/raid1/www/Hosts/bankrupt/TCR_Public/191031.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, October 31, 2019, Vol. 23, No. 303
Headlines
305 EAST 61ST: DOJ Watchdog Appoints K. Silverman as Ch. 11 Trustee
84 LUMBER: S&P Rates New $310MM Senior Secured Term Loan 'B+'
ABC SOUTH: Court Conditionally Approves Disclosure Statement
AFGO DEVELOPMENT: Court Directs Chapter 11 Trustee Appointment
AIR FORCE VILLAGE: PCO Files 3rd Report
ALGOMA STEEL: S&P Alters Outlook to Negative, Affirms 'B-' ICR
BETTEROADS ASPHALT: Involuntary Petitions Not Filed in Bad Faith
BOB MOORE: U.S. Trustee Unable to Appoint Committee
BRIGGS & STRATTON: S&P Cuts ICR to 'B-' on Approaching Maturities
BW GAS: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
BW GAS: S&P Assigns 'B' ICR on Allsup's Acquisition; Outlook Stable
CHARLES BRELAND: Lacks Standing to Raise 13th Amendment Claims
CHOICE BRANDS: Disclosure Statement Approved
COBALT COAL: Court May Sua Sponte Consider Trustee Appointment
COMMUNITY HEALTH: Reports Third Quarter 2019 Results
CONTANDA LLC: S&P Affirms 'B' Issuer Credit Rating; Outlook Neg.
COSTELLO INDUSTRIES: U.S. Trustee Unable to Appoint Committee
COUNTRY CLUB: Nov. 14 Hearing on Disclosure Statement Set
DANA INC: Fitch Affirms BB+ LongTerm IDR, Outlook Stable
DHX MEDIA: Fitch Affirms B+ LT IDR & Alters Outlook to Negative
DOWNSTREAM DEVELOPMENT: S&P Affirms 'B' ICR; Outlook Negative
F&M TRUCKING: Unsecured Creditors to Get 5% in 5 Years
FIRST FLORIDA LIVING: U.S. Trustee Names C. Carr as Ombudsman
GFL ENVIRONMENTAL: S&P Puts 'B' ICR on Watch Pos. on IPO Launch
GK HOLDINGS: S&P Lowers ICR to 'CCC-' on Increased Operating Risks
GOODRX INC.: S&P Alters Outlook to Positive, Affirms 'B' ICR
HCC CATERERS: Hires Kirby Aisner as Substitute Counsel
HERZ HERZ & REICHLE: Directed to Apply G. Miller as CRO
HIGHLAND CAPITAL: U.S. Trustee Forms 4-Member Committee
HUNT OIL: S&P Cuts ICR to 'B+', Puts Rating on Watch Negative
JPM REALTY: To Present Plan for Confirmation on Dec. 18
KIP AND ANDREA: Bankr. Court Takes Back Rabo Derivative Standing
KOBA LIMITED: Bankr. Court Okays Portion of Giddens & Gatton Fees
KRONOS WORLDWIDE: S&P Lowers ICR to 'B'; Outlook Stable
LANDING AT BRAINTREE: Unsecureds to be Paid 100% in 12 Months
MAGEE BENEVOLENT: Trustmark Objects to Disclosure Statement
MCDERMOTT INTERNATIONAL: S&P Assigns 'CCC' Rating to New Term Loan
MCDERMOTT TECHNOLOGY: Moody's Lowers CFR to Caa2
MEDNAX INC: S&P Cuts ICR to BB on Rising Leverage; Outlook Stable
MITCHELL TOPCO: S&P Affirms 'B-' Issuer Credit Rating
MJ TRANSPORTATION: Voluntary Chapter 11 Case Summary
MULTICULTURAL COMMUNITY: U.S. Trustee Objects to Plan
MURRAY ENERGY: Case Summary & 50 Largest Unsecured Creditors
MURRAY ENERGY: Files Chapter 11 to Facilitate Restructuring
NABORS INDUSTRIES: S&P Cuts ICR to 'BB-' on Elevated Debt Levels
NAVIENT CORP: Moody's Affirms Ba3 CFR, Outlook Stable
NELNET INC: Moody's Affirms Ba1 CFR, Outlook Stable
NGL ENERGY: S&P Alters Outlook to Negative, Affirms 'B+' ICR
OLDE LIBRARY: U.S. Trustee Unable to Appoint Committee
PJZ TRANSPORT: Balboa Wants Administrative Claim, Opposes Plan
PRESIDENTS PUB: U.S. Trustee Unable to Appoint Committee
PTC INC: S&P Affirms BB ICR on OnShape Acquisition; Outlook Stable
PUERTO RICO HOSPITAL: Objection to Disclosure Statement
PWR INVEST: Seeks Appointment of Examiner
R & S ST. ROSE: Dist. Court Affirms Ruling on Rose Lenders' Claim
RACKSPACE HOSTING: S&P Lowers ICR to 'B'; Outlook Stable
RESIDEO TECHNOLOGIES: S&P Lowers ICR to 'BB'; Outlook Negative
RESTLAND MEMORIAL: Plan Confirmation Hearing on Dec. 5
RRQ LLC: Unsecured Creditors Out of Money Under Plan
SADLER CONSTRUCTION: U.S. Trustee Unable to Appoint Committee
SARACEN DEVELOPMENT: S&P Assigns 'B-' ICR; Outlook Positive
SBA COMMUNICATIONS: Moody's Raises CFR to Ba3, Outlook Stable
SEVERIN HOLDINGS: S&P Affirms 'B-' ICR on Debt Add-On
SIGNET CAPITAL: Seeks to Hire David W. Steffensen as Legal Counsel
STONEMOR PARTNERS: Completes $3.6 Million Rights Offering
STRAIGHT UP ENTERPRISES: Wins Interim Approval of Plan Outline
TECHNIPLAS LLC: S&P Withdraws 'CCC+' ICR
TIGER OAK MEDIA: LSC Communications Appointed as Committee Member
TRANSDIGM INC: Mooody's Affirms B1 CFR, Outlook Stable
TRIUMPH GROUP: S&P Lowers Unsecured Notes Rating to 'CCC'
UNITED NATURAL: Moody's Lowers CFR to C2, Outlook Stable
US TOBACCO: S&P Resolves CreditWatch Placement of Revenue Bonds
USIC HOLDINGS: S&P Lowers ICR to 'B-'; Outlook Stable
UTZ QUALITY: Moody's Affirms B2 CFR, Outlook Stable
VERITY HEALTH: Chubb Objection Deadline Moved for 7th Time
VIRGIN ISLANDS PORT AUTHORITY: S&P Withdraws 'B+' Bond Rating
WASHINGTON PRIME: S&P Cuts ICR to 'BB-' on Weak Business Prospects
WILLIAMS COMMUNICATIONS: Seeks to Hire Harry P. Long as Counsel
WILWOOD ANTIQUE: Seeks to Hire Arcadier Biggie as Legal Counsel
WINNEBAGO INDUSTRIES: Moody's Affirms B1 CFR, Outlook Stable
WOODBRIDGE GROUP: Adversary Suit vs Buyer Goes to Trial
WSLD LLC: U.S. Trustee Unable to Appoint Committee
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
305 EAST 61ST: DOJ Watchdog Appoints K. Silverman as Ch. 11 Trustee
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William K. Harrington, United States Trustee for Region 2, filed an
application for an order approving the appointment of a Chapter 11
Trustee for 305 East 61st Street Group, LLC.
305 E 61st Street Lender, LLC, the Debtor's secured creditor, moved
for the appointment of a chapter 11 Trustee.
Accordingly, the United States Trustee asks the Court to enter an
order approving the appointment of Kenneth P. Silverman, Esq., as
Chapter 11 trustee, pursuant to Chapter 11 of the Bankruptcy Code
and for such other and relief as may seem just and proper.
About 305 East 61st Street Group
Based in New York, 305 East 61st Street Group LLC, a Single Asset
Real Estate (as defined in 11 U.S.C. Section 101(51B)), filed a
voluntary Chapter 11 Petition (Bankr. S.D.N.Y. Case No.19-11911) on
June 10, 2019. The case is assigned to Hon. Sean H. Lane.
The Debtor's counsel is Robert J. Spence, Esq., at Spence Law
Office, P.C., in Roslyn, New York. The Debtor's accountant is
Singer & Falk.
At the time of filing, the Debtor had estimated assets and debts of
$10 million to $50 million.
84 LUMBER: S&P Rates New $310MM Senior Secured Term Loan 'B+'
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S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to 84 Lumber Co.'s new $310 million senior secured
term loan B due in 2026. The '3' recovery rating indicates S&P's
expectation for meaningful recovery (50%-70%; rounded estimate:
55%) in the event of a payment default.
The company will use the proceeds to repay the outstanding balance
under its existing $350 million term loan B ($307.5 million
outstanding).
As part of the refinancing, 84 Lumber also amended and extended its
$400 million asset-based lending (ABL) revolving credit facility
(unrated, $152 million outstanding), moving out the maturity to
2024 from 2021.
The transaction is leverage neutral. S&P's issuer credit rating on
84 Lumber remains 'B+' with a stable outlook.
84 Lumber is the nation's largest privately held distributor of
building materials for single- and multifamily residences as well
as commercial buildings. The company provides lumber, building
materials, trusses, doors, millwork, and construction services as
well as professional services such as installation to homebuilders,
professional contractors, and remodelers/renovators. About 20% of
the company's sales are over-the-counter retail to walk-in
contractors and about 33% are special orders (i.e., items not
carried in normal inventory such as cabinets, moldings, and windows
that generate higher than average margins).
Issue Ratings – Recovery Analysis
Key analytical factors
-- S&P is assigning a 'B+' issue-level rating and a '3' recovery
rating to 84 Lumber's proposed $310 million senior secured term
loan B due in 2026.
-- S&P's recovery analysis incorporates a capital structure that
includes the amended and extended $400 million ABL revolving
facility due in 2024 (unrated) and proposed $310 million term loan
B due in 2026.
-- S&P's simulated default scenario contemplates a default in 2023
due to a prolonged and material downturn in the U.S. leading to a
volume decline, overcapacity dynamics in the industry, and a loss
of market share due to a more competitive operation environment. As
revenues and margins decline, 84 Lumber would fund operating
losses/debt service with available cash and, to the extent
available, its ABL facility. Eventually, liquidity and capital
resources become strained to the point it cannot continue to
operate absent a bankruptcy filing, after which S&P would assume a
reorganization.
-- S&P's recovery analysis assumes that by the end of 2023, the
company would have drawn approximately $240 million (60%) of the
ABL revolving credit facility to fund its operations (net of
letters of credit).
-- S&P estimates a gross recovery value of approximately $440
million, assuming an emergence EBITDA of $80 million and an EBITDA
multiple of 5.5x, in line with the multiple used for the other
building materials distributors.
Simulated default assumptions
-- Simulated year of default: 2023
-- EBITDA at emergence: $80 million
-- EBITDA multiple: 5.5x
-- Gross enterprise value: $440 million
Simplified waterfall
-- Net recovery value (after 5% administrative costs): $418
million
-- Estimated priority claims (ABL revolving facility): $242
million
-- Collateral value available to secured creditors: $176 million
-- Estimated first-lien secured debt: $308 million
-- Recovery expectation: 50%-70% (rounded estimate: 55%)
ABC SOUTH: Court Conditionally Approves Disclosure Statement
------------------------------------------------------------
ABC South Consulting and Construction, L.L.C., won conditional
approval of the disclosure statement in support of its Chapter 11
plan.
A hearing to consider final approval of the disclosure statement
and a confirmation hearing on the Debtor's plan of reorganization
is scheduled before Judge Jerry A. Brown, in Courtroom 705, Hale
Boggs Federal Building, 500 Poydras Street, New Orleans, Louisiana
on Monday, November 25, 2019 at 2:00 P.M.
Nov. 18, 2019 is fixed as the last day to file and serve written
objections to both the debtor's disclosure statement and the plan.
As reported in the TCR, ABC South Consulting and Construction filed
with the U.S. Bankruptcy Court for Eastern District of Louisiana a
a reorganization plan.
Under the Plan, a creditor whose allowed claim is $70 0or less or
who elects to reduce its allowed claim to 50% of the claim amount
will receive a single payment equal to 100% of its allowed claim
on, or as soon as practicable after, the Effective Date of the
Plan. Other general unsecured creditors will be paid one 100% of
their allowed claims with interest at the rate of 3 percent per
annum in equal quarterly installments within of one year after the
effective date of the Plan. Under Sec. 1129(a)(15), if an
unsecured creditor objects to confirmation, the Debtor must either
pay the present value of that unsecured claim in full or make
distributions under the Plan totaling at least the value of the
Debtor's net disposable income over the greater of (a) five years
or (b) the period for which the plan provides payments.
An equity holder is a holder of an equity security or ownership
interest in the debtor and, under the Plan the equity holder shall
retain their equity interest in the Debtor.
A full-text copy of the Disclosure Statement dated October 17,
2019, is available at https://tinyurl.com/yygd6zn8 from
PacerMonitor.com at no charge.
About ABC South Consulting and Construction
ABC South Consulting and Construction, LLC, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No.
19-11650) on June 19, 2019. At the time of the filing, the Debtor
was estimated to have assets of less than $1 million and
liabilities of less than $500,000. Evan Park Howell III, Esq., is
the Debtor's bankruptcy attorney.
AFGO DEVELOPMENT: Court Directs Chapter 11 Trustee Appointment
--------------------------------------------------------------
The Bankruptcy Court, after hearing partial evidence on Capital
Bank's motion for relief from stay, finds that a Chapter 11 Trustee
should be appointed for AFGO Development Inc.
Accordingly, the Court ordered that the U. S. Trustee’s office
shall immediately appoint a Chapter 11 Trustee.
The Court further ordered that the automatic stay is lifted solely
to allow Capital Bank to post the properties for a foreclosure sale
on December 3, 2019, and to take all steps required by applicable
non-bankruptcy law that are preparatory to a foreclosure, provided
that Capital Bank may not proceed with the foreclosure sale without
further Court order.
The Chapter 11 Trustee is directed to prepare and file a report
with his recommendations by 8:30 a.m. on November 20, 2019. A
hearing is set for November 22, 2019 at 8:30 a.m. in Courtroom 404,
United States Bankruptcy Court for the Southern District of Texas,
Houston Division, 515 Rusk, Houston, Texas 77002 on the status of
the case and to review the report and recommendations of the
Chapter 11 Trustee.
AFGO Development Company, Inc., filed a voluntary Chapter 11
petition (Bankr. S.D. Tex. Case No. 19-35506) on September 30,
2019. The Debtor is represented by:
Reese W. Baker, Esq.
950 Echo Lane, Suite 300
Houston, TX 77024
Tel: 713-869-9200
Counsel for Capital Bank:
Mynde S. Eisen, Esq.
P.O. Box 630749
Houston, Texas 77263
Tel: 713-266-2955
AIR FORCE VILLAGE: PCO Files 3rd Report
---------------------------------------
Joseph Rodrigues, as Patient Care Ombudsman for Air Force Village
West, Inc., d/b/a Altavita Village, submitted his third 60-day
report pursuant to the Bankruptcy Code.
The Council on Aging, Southern California is the designated Long
Term Care Ombudsman Program for Riverside County and Debbie
Aguilera is the local representative of the Office of the State LTC
Ombudsman.
The Debtor is located at 17050 Arnold Drive, Riverside, California.
This facility is a Continuing Care Retirement Community. It is a
long term continuing care contract that provides for housing,
residential services, and nursing care, usually in one location,
and usually for a resident's lifetime.
The CCRC is licensed as a Residential Care Facility for the Elderly
by the California Department of Social Services and as a Skilled
Nursing Facility by the California Department of Public Health.
PCO OBSERVATION:
The licensed capacity of the facility is 770 beds with a current
census a total of 354 broken down as follows:
a. Skilled Nursing - 51
b. Assisted Living - 99
c. Memory Care - 31
d. Independent Living - 173
The local Ombudsman Program has not received any concerns involving
vendors, utilities, or external support factors that may affect
residents or resident care within the Skilled Nursing portion of
the facility. The Administrator reports having no current staff
openings and the local Ombudsman Representative did not find any
issues with the staffing levels.
On October 17, 2019, the Ombudsman representative observed the
following issues within the portion of the facility licensed as a
Residential Care for the Elderly:
1. Lack of security and staff in Debtor's area and there are
only six doors to the facility that are open on a 24-hour basis.
2. There is no longer a receptionist or other staff to monitor
who is coming in or going out.
3. There were no reports from any regulatory agency provided to
the local Ombudsman Program during this reporting period.
Therefore, the Patient Care Ombudsman recommends that the facility
review security precautions in the Residential Care Facility for
the Elderly to ensure residents and staff are safe from unwanted
visitors.
The PCO can be reached at:
JOSEPH RODRIGUES
State Long-Term Care Ombudsman
Office of the State Long-Term Care Ombudsman
California Department of Aging
1300 National Drive, Suite 200
Sacramento, CA 95834
Tel: (916) 419-7510
Fax: (916) 928-2503
About Air Force Village West
Air Force Village West -- https://livealtavita.org/ -- owns and
operates a continuing care retirement community with assisted
living, independent living, skilled nursing and memory care
services. Air Force Village is a not-for-profit entity opened in
1989.
Air Force Village West, Inc., based in Riverside, CA, filed a
Chapter 11 petition (Bankr. C.D. Cal. Case No. 19-11920) on March
10, 2019. The petition was signed by Mary Carruthers, chairman of
the Board. In its petition, the Debtor estimated $50 million to
$100 million in both assets and liabilities. The Hon. Scott C.
Clarkson oversees the case. Samuel R. Maizel, Esq., at Dentons US
LLP, is the Debtor's bankruptcy counsel.
ALGOMA STEEL: S&P Alters Outlook to Negative, Affirms 'B-' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Algoma Steel Inc. to
negative from stable and affirmed its 'B-' issuer credit rating on
the company and its 'B-' issue-level rating on the company's term
loan facility.
The outlook revision follows sharply lower steel prices that are
expected to persist and result in higher-than-expected free cash
flow deficits that weaken Algoma's prospective liquidity. Hot
rolled coil (HRC) steel prices have declined sharply over the
course of 2019, from about US$700 per net ton (nt) in January to
about US$500/nt currently -- well below S&P's previous assumptions.
Algoma is also facing elevated raw material costs, which have
exacerbated the impact on steel margins through fiscal 2020. S&P
now expects the company to generate materially lower earnings and
cash flow in fiscal 2020 (ending March 31, 2020), based mainly on
the downward revision to the rating agency's benchmark HRC
assumptions (to about US$600/nt in calendar 2020). Beyond the
impact of sharply higher leverage (above 10x) and weak EBITDA
interest coverage (about 1x) that S&P now estimates for fiscal
2020, the rating agency also expects the company will generate a
heightened free cash flow deficit this year as Algoma continues to
spend on modernization initiatives, thereby limiting financial
flexibility.
The negative outlook reflects the increased risk of a downgrade
with the next 12 months if Algoma's liquidity position were to
materially decline to an extent that S&P no longer views the
company's capital structure as sustainable. The outlook follows the
sharp deterioration in steel prices over the past year, which has
weakened S&P's view of Algoma's financial flexibility to manage a
potentially sustained period of steel price weakness.
"We could lower the rating within the next 12 months if we expect
the company's interest coverage to decline below 1.5x or Algoma
generates larger-than-expected cash flow deficits such that
liquidity deteriorates. In this scenario, we believe the company
will not be able to cover its fixed-charge obligations (interest
and maintenance capital spending) and view its capital structure as
unsustainable. This could result from a protracted weakness in
steel prices or unexpected operational missteps that lead to a
material deterioration in cash flows," S&P said.
"We could revise the outlook to stable in the next 12 months if
Algoma were to generate cash flow in line with our expectation and
maintain an adjusted EBITDA-to-interest coverage ratio above 2x.
This could happen if HRC prices were to average about US$625-US$650
in fiscal 2021. In this scenario, we would expect the company to
generate breakeven-to-positive free cash flow, and reduce its
reliance on its credit facility to fund its operations," the rating
agency said.
BETTEROADS ASPHALT: Involuntary Petitions Not Filed in Bad Faith
----------------------------------------------------------------
In the bankruptcy cases captioned IN RE: BETTEROADS ASPHALT LLC,
Chapter 11, Debtor; and IN RE: BETTERCYCLING CORPORATION CHAPTER
11, Debtor, Case Nos. 17-04156 (ESL), 17-04157 (ESL) (Bankr.
D.P.R.), Bankruptcy Judge Enrique S. Lamoutte finds that the
involuntary petitions filed by Petitioning Creditors were not filed
in bad faith.
The Court says the act of seeking other creditors to join in filing
an involuntary petition in order to pursue debt collection in
bankruptcy court is not an improper bankruptcy purpose. The Court
notes that the evidence presented showed that the involuntary
debtors had defaulted on their loan payments and that the lenders
had engaged in active collection actions. The discussions by and
between the lenders, including the syndicate lenders, and the
advice provided by their legal counsel show that the decision to
file the involuntary petitions was more in the nature of a studied
business decision that an action to harass or merely seek an
alternate collection forum.
The Petitioning Creditors are composed of Firstbank Puerto Rico,
Banco Santander de Puerto Rico, the Economic Development Bank for
Puerto Rico, and Banco Popular de Puerto Rico, Sargeant Marine,
Inc. and Sargeant Trading LTD, Facsimil Paper Connection, Inc.,
Champion Petroleum, Inc., Control Force, Corp., and St. James
Security, Inc.
The burden to prove that the petitioning creditors filed an
involuntary petition whether or not the involuntary petitions were
filed "in bad faith, that is, for an improper purpose that
constitutes an abuse of the bankruptcy process" lies on the alleged
debtors. During an evidentiary hearing, the Court emphasized that
key to the alleged debtors prevailing in their allegations of bad
faith was to establish pursuant to the totality of the
circumstances that the involuntary petitions were filed for an
improper bankruptcy purpose.
Banco Popular de Puerto Rico and the involuntary debtors engaged in
extensive negotiations and discussions after the involuntary
debtors defaulted on their loan payments. As part of the
negotiations Banco Popular unsuccessfully tried to renegotiate the
terms of the loans which restricted the potential sale of the
loans. Banco Popular initiated state court actions for collection
of monies. Banco Popular as agent for a syndicate of lenders
contracted and provided legal advice on the filing of the
involuntary petitions.
Prior to the filing of the involuntary petitions the banks that
formed the syndicate -- Banco Popular, Banco Santander de Puerto
Rico, Firstbank, and the Economic Development Bank -- met to
discuss what steps to take in relation to the involuntary debtors'
loan. One action taken was the filing of two actions against the
involuntary debtors around September 2015. The discussions
concerning the filing of the state court actions and the filing of
the involuntary petitions were not directly related. The
considerations and analysis of the filing of the involuntary
petitions were made by counsel for the syndicate banks.
The Court says an involuntary petition has a presumption of good
faith, and it is the Debtor's burden to prove under the totality of
the circumstances that the filing was in bad faith. The Court
agrees that there are several non-exclusive factors which may be
considered but have no particular importance or weight. The factors
are weighed to determine if the involuntary petition was filed for
an improper bankruptcy purpose, such as ill will or malice, intent
to harass or embarrass the debtor, or use the bankruptcy court as a
substitute for customary collection procedures.
A copy of the Court's Order and Opinion dated Oct. 10, 2019 is
available at https://bit.ly/2BPdeck from Leagle.com.
BETTEROADS ASPHALT LLC, Alleged Debtor, represented by ALEXIS A.
BETANCOURT VINCENTY , LUGO MENDER GROUP LLC & WIGBERTO LUGO MENDER
, LUGO MENDER & CO.
BETTEROADS ALPHALT LLC, Debtor, represented by ALEXIS A. BETANCOURT
VINCENTY , LUGO MENDER GROUP LLC.
SARGEANT TRADING LIMITED & SARGEANT MARINE INC., Petitioning
Creditors, represented by GUSTAVO A. CHICO BARRIS , FERRAIUOLI LLC,
SONIA COLON COLON , FERRAIUOLI, LLC, JORDI GUSO , BERGER SINGERMAN
LLP & CAMILLE N. SOMOZA , FERRAIUOLI LLC.
BANCO POPULAR DE PUERTO RICO, ECONOMIC DEVELOPMENT BANK FOR PUERTO
RICO & BANCO SANTANDER DE PUERTO RICO, Petitioning Creditors,
represented by Valerie M. Blay Soler , Marini Pietrantoni Muniz,
LLC., IGNACIO LABARCA MORALES , MARINI PIETRANTONI MUNIZ LLC, LUIS
C. MARINI BIAGGI , MARINI PIETRANTONI MUNIZ LLC, MAURICIO O. MUNIZ
LUCIANO , Marini Pietrantoni Muniz LLC & CAROLINA VELAZ RIVERO ,
MARINI PIETRANTONI MUNIZ LLC.
FIRSTBANK PUERTO RICO, Petitioning Creditor, represented by Valerie
M. Blay Soler , Marini Pietrantoni Muniz, LLC., FAUSTO DAVID
GODREAU ZAYAS , GODREAU & GONZALEZ LAW, RAFAEL A. GONZALEZ VALIENTE
, GODREAU & GONZALEZ LAW, IGNACIO LABARCA MORALES , MARINI
PIETRANTONI MUNIZ LLC, LUIS C. MARINI BIAGGI , MARINI PIETRANTONI
MUNIZ LLC, MAURICIO O. MUNIZ LUCIANO , Marini Pietrantoni Muniz LLC
& CAROLINA VELAZ RIVERO , MARINI PIETRANTONI MUNIZ LLC.
BetterRoads Asphalt LLC produces warm mix asphalt. Its products are
used in airports, highways, neighborhoods, and environment
projects. Betterecycling produces gasoline, kerosene, distillate
fuel oils, residual fuel oils, and lubricants. BetterRoads and
Betterecycling are affiliates of Coco Beach Golf & Country Club,
S.E., which sought bankruptcy protection on July 13, 2015 (Bankr.
D.P.R. Case No. 15-05312). Both companies are based in San Juan,
Puerto Rico.
The Petitioning Creditors filed an involuntary bankruptcy petition
(Bankr. D.P.R. Case Nos. 17-04156 to 57) on June 9, 2017.
BOB MOORE: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------
The Office of the U.S. Trustee on Oct. 23, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of Bob Moore Tire Service,
Inc.
About Bob Moore Tire Service
Bob Moore Tire Service, Inc., sought Chapter 11 protection (Bankr.
W.D. Pa. Case No. 19-23660) on Sept. 18, 2019, estimating less than
$1 million in both assets and liabilities. Christopher M. Frye,
Esq., at Steidl & Steinberg, is the Debtor's counsel.
BRIGGS & STRATTON: S&P Cuts ICR to 'B-' on Approaching Maturities
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Briggs &
Stratton Corp. (BGG) to 'B-' from 'B'.
In addition, S&P lowered its issue-level rating on BGG's senior
unsecured notes due December 15, 2020 to 'CCC+' from 'B' and
removed the rating from CreditWatch with negative implications. S&P
revised its recovery rating on the unsecured notes to '5' from '3',
since the company's asset-based lending (ABL) facility ranks ahead
of the unsecured notes. The '5' recovery rating indicates S&P's
expectation for modest (10%-30%; rounded estimate: 10%) recovery of
principal in the event of a payment default.
The downgrade reflects BGG's weaker-than-expected liquidity profile
after the company's refinancing of its unsecured revolver into an
asset-based lending (ABL) facility.
BGG, a U.S.–based manufacturer of small gasoline engines,
refinanced its $500 million unsecured revolver (unrated) with a new
$625 million secured asset-based lending (ABL) facility (unrated)
that has a springing maturity feature effectively accelerating the
maturity of the company's $195.5 million unsecured notes
(outstanding) to mid-September 2020 from December 2020.
The company's ABL revolver borrowings as of Sept. 27, 2019 were
elevated at $371 million. S&P believes that a prolonged weak
operating environment in the company's residential consumer-exposed
part of the business (about 70% of 2019 revenues) could hinder the
company's ability to generate sufficient free operating cash flow
to reduce seasonally high revolver borrowings. In S&P's view, there
is a risk that the company may not be able to reduce ABL borrowings
to a level that will allow it to both repay the balance of the
unsecured notes and maintain sufficient availability to operate
comfortably through seasonal peaks of fiscal 2021. Given the
looming maturities, S&P now assesses its capital structure modifier
as negative (previously neutral).
The negative outlook reflects the risk of a delay in the
improvement of EBITDA and cash flow generation if the company's
residential markets weaken or if it encounters operating
inefficiencies, which could further strain liquidity over the next
six to 12 months.
"We could lower the rating if BGG's operating performance does not
sufficiently improve over the next few quarters and we anticipate
that the company may not be able to both repay its unsecured notes
and maintain sufficient liquidity to comfortably operate through
the next seasonal working capital peak in the second half of
calendar 2020," S&P said.
"We could revise the outlook to stable if BGG repays its unsecured
notes and improves its operating performance such that we expect it
will operate with adequate liquidity over the following 12 months,"
the rating agency said.
BW GAS: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
--------------------------------------------------------------
Moody's Investors Service assigned first time ratings to BW Gas &
Convenience Holdings, LLC including a B2 Corporate Family Rating,
B3-PD Probability of Default Rating and a B2 rating on the
company's proposed $600 million senior secured bank credit facility
-- comprised of a $75 million revolving credit facility and a $525
million term loan B. The outlook is stable. All ratings are subject
to final review of documentation.
"BW Gas & Convenience's credit profile benefits from its modest
leverage, good interest coverage, and the addition of the Allsup's
brand which performs well versus peers in the markets in which it
operates," stated Pete Trombetta, Moody's convenience store
analyst. "We expect the company will maintain debt/EBITDA at about
5.5x as it integrates this acquisition," added Trombetta.
Proceeds of the term loan B, along with new cash common equity,
will go to fund the $830 million purchase price of Allsup's, pay
any working capital true-up, refinance existing debt, and pay fees
and expenses.
Assignments:
Issuer: BW Gas & Convenience Holdings, LLC
Probability of Default Rating, Assigned B3-PD
Corporate Family Rating, Assigned B2
Gtd. Senior Secured Term Loan B, Assigned B2 (LGD3)
Gtd. Senior Secured Revolving Credit Facility,
Assigned B2 (LGD3)
Outlook Actions:
Issuer: BW Gas & Convenience Holdings, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
BW Gas & Convenience's credit profile is constrained by its small
scale in terms of number of stores and absolute levels of EBITDA.
With 420 stores, the company is one of the smaller rated
convenience stores. Also considered is the high integration risk
related to migrating Allsup's approximate 305 stores onto BW Gas &
Convenience's operating platforms. BW Gas & Convenience has been
successful integrating smaller acquisitions over the past three
years, but the acquisition of Allsup's will more than triple its
total store base.
The combined company credit profile benefits from its moderately
high leverage and good interest coverage along with strong cash
flow generation available for debt repayment. Merchandise gross
profit margins at Allsup's have remained consistently high -- at
around 30% -- driven by a strong food service platform and good
fuel margins (on a cents per gallon basis (CPG)) relative to the
industry. Allsup's exposure to the growth in the Permian Basin is
beneficial to both total gallon volumes as well as CPG due to a
favorable mix shift toward higher margin diesel. The mix of
merchandise vs fuel gross profit for the combined entity is
weighted more towards merchandise at 61% vs 39% from fuel which
Moody's expects will provide more stability in gross profit margins
going forward. The combined company also benefits from its very
good liquidity and a significant portion of owned real estate in
its portfolio of stores.
The stable outlook reflects Moody's expectations that the company
will maintain debt/EBITDA at about 5.5x while it integrates the
sizeable acquisition of Allsup's.
Ratings could be upgraded if BW Gas & Convenience were to maintain
debt/EBITDA below 5.0x on a sustained basis with EBIT/interest
expense above 2.0x. An upgrade would also require the company
maintain at least good liquidity. A downgrade could occur if it
appears the company is unable to maintain debt/EBITDA above 6.5x
and EBIT/interest at or below 1.25x.
A key long term risk to BW Gas & Convenience is declining fuel
consumption as developed economies shift to a low carbon
environment. Moody's expects fuel demand in the US to decline in
the next decade as environmental regulations force continuing fuel
efficiency improvements and growing alternative fuel vehicle (AFV)
penetration. According to forecasts from the US Energy Information
Administration, demand for gasoline and diesel will decline between
1% to 2% annually over the next decade. BW Gas & Convenience and
other fuel retailers have time to adapt their businesses to the
changing trends in fuel consumption as the decline will be gradual
for several reasons, including large investments needed in related
infrastructure for AFV, total cost of ownership that is higher than
vehicles with internal combustion engines, and range limitations.
Moody's does not expect the company's environmental risk to impact
the ratings in the near to medium term.
Moody's views BW Gas & Convenience's corporate governance risk as
high given its ownership by a private equity firm. Private equity
firms typically employ more aggressive financial policies which
favor leverage. In addition, the financial statements are typically
private and contain less disclosures than relative to their public
peers. Moody's expects BW Gas & Convenience to continue to acquire
additional convenience stores and will primarily use debt to fund
these acquisitions.
BW Gas & Convenience Holdings, LLC, through its operating
subsidiaries, operates over 420 convenience stores in 9 states
primarily in the Midwest and southern US. Brookwood Financial
Partners, LLC, which operates convenience stores mostly under the
Yesway brand, entered into an agreement to acquire Allsup's, a
convenience store operator based in Clovis, NM. The combined
company is expected to generate annual revenue of about $1.8
billion. The company is private and does not file public
financials.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
BW GAS: S&P Assigns 'B' ICR on Allsup's Acquisition; Outlook Stable
-------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to BW Gas
& Convenience Holdings.
S&P also assigned its 'B' issue-level rating and '3' recovery
rating to the company's credit facilities, which include a $75
million revolver and a $525 million term loan that will be used to
partially fund the company's acquisition of gas station and
convenience store chain Allsup's for approximately $830 million.
The pro-forma capital structure is highly leveraged and will
require good integration to reduce leverage to sustainable levels,
according to S&P.
S&P views the financing structure as aggressive with expected pro
forma S&P Global Ratings-adjusted leverage in the mid-6x area in
2019. It expects leverage to decline to the high-4x area on
improvements from a growing EBITDA base, which is dependent on a
successful execution of its integration plan and synergy
realization over time. It believes the company will achieve profit
growth from better labor cost management, system integration, and
vendor contract savings.
The stable outlook reflects S&P's expectation BW Gas will
successfully integrate Allsup's and benefit from cost savings that
the rating agency expects will improve the company's performance
over the next year. S&P forecasts debt/EBITDA improving to the
high-4x area by the end of 2020.
If S&P expects the company will sustain debt/EBITDA above 6.5x, the
rating agency could lower its ratings on BW Gas. This could occur
if the company faces integration issues and EBITDA does not improve
in line with S&P's expectation or debt repayment does not occur as
it anticipates. In this instance, S&P could see EBITDA margins
deteriorating by about 200 basis points (bps) below its forecast.
"We could raise the ratings if we expect debt/EBITDA to decline
below 4.5x and believe that BW Gas will maintain leverage in this
area, which would require a less aggressive financial policy that
we do not view as likely given the sponsor ownership. This could
occur if the company successfully integrates Allsup's and achieves
targeted synergies, leading to EBITDA margin expansion of 200 bps
or more relative to the assumptions in our base case," S&P said.
CHARLES BRELAND: Lacks Standing to Raise 13th Amendment Claims
--------------------------------------------------------------
Appellant Charles K. Breland, Jr. appeals from the Bankruptcy Court
for the Southern District of Alabama's Orders dated April 28, 2017,
May 3, 2017, and June 21, 2017. Upon review and analysis, District
Judge Jeffrey U. Beaverstock affirms those orders.
Appellant filed a Chapter 11 petition on July 8, 2016. On July 25,
2016, Appellee Levada EF Five, LLC filed a Motion to Dismiss
Appellant's Chapter 11 case, or in the Alternative, for the
Appointment of a Chapter 11 Trustee. On Sept. 22, 2016, Appellees
Equity Trust Company, Custodian f/b/o David E. Hudgens and Hudgens
& Associates, LLC filed a motion requesting the Bankruptcy Court
appoint a Chapter 11 Trustee over Mr. Breland's case.
Appellant presents fives issues for the District Court to consider
on appeal:
(1) Whether the Bankruptcy Court erred in appointing a Chapter
11 trustee under 11 U.S.C section 1104 given that Chapter 11 of the
Bankruptcy Code, including 11 U.S.C. sections 541 and 1115,
includes post-petition income, earnings, and/or wages of an
individual debtor -- i.e., Mr. Breland, as property of the estate,
thus forcing Appellant into involuntary servitude in violation of
the Thirteenth Amendment.
(2) Whether the Bankruptcy Court erred in appointing a Chapter
11 trustee under 11 U.S.C. section 1104, given that the case
remained a reorganization case at the time of allowance of the
appointment and at the time of appointment, requiring a Chapter 11
plan to be filed that would, by necessity under 11 U.S.C. section
1129 require an individual debtor's projected disposable income,
earnings, and/or wages to be included in such a plan, thus further
forcing Appellant into involuntary servitude in violation of the
Thirteenth Amendment to the Constitution of the United States of
America.
(3) Whether the Bankruptcy Court erred in failing to vacate
its Orders related to the appointment of a trustee by holding that
Appellant's challenge to the appointment of a Chapter 11 trustee in
violation of the Thirteenth Amendment was not ripe for
consideration.
(4) Whether the Bankruptcy Court erred in not dismissing the
Chapter 11 case I lieu of appointing a Chapter 11 Trustee in this
case, given the prohibitions of the thirteenth Amendment to the
Constitution of the United States of America
(5) Whether the appointment of a trustee in an individual
Chapter 11 case violates the Thirteenth Amendment to the
Constitution of the United States of America
Each issue Appellant raises concerns the Bankruptcy court's
appointment of a Trustee, save for the fourth issue, which only
focuses on the Bankruptcy court's failure to dismiss his petition
outright. However, each claim centers on whether the Bankruptcy
court violated the Thirteenth Amendment.
The District Court holds that it cannot address the merits of
Appellant's claims because he does not have constitutional
standing. In its Brief in Opposition, the United States (as an
intervenor), argues that Appellant lacks constitutional standing to
raise his Thirteenth Amendment claims in connection with the
appointment of a Trustee in his Chapter 11 bankruptcy because he
has not suffered an injury-in-fact.
To support this claim, the United States argues that "Mr. Breland
has voluntarily chosen to continue to work" and that he is "not
being physically or legally compelled to work for the Trustee by
any provision of the Bankruptcy Code." The United States further
argues that Appellant has suffered no injury because "[t]he Trustee
has only taken the place of Mr. Breland as the fiduciary of the
estate" and that "[e]ven without the appointment of the Trustee,
Mr. Breland would not have had full control of the estate accounts
since he only served as a fiduciary." Finally, the United states
argues that Appellant has suffered no injury-in-fact because no
party has proposed a reorganization plan, and thus, Appellant
positing that he will lose all his post-petition income is mere
conjecture.
To rebut the constitutional standing issue, the Appellant contends
that:
-- if he chooses to stop working, his business will fail,
which places him in a "psychological bind";
-- the United States' argument concerning his former status as
debtor-in-possession fails because after the Trustee was appointed,
he lost the ability to convert or dismiss the case pursuant to 11
U.S.C.S. section 1112; and
-- even though no plan has been proposed, Appellant still
suffered an injury because 11 U.S.C. sections 1123 and 1129 require
post-petition income to fund a plan as needed and as a benchmark
for reorganizational plan approval.
Mr. Breland is not being coerced to work, nor does 11 U.S.C.
section 1115 place him in a state of involuntary servitude.
According to the record, the post-petition income Mr. Breland earns
is accumulating in his Bankruptcy Estate. However, Mr. Breland is
under no obligation to continue to work because the Bankruptcy Code
does not require it. Further, there is no reorganization plan in
place requiring Mr. Breland to continue working "for the benefit of
creditors" as he describes. Rather, if such a plan existed, he
might have standing to pursue a Thirteenth Amendment claim.
Nevertheless, such is not the case and Mr. Breland suffers no
actual or imminent injury in this regard.
Appellant's argument that he suffered an injury-in-fact due to the
mandates in 11 U.S.C.S. section 1123 and 1129 is meritless, the
District Court says. Appellant asserts that he has already
suffered an injury-in-fact prior to the proposal of a
reorganization plan because "11 U.S.C.S. sections 1123 and 29 both
require post-petition income to fund a plan as needed and use such
income as a benchmark for approval of a plan." Because of this,
Appellant argues that "a plan that has been objected to will likely
include [his] projected post-petition income for a period of five
years" -- he would be subjected to a state of involuntary
servitude for a time exceeding that which he assumes he has already
been subjected to.
Accordingly, the District Court finds that Mr. Breland lacks
constitutional standing to raise his Thirteenth Amendment claims.
Because Appellant cannot clear the first hurdle necessary to show
that this matter is justiciable, his requests for relief are denied
and the Bankruptcy Court's orders from April 28, 2017, May 3, 2017,
and June 17, 2017 are affirmed.
The bankruptcy case is in re: Charles K. Breland, Jr., No.
4:18-CV-3121 (Bankr. S.D. Ala.).
A copy of the Court's Order dated Sept. 30, 2019 is available at
https://bit.ly/2N0Jrm8 from Leagle.com.
Charles K. Breland, Jr., Appellant, represented by Richard M. Gaal
-- rgaal@mcdowellknight.com -- McDowell Knight Roedder & Sledge,
L.L.C., Algert S. Agricola, Jr. , James Willis Garrett, III ,
Galloway, Wettermark, Everest, Rutens & Gaillard, LLP & Robert M.
Galloway , Galloway, Wettermark, Everest, Rutens & Gaillard, LLP.
United States of America, Intervenor, represented by Danielle Pham
, United States Department of Justice & Jamie Alisa Wilson ,
Assistant United States Attorney.
Charles K. Breland, Jr., sought Chapter 11 protection (Bankr. S.D.
Ala. Case No. 16-02272) on July 8, 2016. The Debtor tapped Robert
M. Galloway, Esq., at Galloway Wettermark Everest Rutens, as
counsel. A. Richard Maples was appointed as the Chapter 11 Trustee
for the Debtor.
CHOICE BRANDS: Disclosure Statement Approved
--------------------------------------------
The Honorable Judge Robert N. Opel, II of the U.S. Bankruptcy Court
for the Middle District of Pennsylvania has approved the Choice
Brands Group's Disclosure Statement, authorized the Debtor to
disseminate the solicitation package to creditors, and scheduled a
Dec. 18 hearing to consider confirmation of the Plan.
The last day for submitting written acceptances or rejections of
the plan for Choice Brands Group, Inc is on Nov. 21, 2019, and must
be sent through their counsel’s address.
A hearing will be held on Dec. 18, 2019 at 9:30 a.m. to consider
confirmation of the Plan.
As reported in the TCR, the Debtor currently has $114,886.40, as of
June 30, 2019 for the payment of administrative claims and for
distribution to outstanding claims. Funding for the plan will be
from Debtor's cash or hand. Under the Plan, all Class 3 general
unsecured claims that are allowed will be paid pro-rata with the
funds on hand by the Debtor after payment of administrative claims
and U.S. Trustee fees. John V. Moncada, Thomas J. Murphy and Ralph
Caldwell, IV -- the existing equity holders -- will retain their
interest in the Debtor.
A full-text copy of the Disclosure Statement is available at
https://tinyurl.com/y6a8zou5 from PacerMonitor.com at no charge.
About Choice Brands Group
Choice Brands Group, Inc., formerly known as Choice Brands
Equestrian, Inc., is a wholesale importer and distributor of
equestrian products. The company, which also operates under the
name Horseloverz.com, is located in Hazleton, Pennsylvania. It
offers discounted horse supplies, horse tack, saddles, clothing,
boots and breyer.
Choice Brands Group sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Pa. Case No. 18-01175) on March 23,
2018. In the petition signed by John V. Moncada, president, the
Debtor disclosed $1.11 million in assets and $3.63 million in
liabilities. Judge Robert N. Opel II oversees the case. The
Debtor tapped the Law Offices of Mark J. Conway, P.C., as its legal
counsel.
COBALT COAL: Court May Sua Sponte Consider Trustee Appointment
--------------------------------------------------------------
Cobalt Coal, LLC, filed a Motion to Assume Lease with Steinman
Development Company. The Steinman Development Company leased
certain coal tracts to the Debtor pre-petition, however, Steinman
filed its Objection to Debtor's Motion to Assume on September 30,
2019.
The Debtor also filed a Motion to Assume Stanley Agreement on May
1, 2019, and an
amended motion on August 22, 2019. The Debtor also filed a third
motion, Motion to Assume Overriding Royalty Agreement, on May 1,
2019, and amended that motion on September 13, 2019.
Kenneth D. Stanley filed a Response to the Stanley Motion on
September 30, 2019, and a Supplemental Response on October 1, 2019.
James L. Sykes, Kenneth D. Stanley, Mountain Land Services, LLC,
and Tommy N. Bright, filed a Response to the Debtor's Motion to
Assume Overriding Royalty Agreement on September 30, 2019.
The collective motions to assume were continued four times, and set
for trial in Roanoke, Virginia on October 4, 2019. The Court was
prepared to hear the matters on that date. But, the day before
trial, the Debtor filed numerous exhibits, which Steinman, by
counsel, indicated they had never seen before, including several
exhibits that needed to be reviewed by a mining engineer. It was
agreed, after lengthy discussions in chambers and in open Court,
that all matters would be set for trial on October 23, 2019 in
Roanoke.
The Overriding Royalty and Stanley motions were then left in limbo,
as it served little purpose to go forward on those motions if the
underlying coal lease was not being assumed.
However, that Order has contingencies and is not an immediate
assumption of the Steinman lease. All matters, including the
Overriding Royalty and Stanley motions, were carried over to
January 9, 2020 for further hearing.
The Court ordered that the Counsel for the Debtor to file a written
motion to withdraw if he intended to pursue such a motion. One of
the issues creating turmoil in this case is that a third-party that
apparently provides funding to the Debtor, in a manner unknown to
and not approved by the Court, is in negotiation with Steinman to
purchase the fee interest in the real estate from Steinman. That
third-party has not been a participant in this case, but appears to
hold influence over the Debtor.
"Whatever is going on outside the Court is having a direct and
detrimental impact on the conduct of this case," the Court said.
All parties agree that the plan and disclosure statement presented
to the Court thus far cannot go forward, and further amendments
will need to be prepared and filed, as much of it is dependent on
what happens on the motions to assume described in this Order
The Court made it clear to all parties in open Court on October 23,
2019, and formally does so by the entry of this Order, that unless
satisfactory progress is made to advance this case before the
January 9, 2020 hearing, the Court is going to sua sponte consider
the appointment of a Chapter 11 trustee for the Debtor either for
"cause" under 11 U.S.C. Section 1104(a)(1) or in the best interests
of creditors under 11 U.S.C. Section 1104(a)(2), or both.
Any party wishing to submit a position on this matter must do so on
or before January 2, 2020. Nothing contained herein shall prevent
any party in interest, including the United States Trustee, from
filing any additional motions or requests for relief as they deem
appropriate, whether to be heard on or before January 9, 2020.
About Cobalt Coal LLC
Cobalt Coal, LLC, a producer of metallurgical coal headquartered in
Wise, Virginia, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Va. Case No. 19-70149) on Jan. 31,
2019. At the time of the filing, the Debtor disclosed $1,100,002
in assets and $455,100 in liabilities. The case has been assigned
to Judge Paul M. Black. The Debtor tapped Scot S. Farthing,
Attorney at Law, PC, as its legal counsel.
COMMUNITY HEALTH: Reports Third Quarter 2019 Results
----------------------------------------------------
Community Health Systems, Inc., announced financial and operating
results for the three and nine months ended Sept. 30, 2019.
Net operating revenues for the three months ended Sept. 30, 2019,
totaled $3.246 billion, a 5.9 percent decrease, compared with
$3.451 billion for the same period in 2018.
Net loss attributable to Community Health Systems, Inc. common
stockholders was $(17) million, or $(0.15) per share (diluted), for
the three months ended Sept. 30, 2019, compared with $(325)
million, or $(2.88) per share (diluted), for the same period in
2018. Excluding adjusting items, net loss attributable to
Community Health Systems, Inc. common stockholders was $(0.29) per
share (diluted), for the three months ended Sept. 30, 2019,
compared with $(1.64) per share (diluted) for the same period in
2018. Weighted-average shares outstanding (diluted) were 114
million for the three months ended Sept. 30, 2019, and 113 million
for the three months ended Sept. 30, 2018.
Adjusted EBITDA for the three months ended Sept. 30, 2019, was $388
million compared with $372 million for the same period in 2018,
representing a 4.3 percent increase.
The consolidated operating results for the three months ended Sept.
30, 2019, reflect a 9.2 percent decrease in admissions, and an 8.4
percent decrease in adjusted admissions, compared with the same
period in 2018. On a same-store basis, admissions increased 2.4
percent and adjusted admissions increased 3.6 percent for the three
months ended Sept. 30, 2019, compared with the same period in 2018.
On a same-store basis, net operating revenues increased 4.1
percent for the three months ended Sept. 30, 2019, compared with
the same period in 2018.
Net operating revenues for the nine months ended Sept. 30, 2019,
totaled $9.925 billion, a 7.3 percent decrease, compared with
$10.702 billion for the same period in 2018.
Net loss attributable to Community Health Systems, Inc. common
stockholders was $(302) million, or $(2.66) per share (diluted),
for the nine months ended Sept. 30, 2019, compared with $(460)
million, or $(4.08) per share (diluted), for the same period in
2018. Excluding adjusting items, net loss attributable to
Community Health Systems, Inc. common stockholders was $(1.29) per
share (diluted), for the nine months ended Sept. 30, 2019, compared
with $(1.52) per share (diluted) for the same period in 2018.
Weighted-average shares outstanding (diluted) were 114 million for
the nine months ended Sept. 30, 2019, and 113 million for the nine
months ended Sept. 30, 2018.
Adjusted EBITDA for the nine months ended Sept. 30, 2019, was
$1.181 billion compared with $1.223 billion for the same period in
2018, representing a 3.4 percent decrease.
The consolidated operating results for the nine months ended Sept.
30, 2019, reflect an 11.4 percent decrease in admissions, and an
11.2 percent decrease in adjusted admissions, compared with the
same period in 2018. On a same-store basis, admissions increased
1.7 percent and adjusted admissions increased 2.3 percent for the
nine months ended Sept. 30, 2019, compared with the same period in
2018. On a same-store basis, net operating revenues increased 4.3
percent for the nine months ended Sept. 30, 2019, compared with the
same period in 2018.
Commenting on the results, Wayne T. Smith, chairman and chief
executive officer of Community Health Systems, Inc., said, "We
delivered a strong same-store performance across key metrics during
the third quarter. Continued execution of our transfer program,
Accountable Care Organizations, capital investments, and strategic
plans have driven these improved results. We believe these
investments, along with recent divestitures and ongoing operating
efficiency initiatives, have positioned the Company for continued
improved performance. As we move forward, we expect a good finish
to this year and believe we are well-positioned to deliver a strong
performance in 2020."
The Company completed 11 hospital divestitures during the nine
months ended Sept. 30, 2019 (including two divestitures that
preliminarily closed on Dec. 31, 2018) and completed the
divestiture of one additional hospital on Oct. 1, 2019. In
addition, the Company has entered into a definitive agreement to
sell three additional hospitals, which divestitures have not yet
been completed. The Company intends to continue its portfolio
rationalization strategy during the remainder of 2019 and is
pursuing additional interests for sale transactions, which are
currently in various stages of negotiation with potential buyers.
There can be no assurance that these potential divestitures (or the
potential divestitures currently subject to a definitive agreement)
will be completed, or if they are completed, the ultimate timing of
the completion of these divestitures. The Company continues to
receive interest from potential acquirers for certain of its
hospitals.
A full-text copy of the press release is available for free at:
https://is.gd/WWncTt
About Community Health
Community Health -- http://www.chs.net/-- is a publicly traded
hospital company and an operator of general acute care hospitals in
communities across the country. The Company, through its
subsidiaries, owns, leases or operates 102 affiliated hospitals in
18 states with an aggregate of approximately 16,000 licensed beds.
The Company's headquarters are located in Franklin, Tennessee, a
suburb south of Nashville. Shares in Community Health Systems,
Inc. are traded on the New York Stock Exchange under the symbol
"CYH."
Community Health reported a net loss attributable to the Company's
stockholders of $788 million for the year ended Dec. 31, 2018,
compared to a net loss attributable to the Company's stockholders
of $2.45 billion for the year ended Dec. 31, 2017. As of June 30,
2019, the Company had $16.13 billion in total assets, $17.38
billion in total liabilities, $503 million in redeemable
noncontrolling interests in equity of consolidated subsidiaries,
and a total stockholders' deficit of $1.75 billion.
* * *
In July 2018, S&P Global Ratings raised its corporate credit rating
on Franklin, Tenn.-based hospital operator Community Health Systems
Inc. to 'CCC+' from 'SD' (selective default). The outlook is
negative. "The upgrade of Community to 'CCC+' reflects the
company's longer-dated debt maturity schedule, and our view that
its efforts to rationalize its hospital portfolio as well as
improve financial performance and cash flow should strengthen
credit measures over the next 12 to 18 months."
In June 2019, Fitch Ratings affirmed Community Health System Inc.'s
Long-Term Issuer Default Rating at 'CCC'. CHS's 'CCC' Issuer
Default Rating reflects the company's weak financial flexibility
with high gross debt leverage and stressed FCF generation (CFO less
capex and dividends).
CONTANDA LLC: S&P Affirms 'B' Issuer Credit Rating; Outlook Neg.
----------------------------------------------------------------
S&P Global Ratings affirmed the 'B' issuer credit and issue-level
rating on Contanda LLC. The '3' recovery rating is (rounded
estimate: 65%) unchanged.
Contanda's commitment letter with TD Securities indicates that
funds will be available to refinance the term loan B (about $230
million outstanding) before its maturity on Feb. 27, 2020. The
commitment also provides for additional liquidity, including a $30
million revolving credit facility, that should support its growth
plans and S&P's assessment of liquidity on a forward-looking basis.
(The company's prior revolver matured in February 2019 and was not
renewed or extended.) S&P also doesn't expect the financial
covenant thresholds to be an issue prior to the term loan's
maturity, after the sponsor injected significant cash into the
company to lower net debt in 2018. Importantly, S&P expects any
covenants in the proposed facility will likely be more manageable
in order to prevent any ongoing concerns."
The negative outlook reflects S&P's view that the company has
elevated execution risk over the next few months, given its robust
capex plans and its plan to bring projects online over the next six
to nine months. S&P notes the company has a committed plan to
refinance the debt in February 2020 and will likely not be burdened
by the leverage covenant going forward. The rating agency expects
the company's adjusted leverage to remain between 5.5x and 6.0x
during the next few years and that storage rates and utilization
rates will not materially decline.
"We could consider a negative rating action if the company's growth
projects experience delays or cost overruns over the next six to
nine months, or if EBITDA growth underperforms due to lagging
demand or operational issues. We could also downgrade the company
several notches if the refinancing is not consummated before the
term loan maturity in February for any reason," S&P said, adding
that it could also lower the rating if leverage increases and
expects it to remain above 6.5x for a sustained period.
"We could revise the outlook to stable over the next six to nine
months if Contanda can execute on its growth strategy by bringing
the Jacintoport and Stockton terminals online as planned and the
projects begin generating EBITDA while leverage remains below 6x.
Importantly, the company will have to refinance its debt without
any unforeseen issues before the maturity in February," the rating
agency said.
COSTELLO INDUSTRIES: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------------
The Office of the U.S. Trustee on Oct. 23, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of Costello Industries, Inc.
About Costello Industries
Costello Industries, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. W.D. Pa. Case No. 19-23365) on Aug. 26, 2019, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by Christopher M. Frye, Esq., at Steidl and Steinberg,
P.C.
COUNTRY CLUB: Nov. 14 Hearing on Disclosure Statement Set
---------------------------------------------------------
A hearing to consider approval of the Disclosure Statement of Trop,
Inc.'s affiliate Country Club Inc., will be held on Nov. 14, 2019,
at 11:00 a.m., in Courtroom 1203, U.S. Courthouse, 75 Ted Turner
Drive, SW, Atlanta, GA 30303.
As reported Trop, Inc.'s affiliate Country Club, Inc. filed with
the U.S. Bankruptcy Court for the Northern District of Georgia,
Atlanta Division, a plan of reorganization and disclosure
statement.
Holders of allowed unsecured claims (Class 3) will receive payment
equivalent to their pro rata share of Distribution Pool 2 after the
resolution of all claim objections. Class 3 claim holders will not
receive interest, attorneys’ fees or any penalties of any type,
inclusive of any claimed liquidated damages if claimed under the
FLSA, unless all principle amounts claimed are paid in full.
The Plan contemplates the creation of two Distribution Pools for
the benefit of creditors of Debtor. The Debtor and Teri G. Galardi
will fund the Distribution Pools. Distribution Pool 1 funds will
pay administrative claims and Distribution Pool 2 funds will pay
prepetition claims.
A full-text copy of the Disclosure Statement dated October 15,
2019, is available at https://tinyurl.com/y4ca7u8u from
PacerMonitor.com at no charge.
The Debtor is represented by:
McBRYAN, LLC
Louis G. McBryan
6849 Peachtree Dunwoody Rd
Building B-3, Suite 100
Atlanta GA 30328
Tel: (678) 733-9322
About Country Club
and Trop Inc.
Trop, Inc., is a privately held company that owns the Pink Pony, an
adult entertainment club in Atlanta, Georgia. The club began
operations in 1990.
Country Club, Inc., operates the adult entertainment business known
as the Goldrush Showbar, which began operations in 1993. It is
located at 2608 Metropolitan Parkway, Atlanta, Georgia in southwest
Atlanta.
Trop, Inc., filed a Chapter 11 petition (Bankr. N.D. Ga. Case
No.18-65726) on Sept. 19, 2018. In the petition signed by Teri
Galardi, chief executive officer, the Debtor estimated $500,000 to
$1 million in assets and $1 million to $10 million in liabilities.
Louis G. McBryan, Esq., at McBryan, LLC, is the Debtor's bankruptcy
counsel. Schulten Ward Turner & Weiss, LLP, and the Law Offices of
Aubrey T. Villines, Jr., serve as special counsel.
Country Club Inc. filed a Chapter 11 petition (Bankr. N.D. Ga. Case
No. 18-bk-66879) on Oct. 5, 2018.
DANA INC: Fitch Affirms BB+ LongTerm IDR, Outlook Stable
--------------------------------------------------------
Fitch Ratings affirmed Dana Incorporated's long-term Issuer Default
Rating at 'BB+'. In addition, Fitch has affirmed DAN's secured
revolver, term loan A and term loan B ratings at 'BBB-'/'RR1' and
the 'BB+'/'RR4' ratings on the senior unsecured notes issued by DAN
and its subsidiary Dana Financing Luxembourg S.a.r.l. The ratings
apply to a $1.0 billion secured revolver, $923 million in secured
term loan borrowings and $1.5 billion in senior unsecured notes.
The Rating Outlook is Stable.
KEY RATING DRIVERS
Ratings Overview: DAN's ratings are supported by the company's
market position as a top global supplier of driveline components
for light, commercial and off-road vehicles, as well as sealing and
thermal products. The diversification of DAN's products is a credit
strength, limiting its exposure to any single end-market, although
the company's light vehicle business is primarily weighted toward
pickups and sport utility vehicles (SUVs).
Increasingly, the company is investing in products for electrified
powertrains, and Fitch believes it has solid growth prospects with
a product portfolio that that will remain relevant as emerging
automotive technologies begin to take hold. DAN has a stated
objective of achieving metrics consistent with investment-grade
ratings. While its debt increased in conjunction with the Oerlikon
Drive Systems (ODS) acquisition, the company's decisions to
annuitize a large portion of its pension obligations and fund the
ODS acquisition with pre-payable term loans point toward its
ongoing focus on reducing debt and debt-like obligations over the
intermediate term.
Key Rating Issues: Rating concerns include industry cyclicality,
particularly in the commercial and off-highway vehicle sectors, and
volatile raw material costs. With over 40% of DAN's revenue tied to
the highly cyclical commercial and off-road vehicle segments, the
company is exposed to potentially greater revenue volatility than
suppliers that are primarily tied to the light vehicle sector,
which tends to be relatively more stable. However, DAN's more
varied product portfolio provides a level of customer
diversification not seen at its primary competitors, which could
provide benefits in an industry downturn, and commercial and
off-road vehicle components tend to carry higher margins than those
for light vehicles.
Similar to virtually all other vehicle component suppliers, DAN
manages raw material cost volatility primarily through pass-through
mechanisms in its customer supply agreements, which Fitch expects
will effectively pass along changes in material costs to the
company's customers over the longer term. However, a period of
rapidly rising prices could pressure profitability, as there is
generally a lag before the mechanisms adjust to changes in material
prices. In the event of a particularly steep rise in material
costs, there is also a risk that vehicle manufacturers might try to
share the increased costs with their suppliers, such as by
insisting on higher annual price downs or by pushing for lower base
pricing in future supply agreements.
DAN's acquisition strategy is also a potential credit risk,
although Fitch expects most acquisitions will be relatively modest
and of a "bolt-on" nature. The company's attempted acquisition of
GKN plc's driveline business in 2018, which would have grown DAN's
revenue by over 80% while increasing debt by about $2 billion, was
opportunistic and not representative of DAN's typical acquisition
strategy. Also, Fitch expects DAN to consider potential
acquisitions within the context of its plan to strengthen its
credit metrics. The ODS acquisition completed in February 2019 was
the company's largest in several years, and although the company
funded the acquisition primarily with debt, its decision to use
term loans rather than notes has given it the flexibility to reduce
the debt in the future with available cash.
Solid Cash Flow Generation: Fitch expects DAN to produce positive
post-dividend FCF over the next several years, with FCF margins
generally running in the low-4% range over the longer term. Fitch
expects FCF margins will benefit from the attainment of synergies
related to recent acquisitions, particularly the ODS acquisition,
as well as benefits from continued cost control efforts and higher
expected production volumes. Fitch expects capital spending as a
percentage of revenue to normalize at about 4% over the next
several years, down from an expected 5% in 2019, following the
completion of several large capital projects. In 2019, Fitch
expects DAN's FCF margin will be closer to 1.5%, in part as a
result of a discretionary $62 million pension contribution related
to the transfer of its largest U.S. plan to annuities, as well as
higher restructuring costs.
Actual post-dividend FCF in the last 12 months (LTM) ended June 30,
2019 was $34 million, equal to a 0.4% FCF margin. However, this was
affected by the discretionary $62 million pension contribution made
in June 2019 and somewhat elevated capex, which equaled 4.4% of
revenue in the period.
Solid Profitability: DAN's EBITDA margins have been relatively
solid and have grown over the past several years, despite
challenging conditions in certain end markets, such as agricultural
equipment and construction and mining equipment. Fitch expects
margins to strengthen further over the next several years as the
company converts on its growing business backlog. Based on Fitch's
calculations, DAN's EBITDA margin was 11.5% in 2018, and with
higher production volumes, synergy benefits and other
margin-enhancing initiatives, Fitch expects the company's EBITDA
margins (as calculated by Fitch) will rise above 12% in 2019 and
could rise further, nearing 13%, over the next several years.
Declining Leverage: Fitch expects DAN's gross EBITDA leverage
(debt/Fitch-calculated EBITDA) to be in the low-2x range at
year-end 2019 and to potentially decline below 2x by year-end 2020,
absent any additional debt-funded acquisitions. Fitch expects DAN
will reduce leverage through a combination of debt reduction and
increased EBITDA. The company's two term loans provide it with the
flexibility to accelerate debt reduction using FCF if it chooses to
do so. Fitch expects FFO-adjusted leverage to be in the mid-3x
range by year-end 2019 and to decline toward the mid-2x range over
the next several years.
As of June 30, 2019, DAN had about $2.5 billion in debt, resulting
in actual EBITDA leverage of 2.6x and FFO-adjusted leverage of
3.9x. However, these leverage figures were elevated due to the ODS
acquisition that closed in early 2019 and that was funded via
proceeds from a $225 million increase in DAN's existing term loan A
and the addition of a new $450 million term loan B in February
2019.
Strengthening Coverage Metrics: Fitch expects DAN's FFO
fixed-charge coverage to end 2019 in the mid-4x range and to
potentially rise above 5x in 2020 as a result of increased FFO on
higher business levels and declining debt. Actual FFO fixed-charge
coverage at June 30, 2019 was 4.3x, although this figure was
negatively affected by the ODS acquisition. Fitch expects EBITDA
interest coverage (LTM EBITDA/gross interest expense) to rise
toward 10x over the next couple of years as EBITDA grows and debt
levels decline. At June 30, 2019, DAN's actual EBITDA interest
coverage was 8.5x.
Manageable Pension Obligations: In June 2019, DAN transferred all
the liabilities of its largest U.S. pension plan to third-party
annuities, removing all associated assets and liabilities of the
plans from its balance sheet. To facilitate the transfer, DAN made
a $62 million cash payment to the plan. The transfer reduced DAN's
U.S. pension obligation by approximately $940 million, which was
underfunded by about $166 million prior to the transfer. At
year-end 2018, DAN's total U.S. pension obligation was about $1.5
billion, of which $200 million was unfunded, so Fitch expects the
funded status of the remaining plans to be substantially improved
at year-end 2019.
Outside the U.S., DAN's pension plans were only 20% funded at
year-end 2018, with an underfunded status of $293 million. The
lower funded status of DAN's non-U.S. plans is largely due to
unfunded 'pay-as-you-go' plans in certain countries. DAN
contributed $16 million to its non-U.S. plans in 2018.
With the substantially improved funded status of the U.S. plans
following the transfer, Fitch does not view DAN's pension plans as
a meaningful long-term credit risk.
DERIVATION SUMMARY
DAN has a relatively strong competitive position focusing primarily
on driveline systems for light, commercial and off-road vehicles.
It also manufactures sealing and thermal products for vehicle
powertrains and drivetrains. DAN's driveline business competes
directly with the driveline businesses of American Axle &
Manufacturing Holdings, Inc. and Meritor, Inc. (BB-/Positive),
although American Axle focuses on light vehicles, while Meritor
focuses on commercial and off-road vehicles. From a revenue
perspective, DAN is similar in size to American Axle, although
American Axle's driveline business is a little larger than DAN's
light vehicle driveline business. Compared with Meritor, DAN has
roughly twice the annual revenue overall, and DAN's commercial and
off-highway vehicle driveline segments are a little larger overall
than Meritor's commercial truck and industrial segment.
DAN's EBIT and EBITDA margins are roughly in-line with auto
suppliers in the low-'BBB' range. However, EBITDA leverage is more
consistent with auto suppliers in the 'BB' range, such as Delphi
Technologies PLC (BB/Stable) or The Goodyear Tire & Rubber Company
(BB/Stable).
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- U.S. light vehicle sales run at about 16.9 million units in
2019, down about 2% from 2018, while global sales decline in the
low-single digit range. After 2019, U.S. industry sales run in a
16.5 million to 17 million unit range for several years, while glob
al sales rise at a low-single-digit rate.
--The global commercial vehicle market remains relatively strong
through 2019 and begins a cyclical decline after that. The global
off-road vehicle market weakens in the latter half of 2019 and is
somewhat volatile in subsequent years.
-- Revenue grows in 2019 as a result of acquisitions,
particularly the ODS acquisition, as well as DAN's backlog of new
business. Beyond 2019 growth moderates as the effect of new product
programs is partially offset by slower global light and commercial
vehicle industry production.
-- EBITDA margins remain relatively strong, in the low-teens,
over the next several years.
-- FCF margins are solid, in the low-single-digit range in 2019
due to restructuring costs and the voluntary pension contribution
and then grow to the mid-single-digit range over the next several
years on more normalized spending levels.
-- Capital spending runs near 5% of revenue in 2019, within the
recent historical range, and then declines toward 4% in the
following years as several significant capital projects are
completed.
-- The company generally maintains a solid liquidity position,
with any excess cash used for debt reduction, acquisitions or share
repurchases.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Sustained gross EBITDA leverage below 2.0X;
- Sustained post-dividend FCF margin above 2.0%;
- Sustained FFO-adjusted leverage below 2.5X;
- Sustained FFO fixed charge coverage above 5.5x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- A severe decline in global vehicle production that leads to
reduced demand for DAN's products;
- A debt-funded acquisition that leads to weaker credit metrics
for a prolonged period;
- Sustained gross EBITDA leverage above 2.5x;
- Sustained FCF margin below 1.0%;
- Sustained EBITDA margin below 10%;
- Sustained FFO-adjusted leverage above 3.5x;
- Sustained FFO fixed charge coverage below 3.0x.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: As of June 30, 2019, DAN had $304 million of
consolidated cash, cash equivalents and marketable securities. In
addition to its cash on hand, DAN maintains additional liquidity
through a $1.0 billion secured revolver that was upsized from $750
million in the third quarter of 2019. The revolver is guaranteed by
DAN's wholly-owned U.S. subsidiaries and is secured by
substantially all of the assets of the company and the guarantor
subsidiaries. The revolver expires in 2024. As of June 30, 2019, no
amounts were drawn on the revolver, but $21 million of the
available capacity was used to back letters of credit, leaving $729
million in available capacity prior to the upsizing.
Based on the seasonality in DAN's business, Fitch has treated $110
million of DAN's cash and cash equivalents as not readily available
for the purpose of calculating net metrics. This is an amount that
Fitch estimates DAN would need to hold to cover negative operating
cash flow, maintenance capex and common dividends without resorting
to temporary borrowing. The $110 million figure is higher than the
$53 million used in 2018 due to Fitch's revised view on the level
of cash the company would need to hold to cover seasonality based
on seasonal cash patterns in 2018.
Debt Structure: DAN's debt structure primarily consists of
borrowings on its secured credit facility (which includes a term
Loan A, term Loan B and revolver) and senior unsecured notes issued
by both DAN and its Dana Financing subsidiary.
DHX MEDIA: Fitch Affirms B+ LT IDR & Alters Outlook to Negative
---------------------------------------------------------------
Fitch Ratings affirmed DHX Media, LTD's Long-Term Issuer Default
Rating at 'B+' and revised the Rating Outlook to Negative from
Stable.
The Outlook revision to Negative reflects DHX Media's gross
leverage continuing to exceed Fitch's negative rating threshold of
6.0x driven by operational headwinds. Fitch takes comfort from
actions taken by the company, including those resulting from a
strategic review initiated soon after a weak fiscal year end (FYE)
June 30, 2017 that included structural, operational and senior
management changes.
The primary outcome involved the sale of 49% of DHX Media's 80%
interest in the 'Peanuts' brand to Sony Music Entertainment (Japan)
Inc. (Sony) for CAD236 million, or 14x the company's interest in
'Peanuts', and the use of net proceeds of CAD214 million to repay
debt. This became a significant component of the company's
repayment of more than CAD300 million of debt since 2017 (a 34%
reduction) despite the operational headwinds. Fitch notes DHX
Media's debt had increased significantly in 2017 due to the
acquisition of an 80% controlling interest in 'Peanuts' and 100% of
'Strawberry Shortcake' for CAD466 million.
The company also replaced several senior executives, including the
CEO in August 2019 and CFO in September 2019, and added five
independent board members. The new CEO, Eric Ellenbogen, has more
than 30 years of industry experience including senior roles at
Marvel Enterprises and DreamWorks Animation and has been a member
of DHX Media's board since 2018, serving in an advisory role since
April 2019. The prior CEO, who founded the company, had been CEO
since February 2018. The new CFO, Aaron Ames, served as the
company's COO since September 2018 (the COO role will be eliminated
as part of cost reduction efforts) and had held senior financial
roles in several companies prior to joining DHX Media.
Fitch notes the new CEO has already put his stamp on the company.
In September 2019, the company announced a reorganization that
included the CFO change along with a streamlined organizational
structure that is expected to generate CAD10 million of cost
reductions, excluding associated one-time costs of CAD10
million-CAD12 million. In October 2019, the company announced a
CAD60 million rights offering, with CAD50 million of net proceeds
to be used for debt reduction. Finally, the company announced it
will change its name to WildBrain to recognize that segment's
significant growth on digital platforms, specifically YouTube, and
its importance to the company as corroborated by its recognition by
the strategic review as one of the company's three primary
strategic priorities.
Fitch would consider stabilizing the Outlook if the company
demonstrates significant progress towards moving leverage below
6.0x within 18 months.
KEY RATING DRIVERS
Leverage Exceeds Sensitivities: Fitch-defined total pro forma
leverage at June 30, 2019 was 7.5x, adjusted for a full year of
Sony distributions, debt repayment from the rights offering net
proceeds and a CAD7.5 million required excess cash flow payment.
Although leverage continues to exceed Fitch's negative rating
sensitivities, the ratings consider positive actions taken by the
company including instituting a strategic review soon after
reporting a weak FYE June 30, 2017 and the pro forma repayment of
more than CAD300 million of debt. Fitch expects leverage to move
towards the rating sensitivities over the next 18 months.
Significant Debt Repayment: DHX Media has reduced debt from a peak
of CAD904 million at June 30, 2018 to CAD600 million at June 30,
2019, pro forma for the repayments discussed above, which has
driven Fitch-calculated leverage down from a peak of 9.3x at June
30, 2018. Although the significant term loan prepayments have
eliminated required amortization through maturity, the company has
publicly committed to using FCF to continue to improve their
balance sheet through further debt prepayments.
Vertically Integrated Platform: DHX Media develops and creates
content for itself and others, delivering between 175 to 225 half
hours annually to more than 500 global broadcasters and streaming
services. This fresh content expands the world's largest
independent children's programming library, with more than 13,000
half hours of children's programming. The company distributes
programming globally to linear and digital video outlets, including
WildBrain, the largest proprietary network of children's content on
YouTube, and four pay-TV Canadian channels. WildBrain grew total
watch time by a 112% five-year CAGR through 2018. It also provides
licensing and merchandising for intellectual property (IP) it both
owns and represents.
Strong Defensible Brand Recognition: DHX Media owns some of the
industry's most iconic children's programing brands representing
unique IP with global exposure that is virtually impossible to
recreate. Brands include 'Strawberry Shortcake', 'Caillou', 'Yo
Gabba Gabba!', and 'Inspector Gadget'. DHX Media also holds a 41%
interest in 'Peanuts', the world's sixth largest character brand.
DHX Media's vertically integrated platform provides diversification
across a broad product and content offering, expansive geographic
reach and deep customer base.
Children's Programming Growth: DHX Media is well-positioned to
capitalize on continued growth in spending on children's
programming by linear and digital platforms. Spending on
children's/family programming by U.S. linear cable networks grew at
a 7.9% four-year CAGR through 2016, exceeding overall total content
growth of 6.3%. over-the-top (OTT) networks have also made
significant children's programming investments as part of their
destination branding efforts; the company has relationships with
several, including Netflix, and recently signed an exclusive global
agreement with Apple TV Plus. Finally, children are increasingly
directly accessing content on the internet with YouTube becoming a
centralized destination for online children's viewing.
Content Production Costs: Many competitors have deeper funding
access as they are part of larger better-capitalized conglomerates.
However, while DHX Media has increased content production to
refresh and expand its library, more than 85% of cash outlays are
prefunded with government tax credits available only to Canadian
content producers and content presales. To account for cash
variances, the company uses interim production facilities (IPF) to
fund shortfalls until the tax credits are collected and the IPF is
repaid as required. IPF's are nonrecourse subordinated loans made
to special purpose vehicles (SPVs) specifically created for each
show's season and are secured by tax credits associated with the
season. As of June 30, 2019, the company had CAD92.4 million of
IPFs, secured by CAD109.6 million of licensing contract and tax
credit receivables, which Fitch includes in its leverage
calculations.
DERIVATION SUMMARY
DHX Media is weakly positioned against major global peers on most
comparatives given its relative lack of scale and elevated
leverage. Many of its competitors have deeper access to production
funding as part of larger, better capitalized diversified
conglomerates. However, the company benefits from its broad
collection of iconic global brands, diverse revenue sources and
customer base, strong industry position within its business
segments and vertically integrated platform. In addition, as a
Canadian company, DHX Media uses access to Canadian incentive
programs and tax credits to fund a significant portion of their
content production costs. Fitch believes the company is well
positioned overall to continue exploiting the ongoing positive
growth characteristics of the children's programming subsector. No
country ceiling or parent/subsidiary aspects impact the rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Overall mid- to high-single digit revenue growth driven by: 1)
high single digit growth in Distribution driven by focus on
continued growth at WildBrain; 2) owned IP Consumer Products
benefitting from Sony's ownership interest in 'Peanuts'; 3)
mid-single digit Production increase driven by strategic focus on
premium content production for internal and external use; 4)
mid-single digit declines in Broadcasting as overall softness in
Cable Networks more than offsets the increased commercial load.
-- Margin improvement driven by cost cutting efforts and
increased economies of scale.
-- Annual FCF generation increasing from CAD12 million in fiscal
2018 to more than CAD60 million by fiscal 2023. Fitch assumes a
significant portion of FCF will be used for additional debt
repayment, in line with management's strategic review and public
comments, and total leverage falls below 4.0x by fiscal 2023
-- No new M&A over the rating horizon.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that DHX Media would be considered a
going concern in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim. Fitch's recovery analysis estimates a going
concern enterprise value for a reorganized firm of approximately
CAD504 million.
Fitch assumes a 5% decline in revenues driven by a significant
decline in WildBrain's top line, the loss of a major OTT contract
and a decline in consumer product sales driven by a recession.
Fitch also assumes the company is unable to reduce costs fast
enough leading to a 150bp margin decline. As such, EBITDA after
minority interests declines to CAD70million.
Fitch assumes DHX Media will receive a going concern multiple of 8x
EBITDA and considered several factors:
DHX Media owns some of the industry's most iconic children's
programing brands representing unique intellectual property with
global exposure that is virtually impossible to recreate. Brands
include 'Strawberry Shortcake', 'Caillou', 'Yo Gabba Gabba!', and
'Inspector Gadget'. DHX Media also has a 41% interest in 'Peanuts',
the world's sixth largest character brand.
Content creators have been acquired at lofty multiples, especially
if their IP is difficult to recreate. Children's programming
creators are especially valuable as spending on children's/family
programming by U.S. linear cable networks grew at a 7.9% four-year
CAGR through 2016, exceeding overall total content growth of 6.3%.
In addition, OTT networks have made significant investments in
children's programming as part of their destination branding
efforts.
Content acquisition examples include several by The Walt Disney
Company: 1) Pixar for USD7.4 billion (23x Fitch-calculated EBITDA)
in 2006; 2) Marvel Entertainment, Inc. for USD4 billion (high teens
market multiple estimates) in 2009; 3) Lucasfilm Limited for USD4.1
billion (low teens estimates) in 2012 and; 4) certain Twenty-First
Century Fox assets, primarily content creation, for USD85 billion
(low teens estimates) in 2018. Comcast acquired DreamWorks
Animation SKG, Inc. for USD4.1 billion (mid-20s estimates) in 2016
(the NBCUniversal acquisition is excluded as it included broadcast
and cable channels and the NBC network along with Universal
Studios' content creation arm). Finally, Fitch includes the two
recent 'Peanuts' brand acquisitions: DHX Media's initial
acquisition of an 80% interest for USD345 million (11x) in 2017 and
Sony's acquisition of 49% of DHX Media's 80% ownership for USD185
million (14x) in 2018.
The 8x multiple also incorporates the fact that children are
increasingly directly accessing content on the internet with
YouTube becoming a centralized destination for online children's
programming viewing. To that end, 'WildBrain', the company's
digital network and studio, is one of YouTube's largest children's
programming networks and grew total watch time by a 112% five-year
CAGR through 2018.
Fitch assumes a fully drawn revolving credit facility (CAD40
million) in its recovery analysis since credit revolvers are tapped
as companies are under distress. As of June 30, 2019, the company
had no outstandings under its revolving facility, CAD361 million in
secured term loan debt, pro forma for debt repayment detailed
above, and CAD140 million of unsecured debentures.
Fitch excludes DHX Media's IPFs (CAD92 million) from the recovery
analysis as they are secured by assets directly related to specific
programming content. Each IPF is secured by assets associated with
that particular season including Canadian federal and provincial
tax credits, licensing contract receivables and restricted cash.
Regarding the Canadian tax credits, more than 50% of DHX Media's
content creation cash outlays associated with qualifying SPVs are
funded with government tax credits available only to Canadian
content producers.
The recovery analysis results in a 'BB+' and 'RR1' issue and
recovery rating for the company's secured credit facilities,
implying expectations for 100% recovery. Fitch does not rate the
IPFs or the unsecured debentures.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- The Negative Outlook could be stabilized if the company
demonstrates significant progress in moving Fitch-calculated total
leverage (total debt with equity credit to EBITDA) towards 6.0x
within the next 18 months.
-- FCF/gross adjusted debt exceeds 10%.
-- Strong revenue growth and EBITDA and FCF expansion of benefits
from the company's economies of scale resulting in Fitch-calculated
total leverage declining below 5.0x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Adverse operating performance and/or failure to achieve
planned cost savings delaying progress in moving Fitch-calculated
total leverage (total debt with equity credit to EBITDA) towards
6.0x over the next 18 months.
-- Weakening of operating profile characterized by weak organic
revenue growth and lack of margin expansion owing to sector
headwinds and inability to expand content penetration.
-- FCF/gross adjusted debt falls below 5%.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: As of June 30, 2019, the company had CAD40
million of cash and a CAD40 million revolver (no outstandings).
Since acquiring Peanuts in 2017, the company has prepaid more than
CAD300 million of debt, reducing interest payments and eliminating
required term loan amortization through maturity. The lower
interest payments, coupled with low capex requirements of less than
1.5% of revenues and the elimination of the dividend, generates
improved FCF conversion metrics. Fitch believes the company will
generate enough cash over the ratings case to cover internal
operating and investment needs and repay additional debt.
DOWNSTREAM DEVELOPMENT: S&P Affirms 'B' ICR; Outlook Negative
-------------------------------------------------------------
S&P Global Ratings affirmed all the ratings, including the 'B'
issuer credit rating, on Downstream Development Authority (DDA).
DDA's wholly owned subsidiary, Saracen Development LLC, issued $285
million in senior secured notes to finance the construction of a
new casino in Pine Bluff, Arkansas. Saracen expects to open the
casino in June 2020.
During the construction and ramp up of the Saracen Casino Resort
project, DDA's operating risks may increase if it diverts resources
from Downstream Casino, according to S&P.
S&P expects the proposed Saracen Casino Resort (including the
recently opened Annex) will be a larger gaming facility in terms of
slot machines and table games than the existing operations at
Downstream Casino Resort and contribute more than half the revenue
and EBITDA of the consolidated operations. In addition to its
potential to generate significant cash flow, the project
diversifies DDA and provides an avenue for long-term growth in the
Little Rock, Arkansas market with limited current and anticipated
competition, and proximity to a market with good population
density. DDA owns 100% of Saracen and S&P expects the project to be
consolidated in its financial statements. Furthermore, DDA has
ancestral ties to the area where it is building Saracen. Therefore,
S&P believes this project is strategically important to DDA and the
Quapaw Tribe of Oklahoma. Given the importance of the success of
Saracen to DDA and the tribe, operating risks during construction
and ramp up of Saracen Casino may be heightened if it diverts
management's attention or drains tribal resources and employee
talent from Downstream Casino. DDA is currently limited in its
ability to provide financial and cash flow support to Saracen aside
from investments it has already made. However, S&P believes DDA
would utilize all available resources to support the project and
improve Saracen's business prospects if its opening is weaker than
the rating agency expects.
The negative outlook reflects S&P's view that DDA may face
heightened operating risks as it constructs and ramps up a new
gaming facility in another state if there is a diversion of
resources from its existing Downstream Casino Resort in Oklahoma.
Additionally, S&P expects consolidated adjusted debt to EBITDA to
be meaningfully elevated (above 7x) through fiscal 2020. However,
the rating agency believes this increase in consolidated leverage
is temporary, and that once Saracen opens, it will likely generate
significant cash flow and support a significant improvement in
leverage in 2021 to the low-5x area.
"We could lower the rating if we believe adjusted leverage will
stay above 6.5x, which could happen if construction challenges
cause delays in the Saracen project or lead to cost overruns, or if
operating results at either gaming property are significantly
weaker than we expect stemming from cost inefficiencies, or
economic or competitive pressures," S&P said.
"A stable outlook is unlikely until Saracen opens and we can
observe its operating performance. We could revise the outlook to
stable if Saracen opens and begins ramping up in a manner that we
believe will support better leverage and limited operational
distractions, and if the existing Oklahoma property's performance
is stable," S&P said, adding that it could raise the rating one
notch if Saracen opens successfully in June 2020, exceeds its
expectations without impairing the financial performance at
Downstream Casino Resort, and generates sufficient cash flow to
contribute to a sustained reduction in consolidated adjusted
leverage to below 5x.
F&M TRUCKING: Unsecured Creditors to Get 5% in 5 Years
------------------------------------------------------
F&M Trucking is proposing a Plan of Reorganization that says
allowed unsecured claims will paid in full over 60 months, with
payments beginning on the of month after Effective Date, and there
will be no payment of interest. Holders of equity interests are
unimpaired under the Plan. The payments due under the Plan will be
funded from the Debtor's business operations.
A full-text copy of the Plan is available at
https://tinyurl.com/y6mgrr5e from PacerMonitor.com at no charge.
About F&M Trucking
F&M Trucking, LLC, filed a Chapter 11 bankruptcy petition (Bankr.
D. Colo. Case No. 19-11306) on Feb. 26, 2019. At the time of the
filing, the Debtor had estimated assets of less than $500,000 and
liabilities of less than $500,000. The case has been assigned to
Judge Thomas B. Mcnamara. The Debtor hired the Law Office of
Bonnie Bell Bond, LLC as its legal counsel.
FIRST FLORIDA LIVING: U.S. Trustee Names C. Carr as Ombudsman
-------------------------------------------------------------
Pursuant to the Order of the Court directing the United States
Trustee to appoint the successor of Michael Milliken as Patient
Care Ombudsman for First Florida Living Options LLC, d/b/a
Hawthorne Health and Rehab of Ocala, d/b/a Hawthorne Village of
Ocala, d/b/a Hawthorne Inn of Ocala, the United States Trustee
appoints Carol Carr as Acting State Long-Term Care Ombudsman
Florida Department of Elder Affairs Long Term Care Ombudsman
Program in order to monitor the quality of patient care provided to
patients of the debtor, to the extent necessary under the
circumstances, including interviewing patients and physicians.
The PCO can be reached at:
Carol Carr
Acting State Long-Term Care Ombudsman
Florida Department of Elder Affairs
Long Term Care Ombudsman Program
4040 Esplanade Way, Suite 380
Tallahassee, FL 32399
Email: carrc@elderaffairs.org
About First Florida Living Options
First Florida Living Options LLC, d/b/a Hawthorne Health and Rehab
of Ocala, d/b/a Hawthorne Village of Ocala, d/b/a Hawthorne Inn of
Ocala, formerly known as Surrey Place of Ocala, based in Ocala,
Fla., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No.
19-02764) on July 22, 2019. The petition was signed by John M.
Crock, vice president of Florida Living Options, Inc., MGMR. The
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities as of the bankruptcy filing. Johnson Pope
Bokor Ruppel & Burns, LLP, serves as bankruptcy counsel.
GFL ENVIRONMENTAL: S&P Puts 'B' ICR on Watch Pos. on IPO Launch
---------------------------------------------------------------
S&P Global Ratings placed all of its ratings, including its 'B'
issuer credit rating, on waste services company GFL Environmental
Inc. on CreditWatch with positive implications.
The CreditWatch placement reflects S&P's view that the planned IPO
(which is expected to raise about C$2.5 billion) is likely to close
within the coming weeks and contribute to adjusted debt-to-EBITDA
(leverage) falling below S&P's 6x upgrade trigger in 2020. S&P
anticipates that the lower debt levels and higher earnings from
prospective acquisitions following the IPO should also contribute
to positive free operating cash flow and interest coverage ratios
well above 2x.
The CreditWatch placement reflects the high likelihood that S&P
could raise its issuer credit rating on GFL by one notch at the
close of the company's recently launched IPO. The rating agency
intends to resolve the CreditWatch well within the next 90 days.
"We could raise our ratings if the IPO closes and we expect
adjusted debt-to-EBITDA at or below 6x while the company maintains
funds from operations cash interest coverage well above 2x. In this
scenario, we would expect GFL to generate positive annual free
operating cash flow and see a lower likelihood that the company
could enter material acquisitions that bring leverage back
meaningfully above 6x," S&P said.
GK HOLDINGS: S&P Lowers ICR to 'CCC-' on Increased Operating Risks
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S-based
information technology (IT) and business skills learning solutions
provider GK Holdings Inc. (doing business as Global Knowledge Inc.)
to 'CCC-' from 'CCC', saying the company faces a potential payment
default and a covenant breach over the next two quarters, absent
another equity infusion.
Meanwhile, S&P lowered its issue-level ratings on the company's
senior secured first-lien debt to 'CCC-' from 'CCC', and lowered
the issue-level rating on the senior secured second-lien term loan
to 'CC' from 'CCC-'. The recovery ratings on the debt facilities
are unchanged.
The downgrade reflects S&P's view of Global Knowledge's heightened
liquidity risks. S&P expects the company to generate negative free
operating cash flow this year and believe there is an increased
likelihood that it will struggle to meet its near-term financial
obligations, including the next quarterly interest payment of about
$5 million due in December 2019 and the quarterly term loan
amortization payments of $438,000. In addition, S&P believes the
company could breach its first-lien net leverage covenant, which
had an 11% covenant headroom as of June 30, 2019, and steps down to
6.5x on March 31, 2020.
The negative outlook reflects S&P's view that Global Knowledge may
be unable to meet its financial obligations because of its strained
liquidity and could pursue a restructuring or in the next six
months.
"We could lower our ratings on Global Knowledge if the company is
unable to pay its future debt expenses, including the next interest
payment due December 2019. We could also lower the rating if the
company announces a distressed exchange or restructuring
transaction," S&P said.
"While unlikely within the next 12 months or so, we could raise our
ratings if we expect Global Knowledge will meet its financial
obligations, and sustainable operating prospects significantly
improve that enables the company refinance its debt facilities in
accordance with its original terms," the rating agency said.
GOODRX INC.: S&P Alters Outlook to Positive, Affirms 'B' ICR
------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on Santa
Monica, Calif.-based prescription drug price comparison platform
provider GoodRx Inc. and revised the outlook to positive from
stable.
GoodRx is raising $155 million in incremental first-lien term debt
and is using the proceeds along with cash to pay its outstanding
$200 million second-lien term loan in full. The company is also
extending the maturity on its $40 million revolving credit facility
to 2024.
As a result of the meaningful increase in first-lien debt, S&P
lowered its rating on the first-lien credit facilities to 'B' from
'B+' and revised the recovery rating to '3' from '2', reflecting
its expectations for meaningful (50%-70%; rounded estimate: 55%)
recovery in the event of a payment default.
The revision of S&P's ratings outlook to positive from stable
reflects its view of the credit impact of the proposed transaction,
which will reduce debt by $45 million and the company's interest
burden by about $11 million in the rating agency's 2020 base-case
forecast. While the transaction will modestly improve S&P's
leverage forecast from about 5x to the high-4x area for year-end
2019, the rating agency believes that favorable investment returns
on advertising spending will drive EBITDA expansion, thus lowering
adjusted leverage below 4x by 2020. The first-lien credit facility
downgrade reflects lower expected lender recoveries in S&P's
simulated default scenario give the increased recovery dilution for
the increased amount of outstanding first-lien debt.
S&P's positive outlook reflects its expectation that high growth in
new users, prescription drug fill claims, and a supportive
regulatory environment will result in EBITDA growth in the 20-25%
range and adjusted leverage to fall below the rating agency's 4x
upgrade threshold by year-end 2020.
"We could consider an upgrade if the company continues to
demonstrate strong operating performance and establishes a track
record of operating with debt to EBITDA below 4x. In this scenario
we would expect limited risks for regulatory changes to the U.S.
health care system that would adversely affect the company's
business prospects or profitability," S&P said.
"We could revise our outlook back to stable if GoodRx adopts a more
aggressive financial policy that sustains leverage above the 4x
area, perhaps through a debt-financed acquisition or dividend
payment, or if it faces unexpected regulatory pressures that
threaten its strong cash flow and earnings prospects," the rating
agency said.
HCC CATERERS: Hires Kirby Aisner as Substitute Counsel
------------------------------------------------------
HCC Caterers Inc. and Ripe Inc. seek a bankruptcy court order
authorizing the Debtors to employ Kirby Aisner & Curley LLP as
their substitute attorneys, nunc pro tunc to September 30, 2019.
The Debtors need KAC to perform these tasks:
a) Give advice to the Debtors with respect to their powers and
duties as Debtors-in-Possession and the continued management of
their property and affairs;
b) Negotiate with creditors of the Debtors and work out a plan
of reorganization and take the necessary legal steps in order to
effectuate such a plan including, if need be, negotiations with the
creditors and other parties-in-interest;
c) Prepare the necessary answers, orders, reports and other
legal papers required for the Debtors who seek protection from
their creditors under Chapter 11 of the Bankruptcy Code;
d) Appear before the Bankruptcy Court to protect the interest
of the Debtors and to represent the Debtors in all matters pending
before the Court;
e) Attend meetings and negotiate with representatives of
creditors and other parties in interest;
f) Advise the Debtors in connection with any potential
refinancing of secured debt and any potential sale of the business
and its assets;
g) Represent the Debtors in connection with obtaining
post-petition financing;
h) Take any necessary action to obtain approval of a
disclosure statement and confirmation of a plan of reorganization;
and
i) Perform all other legal services for the Debtors which may
be necessary for the preservation of the Debtors' estates and to
promote the best interests of the Debtors, their creditors and
their estates.
The Debtors have elected to retain KAC because its attorneys have
had extensive experience representing debtors in proceedings before
the Court. KAC's attorneys have been actively involved in many
Chapter 11 cases and have represented many individual and corporate
Chapter 11 debtors.
KAC's 2019 hourly rates for this matter are:
Attorneys, $425 to $475, and
Paraprofessionals, $125.
KAC received a post-petition retainer payment from the Ugell Law
Firm P.C., which previously received the funds from William J.
Murray, 25% shareholder in HCC Caterers Inc., in the amount of
$15,000 on account of legal services, costs and expenses in
conjunction with the filing of this Chapter 11 case.
To the best of the Debtors' knowledge, (i) KAC does not hold or
represent any interest adverse to the Debtors with respect to the
matters for which it is being retained; (ii) KAC is a
"disinterested person" as that phrase is defined in section 101(14)
of the Bankruptcy Code; (iii) neither KAC nor its professionals
have any connection with the Debtors, their estates, or creditors;
and (iv) KAC's employment is necessary and in the best interests of
the Debtors.
The firm may be reached at:
Dawn Kirby, Esq.
KIRBY AISNER & CURLEY LLP
700 Post Road, Suite 237
Scarsdale, NY 10583
Tel: (914) 401-9500
About HCC Caterers, Inc. and Ripe, Inc.
HCC Caterers Inc. offers catering for events, in home functions, or
just about any occasion. HCC Catering Inc. owns and operates X2O,
an award-winning restaurant serving French and Asian-Fusion cuisine
located on a turn of the century Victorian pier overlooking the
Hudson River located at 71 Water Grant Street, Yonkers, New York.
Ripe, Inc. owns and operates Restaurant X, a charming, country
location serving classic American cuisine, and including casual
dining in the Bully Boy Bar. Both Debtors are owned and operated
as part of the Xaviars Restaurant Group, headed by Peter Kelly.
HCC and Ripe sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Lead Case No. 19-23634) on September 12,
2019. In the separate petitions signed by their authorized
representative, Peter X. Kelly, HCC and Ripe each estimated assets
of less than $50,000 and debts of less than $10 million. Ugell Law
Firm P.C. was initially hired to serve as Debtors' counsel. The
Debtors later hired Kirby Aisner & Curley LLP as substitute
counsel. Judge Robert D. Drain is assigned to the case.
HERZ HERZ & REICHLE: Directed to Apply G. Miller as CRO
-------------------------------------------------------
Upon consideration of the Emergency Motion of the Official
Committee of Unsecured Creditors for the Appointment of a Chapter
11 Trustee for Herz, Herz and Reichle, Inc., the Debtors and the
Committee having reached an interim resolution of the Emergency
Motion for the appointment of a chief restructuring officer pending
the Debtors' anticipated sale of substantially all of their assets,
and Frederick Reichle, a principal and officer of the Debtors and a
debtor in a Chapter 13 case, having agreed to the sale of certain
of his assets in connection with the Debtors' sale, the Court
ordered that the Amended Emergency Motion is granted on an interim
basis pending the consummation of the sale of substantially all the
Debtors' assets and the disposition of the proceeds.
The Debtor will apply to have George Miller be named as the Chief
Restructuring Officer and sole Manager of each of the Debtors and
will serve in that capacity through the date of the distribution of
the proceeds of the sale of substantially the Debtors' Timberline
Resort.
The Debtors and the Debtors' management will cede to the CRO and
Manager the management of the Debtors and observe all of their
responsibilities.
The Emergency Amended Motion and the pending motion of the U.S.
Trustee for the conversion or dismissal of the Debtors' Chapter 11
cases will be continued without date pending consummation of the
sale of the Debtors' assets, without prejudice to the Committee's
rights to reschedule those motions for hearings and the Debtors'
rights to object one day prior to the date of the rescheduled
hearings.
About Herz, Herz & Reichle Inc.
Herz, Herz & Reichle, Inc and its subsidiaries are privately held
companies in Davis, W.Va. that operate in the real estate
development industry.
Herz, Herz & Reichle Inc., Long Run Realty, Inc. and Timberline
Four Seasons Resort sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Pa. Case Nos. 19-12771, 19-12773 and
19-12775) on April 30, 2019.
At the time of the filing, Herz disclosed assets of between $1
million and $10 million and liabilities of the same range. Long
Run Realty and Timberline Four each had estimated assets of between
$1 million and $10 million and liabilities of between $1 million
and $10 million.
The cases have been assigned to Judge Jean K. FitzSimon. The
Debtors are represented by Ciardi Ciardi & Astin, P.C.
HIGHLAND CAPITAL: U.S. Trustee Forms 4-Member Committee
-------------------------------------------------------
Andrew Vara, acting U.S. trustee for Region 3, on Oct. 29, 2019,
appointed four creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case of Highland Capital
Management, L.P.
The committee members are:
(1) Redeemer Committee of Highland Crusader Fund
Attn: Eric Felton
731 Pleasant Avenue
Glen Ellyn, IL 60137
Phone: 312-953-0664
Email: ericfelton@me.com
(2) Meta-e Discovery
Attn: Paul McVoy
93 River St.
Milford, CT 06460
Phone: 203-5448323
Email: pmcvoy@metaediscovery.com
(3) UBS Securities LLC and UBS AG London Branch
Attn: Elizabeth Kozlowski
1285 Avenue of the Americas
New York, NY 10019
Phone: 212-713-2000
(4) Acis Capital Management, L.P.
Acis Capital Management GP, LLP
Attn: Joshua Terry
3100 Webb Ave, Suite 203
Dallas, TX 75025
Phone: 214-556-3405
Email: josh@shorewoodmgmt.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Highland Capital
Highland Capital Management LP was founded by James Dondero and
Mark Okada in Dallas in 1993. Highland Capital is the world's
largest non-bank buyer of leveraged loans in 2007. It also manages
collateralized loan obligations. In March 2007, it raised $1
billion to buy distressed loans. Collateralized loan obligations
are created by bundling together loans and repackaging them into
new securities.
Highland Capital Management, L.P., sought Chapter 11 protection
(Bank. D. Del. Case No. 19-12239) on Oct. 16, 2019. The Hon.
Christopher S. Sontchi is the case judge. Highland was estimated
to have $100 million to $500 million in assets and liabilities.
The Debtor's counsel is James E, O'Neill, Esq., at Pachulski Stang
Ziehl & Jones LLP.
HUNT OIL: S&P Cuts ICR to 'B+', Puts Rating on Watch Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Dallas-based
oil and gas exploration and production (E&P) company Hunt Oil Co.
to 'B+' from 'BB-', and placed the rating on CreditWatch with
negative implications.
The downgrade and CreditWatch placement reflects the weakening of
Hunt's liquidity position, in S&P's view, as the refinancing
process of its $1.75 billion unsecured revolving credit facility
due July 2020 is still pending. At the end of June 2019, $560
million was drawn under this facility. Since the beginning of 2018,
Hunt has implemented several measures to simplify its capital
structure, including establishing stand-alone financing for its
Peru and U.S. refining entities. The company is engaged in active
discussions with its bank group regarding the refinancing of its
credit facility.
The CreditWatch placement reflects the likelihood of further
downgrades if the company does not refinance its credit facility
over the next three to six months. S&P believes a downgrade could
still occur if the refinancing is successful, depending on the
terms of the refinancing and its updated assessment of the
company's cash flows and capital spending. In resolving the
CreditWatch, S&P will base its rating on its view on the new
capital structure, the refinancing plan for future debt maturities,
and the company's deleveraging goals amid the backdrop of weak
commodity prices and deteriorating economic conditions.
JPM REALTY: To Present Plan for Confirmation on Dec. 18
-------------------------------------------------------
Honorable Judge Robert N. Opel II of the U.S. Bankruptcy Court for
the Middle District of Pennsylvania approved JPM Realty's
Disclosure Statement and scheduled a Dec. 18, 2019 hearing to
consider confirmation of the JPM's Chapter 11 Plan.
JPM Realty, Inc. will mail the plan or a summary, or summaries
thereof approved by the court, the disclosure statement, and a
ballot conforming to Official Form 314 to creditors, equity
security holders, and other parties in interest, and JPM Realty,
Inc. shall transmit these documents to the United States Trustee.
The last day for submitting written acceptances or rejections of
the Plan is Nov. 21, 2019.
The last day for filing and serving written objections to
confirmation of the Plan is Nov. 21, 2019.
The last day for filing with the Court a tabulation of ballots
accepting or rejecting the plan is Dec. 11, 2019.
The hearing to consider confirmation of the Plan is Dec. 18, 2019,
at 9:30 a.m.
As reported in the TCR, the Debtor filed an amended plan of
reorganization that provides that unsecured claims will be payable
in quarterly in pro-rata cash distributions from future revenues
and contribution/repayment of preference distributions repaid to
Debtor, after the payment of administrative claims and secured
claims over the plan term of 120 months. All interests will be
cancelled, and new stock equal to the prepetition stock will be
issued to the new equity owner in exchange for the sum of $1,000.
A full-text copy of the Amended Disclosure Statement dated August
28, 2019, is available at https://tinyurl.com/y2bd8aoy from
PacerMonitor.com at no charge.
About JPM Realty Inc.
JPM Realty, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Pa. Case No. 18-04511) on Oct. 24,
2018. At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $500,000. Judge
Robert N. Opel II oversees the case. The Debtor tapped C. Stephen
Gurdin Jr., Esq., as its legal counsel.
KIP AND ANDREA: Bankr. Court Takes Back Rabo Derivative Standing
----------------------------------------------------------------
Bankruptcy Judge Shon Hastings granted Kip and Andrea Richards'
Motion to Reconsider or Amend Order Granting Rabo AgriFinance, LLC
Derivative Standing to Prosecute Claims Against Debtor Kip and
Andrea Richards Family Farm & Ranch, LLC.
After numerous hearings and significant delay, the Bankruptcy Court
confirmed the Debtor's Third Amended Plan of Reorganization with
Addendum on Feb. 27, 2017. Among other provisions, the Confirmed
Plan provided that the Debtor would pay general unsecured claims in
full within 30 days of the effective date of the Confirmed Plan.
The Confirmed Plan also provided for prompt payment of priority and
administrative claims. According to Judge Hastings, Rabo offered
no evidence showing that any unsecured claim remained unpaid more
than 30 days after confirmation or more than 30 days after they
were allowed.
The Debtor refused to comply with the terms of the Confirmed Plan
applicable to Rabo, however, leading to extensive litigation.
Rather than pursuing dismissal, Rabo filed pleadings seeking to
enforce the terms of the Confirmed Plan. Following a hearing on
Rabo's Motion to Compel the Debtor to Comply with the Confirmed
Plan, the Court entered an order granting part of the relief Rabo
sought but denying its request to compel the Debtor to sell titled
vehicles. In its oral ruling, the Court explained that the
Confirmed Plan and a related stipulations did not include titled
vehicles among the assets the Debtor agreed to liquidate to pay
Rabo.
Rabo then sought derivative standing to prosecute claims on behalf
of the bankruptcy estate on Jan. 2, 2019. Specifically, it sought
authority to prosecute claims on behalf of the bankruptcy estate
related to the allegedly fraudulent transfer of titled vehicles and
unauthorized use of cash collateral.
Rabo served notice of its motion on the Debtor; Kip and Andrea
Richards; and Larry Richards. An unidentified representative of the
Debtor filed a response advising that the Debtor did not have an
attorney. Following a telephonic hearing on Feb. 27, 2019, the
Court granted the motion for derivative standing without receiving
evidence or substantive argument from Kip Richards or the Debtor
because neither party offered evidence or argument. Less than one
month later, Kip and Andrea Richards filed their Motion to
Reconsider or Amend Order Granting Rabo AgriFinance Derivative
Standing.
Rabo objected, arguing that the Richards received proper notice of
its motion seeking derivative standing and failed to object. It
also argues that the Richards are not interested parties and lack
standing to bring the Motion to Reconsider or Amend.
The Court acknowledged that it erroneously granted derivative
standing. Despite Rabo's arguments, the Bankruptcy Court said it
will reconsider its order granting derivative standing to Rabo
because "standing is an essential and unchanging part of the
case-or-controversy requirement of Article III."
Given that the derivative standing issues raised by Kip and Andrea
Richards relate to the Court's jurisdiction over Rabo's section
544, 549 and 550 claims, and given that it would be a waste of the
parties' resources to proceed with litigation when the Court
erroneously granted derivative standing, the Court found it
appropriate to reconsider its decision -- even though the issue was
raised by parties who either waived it or who are not the proper
parties to assert it.
Rabo cites no authority granting a creditor "derivative standing"
post-confirmation to pursue claims on behalf of the bankruptcy
estate under Chapter 5 of the Bankruptcy Code in a Chapter 11 case
-- absent a specific plan provision retaining the right to bring
such causes of action and transferring them to a representative of
the bankruptcy estate, the Court said.
There are courts that address the right of third parties to bring
causes of action owned by the bankruptcy estate after confirmation
in a Chapter 11 case, but typically they analyze standing to bring
these claims within the framework of 11 U.S.C. section
1123(b)(3)(B). Bridge Assocs. L.L.C. ex rel. Torch Liquidating Tr.
v. Stockstill, 561 F.3d 377, 387 (5th Cir. 2009). Third-party
standing under section 1123(b)(3)(B) is commonly granted to
trustees of liquidating trusts, plan administrators and unsecured
creditors' committees, who were appointed in the confirmed Chapter
11 plan.
The court in In re Stockstill observed that section 1123(b)(3)
allows a chapter 11 plan of reorganization to retain and to
transfer the right to enforce a claim or interest to a debtor, a
trustee or a representative of the estate appointed for such
purpose. In re Stockstill, 561 F.3d at 387. "To show standing based
on a plan's effectuation of such a transfer, the [representative]
must show: (1) that is has been appointed, and (2) that it is a
representative of the estate."
Rabo offers no evidence that granting it derivative standing would
benefit the Debtor's unsecured creditors or the bankruptcy estate.
It argues that the Debtor's attorneys and other professionals must
be paid from unsecured assets, and it claims that it would not be
the only party that benefits from the recovery of fraudulently
transferred assets.
According to the terms of the Confirmed Plan, the Debtor agreed to
pay general unsecured claims in full within 30 days of the
effective date of the Confirmed Plan. The Confirmed Plan provided
for prompt payment of priority and administrative claims as well.
Rabo, the Court held, offered no evidence that the Debtor failed to
pay these creditors or that professional fees were pending at the
time of confirmation. Rabo, who was treated as a secured creditor
in the Confirmed Plan, is the only creditor of the bankruptcy
estate that will benefit from this litigation.
The Court also held that the Debtor did not reserve to a
representative of the bankruptcy estate or a creditor (like Rabo)
the bankruptcy estate's interest in causes of action under Chapter
5 of the Bankruptcy Code or Nebraska law in the Confirmed Plan.
Consequently, the Court may not grant Rabo derivative standing to
pursue a claim that the estate owned before it was dissolved. The
equitable considerations cited by Rabo do not supersede the
authority the Court cited above. Rabo's motion for derivative
standing is denied.
A copy of the Court's Order dated Sept. 30, 2019 is available at
https://bit.ly/2WdiVtO from Leagle.com.
About Kip and Andrea Richards Family Farm
Headquartered in Hayes Center, Nebraska, Kip and Andrea Richards
Family Farm & Ranch, LLC, dba Richards Farm & Ranch, LLC, filed for
Chapter 11 bankruptcy protection (Bankr. D. Neb. Case No. 15-40070)
on Jan. 21, 2015. In the signed by Kip L. Richards, manager, the
Debtor estimated its assets at between $10 million and $50 million
and its debts at between $1 million and $10 million. Judge Shon
Hastings presides over the case. William L. Biggs, Jr., Esq., and
Frederick D. Stehlik, Esq., at Gross & Welch, served as the
Debtors' bankruptcy counsel.
The Bankruptcy Court confirmed the Debtor's Third Amended Plan of
Reorganization with Addendum on Feb. 27, 2017.
KOBA LIMITED: Bankr. Court Okays Portion of Giddens & Gatton Fees
-----------------------------------------------------------------
Giddens & Gatton Law, P.C., Debtor KOBA Limited Partnership former
chapter 11 counsel, filed with the Bankruptcy Court a final fee
application. The Debtor's owner objected, alleging a number of
serious problems with the counsel's conduct.
After a final hearing on the application and the objection,
Bankruptcy Judge David T. Thuma finds and concludes that the
application should be granted for the most part. Except for the
work done on the plan of liquidation and disclosure statement, the
Court finds and concludes that Counsel's services rendered to the
estate were actual and necessary, and that the fees charged for
those services were reasonable.
Attorney Paul Fish testified at the final hearing in support of the
Application. Mr. Fish, qualified as an expert witness, opined that
the fees charged by Counsel were high for a case the size of the
Debtor's, but that there were adequate reasons for the high fees.
Essentially, Mr. Fish testified that the high cost was due to
problems caused by Wilmer Koop. Mr. Koop and his wife, Sally, own
and operate the Debtor.
Mr. Fish gave a number of examples. For the cash collateral orders,
the Debtor's lender insisted on hearing Mr. Koop admit under oath
that he was bound by a cash collateral order. Because of
unspecified pre-petition actions, Mr. Koop's lender did not trust
him. The lack of trust resulted in more time being spent going into
routine document preparation.
Mr. Fish also outlined the issues the case had regarding insurance.
The Debtor's attorneys had to spend a great deal of time trying to
find insurance because Mr. Koop failed to do so. Insurance should
have been a management issue, not a lawyer issue. Due to Mr. Koop's
failure to act, it was necessary for his lawyers to search for and
purchase insurance on his behalf.
Mr. Fish testified that additional challenges included first day
motions regarding utility services (e.g. the electric utility
wanted drop-dead provisions given the history of pre-petition
payments); several expedited motions to evict tenants shortly
before closing of the sale to M&M; and Mr. Koop's interference
during the closing process. At closing, net proceeds went into a
trust account pursuant to a court order. Mr. Koop went to the title
company to try to retrieve part of these funds to repay personal
loans made to the Debtor. Mr. Fish opined that the result of these
problems was higher expense to the estate and that Mr. Koop was the
primary cause of most of them.
The Court finds that Mr. Fish's opinions were credible and
persuasive.
Reviewing the docket in this case and Counsel's fee bills, the
Court concludes that, with one exception, the services rendered by
Counsel to the estate were necessary. Counsel prepared and amended
the Debtor's bankruptcy schedules; employed professionals; obtained
permission to use cash collateral; dealt with utility deposits;
filed operating reports; obtained critical insurance for the
Debtor; worked with the U.S. Trustee's office; negotiated with the
secured lender; worked diligently on the sale of the hotel; got the
sale closed despite substantial interference from Mr. Koop; and
rendered numerous other services needed to achieve a fairly good
result for this difficult case. That Mr. Koop became (extremely)
disenchanted with Counsel is unfortunate, but the Court's overall
impression is that Counsel did a good job in this case under trying
circumstances.
The one area where the Court questions the necessity of the
services is in drafting and pursuing confirmation of a plan and
disclosure statement. Despite Mr. Koop's late protests to the
contrary, a sale of the hotel was always the most likely resolution
of this bankruptcy case, and probably the only possible resolution.
Given that, it is not clear to the Court that it was necessary to
obtain confirmation of a plan of liquidation. It is far cheaper and
faster to sell the estate's assets and then convert the case to
chapter 7, which ultimately was done. Counsel billed $11,049.50
for work on a plan and disclosure statement. The Court concludes
that the work was not necessary.
A copy of the Court's Opinion dated Sept. 30, 2019 is available at
https://bit.ly/2MLBjHi from Leagle.com.
KOBA Limited Partnership, a New Mexico Limited Partnership d/b/a
Kachina Lodge Properties, Debtor, represented by Christopher M.
Gatton , Giddens, Gatton & Jacobus, P.C. & Marcus A. Sedillo ,
Giddens & Gatton Law, P.C.
United States Trustee, U.S. Trustee, represented by Alice Nystel
Page , Office of the U.S. Trustee & Christopher Pattock , Office of
U.S. Trustee.
About KOBA Limited
KOBA Limited Partnership operates the Kachina Lodge located at 413
Paseo del Pueblo Norte Taos, New Mexico 87571. Owned by Dean and
Sally Koop, Kachina Lodge provides all the comforts of classic New
Mexico living combined with modern ammenities.
The company filed for chapter 11 bankruptcy protection (Bankr.
D.N.M. Case No. 18-11104) on May 2, 2018, with estimated assets at
$0 to $50,000 and estimated liabilities at $1 million to $10
million The petition was signed by Wilmer Dean Koop, managing
general partner.
Judge Robert H. Jacobvitz presides over the case.
KRONOS WORLDWIDE: S&P Lowers ICR to 'B'; Outlook Stable
-------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Dallas-based
titatium dioxide (TiO2) pigment maker Kronos Worldwide Inc. to 'B'
from 'B+'. S&P also lowered the issue-level ratings on the secured
notes to 'B+' due to the one-notch downgrade of Kronos. The
recovery rating remains '2'.
The downgrade reflects S&P's view that profitability has weakened
in recent quarters and will remain at similar levels, leading to
credit measures that will stay at levels appropriate for the 'B'
rating. The broader TiO2 industry experienced weakening demand in
the second half of 2018 related to macroeconomic uncertainty and
slowing demand in end markets such as automotive. This led to a
period of inventory destocking among coatings companies, which
slowed their purchasing of TiO2 products. As of the second quarter
of 2019, Kronos paid TiO2 prices that were 8% below levels seen
during the same period of 2018. In addition, gross margins have
declined due to rising feedstock costs, which tend to lag TiO2
price trends by several quarters. The second quarter also saw a
rebound in volumes of 15% relative to the prior year, evidence that
the recent destocking trend has likely run its course.
The stable outlook reflects S&P's expectation that credit measures
at Kronos Worldwide Inc. and its parent company Valhi Inc. will
remain appropriate for the current rating, after taking into
account high volatility in the TiO2 sector. S&P expects that after
elevated EBITDA margins in 2018, they will weaken to the mid-teens
percentage range in 2019, and remain at similar levels over the
next two years, due to macroeconomic uncertainty leading to
softness in pricing, as well as higher feedstock costs. S&P does
not expect a significant deterioration in TiO2 prices due to
limited new capacity coming online across the industry. Over the
next 12 months, the rating agency expects Kronos Worldwide to
maintain weighted average adjusted FFO to debt of over 30%, and
Valhi to maintain adjusted FFO to debt of above 12% on a
weighted-average sustainable basis. S&P expects Kronos will
maintain adequate liquidity and that management will maintain a
prudent approach to funding growth and returns to shareholders.
"We could lower the rating during the next 12 months if
profitability weakened due to a significant weakening in TiO2
prices beyond our expectations, escalation of feedstock costs, or
operational disruptions at Kronos leading to weaker-than-expected
credit measures," S&P said.
S&P said that under this scenario, it would expect EBITDA margins
to fall 300 basis points (bps) below expectations, leading to
weighted-average FFO to debt at Valhi to fall below 12%, without
near-term prospects for improvement. This could also occur if
consolidation in the global paints and coatings market leads to
weakened pricing power, or if Kronos or Valhi uses additional debt
to fund growth plans or returns to shareholders. Each of these
circumstances would lead to credit quality at Valhi weakening,
according to the rating agency.
"We could raise the issuer credit rating by one notch over the next
12 months if TiO2 price rebounds potentially due to competitor
outages while Kronos' operations continue to improve such that FFO
to debt at Valhi exceeds 20% on a weighted average sustained basis.
This could occur as a result of TiO2 price increases, volume gains,
or moderation in feedstock costs, leading to incremental EBITDA
margin expansion at least 300 bps above our expectations," S&P
said, adding that for an upgrade to occur, it would also need to
believe that management will continue to maintain a prudent
approach to funding growth and returns to shareholders.
LANDING AT BRAINTREE: Unsecureds to be Paid 100% in 12 Months
-------------------------------------------------------------
Landing at Braintree submitted a Second Amended Plan of
Reorganization and a Second Amended Disclosure Statement, which
provide that:
* Northeast Bank is a fully secured creditor which is cross
collateralized with the Braintree and Quincy Properties. The
second mortgage securing the Braintree Property was paid in full
with the net proceeds of the sale of the three(3)Quincy Units. The
net proceeds from the sale or foreclosure of the last unit, Unit 2
and parking space, will pay down a portion of the Landing mortgage
balance
* The Debtor has five unsecured creditors which total $2,635.25.
The Debtor shall pay the unsecured creditors 100% over 12 months
through the Plan at $219.61 per month beginning on the Effective
Date.
* The allowed claim of the Town of Braintree for the property
taxes and water and sewer claims will be paid over a period of 46
months at $1,690.80 per month beginning on the Effective Date.
A full-text copy of the Amended Disclosure Statement is available
at https://tinyurl.com/y3ambtvb from PacerMonitor.com at no
charge.
About 10 Homestead Avenue
and Braintree LLC
Landing at Braintree LLC is the owner of all of the 10 separate
condominium units located in a 10-unit building that consists of
the front building of a two-building condominium complex named
Landing at Braintree Condominiums with a property address of
125-141 Commercial Street, Braintree, MA 02184.
10 Homestead Avenue, LLC owns four condominium units located at 10
Homestead Avenue, Quincy, MA.
10 Homestead Avenue, LLC, and its affiliate Landing at Braintree,
LLC, filed voluntary petitions seeking relief under Chapter 11 of
the Bankruptcy Code (Bankr. D. Mass. Case no. 18-14158 and Bankr.
D. Mass. Case No. 18-14159, respectively) on Nov. 6, 2018. In the
petitions signed by William T. Barry, manager, the Debtors
estimated $1 million to $10 million in assets and liabilities.
Judge Frank J. Bailey oversees Case No. 18-14158 while the Hon.
Christopher J. Panos presides over Case No. 18-14159.
The Ann Brennan Law Offices serves as the Debtors' counsel. The
Law Office of Lipman & White, is the special counsel.
MAGEE BENEVOLENT: Trustmark Objects to Disclosure Statement
-----------------------------------------------------------
Trustmark National Bank, a secured creditor, objects to the
adequacy of information contained in the Disclosure Statement of
Magee Benevolent Association.
Trustmark has a lien on substantially all of the Debtor's assets,
including the Hospital building and equipment along with the
accounts receivable of the hospital. Trustmark has filed Claim
Nos. 4, 5 and 14, asserting total claims of $4,360,951.38.
According to Trustmark, the Disclosure Statement does not provide
adequate information under which a hypothetical, reasonable
investor can make an informed decision whether to accept or reject
the plan of reorganization. Specifically, the Disclosure Statement
does not provide adequate information about the methodology used to
determine how the Debtor calculated that Trustmark's secured claim
in the case is only $1,450,000.
A full-text copy of the Objection is available at
https://tinyurl.com/y4k3u2h9 from PacerMonitor.com at no charge.
About Magee General Hospital
Magee General Hospital serves as a general medical and 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 sought Chapter 11 bankruptcy protection
(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.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Sept. 24, 2018. The committee tapped Arnall
Golden Gregory LLP as its legal counsel, and McCraney, Montagnet,
Quin & Noble, PLLC as its local counsel.
MCDERMOTT INTERNATIONAL: S&P Assigns 'CCC' Rating to New Term Loan
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on McDermott
International Inc. to 'CC' from 'CCC' and assigned its 'CCC'
issue-level rating to the company's new superpriority term loan.
The '1' recovery rating reflects S&P's expectation for very high
(90%-100%; rounded estimate: 95%) recovery in the event of a
payment default.
Due to the downgrade and new priority debt, S&P also lowered its
issue-level rating on the company's senior secured term loan to
'CC' from 'CCC+'. The '4' recovery rating reflects S&P's
expectation for average (30%-50%; rounded estimate: 30%) recovery
in the event of a payment default. S&P also lowered its issue-level
rating on the senior unsecured notes to 'C' from 'CC', the '6'
recovery rating is unchanged and reflects the rating agency's
expectation for negligible (0%-10%; rounded estimate: 0%)
recovery.
The downgrade reflects S&P's anticipation of a distressed exchange.
The company recently borrowed the first $550 million of the term
loan and was provided access to $100 million of the letter of
credit facility under its new superpriority credit facility.
However, McDermott indicated it will have additional liquidity
needs over the next few quarters. Under this superpriority credit
agreement, the conditions to receiving the remaining term loan
tranches (B, C, and D totaling $750 million) as well as an
additional $300 million of letter of credit capacity in order to
meet its liquidity needs include an exchange of at least 95% of the
existing senior unsecured notes for notes that no longer pay cash
interest and allow the introduction of additional priority debt in
the capital structure. S&P would view this exchange as a de facto
restructuring.
The negative outlook reflects S&P's expectation that a
restructuring or default is inevitable barring unforeseen positive
developments. If the company engages in a distressed exchange of
the unsecured notes S&P expects to lower its issuer credit rating
to 'SD' (selective default) and the issue-level rating on the
unsecured notes to 'D'.
MCDERMOTT TECHNOLOGY: Moody's Lowers CFR to Caa2
------------------------------------------------
Moody's Investors Service downgraded McDermott Technology, Inc.'s
corporate family rating to Caa2 from B3, its probability of default
rating to Caa2-PD from B3-PD, its senior secured credit facilities
rating to Caa2 from B2, and its senior unsecured notes rating to Ca
from Caa2. At the same time, Moody's assigned a B2 rating to the
company's $1.3 billion term loan, which is part of the
superpriority credit agreement it entered into on October 21, 2019.
McDermott's speculative grade liquidity rating remains SGL-3. This
concludes the review for downgrade initiated on September 19,
2019.
"The downgrade of McDermott's ratings reflects the company's much
higher than anticipated costs to complete a few major problem
projects, which has led to weaker than expected profitability and
higher cash outflows. These issues have necessitated the pursuit of
additional high cost financing to maintain adequate liquidity and
will result in credit metrics remaining very weak." said Michael
Corelli, Moody's Vice President -- Senior Credit Officer and lead
analyst for McDermott Technology (Americas), Inc.
Downgrades:
Issuer: McDermott Technology (Americas), Inc.
Probability of Default Rating, Downgraded to Caa2-PD
from B3-PD
Corporate Family Rating, Downgraded to Caa2 from B3
Senior Secured First Lien Term Loan, Downgraded to
Caa2 (LGD4) from B2 (LGD3)
Senior Secured First Lien Revolving Credit Facility,
Downgraded to Caa2 (LGD4) from B2 (LGD3)
Senior Unsecured Notes, Downgraded to Ca (LGD6) from
Caa2 (LGD5)
Assignments:
Issuer: McDermott Technology (Americas), Inc.
Senior Secured Term Loan, Assigned B2 (LGD2)
Outlook Actions:
Issuer: McDermott Technology (Americas), Inc.
Outlook, Changed To Stable From Rating Under Review
RATINGS RATIONALE
McDermott's Caa2 rating reflects the company's high exposure to
fixed price contracts on large and technically complex projects,
and the recent substantial cost overruns, negative cash flows and
weaker than expected liquidity. The company's decision to combine
with CB&I and its inability to accurately forecast the costs to
complete a few key inherited projects indicate inadequacies in
project scoping and planning. They also indicate weakness in
corporate governance with regards to financial strategy, risk
management and due diligence. McDermott's rating also considers the
risk that further unexpected issues will arise considering the
ongoing charges on fixed price contracts in the E&C sector. The
rating also reflects the high risk of a distressed restructuring
given the company's untenable capital structure. These risks are
somewhat tempered by McDermott's large scale, broad geographic, end
market and customer diversity, strong technical capabilities and
sizeable backlog.
McDermott revised its 2019 earnings guidance for the second time in
three months in October 2019 to reflect modifications of
performance assumptions. According to detailed financial
projections provided in an 8-K filing the company now expects to
generate $474 million in adjusted EBITDA and a cash outflow of
around $1.2 billion versus its prior guidance of adjusted EBITDA of
$725 million and a cash outflow of $640 million. Moody's believes
it is highly uncertain as to whether the company can achieve this
level of profitability considering its recent inability to
accurately forecast cost overruns.
McDermott was unlikely to remain in compliance with its financial
covenants in the second half of 2019 based on its revised
projections and may have triggered an event of default under its
credit agreements, and a potential cross default under the
indenture governing its senior notes. The company's liquidity has
become weak, prompting it to engage legal and financial advisors to
evaluate its options. This evaluation led to the amendment of its
credit and LC agreements, and the establishment of a superpriority
credit agreement consisting of a $1.3 billion term loan facility
and a $400 million letter of credit facility. Tranche A consisting
of $550 million under the term loan and $100 million of letters of
credit became available upon closing on October 21, 2019. The
company must meet certain conditions to receive the additional
capital from tranches B through D, including potentially receiving
consent from its note holders to convert to new senior notes that
will pay PIK interest. If the exchange of the notes is completed as
contemplated it will constitute a distressed exchange, which is an
event of default under Moody's definition of default.
The superpriority facility will address McDermott's near-term
liquidity issues while it evaluates potential long-term solutions
to address its unsustainable capital structure. The company has
abandoned the sale of its industrial storage tank business, but is
pursuing strategic alternatives for its Lummus Technology business
to potentially generate funds to pay down debt. It has received
indications of interest with valuations exceeding $2.5 billion, but
would like to structure a transaction that maintains the EPC
pull-through from Lummus. If the company is unable to complete a
transaction that significantly reduces its outstanding debt or is
unable to achieve a material turnaround in its operating
performance, then its ratings could be further downgraded.
McDermott has a speculative grade liquidity rating of SGL-3 since
it is expected to maintain an adequate liquidity profile with the
contemplated funding. It had $455 million of unrestricted cash and
$568 million of revolver availability as of June 30, 2019. Its
liquidity is expected to trough at a lower level in 4Q19, but
should remain adequate due to the funds provided by the
superpriority facility. However, it provides only a moderate buffer
against potential sizeable additional cost overruns. The company's
liquidity could be bolstered by the sale of Lummus, but this will
reduce its scale, diversity and profitability and the successful
sale of this business remains uncertain.
The stable outlook reflects the expectation the company's operating
performance will trough in 3Q19 and improve thereafter and that it
will maintain an adequate liquidity profile.
The ratings are not likely to experience upward pressure in the
short term considering the uncertainties around achieving a
materially improved operating performance. However, an upgrade is
possible if the company maintains a leverage ratio below 7.0x, an
interest coverage ratio above 0.75x and consistently generates free
cash flow.
Downward rating pressure could develop if weaker than expected
operating results and cash flow result in the leverage ratio being
sustained above 8.5x or there is a reduction in liquidity.
McDermott Technology (Americas), Inc., is an operating subsidiary
of McDermott International, Inc., which is a fully-integrated
provider of engineering, procurement, construction, installation
and technology solutions to the energy industry. Its technologies
and solutions are utilized for offshore, subsea, power, liquefied
natural gas and downstream energy projects around the world. Its
customers include national, major integrated and other oil and gas
companies as well as producers of petrochemicals and electric
power. It operates in most major energy producing regions
throughout the world and executes its projects principally under
fixed-price contracts. The company expects to generate about $9.5
billion in revenues in 2019 and had a backlog of $20.5 billion as
of June 2019, with 39% in North, Central and South America, 32% in
the Middle East and North Africa, 20% in Europe, Africa, Russia and
the Caspian region, 6% in the Asia Pacific region, and 3% related
to its Technology segment.
The principal methodology used in these ratings was Construction
Industry published in March 2017.
MEDNAX INC: S&P Cuts ICR to BB on Rising Leverage; Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
neonatal, anesthesia, and radiology services provider MEDNAX Inc.
to 'BB' from 'BBB-'.
At the same time, S&P is lowering its issue-level ratings on
MEDNAX's unsecured debt to 'BB' from 'BBB-' and assigning it a '4'
recovery rating, which reflects its expectation for average
(30%-50%; rounded estimate 45%) recovery in the event of a payment
default.
The downgrade follows several quarters of soft same-unit net
revenue increases and weaker-than-expected EBITDA due largely to
lower volumes in the company's neonatal business, as well as
persistently high costs associated with physicians and other staff,
leading to elevated leverage. Based on these factors, S&P now
thinks the company will likely sustain average leverage between
3.5x-4.0x over time, up from its previous expectation that leverage
would be below 3.0x.
The stable outlook on MEDNAX reflects S&P's expectation that the
company will continue to grow organically and through acquisitions
and fund them through internally generated cash flow and some
incremental debt issuance. However, S&P believes the company will
maintain leverage between 3.5x and 4x over time, consistent with
its stated financial policies.
S&P could consider a lower rating if it expects the company to
sustain leverage over 4x, most likely as a result of severe
reimbursement rate cuts or a greater-than-expected acquisition
activity.
S&P could raise the rating if it believes the company will likely
sustain debt to EBITDA below 3.5x, and financial policies support
maintaining leverage in the low-3x area.
MITCHELL TOPCO: S&P Affirms 'B-' Issuer Credit Rating
-----------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
Mitchell Topco Holdings Inc. S&P's 'B-' issue-level and '3'
recovery ratings on Mitchell International's first-lien credit
facility and its 'CCC' issue-level and '6' recovery ratings on its
second-lien facilities are unchanged.
S&P believes Mitchell Topco Holdings Inc. (Mitchell) can improve
performance in 2020 and deleverage its balance sheet. It forecasts
the business to improve from a weaker-than-expected performance in
2019. Management stated that several large bookings in its in
casualty solutions segment were pushed into 2020. S&P also expects
EBITDA margins to improve slightly to the low-20% range over the
next few years as cost savings are gradually achieved and as high
investment spending in APD over the past few years returns to
historical levels. Also margins should improve from transaction
costs decreasing. This should result in credit metrics improving
from 2019 levels.
S&P notes that 2019 metrics will appear weaker than what it
initially expected. Mitchell's leverage will remain elevated one
year after its merger with Genex Holdings Inc. The rating agency
forecasts leverage in the high-8x area at the end of 2019, slightly
down from the mid-9x pro forma leverage last year. S&P had
previously expected leverage around the mid-7x by year-end 2019.
Part of the underperformance is due to lower growth than expected
in Mitchell's business segments. The auto physical damage (APD)
segment (approximately 16% of sales) declined about 5% year over
year for the first half of 2019, mainly driven by small customer
losses. S&P believes competition is intensifying with CCC
Information Services Inc.; however, revenue declines may moderate
after 2019 due to Mitchell's recent investments in modernizing its
solutions through a cloud-based offering. Mitchell's casualty
solutions segment revenues have been (approximately 43% of sales)
about flat year over year. The potential for low-single-digit
percent growth was muted by a customer loss in Mitchell's pharmacy
solutions subsegment. Longer term, S&P views this business as a
flat to low-growth revenue generator unless Mitchell can
successfully increase its product and service offerings, including
Genex, to its existing customer base. Organic revenue in Mitchell's
clinical solutions segment, which mostly contains Genex, grew in
the low-single-digits during the first half of 2019.
The stable outlook reflects S&P's expectation that the company's
high recurring business model and good market position will support
positive free operating cash flow to debt in the low-single-digits
over the next 12 months. The rating agency expects the realization
of identified cost savings related to the Genex merger and the
roll-off of one-time transaction costs to help improve leverage to
about 8x over the same period.
"Over the next 12 months, we could lower our rating if the company
experiences integration missteps and delayed synergy realization
such that margins do not improve above 20% and leverage is not on
the path to declining below 8x. A downgrade could also occur
because of persistent customer and market share losses that further
weaken credit metrics such that interest coverage approaches 1x or
annual free operating cash flow after debt service is negative,"
S&P said.
"An upgrade is unlikely over the next 12 months due to Mitchell's
elevated leverage profile. Longer term, we could raise the rating
if the company reduces its adjusted leverage to under 7.5x on a
sustained basis and its free operating cash flow to debt ratio
reaches the mid-single-digit percent area," S&P said. This would
likely happen if the company executes its growth strategy and gains
share across its clinical, casualty, and auto service offerings as
evidenced by above-market average growth and improved
profitability, according to the rating agency.
MJ TRANSPORTATION: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: MJ Transportation Inc.
d/b/a Jim Mies Trucking
d/b/a JMMT Inc
601 W 48th St N
Wichita, KS 67204-2919
Case No.: 19-12092
Business Description: MJ Transportation Inc. is a cargo and
freight company in Wichita, Kansas.
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
District of Kansas (Wichita)
Judge: Hon. Robert E. Nugent
Debtor's Counsel: Mark J. Lazzo, Esq.
MARK J. LAZZO, ATTORNEY AT LAW
3500 N Rock Rd
Building 300, Suite B
Wichita, KS 67226
Tel: (316) 263-6895
Fax: (316) 264-4704
E-mail: mark@lazzolaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by James M. Mies, president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/ksb19-12092.pdf
MULTICULTURAL COMMUNITY: U.S. Trustee Objects to Plan
-----------------------------------------------------
The United States Trustee for Region 21 filed objections to the
final approval of the Disclosure Statement and confirmation of Plan
of Reorganization of Multicultural Community Mental Health Center.
The Debtor filed its disclosure statement and plan of
reorganization on Oct. 1, 2019. On October 10, 2019, the Court
entered an order conditionally approving the Debtor's Disclosure
Statement, and scheduling Confirmation of Debtor’s Plan of
Reorganization for Nov. 5, 2019.
The order entered on Oct. 10, 2019 required the Debtor to serve the
Order, Disclosure Statement, Plan and Ballot not later than Oct. 5,
2019. The U.S. Trustee notes that the Debtor had no means with
which to comply with the Order and questions whether the Debtor
meets the requirements of 11 U.S.C. section 1129(a)(2).
With respect to the Disclosure Statement, the U.S. Trustee notes
that the Debtor fails to provide any discussion regarding the
Debtor's financial activity postpetition other than indicating in
Section VII that the Debtor has attached its monthly operating
reports and future projections and that the Debtor deems the plan
feasible. The Disclosure Statement provides no discussion
regarding the financial information.
According to the U.S. Trustee, the Disclosure Statement fails to
disclose that prior counsel filed the petition and worked on this
Chapter 11 case for approximately 5 months before withdrawing.
Additionally, the Disclosure Statement fails to indicate whether
prior counsel received a retainer and/or if prior counsel intends
to file a fee application in this case.
The Disclosure Statement very briefly mentions the Debtor being
involved in expensive litigation but provides no details or whether
a resolution of the litigation has occurred.
The U.S. Trustee objects to the confirmation of the Debtor's Plan
of Reorganization and requests to be heard at a hearing set on this
matter.
About Multicultural Community
Multicultural Community Mental Health Center, Inc., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Case No. 19-10207) on Jan. 7, 2019. At the time of the
filing, the Debtor had estimated assets of less than $50,000 and
liabilities of less than $50,000. The case has been assigned to
Judge Mindy A. Mora.
MURRAY ENERGY: Case Summary & 50 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Murray Energy Holdings Co.
46226 National Road
St. Clairsville, OH 43950
Business Description: Murray Energy Holdings Co. (together with
its Debtor and non-debtor subsidiaries)
-- http://murrayenergycorp.com-- is a
privately-owned coal company in the United
States, producing approximately 53 million
tons of bituminous coal in 2018, and
employing nearly 5,500 people, including
approximately 2,400 active union members.
Headquartered in St. Clairsville, Ohio,
Murray owns and operates 13 active mines
across the Northern, Central, and Southern
Appalachia Basins (located in Ohio, West
Virginia, Eastern Kentucky, and Alabama),
the Illinois Basin (located in Illinois and
Western Kentucky), the Uintah Basin (located
in Utah), and Colombia, South America.
Murray also manages and operates five
additional mines in the Illinois Basin
through its partnership with non-debtor
Foresight Energy LP.
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
Southern District of Ohio (Columbus)
Ninety-nine affiliates that concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Murray Energy Holdings Co. (Lead Case) 19-56885
The Ohio Valley Coal Company 19-56884
AMCA Coal Leasing, Inc. 19-56886
Central Ohio Coal Company 19-56887
Murray American Coal, Inc. 19-56888
AmCoal Holdings, Inc. 19-56889
Coal Resources Holdings Co. 19-56890
Murray American Energy, Inc. 19-56891
Coal Resources, Inc. 19-56892
American Compliance Coal, Inc. 19-56893
Consolidated Land Company 19-56894
The American Coal Company 19-56895
Murray American Kentucky Towing, Inc. 19-56896
American Energy Corporation 19-56897
Consolidation Coal Company 19-56898
The American Coal Sales Company 19-56899
Murray American Minerals, Inc. 19-56900
American Equipment & Machine, Inc. 19-56901
Corporate Aviation Services, Inc. 19-56902
American Mine Services, Inc. 19-56903
Eighty-Four Mining Company 19-56904
The Franklin County Coal Company 19-56905
Murray American Resources, Inc. 19-56906
American Natural Gas, Inc. 19-56907
Empire Dock, Inc. 19-56908
The Harrison County Coal Company 19-56909
Murray American River Towing, Inc. 19-56910
Energy Resources, Inc. 19-56911
AmericanHocking Energy, Inc. 19-56912
The Marion County Coal Company 19-56913
Murray American Transportation, Inc. 19-56914
Energy Transportation, Inc. 19-56915
AmericanMountaineer Energy, Inc. 19-56916
The Marshall County Coal Company 19-56917
Murray Colombian Resources, LLC 19-56918
Genwal Resources, Inc. 19-56919
AmericanMountaineer Properties, Inc. 19-56920
The McLean County Coal Company 19-56921
Kanawha Transportation Center, Inc. 19-56922
The Meigs County Coal Company 19-56923
Murray Equipment & Machine, Inc. 19-56924
Anchor Longwall and Rebuild, Inc. 19-56925
KenAmerican Resources, Inc. 19-56926
The Monongalia County Coal Company 19-56927
Murray Kentucky Energy Services, Inc. 19-56928
Andalex Resources Management, Inc. 19-56929
Keystone Coal Mining Corporation 19-56930
The Muhlenberg County Coal Company, LLC 19-56931
Andalex Resources, Inc. 19-56932
Murray Kentucky Energy, Inc. 19-56933
The Muskingum County Coal Company 19-56934
Maple Creek Mining, Inc. 19-56935
Avonmore Rail Loading, Inc. 19-56936
The Ohio County Coal Company 19-56937
Maple Creek Processing, Inc. 19-56938
Murray Keystone Processing, Inc. 19-56939
Belmont Coal, Inc. 19-56940
The Ohio Valley Transloading Company 19-56941
McElroy Coal Company 19-56942
The Oklahoma Coal Company 19-56943
Murray South America, Inc. 19-56944
Belmont County Broadcast Studio, Inc. 19-56945
Mill Creek Mining Company 19-56946
The Washington County Coal Company 19-56947
Mon River Towing, Inc. 19-56948
Canterbury Coal Company 19-56949
Murray Utah Energy Services, Inc. 19-56950
The Western Kentucky Coal Company, LLC 19-56951
MonValley Transportation Center, Inc. 19-56952
CCC Land Resources LLC 19-56953
Twin Rivers Towing Company 19-56954
Ohio Energy Transportation, Inc. 19-56955
CCC RCPC LLC 19-56956
UMCO Energy, Inc. 19-56957
Ohio Valley Resources, Inc. 19-56958
UtahAmerican Energy, Inc. 19-56959
West Ridge Resources, Inc. 19-56960
OhioAmerican Energy, Incorporated 19-56961
West Virginia Resources, Inc. 19-56962
Western Kentucky Coal Resources, LLC 19-56963
Oneida Coal Company, Inc. 19-56964
Western Kentucky Consolidated Resources, LLC 19-56965
Western Kentucky Land Holding, LLC 19-56966
PennAmerican Coal L.P. 19-56967
Western Kentucky Rail Loadout, LLC 19-56968
Western Kentucky Resources Financing, LLC 19-56969
PennAmerican Coal, Inc. 19-56970
Western Kentucky Resources, LLC 19-56971
Western Kentucky River Loadout, LLC 19-56972
Pennsylvania Transloading, Inc. 19-56973
Southern Ohio Coal Company 19-56974
Pinski Corp. 19-56975
Spring Church Coal Company 19-56976
Sunburst Resources, Inc. 19-56977
Pleasant Farms, Inc. 19-56978
T D K Coal Sales, Incorporated 19-56979
Premium Coal, Inc. 19-56980
Murray Global Commodities, Inc. 19-56981
Murray Energy Corporation 19-57017
Judge: Hon. John E. Hoffman Jr.
Debtors'
General
Bankruptcy
Counsel: Nicole L. Greenblatt, P.C.
Mark McKane, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: nicole.greenblatt@kirkland.com
mark.mckane@kirkland.com
- and -
Ross M. Kwasteniet, P.C.
Joseph M. Graham, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: ross.kwasteniet@kirkland.com
joe.graham@kirkland.com
Debtors'
Local
Bankruptcy
Counsel: Kim Martin Lewis, Esq.
Alexandra S. Horwitz, Esq.
DINSMORE & SHOHL LLP
255 East Fifth Street, Suite 1900
Cincinnati, Ohio 45202
Tel: (513) 977-8200
Fax: (513) 977-8141
Email: kim.lewis@dinsmore.com
allie.horwitz@dinsmore.com
Debtors'
Investment
Banker: EVERCORE GROUP L.L.C.
Debtors'
Financial
Advisor: ALVAREZ AND MARSAL L.L.C.
Debtors'
Notice &
Claims
Agent: PRIME CLERK LLC
https://cases.primeclerk.com/murrayenergy
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities
(on a consolidated basis): $1 billion to $10 billion
The petitions were signed by Robert D. Moore, president, chief
executive officer, and chief financial officer.
A full-text copy of Murray Energy Holdings' petition is available
for free at:
http://bankrupt.com/misc/ohsb19-56885.pdf
A full-text copy of Murray Energy Corporation's petition is
available for free at:
http://bankrupt.com/misc/ohsb19-57017.pdf
List of Debtors' 50 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Joy Global Trade Debt $31,375,190
Attn: Matt Kulasa
VP, Corporate
Controller & CAO
100 East Wisconsin Ave, Suite 2780
Milwaukee, WI 53201-0551
United States
Tel: 724-873-4337
Fax: 724-873-4309
Email: mkulasa@joyglobal.com
2. Jennmar Corporation Trade Debt $27,712,339
Attn: Michael Calandra
Executive Vice President
258 Kappa Dr.
Pittsburgh, PA 15238
Tel: 412-963-9071
Fax: 304-864-4169
Email: mcalandra@jennmar.com
3. CB Mining, Inc. Trade Debt $11,929,629
Attn: Jay W. Cleveland
Chief Executive Officer
255 Berry Road
Washington, PA 15301
United States
Tel: 866-226-4688
Fax: 724-884-2655
Email: jcleveland@cbmining.com
4. Jeffrey C. Hurt Trade Debt $10,953,579
Attn: Jeffery C. Hurt
29425 Chagrin Blvd, Suite 300
Pepper Pike, OH 44122
United States
Tel: 440-724-1616
Fax: 216-591-0079
5. GMS Mine Repair & Trade Debt $9,355,472
Maintenance
Attn: Ron Petrella
Chief Financial Officer
32 Enterprise Drive
Mountain Lake Park, MD 21550
United States
Tel: 301-334-8186
Fax: 301-334-8698
Email: rpetrella@gmsminerepair.com
6. Coastal Drilling East, LLC Trade Debt $9,212,716
Attn: Scott Kiger, Owner/CEO
130 Meadow Ridge Road, Suite 24
Mt. Morris, PA 15349
United States
Tel: 304-328-5670
Fax: 304-296-1569
Email: skiger@shaftdrillers.com
7. Anderson Excavating LLC Trade Debt $8,873,720
Attn: Rodney Anderson, President
343 Williams Rd
Morgantown, WV 26501
United States
Tel: 304-983-2296
Fax: 304-983-4755
Email: randerson@andersonexcavatingllc.com
8. Industrial Commerical Trade Debt $6,106,521
Residential
Attn: Kenneth Ware, Owner
3351 Hamilton St.
Bellaire, OH 43906
United States
Tel: 844-427-2020
Fax: 740-671-8996
Email: kware@icsupply.com
9. Swanson & Morgantown Trade Debt $5,876,735
Attn: Steve Sangalli
President & CEO
2608 Smithtown Road
Morgantown, WV 26508
United States
Tel: 304-296-8371
Fax: 304-291-5602
Email: ssangalli@swansonindustries.com
10. R M Wilson Co. Trade Debt $5,512,932
Attn: Pat Popicg, President
3434 Market St.
Wheeling, WV 26003
United States
Tel: 304-232-5860
Fax: 304-232-3642
Email: info@rmwilson.com
11. Penn Line Service, Inc. Trade Debt $4,205,604
Attn: David W. Lynn, President
300 Scottdale Avenue
Scottsdale, PA 15683
United States
Tel: 724-887-9110
Fax: 724-887-0545
Email: dave@pennline.com
12. Heritage Cooperative Inc. Trade Debt $3,989,165
Attn: Eric Parthermore
President & CEO
59 Greif Parkway
Delaware, OH 43015
United States
Tel: 937-335-2135
Fax: 330-533-7868
Email: eparthemore@heritagecooperative.com
13. Sandvik Mining & Const. Trade Debt $3,887,547
USA, LLC
Attn: Joe Antonelli
VP of Business
300 Technology Court
Smyrna, GA 30082
United States
Tel: 888-778-3156
Fax: 201-468-0865
Email: jantonelli@sandvik.com
14. United Central Ind. Trade Debt $3,724,838
Supply Co. LLC
Attn: Henry Looney, President
1241 Volunteer Parkway, Suite 1000
Bristol, TN 37620
United States
Tel: 423-0573-7300
Fax: 423-573-7297
Email: hlooney@unitedcentral.net
15. Cintas Corporation Trade Debt $3,539,927
Attn: Scott Farmer
President & CEO
800 Cintas Boulevard
Cincinnati, OH 45262-5737
United States
Tel: 513-573-4020
Fax: 513-573-4130
Email: farmers2@cintas.com
16. Lone Pine Construction, Inc. Trade Debt $3,497,808
Attn: Regis Leach
President & CEO
83 Lusk Road
Bentleyville, PA 15314
United States
Tel: 724-239-6100
Fax: 724-239-6107
Email: rleach@lonepineconst.net
17. Nexgen Industrial Trade Debt $2,885,771
Services, Inc.
Attn: Don Lemley, President
125 Long Street
Rices Landing 15357
United States
Tel: 724-592-5133
Fax: 724-592-5144
Email: dlemley@nexgenindustrial.com
18. Global Mine Service, Inc. Trade Debt $2,821,941
Attn: Craig Watson, President
207 Marine St.
Belle Vernon, PA 15012
United States
Tel: 724-929-8700
Fax: 724-929-5252
Email: cwatson@globalmineservice.com
19. Royal Hydraulic Service & Mfg. Trade Debt $2,774,879
Attn: Gary Morrell, President
2 Washington St.
Cokeburg, PA 15324
United States
Tel: 724-945-6800
Fax: 724-945-5225
Email: mary.johnson@live.com
20. C&A Cutter Head, I Trade Debt $2,755,804
Attn: Paul Campbell, President
212 Kendall Avenue
PO Box 1488
Chilhowie, VA 24319
United States
Tel: 276-646-2004
Fax: 276-646-3999
Email: pcambell@longwall.com
21. Fuchs Lubricants Co. Trade Debt $2,731,982
Attn: Keith Brewer
President & CEO
17050 Lathrop Avenue
Harvey, IL 60426
United States
Tel: 708-333-8900
Fax: 724-852-2351
Email: kbrewer@fuchs.com
22. Davis Electric Company, Inc. Trade Debt $2,498,338
Attn: Mark Tarley, President
309 Mound Avenue
Fairmont, WV 26554
United States
Tel: 304-363-8730
Fax: 304-367-1223
Email: mtarley@daviselectric.net
23. Strata Mine Services, LLC Trade Debt $2,361,984
Attn: President & CEO
8800 Roswell Road, Suite 145
Sandy Springs, GA 30350
United States
Tel: 740-695-6880
Fax: 276-991-1025
Email: mike.berube@strataworldwide.com
24. Warwood Armature Repair Co. Trade Debt $2,314,228
Attn: Bill Thalman
VP of Operations
128 North 7th St.
Wheeling, WV 26003
United States
Tel: 304-277-2550
Fax: 304-277-2917
Email: cthalman@warwoodarmature.com
25. Lincoln Contracting & Trade Debt $2,177,106
Equip Co Inc.
Attn: Harold Walker, President
2478 Lincoln Highway
Stoystown 15563
United States
Tel: 814-629-2151
Fax: 814-629-6588
Email: jih@ceci.com
26. Savage Services Corporation Trade Debt $2,144,454
Attn: Kirk Aubry
President & CEO
901 W. Legacy Center Way
Midvale, UT 84047
United States
Tel: 801-944-6600
Fax: 801-944-6500
Email: kirkr@saveageservices.com
27. Cleveland Brothers Trade Debt $1,977,533
Equipment Co Inc.
Attn: Jay Cleveland
President & CEO
4565 William Penn Highway
Murrysville, PA 15668
United States
Tel: 724-327-1300
Fax: 724-325-8406
Email: jcleveland@clevelandbrothers.com
28. Crown Products & Trade Debt $1,699,615
Services, Inc.
Attn: Doug Simmons
President & CEO
319 S. Gillette Ave Ste 303
Gillette, WY 82716
United States
Tel: 307-696-8164
Fax: 307-696-8174
Email: sdsimmons@crownps.us
29. Memmo Contracting, Inc. Trade Debt $1,619,285
Attn: Deano Memmo, Director
600 Cherry Blossom Way
Bridgesville, PA 15017
United States
Tel: 724-350-2649
Fax: 724-746-4813
Email: memcon@comcast.net
30. Lee Supply Co., Inc. Trade Debt $1,573,976
Attn: Noelle Taucher, Controller
305 1st Street
Charleroi, PA 15022-1427
United States
Tel: 724-483-3543
Fax: 724-483-0577
Email: ntaucher@leesupply.com
31. Eriks North America Inc. Trade Debt $1,531,990
Attn: Ben Mondics, President & CEO
650 Washington Road, Suite 500
Pittsburgh, PA 15228
United States
Tel: 724-213-1166
Fax: 724-344-8342
Email: bmondics@eriksna.com
32. Larrol Supply, Inc. Trade Debt $1,499,240
Attn: Pete Kohut, President
66261 North 26th Road
Bethesda, OH 43719-9748
United States
Tel: 740-782-1324
Fax: 740-782-1326
Email: pkohut@larrolsupply.com
33. Wheeler Machinery Company Trade Debt $1,393,183
Attn: Jeff Ipsen
Chief Financial Officer
4901 2100 S
Salt Lake City, UT 84120
United States
Tel: 801-974-0511
Fax: 801-974-9404
Email: jeffipsen@wheelercat.com
34. Omega Cementing Co. Trade Debt $1,389,105
Attn: Chief Executive Officer
3776 Millborne Rd
Apple Creek, OH 44606
United States
Tel: 330-695-7147
Email: gaddi25@embarqmail.com
35. Harvey Services LLC Trade Debt $1,272,815
Attn: Gary L. Harvey
31 Harvey Lane
Scenery Hill, PA 15360
United States
Tel: 740-391-1885
Fax: 724-632-2440
Email: harveyservicesllc@gmail.com
36. Jabo Supply Corp. Trade Debt $1,259,129
Attn: Jack Bazemore, President
5164 Braley Rd
Huntington, WV 25707
United States
Tel: 304-736-8333
Fax: 304-736-8551
Email: jbazemore@jabosupply.com
37. Ohio Cat Trade Debt $1,249,688
Attn: Dave Blocksom
Chief Financial Officer
3993 E. Royalton Rd
Broadview Heights, OH 44147
United States
Tel: 800-837-6204
Fax: 740-942-4029
Email: dblocksom@ohiocat.com
38. Mechanical & Ceramic Trade Debt $1,246,200
Solutions, Inc.
Attn: Kenneth Sharek, President
730 Superior Street
Carnegie, PA 15106
United States
Tel: 412-429-8991
Fax: 412-429-8766
Email: kenneths@mcs-pa.com
39. Richwood Industries, Inc. Trade Debt $1,235,667
Attn: Kevin Maloy
Chief Operating Officer
707 7th Street West
Hungtington, WV 25704
United States
Tel: 304-525-5436
Fax: 304-525-8018
Email: kmaloy@richwood.com
40. A. Reed Excavating L Trade Debt $1,234,931
Attn: Adam Reed
Chief Executive Officer
52912 State Route 145
Beallsville, OH 43716
United States
Tel: 740-391-4985
Fax: 740-926-1422
41. Elgin Industries Trade Debt $1,232,678
Attn: Peter Walier
Chief Executive Officer
2001 Butterfield
Downers Grove, IL 60515
United States
Tel: 630-434-7200
Fax: 618-268-4850
Email: peter.walier@elginindustries.com
42. R.G. Johnson Company Trade Debt $1,221,678
Attn: Jim Leckie, President
25 South College Street
Washington, PA 15301
United States
Tel: 724-222-6810
Fax: 724-222-6815
43. MAC's Mining Repair Trade Debt $1,215,224
Services, Inc.
Attn: Lynn C. Sitterud, President
225 West 400 South
Hingtonton, UT 84528
United States
Tel: 435-687-2244
Fax: 435-687-2547
Email: lynn@macsmininggrepair.com
44. Irwin Mine & Tunneling Supply Trade Debt $1,144,812
Attn: David Fitzpatrick
Senior Vice President
9953 Broadway St.
Irwin, PA 15642
United States
Tel: 724-864-8900
Fax: 724-864-8909
Email: dfitzpatrick@irwincar.com
45. American Mine Power, Inc. Trade Debt $1,138,652
Attn: Freddie D. Ball, Jr., President
584 Ragland Road
Beckley, WV 25801
United States
Tel: 304-253-6374
Fax: 304-235-6378
46. State Electric Supply Trade Debt $1,127,785
Company
Attn: John Spoor
President & COO
210 2nd Ave
Hungtington, WV 25703
United States
Tel: 304-528-0265
Fax: 304-424-8144
Email: john.spoor@stateelectric.com
47. Date Mining Trade Debt $1,121,544
Attn: Terry Rice, Principal
1400 South Main Street
Harrisburg, IL 62946
United States
Terry Rice
Tel: 618-252-7200
48. UMWA Health and Pension and Undetermined
Retirement Funds Health Benefits
Attn: Dale Stover
Director of Finance
and General Services
2121 K. Street, Suite 350
Washington, DC 20037
United States
Tel: 703-291-2463
Email: dstover@umwafunds.org
49. Raven Energy LLC ("CMT") Breach of Undetermined
Attn: Catherine Steege, Contract
Partner
c/o Jenner Block
353 N. Clark Street
Chicago, IL 60654
United States
Tel: 312-923-2952
Fax: 312-840-7352
Email: csteege@jenner.com
50. Margaret Anne Wickland Litigation Undetermined
as Trusttee for and on
Behalf of an Irrevocable
Trust Established December
23, 1974, and a Revocable
Trust Established August 23,
1985, and Guy Corporation
Attn: Kevin G. Hroblak, Attorney
Whiteford, Taylor & Preston, LLP
Seven Saint Paul Street, Suite 1500
Baltimore, MD 21202
Tel: 410-347-8700
Fax: 410-752-7092
Email: khroblak@wtplaw.com
MURRAY ENERGY: Files Chapter 11 to Facilitate Restructuring
-----------------------------------------------------------
Murray Energy Holdings Co. on Oct. 29, 2019, disclosed that Murray
Energy and certain of its subsidiaries entered into a Restructuring
Support Agreement (the "RSA") with an ad hoc lender group (the "Ad
Hoc Lender Group") holding more than 60% of the approximately $1.7
billion in claims under the Company's Superpriority Credit and
Guaranty Agreement.
To implement the RSA, Murray Energy, including certain of its
subsidiaries, filed voluntary petitions for relief under Chapter 11
of Title 11 of the United States Code in the United States
Bankruptcy Court for the Southern District of Ohio on October 29,
2019.
Voluntary petitions have also been filed for all of the Company's
main operating subsidiaries, including American Energy Corporation,
The Harrison County Coal Company, The Marion County Coal Company,
The Marshall County Coal Company, The Monongalia County Coal
Company, The Ohio County Coal Company, UtahAmerican Energy, Inc.,
Murray South America, Inc., The Muhlenberg County Coal Company and
The Western Kentucky Coal Company, LLC, which operate mining
complexes located in Ohio, West Virginia, Utah, Kentucky and
Colombia.
Foresight Energy LP (NYSE: FELP) and Foresight Energy GP LLC,
including their direct and indirect subsidiaries, as well as Murray
Metallurgical Coal Holdings, LLC, Murray Eagle Mining, LLC, Murray
Alabama Minerals, LLC, Murray Maple Eagle Coal, LLC, Murray Alabama
Coal, LLC and Murray Oak Grove, LLC did not file voluntary
petitions and are not part of the Company's Chapter 11 Cases.
New Money DIP Financing and RSA Terms
The Company intends to finance its operations throughout Chapter 11
with cash on hand and access to a $350 million new money
debtor-in-possession financing facility (the "DIP Facility"),
subject to Bankruptcy Court approval. Lenders party to the RSA
have committed to provide the full amount of the DIP Facility, and
other Lenders under the Company's Superpriority Credit and Guaranty
Agreement will be given the opportunity to provide funding under
the DIP Facility. The proceeds of the DIP Facility will be used to
refinance borrowings under the Company's existing ABL credit
facility and to support ordinary course operations and payments to
employees and suppliers throughout the restructuring process.
Under the RSA, the Ad Hoc Lender Group has agreed to form a new
entity ("Murray NewCo") to serve as a "stalking horse bidder" to
acquire substantially all of the Company's assets by credit bidding
its debt under a Chapter 11 plan, subject to an overbid process.
The RSA contemplates that substantially all of the Company's
prepetition funded debt will be eliminated. The RSA further
contemplates that Mr. Robert E. Murray will be named Chairman of
the Board of Murray NewCo and Mr. Robert D. Moore will be President
and CEO of Murray NewCo. The Company has agreed to comply with
certain milestones related to implementing its Chapter 11 plan and
related sale process under the DIP Facility and RSA.
Robert D. Moore Named President and CEO
In connection with the RSA and DIP Facility, as of the petition
date, Mr. Robert D. Moore has been named President and CEO of
Murray Energy and Murray Energy Corporation.
Mr. Moore said, "We appreciate the support of our lenders for this
process, many of whom have been invested with the Company for a
long time. I am confident the DIP Facility provides the Company
with adequate liquidity to get payments to our valued trade
partners and continue operating in the normal course of business
without any anticipated impact to production levels." Company
founder Mr. Robert E. Murray noted, "Although a bankruptcy filing
is not an easy decision, it became necessary to access liquidity
and best position Murray Energy and its affiliates for the future
of our employees and customers and our long term success."
The Company has filed first day motions with the Bankruptcy Court
that when granted will enable day-to-day operations to continue
uninterrupted.
Kirkland & Ellis LLP is acting as legal counsel to Murray Energy;
Evercore is acting as investment banker; and Alvarez & Marsal is
acting as financial advisor.
Davis Polk & Wardwell LLP is acting as legal counsel and Houlihan
Lokey Capital, Inc. is acting as investment banker to the Ad Hoc
Lender Group.
Additional information, including court filings and other documents
related to the reorganization proceedings, will be available on a
website administered by the Company's claims agent, Prime Clerk
LLC, at https://cases.primeclerk.com/MurrayEnergy.
Murray Energy Posts Information Provided to Certain Lenders and
Bondholders to its Website
The Company has posted certain previously undisclosed material to
its website to satisfy its disclosure obligations under
confidentiality agreements with certain lenders under its
Superpriority Credit and Guaranty Agreement, certain lenders under
its ABL and FILO credit facilities and certain holders of its
second lien notes. Such information can be viewed at the Investors
portion of the Company's website located at
murrayenergycorp.com/investors.
Further inquiries should be directed to media@coalsource.com.
Headquartered in St. Clairsville, Ohio, Murray Energy Corporation
-- http://murrayenergycorp.com/-- is the largest privately owned
coal company in the United States, producing approximately
seventy-six million tons of high quality bituminous coal each year,
and employing nearly 7,000 people in six states, and Colombia,
South America.
Murray Energy now operates fifteen active mines in five regions in
the United States, plus two mines in Colombia, South America.
Murray Energy operates twelve underground longwall mining systems
and forty-two continuous mining units. It operates ten
transloading facilities, and five mining equipment factory and
fabrication facilities.
NABORS INDUSTRIES: S&P Cuts ICR to 'BB-' on Elevated Debt Levels
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Nabors
Industries Ltd. and its issue-level rating on the company's senior
unsecured debt to 'BB-' from 'BB'
The negative outlook reflects the volatile capital market
conditions, muted demand for drilling rigs and services, and
Nabors' need to proactively address its upcoming debt maturities in
2020–2023. Additionally, although the company has maintained a
high utilization rate for its super-spec rigs in the lower 48
market, S&P is uncertain how the demand for its rigs will be
affected by volatile crude oil prices and the capital discipline in
the exploration and production (E&P) industry. Furthermore, S&P's
expectations for the company's discretionary cash flow could weaken
quickly if crude oil prices decline and drilling levels drop.
The downgrade reflects Nabors' elevated debt levels and heavy debt
maturity schedule over the next three years amid a period of
challenging conditions in the capital markets for much of its
industry, as evidenced by the very high yields on non-investment
grade debt in the sector. Although S&P expects the company's
financial measures to remain adequate for the rating over the next
24 months -- with funds from operations (FFO) to debt averaging
between 25% and 30% -- its longer-term credit quality is a concern,
particularly in 2022 when it needs to address the maturity of its
2023 senior notes (about $575 million outstanding). If the
conditions in the capital markets do not improve and Nabors is
forced to refinance its debt at onerous terms, its cash flows and
resulting financial performance could be negatively affected. S&P
expects the company to generate free cash flow of $450 million-$500
million in 2020-2021, building on the about $200 million the rating
agency expects it will generate this year. S&P expects that Nabors
will use its discretionary cash flow, along with availability under
its 2018 credit facility, to address about $1.4 billion of its debt
maturities (including the 2012 credit facility) over this period.
However, the rating agency believes the company will have to raise
external capital to meet its 2023 maturities.
S&P's negative outlook reflects the challenging capital market
conditions, muted demand for drilling rigs and services, and the
need for Nabors to proactively address upcoming maturities between
2020 and 2023. It expects the company to generate discretionary
cash flow of $150 million to $200 million in 2019 and $200 million
to $250 million in 2020, and to use most of this cash for permanent
debt repayment.
"We could lower our ratings on Nabors if its expected discretionary
cash flow weakens such that we no longer anticipate material debt
repayment over the next 12 to 18 months. This could occur if market
conditions deteriorate materially from current levels, likely due
to a decline in oil prices and a commensurate pull-back in spending
by the E&P industry," S&P said, adding that it could lower its
ratings if Nabors increased its capital spending or pursued share
repurchases that materially reduce its discretionary cash flow.
"We could revise our outlook on Nabors to stable if it materially
reduces its debt levels such that we expect its FFO to debt to
remain comfortably above 12% while its debt to EBITDA stays below
5x during a market trough. Over the next 12 months, the company
will have to prove both its ability to generate significant
discretionary cash flow as well as its willingness to repay debt
instead of increasing its capital spending or other uses of cash,"
the rating agency said.
NAVIENT CORP: Moody's Affirms Ba3 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service affirmed Navient Corporation's Ba3 senior
unsecured debt rating, its (P)Ba3 senior unsecured debt shelf
rating and the Ba3 Corporate Family Rating. The outlook remains
stable.
Moody's also has withdrawn the outlooks on Navient's long-term
corporate family and senior unsecured ratings for its own business
reasons.
Affirmations:
Issuer: Navient Corporation
Corporate Family Rating, Affirmed Ba3
Senior Unsecured Shelf, Affirmed (P)Ba3
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3
Outlook Actions:
Issuer: Navient Corporation
Outlook, Remains Stable
RATINGS RATIONALE
The ratings affirmation reflects Moody's assessment of an unchanged
credit profile, which is supported by the company's predictable,
but declining, earnings and the strong asset quality of its $87.9
billion legacy student loan portfolio as of 30 September 2019. It
also takes into account that the company continues to slow the
decline in net income by growing its newly-acquired origination
business.
Net income was $425 million in the first three quarters of 2019 and
unsecured debt outstanding was $10.5 billion as of September 30,
2019. As its income to outstanding unsecured debt is modest, the
company will repay unsecured debt largely from the equity
investment in its loan portfolio. Therefore, Navient's greatest
risk is a significant decline in portfolio cash flow stemming from
increased loan charge-offs or a shrinking investment portfolio.
Moody's estimates that Navient would be able to fully repay
unsecured bondholders in a scenario in which losses double and
prepayment rates quadruple, a credit positive.
Consumer Financial Protection Bureau (CFPB) and state lawsuits
weigh on Moody's assessment of Navient's standalone credit profile.
The CFPB and several state attorneys general have filed civil suits
alleging that Navient violated Federal consumer financial laws in
servicing federal and private student loans. The outcome and timing
for the resolution of these matters is uncertain.
Moody's assesses that as a student loan provider, Navient faces a
high regulatory risk. As student debt service increasingly weighs
on household finances, there have been many proposed measures to
alleviate the burden. A large-scale program to refinance loans
under the Federal Family Education Loan Program (FFELP) and private
student loans with direct loans funded by the US government would
be credit negative for FFELP and private student loan lenders and
servicers, particularly those concentrated in the market, such as
Navient. While repayment at par would result in lenders not
incurring credit losses on forgiven loans, a reduction in lenders'
loan portfolios would deprive lenders of future net interest income
and servicers of future servicing income.
Overall, Moody's considers student loan providers to face high
social risks. The most relevant social risks for these companies
arise from the way they interact with their customers. Social risks
are also particularly high in the area of data security and
customer privacy, which is partly mitigated by sizeable oversight
and technology investments and the companies' long track record of
handling sensitive client data. Fines and reputational damage due
to any type of misconduct is a further social risk.
Governance is highly relevant for Navient. Corporate governance
weaknesses can lead to a deterioration in a company's credit
quality, while governance strengths can benefit its credit profile.
Governance risks are largely internal rather than externally
driven.
The stable outlook is driven by Moody's expectation that the
company's financial performance will remain consistent over the
next 12-18 months.
WHAT COULD CHANGE THE RATINGS UP/DOWN
The ratings could be upgraded if the company executes on its
strategy to build a private loan origination franchise and slows
the decline in its loan portfolio while maintaining current
financial performance, as well as current liquidity and capital
financial policies.
The ratings could be downgraded if 1) the financial performance of
the company deteriorates or 2) the value of the investment
portfolio declines, for example, from rising delinquencies and
defaults on the private student loan portfolio or a large increase
in prepayment speeds on the Federal Family Education Loan Program
portfolio.
Moody's expects the outcome of the lawsuits to be manageable, given
the company's capital levels. However, a downgrade is possible if
the costs of the CFPB and state attorney general lawsuits resulted
in the company's leverage increasing or if the lawsuits impair the
company's franchise, reducing its profitability prospects.
The principal methodology used in these ratings was Finance
Companies published in December 2018.
NELNET INC: Moody's Affirms Ba1 CFR, Outlook Stable
---------------------------------------------------
Moody's Investors Service affirmed Nelnet, Inc.'s Ba1 Corporate
Family Rating and Ba2 (hyb) junior subordinated debt rating. The
rating outlook is stable.
Moody's also has withdrawn the outlook on Nelnet's long-term
corporate family for its own business reasons.
Affirmations:
Issuer: Nelnet, Inc.
Corporate Family Rating, Affirmed Ba1
Junior Subordinated Regular Bond/Debenture, Affirmed Ba2 (hyb)
Outlook Actions:
Issuer: Nelnet, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The ratings affirmation reflects Moody's unchanged view of the
company's credit profile, which is supported by its solid core
earnings generation, low corporate leverage, strong asset profile
and adequate liquidity position. As Nelnet's student loan portfolio
runs off, the company is facing operational and execution risks as
it goes through a strategic transformation.
Last December, the company announced that it will begin issuing
private loans under the U-fi brand. Re-entry into the originations
market will be credit positive if underwriting and pricing are
prudent.
After the 2008/09 financial crisis, the company significantly
reduced its leverage and almost entirely funds its business with
securitizations, warehouse facilities and cash generated from
operations. At 30 June 2019, the company had just $321 million of
corporate debt outstanding, consisting primarily of $260 million
outstanding on its revolver due in 2023, $20.4 million of junior
subordinated hybrid securities, and $40.6 million of unsecured term
loans. The company has disclosed its plans to fully paydown the
balance on its revolver in Q3.
Moody's assesses that as a student loan provider, Nelnet faces a
high regulatory risk. As student debt service increasingly weighs
on household finances, there have been many proposed measures to
alleviate the burden. A large-scale program to refinance loans
under the Federal Family Education Loan Program (FFELP) and private
student loans with direct loans funded by the US government would
be credit negative for FFELP and private student loan lenders and
servicers, particularly those concentrated in the market, such as
Nelnet. While repayment at par would result in lenders not
incurring credit losses on forgiven loans, a reduction in lenders'
loan portfolios would deprive lenders of future net interest income
and servicers of future servicing income.
Overall, Moody's considers student loan providers to face high
social risks. The most relevant social risks for these companies
arise from the way they interact with their customers. Social risks
are also particularly high in the area of data security and
customer privacy, which is partly mitigated by sizeable oversight
and technology investments and the companies' long track record of
handling sensitive client data. Fines and reputational damage due
to any type of misconduct is a further social risk.
Governance is highly relevant for Nelnet. Corporate governance
weaknesses can lead to a deterioration in a company's credit
quality, while governance strengths can benefit its credit profile.
Governance risks are largely internal rather than externally
driven.
The stable outlook is driven by Moody's expectation that the
company's financial performance will remain consistent over the
next 12-18 months.
WHAT COULD CHANGE THE RATINGS UP/DOWN
Given the operational and execution risks associated with its
strategic transformation, an upgrade of the ratings is unlikely
over the next 12-18 months. Positive credit developments include
continued progress in building the scope and prominence of Nelnet's
fee-based businesses, in combination with appropriate business line
and customer diversification.
The ratings could be downgraded if the financial performance of the
company deteriorates, leverage materially increases or if the value
of the investment portfolio declines due, for example, to
increasing prepayment speeds on the FFELP portfolio.
The principal methodology used in these ratings was Finance
Companies published in December 2018.
NGL ENERGY: S&P Alters Outlook to Negative, Affirms 'B+' ICR
------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' long-term issuer credit rating
and 'B+' senior unsecured ratings on midstream energy partnership
NGL Energy Partners LP. However, S&P revised the ratings outlook
to negative from stable to reflect NGL's increased leverage metrics
from these acquisitions.
The outlook revision is underpinned by the aggressive growth over
the last six months in the water solutions business, as the
partnership intends to spend approximately $1.5 billion (inclusive
of the $200 million Mesquite earn-out payments) to finance the
acquisitions of both Mesquite Disposal Unlimited LLC and Hillstone
Environmental Partners LLC.
The negative outlook reflects S&P's expectation of elevated
execution risk in successfully integrating Mesquite and Hillstone.
Additionally, S&P expects an adjusted debt-to-EBITDA ratio that
will increase to 5.5x or more by fiscal year-end 2020, and hover at
5.5x over the subsequent 12-24 months.
"We could lower the rating if NGL sustains adjusted debt to EBITDA
in the 6x area. This could occur if the Mesquite and Hillstone
acquisitions underperform due to lower-than-expected drilling
activity in the Delaware basin. We could also consider further
negative rating action if the company's liquidity deteriorates,"
S&P said.
"We could revise the outlook to stable if the partnership maintains
an adjusted debt-to-EBITDA ratio of about 5x and if the percentage
of fee-based cash flows improves such that its direct exposure to
commodity prices diminishes. This could result from a greater focus
on fixed-fee cash flows, or the use of excess cash flow to pay down
debt," the rating agency said.
OLDE LIBRARY: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
The Office of the U.S. Trustee on Oct. 23, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of Olde Library Office
Complex Partnership.
About Olde Library Office
Complex Partnership
Olde Library Office Complex Partnership sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
19-23767) on Sept. 26, 2019. At the time of the filing, the Debtor
was estimated to have assets of between $100,001 and $500,000 and
liabilities of the same range. The case has been assigned to Judge
Gregory L. Taddonio. The Debtor is represented by Keila Estevez,
Esq., at Bernstein-Burkley, PC.
PJZ TRANSPORT: Balboa Wants Administrative Claim, Opposes Plan
--------------------------------------------------------------
Balboa Capital Corporation, by its attorneys, Barclay Damon LLP,
submitted an opposition to the Disclosure Statement and Plan of
Reorganization of PJZ Transport Corp.
Balboa is a creditor of the Debtor. Less than six months prior to
the Petition Date, Balboa executed and delivered to the Debtor a
certain written Vehicle Financing Agreement No.: 267954-000,
together with various addendums, amendments and schedules, under
the terms of which Balboa loaned the Debtor the principal sum of
$176,047.94 to be used by the Debtor to purchase a new Peterbilt
vehicle.
On Sept. 25, 2019, Balboa filed a proof of claim in the amount of
$194,524.84 (claiming $140,000 as secured).
Prior to the Petition Date, the Debtor made seven payments to
Balboa, and 53 monthly payments remain due. Post-petition, the
last payment received by Balboa was credited toward the monthly
payment due for March 22, 2019. The Debtor has failed to make any
monthly payments thereafter.
On August 16, 2018, the Debtor filed its schedules listing Real
Property at $0.00 and Personal Property at $1,500,813.00
On May 17, 2019, Balboa filed a motion for relief from stay. On
May 30, 2019, the Court entered an order granting relief from the
automatic stay (and waiving the 14 day stay).
On May 30, 2019, Counsel for the Debtor provided contact
information for the surrender of the 2018 Peterbilt, including the
name of the Debtor's principal Peter Zebrowski, his email address
and a telephone number. After numerous unsuccessful attempts to
obtain its collateral through voluntary surrender, on July 26,
2019, Balboa commenced a replevin action.
On Aug. 6, 2019, Balboa's bankruptcy counsel Barclay Damon LLP
wrote to Debtor's Counsel advising that it had initiated a state
court action and need to serve the order of show cause on the
Debtor's principal. Counsel advised that the process server was
not able to serve Mr. Zebrowski and inquired if Debtor's counsel
would accept service.
Prior to Aug. 21, 2019, the return date of the Order to Show Cause,
81 days after the order granting relief from the stay was entered,
the Debtor surrendered the 2018 Peterbilt to Balboa’s agent. On
or about August 25, 2019, the Debtor returned the original title to
Balboa. Thereafter, the state court action was discontinued.
Balboa is entitled to an administrative claim based on several
bases. First, the Debtor benefited from the use of the 2018
Peterbilt during the Chapter 11 case. On the Petition Date and in
the Plan the Debtor describes the 2018 Peterbilt as having a value
of $150,000.00 However, when Balboa’s collateral was returned it
was not operational and essential parts were stripped.
Balboa requests that the Court deny confirmation of the Debtor's
plan pursuant to 11 U.S.C. section 1129 because (1) the Debtor has
not complied with the applicable provisions of this title; (2) the
Plan was not proposed in good faith; (3) the Plan is not feasible;
(4) the Plan is not in the best interest of creditors; (5) the
unimpaired class has not accepted the Debtor's Plan; (6) the Plan
violates the Absolute Priority Rule; (7) the Debtor offers no new
value; and (8) confirmation of this Plan is likely to be followed
by the liquidation of the Debtor.
A full-text copy of the Disclosure Statement is available at
https://tinyurl.com/y3dm5wse from PacerMonitor.com at no charge.
Attorneys for Balboa Capital Corp.:
Beth Ann Bivona, Esq.
John R. Weider, Esq.
The Avant Building, Suite 1200
200 Delaware Avenue
Buffalo, New York 14202
Tel: (716) 856-5500
About PJZ Transport Corp.
PJZ Transport Corp. filed a Chapter 11 bankruptcy petition (Bankr.
W.D.N.Y. Case No. 18-11355) on July 12, 2018. In the petition
signed by Peter J. Zebrowski, president, the Debtor was estimated
to have under $50,000 in assets and between $100,001 to $500,000 in
liabilities. The Debtor hired Baumeister Denz LLP, as counsel.
PRESIDENTS PUB: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The Office of the U.S. Trustee on Oct. 23, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of The Presidents Pub &
Grille, LLC.
About Presidents Pub & Grille
The Presidents Pub & Grille LLC sought protection under Chapter 11
of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 19-21297) on March
29, 2019. At the time of the filing, the Debtor was estimated to
have assets of less than $100,000 and liabilities of less than
$500,000. The case is assigned to Judge Gregory L. Taddonio.
Calaiaro Valencik is the Debtor's legal counsel.
PTC INC: S&P Affirms BB ICR on OnShape Acquisition; Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' issuer credit rating on
U.S.-based provider of industrial design and manufacturing software
and services PTC Inc. and its 'BB' issue-level rating on the $500
million of senior unsecured notes due May 15, 2024.
The rating affirmation follows PTC's announcement of its agreement
to acquire OnShape, a cloud-based computer aided design (CAD)
software provider, for $470 million to be funded by drawing on its
$700 million revolving credit facility (RCF) maturing in September
2023.
S&P expects solid FOCF and rapid deleveraging following the
transaction. The rating affirmation incorporates our expectation
that PTC will continue to generate strong FOCF of well above $200
million and significantly reduce leverage in fiscal 2020 following
the OnShape acquisition, which the rating agency expects will close
in November 2019. In particular, S&P expects FOCF to debt to remain
above 25% and leverage to improve to just below 3x from the low-4x
area within 12 months of transaction close.
The stable outlook reflects S&P's expectation that PTC will
maintain reported FOCF at about $220 million in fiscal 2020 helped
by ARR growth of just above 10% and lower capital expenditures but
offset by higher cash taxes and restructuring-related outflows. The
rating agency also expects EBITDA growth from new multiyear
subscriptions and a successful integration of OnShape to support a
reduction in leverage to just below 3x.
"We could lower the rating if leverage stays above 3x on a
sustained basis, combined with FOCF to debt of below 15%. This
could be due to a slowdown in ARR growth from competitive pressures
or prolonged sales execution issues, as well as EBITDA margins of
below 20%. This could also be the result of further significant
debt-funded acquisitions or aggressive shareholder returns," S&P
said.
"We could raise the rating if leverage stays below 2x on a
sustained basis, combined with FOCF to debt of above 25%. We would
also expect PTC to maintain a financial policy in line with these
metrics, even when accounting for shareholder returns and strategic
acquisitions," the rating agency said.
PUERTO RICO HOSPITAL: Objection to Disclosure Statement
-------------------------------------------------------
Puerto Rico Hospital Supply Inc. and Customed Inc. are slated to
seek approval of the Disclosure Statement in support of their Joint
Plan of Reorganization on Nov. 5, 2019.
Johnson & Johnson International, Inc., which filed Claim No. 70 in
the amount of $7,264,100.66 against PRHS and Claim No. 31 in the
amount of $480,574.61 against Customed, objects to approval of the
Disclosure Statement for these following reasons:
a) The Disclosure Statement fails to provide adequate
information to creditors to enable them to decide whether to accept
or reject the proposed Plan.
b) The Disclosure Statement contains inadequate information
regarding Claims and their treatment.
c) The Disclosure Statement lacks information and provides
inaccurate information in support of Debtor's assets and their
values.
Johnson & Johnson International requests that this Honorable Court
denies the approval of the Disclosure Statement, with any further
relief it deems proper.
A full-text copy of the Disclosure Statement is available at
https://tinyurl.com/y5tg58h5 from PacerMonitor.com at no charge.
About Puerto Rico Hospital Supply
Puerto Rico Hospital Supply, Inc., distributes medical supplies in
Puerto Rico. Customed Inc., founded in 1991, manufactures surgical
appliances and supplies.
Puerto Rico Hospital Supply, Inc. and Customed, Inc., filed
voluntary Chapter 11 petitions (Bankr. D. P.R. Case Nos. 19-01022
and 19-01023) on Feb. 26, 2019. The petitions were signed by Felix
B. Santos, president. The cases are assigned to Judge Enrique S.
Lamoutte Inclan.
At the time of the filing, Puerto Rico Hospital estimated $50
million to $100 million in assets and $10 million to $100 million
in liabilities while Customed, Inc. estimated $10 million to $50
million in both assets and liabilities.
Alexis Fuentes Hernandez, Esq., at Fuentes Law Offices, represents
the Debtors.
PWR INVEST: Seeks Appointment of Examiner
-----------------------------------------
The PWR Invest, LP, et al., filed a conditional motion asking the
Bankruptcy Court to direct the appointment of an examiner in their
Chapter 11 cases as an alternative to the appointment of a Chapter
11 trustee, if and to the extent that the Court deems appointment
of an estate fiduciary to be appropriate.
On September 24, 2019, Chambers Energy Management, LP and Chambers
Energy Capital III, LP, filed the Motion of Chambers Energy
Management, LP for an Order (I) Dismissing the Parent Cases or,
(II) in the Alternative, Granting Relief from the Automatic Stay
or, (III) in the Alternative, Appointing a Trustee, or, (IV) in the
Alternative, Terminating Exclusivity.
On October 18, 2019, the Debtors filed their Response to the
Trustee Motion and a Joint Plan of Reorganization. A hearing on
the Disclosure Statement is currently scheduled for November 26,
2019.
On October 23-24, 2019, the Court held an evidentiary hearing with
respect to the Trustee Motion. At the Hearing, Chambers and the
U.S. Trustee requested that the Court appoint a chapter 11 trustee
in these cases based on allegations that, among other things, the
management structure of the Debtors' would render it difficult for
the Debtors to pursue any potential chapter 5 or fiduciary duty
causes of action.
The Debtors indicated to the Court that, although they do not
believe such Causes of Action exist, if the Court shared the
concerns of Chambers and the U.S. Trustee, the Debtors would agree
to the appointment of an Examiner to act as an estate fiduciary
with special powers to investigate and bring such Causes of Action,
if any.
By this Motion, the Debtors conditionally request entry of the
Proposed Order. If the court does not order the appointment of a
trustee under this section, then at any time before the
confirmation of a plan, on request of a party in interest or the
United States trustee, and after notice and a hearing, the court
shall order the appointment of an examiner. Under the Bankruptcy
Code, the Debtors are included in the definition of parties in
interest who could make such a request.
According to the Debtors, the Bankruptcy Code contemplates that if
an examiner is appointed, he or she will investigate the very
Causes of Action that Chambers and the U.S. Trustee allege may
exist as cited in the Debtors' Response to the Trustee Motion, and
acknowledged by the U.S. Trustee at the hearing, the appointment of
a chapter 11 trustee is a draconian remedy and should only be
utilized in rare cases.
The evidence introduced at the Hearing makes clear that there has
been no fraud, dishonesty, incompetence, or gross mismanagement of
the affairs of the debtor by current management. Rather, Chambers
and the U.S. Trustee rely on the presence of potential perceived
conflicts to justify their request for a chapter 11 trustee to be
appointed.
Accordingly, the Debtors request that the Court (i) direct the U.S.
Trustee to appoint an examiner in these cases, if and to the extent
that the Court deems appointment of an estate fiduciary to be
appropriate.
Counsel for Debtors:
David M. Powlen, Esq.
Kevin G. Collins, Esq.
BARNES & THORNBURG LLP
1000 N. West Street, Suite 1500
Wilmington, DE 19801
Telephone: (302) 300-3434
Facsimile: (302) 300-3456
Email: david.powlen@btlaw.com
kevin.collins@btlaw.com
-- and --
Gerrit M. Pronske, Esq.
Jason P. Kathman, Esq.
Brandon J. Tittle, Esq.
PRONSKE & KATHMAN, P.C.
2701 Dallas Parkway, Suite 590
Plano, TX 75093
Telephone: (214) 658-6500
Facsimile: (214) 658-6509
Email: gpronske@pronskepc.com
jkathman@pronskepc.com
btittle@pronskepc.com
About PWR Invest
PWR Invest, LP, and debtor affiliates Oklahoma Merge, LP; Oklahoma
Merge Midstream, LP; Oklahoma River Basin, LP; and PWR Oil & Gas
General Partners, Inc., operate and develop oil and gas properties
predominantly in Oklahoma.
On May 22, 2019, PWR Oil & Gas General Partners, Inc., filed a
Chapter 11 petition (Bankr. D. Del.). On May 23, 2019, PWR
Invest, LP, also sought for Chapter 11 protection. On Aug. 12,
2019, Oklahoma Merge, LP, Oklahoma River Basin, LP, and Oklahoma
Merge Midstream, LP, each filed Chapter 11 petitions. The
Debtors' Chapter 11 cases are jointly administered under Case No.
19-11164, with that of PWR Invest, LP, as the lead case.
As of its Petition Date, PWR Invest estimated assets at $50 million
to $100 million, and liabilities at $50 million to $100 million.
Pronske & Kathman, P.C., and Barnes & Thornburg LLP serve as the
Debtors' counsel. FTI Consulting, Inc., is the Debtors'
financial advisor.
R & S ST. ROSE: Dist. Court Affirms Ruling on Rose Lenders' Claim
-----------------------------------------------------------------
In the consolidated cases captioned BRANCH BANKING AND TRUST
COMPANY, Appellant, v. R & S ST. ROSE LENDERS, LLC; R & S ST. ROSE,
LLC; R & S INVESTMENT GROUP, LLC; COMMONWEALTH LAND TITLE INSURANCE
COMPANY; THE CREDITOR GROUP; and THE U.S. TRUSTEE, Appellees. AND
RELATED APPEALS, Case No. 2:17-cv-01251-MMD, Member Cases
2:17-cv-1298-MMD & 2:17-cv-1301-MMD (D. Nev.), BB&T and
Commonwealth appeal the Bankruptcy Court's order overruling BB&T's
Objection to R&S St. Rose Lenders' proof of claim. BB&T separately
appeals from the Bankruptcy Court's Memorandum Decision/Judgment in
the adversary proceeding, which determined the amount of Lenders'
claim filed against Rose.
Upon review of the facts presented, Chief District Judge Miranda M.
Du affirms both the order and the judgment.
Rose and Lenders were both formed in 2005. Each had the same
members: Forouzan, Inc., and RPN LLC, which were respectively owned
by Saiid Forouzan Rad and R. Phillip Nourafchan. Rose was
established to land-bank real property in Henderson, Nevada with
the intent of selling the Property to Centex Homes. Lenders was
formed for the purpose of borrowing funds from individual lenders
and then loaning those same funds to Rose.
Two umbrella issues are presented in these consolidated appeals:
whether the Bankruptcy Court erred in (1) finding that Lenders
funded Lenders' Promissory Note; and/or (2) finding the balance
owed on Lenders' Promissory Note.
As to the second issue -- of the amount owed -- the following
sub-issues are presented: whether the Bankruptcy Court erred in (a)
relying on the testimony of Lender's expert Thomas Neches; or (b)
its consideration of the noted "substitute lenders/loans" -- and by
extension allowing for recovery by substitute lenders. The latter
sub-issue goes to BB&T's contention that Lenders engaged in a
"Ponzi scheme."
B&T and Commonwealth contend that by including the "substitute
funds" in the balance, the Bankruptcy Court improperly ignored
Nevada law -- NRS section 104.3101.3605 -- concerning the proper
method for transferring the right to payment under a negotiable
instrument. Relying on NRS section 104.3301, BB&T and Commonwealth
specifically argue that Nevada law supports a conclusion that there
must be documentation showing "an intent of one lender to replace
another lender or an assignment of the earlier in time promissory
note to the new 'substitute lender.'"
Lenders responds that BB&T and Commonwealth effectively ask the
Court to ignore the parties' intent.
The District Court is unpersuaded by BB&T and Commonwealth's
contention. The Court finds that NRS section 104.3301 ("Person
entitled to enforce instrument") is not applicable in the dispute.
As the Bankruptcy Court recognized, "[n]egotiation or transfer of
the prior promissory notes was unnecessary . . . because there is
no dispute that the subsequent individual lenders received separate
notes from Lenders." In short, this is not a situation where one
party is trying to enforce a note purportedly belonging to another.
Moreover, the evidence presented at trial supports an intention to
substitute prior loans with later loans. This evidence includes
Rad's testimony about the substitutions and similar uncontradicted
testimony by Nourafchan on remand. The Bankruptcy Court cites to
Nourafchan's testimony "without contradiction that after [Rose]
acquired the Property, Lenders received additional funds from
individual lenders that `facilitated the substitution of certain
individual lenders to new lenders who wished to earn interest from
the Debtor.'" Additionally, the relevant general ledger reflected
that certain loans were substituted. This evidence cumulatively
supports the Bankruptcy Court's finding that sufficient evidence
established the substitution of funds used to acquire the Property
and thus it was proper for Neches to include such substitute funds
in the balance owed on Lenders' Promissory Note.
BB&T and Commonwealth also maintain that the substituting of funds
from later-in-time "investors" to pay off first-in-time "investors"
amounts to a Ponzi scheme and the Bankruptcy Court erred in
concluding otherwise.
Lenders argues that BB&T and Commonwealth can produce no evidence
to support such a claim.
The District Court agrees with the Bankruptcy Court, saying there
is simply no evidence that the first-in-time-lenders received the
repayment of their loan from Lenders in the guise of profits or
that the repayment of those loans resulted in "artificially high"
returns. In short, there is no evidence to support a conclusion
that the Bankruptcy Court erred in finding the absence of a Ponzi
scheme.
As an extension of their Ponzi scheme theory, BB&T and Commonwealth
insist that the inclusion of later funds into the balance owed
improperly rewards "substitute lenders" for participating in such a
scheme and thus the inclusion of such funds was in error. Because
it concurs that BB&T and Commonwealth fail to establish that such a
scheme exists, the District Court concludes that the Bankruptcy
Court did not commit error--that its decision will result in
recovery by the "substitute lenders."
A copy of the District Court's Order dated Sept. 30, 2019 is
available at https://bit.ly/32wJ7Cd from Leagle.com.
Branch Banking and Trust Company, Successor in Interest to FDIC as
Receiver of, Appellant, represented by J. Stephen Peek --
speek@hollandhart.com -- Holland & Hart, LLP, Joseph S. Kistler,
Hutchison & Steffen & Joseph G. Went -- jwent@hollandhart.com --
Holland & Hart LLP.
R&S St. Rose, LLC, Appellee, represented by Samuel A. Schwartz --
saschwartz@bhfs.com -- Brownstein Hyatt Farber Schreck, LLP.
R&S St. Rose Lenders, LLC & R&S Investment Group LLC, from,
Appellees, represented by Nedda Ghandi , Ghandi Deeter Blackham &
David J. Merrill , David J. Merrill, P.C.
About R & S St. Rose Lenders
Las Vegas, Nevada-based R & S St. Rose Lenders, LLC, filed for
Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 11-14973)
on April 4, 2011. Rose Lenders disclosed $12,041,574 in assets and
$24,502,319 in liabilities in its schedules, as amended. Its
primary asset consists of its claim in the scheduled amount of $12
million against R&S St. Rose, LLC.
Affiliate R & S St. Rose, LLC, filed a separate Chapter 11 petition
(Bankr. D. Nev. Case No. 11-14974) on April 4, 2011. According to
its schedules, it disclosed $16,821,500 in total assets and
$48,293,866 in total debts. Its primary asset consists of a fee
simple interest in approximately 38 acres of raw land located in
Henderson, Nevada.
R & S ST Rose Lenders' bankruptcy case was assigned to Judge Mike
K. Nakagawa.
R&S St. Rose Lenders tapped Nedda Ghandi, Esq., of Ghandi Law
Offices as bankruptcy counsel. The Debtor previously engaged Larson
& Larson as counsel but the application was opposed by the U.S.
Trustee, prompting the withdrawal.
Commonwealth Land Title Insurance Company was represented in the
case by Scott E. Gizer, Esq., at Early Sullivan Wright Gizer &
McRae LLP, in Las Vegas, Nevada, and Mary C.G. Kaufman, Esq., at
Early Sullivan Wright Gizer & McRae LLP, in Los Angeles,
California.
Branch Banking and Trust Company was represented by J. Stephen
Peek, Esq., and Joseph G. Went, Esq., at Holland & Hart LLP, in Las
Vegas, Nevada.
RACKSPACE HOSTING: S&P Lowers ICR to 'B'; Outlook Stable
--------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on information
technology (IT) service provider Rackspace Hosting Inc. to 'B' from
'B+'. S&P also lowered its issue-level ratings one notch each. The
senior secured debt rating is 'B+' with a '2' recovery rating
(70%-90%; rounded estimate: 80%) and the senior unsecured debt
rating is 'B-' with a '5' recovery rating (10%-30%; rounded
estimate: 15%).
The downgrade reflects S&P's view that Rackspace faces greater
execution risks as it continues its multiyear business
transformation. Uncertainty remains on when the overall business
will return to growth.
The company faced organic revenue pressure over the last few years
as managed hosting clients have churned to adopt various public and
private clouds and as Rackspace's cloud solution, OpenStack,
continues to lose customers. S&P estimates that the managed hosting
and private cloud segment will decline about 5% in 2019 to $1.5
billion and for OpenStack to decline 20% to $286 million. S&P also
thinks the company faces greater execution risks due to high
management turnover as the new leadership (since early 2019)
embarks on a series of revenue and cost related transformation
projects and as sales teams attempt to convert existing managed
hosting clients who may churn in the future to other Rackspace
offerings over the near-term.
The stable outlook reflects S&P's view that Rackspace will display
moderating revenue declines over the next few years, as churn in
the managed hosting and private cloud segment declines and private
cloud becomes a larger contributor to that segment. While S&P
forecasts the OpenStack segment to continue declining 10%-15% after
2019, it notes that continued strong momentum in the company's
managed public cloud services and apps businesses will contribute
to slight revenue growth in 2020.
While S&P foresees some margin pressure as the company expands its
lower-margin business, the rating agency expects management to hold
S&P-adjusted EBITDA margins in at least the mid-20% area from a
combination of cost-saving plans and revenue stability measures in
its managed hosting and private cloud business. The rating agency
forecasts leverage to remain in the high-6x to low-7x range and
FOCF in the 3%-4% range of debt in 2020.
"We could lower the rating over the next year if execution missteps
in management's strategy accelerate revenue declines because of
higher customer churn. From a financial metrics standpoint, we
could lower the rating with expected annual FOCF to debt of 0%-3%,
leverage above 7x, or EBITDA interest coverage below 2x," S&P
said.
"While not likely over the next year, we could raise the rating
with business improvements such that new bookings exceed churn, a
stabilized or increased EBITDA margin profile, and if organic
revenue growth appears to be sustained. This would entail sustained
leverage below 5x and FOCF to debt maintained above 5%. A public
commitment from Rackspace's financial sponsor to maintain S&P
Global Ratings-adjusted leverage below 5x would also be viewed
positively," the rating agency said.
RESIDEO TECHNOLOGIES: S&P Lowers ICR to 'BB'; Outlook Negative
--------------------------------------------------------------
S&P Global Ratings downgraded Austin, Texas-based Resideo
Technologies Inc. (parent holding company of debt issuing
subsidiary Resideo Funding Inc.) to 'BB' from 'BB+'. The outlook is
negative.
At the same time, S&P affirmed its 'BBB-' issue-level ratings on
the company's secured term loan and lowered its issue-level ratings
on the company's senior unsecured notes to 'BB' from 'BB+' in
conjunction with the downgrade. S&P previously capped the secured
debt ratings at 'BBB-' (one notch above the previous issuer credit
rating) in accordance with its recovery criteria.
The negative outlook reflects the one-in-three potential for S&P to
lower the ratings within the next year if it becomes apparent that
Resideo cannot improve its profitability and reduce debt leverage
within the next year or if its liquidity weakens. At the current
rating, S&P Global Ratings' expects the company to return its
adjusted debt-to-EBITDA ratio to the low end of the 4x-5x range.
However, continued sluggishness in U.S. residential spending,
inability to enhance value from its product portfolio while
reducing operational costs, or inability to adapt to regulatory
changes in certain market segments could slow or prevent that
progress from occurring. Given the cloudier operating environment
for Resideo, S&P also expects financial discipline on the part of
management to keep credit measures from straying from the path of
improvement. S&P's leverage figure includes adjustments to
incorporate anticipated future environmental indemnification
payments to former parent Honeywell.
S&P said it could lower the ratings on Resideo if the company's
adjusted debt-to-EBITDA ratio approaches 5x and stays there
consistently, or if there is sustained deterioration in the
operating environment (i.e., long-term adverse macroeconomic
conditions or regulatory changes) or company-specific challenges
that bring about long-term chronic EBITDA margin degradation or
operational volatility.
"We could revise the outlook to stable provided that Resideo
obtains an amendment or waiver to its credit facilities that
provides for sufficient covenant headroom through the next year, as
well as realizes benefits from operational initiatives to improve
its adjusted EBITDA margins to greater than 12% consistently, with
the result that the adjusted debt-to-EBITDA ratio contracts to and
stays within the lower end of the 4x-5x range," the rating agency
said.
RESTLAND MEMORIAL: Plan Confirmation Hearing on Dec. 5
------------------------------------------------------
The Honorable Judge Gregory L. Taddonio of the U.S. Bankruptcy
Court for the Western District of Pennsylvania conditionally
approved the Disclosure Statement of Restland Memorial Parks on
Oct. 17, 2019, and scheduled a Dec. 5 hearing to consider
confirmation of the Debtor's Amended Chapter 11 Small Business
Liquidating Plan.
On or before Nov. 27, 2019, the Debtor(s) shall mail a copy of the
Conditional Order, the Disclosure Statement, the Plan Summary, the
Plan and Ballot (Official Form 14) to all creditors, equity
security holders, the U.S. Trustee and other parties in interest
and file a Certificate of Service.
On or before Nov. 27, 2019, all Ballots accepting or rejecting the
Plan will be served on the attorney for the Debtor.
On or before Nov. 27, 2019, all Objections to the Disclosure
Statement pursuant to Fed.R.Bankr.P. 3017.1(c)(2), and/or
Objections to Plan confirmation pursuant to
Fed.R.Bankr.P.3020(b)(1), shall be filed.
Dec. 5, 2019, at 11:00 a.m. is the hearing to consider final
approval of the Disclosure Statement and confirmation of the Plan.
The Debtor's Plan provides that upon the closing of the sale, the
equity interest in the Debtor will transfer to the successful
purchaser of the real estate. Allowed unsecured claims will be
paid once all other obligations are paid. A copy of the Disclosure
Statement dated Sept. 30, 2019, is available at
https://is.gd/Lu4UG6 from PacerMonitor.com free of charge.
About Restland Memorial Parks
Restland Memorial Parks, Inc., offers cemetery pre-need programs.
Restland Memorial Parks sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 18-24151) on Oct. 24,
2018. At the time of the filing, the Debtor was estimated to have
assets of $1 million to $10 million and liabilities of less than $1
million. The Debtor tapped Donald R. Calaiaro, Esq., at Calaiaro
Valencik as its legal counsel.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case.
RRQ LLC: Unsecured Creditors Out of Money Under Plan
----------------------------------------------------
RRQ, LLC. filed an Amended Plan of Reorganization and Amended
Disclosure Statement on Oct. 22, 2019.
The Debtor says that a $100,0000 DIP financing will help fund plan
payments. RRQ will distribute the $100,000 to secured creditor The
Estate of Sylvester H. Cook, pay the administration cost of the
bankruptcy, including the U.S. Trustee fees, attorney fees, and any
other allowable costs and fees. The secured creditor will not be
paid in full. There will be no distribution of any payments to any
unsecured creditor. Insiders Allan J. NOwicki and Dianne M.
Nowicki will not receive any monetary distribution.
RRQ is a Limited Liability Company formed on April 24, 2013 in
Erwinna, Bucks County, Pennsylvania. On Jan. 16, 2013, RRQ's
general manager, Allan J. Nowicki, entered an agreement of sale
with the Estate of Sylvester H. Cook for the purchase of a 56-acre
land in Tinicum Township, Bucks County, Upper Black Eddy,
Pennsylvania in the amount of $425,000. At settlement, RRQ
tendered $50,000 towards the purchase price of $425,000. The
balance of the consideration was in the form of a mortgage and note
in the amount of $375,000 from the Estate of Sylvester H. Cook.
From May 7, 2014 to June 3, 2016, RRQ paid a total of $152,482.07,
for which the money was loaned to RRQ.
The purchase of property was and remains under and subject to a
lease, together with multiple addendums, for the mining of sand and
gravel to Delaware Valley Landscape Stone, Inc. The original
lease commenced on June 1, 1977 between Sylvester H. Cook and
Delaware, and modified in October 1981, October 1983, April 1987,
and May 1987, which allowed the renewal of the lease every five
years.
Delaware Valley then filed a lawsuit on Sept. 18, 2013 against
Allan J. Nowicki and RRQ, which sought an injunctive relief against
the Defendants and a Declaratory Judgment for the lease being
renewable every five years. On July 2018, the Court decided the
case in favor of Delaware Valley Landscape Stone.
Delaware Valley pays $325 per month or $3,900 per year to RRQ,
which is their only income.
The fair value of the 56-acre property -- $20,000 -- is less than
the value of the secured creditors, and its value can only be
increased by successfully litigating the lease with Delaware
Valley.
Allan J. Nowicki will continue to litigate his claims of Fraud,
Fraudulent Misrepresentation and Unjust Enrichment against the
Estate of Sylvester H. Cook, Herbert A. Cook and Stewart H. Cook.
The Bankruptcy Court for the Eastern District of Pennsylvania has
entered an Order and an Amended Order as per the interest to be
paid by RRQ to the Estate of Sylvester H. Cook. RRQ has complied
with the Order.
RRQ then believes and avers that Debtor-in-Possession Financing can
be the financial instrument to complete the Plan of Reorganization.
The Debtor has received a conditional commitment to enter into a
DIP financing in the amount of $100,000. JN Forest Products is the
DIP lender and is owned and operated by Jonathan and Rose Nowicki.
A full-text copy of the Amended Disclosure Statement is now
available at https://tinyurl.com/y6lsbact from PacerMonitor.com at
no charge.
About RRQ, LLC
RRQ, LLC, filed a Chapter 11 Petition (Bankr. E.D. Pa. Case No.
19-13045) on May 9, 2019, and is represented by Stuart A.
Eisenberg, Esq., and Carol McCullough, Esq., at McCullough
Eisenberg, LLC.
SADLER CONSTRUCTION: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------------
The Office of the U.S. Trustee on Oct. 23, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of Sadler Construction
Company, Inc.
About Sadler Construction
Sadler Construction Company, Inc., is a full-service, general
contractor with its primary business offices located at 536 Bash
Road in Indiana, Pa.
Sadler Construction Company sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Pa. Case No. 19-70571) on Sept.
13, 2019. At the time of the filing, the Debtor was estimated to
have assets of between $100,001 and $500,000 and liabilities of
between $500,001 and $1 million. Robleto Kuruce, PLLC, is the
Debtor's counsel.
SARACEN DEVELOPMENT: S&P Assigns 'B-' ICR; Outlook Positive
-----------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
Saracen Development LLC (Saracen) and its 'B-' issue-level rating
and '3' recovery rating to the $285 million of senior secured notes
proposed by the company.
Saracen will use the proceeds to finance the construction of
Saracen Casino Resort, a new casino in Pine Bluff, Ark., which is
expected to open in June 2020.
S&P said the 'B-' issuer credit rating on Saracen reflects the
risks associated with developing and ramping up new gaming
operations, including uncertainty over the breadth and depth of the
target gaming market, the need to build a customer database from
scratch, some construction risk, future economic uncertainty, and
the need to service relatively high-interest construction loans.
"The positive outlook reflects our belief that Saracen will open on
schedule and have sufficient liquidity to cover the eight-month
construction period and pay interest for seven months post-opening
of the casino. We also believe the property will generate enough
cash flow during the first full year of operations to facilitate
significant deleveraging," S&P said.
"We are unlikely to consider an upgrade until the casino opens and
we can observe its operating performance. We could raise the rating
one notch if the casino opens on time and meets our operating
expectations such that it sustains debt to EBITDA under 5x and
EBITDA coverage of total interest above 2x, incorporating future
growth investments and potential additional competition," the
rating agency said. S&P's issuer credit rating on Saracen is also
currently capped by its issuer credit rating on DDA given its
strategic importance to DDA's growth objectives and ownership of
Saracen.
"While a downgrade is less likely given Saracen's 15-month interest
reserve and its relatively short construction timeline, we could
revise the outlook to stable or lower the rating if there are
construction challenges that delay the project or lead to
significant cost overruns, or if operating results upon opening are
significantly weaker than we expect," S&P said. Additionally, if
the economic environment deteriorates during the eight-month
construction period and S&P expects a slower ramp-up in operating
performance such that it no longer forecasts leverage below 5x in
fiscal 2021, the rating agency could revise the outlook.
SBA COMMUNICATIONS: Moody's Raises CFR to Ba3, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service upgraded all ratings of SBA
Communications Corporation and its operating subsidiary, SBA Senior
Finance II, LLC, by one notch, including SBAC's corporate family
rating to Ba3 from B1. Concurrently, Moody's assigned SGL-1
speculative grade liquidity rating to SBAC, indicating very strong
liquidity. The rating outlook is stable.
The following ratings were upgraded:
Issuer: SBA Communications Corporation
Corporate Family Rating, upgraded to Ba3 from B1;
Senior Unsecured Debt Rating, upgraded to B1 from B2;
Issuer: SBA Senior Finance II, LLC
Senior Secured Bank Credit Facility, upgraded to Ba3 from B1
The following rating was assigned:
Issuer: SBA Communications Corporation
Speculative Grade Liquidity Rating, assigned SGL-1
Outlook action
Issuer: SBA Communications Corporation
Outlook remains stable
Issuer: SBA Senior Finance II, LLC
Outlook remains stable
The rating upgrade reflects SBAC's improved credit profile
supported by lower leverage levels and robust operating
performance, which Moody's expects to continue in the next 12-18
months. SBAC reduced its Net Debt/EBITDA to approximately 7.8x for
LTM Q3 2019 from 8.5x for fiscal 2017, while operating with
effective leverage of approximately 80% (all metrics calculated
using Moody's accounting adjustments), meeting the thresholds that
Moody's had previously indicated would result in positive rating
momentum. The rating action incorporates Moody's view that SBAC's
cash flows will continue to benefit from visible revenue growth
from a significant backlog of contractual rents as well as robust
and growing wireless carrier demand for tower lease space.
As the third largest US tower operator with significant
international business, SBAC is well positioned to benefit from the
current upgrade cycle and lease amendments as carriers continue to
install new cell site equipment, expand coverage, densify their
4G/LTE wireless networks, and 5G-related activity in the US as well
as strong organic revenue growth trends in SBAC's international
markets. This should lead to SBAC's continued EBITDA expansion and
adjusted leverage maintained under 8x range in the next 12-18
months, even as the REIT continues to invest in growth, funds its
share repurchase program, and grows its dividends that commenced in
September 2019.
The SGL-1 liquidity rating reflects Moody's view that SBAC will
have very good liquidity in the next 12-18 months, characterized by
solid operating cash flow, high cash balances, and access to its
largely undrawn $1.25 billion revolver due 2023. SBAC had full
availability on its revolver as of September 30, 2019. Given
Moody's projection for solid EBITDA performance, strong internally
generated cash flows, modest maintenance capital expenditures,
healthy cash levels (at least $100 million) and over $1 billion
available under its committed revolver at all times, SBAC has more
than sufficient liquidity to meet the upcoming debt maturities over
the next 18 months ($500 million in tower revenue notes and $24
million in term loan amortization), maintenance capex and to fund
share repurchases and dividends. Moody's expects that SBAC will
size its share repurchases and any incremental share buyback
authorizations within the REIT's free cash flow generating capacity
without impairing liquidity. As of July 29, 2019, the REIT has
authorization for a $1 billion share repurchase program. Moody's
expectation that SBAC will have ample cushion under its maintenance
covenants also supports the SGL-1 liquidity rating.
RATINGS RATIONALE
SBAC's Ba3 Corporate Family Rating reflects the REIT's significant
tenant concentration, its financial policy which includes a
meaningful share of secured debt in its capital structure and high
financial leverage, with Moody's adjusted net debt to EBITDA of
7.8x and effective leverage (debt plus preferred as a percentage of
gross assets) of 80% as of June 30, 2019. The Ba3 rating also
considers SBAC's high profitability business with stable,
contractual cash flows and good liquidity. SBAC's substantial scale
as the third largest wireless tower operator in the U.S., good
geographic diversification with a footprint across 14 countries
bodes well for the REIT's favorable tower industry fundamentals.
The REIT's credit profile benefits from the stability of much of
its revenue base and cash flow generation, which is derived
predominantly from its contractual relationships with the largest
wireless operators in the U.S. and the high barriers to entry for
wireless towers. The Ba3 rating embeds the risk of lower lease
demand as a result of technology network shifts or the emergence of
substitute technologies in the longer (7 years or more) term. These
risks are counterbalanced over the near-term by the solid contracts
with embedded annual escalators in the range of 3-4% per annum that
SBA has with the largest wireless carriers.
A social impact that Moody's considers in SBAC's credit profile
includes rapidly increasing wireless data consumption, which
benefits SBAC. Moody's believes that strong growth in mobile data
traffic will continue to support the strength of wireless tower
sector fundamentals over the next several years.
The stable outlook reflects Moody's expectations that SBAC will
remain disciplined in managing its future growth and shareholder
returns.
Ratings will be upgraded if SBAC continues to demonstrate EBITDA
expansion and allocates a significant portion of free cash flows
towards deleveraging and unencumbering its asset base such that
Moody's adjusted net debt to EBITDA is sustained below 7.5x and
effective leverage (debt plus preferred over gross assets)
approaches 75%.
Ratings could be downgraded if a more aggressive financial policy,
including large debt-financed acquisitions or share repurchases, or
lower-than-expected cash flow growth result in tight liquidity and
deterioration in credit metrics, such that Moody's adjusted net
debt to EBITDA is sustained above 8x.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2018.
Headquartered in Boca Raton, Florida, SBA Communications
Corporation is the third largest independent operator of wireless
tower assets in the U.S. with 16,371 sites as of June 30, 2019. In
addition, SBAC owns and operates 13,474 wireless towers in South
America, Central America, South Africa and Canada as of June 30,
2019.
SEVERIN HOLDINGS: S&P Affirms 'B-' ICR on Debt Add-On
-----------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
Severin Holdings LLC (doing business as PowerSchool), which plans
to raise $70 million of first-lien debt to fund its acquisition of
Schoology Inc.
At the same time, S&P affirmed its 'B-' issue-level rating on the
company's first-lien credit facility and its 'CCC' issue-level
rating on the company's second-lien credit facility.
The affirmation reflects S&P's view of the company's high tolerance
for debt-funded business expansion, which is illustrated by its pro
forma leverage of 12x as of June 30, 2019, and the integration risk
related to its pending acquisition of Schoology. Partially
offsetting these risks are S&P's expectation for high customer
retention rates in the mid 90% area, due to the stickiness of its
core offering, and the potential for cost takeout following
multiple acquisitions. S&P foresees PowerSchool's leverage
improving to the high 9x area in the 12 months following the close
of its acquisition and expect its free operating cash flow
(FOCF)-to-debt ratio to be in the low single digit percent area in
2020 and 2021. S&P believes the company has a good track record of
achieving cost savings from its previous tuck-in acquisitions and
has made good progress on its largest acquisition to date
(PeopleAdmin), which closed in August 2018. Management has so far
achieved about two-thirds of the approximately $60 million of
targeted cost savings and synergies it identified prior to the
acquisition.
The stable outlook on Severin Holdings reflects S&P's expectation
that it will deleverage and generate free cash flow in the $50
million area over the next 12 months as it realizes cost synergies
from previous acquisitions. Under S&P's base case, the company
maintains revenue retention rates of close to 100% and organic
revenue growth in the mid-single-digit percent area in 2019. S&P
believes the company could sustain its revenue growth over the next
few years on a combination of price increases for existing
solutions, the increasing adoption of technology in schools, and
management's cross-selling efforts.
"We would lower our rating on Severin due to liquidity pressures or
if we believe its capital structure has become unsustainable. This
could occur if the company is unable to generate positive FOCF and
repay its interim revolver borrowings," S&P said.
"We could also lower our rating if a severe business disruption
from restructuring activities leads to declining revenue and
profitability," the rating agency said, adding that it could
downgrade Severin if the company fails to integrate current or
future acquisitions such that they result in material revenue
declines.
An upgrade is unlikely over the next 12 months because of the
company's high financial leverage, according to S&P. However, the
rating agency could consider raising its rating on Severin over the
longer term if the company sustains leverage of less than 7x. This
could occur if the company voluntarily prepays its debt and
experiences faster-than-expected earnings growth, according to the
rating agency.
SIGNET CAPITAL: Seeks to Hire David W. Steffensen as Legal Counsel
------------------------------------------------------------------
Signet Capital Partners, LLC seeks authority from the U.S.
Bankruptcy Court for the District of Utah to hire the Law Office of
David W. Steffensen, P.C. as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor of its powers, rights, and duties in the
continued management and operation of its business;
b. provide legal advice and consultation related to the legal
and administrative requirements of operating the Debtor's
bankruptcy case;
c. take all necessary actions to protect and preserve the
Debtor's estate, including prosecuting actions on the Debtor's
behalf, defending any action commences against the Debtor, and
representing the Debtor's interest in any negotiations or
litigation in which it is involved;
d. prepare on behalf of the Debtor pleadings and other
documents necessary to the administration of its estate;
e. represent the Debtor's interests at the meeting of
creditors pursuant to Sec. 341 of the Bankruptcy Code and at court
hearings;
f. assist the Debtor in the formulation, negotiation and
implementation of a Chapter 11 plan;
g. assist the Debtor in the negotiation, documentation,
implementation, consummation and closing of corporate transactions,
including sales of the Debtor's assets;
h. advise the Debtor with respect to the use of cash
collateral and obtaining debtor-in-possession or exit financing;
i. review claims filed against the Debtor and represent the
Debtor in connection with the possible prosecution of objections to
those claims;
j. advise the Debtor concerning the assumption, assignment,
rejection or renegotiation of its executory contracts and unexpired
leases; and
k. coordinate with other professionals employed in the case to
rehabilitate the Debtor's affairs.
David Steffensen, Esq., the firm's attorney who will be handling
the case, will charge $300 per hour for his services.
Mr. Steffensen attests that he and his firm are "disinterested
persons" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
David W. Steffensen, Esq.
Law Office of David W. Steffensen, P.C.
4873 South State Street
Salt Lake City, UT 84107
Tel: 801-263-1122
Fax: 801-207-1755
Email: dave.dwslaw@me.com
About Signet Capital Partners
Signet Capital Partners, LLC, a company engaged in activities
related to real estate, filed a voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. D. Utah Case No. 19-26429) on Aug.
30, 2019. In the petition signed by Kent A. Hoggan, manager, the
Debtor estimated $10 million to $50 million in both assets and
liabilities.
Judge Kimball R. Mosier presides over the case.
David W. Steffensen, Esq. at the Law Office of David W. Steffensen,
P.C., represents the Debtor as counsel.
STONEMOR PARTNERS: Completes $3.6 Million Rights Offering
---------------------------------------------------------
StoneMor Partners L.P. has closed the rights offering to
unitholders that was launched on Sept. 25, 2019 and made pursuant
to the previously-filed registration statement on Form S-1, which
was declared effective by the U.S. Securities and Exchange
Commission on Sept. 25, 2019.
The aggregate gross proceeds to the Partnership were $3,647,256.
StoneMor sold an aggregate of 3,039,380 common units at a purchase
price of $1.20 per unit in the Rights Offering. The common units
subscribed for in the Rights Offering are expected to be
distributed to applicable offering participants through the
Partnership's transfer agent or through the clearing systems of the
Depository Trust Partnership, which commenced on Oct. 25, 2019.
Immediately following the closing of the Rights Offering, the
Partnership had 42,636,311 common units outstanding.
About StoneMor Partners
StoneMor Partners L.P., headquartered in Trevose, Pennsylvania --
http://www.stonemor.com-- is an owner and operator of cemeteries
and funeral homes in the United States, with 321 cemeteries and 90
funeral homes in 27 states and Puerto Rico. StoneMor's cemetery
products and services, which are sold on both a pre-need (before
death) and at-need (at death) basis, include: burial lots, lawn and
mausoleum crypts, burial vaults, caskets, memorials, and all
services which provide for the installation of this merchandise.
StoneMor reported a net loss of $72.69 million for the year ended
Dec. 31, 2018, compared to a net loss of $75.15 million for the
year ended Dec. 31, 2017. As of June 30, 2019, the Company had
$1.76 billion in total assets, $1.76 billion in total liabilities,
$57.50 million in total redeemable convertible preferred units, and
a total partners' deficit of $60.94 million.
* * *
As reported by the TCR on Feb. 13, 2019, Moody's Investors Service
downgraded StoneMor Partners L.P.'s Corporate Family rating to Caa2
from Caa1 and Probability of Default rating to Caa3-PD from
Caa1-PD. The Caa2 CFR reflects Moody's concern that if pre-need
cemetery selling and liquidity pressures do not abate while the
senior secured credit facility is being refinanced, a distressed
exchange or other default event could become more likely.
As reported by the TCR on July 3, 2019, S&P Global Ratings affirmed
its 'CCC+' issuer credit rating on StoneMor Partners L.P. The
outlook remains negative. S&P said, "The rating affirmation
reflects our view that despite the removal of near term maturities
and sufficient liquidity over the next twelve months, we continue
to view StoneMor's capital structure as unsustainable in the long
term given our projection for persistent free cash flow deficits.
STRAIGHT UP ENTERPRISES: Wins Interim Approval of Plan Outline
--------------------------------------------------------------
Honorable Judge Joel D. Applebaum of the U.S. Bankruptcy Court for
the Eastern District of Michigan granted preliminary approval of
Straight Up Enterprises' Amended Disclosure Statement on Oct. 17,
2019.
The deadline to return ballots on the Amended Plan of
Reorganization, as well the deadline to file objections to final
approval of the Amended Disclosure Statement and objections to
confirmation of the Amended Plan of Reorganization is Nov. 18,2019.
The completed ballot form must be returned by mail to the Debtor's
attorney, Dennis M.Haley, Winegarden, Haley, Lindholm Tucker
and Himelhoch, PLC, G-9460 South Saginaw Street, Suite A, Grand
Blanc, Michigan 48439.
The hearing on objections to final approval of the Amended
Disclosure Statement and confirmation of the Amended Plan of
Reorganization will be held on Tuesday, Nov. 26, 2019 at 10:00 a.m.
in the U.S. Bankruptcy Courtroom, 226 WestSecond Street, Flint,
Michigan 48502.
About Straight Up Enterprises
Straight Up Enterprises, Inc., is a retailer of sports apparel and
other miscellaneous sports gear and accessories.
Straight Up Enterprises sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-31010) on April 23,
2019. At the time of the filing, the Debtor disclosed $1,985,246
in assets and $5,557,303 in liabilities.
The case is assigned to Judge Daniel S. Opperman.
The Debtor tapped Winegarden, Haley, Lindholm Tucker & Himelhoch,
P.L.C., as its legal counsel.
The U.S. Trustee for Region 9 on May 8, 2019, appointed three
creditors to serve on an official committee of unsecured creditors
in the Chapter 11 case. The committee retained Cooley LLP, as lead
counsel, and Miller Canfield Paddock and Stone, P.L.C., as Michigan
counsel.
TECHNIPLAS LLC: S&P Withdraws 'CCC+' ICR
----------------------------------------
S&P Global Ratings withdrew all of its ratings on Techniplas LLC
due to a lack of sufficient information to maintain the ratings. At
the time of the withdrawal, S&P rated the company 'CCC+' with a
negative outlook.
TIGER OAK MEDIA: LSC Communications Appointed as Committee Member
-----------------------------------------------------------------
The U.S. Trustee for Region 12 on Oct. 23 , 2019,appointed LSC
Communications US LLC as new member of the official committee of
unsecured creditors in the Chapter 11 case of Tiger Oak Media,
Inc.
LSC Communications can be reached through:
Dan Pevonka
LSC Communications US LLC
4101 Winfield Road
Warrenville, IL 60555
Phone: 630-821-3108
Email: Dan.Pevonka@LSCCom.com
The bankruptcy watchdog had earlier appointed Quad, The Law Offices
of Alex W. Craigie, Buehler Communications Inc., and Northwest
Harvest, court filings show.
About Tiger Oak Media Incorporated
Tiger Oak Media, Incorporated, is a regional and national publisher
of books, magazines, media and events that appeal to targeted
audiences. Tiger Oak Media sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Minn. Case No. 19-43029) on Oct. 7,
2019. In the petition signed by its chief executive officer, Craig
Bednar, the Debtor disclosed assets of less than $50,000 and
liabilities of less than $10 million. The Hon. Michael E. Ridgway
is the case judge. The Debtor is represented by Steven Nosek,
Esq., and Yvonne Doose, Esq.
TRANSDIGM INC: Mooody's Affirms B1 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service affirmed all of its ratings for TransDigm
Inc., including the company's B1 corporate family rating and B1-PD
probability of default rating, as well as the Ba3 senior secured
and B3 senior subordinated debt ratings. Moody's also assigned a B3
rating to the company's new $2.65 billion senior subordinated
notes, proceeds of which will be used for general corporate
purposes that may include potential acquisitions or distributions
to shareholders and to refinance existing senior subordinated notes
due 2022. Moody's also affirmed the B3 rating for the senior
subordinated notes of TransDigm Holdings UK plc. Ratings on the
existing senior subordinated notes due 2022 will be withdrawn upon
payoff. The speculative grade liquidity rating remains SGL-1. The
ratings outlook is stable.
RATINGS RATIONALE
The B1 corporate family rating balances an aggressive financial
policy and elevated financial leverage against TransDigm's strong
competitive position and its focus on profitable aftermarkets in a
favorable operating environment. TransDigm is governed in a manner
characterized by aggressive financial policies that seek private
equity-like returns with a focus on shareholder-friendly
initiatives that entail cash distributions as a key priority.
Leverage remains very elevated with pro forma debt-to-EBITDA of
about 7.7x, and the cyclical nature of the company's commercial OEM
aerospace markets (30% of sales) remain vulnerable to economic
downturns.
TransDigm's strong competitive position supported by the
proprietary and sole-source nature of the majority of its products,
as well as its robust liquidity and favorable demand fundamentals
within aerospace and defense end-markets, serve to somewhat
mitigate concerns about its aggressive financial policies. The
company's installed base of niche products across multiple carriers
and platforms, as well as its focus on highly profitable
aftermarkets, add stability to its revenue streams and lend further
support to the rating.
The stable outlook reflects Moody's expectation of a favorable
operating environment over the next 12 to 18 months which should
support continued sales and earnings growth and robust levels of
cash generation.
The SGL-1 speculative grade liquidity rating denotes a very good
liquidity profile as anticipated for the next 12 months. Moody's
expects TransDigm to maintain healthy cash balances, and September
2019 cash on hand is likely to be about $1.5 billion. Moody's
anticipates substantial cash generation before dividends during
fiscal (September) 2019 and fiscal 2020 in amounts comfortably in
excess of $1 billion. Moody's believes this cash will be used for
acquisitions and/or returned to shareholders, but not be used to
reduce debt. Moody's also expects near full availability under the
company's $760 million revolving credit facility which expires in
December 2022.
An upgrade is unlikely in the near term given TransDigm's
aggressive financial policies and its highly leveraged capital
structure. Any upward rating action would be driven by leverage
sustained below 5x on a Moody's-adjusted basis, coupled with
maintenance of the company's industry leading margins and a strong
liquidity profile.
Factors that could result in lower ratings include expectations
that Moody's-adjusted debt-to-EBITDA will be sustained at the high
7x level. An inability or an unwillingness to reduce financial
leverage back towards 7x would likely cause downward rating
pressure. An inability to continue to make regular price increases
or expectations of pricing pressure from aftermarket customers that
meaningfully lowers the company's EBITDA margins below 40% could
also result in a ratings downgrade. A deteriorating liquidity
profile involving cash flow from operations less capex-to-debt
continuously below 5%, annual free cash flow generation sustained
below $700 million, or a reliance on revolver borrowings could
pressure the rating downward.
Affirmations:
Issuer: TransDigm Inc.
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Senior Subordinated Regular Bond/Debenture, Affirmed B3 (LGD5)
Senior Secured Bank Credit Facility, Affirmed Ba3 (LGD3)
Senior Secured Bond/Debenture, Affirmed Ba3 (LGD3)
Issuer: TransDigm Holdings UK plc
Senior Subordinated Regular Bond/Debenture, Affirmed B3 (LGD5)
Assignments:
Issuer: TransDigm Inc.
Senior Subordinated Regular Bond/Debenture, assigned B3 (LGD5)
Unchanged:
Issuer: TransDigm Inc.
Speculative Grade Liquidity Rating, unchanged at SGL-1
Outlook Actions:
Issuer: TransDigm Holdings UK plc
Outlook, Remains Stable
Issuer: TransDigm Inc.
Outlook, Remains Stable
The principal methodology used in these ratings was Aerospace and
Defense Industry published in March 2018.
TransDigm Inc., headquartered in Cleveland, Ohio, is a manufacturer
of engineered aerospace components for commercial airlines,
aircraft maintenance facilities, original equipment manufacturers
and various agencies of the US Government. TransDigm Inc. is the
wholly-owned subsidiary of TransDigm Group Incorporated (TDG).
Esterline Technologies Corp. designs and manufactures highly
engineered products and systems primarily serving aerospace and
defense customers. Pro forma revenues for the last twelve-month
period ended June 30, 2019 were approximately $6.3 billion.
TRIUMPH GROUP: S&P Lowers Unsecured Notes Rating to 'CCC'
---------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on Triumph Group
Inc.'s unsecured debt to 'CCC' from 'CCC+' and revised the recovery
rating to '6' from '5'. S&P removed the rating from CreditWatch,
where the rating agency placed it with negative implications on
Sept. 9, 2019.
The downgrade follows Triumph's refinancing of $375 million of
unsecured notes due in 2021 and revolver borrowings with the
proceeds from $525 million of secured second-lien notes. The higher
secured debt reduces recovery prospects for the remaining unsecured
notes.
S&P also raised its issue-level rating on the second-lien notes to
'B+' from 'B' and revised the recovery rating to '1' from '2'.
Triumph recently amended its revolving credit agreement to extend
the maturity from 2021 to 2024, but only $406 million of
commitments were extended, resulting in less first-lien debt ahead
of the second-lien notes.
The 'B+' issue-level rating and '1' recovery rating on the
first-lien revolver are unchanged.
Issue Ratings – Recovery Analysis
Key analytical factors:
-- The company's capital structure consists of a first-lien
revolver (commitments drop to $600 million after March 2020 and
then to $406.5 million after May 2021), $125 million accounts
receivable (AR) facility, $525 million of second-lien notes, and
$800 million of unsecured notes.
-- S&P's default assumptions include LIBOR rising to 250 basis
points, the revolver is 85% drawn after letters of credit usage,
and the AR facility is 80% drawn. The drawings on the AR facility
are considered priority claims.
Simulated default assumptions:
-- Emergence EBITDA: $272 million
-- Default year: 2022 (fiscal year ending March 31)
-- EBITDA multiple: 5x
Simplified waterfall:
-- Net enterprise value (after 5% administrative expenses and
pension claims): $1.087 billion
-- Priority claims (AR facility): $104 million
-- Collateral value available to first-lien debt: $983 million
-- Estimated first-lien claims: $364 million
-- Recovery range: 90%-100% (rounded estimate: 95%)
-- Collateral value available to second-lien debt: $619 million
-- Estimated second-lien claim: $541 million
-- Recovery range: 90%-100% (rounded estimate: 95%)
-- Total value available to unsecured claims: $77 million
-- Total unsecured claims: $827 million
-- Recovery range: 0%-10% (rounded estimate: 5%)
Ratings List
Triumph Group Inc.
Issuer Credit Rating B-/Stable/-- B-/Stable/--
Not Rated Action
To From
Triumph Group Inc.
Senior Unsecured NR CCC+
Recovery Ratings NR 5(25%)
Ratings Raised; Recovery Ratings Revised
Triumph Group Inc.
Senior Secured B+ B
Recovery Ratings 1(95%) 2(80%)
Affirmed
Triumph Group Inc.
Senior Secured B+ B+
Recovery Ratings 1(95%) 1(95%)
Ratings Lowered; CreditWatch Action
Triumph Group Inc.
Senior Unsecured CCC CCC+ /Watch Neg
Recovery Rating 6(5%) 5(25%)
UNITED NATURAL: Moody's Lowers CFR to C2, Outlook Stable
--------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
and Probability of Default Rating of United Natural Foods, Inc to
B2 and B2-PD from B1 and B1-PD, respectively. Concurrently, Moody's
also downgraded the rating of the company's senior secured term
loan to B3 from B2. The company's Speculative Grade Liquidity
rating of SGL-2 is unchanged. The outlook is stable.
"UNFI's operating performance has been below expectations since its
acquisition of SUPERVALU Inc. with metrics and profitability
expected to be lower than our previous forecasts for the next 12-18
months", Moody's Vice President Mickey Chadha stated. "The combined
company has a leading position in a growing and attractive market
niche for natural, organic and specialty foods with the scale
necessary to compete, however significant execution and integration
risks remain", Chadha further stated.
Downgrades:
Issuer: United Natural Foods, Inc
Probability of Default Rating, Downgraded to B2-PD
from B1-PD
Corporate Family Rating, Downgraded to B2 from B1
Senior Secured Term Loan, Downgraded to B3 (LGD5)
from B2 (LGD4)
Outlook Actions:
Issuer: United Natural Foods, Inc
Outlook, Remains Stable
RATINGS RATIONALE
UNFI's B2 Corporate Family Rating is supported by its good
liquidity, its formidable size in food distribution and its
leadership position in the fast growing natural, organic and
specialty food business. The acquisition of SUPERVALU diversified
UNFI's customer base as well as its product offerings and has the
potential for improved profitability and growth through leveraging
fixed costs of the distribution operation and cost synergies. The
transaction reduced UNFI's sales concentration to Whole Foods from
about 38% of total sales prior the acquisition to below 20% on a
combined basis. However, as demonstrated by the company's
underperformance since the acquisition, execution and integration
risks remain high. At the closing of the transaction UNFI's lease
adjusted leverage proforma for the divestiture of the retail
operations and excluding any synergies increased significantly to
over 6.0x on a combined basis. The lower than expected
profitability since the acquisition has resulted in minimal
improvement in credit metrics with debt/EBITDA (as adjusted by
Moody's) expected to be about 6.0x in the next 12-18 months despite
debt reduction of about $350 million since the acquisition. Its
original expectation at the time of the acquisition was for
leverage to improve to around 5.0 times by fiscal year ending
August 2020.
Moody's views the planned divestiture of SUPERVALU's retail banners
as a positive as it is not the core business for UNFI. However,
Moody's believes that the company's operating profits will remain
pressured due to the highly competitive and challenging business
environment for its wholesale distribution customers especially the
independent food retailers or small retail grocery chains. These
customers are being squeezed by larger, better capitalized
traditional supermarkets and alternative food retailers thereby
pressuring their growth and profitability.
The stable rating outlook reflects its expectation that UNFI will
be successful in realizing planned synergies, credit metrics will
not deteriorate further, liquidity will remain good and financial
policies including but not limited to acquisitions will be
balanced.
Ratings could be upgraded if the company demonstrates sustained
growth in sales, and profitability and maintains good liquidity
while successfully integrating SUPERVALU's operations.
Quantitatively, ratings could be upgraded if debt/EBITDA is
sustained below 5.5 times and EBITA/interest expense is sustained
above 1.75 times.
Ratings could be downgraded if operating performance deteriorates
or the integration is not executed as planned. Ratings could also
be downgraded if debt/EBITDA is sustained above 6.5 times or
EBITA/interest is sustained below 1.5 times or if liquidity
deteriorates or if acquisition activity causes deterioration in
cash flow or credit metrics.
UNFI is a leading distributor of natural, organic, and specialty,
produce, and conventional grocery foods and non-food products, and
provider of support services in the United States and Canada. The
company has 63 distribution centers and about $24 billion in
revenue.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
US TOBACCO: S&P Resolves CreditWatch Placement of Revenue Bonds
---------------------------------------------------------------
S&P Global Ratings resolved its placement of 256 classes of
outstanding tobacco settlement revenue bonds on CreditWatch with
negative implications after a comprehensive review of each
transaction. S&P's review resulted in 166 affirmations, 23
upgrades, and 67 downgrades.
All of these ABS transactions are backed by tobacco settlement
revenues resulting from master settlement agreement payments. The
CreditWatch negative placements reflected both the downgrading of
Altria on Dec. 20, 2018, as well as the lower-than-expected
settlement payments based on lower cigarette consumption.
BACKGROUND OF THE CREDIT WATCH PLACEMENTS
On Dec. 20, 2018, Altria was downgraded to 'BBB (sf)' from 'A
(sf)', which prompted the placement of 30 tobacco settlement bonds
on CreditWatch with negative implications. The bonds affected were
not previously constrained by the rating of Altria because the
rating was not higher than the rating indicated by the other rating
stress tests.
On May 10, 2019, S&P placed 238 of the remaining 240 tobacco
securitization bonds it rated that were not already on CreditWatch
with negative implications. These additional CreditWatch actions
reflected S&P's view on future tobacco shipment volumes, a key
input into its analysis of tobacco settlement bonds. Inland Empire
Tobacco Securitization Authority (which closed after the Altria
downgrade and included the new decline stress) and Children's
Trust's 2002 (currently constrained by S&P's view of Puerto Rico
legislation passed in 2016) were the two excluded transactions. On
May 3, 2019, the National Assn. of Attorneys General (NAAG)
released its annual domestic cigarette volume data, reporting a
decline of 4.75% for the 2018 sales years, which was in line with
the declines considered in S&P's article, "Combustible Cigarette
Volume Decline Expected to Accelerate," published April 22, 2019."
These declines are based on developments and evolving regulations
in the tobacco industry, such as current and potential vapor
product growth and the consideration of legislation to increase the
minimum age to purchase tobacco products.
While S&P believes the rapid growth of electronic cigarettes has
contributed to the acceleration in volume declines of combustible
cigarettes, other factors such as heightened health awareness and
state/local regulatory enactments raising the minimum age to
purchase tobacco products to 21 are likely having an impact also.
While further legislation aimed at vaping products could moderate
the rate of volume declines for combustibles, S&P is uncertain if
there will be a reversion back to the 3.00%-4.00% historical range,
so it ran an updated volume decline scenario as an additional
stress along with its current volume decline assumptions from the
criteria.
The overall view of the declining market also prompted S&P to be
more conservative on its assignment of ratings at the lower rating
levels. Current interest bonds that previously could have achieved
a rating of 'B- (sf)' have to also pass a steady state test,
defined as 0% consumption decline with 'B- (sf)' recovery
assumptions. If it cannot, a 'CCC+ (sf)' rating is assigned. To
differentiate the capital appreciation bonds (CABs) that do not
pass any rating tests defined in the criteria, the CABs were
downgraded to 'CCC- (sf)'. Previously the CABs were rated 'CCC+
(sf)' and 'CCC (sf)' depending on the structure of the deal.
Table1
Shipment Volume Stress Scenario
Constant decline starting year 1
B (4.25)
B+ (4.42)
BB- (4.58)
BB (4.75)
BB+ (4.92)
BBB- (5.08)
BBB (5.25)
BBB+ (5.42)
A- (5.58)
A (5.75)
RESULTS
Table 2
Rating Results
Affirmations Upgrades Downgrades
166 23 67
The results of S&P's cash flow analysis were mixed, which it
expected. S&P anticipated downgrades due to the fact that the new
stressed cigarette shipment assumption is 1.00% greater than the
high decline assumption contained in the criteria. Also, the rating
agency expected downgrades on the bonds that do not pass the
largest product manufacturer test because they now have a ceiling
of 'BBB' (previously 'BBB+' ceiling before Altria was downgraded).
Also, attributing to some of the downgrades was the additional
steady state stress for current pay bonds and the assignment of the
'CCC-' to all capital appreciation bonds that do not pass any of
the stresses in the criteria.
The upgrades reflect the following: 1) many of the bonds have paid
down further than anticipated since they were last analyzed, mainly
due to non-participating manufacturer settlements; and 2) the
remaining length of time until maturity has moved bonds into other
maturity buckets for notching. For example, a bond that previously
had 21 years until maturity now has 19 years and therefore, only
received a one-notch adjustment. Of course, each deal has various
levels of underlying excess credit support and different cash flow
waterfalls that affect the final rating recommendations as well.
S&P will continue to monitor the tobacco sector and the tobacco
settlement bonds and assess any potential impact on its outstanding
ratings.
A list of Affected Ratings can be viewed at:
https://bit.ly/32GKuOJ
USIC HOLDINGS: S&P Lowers ICR to 'B-'; Outlook Stable
-----------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on
Indianapolis-based line locating service provider USIC Holdings
Inc. to 'B-' from 'B'. The outlook is stable.
At the same time, S&P lowered its issue-level ratings on the
company's revolving credit facility due in 2021 and first-lien term
loan due in 2023 to 'B-' from 'B'. The '3' recovery ratings on this
debt are unchanged, indicating S&P's expectation for meaningful
recovery (50%-70%; rounded estimate: 50%) in the event of a
default.
In addition, S&P lowered its issue-level rating on USIC's
second-lien term loan due in 2024 to 'CCC' from 'CCC+'. The '6'
recovery rating is unchanged, indicating S&P's expectation for
negligible recovery (0%-10%; rounded estimate: 0%) in the event of
a default.
"Although we expect continued revenue and earnings growth, we
believe debt leverage will remain about 7x," S&P said.
S&P assumes 2019 revenues will continue to benefit from the
company's acquisition of OnTarget last year, in addition to new
contract wins, and favorable pricing gains. However, the rating
agency believes revenue growth will be tempered based on its
economic forecast for a slowdown in residential (negative 2.3%) and
nonresidential (negative 3.3%) construction this year.
Additionally, USIC's damage expenses have not declined as quickly
as previously expected, slowing earnings growth somewhat. As such,
S&P expects debt to EBITDA to be above 7x this year and next.
The stable outlook on USIC reflects S&P's expectations for the
company's continued improvement in performance through modest
top-line growth, stable profitability, and positive free operating
cash flow generation. Although it believes that the company will
continue to achieve earnings growth over the next 12 months, S&P
expects leverage to remain high, with debt to EBITDA over 7x.
"We could lower our ratings on USIC over the next 12 months if it
appears that the company's free cash flow will turn negative on a
sustained basis or its liquidity position could become constrained.
This could occur due to a decline in demand stemming from a
slowdown in construction end markets or a decline in EBITDA margins
from larger-than-anticipated damage expenses, for example," S&P
said, adding that it could also lower the rating if it views the
company's financial commitments as unsustainable in the long term,
even though the company may not face a credit or payment crisis
within the next 12 months.
"We could raise our rating on USIC in the next 12 months if the
company improves its FOCF generation such that its FOCF to debt
approaches 5% on a sustained basis and debt to EBITDA declines well
below 7x. This could occur, for example, through margin expansion
by sustained reduction of its damage expenses," S&P said.
UTZ QUALITY: Moody's Affirms B2 CFR, Outlook Stable
---------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating
and B2-PD Probability of Default Rating of Utz Quality Foods, LLC.
Moody's also affirmed the B2 rating on the first lien term loan and
withdrew the rating on the second lien term loan. The rating
outlook is stable.
The affirmation reflects the company's improved capital structure
after it repaid its second lien debt with preferred stock issued to
Blackstone Alternative Solutions LLC, giving it capacity to raise
$125 million in new first lien notes (unrated) to fund the
acquisition of Kennedy Endeavors, Inc. from Conagra Brands. Kennedy
holds the Tim's Cascade and Snyder of Berlin salty snack
businesses, which produce and distribute potato chips and other
snack products. Utz will gain access to Tim's Cascade's large west
coast direct-store-delivery capability. While the new acquisition
will leave leverage slightly above 6 times at closing, Moody's
expects leverage to fall to below 6 times once the new businesses
are integrated.
Moody's affirmed the following ratings:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
$535 million senior secured first lien
term loan due 2024 at B2 (LGD4 from LGD3)
Moody's withdrew the following ratings:
$125 million senior secured second lien term
loan due 2025 at Caa1 (LGD6)
The rating outlook is stable
RATINGS RATIONALE
Utz's B2 Corporate Family Rating reflects its relatively small
share of the salty snack market and high financial leverage, with
pro forma closing leverage of approximately 6.3 times. It also
reflects modest geographic and segment diversification, although
the planned acquisition will help Utz further expand its reach into
the western portion of the United States.
The stable ratings outlook reflects Moody's expectation that Utz
will maintain its small share of the salty snack market, that
segment diversification will remain limited, and that financial
leverage will moderate but remain high.
Ratings could be downgraded if the company experiences a
deterioration in operating performance, or if the company is unable
to successfully integrate planned acquisitions and realize
synergies as expected. Additionally, a downgrade could occur if
debt to EBITDA is expected to be sustained above 6.0 times, if free
cash flow turns negative, or the company engages in further debt
financed M&A before leverage has been reduced.
Ratings could be upgraded if operating performance improves, the
company gains scale and diversity, and the company successfully
integrates planned acquisitions. Additionally, the ratings could be
upgraded if debt to EBITDA declines to around 5.0 times.
Corporate governance is influenced by the company's private
ownership by the Rice and Lissette families, which have tolerated
relatively high leverage to fund recent acquisitions. With the
addition of the preferred stock held by Blackstone, there is the
possibility of some influence from the typically more aggressive
private equity interest, although at the current investment level
Blackstone will have one observer seat on the board. The preferred
will be payment in kind but Blackstone will have a right to redeem
the preferred after 7 years (2026) which could prompt an IPO or
sale of the company.
Utz Quality Foods, LLC, headquartered in Hanover, PA, is a branded
salty snack producer and marketer. Key products include potato
chips, pretzels, cheese snacks, pork skins, pub/party mix, popcorn
and tortilla chips. The Company's brand portfolio is well known in
its core regional markets and includes Utz, Golden Flake, Good
Health, Zapp's, Dirty, Boulder Canyon, Bachman, Tim's Cascade and
Snyder's of Berlin, among others. Pro forma annual gross sales are
approximately $1 billion.
The principal methodology used in these ratings was Global Packaged
Goods published in January 2017.
VERITY HEALTH: Chubb Objection Deadline Moved for 7th Time
----------------------------------------------------------
Honorable Judge Ernest M. Robles of the U.S. Bankruptcy Court for
the Central District of California approved a seventh stipulation
continuing the deadlines for Chubb Companies and Old Republic to
respond to Verity Health System Of California, Inc., et al.'s
motion to approve disclosure statement.
The Opposition Deadline for Old Republic and the Chubb Companies
will be extended from Oct. 16, 2019 to Octo. 29, 2019.
The Reply Deadline for the Debtors shall be extended from October
21, 2019 to November 1, 2019 with respect to any opposition or
response to the Motion filed by Old Republic or the Chubb
Companies.
About Verity Health System
Verity Health System -- https://www.verity.org/ -- operates as a
non-profit health care system in the state of California, with
approximately 1,680 inpatient beds, six active emergency rooms, a
trauma center, and a host of medical specialties, including
tertiary and quaternary care. Verity's two Southern California
hospitals are St. Francis Medical Center in Lynwood and St. Vincent
Medical Center in Los Angeles. In Northern California, O'Connor
Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton
Medical Center in Daly City and Seton Coastside in Moss Beach are
part of Verity Health. Verity Health also includes Verity Medical
Foundation.
With more than 100 primary care and specialty physicians, VMF
offers medical, surgical and related healthcare services for people
of all ages at community-based, multi-specialty clinics
conveniently located in areas served by the Verity hospitals.
Verity Health System was created in a transaction approved by
California Attorney General Kamala Harris and completed in December
2015.
Verity Health System of California, Inc., and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition
signed by CEO Richard Adcock, Verity Health estimated assets of
$500 million to $1 billion and liabilities of $500 million to $1
billion.
Judge Ernest M. Robles oversees the cases.
The Debtors tapped Dentons US LLP as their bankruptcy counsel;
Berkeley Research Group, LLC, as financial advisor; Cain Brothers
as investment banker; and Kurtzman Carson Consultants as claims
agent.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Sept. 17, 2018.
VIRGIN ISLANDS PORT AUTHORITY: S&P Withdraws 'B+' Bond Rating
-------------------------------------------------------------
S&P Global Ratings withdrew its 'B+' underlying rating (SPUR) on
the Virgin Islands Port Authority's (VIPA) marine revenue bonds.
The rating was suspended on June 25, 2019.
The authority is recovering from hurricanes Irma and Maria in
September 2017, which have adversely affected the local
tourist-dependent economy. The authority has been delayed in
publishing its audited financial information. The authority
recently published its 2017 audit and is working on the 2018 audit.
Due to delays in receiving audited financial information, S&P
Global Ratings lacks timely information of satisfactory quality to
maintain the rating on the securities in accordance with its
applicable criteria and policies.
The withdrawal of this rating was preceded, in accordance with
S&P's policies, by any changes to the rating it considers
appropriate given available information.
WASHINGTON PRIME: S&P Cuts ICR to 'BB-' on Weak Business Prospects
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Washington
Prime Group Inc. to 'BB-' from 'BB'. The outlook is negative. S&P
also lowered its issue-level ratings on the company's unsecured
debt to 'BB' from 'BB+' and the preferred stock to 'B-' from 'B.'
Washington Prime's operating performance remains under pressure
from bankruptcies, store closures, and co-tenancy clauses,
according to S&P.
S&P said the company underperformed expectations in the third
quarter of 2019, with negative overall same-property net operating
income (NOI) growth and occupancy declines. Year-over-year,
combined tier 1 and open air leased occupancy decreased 110 basis
points to 92.9% at Sept. 30, 2019, attributable to the bankruptcies
of Charlotte Russe, Gymboree, and Payless ShoeSource. Moreover,
despite slight sequential improvement, same-property NOI growth at
tier 1 enclosed properties remained extremely negative, declining
8.8% with negative 7.6% releasing spreads over the past year,
affected by co-tenancy clauses and additional
bankruptcies/liquidations, with some expected redevelopment
deliveries delayed. S&P believes overall metrics are modestly worse
when factoring in the company's 14 remaining tier 2 and noncore
malls, which S&P continues to include in its analysis of Washington
Prime. Due to third-quarter results, management downwardly revised
its publicly stated operating target for same-property NOI growth
in 2019.
The negative outlook reflects S&P's view that Washington Prime's
operating performance will remain under pressure over the next 12
months from ongoing tenant bankruptcies and store closures, which
could result in further deterioration to its liquidity assessment,
business prospects, and credit protection measures. While WPG has
secured enough financing to pay down upcoming unsecured notes due
in April 2020, the company's covenant cushions have tightened from
additional secured debt.
S&P said it could lower its ratings if Washington Prime's covenant
cushion deteriorates further and causes the rating agency to revise
its liquidity assessment downward. It would also consider a
downgrade if the company's financial risk profile deteriorates such
that debt to EBITDA weakens to around 9x or FCC approaches 1.7x.
Lastly, S&P would consider a downgrade if operating performance
underperforms expectations, perhaps due to greater-than-anticipated
store closures, tenant bankruptcies, and/or continued declines in
rent renewals, further negatively affecting its business
prospects.
"Although we do not foresee stabilization over the next 12 months,
we could revise our outlook to stable if Washington Prime
demonstrates an improvement in its operating and financial
performance, which could include a flattening of same-store NOI
growth from forecast levels. At that time, we would also expect
debt to EBITDA to be sustained at 8x or below, with FCC remaining
above 2.0x, with greater covenant headroom," S&P said, adding that
it could also revise the outlook back to stable if Washington Prime
addresses its tier 2 portfolio and preserves cash flow for
additional redevelopment.
WILLIAMS COMMUNICATIONS: Seeks to Hire Harry P. Long as Counsel
---------------------------------------------------------------
Williams Communications, Inc. seeks authority from the U.S.
Bankruptcy Court for the Northern District of Alabama to hire The
Law Offices of Harry P. Long, LLC as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor of its powers and duties under the
Bankruptcy Code;
b. negotiate and formulate a plan of arrangement under Chapter
11 which will be acceptable to its creditors ad equity
shareholders;
c. deal with secured lien claimants of the Debtor regarding
the arrangements for payment of its debts; and
d. prepare legal papers necessary to administer the Debtor's
bankruptcy estate.
The firm will charge $350 per hour for its services.
Harry Long, Esq., the firm's attorney who will be handling the
case, attests that he is a "disinterested" person within the
meaning of Section 101(14) of the Bankruptcy Code.
Mr. Long can be reached at:
Harry P. Long, Esq.
The Law Offices of Harry P. Long, LLC
P.O. Box 1468
Anniston, AL 36202
Tel: 256 237-3266
Fax: 256-237-3268
Email: hlonglegal8@gmail.com
About Williams Communications
Williams Communications, Inc., a privately held company in the
radio and television broadcasting business, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No.
19-41720) on Oct. 11, 2019. In the petition signed by Walt
Williams, Jr., president, the Debtor estimated $50,000 in assets
and $1 million to $10 million in liabilities.
Judge Tamara O. Mitchell presides over the case.
Harry P. Long, Esq., at The Law Offices of Harry P. Long, LLC,
represents the Debtor as counsel.
WILWOOD ANTIQUE: Seeks to Hire Arcadier Biggie as Legal Counsel
---------------------------------------------------------------
Wildwood Antique Malls LLC seeks authority from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Arcadier Biggie &
Wood, PLLC as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor of its rights and duties in its
bankruptcy case;
b. prepare pleadings related to the case, including a
disclosure statement and a plan of reorganization; and
c. take any and all other necessary action incident to the
proper preservation and the administration of the estate.
Arcadier charges $250 per hour for its services.
Stephen Biggie, Esq., at Arcadier Biggie, disclosed in an affidavit
that his firm does not represent any interest adverse to the
Debtor.
The firm can be reached through:
Stephen J Biggie, Esq.
Arcadier Biggie & Wood, PLLC
2815 West New Haven, Ste 304
Melbourne, FL 32904
Phone: 321-953-5998
Fax : 321-953-6075
Email: biggie@melbournelegalteam.com
About Wildwood Antique Malls
Wildwood Antique Malls offers the largest selection of antique,
vintage and collectible finds in the state of Florida.
Wildwood Antique Malls filed a voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03363) on Aug.
30, 2019, listing under $1 million in both assets and liabilities.
Stephen J. Biggie, Esq., at Arcadier Biggie & Wood, PLLC, is the
Debtor's legal counsel.
WINNEBAGO INDUSTRIES: Moody's Affirms B1 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating
and B1-PD probability of default rating for Winnebago Industries,
Inc., and upgraded the company's senior secured term loan to B1
from B2. The company's speculative grade liquidity rating remains
SGL-2. The rating actions follows Winnebago's recent announcement
that it intends to acquire Newmar Corporation for about $344
million. The transaction is expected to be financed through a
combination of convertible notes ($270 million) and common stock (2
million shares) of publicly traded Winnebago. The ratings outlook
is stable.
"The affirmations reflect Winnebago's relatively solid operating
and financial performance, notwithstanding ongoing cyclical
headwinds for the recreational vehicle and broader leisure industry
in a decelerating macroeconomic environment," according to Eoin
Roche, Moody's lead analyst for the company.
"The pending placement of junior-ranking capital in the form of new
convertible notes, which are unsecured, will afford first-loss
protection such that secured lenders now warrant a rating that is
in line with the company's fundamental benchmark corporate family
rating," added Roche.
RATINGS RATIONALE
The B1 CFR reflects the highly cyclical nature of the RV and
broader leisure industry, and ensuing near-term wholesale and
retail pressures that are expected to persist, balanced against
Winnebago's strong brand name and well-established market position.
RV retail sales have fallen by mid-single-digit percentages
year-to-date, and ongoing dealer inventory rationalization efforts
continue to disrupt the market, as well, although Moody's believes
that the destocking trend will have largely played out by the end
of 2019. Winnebago's growing market share is noteworthy, despite
these adverse trends, and is estimated to be in the
low-double-digit percentage range pro forma for the Newmar
acquisition. The company has a track record of earnings growth and
debt reduction, and Moody's notes a history of deleveraging after
previous debt-financed acquisitions (i.e.; Grand Design, Chris
Craft). Moody's also recognizes Winnebago's positive sales growth
and market share gains in towables, although this is in part
tempered by ongoing weakness and operational issues in Class A
motorized RVs.
Moody's expects the addition of Newmar -- a manufacturer of premium
motorized RVs -- to Winnebago's portfolio to help support the
company's presence in motorized Class A RVs while broadening access
to premium RV dealers and enhancing margins (Newmar Class A margins
are almost 2x those of Winnebago). Moody's anticipates
debt-to-EBITDA of about 2.3x upon close of the transaction, which
is likely to occur during the quarter ending November 2019. Over
the coming quarters, Moody's expects Winnebago to direct
substantially all of its free cash flow to debt repayment, with
leverage projected to drop comfortably below 1.5x by the end of
calendar 2020.
The stable outlook reflects Moody's expectation that dealer
inventory destocking is near-completion and that retails sales will
generally remain around current levels. The stable outlook also
reflects Moody's expectation that Winnebago will delever over the
coming quarters through a combination of debt reduction and
earnings growth.
Given the high degree of cyclicality inherent in Winnebago's
end-markets, Moody's would expect the company to maintain credit
metrics that are meaningfully stronger than levels typically
associated with companies at the same rating level. Consideration
for a ratings upgrade could be warranted if leverage is expected to
be sustained below 1.5x. A larger and more diversified product
offering that reduces the cyclicality of the overall business would
be constructive to any prospective consideration of higher ratings.
A ratings upgrade would require maintenance of a strong liquidity
profile and a demonstrated ability to generate consistently strong
free cash flows, with EBITDA margins maintained in the
high-single-digit percentage range.
The ratings could be downgraded if leverage is expected to increase
and remain near 3.0x. A weaker than expected liquidity profile
involving increased reliance on the company's asset-backed loan /
revolving credit facility, or annual free cash flow generation of
less than $50 million, or an absence of improved EBITDA margins
could also pressure the ratings downward. The loss of a key dealer,
an erosion of market share, or further debt-financed acquisitions
could also result in lower ratings.
The following is a summary of the rating actions:
Issuer: Winnebago Industries, Inc.
Corporate Family Rating, affirmed B1
Probability of Default Rating, affirmed B1-PD
Senior secured term loan B due 2023, upgraded to
B1 (LGD4) from B2 (LGD 4)
Speculative Grade Liquidity Rating, unchanged at
SGL-2
Outlook, Stable
The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.
Headquartered in Forest City, Iowa, Winnebago Industries, Inc. is a
leading manufacturer of RVs used primarily in leisure travel and
outdoor recreation activities. Winnebago manufactures a variety of
motorhomes, travel trailers and fifth wheel trailers. Pro forma for
the Newmar acquisition, revenues for the twelve months ended August
2019 are about $2.7 billion.
WOODBRIDGE GROUP: Adversary Suit vs Buyer Goes to Trial
-------------------------------------------------------
Bankruptcy Judge Brendan Linehan Shannon denies the Motion for
Default Judgment filed by Plaintiffs in the case captioned
Woodbridge Wind-Down entity, LLC and WB 714 Oakhurst, LLC,
Plaintiffs, v. Monsoon Blockchain Storage, Inc., Defendant, Adv.
Pro. No. 19-50102 (BLS) (Bankr. D. Del.).
On Feb. 2, 2019, the Plaintiffs filed an adversary complaint
against Monsoon concerning ownership of a $318,000 "earnest money"
deposit by Monsoon in connection with an agreement dated Nov. 14,
2018, for Monsoon's purchase of real property located at 714 N.
Oakhurst Drive, Beverly Hills, California.
The Complaint alleges that Monsoon waived "any and all buyer
contingencies" under the Purchase Agreement upon signing a
Contingency Removal No. 2 on Dec. 4, 2018, and, consequently, the
Escrowed Funds became non-refundable to Monsoon and payable to
Eldredge as liquidated damages if the escrow failed to close as a
result of a default by Monsoon.
The Bankruptcy Court approved the Purchase Agreement on Jan. 2,
2019. The Complaint alleges that the parties were obligated to
close escrow for the purchase and sale of the Property within 14
days following the entry of the Sale Order. The Complaint alleges
that Monsoon breached its obligations under the Purchase Agreement
when it failed to deposit into the escrow the purchase price and
other deliverables required under the Purchase Agreement. Monsoon
failed to cure its breach by again failing to close escrow within
three days following its receipt of the Demand to Close Escrow.
The Complaint also alleges that on Jan. 23, 2019, Eldredge, through
its legal counsel, notified Monsoon that it was terminating the
Purchase Agreement and requested that Monsoon countersign the
Cancellation of Contract, Release of Deposit, and Cancellation of
Escrow. Monsoon refused to execute the Cancellation Instructions
and, instead, responded by a letter proposing "three paths
forward": (i) returning the Escrowed Funds to Monsoon; (ii)
extending the closing date to allow for repairs and appraisal; or
(iii) becoming "embroiled in a legal dispute."
Monsoon argues that it has several valid defenses to the Complaint,
including: (i) unclean hands, alleging that Eldredge principals and
agents made repeated promises without any intent to perform those
promises, including promises to extend the escrow closing date;
(ii) lack of jurisdiction, because it has not filed a proof of
claim in the bankruptcy case; (iii) mandatory arbitration required
under the parties' contract, (iv) failure of conditions precedent,
alleging that Eldredge failed to perform contract obligations
relating to inspections, repairs and closing, and (v) waiver and
estoppel, alleging that both the terms of the parties' written
agreement, and the promises, representations and assurances given
to Monsoon by the principals and agents of Eldredge constitute
waivers of the Plaintiffs' rights to receive equitable relief as
requested in the Complaint.
The Plaintiffs contend that the existence of a meritorious defense
is a threshold issue in the default judgment analysis, but argue
that that Monsoon's defenses rest on improper parol evidence and
claims that are foreclosed by the actual documents.
Considering the background and the parties' arguments along with
the Third Circuit's standard for granting or setting aside default
judgments, the Court finds this matter to present a very close
call, but concludes that the Plaintiffs' Motion should be denied. A
threshold issue is whether Monsoon has asserted a meritorious
defense. The Court explains that Monsoon at this time is not
required to establish its defense beyond doubt; instead, it needs
to establish a defense that, if proven at trial, would constitute a
complete defense. Moreover, there is nothing to suggest that the
Plaintiffs' "ability to pursue to the claim has been hindered since
the entry of the default judgment by loss of evidence or
otherwise." And, finally, the timing of this matter is not so
egregious to show willfulness or bad faith conduct by Monsoon.
A copy of the Court's Memorandum Order dated Oct. 10, 2019 is
available at https://bit.ly/36bUUYQ from Leagle.com.
Woodbridge Group of Companies, LLC, Debtor, represented by Jennifer
L. Conn -- jconn@gibsondunn.com -- Gisbon Dunn & Crutcher LLP,
Daniel B. Denny -- ddenny@milbank.com -- Milbank LLP, David A.
Fidler -- dfidler@ktbslaw.com -- Klee, Tuchin, Bogdanoff & Stern,
LLP, Oscar Garza -- ogarza@gibsondunn.com -- Gibson Dunn & Crutcher
LLP, Matthew K. Kelsey – mkelsey@gibsondunn.com -- Gibson, Dunn
& Crutcher LLP, Samuel M. Kidder -- skidder@ktbslaw.com -- Klee,
Tuchin, Bogdanoff & Stern LLP, Kenneth N. Klee -- kklee@ktbslaw.com
-- Klee Tuchin Bogdanoff Stern LLP, Samuel A. Newman --
SAM.NEWMAN@SIDLEY.COM -- Sidley Austin LLP, Robert J. Pfister --
rpfister@ktbslaw.com -- Klee, Tuchin, Bogdanoff & Stern LLP,
Matthew P. Porcelli -- mporcelli@gibsondunn.com -- Gisbon Dunn &
Crutcher LLP, David M. Stern , Klee Tuchin Bogdanoff & Stern LLP,
Michael L. Tuchin , Klee, Tuchin, Bogdanoff & Stern, LLP, Jonathan
M Weiss , Klee, Tuchin, Bogdanoff & Stern LLP & J. Eric Wise ,
Gibson, Dunn & Crutcher LLP.
Liquidation Trust, Trustee, represented by Colin R. Robinson --
crobinson@pszjlaw.com -- Pachulski Stang Ziehl & Jones LLP.
U.S. Trustee, U.S. Trustee, represented by Timothy Jay Fox, Jr. ,
Office of the United States Trustee.
About Woodbridge Group
Headquartered in Sherman Oaks, California, The Woodbridge Group
Enterprise -- http://www.woodbridgecompanies.com/-- was a
comprehensive real estate finance and development company. Its
principal business was buying, improving, and selling high-end
luxury homes. The Woodbridge Group Enterprise also owned and
operated full-service real estate brokerages, a private investment
company, and real estate lending operations. The Woodbridge Group
Enterprise and its management team had been in the business of
providing a variety of financial products for more than 35 years,
and had 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 involved real estate, note buying
and selling, hard money lending, and alternative financial
transactions involving thousands of investors.
Woodbridge filed for bankruptcy as a result of a massive,
multi-year Ponzi scheme perpetrated by Robert Shapiro between (at
least) 2012 and 2017. As part of this fraud, Shapiro, through the
Woodbridge entities, raised over one billion dollars from
approximately 10,000 investors -- as either noteholders or
unitholders.
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, served as the Debtors' bankruptcy counsel.
Homer Bonner Jacobs, PA, served as special counsel; Province, Inc.,
as expert consultant; and Moelis & Company LLC, as investment
banker.
The Debtors' financial advisors were Larry Perkins, John Farrace,
Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman
at SierraConstellation Partners, LLC. Beilinson Advisory Group
served as independent management to the Debtors. Garden City
Group, LLC, served as the Debtors' claims and noticing agent.
An official committee of unsecured creditors was appointed in the
Chapter 11 cases on Dec. 14, 2017. Pachulski Stang Ziehl & Jones
served as counsel to the Official Committee of Unsecured Creditors;
and FTI Consulting, Inc., acted as its financial advisor.
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 said that effective as of February 15, 2019, it
has emerged from chapter 11 bankruptcy following confirmation of
its plan of liquidation. The Plan was confirmed on October 26,
2018.
WSLD LLC: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
WSLD LLC, according to the case docket.
About WSLD LLC
WSLD LLC, a privately held company in Tampa, Fla., filed a Chapter
11 petition (Bankr. M.D. Fla. Case No. 19-08916) on Sept. 20, 2019.
In the petition signed by Jason Mitow, authorized representative,
the Debtor was estimated to have assets of between $50,000 and
$100,000 and liabilities of between $1 million and $10 million.
McIntyre Thanasides Bringgold Elliott Grimaldo Guito & Matthews,
P.A., represents the Debtor.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Alfredo Gonzalez
Bankr. C.D. Cal. Case No. 19-12680
Chapter 11 Petition filed October 23, 2019
Filed Pro Se
In re Erika Rice
Bankr. C.D. Cal. Case No. 19-22522
Chapter 11 Petition filed October 23, 2019
represented by: Thomas B. Ure, Esq.
URE LAW FIRM
E-mail: tbuesq@aol.com
In re Mitesh Kumar Patel and Kinnal Mitesh Patel
Bankr. N.D. Cal. Case No. 19-42399
Chapter 11 Petition filed October 23, 2019
represented by: Michael J. Yesk, Esq.
YESK LAW
E-mail: yesklaw@gmail.com
In re Shoukath S. Ahmed and Raana A. Ahmed
Bankr. N.D. Ill. Case No. 19-30136
Chapter 11 Petition filed October 23, 2019
represented by: Konstantine T. Sparagis, Esq.
LAW OFFICES OF KONSTANTINE SPARAGIS PC
E-mail: gsparagi@yahoo.com
In re Four Holdings, LLC
Bankr. D. Md. Case No. 19-24179
Chapter 11 Petition filed October 23, 2019
See http://bankrupt.com/misc/mdb19-24179.pdf
represented by: Gary S. Poretsky, Esq.
PHOENIX LAW GROUP, LLC
E-mail: gary@plgmd.com
In re Bushwick 1242 Corp.
Bankr. E.D.N.Y. Case No. 19-46354
Chapter 11 Petition filed October 23, 2019
Filed Pro Se
In re Brooklyn Beauty Mix Inc.
Bankr. E.D.N.Y. Case No. 19-46361
Chapter 11 Petition filed October 23, 2019
Filed Pro Se
In re PR Plumbing & Heating Inc.
Bankr. E.D.N.Y. Case No. 19-46364
Chapter 11 Petition filed October 23, 2019
See http://bankrupt.com/misc/nyeb19-46364.pdf
represented by: J. Ted Donovan, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
E-mail: Tdonovan@gwfglaw.com
In re Spoiled Sweet Designs, Inc.
Bankr. W.D. Tenn. Case No. 19-28449
Chapter 11 Petition filed October 23, 2019
See http://bankrupt.com/misc/tnwb19-28449.pdf
represented by: Preston Wilson, Esq.
WAMPLER & PIERCE, PC
E-mail: preston@prestonwilsonlaw.com
In re Maria Theresa Paesano
Bankr. S.D. Tex. Case No. 19-20519
Chapter 11 Petition filed October 23, 2019
Filed Pro Se
In re West End Resources, Inc.
Bankr. E.D. La. Case No. 19-12902
Chapter 11 Petition filed October 24, 2019
See http://bankrupt.com/misc/laeb19-12902.pdf
represented by: Robert L. Marrero, Esq.
LAW OFFICE OF ROBERT L. MARRERO
E-mail: marrero1035@bellsouth.net
In re 1814 Gateway Blvd Corp
Bankr. E.D.N.Y. Case No. 19-46379
Chapter 11 Petition filed October 24, 2019
Filed Pro Se
In re Mediquip, Inc.
Bankr. E.D.N.Y. Case No. 19-77310
Chapter 11 Petition filed October 24, 2019
See http://bankrupt.com/misc/nyeb19-77310.pdf
represented by: Heath S. Berger, Esq.
BERGER, FISCHOFF, SHUMER,
WEXLER & GOODMAN, LLP
E-mail: hberger@bfslawfirm.com/
gfischoff@bfslawfirm.com
In re Gulliver's Gate, LLC
Bankr. S.D.N.Y. Case No. 19-13392
Chapter 11 Petition filed October 24, 2019
See http://bankrupt.com/misc/nysb19-13392.pdf
represented by: Gabriel Del Virginia, Esq.
LAW OFFICE OF GABRIEL DEL VIRGINIA
E-mail: gabriel.delvirginia@verizon.net
In re Sweet Wolverine Management LLC
Bankr. D. Ariz. Case No. 19-13670
Chapter 11 Petition filed October 25, 2019
See http://bankrupt.com/misc/azb19-13670.pdf
represented by: John C. Smith, Esq.
SMITH & SMITH PLLC
E-mail: john@smithandsmithpllc.com
In re Sweet Wolverine Holdings, LLC
Bankr. D. Ariz. Case No. 19-13671
Chapter 11 Petition filed October 25, 2019
See http://bankrupt.com/misc/azb19-13671.pdf
represented by: John C. Smith, Esq.
SMITH & SMITH PLLC
E-mail: john@smithandsmithpllc.com
In re Ross Allen Gosney
Bankr. D. Ariz. Case No. 19-13675
Chapter 11 Petition filed October 25, 2019
represented by: James Webster, Esq.
JAMES PORTMAN WEBSTER LAW OFFICE, PLC
E-mail: Help@jpwlegal.com
In re Arch Group, Inc.
Bankr. M.D. Fla. Case No. 19-10127
Chapter 11 Petition filed October 25, 2019
See http://bankrupt.com/misc/flmb19-10127.pdf
represented by: Michael R. Dal Lago, Esq.
DAL LAGO LAW
E-mail: mike@dallagolaw.com
In re Lifestyle Yachts, Inc.
Bankr. S.D. Fla. Case No. 19-24364
Chapter 11 Petition filed October 25, 2019
See http://bankrupt.com/misc/flsb19-24364.pdf
represented by: Chad T. Van Horn, Esq.
VAN HORN LAW GROUP, P.A.
E-mail: Chad@cvhlawgroup.com
In re DDR Investments LLC
Bankr. D. Minn. Case No. 19-43252
Chapter 11 Petition filed October 25, 2019
Filed Pro Se
In re Jason's Painting and Home Remodeling, LLC
Bankr. D.N.J. Case No. 19-30193
Chapter 11 Petition filed October 25, 2019
See http://bankrupt.com/misc/njb19-30193.pdf
represented by: Ellen M. McDowell, Esq.
MCDOWELL LAW, PC
E-mail: emcdowell@mcdowelllegal.com
In re Chaudry A. Ali
Bankr. S.D.N.Y. Case No. 19-23890
Chapter 11 Petition filed October 25, 2019
represented by: Michael L. Previto, Esq.
MICHAEL L. PREVITO
E-mail: mchprev@aol.com
In re Crazy Cat Cyclery, LLC
Bankr. W.D. Tex. Case No. 19-31773
Chapter 11 Petition filed October 25, 2019
See http://bankrupt.com/misc/txwb19-31773.pdf
represented by: Corey W. Haugland, Esq.
JAMES & HAUGLAND, P.C.
E-mail: chaugland@jghpc.com
In re Andrew J. Piotrowski and Michelle Piotrowski
Bankr. D. Ariz. Case No. 19-13679
Chapter 11 Petition filed October 27, 2019
represented by: Michael A. Jones, Esq.
ALLEN BARNES & JONES, PLC
E-mail: mjones@allenbarneslaw.com
In re Sharyl Gwen Bloom
Bankr. C.D. Cal. Case No. 19-22624
Chapter 11 Petition filed October 25, 2019
Filed Pro Se
In re Laura D. Gonzalez-Gomez
Bankr. C.D. Cal. Case No. 19-22641
Chapter 11 Petition filed October 25, 2019
represented by: Onyinye N. Anyama, Esq.
ANYAMA LAW FIRM, A PROFESSIONAL CORP
E-mail: onyi@anyamalaw.com
In re Judy Giblin Lee
Bankr. N.D. Cal. Case No. 19-31124
Chapter 11 Petition filed October 26, 2019
represented by: Michael D. Lee, Esq.
LEE & LI, ATTORNEYS AT LAW
E-mail: michael.lee@lee-li.com
In re Raul Castro
Bankr. D. Md. Case No. 19-24286
Chapter 11 Petition filed October 25, 2019
represented by: Richard B. Rosenblatt, Esq.
THE LAW OFFICES OF RICHARD B. ROSENBLATT
E-mail: rrosenblatt@rosenblattlaw.com
In re Family Services LLC II
Bankr. D. Minn. Case No. 19-50847
Chapter 11 Petition filed October 27, 2019
See http://bankrupt.com/misc/mnb19-50847.pdf
represented by: Michael R. Ruffenach, Esq.
RUFFENACH LAW OFFICE
E-mail: ruffenac@paulbunyan.net
ruffenach@live.com
In re Gregory A. Johnson
Bankr. D. N.D. Case No. 19-30593
Chapter 11 Petition filed October 25, 2019
represented by: Jon R. Brakke, Esq.
VOGEL LAW FIRM
E-mail: jbrakke@vogellaw.com
In re Charles Alfred Linke
Bankr. N.D.N.Y. Case No. 19-11934
Chapter 11 Petition filed October 25, 2019
Filed Pro Se
In re Twin Care Home, Inc.
Bankr. C.D. Cal. Case No. 19-22666
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/cacb19-22666.pdf
represented by: Dana M. Douglas, Esq.
ATTORNEY AT LAW
E-mail: dmddouglas@hotmail.com
dana@danamdouglaslaw.com
In re J.A.M. 041966 Family Trust
Bankr. E.D. Cal. Case No. 19-14508
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/caeb19-14508.pdf
represented by: Justin D. Harris, Esq.
HARRIS LAW FIRM, PC
E-mail: jdh@harrislawfirm.net
In re Skip, LLC
Bankr. E.D. Cal. Case No. 19-26679
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/caeb19-26679.pdf
represented by: W. Steven Shumway, Esq.
LAW OFFICE OF W. STEVEN SHUMWAY
E-mail: sshumway@shumwaylaw.com
In re Lynn Roxanne Waller
Bankr. S.D. Cal. Case No. 19-06495
Chapter 11 Petition filed October 28, 2019
Filed Pro Se
In re Kwong Lam Sit
Bankr. D.C. Case No. 19-00718
Chapter 15 Petition filed October 28, 2019
See http://bankrupt.com/misc/dcb19-00718.pdf
represented by: David W. Gaffey, Esq.
Brent C. Strickland, Esq.
WHITEFORD, TAYLOR & PRESTON, LLP
E-mail: dgaffey@wtplaw.com
bstrickland@wtplaw.com
- and -
Daniel Lowenthal, Esq.
PATTERSON BELKNAP WEBB & TYLER LLP
Email: dalowenthal@pbwt.com
In re Go-Go's Greek Grille, LLC
Bankr. M.D. Fla. Case No. 19-10198
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/flmb19-10198.pdf
represented by: Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
E-mail: Buddy@TampaEsq.com
All@tampaesq.com
In re Terry Alan Case
Bankr. N.D. Ga. Case No. 19-42495
Chapter 11 Petition filed October 28, 2019
represented by: Robert J. Wilkinson, Esq.
LAW OFFICE OF W. THOMAS BIBLE, JR.
E-mail: robert@tombiblelaw.com
In re Kyung Sil Choi
Bankr. S.D. Ind. Case No. 19-07999
Chapter 11 Petition filed October 28, 2019
represented by: David R. Krebs, Esq.
HESTER BAKER KREBS LLC
E-mail: dkrebs@hbkfirm.com
In re Eli TeVoortwis and Johanna Theodora TeVoortwis
Bankr. E.D. Mich. Case No. 19-22092
Chapter 11 Petition filed October 28, 2019
represented by: Elliot G. Crowder, Esq.
E-mail: ecrowder@sbplclaw.com
In re NC Special Police, LLC
Bankr. E.D.N.C. Case No. 19-04972
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/nceb19-04972.pdf
represented by: Travis Sasser, Esq.
SASSER LAW FIRM
E-mail: travis@sasserbankruptcy.com
In re TM Constructors, LLC
Bankr. D.N.J. Case No. 19-30283
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/njb19-30283.pdf
represented by: Joseph Casello, Esq.
COLLINS, VELLA & CASELLO, LLC
E-mail: jcasello@cvclaw.net
In re Tatuado Hospitality Management Group LLC
Bankr. D. Nev. Case No. 19-16965
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/nvb19-16965.pdf
represented by: Ryan A. Andersen, Esq.
ANDERSEN LAW FIRM, LTD.
E-mail: ryan@vegaslawfirm.legal
In re A Merryland Operating LLC
Bankr. E.D.N.Y. Case No. 19-46475
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/nyeb19-46475.pdf
represented by: Dawn Kirby, Esq.
KIRBY AISNER & CURLEY LLP
E-mail: dkirby@kacllp.com
In re The NSJ Group II LTD. d/b/a Edible Arrangements
Bankr. E.D.N.Y. Case No. 19-77392
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/nyeb19-77392.pdf
represented by: Salvatore LaMonica, Esq.
LAMONICA HERBST & MANISCALCO, LLP
E-mail: sl@lhmlawfirm.com
In re Lan Holdings LLC
Bankr. S.D.N.Y. Case No. 19-23897
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/nysb19-23897.pdf
represented by: Allen A. Kolber, Esq.
LAW OFFICES OF ALLEN A. KOLBER, ESQ.
E-mail: akolber@kolberlegal.com
In re Monmin LLC
Bankr. S.D.N.Y. Case No. 19-23899
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/nysb19-23899.pdf
represented by: Allen A. Kolber, Esq.
LAW OFFICES OF ALLEN A. KOLBER, ESQ.
E-mail: akolber@kolberlegal.com
In re Gloria M. Moronta
Bankr. S.D.N.Y. Case No. 19-23900
Chapter 11 Petition filed October 28, 2019
represented by: Anne J. Penachio, Esq.
PENACHIO MALARA LLP
E-mail: apenachio@pmlawllp.com
In re River Equity Holdings LLC
Bankr. S.D.N.Y. Case No. 19-23901
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/nysb19-23901.pdf
represented by: Allen A. Kolber, Esq.
LAW OFFICES OF ALLEN A. KOLBER, ESQ.
E-mail: akolber@kolberlegal.com
In re The BSD Trust
Bankr. S.D.N.Y. Case No. 19-23902
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/nysb19-23902.pdf
represented by: Ted T. Mozes, Esq.
TED MOZES PLLC
E-mail: tmozeslaw@gmail.com
In re 52 wood LLC
Bankr. W.D.N.Y. Case No. 19-12245
Chapter 11 Petition filed October 29, 2019
See http://bankrupt.com/misc/nywb19-12245.pdf
represented by: James M. Joyce, Esq.
E-mail: jmjoyce@lawyer.com
In re CNE Poured Walls, Inc.
Bankr. S.D. Ohio Case No. 19-56875
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/ohsb19-56875.pdf
represented by: Derek Michael Shaw, Esq.
CALIG LAW FIRM
E-mail: measter@caliglaw.com
In re Estudio Legal Loiza CSP
Bankr. D.P.R. Case No. 19-06241
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/prb19-06241.pdf
represented by: Robert Millan, Esq.
MILLAN LAW OFFICES
E-mail: rmi3183180@aol.com
In re Amir Golestan
Bankr. D.S.C. Case No. 19-05657
Chapter 11 Petition filed October 28, 2019
represented by: Kevin Campbell, Esq.
E-mail: kcampbell@campbell-law-firm.com
In re Majestic Properties of Tennessee LLC
Bankr. W.D. Tenn. Case No. 19-28593
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/tnwb19-28593.pdf
represented by: Ted I. Jones, Esq.
LAW OFFICE OF TED I. JONES
E-mail: dtedijones@aol.com
In re Viscaria Consulting and Services, LLC
Bankr. S.D. Tex. Case No. 19-35993
Chapter 11 Petition filed October 28, 2019
See http://bankrupt.com/misc/txsb19-35993.pdf
represented by: Russell Van Beustring, Esq.
THE LANE LAW FIRM, PLLC
E-mail: russell.beustring@lanelaw.com
In re Moyanne E. Harding
Bankr. W.D. Va. Case No. 19-62275
Chapter 11 Petition filed October 28, 2019
represented by: Stephen E. Dunn, Esq.
STEPHEN E. DUNN, ESQ.
E-mail: stephen@stephendunn-
pllc.com,jennifer@stephendunn-
pllc.com,kelly@stephendunn-
pllc.com,michelle@stephendunn-
pllc.com,sherry@stephendunn-
pllc.com
In re Haeshing Hwang
Bankr. E.D. Cal. Case No. 19-26730
Chapter 11 Petition filed October 29, 2019
represented by: Stephan M. Brown, Esq.
In re The Dough Bar, LLC
Bankr. D. Colo. Case No. 19-19325
Chapter 11 Petition filed October 29, 2019
See http://bankrupt.com/misc/cob19-19325.pdf
represented by: Owen Hathaway, Esq.
THE LAW OFFICES OF OWEN HATHAWAY, LLC
E-mail: owen@ohlawcolorado.com
In re PFM Restaurants, LLC
Bankr. D.C. Case No. 19-00722
Chapter 11 Petition filed October 29, 2019
See http://bankrupt.com/misc/dcb19-00722.pdf
represented by: Steven H. Greenfeld, Esq.
COHEN, BALDINGER & GREENFELD, LLC
E-mail: steveng@cohenbaldinger.com
In re PC 12, Inc.
Bankr. D. Kan. Case No. 19-12086
Chapter 11 Petition filed October 29, 2019
See http://bankrupt.com/misc/ksb19-12086.pdf
represented by: William H. Zimmerman, Jr., Esq.
ERON LAW, P.A.
E-mail: zim@eronlaw.net
In re Salvatore Lubrano and Maria Lubrano
Bankr. D. Md. Case No. 19-24449
Chapter 11 Petition filed October 29, 2019
represented by: Richard M. McGill, Esq.
LAW OFFICES OF RICHARD M. MCGILL
E-mail: mcgillrm@aol.com
In re 1/0 Technology Corp
Bankr. S.D.N.Y. Case No. 19-23909
Chapter 11 Petition filed October 29, 2019
See http://bankrupt.com/misc/nysb19-23909.pdf
represented by: Dawn Kirby, Esq.
KIRBY AISNER & CURLEY, LLP
E-mail: dkirby@kacllp.com
In re Arthur Joseph Lipton
Bankr. S.D.N.Y. Case No. 19-23910
Chapter 11 Petition filed October 29, 2019
represented by: Julie Cvek Curley, Esq.
KIRBY AISNER & CURLEY LLP
E-mail: jcurley@kacllp.com
In re 52 Wood LLC
Bankr. W.D.N.Y. Case No. 19-12245
Chapter 11 Petition filed October 29, 2019
See http://bankrupt.com/misc/nywb19-12245.pdf
represented by: James M. Joyce, Esq.
E-mail: jmjoyce@lawyer.com
*********
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 2019. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
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firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***