced that third-quarter production volumes
averaged 734mmcfe/d, which is above the mid-point of guidance. In
addition, Ultra closed on its sale of its Utah assets for $75
million ($69.3 million net proceeds) and used most of the proceeds
to fully pay down its revolving credit facility.
Fitch applies a two prong approach when determining whether a debt
exchange is considered a distressed debt exchange (DDE). In order
to be considered a DDE and recorded as a Restricted Default (RD),
there must be a material reduction in terms compared with the
original contractual terms and the exchange is necessary to avoid
bankruptcy. In the Ultra exchange, Fitch believes that there is a
material reduction in terms given that the exchange occurred at a
significant discount to par. However, Fitch does not believe the
exchange was necessary to avoid bankruptcy for several reasons:
First, Ultra has ample liquidity ($338 million as of Sept. 30,
2018) and is expected to be FCF positive in 2018 and 2019. Second,
there are no maturities until 2022. Third, Ultra's leverage is in
line with other single-B rated issues at 3.7x. As a result, Fitch
recommends not calling the proposed debt exchange a DDE.
KEY RATING DRIVERS
Disappointing Horizontal Well Results: The transition to horizontal
drilling, from the previous exclusive focus on vertical wells, did
not perform as expected. While results from the initial horizontal
well were promising, the performance of later wells was uneven.
Management's returned emphasis on exploiting its vertical well
inventory, with lesser budget allocated to delineating its
horizontal resources, will reduce volumetric risk, improve
near-term operating cash flow visibility and preserve near-term
liquidity. However, it will also delay potential full-cycle cost
improvements and expansion of the asset base. In Fitch's view,
failure to improve unit economics and expand the economic resource
base could lead to heightened longer-term refinancing risk.
Weaker Expected Credit Metrics: Fitch anticipates EBITDA will
remain around $500 million in 2018-2019 driven primarily by
flattish production volumes, wide location differentials and lack
of unit economic improvements. The modest FCF burn in 2018 is
offset by proceeds from the divestment of the Utah acreage while
FCF in 2019 should be neutral-to-slightly positive assuming a
continuation of the current three-rig program into 2019. Prior to
the exchange transaction, Fitch expects credit metrics to fluctuate
around 4.0x-4.3x over the forecast horizon, which is generally
consistent with a 'B' rating, subject to the alleviation of
covenant risk.
Downside Risk to the Borrowing Base: Fitch views the liquidity as
adequate over the near term from a combination of operations scaled
to cash flow neutrality, net proceeds of $69 million from the Utah
asset sale and some availability under the revolving credit
facility. However, Fitch is concerned that liquidity could become
constrained from tightening financial covenants or from future
reductions of the borrowing base without an improved production or
margin outlook. In October 2018, the borrowing base was reduced by
$100 million to $1.3 billion. Fitch would expect Ultra to seek a
covenant waiver and/or engage in asset monetization, in addition to
the recently completed Utah assets, to reduce secured debt
outstanding and bolster its liquidity position, if needed.
Proven Vertical Resources and Cost Structure: Ultra has a
contiguous position in the Pinedale Field with about 78,000 net
acres supportive of over 4,000 gross drilling locations. However,
management estimates only 800 locations are estimated to be
economic at the current low commodity prices and wide
differentials. This represents about eight years of drilling
inventory at current production levels. While the performance of
the horizontal wells has been uneven, Ultra has an established
track record of successful vertical exploitation of its acreage
with a competitive cost structure. EBITDA cash costs of about $1.00
per Mcfe in 2018 allows for relatively favorable net backs even at
the currently weak commodity prices and wide locational
differentials. Ultra's acreage is essentially 100% held by
production, providing the company significant flexibility in the
timing of capital deployment and drilling activity.
Wider Differentials: Roughly half of the 17% decline in Ultra's
realized natural gas prices (inclusive of realized derivatives)
during first-half 2018 compared with the same period in 2017 was
due to local disruptions. Basis differentials, approximately 10% of
Henry Hub in 2015-2017, have widened in 2018 from a combination of
weaker demand in California and increasing competition from the
Permian, the Marcellus and Canada. Ultra has hedged the basis
differential on a significant portion of the expected production
during the next 12 months at around $0.67/MMBtu. Fitch expects
differentials to remain under pressure at least through 2019, when
incremental pipeline capacity is expected to diversify gas flows
away from California, and applies a $0.70 per Mcf differential in
2018 then $0.75 per Mcf in 2019.
Hedging Policy Reduces Risk: In accordance with the terms of its
amended credit agreement, Ultra aims to maintain a rolling hedge
program of at least 65% of the of the forecasted gas production
from PDP reserves per quarter for the next 18 months, which helps
to protect a minimum level of cash flow needed to maintain drilling
activity levels. As of the end of second-quarter 2018, the company
had entered into NYMEX natural gas swaps for over 80% of its
expected natural gas production at an average price of $2.88/MMBtu
for second-half 2018 as well as hedges at $2.86/MMBtu for a
significant portion of its first-half 2019 production. Fitch
expects Ultra to opportunistically expand the size and length of
its hedging program. The hedges provide modest margin uplift to
Fitch's base case but significant protection under Fitch's stressed
scenario (where current year prices drop to $2.25-$2.00 per Mcf in
2018-2019).
Recovery Estimates: Fitch's recovery analysis, assuming a
hypothetical bankruptcy scenario, used both an asset value based
approach on observed transactions or reserve estimates and a
going-concern (GC) approach. Fitch estimates the value of the oil
and gas assets at $1.8 billion. This discount to the standardized
value of discounted future net cash flows at year-end 2017 reflects
Fitch's assumption of $2.75 per Mcf Henry Hub price, $(0.75) per
Mcf differential and 7% Btu content uplift in estimating valuation
price. Fitch's valuation price is closer to the calculated average
prices used at year-end 2016 and 2015, when the standardized value
of discounted future net cash flows was $1.7 billion-$1.9 billion.
Fitch estimated the going concern EBITDA using current production
volumes and long-term stressed Henry Hub price of $2.75 per Mcf.
Valuation multiple of 4.5x reflects the proven track record of the
vertical drilling program but finite well inventory at stressed
commodity prices. This results in total asset-based valuation of
nearly $2.0 billion. Fitch assumes a fully drawn but smaller
revolving credit facility, due to a downward redetermination of the
borrowing base, resulting in $1,225 million of first-lien debt and
$1,200 million of senior unsecured notes at default. After
deducting 10% for administrative claims, Fitch estimates that the
revolver and secured term loan have recovery prospects of 100% or
'RR1', while the unsecured debt has recovery prospects of 31%-50%,
or 'RR4'. Upon completion of the exchange offer, Fitch expects the
recovery prospects of the senior unsecured notes will be lower,
resulting in a potential downgrade.
DERIVATION SUMMARY
Ultra's ratings reflect the company's dry-gas production profile
and focus on one play, the Pinedale region. While Fitch views some
execution risk to the revised development strategy, continued
production growth and competitive operating expenses should provide
Ultra with profitable natural gas opportunities despite wider
differentials and the prevailing low natural gas price environment.
Ultra's ratings reflects smaller production size (130 mboe/d in
second-quarter 2018) than natural gas peers Southwestern Energy
(BB/Stable) at 429 mboe/d, EQT Corp (BBB-/Stable) at 664 mboe/d and
Antero Resources (BBB-/Stable) at 420 mboe/d. Peers' ratings also
reflect greater resource diversification across regions and
slightly higher associated liquids production (EQT and Southwestern
around low 10% and Antero at about 30%). In addition, Ultra had
weaker debt/EBITDA leverage and upstream metrics than peers',
including debt/1P at 4.2x and debt/flowing barrel at $17,000 at
Dec. 31, 2017.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Base case Henry Hub natural gas improving from $2.75/mcf in
2018 to $3.00/mcf in 2019 and beyond;
-- Base case WTI oil price declining from $65/barrel in
second-half 2018 to $60/barrel in 2019 then $55/barrel for
subsequent years;
-- Basis differential of $0.70-0.75 per Mcf and 7% uplift from
NGLs through the forecast period;
-- Capex of $400 million in 2018, decreasing to $300 million in
later years;
-- Cash costs of about $1.00 per Mcfe in 2018 without material
efficiency improvement in subsequent years;
-- Production of approximately 275 Bcfe/d in 2018, and flattish
in later years.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Defined plan to address the liquidity and capital structure
constraints in weak realized price environment and/or material
improvement in net realized prices, would lead to a Stable Rating
Outlook;
-- Increased diversification into different production regions
and/or increased exposure to high-margin liquids production;
-- Mid-cycle debt/EBITDA below 4.0x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Material deterioration of the cost profile and/or regional
differentials from current levels;
-- Failure to meaningfully address the shrinking financial
flexibility in the current weak realized pricing environment;
-- Mid-cycle debt/EBITDA above 4.5x.
LIQUIDITY
Tightening Liquidity: Ultra had $338 million of liquidity at Sept.
30, 2018. The company has a $325 million revolving credit facility
that matures January 2022. Fitch expects the liquidity position to
remain adequate over the next six to 12 months as the net cash
proceeds from the divestment of the Utah assets ($69 million to be
received during third-quarter 2018) should offset expected small
FCF burn over that period.
A borrowing base of $1.3 billion (re-evaluated semi-annually on
April 1 and Oct. 1) limits the amount of first lien debt under the
revolving credit facility and the term loan facility. While
material revolver draws are not anticipated, Fitch notes that any
reduction in the borrowing base would directly and proportionally
reduce availability under the revolving credit facility given that
$975 million was outstanding under the term loan facility at
second-quarter end. In addition, ability to draw under the revolver
could be constrained by the maximum net leverage covenant, which
will gradually tighten from the current 4.5x to 4.0x by
first-quarter 2020.
Mandatory debt repayments are minimal until the maturity of the
revolver in Jan. 2022 and $700 million of senior notes in April
2022. Pro forma for the exchange, the debt repayments on the 2022
senior notes declines to $143.6 million. Fitch expects potential
additional settlements to claims from several counterparties in
relation to its chapter 11 filing to be manageable.
FULL LIST OF RATING ACTIONS
Fitch has affirmed the following ratings:
Ultra Petroleum Corp.
-- Long-term IDR at 'B'.
Ultra Resources, Inc.
-- Long-term IDR at 'B';
-- Senior secured debt at 'BB'/'RR1'.
The Rating Outlook remains Negative.
Fitch has placed the following rating on Rating Watch Negative:
Ultra Resources, Inc.
-- Senior unsecured debt 'B'/'RR4'.
ULTRA PETROLEUM: S&P Lowers ICR to 'CC', Outlook Negative
---------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Englewood,
Colo.-based Ultra Petroleum Corp. to 'CC' from 'CCC+'. The outlook
is negative.
S&P said, "At the same time, we lowered the issue-level rating on
the company's unsecured debt to 'CC' from 'CCC+'. The recovery
rating remains '3', indicating our expectation of meaningful
(50%-70%; rounded estimate: 65%) recovery in the event of a payment
default.
"In addition, we affirmed the 'B' issue-level rating on the
company's secured debt term loan. The recovery rating remains '1',
indicating our expectation of very high (90% to 100%; rounded
estimate: 95%) recovery in the event of a payment default.
The downgrade follows the company's announcement that it has
entered into privately negotiated exchange agreements with certain
holders representing a combined $823.5 million of its 6.875% notes
due 2022 and of its 7.125% notes due 2025 for 9% cash and 2% PIK
senior secured second-lien notes due July 2024 and warrants." The
exchange would include:
-- Approximately $556.4 million in aggregate principal amount of
the company's 6.875% senior notes due 2022 for approximately $401
million of the new second-lien notes due 2024 plus approximately
7.8 million warrants (14 per 1,000 exchanged original principal);
and
-- Approximately $267.1 million in aggregate principal amount of
the company's 7.125% senior notes due 2025 for approximately $176
million of new second-lien notes due 2024 plus approximately 3.7
million warrants.
S&P said, "We note that the proposed exchange may be terminated by
either the company or supporting noteholders owning at least a
majority of aggregate principal on the old notes if a transaction
has not occurred by Nov. 15, 2018. Furthermore, if a transaction is
not completed by December 15, any single supporting noteholder can
opt out of the exchange.
"We view the transaction as a distressed exchange because the
offer, in our view, implies that investors will receive less value
that the promise of the original securities, including inadequate
compensation and for the extension of the maturity. We also view
the offer as distressed, rather than purely opportunistic.
"The negative outlook reflects the potential that holders of a
portion of the company's unsecured notes due 2022 and unsecured
notes due 2025 may exchange the securities for the new second-lien
notes due 2024 and warrants at what we consider to be lower value
than the original promise of the securities. Should this occur, we
will lower the issuer credit rating to 'SD'.
"We would lower our issuer credit rating on Ultra Petroleum Corp.
to 'SD' upon completion of the transaction.
"We could raise the issuer credit rating if the transaction is not
executed."
UNIVERSAL HEALTH: Moody's Rates $3.5-Bil. Credit Facilities 'Ba1'
-----------------------------------------------------------------
Moody's Investors Service assigned Ba1 ratings to Universal Health
Services, Inc.'s new $3.5 billion credit facility, including a
revolving credit facility, term loan A and term loan B. Proceeds
from the new term loans will be used to repay existing debt. The
transaction is expected to be leverage neutral.
Universal's remaining existing ratings, including the company's Ba1
Corporate Family Rating and Ba1-PD Probability of Default Rating,
are unchanged. The rating outlook remains stable.
Following is a summary of Moody's rating actions.
Ratings assigned:
$1 billion senior secured revolving credit facility, at Ba1 (LGD3)
$2 billion senior secured term loan A at Ba1 (LGD3)
$500 million senior secured term loan B at Ba1 (LGD3)
RATINGS RATIONALE
Universal Health Services' credit profile reflects Moody's
expectation that it will continue to maintain low financial
leverage, with adjusted debt/EBITDA of around 2.5x, solid interest
coverage and good free cash flow relative to debt. Its credit
profile is also supported by UHS's considerable scale and strong
market positions in both its acute care hospital and behavioral
health segments. While UHS has some geographic concentration in its
acute care business, the behavioral health business -- which has a
national footprint -- affords the company good business and
geographic diversification as a whole. UHS's credit profile is
constrained by reputational and financial risk associated with the
on-going investigations into billing and business practices at some
of the company's behavioral health facilities. Further, its credit
profile is constrained by general industry-wide hospital
challenges, including rising wages and costs and reimbursement
pressures.
If UHS resolves the vast majority of its outstanding litigation and
investigation items and maintains conservative financial policies
and a disciplined approach to capital deployment, Moody's could
upgrade the ratings. Specifically, if Moody's expects UHS to
sustain debt/EBITDA below 2.5 times, there could be upward rating
pressure.
The ratings could be downgraded if the company engages in
significant debt financed acquisitions or cash payouts to
shareholders, or if credit metrics materially worsen for any
reason. More specifically, the ratings could be downgraded if
Moody's expects debt/EBITDA to be sustained above 3.0 times.
Further, a significant escalation of legal liabilities or
government investigations could also put downward pressure on the
ratings.
Universal Health Services, Inc. based in Prussia, Pennsylvania,
owned and operated 26 acute care hospitals and 300 inpatient and 32
outpatient behavioral health centers as of June 30, 2018.
Facilities are located in 37 states, Washington, D.C., the United
Kingdom, and Puerto Rico. Revenues are approximately $10.5 billion.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
US SILICA: Bank Debt Trades at 3% Off
-------------------------------------
Participations in a syndicated loan under which US Silica
Corporation is a borrower traded in the secondary market at 96.84
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.74 percentage points from the
previous week. US Silica pays 400 basis points above LIBOR to
borrow under the $12 million facility. The bank loan matures on May
1, 2025. Moody's rates the loan 'B1' and Standard & Poor's gave a
'B+' rating to the loan. The loan is one of the biggest gainers and
losers among 247 widely quoted syndicated loans with five or more
bids in secondary trading for the week ended Friday, October 12.
VERITAS SOFTWARE: Bank Debt Trades at 3% Off
--------------------------------------------
Participations in a syndicated loan under which Veritas Software is
a borrower traded in the secondary market at 96.61
cents-on-the-dollar during the week ended Friday, October 12, 2018,
according to data compiled by LSTA/Thomson Reuters MTM Pricing.
This represents a decrease of 0.79 percentage points from the
previous week. Veritas Software pays 450 basis points above LIBOR
to borrow under the $19 million facility. The bank loan matures on
January 27, 2023. Moody's rates the loan 'B2' and Standard & Poor's
gave a 'B' rating to the loan. The loan is one of the biggest
gainers and losers among 247 widely quoted syndicated loans with
five or more bids in secondary trading for the week ended Friday,
October 12.
VICTORY SOLUTIONS: Seeks Authority to Use Cash Collateral
---------------------------------------------------------
Victory Solutions LLC requests authority from the U.S. Bankruptcy
Court for the Northern District of Ohio to use cash collateral
immediately to fund the operating expenses necessary to continue
the operation of its business and to otherwise avoid irreparable
harm and injury to its business and the estate.
The Debtor proposes to use cash collateral for purposes which
include the following:
(a) Care, maintenance and preservation of the Debtor's
assets;
(b) Payment of necessary payroll and other business
expenses;
(c) Purchase of goods and services, including inventory; and
(d) Continued business operations.
Prior to the Petition Date, the Debtor, as borrower, was indebted
to the Internal Revenue Service, which has tax liens on all of its
property, in the approximate amount of $411,000. The Debtor
believes that the IRS will assert (a) that it has a perfected
security interests in the Collateral and (b) that its perfected
security interests generally enjoy the first level of priority.
The Debtor proposes to allow floating liens on the post-petition
Collateral in the same amount and level as the IRS held
pre-petition and maintain the same level of Collateral as
pre-petition. The Debtor proposes to grant the IRS a replacement
lien on all inventory and accounts receivables acquired after the
Petition Date equal in extent, validity, and priority to the
security interest in inventory and accounts that the IRS held as of
the Petition Date. To provide additional security to the IRS, the
Debtor proposes to pay adequate protection in the amount of $ 7,500
per month
A full-text copy of the Debtor's Motion is available at
http://bankrupt.com/misc/ohnb18-15798-5.pdf
About Victory Solutions
Victory Solutions LLC is a telecommunications equipment supplier in
Strongsville, Ohio. It developed the Victory VoIP (Voice-over
Internet Protocol) system -- a specially equipped phone that serves
as a plug-and-play call center and enables campaigns to contact
more voters and build intelligent databases.
Victory Solutions sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ohio Case No. 18-15798) on Sept. 27,
2018. The Debtor previously filed for bankruptcy protection
(Bankr. N.D. Ohio Case No. 18-10977) on Feb. 26, 2018.
In the petition signed by Shannon Burns, managing member, the
Debtor disclosed $231,901 in assets and $2,014,386 in liabilities.
Judge Jessica E. Price Smith presides over the case.
VISITING NURSE: Taps Weiland Golden as New Legal Counsel
--------------------------------------------------------
Visiting Nurse Association of the Inland Counties seeks approval
from the U.S. Bankruptcy Court for the Central District of
California to hire Weiland Golden Goodrich LLP as its new legal
counsel.
Weiland will replace The Turoci Firm, the law firm initially
employed by the Debtor in connection with its Chapter 11 case.
Weiland has agreed to an across-the-board $150 reduction of its
customary hourly rates, which range from $250 to $750, depending on
the experience and expertise of the attorney or paralegal
performing the work. The firm will not receive a retainer.
Beth Gaschen, Esq., at Weiland, disclosed in a court filing that
her firm neither holds nor represents any interest adverse to the
interest of the Debtor's estate, creditors or equity security
holders.
The firm can be reached through:
David M. Goodrich, Esq.
Beth E. Gaschen, Esq.
Ryan W. Beall, Esq.
Weiland Golden Goodrich LLP
650 Town Center Drive, Suite 600
Costa Mesa, CA 92626
Telephone: 714-966-1000
Facsimile: 714-966-1002
Email: dgoodrich@wgllp.com
Email: bgaschen@wgllp.com
Email: rbeall@wgllp.com
About Visiting Nurse Association
of the Inland Counties
Visiting Nurse Association of the Inland Counties --
http://www.vnacalifornia.org/-- is a not-for-profit organization
that provides health, palliative and hospice services when in-home
care is needed or preferred. It offers a full continuum of care for
patients, including home health, hospice and bereavement services.
The company is headquartered in Riverside, California, with patient
care centers in Palm Desert and Murrieta.
Visiting Nurse Association of the Inland Counties sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
18-16908) on Aug. 15, 2018. In the petition signed by Bruce
Gordon, corporate controller, the Debtor estimated assets of $1
million to $10 million and liabilities of $10 million to $50
million.
Judge Mark D. Houle presides over the case.
On Sept. 13, 2018, the U.S. trustee appointed Jerry Seelig as
patient care ombudsman in the Debtor's case.
On Sept. 19, 2018, the Office of the U.S. Trustee appointed a
committee of unsecured creditors. The Committee retained Marshack
Hays LLP as counsel.
WOODBRIDGE GROUP: Selling Bishop's Los Angeles Property for $25M
----------------------------------------------------------------
Woodbridge Group of Companies, LLC, and its affiliated debtors ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
their Vacant Land Purchase Agreement and Joint Escrow Instructions
dated as of July 15, 2018, with JGDB, LLC, in connection with the
sale of Bishop White Investments, LLC's real property located at
805 Nimes Place, Los Angeles, California, together with the
Seller's right, title, and interest in and to the buildings located
thereon and any other improvements and fixtures located thereon,
and any and all of the Sellers' right, title, and interest in and
to the tangible personal property and equipment remaining on the
real property as of the date of the closing of the sale, for $25.1
million.
The Property consists of an approximately 1.19 acre vacant lot
situated in Los Angeles, California. The Seller purchased the
Property in May 2017 for a purchase price of $35 million. It
intended to develop the Property by constructing a high-end luxury
home, however, no such development was ever completed and the
development site remains vacant. The Purchaser made an all cash
offer under the Purchase Agreement to acquire the Property on an
"as is" basis, with no financing contingencies. Accordingly, the
Debtors have determined that selling the Property now on an "as is"
basis best maximizes the value of the Property.
The Property has been formally listed on the multiple-listing
service for over 60 days and has been heavily marketed, including
through advertisements in various publications. After several
rounds of negotiation, the Purchaser's offer to acquire the
Property under the Purchase Agreement resulted in the highest and
otherwise best offer (and the only offer) the Debtors have received
for the Property. Accordingly, the Debtors determined that selling
the Property to the Purchaser pursuant to the Purchase Agreement is
the best way to maximize the value of the Property.
On July 16, 2018, the Purchaser made an all cash $27 million offer
on the Property. The Purchaser's offer is contingent on (and
indivisible from) the Purchaser's substantially contemporaneous
offer to acquire another property owned by the Debtors. On July
20, 2018, the Debtors countered the Purchaser's offer in the amount
of $30.5 million. On July 24, 2018, the Purchaser responded by
raising its offer to $28 million. On July 27, 2018, the Debtors
made a second counter offer in the amount of $30 million. On Aug.
3, 2018, the Purchaser responded by raising its offer to $28.1
million. On Aug. 6, 2018, the Debtors made a third counter offer
in the amount of $29 million. On Aug. 9, 2018, the Purchaser
responded indicating that it would hold firm at its $28.1 million,
but agreeing to a shorter inspection period (reduced from 30 days
to 17 days), which the Debtors agreed to.
Thereafter, the Purchaser failed to waive all applicable
contingencies and raised certain concerns regarding the Property.
In response, the Debtors extended the contingency period several
times as the parties continued to negotiate a resolution of these
issues. Ultimately, on Sept. 26, 2018, the Purchaser and the
Seller entered into the First Amendment, pursuant to which, among
other things, the Seller agreed to credit the Purchaser with $3
million toward the purchase price in consideration for the
Purchaser immediately waiving all contingencies (other than (i) the
contingency that the Sale Order be entered by Oct. 31, 2018, (ii)
the Nightingale Contingency, and (iii) a contingency related to
title insurance with respect to mechanics liens) and the Purchaser
agreed to provide an additional cash deposit.
Under the Purchase Agreement as amended, the Purchaser is
purchasing the Property for $25.1 million (which reflects the
reduction of the original price of $28.1 million by the $3 million
Credit), with an initial cash deposit of $843,000, an additional
deposit in the form of the Amendment Consideration in the amount of
$1,667,000, and the balance of $22,590,000 to be paid in cash at
closing. The initial cash deposit and the Amendment Consideration
are being held by A&A Escrow Services, Inc., as the escrow agent.
In connection with marketing the Property, the Debtors worked with
Compass California, Inc., a non-affiliated third-party brokerage
company. The Broker Agreement, as amended, provides the Seller's
broker with the exclusive and irrevocable right to market the
Property for a fee in the amount of 1% of the sale proceeds and
provides for a fee to a cooperating purchaser's broker in the
amount of 2% of the sale proceeds. The Purchase Agreement is
signed by Tomer Fridman of Compass as the Seller's agent and
Johnathan Nash and Stephen Resnick of Hilton & Hyland as the
Purchaser's agent.
In addition to the Broker Fees, the Seller must also satisfy
certain required costs associated with the sale and transfer of
title of the Property to comply with the Purchase Agreement. The
Other Closing Costs include, but are not limited to, recording
fees, title insurance policy costs, prorated property taxes, city
and county transfer taxes, and other items noted on the title
report for the Property. They also rely on outside vendors for
escrow and title services in connection with property sales. In
general, vendors are mutually agreed on by the applicable Debtors
and a purchaser prior to the acceptance of an offer.
All proceeds of the Sale (net of the Broker Fee and Other Closing
Costs) will be paid to the Debtors into the general account of
Debtor Woodbridge Group of Companies, LLC, and such net proceeds
will be disbursed and otherwise treated by the Debtors in
accordance with the Final DIP Order.
The Property is subject to a lien for the benefit of Woodbridge
Mortgage Investment Fund 4, LLC, which secures indebtedness of the
Seller to the Fund in connection with the purchase of the Property.
The Fund has consented to the Sale of the Property free and clear
of the Fund Lien.
The Debtors ask that filing of a copy of an order granting the
relief sought in Los Angeles County, California may be relied upon
by Fidelity National Title Insurance Co. to issue title insurance
policies on the Property. They further ask authority to pay the
Broker Fees by (i) paying 1% of the $25.1 million gross sale
proceeds to Compass out of such proceeds and (ii) paying 2% of the
$25.1 million gross sale proceeds to Hilton & Hyland out of such
proceeds.
Any delay in permitting the Debtors to close the Sale could
jeopardize the Sale with the Purchaser and therefore would be
detrimental to the Debtors, their creditors, and their estates.
Accordingly, and to successfully implement the foregoing, the
Debtors ask a waiver of the notice requirements under Bankruptcy
Rule 6004(a) and the 14-day stay of any order authorizing the use,
sale, or lease of property under Bankruptcy Rule 6004(h).
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Woodbridge_Group_2691_Sales.pdf
A hearing on the Motion is set for Oct. 24, 2018 at 10:00 a.m. (ET)
at 1:30 p.m. (ET). The objection deadline is Oct. 12, 2018 at 4:00
p.m. (ET).
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- is a
comprehensive real estate finance and development company. Its
principal business is buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owns and
operates full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team have been in the business of
providing a variety of financial products for more than 35 years,
and have been primarily focused on the luxury home business for the
past five years. Since its inception, the Woodbridge Group
Enterprise has completed more than $1 billion in financial
transactions. These transactions involve real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge Group of Companies and certain of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-12560) on Dec. 4, 2017. Woodbridge estimated assets and
liabilities at between $500 million and $1 billion. The Chapter 11
cases are being jointly administered.
Judge Kevin J. Carey presides over the case.
Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq.,
Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey,
Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher,
LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J.
Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway
Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as
expert consultant, Moelis & Company LLC, as investment banker.
The Debtors' financial advisors are Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group is
serving as independent management to the Debtors. Garden City
Group, LLC, is the Debtors' claims and noticing agent.
Venable LLP is the Fiduciary Committee of Unitholders' legal
counsel.
Drinker Biddle & Reath LLP is counsel to the Ad Hoc Group of
Noteholders, and Conway MacKenzie, Inc., as its financial advisor.
Pachulski Stang Ziehl & Jones is counsel to the Official Committee
of Unsecured Creditors; and FTI Consulting, Inc., serves as its
financial advisor.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court
approved a settlement providing for the formation of an ad hoc
noteholder group and an ad hoc unitholder group.
WOODBRIDGE GROUP: Selling Merrimack's Carbondale Property for $100K
-------------------------------------------------------------------
Woodbridge Group of Companies, LLC, and its affiliated debtors ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
their Contract to Buy and Sell Real Estate dated as of Sept. 11,
2018, with Jesse James Development, LLC, in connection with the
sale of Merrimack Valley Investments, LLC's real property located
at 1165 Heritage Drive, Carbondale, Colorado, together with the
Seller's right, title, and interest in and to the buildings located
thereon and any other improvements and fixtures located thereon,
and any and all of the Sellers' right, title, and interest in and
to the tangible personal property and equipment remaining on the
real property as of the date of the closing of the sale, for
$100,000.
The Property consists of an approximately 0.24 acre vacant lot.
The Seller purchased the Real Property in August 2015 for $120,000
with the intention of holding the lot for future sale as a vacant
lot or for future possible development. Ultimately, the Debtors
determined that there would be no benefit to constructing a new
home on the Real Property given the existing inventory in the
community. Accordingly, the Debtors have determined that selling
the Property now on an "as is" basis best maximizes the value of
the Property.
The Property has been listed on the multiple-listing service and
marketed for sale as a vacant lot for more than 110 days, and was
previously listed for over 700 days. The Purchaser's all cash
offer under the Purchase Agreement is the highest and otherwise
best offer (and the only offer) the Debtors have received for the
Property. Accordingly, the Debtors determined that selling the
Property on an "as is" basis to the Purchaser is the best way to
maximize the value of the Property.
On Sept. 14, 2018, the Purchaser made an all cash offer for the
Property in the amount of $86,000. On Sept. 16, 2018, the Debtors
countered the Purchaser's offer at $100,000, and the Purchaser
accepted on Sept. 17, 2018. The Debtors believe that this all cash
purchase price provides significant value.
Under the Purchase Agreement, the Purchaser agreed to purchase the
Property for $100,000, with a $4,000 initial cash deposit, and the
balance of $96,000 to be paid in cash at closing, with no financing
contingencies. The deposit is being held by Commonwealth Title Co.
of Garfield County, Inc. as the escrow agent.
In connection with marketing the Property, the Debtors worked with
Aspen Snowmass Sotheby's International Realty, a non-affiliated
third-party brokerage company, as the transaction broker for both
parties. The Broker Agreement provides Sotheby's with the
exclusive and irrevocable right to market the Property for a fee in
the amount of 5% of the contractual sale price, and authorizes the
Seller’s broker to contribute up to 2.5% of the Seller's Broker
Fee to a cooperating broker. The Purchase Agreement is signed by
Laura Gee of Sotheby's as the Seller's broker and Carly Passchier
of Integrated Mountain Properties as the Purchaser's broker.
In addition to the Broker Fees, the Seller must also satisfy
certain required costs associated with the sale and transfer of
title of the Property to comply with the Purchase Agreement. The
Other Closing Costs include, but are not limited to, recording
fees, title insurance policy costs, prorated property taxes, city
and county transfer taxes, and other items noted on the title
report for the Property. They also rely on outside vendors for
escrow and title services in connection with property sales. In
general, vendors are mutually agreed on by the applicable Debtors
and a purchaser prior to the acceptance of an offer.
All proceeds of the Sale (net of the Broker Fee and Other Closing
Costs) will be paid to the Debtors into the general account of
Debtor Woodbridge Group of Companies, LLC, and such net proceeds
will be disbursed and otherwise treated by the Debtors in
accordance with the Final DIP Order.
The Debtors ask that filing of a copy of an order granting the
relief sought in Garfield County, Colorado may be relied upon by
the Title Insurer to issue title insurance policies on the
Property. They further ask authority to pay the Broker Fees out of
the sale proceeds by paying the Seller's Broker Fee in the amount
of up to 2.5% of gross sale proceeds and paying the Purchaser's
Broker Fee in the amount of up to 2.5% of gross sale proceeds.
Any delay in permitting the Debtors to close the Sale could
jeopardize the Sale with the Purchaser and therefore would be
detrimental to the Debtors, their creditors, and their estates.
Accordingly, and to successfully implement the foregoing, the
Debtors ask a waiver of the notice requirements under Bankruptcy
Rule 6004(a) and the 14-day stay of any order authorizing the use,
sale, or lease of property under Bankruptcy Rule 6004(h).
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Woodbridge_Group_2705_Sales.pdf
A hearing on the Motion is set for Oct. 24, 2018 at 10:00 a.m. (ET)
at 1:30 p.m. (ET). The objection deadline is Oct. 12, 2018 at 4:00
p.m. (ET).
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- is a
comprehensive real estate finance and development company. Its
principal business is buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owns and
operates full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team have been in the business of
providing a variety of financial products for more than 35 years,
and have been primarily focused on the luxury home business for the
past five years. Since its inception, the Woodbridge Group
Enterprise has completed more than $1 billion in financial
transactions. These transactions involve real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge Group of Companies and certain of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-12560) on Dec. 4, 2017. Woodbridge estimated assets and
liabilities at between $500 million and $1 billion. The Chapter 11
cases are being jointly administered.
Judge Kevin J. Carey presides over the case.
Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq.,
Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey,
Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher,
LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J.
Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway
Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as
expert consultant, Moelis & Company LLC, as investment banker.
The Debtors' financial advisors are Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group is
serving as independent management to the Debtors. Garden City
Group, LLC, is the Debtors' claims and noticing agent.
Venable LLP is the Fiduciary Committee of Unitholders' legal
counsel.
Drinker Biddle & Reath LLP is counsel to the Ad Hoc Group of
Noteholders, and Conway MacKenzie, Inc., as its financial advisor.
Pachulski Stang Ziehl & Jones is counsel to the Official Committee
of Unsecured Creditors; and FTI Consulting, Inc., serves as its
financial advisor.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court
approved a settlement providing for the formation of an ad hoc
noteholder group and an ad hoc unitholder group.
WOODBRIDGE GROUP: Selling Springvale's Carbondale Land for $110K
----------------------------------------------------------------
Woodbridge Group of Companies, LLC, and its affiliated debtors ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
their Contract to Buy and Sell Real Estate dated as of Aug. 9,
2018, with Steven E. Wafer and Mariann Wafer, in connection with
the sale of Springvale Investments, LLC's real property located at
110 Bowles Drive, Carbondale, Colorado, together with the Seller's
right, title, and interest in and to the buildings located thereon
and any other improvements and fixtures located thereon, and any
and all of the Sellers' right, title, and interest in and to the
tangible personal property and equipment remaining on the real
property as of the date of the closing of the sale, for $110,000.
The Property consists of a vacant lot. The Seller purchased the
Real Property in March 2015 for $125,000, with the intention of
holding the lot for future sale as a vacant lot or for future
possible development. Ultimately, the Debtors determined that
there would be no benefit to constructing a new home on the Real
Property given the existing inventory in the community.
Accordingly, the Debtors have determined that selling the Property
now on an "as is" basis best maximizes the value of the Property.
The Property has not been formally listed on the multiple-listing
service, however, the Debtors have listed comparable lots in the
River Valley Ranch community (including lots in the same cul-de-sac
in which the Property is situated) for approximately $130,000, and
all the Debtors' listings for lots in the community state that
other, similar lots are available for purchase upon inquiry to the
listing broker. In addition, all their available lots for purchase
in the Aspen Glen and River Valley Ranch areas (including the
Property) have been marketed through announcements to the brokerage
community and recent advertisements in local print media. The
Purchaser's all cash offer under the Purchase Agreement is the
highest and otherwise best offer (and the only offer) the Debtors
have received.
On Aug. 2, 2018, the Purchaser made an all cash $105,000 offer on
the Property. The Seller responded with a verbal counter offer of
$120,000, which the Purchaser rejected. On Aug. 10, 2018, the
Purchaser raised its offer to $110,000, with no appraisal
contingency. The Debtors believe that this purchase price provides
significant value. Accordingly, the Seller countersigned the final
Purchase Agreement on Aug. 10, 2018. The parties subsequently
entered into an addendum as to certain non-price terms.
Under the Purchase Agreement, the Purchaser agreed to purchase the
Property for $110,000, with a $5,000 initial cash deposit and the
balance of $105,000 to be paid in cash as a single down payment at
closing. The deposit is being held by Title Company of the Rockies
as the escrow agent.
In connection with marketing the Property, the Debtors worked with
Aspen Snowmass Sotheby's International Realty, a non-affiliated
third-party brokerage company. The Broker Agreement provides the
Seller's broker with the exclusive and irrevocable right to market
the Property for a fee in the amount of 5% of the contractual sale
price and authorizes the Seller's broker to compensate a
cooperating purchaser's broker by contributing a share of the
Seller's Broker Fee in the amount of 2.5% of the contractual sale
price to the purchaser's broker. The Purchase Agreement is signed
by Laura Gee of Sotheby's as the Seller's agent, and Brian Leasure
of Destination Holdings as the broker for the Purchaser.
In addition to the Broker Fees, the Seller must also satisfy
certain required costs associated with the sale and transfer of
title of the Property to comply with the Purchase Agreement. The
Other Closing Costs include, but are not limited to, recording
fees, title insurance policy costs, prorated property taxes, city
and county transfer taxes, and other items noted on the title
report for the Property. The Debtors also rely on outside vendors
for escrow and title services in connection with property sales.
In general, vendors are mutually agreed on by the applicable
Debtors and a purchaser prior to the acceptance of an offer.
All proceeds of the Sale (net of the Broker Fee and Other Closing
Costs) will be paid to the Debtors into the general account of
Debtor Woodbridge Group of Companies, LLC, and such net proceeds
will be disbursed and otherwise treated by the Debtors in
accordance with the Final DIP Order.
The Property is subject to a lien for the benefit of Woodbridge
Mortgage Investment Fund 3, LLC, which secures indebtedness of the
Seller to the Fund in connection with the purchase of the Property.
The Fund has consented to the Sale of the Property free and clear
of the Fund Lien.
The Debtors ask that filing of a copy of an order granting the
relief sought in Garfield County, Colorado may be relied upon by
the Title Insurer to issue title insurance policies on the
Property.
They further ask authority to pay the Broker Fees out of the sale
proceeds in an amount not to exceed 5% of gross sale proceeds in
the aggregate by (i) paying the Purchaser's Broker Fee in an amount
not to exceed 2.5% of the gross sale proceeds and (ii) paying the
Seller's Broker Fee in an amount not to exceed 2.5% of the gross
sale proceeds.
Any delay in permitting the Debtors to close the Sale could
jeopardize the Sale with the Purchaser and therefore would be
detrimental to the Debtors, their creditors, and their estates.
Accordingly, and to successfully implement the foregoing, the
Debtors ask a waiver of the notice requirements under Bankruptcy
Rule 6004(a) and the 14-day stay of any order authorizing the use,
sale, or lease of property under Bankruptcy Rule 6004(h).
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Woodbridge_Group_2678_Sales.pdf
A hearing on the Motion is set for Oct. 24, 2018 at 10:00 a.m. (ET)
at 1:30 p.m. (ET). The objection deadline is Oct. 12, 2018 at 4:00
p.m. (ET).
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- is a
comprehensive real estate finance and development company. Its
principal business is buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owns and
operates full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team have been in the business of
providing a variety of financial products for more than 35 years,
and have been primarily focused on the luxury home business for the
past five years. Since its inception, the Woodbridge Group
Enterprise has completed more than $1 billion in financial
transactions. These transactions involve real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge Group of Companies and certain of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-12560) on Dec. 4, 2017. Woodbridge estimated assets and
liabilities at between $500 million and $1 billion. The Chapter 11
cases are being jointly administered.
Judge Kevin J. Carey presides over the case.
Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq.,
Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey,
Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher,
LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J.
Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway
Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as
expert consultant, Moelis & Company LLC, as investment banker.
The Debtors' financial advisors are Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group is
serving as independent management to the Debtors. Garden City
Group, LLC, is the Debtors' claims and noticing agent.
Venable LLP is the Fiduciary Committee of Unitholders' legal
counsel.
Drinker Biddle & Reath LLP is counsel to the Ad Hoc Group of
Noteholders, and Conway MacKenzie, Inc., as its financial advisor.
Pachulski Stang Ziehl & Jones is counsel to the Official Committee
of Unsecured Creditors; and FTI Consulting, Inc., serves as its
financial advisor.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court
approved a settlement providing for the formation of an ad hoc
noteholder group and an ad hoc unitholder group.
WOODBRIDGE GROUP: Selling Springvale's Carbondale Land for $300K
----------------------------------------------------------------
Woodbridge Group of Companies, LLC, and its affiliated debtors ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
their Contract to Buy and Sell Real Estate dated as of Sept. 7,
2018, with Busby Properties LP, in connection with the sale of
Springvale Investments, LLC's real property located at (i) The
Enclave at Bowles Gulch, Lot 1, Carbondale, Colorado; (ii) The
Enclave at Bowles Gulch, Lot 2, Carbondale, Colorado; and (iii) The
Enclave at Bowles Gulch, Lot 3, Carbondale, Colorado; together with
the Seller's right, title, and interest in and to the buildings
located thereon and any other improvements and fixtures located
thereon, and any and all of the Sellers' right, title, and interest
in and to the tangible personal property and equipment remaining on
the real property as of the date of the closing of the sale, for
$300,000.
The Property consists of three vacant lots. The Seller purchased
the three lots that comprise the Property in March 2015 for
$125,000 each, with the intention of holding the lots for future
sale as vacant lots or for future possible development.
Ultimately, the Debtors determined that there would be no benefit
to constructing new homes on the Real Property given the existing
inventory in the community. Accordingly, they've determined that
selling the Property now on an "as is" basis best maximizes the
value of the Property.
The Property has not been formally listed on the multiple-listing
service; however, the Debtors have listed comparable lots in the
River Valley Ranch community, and all their listings for lots in
the community state that other, similar lots are available for
purchase upon inquiry to the listing broker. In addition, all
their available lots for purchase in the Aspen Glen and River
Valley Ranch areas have been marketed through announcements to the
brokerage community and advertisements in various publications.
The Purchaser's all cash offer under the Purchase Agreement is the
highest and otherwise best offer (and the only offer) the Debtors
have received.
On Sept. 10, 2018, the Purchaser made an all cash $270,000 offer on
the Property, which amounts to approximately $90,000 for each of
the three parcels. On Sept. 11, 2018, the Seller responded with a
counter offer of $300,000, which the Purchaser accepted on Sept.
12, 2018. The Debtors believe that this purchase price provides
significant value.
Thereafter, on Sept. 17 and 19, 2018, the Debtors and the Purchaser
executed an addendum to the Purchase Agreement with respect to
certain non-price terms. Under the Purchase Agreement, the
Purchaser agreed to purchase the Property for $300,000, with a
$10,000 initial cash deposit and the balance of $290,000 to be paid
in cash as a single down payment at closing. The deposit is being
held by
Commonwealth Title Co. as the escrow agent
In connection with marketing the Property, the Debtors and the
Purchaser worked with different agents at Aspen Snowmass Sotheby's
International Realty, a non-affiliated third-party brokerage
company. The Broker Agreement provides the Seller's broker with
the exclusive and irrevocable right to market the Property for a
fee in the amount of 5% of the contractual sale price and
authorizes the Seller's broker to compensate a cooperating
purchaser's broker by contributing a share of the Seller’s Broker
Fee in the amount of 2.5% of the contractual sale price to the
purchaser's broker. The Purchase Agreement is signed by Laura Gee
of Sotheby's as the Seller’s agent and Teri Christensen of
Sotheby's as the broker for the Purchaser.
In addition to the Broker Fees, the Seller must also satisfy
certain required costs associated with the sale and transfer of
title of the Property to comply with the Purchase Agreement. The
Other Closing Costs include, but are not limited to, recording
fees, title insurance policy costs, prorated property taxes, city
and county transfer taxes, and other items noted on the title
report for the Property. They also rely on outside vendors for
escrow and title services in connection with property sales. In
general, vendors are mutually agreed on by the applicable Debtors
and a purchaser prior to the acceptance of an offer.
All proceeds of the Sale (net of the Broker Fee and Other Closing
Costs) will be paid to the Debtors into the general account of
Debtor Woodbridge Group of Companies, LLC, and such net proceeds
will be disbursed and otherwise treated by the Debtors in
accordance with the Final DIP Order.
The Property is subject to a lien for the benefit of Woodbridge
Mortgage Investment Fund 3, LLC, which secures indebtedness of the
Seller to the Fund in connection with the purchase of the Property.
The Fund has consented to the Sale of the Property free and clear
of the Fund Lien.
The Debtors ask that filing of a copy of an order granting the
relief sought in Garfield County, Colorado may be relied upon by
the Title Insurer to issue title insurance policies on the
Property. They further ask authority to pay the Broker Fees out of
the sale proceeds in an amount not to exceed 5% of gross sale
proceeds in the aggregate by (i) paying the Purchaser's Broker Fee
in an amount not to exceed 2.5% of the gross sale proceeds and (ii)
paying the Seller's Broker Fee in an amount not to exceed 2.5% of
the gross sale proceeds.
Any delay in permitting the Debtors to close the Sale could
jeopardize the Sale with the Purchaser and therefore would be
detrimental to the Debtors, their creditors, and their estates.
Accordingly, and to successfully implement the foregoing, the
Debtors ask a waiver of the notice requirements under Bankruptcy
Rule 6004(a) and the 14-day stay of any order authorizing the use,
sale, or lease of property under Bankruptcy Rule 6004(h).
A copy of the Agreements attached to the Motion is available for
free at:
http://bankrupt.com/misc/Woodbridge_Group_2709_Sales.pdf
A hearing on the Motion is set for Oct. 24, 2018 at 10:00 a.m. (ET)
at 1:30 p.m. (ET). The objection deadline is Oct. 12, 2018 at 4:00
p.m. (ET).
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- is a
comprehensive real estate finance and development company. Its
principal business is buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owns and
operates full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team have been in the business of
providing a variety of financial products for more than 35 years,
and have been primarily focused on the luxury home business for the
past five years. Since its inception, the Woodbridge Group
Enterprise has completed more than $1 billion in financial
transactions. These transactions involve real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge Group of Companies and certain of its affiliates filed
Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No.
17-12560) on Dec. 4, 2017. Woodbridge estimated assets and
liabilities at between $500 million and $1 billion. The Chapter 11
cases are being jointly administered.
Judge Kevin J. Carey presides over the case.
Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq.,
Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey,
Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher,
LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J.
Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway
Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as
expert consultant, Moelis & Company LLC, as investment banker.
The Debtors' financial advisors are Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group is
serving as independent management to the Debtors. Garden City
Group, LLC, is the Debtors' claims and noticing agent.
Venable LLP is the Fiduciary Committee of Unitholders' legal
counsel.
Drinker Biddle & Reath LLP is counsel to the Ad Hoc Group of
Noteholders, and Conway MacKenzie, Inc., as its financial advisor.
Pachulski Stang Ziehl & Jones is counsel to the Official Committee
of Unsecured Creditors; and FTI Consulting, Inc., serves as its
financial advisor.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court
approved a settlement providing for the formation of an ad hoc
noteholder group and an ad hoc unitholder group.
WPB HOSPITALITY: Taps Lindquist-Kleissler as Legal Counsel
----------------------------------------------------------
WPB Hospitality, LLC, seeks approval from the U.S. Bankruptcy Court
for the District of Colorado to hire Lindquist-Kleissler & Company,
LLC as its legal counsel.
The firm will assist the Debtor in the preparation of a plan of
reorganization and will provide other legal services related to its
Chapter 11 case.
Arthur Lindquist-Kleissler, Esq., principal and owner of the firm,
charges an hourly fee of $425. The firm's paralegal and legal
assistant will charge $150 per hour and $120 per hour,
respectively.
Lindquist-Kleissler received a retainer in the sum of $25,000, plus
$1,717 for the filing fee.
Mr. Lindquist-Kleissler disclosed in a court filing that his firm
is "disinterested" as defined in section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Arthur Lindquist-Kleissler, Esq.
Lindquist-Kleissler & Company, LLC
950 S. Cherry St., Ste. 418
Denver, CO 80246
Tel: 303-691-9774
Fax: 303-200-8994
Email: Arthuralklaw@gmail.com
About WPB Hospitality
WPB Hospitality, LLC, is a single asset real estate company (as
defined in 11 U.S.C. Section 101(51B)) whose principal assets are
located at 16161 E. 40th Ave Denver, Colorado.
WPB Hospitality sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 18-18636) on Oct. 3,
2018. In the petition signed by Wanda Bertoia, owner, the Debtor
estimated assets of less than $50,000 and liabilities of $10
million to $50 million. Judge Elizabeth E. Brown presides over the
case. The Debtor tapped Lindquist-Kleissler & Company, LLC as its
legal counsel.
YI GROUP: S&P Affirms 'B' Issuer Credit Rating, Outlook Positive
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term issuer credit rating
on Algonquin, Ill.-based YI Group Holdings LLC (also known as Young
Innovations). The outlook remains positive.
S&P said, "At the same time, we affirmed our 'B-' issue-level
rating on the company's first-lien secured debt, which comprises a
$50 million revolving credit facility, a $270 million term loan,
and $67.5 million delayed draw facility (currently $32.5 million
drawn).
"The '3' recovery rating remains unchanged, indicating our
expectation for meaningful (50%-70%; rounded estimate: 55%)
recovery in the event of a payment default. The change in the
rounded estimate to 55% from 60% reflects a higher portion of
first-lien debt in the capital structure as a result of the
drawings on the company's delayed draw facility.
"The rating affirmation reflects our expectation that over the next
18 months, the company will sustain its current rapid revenue
growth and stable EBITDA margins in the 28%-30% range, resulting in
leverage decreasing to the mid-7x area in 2019 from 8x in 2018 and
FOCF improving to around $15 million in 2019.
"Our positive outlook reflects S&P Global Ratings' expectation that
the company will continue to grow in the high-single-digit rate and
that adjusted EBITDA will remain in the 28%-30% range, resulting in
a decline in adjusted leverage to the mid-7x in 2019. Although we
expect only about $10 million of free cash flow in 2018, we believe
it will increase to around $15 million in 2019 and $20 million over
the next few years, with expansion in EBITDA."
ZAREMBA GROUP: Taps Warner Norcross as Legal Counsel
----------------------------------------------------
Zaremba Group, LLC, received approval from the U.S. Bankruptcy
Court for the Eastern District of Michigan to hire Warner Norcross
& Judd, LLP as its legal counsel.
The firm will advise the Debtor regarding the reorganization of its
bankruptcy estate; assist the Debtor in negotiating a plan of
reorganization and sale of its assets and in obtaining credit;
prosecute claims of the estate; and provide other legal services
related to its Chapter 11 case.
Rozanne Giunta, Esq., the attorney who will be handling the case,
charges an hourly fee of $420. The firm received a retainer in the
sum of $15,000.
Warner Norcross is "disinterested" as defined in Section 101(14) of
the Bankruptcy Code, according to court filings.
The firm can be reached through:
Rozanne M. Giunta, Esq.
Warner Norcross & Judd, LLP
715 E. Main Street, Suite 110
Midland, MI 48640-5382
Phone: 989-698-3758
E-mail: rgiunta@wnj.com
About Zaremba Group
Zaremba Group, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 18-21887) on Oct. 4,
2018. At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $100,000. Judge
Daniel S. Oppermanbaycity presides over the case. The Debtor
tapped Warner Norcross & Judd, LLP as its legal counsel.
[*] T&W Fetes 12 Outstanding Young Restructuring Lawyers Nov. 26
----------------------------------------------------------------
Once a year, Beard Group's publication, Turnarounds & Workouts,
recognizes a select number of young corporate restructuring
lawyers, who within the prior year, have compiled an impressive
list of achievements. On Nov. 26th, another group of distinguished
young attorneys will be honored at a dinner reception following the
Distressed Investing 2018 Conference. The 5 p.m. reception and the
25th annual conference will be held at The Harmonie Club, 4 E. 60th
St. in Midtown Manhattan.
This year's awardees include:
* Adam Brenneman, Cleary Gottlieb Steen & Hamilton
* Jonathan Canfield, Stroock & Stroock & Lavan LLP
* Ryan Preston Dahl, Weil, Gotshal & Manges LLP
* Christopher Greco, Kirkland & Ellis LLP
* Vincent Indelicato, Proskauer Rose LLP
* Brian J. Lohan, Arnold & Porter Kaye Scholer LLP
* Jennifer Marines, Morrison & Foerster LLP
* Christine A. Okike, Skadden, Arps, Slate, Meagher
& Flom LLP
* Peter B. Siroka, Fried, Frank, Harris, Shriver &
Jacobson LLP
* Matthew B. Stein, Kasowitz Benson Torres LLP
* Eli Vonnegut, Davis Polk & Wardwell LLP
* Matthew L. Warren, Latham & Watkins LLP
You can learn more about the honorees at
https://www.distressedinvestingconference.com/turnarounds--workouts-2018-outstanding-young-restructuring-lawyers.html
Earlier in the day, the Distressed Investing 2018 Conference will
offer attendees the latest insights and information on distressed
investing and bankruptcy from seasoned corporate restructuring
professionals. And, after a quarter of a century, the conference's
subject matter and presenters are as relevant today as they were
when we began. The developing agenda can be viewed at
https://www.distressedinvestingconference.com/agenda.html
We are also pleased to partner this year with both long-time and
new sponsors including:
Corporate Sponsors:
* Conway MacKenzie
* DSI
* Foley & Lardner LLP
* Milbank
* Morrison & Foerster LLP
Knowledge Partner:
* Pacer Monitor
Media Sponsors:
* Debtwire
* Financial Times
Visit https://www.distressedinvestingconference.com/ for
registration details and information about this year's conference
agenda as well as highlights from past conferences.
To learn how you can be a sponsor and participate in shaping the
day-long program, contact:
Bernard Tolliver at bernard@beardgroup.com
or Tel: (240) 629-3300 x-149
To learn about media sponsorship opportunities to bring your outlet
into the view of leaders in corporate restructuring, lending and
debt and equity investments, and to expand your network of news
sources, contact:
Jeff Baxt at jeff@beardgroup.com
or (240) 629-3300, ext 150
Beard Group, Inc., publishes Turnarounds & Workouts, Troubled
Company Reporter, and Troubled Company Prospector. Visit
http://bankrupt.com/freetrial/for a free trial subscription to one
or more of Beard Group's corporate restructuring publications.
[^] BOND PRICING: For the Week from October 15 to 19, 2018
----------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
Acosta Inc ACOSTA 7.750 35.355 10/1/2022
Acosta Inc ACOSTA 7.750 35.342 10/1/2022
Alpha Appalachia
Holdings LLC ANR 3.250 2.048 8/1/2015
American Tire
Distributors Inc ATD 10.250 18.625 3/1/2022
American Tire
Distributors Inc ATD 10.250 25.500 3/1/2022
Appvion Inc APPPAP 9.000 1.125 6/1/2020
Appvion Inc APPPAP 9.000 1.005 6/1/2020
BPZ Resources Inc BPZR 6.500 3.017 3/1/2015
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bon-Ton Department
Stores Inc/The BONT 8.000 5.000 6/15/2021
Cenveo Corp CVO 6.000 27.750 8/1/2019
Cenveo Corp CVO 8.500 1.367 9/15/2022
Cenveo Corp CVO 8.500 1.367 9/15/2022
Cenveo Corp CVO 6.000 1.384 5/15/2024
Cenveo Corp CVO 6.000 25.795 8/1/2019
Chukchansi Economic
Development Authority CHUKCH 9.750 70.000 5/30/2020
Chukchansi Economic
Development Authority CHUKCH 10.250 70.000 5/30/2020
Community Choice
Financial Inc CCFI 10.750 72.724 5/1/2019
Community Choice
Financial Inc CCFI 12.750 69.875 5/1/2020
Community Choice
Financial Inc CCFI 12.750 69.875 5/1/2020
DBP Holding Corp DBPHLD 7.750 45.219 10/15/2020
DBP Holding Corp DBPHLD 7.750 45.219 10/15/2020
EXCO Resources Inc XCOO 8.500 21.277 4/15/2022
Egalet Corp EGLT 5.500 10.375 4/1/2020
Emergent Capital Inc EMGC 8.500 84.042 2/15/2019
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Future Intermediate
Holding Co LLC /
EFIH Finance Inc. TXU 9.750 37.000 10/15/2019
Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011
Homer City Generation LP HOMCTY 8.137 38.750 10/1/2019
Hope Community Church
of NC Inc HOPECC 6.000 92.100 6/1/2041
Las Vegas Monorail Co LASVMC 5.500 4.037 7/15/2019
Lehman Brothers
Holdings Inc LEH 1.600 3.326 11/5/2011
Lehman Brothers
Holdings Inc LEH 2.000 3.326 3/3/2009
Lehman Brothers
Holdings Inc LEH 2.070 3.326 6/15/2009
Lehman Brothers
Holdings Inc LEH 1.383 3.326 6/15/2009
Lehman Brothers
Holdings Inc LEH 5.000 3.326 2/7/2009
Lehman Brothers
Holdings Inc LEH 1.500 3.326 3/29/2013
Lehman Brothers
Holdings Inc LEH 4.000 3.326 4/30/2009
Lehman Brothers Inc LEH 7.500 1.226 8/1/2026
MModal Inc MODL 10.750 6.125 8/15/2020
Mashantucket Western
Pequot Tribe MASHTU 7.350 16.500 7/1/2026
Midstates Petroleum
Co Inc / Midstates
Petroleum Co LLCMPO 10.750 0.799 10/1/2020
Mississippi Power Co SO 5.550 100.802 3/1/2019
Murray Energy Corp MURREN 11.250 47.000 4/15/2021
Nine West Holdings Inc JNY 6.125 15.125 11/15/2034
OMX Timber Finance
Investments II LLC OMX 5.540 4.916 1/29/2020
Orexigen Therapeutics Inc OREXQ 2.750 5.125 12/1/2020
Orexigen Therapeutics Inc OREXQ 2.750 5.125 12/1/2020
PaperWorks Industries Inc PAPWRK 9.500 53.538 8/15/2019
PaperWorks Industries Inc PAPWRK 9.500 53.538 8/15/2019
Pernix Therapeutics
Holdings Inc PTX 4.250 43.216 4/1/2021
Pernix Therapeutics
Holdings Inc PTX 4.250 43.216 4/1/2021
PetroQuest Energy Inc PQUE 10.000 43.000 2/15/2021
PetroQuest Energy Inc PQUE 10.000 42.875 2/15/2021
PetroQuest Energy Inc PQUE 10.000 42.875 2/15/2021
Powerwave Technologies Inc PWAV 2.750 0.155 7/15/2041
Powerwave Technologies Inc PWAV 3.875 0.155 10/1/2027
Powerwave Technologies Inc PWAV 1.875 0.155 11/15/2024
Powerwave Technologies Inc PWAV 3.875 0.155 10/1/2027
Powerwave Technologies Inc PWAV 1.875 0.155 11/15/2024
Renco Metals Inc RENCO 11.500 29.000 7/1/2003
Rex Energy Corp REXX 8.000 27.800 10/1/2020
Rex Energy Corp REXX 6.250 15.625 8/1/2022
Rex Energy Corp REXX 8.875 17.204 12/1/2020
Rex Energy Corp REXX 8.000 27.306 10/1/2020
Rolta LLC RLTAIN 10.750 15.613 5/16/2018
SandRidge Energy Inc SD 7.500 0.385 2/15/2023
Sears Holdings Corp SHLD 8.000 7.969 12/15/2019
Sempra Texas Holdings Corp TXU 5.550 11.360 11/15/2014
SiTV LLC / SiTV Finance Inc NUVOTV 10.375 52.000 7/1/2019
SiTV LLC / SiTV Finance Inc NUVOTV 10.375 57.758 7/1/2019
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
TerraVia Holdings Inc TVIA 6.000 4.644 2/1/2018
Tesla Energy
Operations Inc/DE SCTY 2.750 99.250 11/1/2018
Tesla Energy
Operations Inc/DE SCTY 2.650 85.834 11/5/2018
Texas Competitive Electric
Holdings Co LLC /
TCEH Finance Inc. TXU 11.500 0.491 10/1/2020
Toys R Us - Delaware Inc TOY 8.750 3.306 9/1/2021
Toys R Us Inc TOY 7.375 5.250 10/15/2018
Transworld Systems Inc TSIACQ 9.500 50.040 8/15/2021
Transworld Systems Inc TSIACQ 9.500 25.890 8/15/2021
Walter Energy Inc WLTG 8.500 0.834 4/15/2021
Walter Energy Inc WLTG 9.875 0.834 12/15/2020
Walter Energy Inc WLTG 9.875 0.834 12/15/2020
Walter Energy Inc WLTG 9.875 0.834 12/15/2020
Washington Mutual Bank /
Debt not acquired
by JPMorgan WAMU 5.550 0.610 6/16/2010
Westmoreland Coal Co WLBA 8.750 42.500 1/1/2022
Westmoreland Coal Co WLBA 8.750 27.125 1/1/2022
Wm Wrigley Jr Co WWY 2.400 99.676 10/21/2018
Wm Wrigley Jr Co WWY 2.400 99.991 10/21/2018
iHeartCommunications Inc IHRT 14.000 12.250 2/1/2021
iHeartCommunications Inc IHRT 14.000 12.111 2/1/2021
iHeartCommunications Inc IHRT 9.000 74.047 12/15/2019
iHeartCommunications Inc IHRT 14.000 12.111 2/1/2021
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
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
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
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
assets. A company may establish reserves on its balance sheet for
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
of the TCR.
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 2018. 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
e-mail. Additional e-mail subscriptions for members of the same
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.
*** End of Transmission ***