/raid1/www/Hosts/bankrupt/TCR_Public/191101.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, November 1, 2019, Vol. 23, No. 304
Headlines
219 SAGG MAIN: Asks Court to Extend Solicitation Period to Feb. 27
ALLEN SUPPLY: Has Until Dec. 31 to Exclusively File Chapter 11 Plan
ANCHOR GLASS: Moody's Lowers CFR to B3, Outlook Negative
ANIXTER INC: Moody's Reviews Ba2 CFR for Downgrade on CD&R Deal
APODACA ENTERPRISES: Taps Gabriel Liberman as Bankruptcy Counsel
ARENA EQUITY: Case Summary & 17 Unsecured Creditors
ASP UNIFRAX: Moody's Reviews B3 CFR for Downgrade
AUTO EARTH: Case Summary & 17 Unsecured Creditors
BIOSTAGE INC: Submits IND Application to the FDA for Cellspan
BROOKLYN BUILDINGS: Wins Approval of Disclosure Statement
BUHLER-FREEMAN: Case Summary & 3 Unsecured Creditors
BURFORD CAPITAL: Moody's Assigns Ba3 CFR, Outlook Positive
COMMUNITY HEALTH: Reports $17 Million Net Loss for Third Quarter
DANRU ENTERPRISES: Hires Reid & Manee as Legal Counsel
DESTINATION MATERNITY: Sets Bidding Procedures for All Assets
DOMINION GROUP: U.S. Trustee Forms 3-Member Committee
ENVIVA PARTNERS: Moody's Raises CFR to Ba3, Outlook Stable
FLEETSTAR LLC: River Parish Buying Mack Two 2018 Rolloffs for $242K
FRED'S INC: Commiittee Hires Womble Bond Dickinson as Counsel
GOODYEAR TIRE: S&P Lowers ICR to 'BB-'; Outlook Stable
HOOD LANDSCAPING: Hendley Buying Cook County Property for $310K
HOOD LANDSCAPING: Lynn Buying Spark Property for $80K
HS MIDCO: S&P Assigns 'B-' ICR on Sponsor-To-Sponsor Sale
IAMGOLD CORP: Moody's Lowers CFR to B1, Outlook Stable
J.T. SHANNON: Seeks to Extend Exclusivity Period to Jan. 24
JBS SA: S&P Upgrades ICR to 'BB' on Substantial Deleveraging
JBS USA: S&P Raises ICR to 'BB' on Substantial Deleveraging
JHS VENTURES: Disclosure Statement Hearing on Dec. 3
LINDLEY FIRE: Expedite Fire Buying All Assets for $600K
M.E. SMITH: Plan Has 6.5% Dividend for Unsecured Claims
MARGARET SCHMIDT: Proposes a Sale of New Port Richey Property
MARSALRET LLC: Case Summary & 16 Unsecured Creditors
MAURICE SPORTING: Gun Auctions Buying Gun Inventory for $97K
MCCLATCHY COMPANY: Moody's Lowers CFR to Ca, Outlook Stable
MI WINDOWS: S&P Assigns 'B+' Issuer Credit Rating; Outlook Stable
MIWD HOLDCO II: Moody's Assigns B2 CFR, Outlook Stable
MOUNTAIN INVESTMENTS: Hearing on Plan Outline Continued to Nov. 7
MURRAY ENERGY: Moody's Lowers Corp. Family Rating to 'C'
MWM OIL: Seeks to Hire Butler County Auction as Auctioneer
MWM OIL: Seeks to Hire Evenson Auctioneer as Auctioneer
NAJEEB KHAN: Wife Selling Edwardsburg Property to Slocums for $750K
NEW GOLD: S&P Alters Outlook to Stable, Affirms 'B' ICR
NEWMARK GROUP: S&P Affirms 'BB+' Long-Term ICR; Outlook Stable
OWENS-ILLINOIS INC: S&P Cuts ICR to BB-; Outlook Stable
PARKINSON SEED: Trustee Selling Ashton Property for $525K Cash
PG&E CORP: Noteholders Want Own Plan Considered Ahead of Debtors'
PHILMONT AVENUE LOWER: Voluntary Chapter 11 Case Summary
PILGRIM'S PRIDE: S&P Raises ICR to 'BB'; Outlook Stable
PIXIUS COMMUNICATIONS: Taps Farhang & Medcoff as Special Counsel
PLAZA PATISSERIE: Unsecureds to Recover 10% Under Plan
PRINCE FASHIONS: Gets More Time to File Chapter 11 Plan
RALPH BURNETT: Selling San Ana Residential Property for $1.24M
RED LOBSTER: S&P Affirms 'B-' ICR; Outlook Negative
REGIONAL SITE: Bankruptcy Administrator to Form Committee
RILEY DRIVE: Case Summary & 12 Unsecured Creditors
RITE AID: Fitch Lowers LT IDR to B-, Outlook Stable
RITORI LLC: Case Summary & 4 Unsecured Creditors
ROBINSON AEROSPACE: Voluntary Chapter 11 Case Summary
RVT, INC: Hires Oaktree Law as General Bankruptcy Counsel
S.A.S.B., INC: Seeks to Hire Kelley Fulton as Legal Counsel
SOUTHCROSS ENERGY: Disclosure Statement Hearing Reset to Nov. 5
STEPHANIE SARRIA: Sets Bidding Procedures for Brooklyn Property
TAJAY RESTAURANTS: Exclusivity Period Extended to Jan. 15
TIGER OAK MEDIA: Two Creditors Appointed as Committee Members
TRANSDIGM INC: S&P Alters Outlook to Stable, Affirms 'B+' ICR
TRIPLET LLC: Case Summary & 11 Unsecured Creditors
TTK RE ENTERPRISE: Voluntary Chapter 11 Case Summary
UNITED METHODIST: Seeks to Hire Parrott Real Estate as Auctioneer
WASTE SERVICES: Plan Filing Deadline Extended to Feb. 8
WATERLOO AFFORDABLE: Voluntary Chapter 11 Case Summary
WELDED CONSTRUCTION: Michels Buying Perrysburg Property for $2.27M
WHEATON MEDICAL: Exclusive Period to File Plan Extended to Dec. 23
WINNEBAGO INDUSTRIES: S&P Revises CreditWatch Implications to Pos.
WMC KIM: Seeks to Hire Robl Law Group as Legal Counsel
WOODS INLET: Taps A. Bruce Wilson as Special Counsel in BOKF Suit
WSLD LLC: Taps McIntyre Thanasides as Legal Counsel
XEROX CORP: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
XTL-PA INC: Committee Taps Miller Coffey Tate as Financial Advisor
[*] BOOK REVIEW: Bankruptcy and Secured Lending in Cyberspace
*********
219 SAGG MAIN: Asks Court to Extend Solicitation Period to Feb. 27
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219 Sagg Main LLC asked the U.S. Bankruptcy Court for the Southern
District of New York to extend the period during which the company
can solicit acceptances for its Chapter 11 plan of reorganization
to Feb. 27, 2020.
The company already filed a plan, which contemplates a
restructuring of its secured claim or sale of its property. Its
current exclusive solicitation period expired on Oct. 30.
219 Sagg Main is in the midst of defending Atalaya Asset Income
Fund II LP's motion for modification of the automatic stay and
appointment of a Chapter 11 trustee and modification of the
automatic stay. The Suffolk County Supreme Court has not yet
determined the amount of Atalaya's claim, and the issue of whether
Atalaya is entitled to charge default interest and other penalties.
To avoid further litigation, 219 Sagg Main filed a motion seeking
to have the issues raised in this case between the company and
Atalaya referred to the bankruptcy court's mediation program. The
hearing to consider the motion is scheduled for Nov. 5.
About 219 Sagg Main LLC
219 Sagg Main LLC owns a real property located at 219 Sagaponack
Main Street, Sagaponack, N.Y.
219 Sagg Main sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 19-11444) on May 3, 2019. The case
was eventually transferred from the Manhattan divisional office to
the White Plains divisional office and was assigned a new case
number (Case No. 19-20004). At the time of the filing, the Debtor
estimated assets of less than $50,000 and liabilities of between $1
million and $10 million. The case is assigned to Judge Robert D.
Drain. Shafferman & Feldman LLP is the Debtor's legal counsel.
ALLEN SUPPLY: Has Until Dec. 31 to Exclusively File Chapter 11 Plan
-------------------------------------------------------------------
Judge John Sherwood of the U.S. Bankruptcy Court for the District
of New Jersey extended to Dec. 31 the period during which only The
Allen Supply Laundry Service, Inc. can file a Chapter 11 plan.
About Allen Supply & Laundry Service
Founded in 1920, The Allen Supply & Laundry Service, Inc. provides
dry cleaning and laundry services. The Allen Supply & Laundry
Service sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D.N.J. Case No. 19-10132) on Jan. 3, 2019. At the time of
the filing, the Debtor estimated assets of $1 million to $10
million and liabilities of less than $1 million. The case is
assigned to Judge John K. Sherwood. Wasserman, Jurista & Stolz,
P.C., is the Debtor's counsel.
ANCHOR GLASS: Moody's Lowers CFR to B3, Outlook Negative
--------------------------------------------------------
Moody's Investors Service downgraded Anchor Glass Container
Corporation's Corporate Family Rating to B3 from B2 and Probability
of Default rating to B3-PD from B2-PD. The ratings outlook is
negative.
Downgrades:
Issuer: Anchor Glass Container Corporation
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Corporate Family Rating, Downgraded to B3 from B2
SR SEC 1ST LIEN TERM LOAN, Downgraded to B3 (LGD3) from B2
(LGD3)
SR SEC 2ND LIEN TERM LOAN , Downgraded to Caa2 (LGD6) from
Caa1(LGD6)
Outlook Actions:
Issuer: Anchor Glass Container Corporation
Outlook, Remains Negative
RATINGS RATIONALE
The downgrade reflects the lack of improvement in credit metrics to
a level within the B2 rating triggers and an expectation that they
will not improve to that level over the next 12 to 18 months.
Anchor continues to struggle to restore metrics after several
extraordinary events (an explosion, a lightning strike and a fire
at its facilities) and the loss of a major brand from a customer
(converted into plastic). While credit metrics are expected to
remain within the B3 category, free cash generation may continue to
be negative depending upon the rate of commercialization of new
business and benefits of various efficiency initiatives.
The negative outlook reflects the uncertainty around free cash
generation going forward. Cash generation is expected to continue
to be weak and dependent upon the commercialization of new business
and success of efficiency initiatives since both one-time charges
and insurance proceeds will be eliminated over the near term.
Anchor will need to demonstrate that it can generate positive free
cash flow and maintain good liquidity (including renewing the
revolver) in order to stabilize the rating.
Weaknesses in Anchor's credit profile include a high concentration
of sales, the mature nature of the industry and softness in end
markets including negative volume trends in mass beer.
Approximately 48% of the company's sales (For the year ended
December 31, 2018) are generated from three customers. The majority
of the company's revenue is generated in the mature US market with
little exposure to faster growing and more profitable emerging
markets. Weaknesses also include the company's relatively smaller
size and weaker margins and free cash flow to debt than its rated
competitors. Strengths in the company's credit profile include
having the majority of business under long term contracts with
strong cost-pass through provisions, an average relationship of 20
years with its top customers and a customer base that includes
large, well-known brands with good market positions. Anchor passes
all raw material costs through to the customer and hedges natural
gas price fluctuations. Additionally, the US glass packaging
industry is consolidated in the US with only three major players.
The proximity of Anchor's plants to customer facilities supports
customer relationships and diminishes the threat from competitors
since it is costly to ship glass packaging more than 200-300
miles.
Moody's expects Anchor to maintain adequate liquidity over the next
12 months. Anchor's liquidity is supported by a $120 million asset
based revolver (not rated by Moody's) which expires in December
2021 and is subject to borrowing base limitations. As of June 30th,
2019, availability was approximately $83 million. Free cash flow is
expected to break even over the next 12 to 15 months due to
continuous recovery process from the unusual events in the prior
year as well as loss of a major customer contract. Cash generation
is expected to continue to be weak and dependent upon the
commercialization of new business and success of efficiency
initiatives since both one-time charges and business interruption
proceeds will be eliminated over the near term. The only financial
covenant is a springing fixed charge coverage covenant which
applies if excess availability is less than the greater of (i) $7.5
million and (ii) 10% of the Line Cap in effect for 5 consecutive
business days. If triggered, the minimum fixed charge coverage
ratio is 1.0. Cushion under the fixed charge covenant is expected
to be adequate over the horizon. The peak working capital period is
in the calendar first and fourth quarter. Amortization for the 1st
lien term loan is 1% annually. The term loan facility includes a
mandatory cash sweep of 50%. There are no significant sources of
alternate liquidity as all assets are encumbered under the credit
facilities.
An upgrade is unlikely given the current weakness in Anchor's
credit metrics and cash generation. However, the ratings could be
upgraded if there is evidence of a sustainable improvement in
credit metrics within the context of a stable operating and
competitive environment and the maintenance of good liquidity.
Anchor's small size relative to peers may also constrain any
upgrade. Specifically, the ratings could be upgraded if funds from
operations to debt increases above 9.0%, debt to EBITDA declines to
below 5.8 times, and/or EBITDA to interest expense increases to
above 3.0 times.
The ratings could be downgraded if the company fails to improve
credit metrics and generate positive free cash flow. The ratings
could also be downgraded if there is a deterioration in liquidity
or in the operating and competitive environment. Specifically, the
ratings could be downgraded if funds from operations to debt
decreases to below 7.0%, debt to EBITDA remains above 6.5 times,
and/or EBITDA to interest expense decreases to below 2.0 times.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
May 2018.
Headquartered in Tampa, Florida, Anchor Glass Container Corporation
is a North American manufacturer of premium glass packaging
products, serving the beer, liquor, food, beverage, ready-to-drink
and consumer end-markets. The company operates six manufacturing
facilities located in Florida, Georgia, Indiana, Minnesota, New
York and Oklahoma. For the 12 months ended June 30, 2019, Anchor
generated approximately $569 million in revenue. Anchor is a
portfolio company of CVC Capital Partners (acquired late 2016),
with a minority ownership by BA Glass. The company does not
publicly disclose information.
ANIXTER INC: Moody's Reviews Ba2 CFR for Downgrade on CD&R Deal
---------------------------------------------------------------
Moody's Investors Service placed all ratings of Anixter Inc.,
including the Ba2 corporate family rating and Ba3 senior unsecured
rating, under review for downgrade. This action follows the
announcement that Anixter has entered into a definitive agreement
to be acquired by an affiliate of Clayton, Dubilier & Rice. The
all-cash transaction is valued at approximately $3.8 billion and is
expected to close by the end of the first quarter of 2020 subject
to customary closing conditions and shareholder approvals.
The rating review will focus on the financial leverage and ultimate
capital structure resulting from the leveraged buy-out. The review
for downgrade is based on the expectation that the company will
have higher financial leverage, likely in the form of secured debt,
following the acquisition given the private equity ownership.
The following ratings were placed on review for downgrade:
Issuer: Anixter Inc.
Corporate Family Rating at Ba2
Probability of Default Rating at Ba2-PD
Senior unsecured notes at Ba3 (LGD4)
Unchanged:
The Speculative Grade Liquidity rating remains unchanged at
SGL-2
Outlook Actions:
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE
Notwithstanding the rating review, Anixter's Ba2 corporate family
rating is supported by the company's global scale, extensive
product and value-added service offerings which provide a distinct
competitive advantage. The rating also considers strong end-market
demand, diversified customer base and proven free cash flow
generation capacity. These factors are offset by Anixter's low, but
improving, operating margins and exposure to volatile copper
prices.
The principal methodology used in these ratings was the
Distribution & Supply Chain Services Industry published June 2018.
Headquartered in Glenview, Illinois, Anixter is a global
distributor of communications products, electrical and electronic
wire and cable, and OEM supply. The company's end users include
enterprises, data centers, manufacturers, natural resources
companies, utilities and original equipment manufacturers. For the
twelve month period ended September 30, 2019, Anixter had revenues
of $8.7 billion.
APODACA ENTERPRISES: Taps Gabriel Liberman as Bankruptcy Counsel
----------------------------------------------------------------
Apodaca Enterprises, Inc. seeks authority from the U.S. Bankruptcy
Court for the Eastern District of California to employ the Law
Offices of Gabriel Liberman, APC.
The firm will serve as the Debtor's legal counsel in its Chapter 11
case.
The firm received a retainer in the sum of $60,000, of which
$$20,632 was used to pay the filing fee and pre-bankruptcy attorney
fees.
Gabriel Liberman, Esq., and Doug Crowder, Esq., the firm's attorney
who will be handling the case, will charge $275 per hour and $350
per hour, respectively. Paraprofessionals will charge an hourly fee
of $150.
Mr. Liberman disclosed in a court filing that the firm and its
attorneys are "disinterested persons" within the meaning of Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Gabriel E. Liberman, Esq.
Law Offices of Gabriel Liberman, APC
2033 Howe Avenue, Suite 140
Sacramento, CA 95825
Tel: (916) 485-1111
About Apodaca Enterprises
Apodaca Enterprises, Inc., a company in fast food restaurants
industry, filed its voluntary Chapter 11 petition (Bankr. E.D. Cal.
Case No. 19-26373) on Oct. 11, 2019. In the petition signed by
Henry A. Apodaca, president, the Debtor estimated $1,061,853 in
assets and $106,377 in liabilities.
The case is assigned to Judge Christopher D. Jaime.
Gabriel E. Liberman, Esq. at the Law Offices of Gabriel Liberman,
APC, is the Debtor's counsel.
ARENA EQUITY: Case Summary & 17 Unsecured Creditors
---------------------------------------------------
Debtor: Arena Equity Investments, LLC
82 Howard Street
Lewiston, ME 04240
Business Description: Arena Equity Investments, LLC is a real
estate investment and management company.
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
Maine (Portland)
Case No.: 19-20554
Judge: Hon. Michael A. Fagone
Debtor's Counsel: Adam R. Prescott, Esq.
BERNSTEIN, SHUR, SAWYER & NELSON, P.A.
100 Middle Street
PO Box 9729
Portland, ME 04104
Tel: 207-228-7145
207-774-1200
E-mail: aprescott@bernsteinshur.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Edward Riekstins, principal.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 17 unsecured creditors is available for free
at:
http://bankrupt.com/misc/meb19-20554.pdf
ASP UNIFRAX: Moody's Reviews B3 CFR for Downgrade
-------------------------------------------------
Moody's Investors Service placed under review for downgrade ASP
Unifrax Holdings, Inc's. B3 Corporate Family Rating, B3-PD
probability of default rating, ratings of its $125 million senior
secured first lien revolving credit facility, approximately $1.05
billion senior secured first lien term loans including both US
dollar and Euro tranches, as well as a Caa2 rating of its $250
million senior secured second lien term loan.
"The review reflects a significant increase in the company's
leverage driven mainly by increased borrowings and weaker financial
performance. Soft demand in key end markets and high debt service
costs will likely limit the company's ability to meaningfully
reduce leverage over the next 12-18 months", said Botir Sharipov,
Vice President and lead analyst for ASP Unifrax Holdings, Inc.
On Review for Downgrade:
Issuer: ASP Unifrax Holdings, Inc.
Corporate Family Rating, Placed on Review for Downgrade,
currently B3
Probability of Default Rating, Placed on Review for Downgrade,
currently B3-PD
Gtd Senior Secured 1st lien Term Loan, Placed on Review for
Downgrade, currently B3 (LGD3)
Gtd Senior Secured 1st lien Revolving Credit Facility, Placed on
Review for Downgrade, currently B3 (LGD3)
Gtd Senior Secured 2nd lien Term Loan, Placed on Review for
Downgrade, currently Caa2 (LGD5)
Outlook Actions:
Issuer: ASP Unifrax Holdings, Inc.
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE
The buyout by Clearlake Capital Group in late 2018, coupled with
subpar financial performance and the debt-funded acquisition of
Stellar Materials in June 2019 drove Unifrax's debt/EBITDA,
including Moody's analytical adjustments and after accounting for
Stellar EBITDA, to about 10.5x as of June 30, 2019. The weakened
financial profile makes the company more vulnerable to market
downturns, particularly given its large exposure to the cyclical
automotive, steel and chemical end markets.
The review will focus on the expected operating performance
following the June 2019 acquisition of Stellar Materials that was
funded by the $100 million debt add-on. The review will assess
whether the projected revenue growth, outlined synergies and cost
saving initiatives will lead to the growth in EBITDA and free cash
flow generation in the next 12-18 months that will allow the
company to reduce leverage to levels appropriate for the B3
rating.
As a specialty chemicals company, Unifrax overall faces moderate
environmental, social and governance risks. However, governance
risk is above average due to private equity ownership and its
aggressive financial policies which have led to currently high
levels of debt.
Unifrax has a good liquidity profile supported by $35 million cash
on hand as of June 30, 2019, $113 million availability under its
$125 million revolving credit facility due in 2023 and its 29%
equity stake in Luyang, publicly listed ceramic fiber producer in
China, which provides an alternative source of liquidity for debt
service if needed.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
Headquartered in Tonawanda, N.Y., ASP Unifrax Holdings, Inc.
produces heat-resistant ceramic fiber products and specialty glass
microfiber materials for a variety of industrial applications. The
company has been a portfolio company of Clearlake Capital Group
since late 2018. Unifrax generated revenues of approximately $530
million for the twelve months ended June 30, 2019.
AUTO EARTH: Case Summary & 17 Unsecured Creditors
-------------------------------------------------
Debtor: Auto Earth, Inc.
Urb. Colinas De Yauco
Calle Vera
Yauco, PR 00698
Business Description: Auto Earth Inc. owns a multi-tenant
commercial property in Puerto Rico having
a comparable sale value of $1.2 million.
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
District of Puerto Rico (Ponce)
Case No.: 19-06244
Judge: Hon. Enrique S. Lamoutte Inclan
Debtor's Counsel: Nydia Gonzalez Ortiz, Esq.
SANTIAGO & GONZALEZ LAW, LLC
11 Calle Betances
Yauco, PR 00698
Tel: 787 267-2205/2252
E-mail: bufetesg@gmail.com
Total Assets: $1,200,000
Total Liabilities: $1,403,364
The petition was signed by Victor Caraballo Santiago, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 17 unsecured creditors is available for free
at:
http://bankrupt.com/misc/prb19-06244.pdf
BIOSTAGE INC: Submits IND Application to the FDA for Cellspan
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Biostage, Inc., has submitted an Investigational New Drug (IND)
application to the U.S. Food and Drug Administration (FDA) for the
Company's lead product candidate, the Cellspan Esophageal Implant
(CEI).
Biostage filed its IND application to address an unmet medical need
where patients requiring surgical treatment of esophageal disease
currently face complication rates of over 50%, multiple surgeries,
and a less than optimal quality of life. Biostage's technology has
the potential to not only avoid multiple complex surgeries, but
also improve the patient's quality of life compared to the current
standard of care.
"The current esophageal reconstruction options result in high
morbidity, meaning that even though patients are expected to live,
they are likely to incur lifelong challenges, including eating,
while facing the risk of multiple surgeries. Biostage believes the
Cellspan implant is not only innovative, but could also potentially
provide surgeons with a constructive alternative to treat these
underserved patient populations," said CEO Jim McGorry.
The Company's Cellspan technology combines a proprietary,
biocompatible scaffold with a patient's own cells to create an
esophageal implant that leverages the body's inherent capacity to
heal itself. The CEI is a "living tube" that facilitates
regeneration of esophageal tissue and triggers a positive host
response resulting in a tissue-engineered neo-conduit that restores
continuity of the esophagus.
Mr. McGorry continued, "We believe our technology has the potential
to dramatically improve the lives of patients suffering under
current treatments. Today marks the culmination of concentrated
pre-clinical and regulatory efforts led by Biostage's team of
scientists, academics, surgeons, and partners, including a
stringent review of the Company's application by a distinguished
group of clinical and regulatory experts."
Biostage marks a major milestone with the filing of its IND to the
FDA, including submission of pre-clinical and clinical evidence to
support first-in-human clinical trials of its innovative technology
platform.
About Biostage
Headquartered in Holliston, Massachusetts, Biostage, Inc., formerly
Harvard Apparatus Regenerative Technology, Inc. --
http://www.biostage.com/-- is a biotechnology company developing
bioengineered organ implants based on its novel Cellframe
technology. The Company's Cellframe technology is comprised of a
biocompatible scaffold that is seeded with the patient's own stem
cells. The Company's platform technology is being developed to
treat life-threatening conditions of the esophagus, bronchus and
trachea.
Biostage reported a net loss of $7.52 million for the year ended
Dec. 31, 2018, compared to a net loss of $11.91 million for the
year ended Dec. 31, 2017. As of June 30, 2019, the Company had
$2.63 million in total assets, $920,000 in total liabilities, and
$1.71 million in total stockholders' equity.
In its report dated March 29, 2019, RSM US LLP, in Boston,
Massachusetts, the Company's auditor since 2018, issued an opinion
on the Company's consolidated financial statements for the year
ended Dec. 31, 2018, expressing substantial doubt about the
Company's ability to continue as a going concern. The auditor
stated that the Company has suffered recurring losses from
operations, has an accumulated deficit, uses cash flows in
operations, and will require additional financing to continue to
fund operations.
BROOKLYN BUILDINGS: Wins Approval of Disclosure Statement
---------------------------------------------------------
Brooklyn Buildings LLC won approval of its Third Amended Disclosure
Statement and is set to seek confirmation of its Third Amended
Chapter 11 Plan of Reorganization on Dec. 4, 2019.
Judge Carla E. Craig approved the Disclosure Statement as
containing adequate information, and ordered that:
* The hearing to consider confirmation of the Plan be held on
Dec. 4, 2019 at 3:30 p.m., or as soon thereafter as counsel may be
heard, before the Honorable Carla E. Craig, Chief United States
Bankruptcy Judge, at the United States Bankruptcy Courthouse,
Eastern District of New York (Brooklyn Division), 271-C Cadman
Plaza East, Brooklyn, New York 11201, Courtroom 3529, and the
confirmation hearing may be adjourned from time to time without
further notice.
* A copy of (a) the Disclosure Statement, (b) the Plan,(c) a
ballot for accepting or rejecting the Plan, and (d) a copy of the
Disclosure Statement Order be transmitted by mail to all creditors,
equity security holders, and other parties in interest as provided
in Bankruptcy Rule 3017(d), with the exception of the Ballot, which
shall be distributed to parties in interest entitled to vote to
accept or reject the Plan;
* Erica Aisner, Esq., is authorized to act as the Balloting
Agent;
* To be counted, Ballots for accepting or rejecting the Plan
must be actually received at the addresses set forth in the ballot
instructions by Nov. 20, 2019 at 5:00 p.m.(Eastern Time); and
* Objections to confirmation of the Plan pursuant to Bankruptcy
Rule 3020(b)(1) will be made in writing, filed with the Court at
the Court's website www.nysb.uscourts.gov and served upon Kirby
Aisner & Curley LLP, attorneys for the Debtor, 700 Post Road, Suite
237, Scarsdale, New York 10583, Attn: Erica Aisner, Esq. and the
Office of the United States Trustee, so as to be received on or
before Nov. 20, 2019 at 5:00 p.m.
As reported by Troubled Company Reporter, Brooklyn Buildings, LLC's
Chapter 11 plan proposes to pay allowed general unsecured creditors
owed an estimated $200,000 up to 100% of their allowed claim from
the proceeds from the sale of the Properties after the payment in
full of all secured creditors. Holders of equity interests in the
Debtor will retain all of their interests in the Debtor.
A full-text copy of the Third Amended Disclosure Statement dated
Oct. 4, 2019, is available at https://tinyurl.com/y2fzoau2 from
PacerMonitor.com at no charge.
About Brooklyn Buildings
Brooklyn Buildings LLC is a privately held real estate company. Its
principal place of business is located at 1600 Bergen Street
Brooklyn, New York. Brooklyn Buildings filed for bankruptcy
protection (Bankr. E.D.N.Y., Case No. 18-43971) on July 11, 2018.
In the petition signed by Yehoshua Allswang, managing member, the
Debtor was estimated to have assets of $10 million to $50 million
and estimated liabilities of $1 million to $10 million. Judge
Carla Craig oversees the case. Kirby Aisner & Curley LLP
represents the Debtor.
BUHLER-FREEMAN: Case Summary & 3 Unsecured Creditors
----------------------------------------------------
Debtor: Buhler-Freeman Management, LLC
105 McGavock Pike
Nashville, TN 37214
Business Description: Buhler-Freeman Management owns in fee simple
a real property located at 2739 Old Elm Hill
Pike Nashville, TN having a current value of
$1.30 million. The Company previously
sought bankruptcy protection on Oct. 24,
2013 (Bankr. M.D. Tenn. Case No. 13-09260).
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
Middle District of Tennessee (Nashville)
Case No.: 19-07025
Judge: Hon. Charles M. Walker
Debtor's Counsel: Steven L. Lefkovitz, Esq.
LEFKOVITZ & LEFKOVITZ, PLLC
618 Church St Ste 410
Nashville, TN 37219
Tel: 615 256-8300
Fax: 615 255-4516
E-mail: slefkovitz@lefkovitz.com
Total Assets: $1,300,000
Total Liabilities: $775,000
The petition was signed by Julie Buhler, owner.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at:
http://bankrupt.com/misc/tnmb19-07025.pdf
BURFORD CAPITAL: Moody's Assigns Ba3 CFR, Outlook Positive
----------------------------------------------------------
Moody's Investors Service assigned a Ba3 corporate family rating to
Burford Capital Limited and Ba3 ratings to the senior unsecured
debt issued by subsidiaries Burford Capital Finance LLC and Burford
Capital PLC. The rating outlook is positive. This is Moody's
initial rating of Burford and its subsidiaries.
Assignments:
Issuer: Burford Capital Finance LLC
Backed Senior Unsecured Regular Bond/Debenture, Assigned Ba3
Issuer: Burford Capital Limited
Corporate Family Rating, Assigned Ba3
Issuer: Burford Capital PLC
Backed Senior Unsecured Regular Bond/Debenture, Assigned Ba3
Outlook Actions:
Issuer: Burford Capital Limited
Outlook, Assigned Positive
Issuer: Burford Capital Finance LLC
Outlook, Assigned Positive
Issuer: Burford Capital PLC
Outlook, Assigned Positive
RATINGS RATIONALE
The assignment of a Ba3 corporate family rating reflects Burford's
superior profitability, low leverage and strong liquidity position.
The rating also takes into consideration the firm's high asset risk
characteristics that could increase asset and earnings volatility,
high growth, a less developed debt funding structure compared to
many finance companies, and high expected investor confidence
sensitivity associated with the company's specialized and opaque
investment processes.
Burford's profitability, measured as net income to average managed
assets, has ranged from 11% to 20% since 2016, a much higher level
than the profitability of other rated specialty finance companies.
Burford's strong competitive positioning in the litigation finance
sector strengthens its business proposition in terms of the array
of its product offerings, breadth of coverage, and access to
information and potential clients, all of which support strong
prospects for future profitability. Burford's experienced
leadership and legal staff are also operating and underwriting
strengths.
Burford maintains a strong capital position to buffer asset and
earnings volatility that stems from its litigation investments. The
company's ratio of tangible common equity to tangible managed
assets was 60% at 30 June 2019, well above the average for other
specialty finance subsectors. By maintaining high cash balances,
employing low leverage and effectively laddering debt maturities,
Burford also maintains a strong liquidity profile. Through its fund
management strategies, Burford has expanded its access to capital
to take advantage of scale opportunities while also diversifying
its income sources and moderating earnings volatility.
Burford's Ba3 ratings also consider the credit challenges
associated with the esoteric and illiquid nature of the company's
litigation investments, which have indeterminate realization in
terms of both timing and amount, contributing to high expected
asset and earnings volatility. About half of the company's income
consists of unrealized gains, which also contributes to volatility
and weakens earnings quality. Burford's rapid growth adds to
operational complexity and execution risk. While Burford's
investment yields are strong on average over time, the range of
possible outcomes, including total loss, and reliance on estimates
of litigation outcomes, albeit rendered by highly experienced
attorneys, warrants that the company operate with strong capital
and liquidity positions.
Burford's access to debt capital is less developed than many
finance companies. The company's niche business is based on
specialized and opaque underwriting and investment management that
instills a higher level of confidence sensitivity among debt and
equity investors than is the case with more established specialty
finance sectors. As an additional credit challenge, Burford's
governance structure is in transition to better respond to investor
concerns.
Burford's outlook is positive, based on Moody's expectation that
Burford will diversify its revenues to reduce volatility, improve
funding diversity, and strengthen governance while also maintaining
strong margins and low leverage, over the next 12-18 months.
WHAT COULD CHANGE THE RATINGS UP/DOWN
Moody's could upgrade Burford's ratings if the company increases
earnings and asset stability, including by diversifying income
sources; diversifies and strengthens access to debt capital
markets, while maintaining currently low leverage levels and strong
liquidity; and strengthens governance by advancing planned
transitions.
The positive outlook indicates that ratings downgrades are
unlikely. However, Moody's could downgrade Burford's ratings if the
company increases earnings and asset volatility through more
aggressive investment selection; materially weakens liquidity,
including by reducing cash balances; and materially increases
leverage, narrowing the cushion versus the company's leverage
covenant.
The principal methodology used in these ratings was Finance
Companies published in December 2018.
COMMUNITY HEALTH: Reports $17 Million Net Loss for Third Quarter
----------------------------------------------------------------
Community Health Systems, Inc., filed with the Securities and
Exchange Commission its quarterly report on Form 10-Q reporting a
net loss attributable to the Company's stockholders of $17 million
on $3.24 billion of net operating revenues for the three months
ended Sept. 30, 2019, compared to a net loss attributable to the
Company's stockholders of $325 million on $3.45 billion of net
operating revenues for the same period during the prior year.
For the nine months ended Sept. 30, 2019, Community Health reported
a net loss attributable to the Company's stockholders of $302
million on $9.92 billion of net operating revenues compared to a
net loss attributable to the Company's stockholders of $460 million
on $10.70 billion of net operating revenues for the nine months
ended Sept. 30, 2018.
As of Sept. 30, 2019, the Company had $15.89 billion in total
assets, $17.16 billion in total liabilities, $498 million in
redeemable noncontrolling interests in equity of consolidated
subsidiaries, and a total stockholders' deficit of $1.76 billion.
Liquidity and Capital Resources
Net cash provided by operating activities decreased $249 million,
from approximately $440 million for the nine months ended Sept. 30,
2018, to approximately $191 million for the nine months ended Sept.
30, 2019. The decrease in cash provided by operating activities
was primarily the result of higher interest payments due to the
timing of payments resulting from the refinancing activity during
the nine months ended Sept. 30, 2019, as well as higher malpractice
claim payments compared to the same period in 2018. Total cash
paid for interest during the nine months ended Sept. 30, 2019
increased to approximately $810 million compared to $637 million
for the nine months ended Sept. 30, 2018. Cash paid for income
taxes, net of refunds received, resulted in a net refund of $3
million and $17 million during the nine months ended Sept. 30, 2019
and 2018, respectively.
The Company's net cash used in investing activities was
approximately $103 million for the nine months ended Sept. 30,
2019, compared to approximately $250 million for the nine months
ended Sept. 30, 2018, a decrease of approximately $147 million. The
cash used in investing activities during the nine months ended
Sept. 30, 2019, was primarily impacted by an increase in proceeds
from the ivestitures of hospitals and other ancillary operations of
$135 million as a result of more hospital divestitures in the first
nine months of 2019 compared to the same period in 2018, a decrease
in the cash used in the purchase of property and equipment of $91
million for the nine months ended Sept. 30, 2019 compared to the
same period in 2018, and a decrease in the cash used in the
acquisition of facilities and other related equipment of $8 million
as a result of a reduction in cash used to purchase physician
practices, clinics and other ancillary businesses for the nine
months ended Sept. 30, 2019 compared to the same period in 2018,
partially offset by the acquisition of one hospital during the nine
months ended
Sept. 30, 2019. The decreases in cash used in investing activities
were also impacted by a decrease in cash provided by the net impact
of the purchases and sales of available-for-sale securities and
equity securities of $11 million, a decrease in the proceeds from
sale of property and equipment of $6 million for the nine months
ended Sept. 30, 2019 compared to the same period in 2018 and an
increase in cash used for other investments (primarily from
internal-use software expenditures and physician recruiting costs)
of $70 million.
The Company's net cash used in financing activities was $127
million for the nine months ended Sept. 30, 2019, compared to
approximately $418 million for the nine months ended Sept. 30,
2018, a decrease of approximately $291 million. The decrease in
cash used in financing activities, in comparison to the prior year
period, was primarily due to the net effect of the Company's debt
repayment, refinancing activity, and cash paid for deferred
financing costs and other debt-related costs.
Capital Expenditures
Cash expenditures for purchases of facilities and other related
businesses were $13 million for the nine months ended Sept. 30,
2019, compared to $21 million for the nine months ended Sept. 30,
2018. The Company's expenditures for the nine months ended Sept.
30, 2019 were primarily related to the purchase of one hospital in
Mississippi, physician practices and other ancillary services. The
Company's expenditures for the nine months ended Sept. 30, 2018
were primarily related to physician practices and other ancillary
services. No hospital acquisitions were completed during the nine
months ended Sept. 30, 2018.
Excluding the cost to construct replacement hospitals, the
Company's cash expenditures for routine capital for the nine months
ended Sept. 30, 2019 totaled $292 million compared to $410 million
for the nine months ended Sept. 30, 2018. These capital
expenditures related primarily to the purchase of additional
equipment, minor renovations and information systems
infrastructure. Costs to construct replacement hospitals totaled
$30 million for the nine months ended Sept. 30, 2019, compared to
$3 million for the nine months ended Sept. 30, 2018. The costs to
construct replacement hospitals for the nine months ended Sept. 30,
2019 and 2018 primarily represent both planning and construction
costs for the replacement facility at La Porte, Indiana.
Pursuant to a hospital purchase agreement from the Company's March
1, 2016 acquisition of La Porte Hospital and Starke Hospital, the
Company committed to build replacement facilities in both La Porte,
Indiana and Knox, Indiana. Under the terms of such agreement,
construction of the replacement hospital for LaPorte Hospital is
required to be completed within five years of the date of
acquisition, or March 2021. In addition, construction of the
replacement facility for Starke Hospital is required to be
completed within five years of the date the Company enters into a
new lease with Starke County, Indiana, the hospital lessor, or in
the event the Company does not enter into a new lease with Starke
County, construction shall be completed by Sept. 30, 2026. The
Company has not entered into a new lease with the lessor for Starke
Hospital and currently anticipate completing construction of the
Starke Hospital replacement facility in 2026. Construction costs,
including equipment costs, for the La Porte and Starke replacement
facilities are currently estimated to be approximately $128 million
and $15 million,
respectively.
Capital Resources
Net working capital was approximately $1.0 billion at Sept. 30,
2019, compared to $1.2 billion at Dec. 31, 2018. Net working
capital decreased by approximately $130 million between Dec. 31,
2018 and Sept. 30, 2019. This decrease is primarily due to the
increase in current operating lease liabilities, partially offset
by an increase in cash and cash equivalents during the nine months
ended Sept. 30, 2019.
The Company has senior secured financing under a credit facility
with a syndicate of financial institutions led by Credit Suisse, as
administrative agent and collateral agent, which at Dec. 31, 2018
included (i) a revolving credit facility with commitments through
Jan. 27, 2021 of approximately $425 million, or the Revolving
Facility and (ii) a Term H facility due 2021, or the Term H
Facility. The Revolving Facility includes a subfacility for
letters of credit.
As of Sept. 30, 2019, the availability for additional borrowings
under the Credit Facility, subject to certain limitations as set
forth in the Credit Facility, was approximately $385 million
pursuant to the Revolving Facility, of which $145 million is in the
form of outstanding letters of credit. CHS has the ability to
amend the Credit Facility to provide for one or more tranches of
term loans or increases in the Revolving Facility in an aggregate
principal amount of up to $500 million. As of
Sept. 30, 2019, the weighted-average interest rate under the Credit
Facility, excluding the swap, was 6.3%.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/NvkLHO
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).
DANRU ENTERPRISES: Hires Reid & Manee as Legal Counsel
------------------------------------------------------
DanRu Enterprises, seeks authority from the U.S. Bankruptcy Court
for the Central District of California (Riverside) to employ Reid &
Manee LLP as the Debtor's general counsel.
DanRu requires Reid & Manee to:
a. advise and assist the Debtor with respect to compliance
with the requirements of the Office of the United States Trustee;
b. advise the Debtor regarding matters of bankruptcy law,
including the rights and remedies of the Debtor regarding its
assets and with respect to the claims of creditors;
c. represent the Debtor in any proceedings or hearings in the
Bankruptcy Court and in any action in any other court where the
Debtor’s rights under the Bankruptcy Code may be litigated or
affected;
d. conduct examinations of witnesses, claimants, or adverse
parties and to prepare and assist in the preparation of reports,
accounts, and pleadings related to this Chapter 11 case;
e. advise the Debtor concerning the requirements of the
Bankruptcy Court and applicable rules as the same affect Debtor in
this proceeding;
f. assist the Debtor in negotiation, formulation,
confirmation, and implementation of a Chapter 11 plan of
reorganization;
g. make any bankruptcy court appearances on behalf of the
Debtor; and
h. take such other action and perform such other services as
the Debtor may require of the Firm in connection with this Chapter
11 case.
Reid & Manee's regular hourly rates are:
Donald W. Reid (Partner) $300.00
Charity J. Manee (Partner) $300.00
Reid & Manee received $1,717 cash from the Debtor for the chapter
11 filing fee, and Rodolfo Rios Jr., its CEO and majority
shareholder, delivered a $5,000 personal check as a prepetition
retainer.
Donald W. Reid, partner of Reid & Manee LLP, attests that the firm
is disinterest person within the meaning of 11 U.S.C. Sec. 101(14)
and does not have an interest adverse to the Debtor's estate
pursuant to 11 U.S.C. Sec. 327.
The firm can be reached at:
Donald W. Reid, Esq.
Charity J. Manee, Esq.
REID & MANEE LLP
3615 Main Street, Suite 103
Riverside, CA 92501
Tel:(951) 777-2460
Email: don@rmbklaw.com
charity@rmbklaw.com
About DanRu Enterprises
Based in Upland, California, DanRu Enterprises sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
19-18309) on September 20, 2019, listing under $1 million in both
assets and liabilities. Donald Reid, Esq. at Reid & Manee LLP
represents the Debtor as counsel.
DESTINATION MATERNITY: Sets Bidding Procedures for All Assets
-------------------------------------------------------------
Destination Maternity Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to authorize the
bidding procedures in connection with the auction sale of
substantially all assets.
A hearing on the Motion is set for Nov. 14, 2019 at 2:30 p.m. (ET).
The Objection Deadline is Nov. 7, 2019 at 4:00 p.m. (ET).
The Debtors believe that pursuing a comprehensive marketing process
a sale transaction is the best opportunity to maximize value for
the benefit of all their stakeholders. With the backing of its
funded debtholders, the Debtors' investment bank, Greenhill & Co.,
LLC, launched a robust, but accelerated marketing process in early
September that requested indications of interest by mid-October.
Five credible interested parties submitted non-binding bids prior
to the Petition Date.
The Debtors commenced these chapter 11 cases, in part, to continue
the marketing effort and seek to consummate a Transaction that will
maximize value for all stakeholders and position the business for
long-term success. In connection with negotiations with their
prepetition lenders regarding the consensual use of cash
collateral, the Debtors and their lenders agreed to certain
milestones related to the marketing process, including: (i) Dec. 5,
2019, as the deadline to receive one or more binding bids that
satisfy the prepetition lenders” claims in full and are otherwise
satisfactory to the prepetition lenders; (ii) Dec. 9, 2019, as the
deadline to hold an auction, if more than one Qualified Bid is
received; (iii) Dec. 12, 2019, as the deadline for entry of an
order approving the sale transaction; and (iv) Dec. 31, 2019, as
the deadline to consummate a sale transaction.
The Debtors ask to establish the Bidding Procedures to govern the
completion of the marketing process in accordance with the timeline
required under the Milestones. The Bidding Procedures provide for
substantial flexibility with respect to the structure of any
Transaction and allow the Debtors to select, in consultation with
the Consultation Parties, a Stalking Horse Bidder, and provide Bid
Protections, subject to Court approval. The Bidding Procedures
also establish assumption procedures to facilitate the fair and
orderly assumption and assignment of certain executory contracts in
connection with any sale transaction, and the cure of any defaults
under such executory contracts.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Dec. 5, 2019 at 5:00 p.m. (ET)
b. Initial Bid: Each Bid must clearly set forth the terms of
any proposed Transaction, including and identifying separately any
cash and non-cash components of the proposed Transaction
consideration, including, for example, certain liabilities to be
assumed by the Acceptable Bidder. The Debtors will consider all
Acceptable Bids, but have a material preference for all cash bids.
c. Deposit: 10% of the aggregate value of the cash and
non-cash consideration of the Bid
d. Auction: The Auction will take place no later than Dec. 9,
2019 at 9:00 a.m. (ET), at the offices of Kirkland & Ellis LLP, 601
Lexington Avenue, New York, New York 10022, or such later date and
time as selected by the Debtors.
e. Bid Increments: $500,000
f. Sale Hearing: De. 12, 2019
g. Sale Objection Deadline: Dec. 6, 2019, at 4:00 p.m. (ET)
h. Any Qualified Bidder who has a valid and perfected lien on
any Assets of the Debtors' estates will have the right to credit
bid all or a portion of such Secured Creditor's allowed claims.
In connection with the Transaction(s), the Debtors anticipate that
they will assume and assign to the Winning Bidder (or its
designated assignee(s)) all or certain of the Potentially Assumed
Contracts. Accordingly, the Debtors ask approval of the proposed
Assumption and Assignment Procedures.
No later than Nov. 19, 2019, the Debtors will file with the Court
the Executory Contract List. Simultaneously with the filing of the
Executory Contract List (or any revised Executory Contract List) or
as soon as reasonably practicable thereafter, serve on each
relevant Potential Assumption Counterparty the Potential Assumption
and, Assignment Notice. The Assumption and Assignment Objection
Deadline is Dec. 6, 2019, at 4:00 p.m. (ET). Adequate Assurance
Objection Deadline is Dec. 11, 2019 at 5:00 p.m. (ET). The Cure
Objection Deadline is Dec. 3, 2019, at 4:00 p.m. (ET).
A copy of the Bidding Procedures attached to the Motion is
available for free at:
http://bankrupt.com/misc/Destination_Maternity_106_Sales.pdf
About Destination Maternity
Destination Maternity is a designer and omni-channel retailer of
maternity apparel in the United States, with the only nationwide
chain of maternity apparel specialty stores, as well as a deep and
expansive assortment available through multiple online distribution
points, including our three brand-specific websites.
As of August 3, 2019, the Company operated 937 retail locations,
including 446 stores in the United States, Canada and Puerto Rico,
and 491 leased departments located within department stores and
baby specialty stores throughout the United States and Canada. It
also sells merchandise on the Internet, primarily through
Motherhood.com, APeaInThePod.com and DestinationMaternity.com
websites. The Company sells merchandise through its Canadian
website, MotherhoodCanada.ca, through Amazon.com in the United
States, and through websites of certain of our retail partners,
including Macys.com.
Its 446 stores operate under three retail nameplates: Motherhood
Maternity(R), A Pea in the Pod(R) and Destination Maternity(R). It
also operates 491 leased departments within leading retailers such
as Macy's(R), buybuy BABY(R) and Boscov's(R). Generally, the
Company is the exclusive maternity apparel provider in its leased
department locations.
Destination Maternity Corporation and two subsidiaries sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-12256) on
Oct. 21, 2019.
Destination Maternity disclosed assets of $260,198,448 and
liabilities of $244,035,457 as of Oct. 5, 2019.
The Hon. Brendan Linehan Shannon is the case judge.
Kirkland & Ellis LLP is acting as the Company's legal counsel,
Greenhill & Co., LLC is acting as investment banker and Berkeley
Research Group, LLC ("BRG") is serving as Destination Maternity's
restructuring advisor while BRG's Robert J. Duffy has been
appointed as the Company's Chief Restructuring Officer.
Landis Rath & Cobb LLP is the local bankruptcy counsel. Hilco
Streambank LLC is the intellectual property advisor. Prime Clerk
LLC is the claims agent.
DOMINION GROUP: U.S. Trustee Forms 3-Member Committee
-----------------------------------------------------
David Asbach, acting U.S. trustee for Region 5, on Oct. 29, 2019,
appointed three creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case of Dominion Group LLC's
affiliate Cape Quarry, LLC.
The committee members are:
(1) Buckley Powder Co.
Attention: Steve Bretzing
Phone: (303) 350-5148
Email: steve.bretzing@buckleypowder.com
(2) Don Heil Oil Co., Inc.
Attention: Jennifer Heller
Phone: (573) 883-7160
Fax: (573) 883-5711
Email: jennifer@donheiloilco.com
(3) Electrical Contractors, Inc.
Attention: Michelle C. Liscombe
Phone: (573) 335-4556
Fax: (573) 335-7417
Email: michelle@eleci.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 Dominion Group
Dominion Group -- https://www.dominiongp.com/ -- is a turn-key bulk
materials producer and provider, which operates marine terminals
and provides transportation and logistics support serving
businesses on the Mississippi River and Gulf Coast. Cape Quarry, a
wholly-owned subsidiary of Dominion, owns and operates a limestone
quarry in Cape Girardeau County, Mo.
Dominion Group, LLC, based in Baton Rouge, La., and Cape Quarry
sought Chapter 11 protection (Bankr. E.D. La. Lead Case No.
19-12366) on Sept. 3, 2019. In the petitions signed by Joe William
Cline, III, manager, Dominion Group was estimated to have assets
and liabilities of $1 million to $10 million; and Cape Quarry LLC
was estimated assets of $10 million to $50 million and estimated
liabilities of $1 million to $10 million.
The Hon. Jerry A. Brown oversees the cases.
The Debtors hired Adams & Reese LLP as counsel; Chiron Advisory
Services LLC as financial advisor; and Chiron Financial LLC as
investment banker.
ENVIVA PARTNERS: Moody's Raises CFR to Ba3, Outlook Stable
----------------------------------------------------------
Moody's Investors Service upgraded Enviva Partners, LP's Corporate
Family Rating to Ba3 from B1 and Probability of Default Rating to
Ba3-PD from B1-PD. Moody's also upgraded the senior unsecured
rating to B1 from B2. The Speculative Grade Liquidity Rating
remains unchanged. The outlook is stable.
"The upgrade reflects Enviva's improved revenue and EBITDA
generation visibility, an increased backlog of long-term
take-or-pay contracts with stronger, more diversified
counterparties as well as our outlook for a continued favorable
regulatory environment in Europe and Asia over the rating horizon"
said Domenick R. Fumai, Vice President and lead analyst.
Upgrades:
Issuer: Enviva Partners, LP
Probability of Default Rating, Upgraded to Ba3-PD from
B1-PD
Corporate Family Rating, Upgraded to Ba3 from B1
Senior Unsecured Regular Bond/Debenture, Upgraded to B1
(LGD4) from B2 (LGD5)
Outlook Actions:
Issuer: Enviva Partners, LP
Outlook, Remains Stable
RATINGS RATIONALE
Enviva Partners, LP's Ba3 CFR reflects it leading industry position
with an estimated 14% market share in the global wood pellets
industry driven by positive fundamentals for the biomass market in
Europe and Asia as a result of an increase in renewable energy
regulation in order to reduce carbon emissions. The company also
benefits from its access to abundant and relatively low-cost supply
of wood fiber in the Southeast US in close proximity to its
manufacturing facilities and transportation. Long-term take-or-pay
contracts at the partnership with an increasing backlog totaling
$9.6 billion and an average contract length of 10.4 years as of
2Q19 provide increased revenue and earnings generation visibility.
Recently added contracts by Enviva and its sponsor with highly
rated Japanese counterparties and improved customer diversification
further support the rating.
Enviva's Ba3 credit profile is constrained by its current
relatively small scale and significant operational concentration in
the Southeast US. The company is highly dependent on continued
government taxes, tariffs and subsidies in Europe and Asia to
ensure that the biomass industry is able to compete with coal on an
economic basis. Enviva's rating also incorporates its MLP structure
that results in significant distribution requirements and limits
free cash flow generation.
Moody's estimates debt-to-EBITDA leverage to decline from 4.9x for
the twelve months ended June 30, 2019 towards 3.5x in FY 2021 as a
result of increased EBITDA growth attributable to new contracts and
the benefits of capacity expansions. While Moody's expects an
increase in absolute debt levels over the next several years to
fund a portion of the company's growth, credit metrics should
remain supportive of the company's credit profile. Moody's also
expects Enviva to be slightly free cash flow positive in 2021 after
several years of negative free cash flow as the major capex
initiatives have been completed and outlays will be largely for
maintenance capex.
Moody's also considers environmental, social and governance risks
into the rating. Enviva's products are considered renewable and
sustainable and increased favorable regulation in Europe and Asia
requiring lower carbon emissions and increased consumption of
renewables benefits the company. Enviva is currently not party to
any legal proceeding or investigation regarding environmental
damages or remediation. On the social front, Enviva is dedicated to
sustainability in terms of forest management, sustainable harvest,
and replanting. However, governance risks for Enviva are above
average. Although Enviva is a public company with good disclosure
and transparency, its MLP structure raises governance risks related
to the inherent GP (general partner) conflicts of interest with
stakeholders including creditors and common unit holders, as the GP
exercises control despite having a minority economic interest.
Furthermore, directors are appointed by the GP and are not required
to have a majority of independent directors. The MLP structure also
constrains the rating as a significant amount of free cash flow is
distributed to the unit holders and sponsors as well as IDRs
(incentive distribution rights) that favor the general partner over
the common unit holders.
Enviva's SGL-3 rating reflects adequate liquidity supported by
modest cash balances, expectations for moderate positive free cash
flow over the rating horizon and an unrated $350 million revolving
credit facility that will be periodically utilized to fund
drop-down transactions and capex expansions.
Enviva's capital structure includes an unrated $350 million senior
secured revolving credit facility that matures in October 2023 and
$355 million 8 1/2 % senior unsecured notes due November 1, 2021.
The B1 rating on the senior unsecured debt, one notch below the
CFR, reflects its subordinated claims to collateral relative to the
secured revolver, which is secured by liens on substantially all of
Enviva's assets. Moody's expects the company to be in compliance
with the restrictive covenants under the secured credit facility
over the next 12 months.
The stable outlook reflects expectations for adjusted Debt/EBITDA
of 3.5x by the end of FY 2021, maintaining sufficient liquidity for
operations and adhering to a financial policy that utilizes a
balance of debt and equity to finance future drop-down transactions
and major capital expenditure programs.
Although not likely in the near-term, Moody's could upgrade the
rating if Debt/EBITDA including Moody's standard adjustments was
maintained below 3.0x, free cash flow to debt (FCF/Debt) sustained
above 10%, enhanced liquidity, and the company experiences further
significant organic growth through new contracts. Moody's could
downgrade the rating if adjusted Debt/EBITDA is sustained above
4.5x, free cash flow to debt (FCF/ Debt ) is negative for a
sustained period, upon a material adverse change in the regulatory
environment in the company's key markets, a decline in liquidity, a
change in the financial policy that includes using more debt in the
capital structure to finance drop-down activity or major capital
expenditures or a major customer loss.
Enviva Partners, LP is a Delaware limited partnership formed in
November 2013, to engage in the production of utility-grade wood
pellets. The company aggregates and processes wood fiber into
transportable wood pellets sold under long-term take-or-pay supply
contracts to major power generators in Europe and Asia who use the
pellets in dedicated biomass or co-fired coal plants. They are
currently the largest supplier of industrial wood pellets as
measured by production capacity, enjoying a 14% market share of
global pellet supply. The company owns and operates seven
production plants that source their wood fiber requirements from
Southeastern US and are in close proximity to the company's owned
and leased ports. For the twelve months ended June 30, 2019, the
company generated $639 million in revenues.
The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.
FLEETSTAR LLC: River Parish Buying Mack Two 2018 Rolloffs for $242K
-------------------------------------------------------------------
Fleetstar, LLC, asks the U.S. Bankruptcy Court for the Eastern
District of Louisiana to authorize the sale to River Parish
Disposal of its (i) 2018 Mack Rolloff #1, VIN 1M2AX04COJM038922,
for $122,000, and (ii) 2018 Mack Rolloff #2, VIN 1M2AX04COJM038838,
for $120,000.
The Debtor commenced the case to reorganize its affairs and sell
under-performing assets to streamline operations. Its principal,
George Ackel, has extensive experience in the truck hauling
industry. He has engaged interested parties in the region
regarding purchasing certain assets in an effort to maximize value
for creditors and enable the company to perform more profitably.
On Sept. 15, 2019, the Debtor its First Sale Motion, pursuant to
which it requested authority to sell Rolloff #1 for $135,000 and #2
for $133,000. Volvo Financial Services("VFS"), holder of a claim
secured by Rolloff #1, objected based on the Debtor's request to
retain a portion of the Rolloff #1 sale proceeds to pay for truck
repairs. The original sale of Rolloff #1 included assets of third
parties that were being contributed to Debtor and included as part
of the purchase price. The assets have been removed from the
transaction, the prices reduced as a result and Debtor no longer
seeks to retain any portion of the sale proceeds, which resolves
the objection of VFS.
On Sept. 11, 2019, the Debtor entered into the Purchase Agreement.
The agreement will result in the Debtor shedding monthly debt
service obligations under the terms of the lenders' notes in excess
of $6,200 and relieve it of paying adequate protection and other
expenses associated with the assets to be sold.
The purchase price for the assets subject to the Motion were
derived based on the Debtor and its owner's experience and
expertise in the business and understanding of the current market
value for the assets. The prices were negotiated at arms'-length
and in good faith.
The Debtor believes, based on review of the proof of claim filed by
VFS US, LLC (holder of lien against Rolloff #1) and the pleadings
filed by BMO Harris Bank NA (holder of lien against Rolloff #2),
that the sale proceeds exceed the value of the liens against their
respective truck collateral. Further, the sale free and clear is
permitted under Section 363(f) even assuming the lenders have an
unsecured deficiency because, under Section 363(f)(3), the value of
their lien is determined by the purchase price or the value of the
collateral.
To the extent a dispute exists regarding the payoffs for BMO and
VFS, their liens may attach to the proceeds of the sales and
distribution of the sale proceeds may be determined at a later
date. However, the Debtor submits that the sales should be
approved, as these are depreciating assets, and an expeditious sale
will result in a much needed reduction in the Debtor's operating
expenses and debt service obligations.
All creditors and interested parties will receive notice of the
proposed Sale and will be provided with an opportunity to be heard.
Such notice if adequate for entry of an Order approving the Motion
and waiving the 14-day waiting period under Bankruptcy Rule
6004(h).
A copy of the Agreement attached to the Motion is available for
free at:
http://bankrupt.com/misc/Fleetstar_LLC_218_Sales.pdf
The Purchaser:
RIVER PARISH DISPOSAL
P.O. Box 10482
Elmwood, LA 70181
About Fleetstar LLC
Fleetstar LLC, a trucking company in Elmwood, La., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La.
Case No. 19-10873) on April 2, 2019. At the time of the filing,
the Debtor was estimated to have assets of between $1 million and
$10 million and liabilities of the same range. The case is
assigned to Judge Elizabeth W. Magner. The Debtor hired Congeni
Law Firm, LLC, as legal counsel, and Degan Blanchard & Nash, APLC,
as special counsel.
FRED'S INC: Commiittee Hires Womble Bond Dickinson as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of Fred's, Inc. and
its debtor-affiliates seeks authority from the the U.S. Bankruptcy
Court for the District of Delaware to retain Womble Bond Dickinson
(US) LLP, as counsel for the Committee, nunc pro tunc to September
18, 2019.
The professional services that WBD will provide to the Committee
are:
-- provide legal advice as necessary with respect to the
Committee's powers and duties as an official committee appointed
under Bankruptcy Code section 1102;
-- assist the Committee in investigating the acts, conduct,
assets, liabilities, and financial condition of the Debtor, the
operation of the Debtor's businesses, potential claims, and any
other matters relevant to the case, to the sale of assets, or to
the formulation of a plan of reorganization or liquidation;
-- participate in the formulation of a Plan;
-- provide legal advice as necessary with respect to any
disclosure statement and Plan filed in these Chapter 11 Cases and
with respect to the process for approving or disapproving
disclosure statements and confirming or denying confirmation of a
Plan;
-- prepare on behalf of the Committee, as necessary, applications,
motions, objections, complaints, answers, orders, agreements, and
other legal papers;
-- appear in Court to present necessary motions, applications,
objections, and pleadings, and otherwise protecting the interests
of those represented by the Committee;
-- assist the Committee in requesting the appointment of a trustee
or examiner, should such action be necessary; and
-- perform such other legal services as may be required and as are
in the best interests of the Committee and creditors.
WBD's hourly rates are:
Partners $325 - $925
Of Counsel $330 - $890
Senior Counsel $125 - $625
Counsel $100 - $650
Associates $255 - $710
Paralegals $50 - $475
Matthew P. Ward, Esq., a partner of WBD, affirms that the firm does
not hold or represent any interest adverse to the Debtors with
respect to the matters upon which it is to be employed.
The counsel can be reached through:
Matthew P. Ward, Esq.
1313 North Market Street, Suite 1200
Wilmington, DE, US 19801
Phone: +1 302-252-4320
Fax: +1 302-252-4330
About Fred's Inc.
Since 1947, Fred's, Inc. (NASDAQ:FRED) -- http://www.fredsinc.com/
-- has been an integral part of the communities it serves
throughout the southeastern United States. Fred's mission is to
make it easy AND exciting to save money. Its unique discount value
store format offers customers a full range of value-priced everyday
items, along with terrific deals on closeout merchandise throughout
the store.
Fred's, Inc., and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 19-11984) on Sept. 9, 2019 in
Delaware. In the petitions signed by Joseph M. Anto, CEO, the
Debtors disclosed $474,774,000 in assets and $380,167,000 in
liabilities as of May 4, 2019.
The Hon. Christopher S. Sontchi oversees the cases.
The Debtors tapped Morris, Nichols, Arsht & Tunnell LLP as counsel;
Kasowitz Benson Torres LLP as general bankruptcy counsel; Akin Gump
Strauss Hauer & Feld LLP as special counsel; Epiq Bankruptcy
Solutions LLC as claims and noticing agent; and Berkeley Research
Group, LLC, as financial advisor.
GOODYEAR TIRE: S&P Lowers ICR to 'BB-'; Outlook Stable
------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on The Goodyear
Tire & Rubber Co. to 'BB-' from 'BB'. In addition, S&P lowered the
issue-level rating on its second-lien secured debt to 'BB+' from
'BBB-' and the rating on its senior unsecured notes to 'BB-' from
'BB'.
The downgrade reflects S&P's belief that Goodyear will not be able
to generate weighted free operating cash flow (FOCF) to debt of 10%
or more on a sustained basis.
Performance in the third quarter was mixed. Goodyear's price versus
raw materials was positive for the first time in three years and
replacement growth was generally strong. However, global
light-vehicle product sales were weak. Demand in Europe, in
particular, was soft amid challenges in its distribution channels.
Moreover, S&P believes the likelihood of a recession in the U.S.
has increased. This risk as well as ongoing original equipment (OE)
production declines and softness in Europe are reflected in S&P's
revised forecast. The rating agency's stable outlook reflects its
view that Goodyear will maintain a debt-to-EBITDA ratio below 5x
and FOCF to debt above 5% over the next 12 months.
S&P's stable outlook reflects its view that Goodyear will generate
an FOCF-to-debt ratio of at least 5% over the next 12 months.
"We could consider revising the outlook to positive if we come to
believe that Goodyear can generate an FOCF-to-debt ratio of at
least 10% and maintain a debt-to-EBITDA ratio of less than 4x on a
sustained basis. This could occur if the company recovers raw
material costs by increasing prices, can materially streamline
operating expenses and expand margins, or pursues meaningful debt
reduction," S&P said.
"We could lower our rating on the company if it cannot raise prices
sufficiently to recover past increases in raw material costs, or if
declining global tire demand makes it unlikely that Goodyear can
maintain metrics in line with our expectations for the current
financial risk profile. This includes a debt-to-EBITDA ratio below
5x and an FOCF-to-debt ratio above 5% on a sustained basis," the
rating agency said.
HOOD LANDSCAPING: Hendley Buying Cook County Property for $310K
---------------------------------------------------------------
Hood Landscaping Products, Inc., asks the U.S. Bankruptcy Court for
the Middle District of Georgia to authorize the sale of
approximately 102 acres located in Land Lot 142 of the 9th Land
District in Cook County, Georgia, identified as Cook County Parcel
No. 0045-045 and located on Massee Post Road in Cook County,
Georgia, to Lyle Andrew Hendley for $310,000.
The Debtor owns the real estate and is a property of the bankruptcy
estate.
The real estate is subject to these liens, shown in the order of
their respective priority:
1. Farmers and Merchants Bank ("FMB") security deed
recorded in the Cook County Clerk's Office securing a debt of
approximately $5,387,382.
2. Cook County Tax Commissioner claim for real estate taxes
estimated to be in the amount of $1,062.
3. American Zurich Insurance Co. Fi. Fa. issued by the
Superior Court of Cook, Georgia in case no.2015-CV-O25 recorded in
Lien Docket 45, Page 243 on 6-15-17 in the amount of $180,636.
4. Georgia Department of Labor Fi. Fa. 201808946 recorded
in Lien Book 48, Page 301 on 3-28-18 in the amount of$1,726.
5. Georgia Department of Labor Fi. Fa. 201823940; recorded
in Lien Book 50, Page 229 on 7-16-18 in the amount of$1,726.
6. Georgia Department of Labor Fi. Fa. 201840807 recorded
in Lien Book 5 Page 235 on 10-15-18 in the amount of $818.
7. Trinity Packaging Corporation Fi. Fa. issued by the
Superior Court of Cook, Georgia in case no. 2018-CV-F008 recorded
in Lien Book 52, Page 48 on 12-1 1-18 in the amount of $27,936.
8. Georgia Department of Labor Fi. Fa. 201858142 recorded
in Lien Book 52, Page 116 on 1-25-19 in the amount of $818.
9. Georgia Department of Labor Fi. Fa. 201912507 recorded
in Lien Docket 52, Page 276 on 4-15-19 in the amount of $848.
The Debtor proposes to sell the real estate free and clear of liens
and claims the Buyer, 1291 Riverside Road, Nashville, Georgia 31639
for a gross sale price of $310,000. No real estate commission is
to be paid as part of the sale. The sale terms are stated in the
Land Lot Sales Agreement dated Oct. 5, 2019.
The Debtor proposes to disburse the sale proceeds of the real
estate sale at closing to pay the following: Attorney fees for
closing attorney Pearce Scott, closing costs, real estate taxes
owed to Cook County Tax Commissioner and pay the remainder of the
sale proceeds to FMB on account of its first priority security
deed. Since FMB's secured claim exceeds the sale price of the real
estate, no sale proceeds will be paid to subordinate lienholders
(other than Cook County Tax Commissioner for real estate taxes)
shown.
A copy of the Agreement attached to the Motion is available for
free at:
http://bankrupt.com/misc/Hood_Landscaping_92_Sales.pdf
About Hood Landscaping
Hood Landscaping Products, Inc., a wholesaler of landscaping
equipment and supplies in Adel, Georgia., filed a voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga.
Case No. 19-70644) on June 3, 2019. In the petition signed by CFO
Leon Hood, the Debtor estimated up to $50,000 in assets and $1
million to $10 million in liabilities. Judge John T. Laney III
oversees the case. Kelley, Lovett, Blakey & Sanders, P.C., is the
Debtor's counsel.
HOOD LANDSCAPING: Lynn Buying Spark Property for $80K
-----------------------------------------------------
Hood Landscaping Products, Inc., asks the U.S. Bankruptcy Court for
the Middle District of Georgia to authorize the sale of
approximately 28 acres located in Land Lot 145 of the 9th Land
District, Cook County, Georgia, and also known as Parcel No.
0035-029, and is on Whiddon Rowan Road in Sparks, Georgia, to
Coleman J. Lynn for $80,000.
The Debtor owns the real estate.
The real estate is subject to these liens, shown in the order of
priority:
A. Farmers and Merchants Bank ("FMB") under a security deed
recorded in the Cook County Clerk's Office. According to FMB, the
total claim owed to it is approximately $5,731,829.
B. Cook County Tax Commissioner for real estate taxes
estimated to be $2,045.
C. American Zurich Insurance Co. by a Fi. Fa. issued by the
Superior Court of Cook County, Georgia; in case no. 2015-CV-025
against Hood Landscaping Products Inc.; recorded in Lien Docket 45,
Page 243 on 6/15/2017 in the amount of $180,636.
D. Georgia Department of Labor by an Unemployment Contribution
Fi. Fa., 201808946; dated 2/ 16/ 18 and recorded in Lien Book 48,
Page 301 on 3-28-18 in the amount of $1726.
E. Georgia Department of Labor by an Unemployment Contribution
Fi. Fa., 201823940; dated 5-16-18 and recorded in Lien Book 50,
Page 229 on 7-16-18 in the amount of $1,726.
F. Georgia Department of Labor by an Unemployment Contribution
Fi. Fa., 201840807; dated 8-16-18 and recorded in Lien Book 5 Page
235 on 10-15-18 in the amount of $818.02.
G. Trinity Packaging Corp. by a Writ of Fi. Fa. issued by the
Superior Court of Cook County, Georgia in case no. 2018-CV-F008
against Hood Landscaping Products Inc.; recorded in Lien Book 52,
Page 48 on 12-11-18 in the amount of $27,936.
H. Georgia Department of Labor by an Unemployment Contribution
Fi. Fa., 201858142 dated 11/28/18 and recorded in Lien Book 52,
Page 116 on 1-25-19 in the amount of $818.
I. Georgia Department of Labor by an Unemployment Contribution
Fi. Fa 201912507; dated 2/26/19 and recorded in Lien Docket 52,
Page 276 on 4/15/2019 in the amount of $848.
The Debtor proposes to sell the real estate free and clear of liens
and claims to the Buyer, 1109 Gomto Road, Valdosta, Georgia 31602
for a gross sale price of $80,000. The sale will be free and clear
of liens and other claims. No real estate commission is to be paid
as part of the sale. The terms of the sale are contained in the
Sales Contract dated July 23, 2019.
The Debtor proposes to pay the following at closing from the sale
proceeds: Closing costs for which the debtor is responsible under
the sale contract, real estate taxes owed to Cook County Tax
Commissioner and to pay the balance of the sale proceeds available
to FMB. Since FMB's secured claim exceeds the value of the real
estate, there will be no sale proceeds available to pay to
subordinate lienholders or claimants whose claims are shown or to
any other lien or claim.
A copy of the Contract attached to the Motion is available for free
at:
https://tinyurl.com/y67fohe2
About Hood Landscaping
Hood Landscaping Products, Inc., a wholesaler of landscaping
equipment and supplies in Adel, Georgia., filed a voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga.
Case No. 19-70644) on June 3, 2019. In the petition signed by CFO
Leon Hood, the Debtor estimated up to $50,000 in assets and $1
million to $10 million in liabilities. Judge John T. Laney III
oversees the case. Kelley, Lovett, Blakey & Sanders, P.C., is the
Debtor's counsel.
HS MIDCO: S&P Assigns 'B-' ICR on Sponsor-To-Sponsor Sale
---------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to server
solutions provider HS Midco Inc.
The rating action follows TA Associates and Charlesbank Capital
Partners' agreement to acquire a 55% equity stake in HS Midco.
Current owners HGGC LLC and Pamplona Capital Management LLP will
retain minority stakes in the company. At the same time,
HelpSystems has signed an LOI to acquire a cyber-security firm,
code-named Project Canopus.
The transactions will be funded with a $725 million first-lien term
loan, $230 million second-lien term loan (unrated private
placement), and new cash equity from the financial sponsors. The
capital structure will also include a $60 million revolving credit
facility and a $50 million delayed-draw term loan, both to be
undrawn at close. S&P assigned 'B-' issue-level and '3' recovery
ratings to the company's $60 million revolving credit facility,
$725 million first-lien term loan, and $50 million first-lien,
delayed-draw term loan.
S&P's rating on HS Midco reflects pro forma leverage in the mid-7x
area as of Sept. 30, 2019, which it expects to decrease to the
low-7x area in 2020.
The rating includes capacity for the company to continue
debt-financed tuck-in acquisitions. The rating also reflects modest
revenue growth, the company's small scale compared to other rated
software companies, and a narrow focus on server solutions, all
within an intensely competitive infrastructure software
marketplace. However, S&P believes that the company's decision to
focus on higher-growth security solutions, its above average EBITDA
margins compared to other technology software companies, high
recurring revenue, and a diverse customer base will help offset
some of those risks.
S&P will withdraw its rating on HS Group Holdings Inc. to align the
issuer credit rating with the audited entity, HS Midco Inc. HS
Purchaser LLC and Help/Systems Holdings Inc will be the
co-borrowers in the new credit facility.
The stable outlook reflect S&P Global Ratings' view that
HelpSystems transition to security solutions will result in organic
growth in the low-single-digit percent area. S&P expects that the
Canopus acquisition will help the company increase scale, maintain
operating efficiency, keep EBITDA margins in the high-40% range,
and help drive leverage to the low-7x area in 2020.
"We could lower the rating if we think HelpSystem's capital
structure has become unsustainable. This could occur if there was
prolonged weakness in IT infrastructure spending or the integration
of Canopus causes disruptions to the business. We could also lower
the rating if unadjusted FOCF approaches breakeven and liquidity is
weakened due to competitive pressures or large debt-financed
acquisitions or shareholder returns," S&P said.
"Although unlikely over the next 12 months, we could look to raise
the rating if HelpSystems indicates that it can sustain leverage of
less than 7x through debt-funded acquisitions and shareholder
returns. We expect that the financial sponsors will continue to use
their balance sheet to grow the company," the rating agency said.
IAMGOLD CORP: Moody's Lowers CFR to B1, Outlook Stable
------------------------------------------------------
Moody's Investors Service downgraded IAMGOLD Corporation's
corporate family rating to B1 from Ba3, probability of default
rating to B1-PD from Ba3-PD, and senior unsecured notes rating to
B2 from B1. The Speculative Grade Liquidity Rating remains at
SGL-1, and the ratings outlook remains stable.
"The downgrade reflects operational challenges at IAMGOLD's
Westwood and Rosebel mines resulting in a deterioration of its
metrics and elevated costs", said Jamie Koutsoukis, Moody's
Vice-President, Senior Analyst.
Downgrades:
Issuer: IAMGOLD Corporation
Corporate Family Rating, Downgraded to B1 from Ba3
Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD5)
from B1 (LGD4)
Outlook Actions:
Issuer: IAMGOLD Corporation
Outlook, Remains Stable
RATINGS RATIONALE
IAMGOLD (B1 stable) benefits from 1) very good liquidity (SGL-1)
with cash in excess of debt, and 2) conservative financial
policies. IAMGOLD is constrained by 1) the company's high operating
cash costs ($1007/gold equivalent ounce ("GEO") LTM Q2/19)
(Revenue-EBITDA)/GEO) following recent operational challenges at
its Rosebel mine in Suriname, and Westwood mine in Canada, 2) its
moderate scale (800 thousand GEOs), 3) its exposure to volatile
gold prices, 4) a concentration of production and cash flows at its
two largest mines, and 5) geopolitical risk (mines in Burkina Faso,
and Suriname). Though IAMGOLD has historically maintained low
leverage (2.2x LTM Q2/19), it will to rise to over 5x on a gross
basis in 2020 (including their $170 million prepay as debt, and
using a $1250/oz price sensitivity) because of low production in
that year before Saramacca reaches full production and operations
at Westwood are resolved.
IAMGOLD is exposed to ESG risks typical for a company in the mining
industry. This includes, but is not limited to wastewater
discharges, site remediation and mine closure, waste rock and
tailings management, air emissions, and social considerations in
relation to the communities its mines operate within. IAMGOLD
temporarily suspended mining activities at its Rosebel mine in
Suriname after a July 28, 2019 incident involving police and the
death of an illegal miner, and resulted in damaged equipment.
Moody's expects that IAMGOLD management will remain fiscally
prudent, and will largely use cash for future development rather
than shareholder returns.
IAMGOLD has very good liquidity (SGL-1). The company had $610
million in cash and $51 million in short term investments at June
2019 and a $500 million committed facility (matures 2023) which is
largely undrawn. As well, IAMGOLD will receive $170 million from
its gold prepay arrangement in December 2019. Moody's expects the
company to be free cash flow negative by about $130 million over
the next 12 months, using a gold price sensitivity of $1365 and
$1250 for 2019 and 2020, respectively. IAMGOLD has no re-financing
risk over the near term: its $500 million credit facility matures
in January 2023, and its $400 million in notes are due in 2025.
IAMGOLD's credit facility includes financial covenants with which
Moody's believes the company will remain comfortably in
compliance.
The stable outlook reflects IAMGOLD's strong liquidity position
which provides it with financial flexibility to progress on its
capital projects associated with potentially increasing production
and lowering its cash costs, as well the ability to work through
its operational challenges at Rosebel and Westwood. It also assumes
that IAMGOLD will fund negative free cash flow largely with its
sizeable cash balance.
The CFR rating could be upgraded to Ba3 if IAMGOLD is able to
achieve increased mine diversity and demonstrate its ability to
execute on new mine development without meaningful setbacks, total
cash costs per ounce (revenue less adjusted EBITDA divided by total
production) are maintained below $800/oz, leverage is sustained
below 2.5x (2.2x at Q2/2019), and liquidity remains good.
The CFR rating could be downgraded to B2 if Moody's expects
IAMGOLD's adjusted debt/EBITDA to be sustained above 3x (2.2 LTM
Q2/19), or should the company's liquidity position materially
worsen, most likely due to new development costs consuming most of
its currently very good liquidity.
The B2 rating on the senior unsecured notes reflect their
contractual subordination to the company's existing senior secured
revolving credit facility (unrated), its new equipment loan
(unrated) and the gold prepay agreement. It also reflects a one
notch up override to the B3 outcome based on Moody's Loss Given
Default model incorporating that the potential usage of the
prior-ranking revolver is limited given its strong cash balance.
The principal methodology used in these ratings was Mining
published in September 2018.
Headquartered in Toronto, Canada, IAMGOLD owns and operates three
gold mines: Rosebel (95% owned,~290koz of attributable gold
production in 2018) in Suriname, Essakane (90%, ~405koz) in Burkina
Faso, and Westwood (100%, ~130koz) in Canada. The company also owns
41% of a joint venture (Sadiola, ~60koz) in Mali, and has two
primary possible gold mine development projects: Côté Gold in
Ontario, Canada, and Boto in Senegal. Revenues in 2018 were $1.1
billion.
J.T. SHANNON: Seeks to Extend Exclusivity Period to Jan. 24
-----------------------------------------------------------
J.T. Shannon Lumber Company, Inc. asked the U.S. Bankruptcy Court
for the Northern District of Mississippi to extend the period
during which only the company can file a Chapter 11 plan to Jan.
24, 2020 and the period during which it can solicit acceptances for
the plan to March 24, 2020.
The current exclusivity period expired on Oct. 28.
J.T. Shannon said the extension is needed to formulate a plan,
litigate claim objections which would have an impact on
confirmation of the plan, and pursue further negotiations with
creditors.
The company has recently entered into preliminary discussions with
its principal customer, Anderson-Tully Lumber Company, concerning a
possible sale of its facility.
About J.T. Shannon Lumber
Memphis, Tenn.-headquartered J.T. Shannon Lumber Company, Inc. --
http://www.jtshannon.com/shannonlumber-- is a family-owned company
in the hardwood lumber business. It specializes in rough and
surfaced lumber, straight-line ripping, double-end trimming, width
sorts, and special length pulls.
J.T. Shannon Lumber Company sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Miss. Case No. 19-11428) on April
1, 2019. At the time of the filing, the Debtor disclosed
$11,026,770 in assets and $14,721,825 in liabilities. The case is
assigned to Judge Jason D. Woodard. Michael P. Coury, Esq., at
Glankler Brown PLLC, is the Debtor's legal counsel.
JBS SA: S&P Upgrades ICR to 'BB' on Substantial Deleveraging
------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit ratings on
Brazil-based protein processor JBS S.A. (JBS) and JBS USA Lux S.A.
to 'BB' from 'BB-'. In addition, S&P raised its national scale
rating on JBS to 'brAAA' from 'brAA+'.
S&P also raised its senior unsecured debt ratings on JBS and JBS
USA to 'BB' from 'BB-' and the senior secured debt ratings on JBS
USA to 'BBB-' from 'BB+'.
The upgrade reflects JBS's resilient cash flows and ability to
quickly deleverage in 2019. S&P revised its business risk profile
on JBS to strong from satisfactory, despite the volatility inherent
in its commodities business, and its financial risk profile to
significant from aggressive, because of significantly improved
leverage profile, capital structure, and liquidity through the use
of cash flows and debt refinancing to reduce debt.
S&P took these actions despite its view of the company's still weak
governance resulting from the corruption scandal that involved the
two sons of the founder, who were previously the CEO and chairman
of the board. JBS implemented several new initiatives to improve
governance such as the creation of independent committees and the
hiring of a compliance director that reports directly to the board.
However, before S&P raises its management and governance score on
the company, it needs a longer track record of targeting, managing,
and mitigating risks. While the corruption allegations against
Messrs. Batista are concentrated at the holding company, J&F
Investimentos, the upgrade of JBS also reflects S&P's expectations
of its more transparent governance following the start of a
corruption probe in 2017.
S&P views JBS as the ultimate company of the group. This is based
on the rating agency's assessment of the company's control of the
cash, given that any decision on dividends increase or capital
reduction requires majority of the ownership votes, while the
Batista family--through J&F--controls only 40% of JBS's shares.
Five board members--out of the total of nine--represent the Batista
family, but any shareholders remuneration would be distributed
equally to all stakeholders, as well as any need to comply with
potential fines and liabilities stemming from the corruption probe
of J&F.
In S&P's view, the company's geographic and portfolio
diversification that allow it to reach the world's largest consumer
markets and ability to quickly improve and maintain margins of
acquired assets underpin the strength of JBS's business. Trade
barriers or weaker industry fundamentals that could be offset by
stronger profits at other markets and proteins, and a sound working
capital management is likely to continue boosting cash flows. The
company is currently enjoying favorable industry fundamentals
across most of its businesses, because the African Swine Fever
(ASF) outbreak boosted export prices for all proteins and increased
demand for pork in the U.S., despite large import tariffs. These
factors, along with sound cattle availability in the U.S. and
Brazil, have bolstered JBS's consolidated margins to 9.5%-10.0%.
However, S&P also assumes that the company would also be able to
deleverage while keeping consolidated margins at 7%-8%.
JBS generated R$6.7 billion in free operating cash flows (FOCF) in
the 12 months ended June 30, 2019. This, along with a part of cash
holdings and new issuances aiming at lowering interest burden and
extending maturity profile, allowed the company to repay R$26
billion (more than $6 billion) in debt in the past nine months. S&P
estimates that annual FOCF of more than R$8 billion in the next
several years, combined with dividend payments of 25%, will enable
JBS to continue deleveraging--despite potential acquisitions--and
maintain debt to EBITDA at 2x-3x.
Finally, S&P currently considers JBS is comparing unfavorably with
companies at the 'BB+' rating level, mainly because as closer to
investment grade the company gets, the more predictable earnings,
cash flows, and metrics we expect, despite potential acquisitions.
S&P will track JBS's ability to adhere to targeted debt levels.
JBS USA: S&P Raises ICR to 'BB' on Substantial Deleveraging
-----------------------------------------------------------
S&P Global Ratings, on Oct. 30, 2019, raised its long-term issuer
credit ratings on Brazil-based protein processor JBS S.A. (JBS) and
JBS USA Lux S.A. to 'BB' from 'BB-'. In addition, S&P raised its
national scale rating on JBS to 'brAAA' from 'brAA+'.
S&P also raised its senior unsecured debt ratings on JBS and JBS
USA to 'BB' from 'BB-' and the senior secured debt ratings on JBS
USA to 'BBB-' from 'BB+'.
The upgrade reflects JBS's resilient cash flows and ability to
quickly deleverage in 2019. S&P revised its business risk profile
on JBS to strong from satisfactory, despite the volatility inherent
in its commodities business, and its financial risk profile to
significant from aggressive, because of significantly improved
leverage profile, capital structure, and liquidity through the use
of cash flows and debt refinancing to reduce debt.
S&P said, "We took these actions despite our view of the company's
still weak governance resulting from the corruption scandal that
involved the two sons of the founder, who were previously the CEO
and chairman of the board. JBS implemented several new initiatives
to improve governance such as the creation of independent
committees and the hiring of a compliance director that reports
directly to the board. However, before we raise our management and
governance score on the company, we need a longer track record of
targeting, managing, and mitigating risks. While the corruption
allegations against Messrs. Batista are concentrated at the holding
company, J&F Investimentos, the upgrade of JBS also reflects our
expectations of its more transparent governance following the start
of a corruption probe in 2017.
"We view JBS as the ultimate company of the group. This is based on
our assessment of its control of the cash, given that any decision
on dividends increase or capital reduction requires majority of the
ownership votes, while the Batista family--through J&F--controls
only 40% of JBS's shares. Five board members--out of the total of
nine--represent the Batista family, but any shareholders
remuneration would be distributed equally to all stakeholders, as
well as any need to comply with potential fines and liabilities
stemming from the corruption probe of J&F.
"In our view, the company's geographic and portfolio
diversification that allow it to reach the world's largest consumer
markets and ability to quickly improve and maintain margins of
acquired assets underpin the strength of JBS's business. Trade
barriers or weaker industry fundamentals that could be offset by
stronger profits at other markets and proteins, and a sound working
capital management is likely to continue boosting cash flows. The
company is currently enjoying favorable industry fundamentals
across most of its businesses, because the African Swine Fever
(ASF) outbreak boosted export prices for all proteins and increased
demand for pork in the U.S., despite large import tariffs. These
factors, along with sound cattle availability in the U.S. and
Brazil, have bolstered JBS's consolidated margins to 9.5%-10.0%.
However, we also assume that the company would also be able to
deleverage while keeping consolidated margins at 7%-8%."
JBS generated R$6.7 billion in free operating cash flows (FOCF) in
the 12 months ended June 30, 2019. This, along with a part of cash
holdings and new issuances aiming at lowering interest burden and
extending maturity profile, allowed the company to repay R$26
billion (more than $6 billion) in debt in the past nine months. S&P
estimates that annual FOCF of more than R$8 billion in the next
several years, combined with dividend payments of 25%, will enable
JBS to continue deleveraging--despite potential acquisitions--and
maintain debt to EBITDA at 2x-3x.
Finally, S&P currently considers JBS is comparing unfavorably with
companies at the 'BB+' rating level, mainly because as closer to
investment grade the company gets, the more predictable earnings,
cash flows, and metrics we expect, despite potential acquisitions.
S&P will track JBS's ability to adhere to targeted debt levels.
JHS VENTURES: Disclosure Statement Hearing on Dec. 3
----------------------------------------------------
Judge Madeleine C. Wanslee will convene a hearing to consider
approval of the disclosure statement in support of JHS Ventures
LLC's plan of reorganization on Dec. 3, 2019, at 100:00 a.m.
Objections to approval of the Disclosure Statement are due Dec. 2,
2019.
The Court has previously set Sept. 30, 2019, as the deadline for
creditors to file proofs of claim. Creditors set forth in
amendment to Schedule E/F of Sept. 11, 2019, will have until Dec.
3, 2019, to file a proof of claim.
As reported by Troubled Company Reporter, the Debtor filed a
Chapter 11 plan that says that the Debtor will pay $40,000 to
unsecured creditors with valid and proven claims exceeding $2,500.
An amount $20,000 will be paid within 12 months of the date of
confirmation and an amount of $20,000 within 24 months of the date
of confirmation, with such amount to be paid on a pro rata basis
and will be paid with interest at 3% per annum.
A full-text copy of the Disclosure Statement dated Sept. 25, 2019,
is available at https://tinyurl.com/yxveezea from PacerMonitor.com
at no charge.
About JHS Ventures
JHS Ventures LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 19-06528) on May 28,
2019. At the time of the filing, the Debtor disclosed assets of
between $500,001 and $1 million and liabilities of the same range.
The case is assigned to Judge Madeleine C. Wanslee. Carmichael &
Powell, P.C., is the Debtor's legal counsel.
LINDLEY FIRE: Expedite Fire Buying All Assets for $600K
-------------------------------------------------------
Lindley Fire Protection Co., Inc., asks the U.S. Bankruptcy Court
for the Central District of California to authorize the bidding
procedures in connection with the sale of substantially all
property (except accounts receivable) to Expedite Fire, Inc. for
$600,000, subject to overbid.
A hearing on the Motion is set for Nov. 6, 2019 at 10:00 a.m.
The Debtor's case has been pending since March 2017. It exercised
its best efforts to reorganize. In May 2017, the Debtor and the
Unsecured Creditors Committee retainer John Murray of Accurate
Business Consulting to assist their business operations and
attempt to
run the Debtor profitably in order to propose a reorganization
plan. To that end, the parties proposed and the Court approved the
Motion to Implement a Resizing Earn Out Strategy in June 2018 and
against in February 2019. When these efforts failed, the Debtor
and the Committee requested and the Court approved the employment
of Brian Weiss at Force 10 Partners to find a buyer for the
Debtor's business.
The Debtor contends that conducting the Auction in accordance with
the Bid Procedures is the best course of action in order to
maximize the value of the sale of the Assets for the benefit of the
estate and its creditors. The Bid Procedures were designed to
limit the process to duly interested and capable prospective
purchasers, encourage the highest available initial bids, and
create a competitive auction, all of which will ensure that the
estate receives the maximum value in return for the sale of the
Property.
The salient terms of the Agreement and the Bidding Procedures are:
a. Bid Deadline: Nov. 1, 2019
b. Initial Bid: $600,000 ($200,000 cash and $400,000 in
promissory notes with monthly payments over three years, and then a
balloon payment upon maturity (see exact terms in Purchase
Agreement), plus $30,000
c. Deposit: $200,000
d. Auction: The Auction shall commence on Nov. 6, 2019 at
10:00 a.m. and shall take place in Courtroom 5D of the United
States Bankruptcy Court, Central District of California, Santa Ana
Division, 411 West Fourth Street, Santa Ana, California 92701.
e. Bid Increments: $30,000
f. Closing: Nov. 8, 2019
The Property shall be sold on an "as is, where is" basis and
without representations or warranties of any kind, nature or
description by the Debtor, except to the extent expressly set forth
in the Purchase Agreement.
The Debtor respectfully asks that the Court approves its proposed
assumption and assignment of the Contracts. The Sale will yield
the maximum value for the Debtor's estate. To that end, the
assumption, assignment and sale of any Contracts will be necessary
for the Debtor to obtain the benefits of any Purchase Agreement.
The Debtor is asking to sell to the Buyer all of its existing
contracts to perform contracting services and its existing
contracts to purchase/use vehicles that were used in its business
operation. It believes that all third parties who have contracts
with the Debtor for contracting services will consent to the
assignment, and such consents will be presented at the hearing on
the Motion.
The Debtor's only secured claim (other than vehicles, which
contracts the Buyer is assuming) is the IRS' secured claim at the
commencement of the bankruptcy case of approximately $99,253. The
Debtor has been paying adequate protection payments of $1,828 to
the IRS on its secured claim since April 2017 (the IRS has other
claims against the Debtor). The Debtor believes that the balance
of the secured claim is approximately $55,000. As the Debtor is
receiving $200,000 cash as part of the Sale, the IRS is more than
adequately protected on its secured claim. Based upon all of the
foregoing, the Debtor's proposed Sale should therefore be free and
clear of all Liens.
The Debtor's business operations need to move immediately forward
with the Buyer or substantial value would be lost by an
interruption of services if an appeal was filed. For this reason,
it submits that ample cause exists to justify a waiver of the
14-day stay imposed by Bankruptcy Rule 6004(h) and 6006(d), to the
extent applicable.
A copy of the Agreement attached to the Motion is available for
free at:
http://bankrupt.com/misc/Lindley_Fire_347_Sales.pdf
About Lindley Fire Protection
Established in 1986 in Anaheim, California, Lindley Fire Protection
Co., Inc. -- http://www.lindleyfire.com/-- provides fire
protection services and contracts with large industrial warehouses
and facilities.
Lindley Fire Protection performs construction services worldwide
and its personnel have performed work in various locations such as
Western Somoa, Puerto Rico, Texas, Illinois, Nevada, Colorado,
Utah, Montana, Idaho and Mexico.
Lindley Fire Protection sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 17-10929) on March 12,
2017. The petition was signed by Leslie L. Lindley, II, president.
At the time of the filing, the Debtor estimated its assets and
debts at $1 million to $10 million.
The case is assigned to Judge Catherine E. Bauer.
Goe & Forsythe, LLP is the Debtor's bankruptcy counsel.
On March 29, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee retained
Marshack Hays LLP as its legal counsel. Accurate Business
Consulting, Inc., serves as joint financial advisor to the Debtor
and the Committee.
M.E. SMITH: Plan Has 6.5% Dividend for Unsecured Claims
-------------------------------------------------------
Debtor M.E. Smith, Inc., filed with the U.S. Bankruptcy Court for
the District of Massachusetts, Central Division, a first amended
plan of reorganization which contemplates a pro rata distribution
of $100,000 which equates to a 6.5% dividend of allowed unsecured
claims. In full and complete satisfaction, settlement, release and
discharge of Allowed Class 7 Unsecured Claims, each holder of an
Allowed Class 7 Claim will receive a pro rata share of $100,000
payable as follows: pro rate share of $20,000 on the Effective Date
and pro rata share of $20,000.00 on each of the next four
anniversary dates of the Effective Date.
Mark E. Smith will retain his equity interests in exchange for a
contribution of new value.
This Plan contemplates the use of accumulated cash from the
Debtor’s prior business operations and the Debtor’s operating
income from its Plan Period business operations to (i) pay Allowed
Administrative Expenses; (ii) pay Allowed Class Claims; and (iii)
maintain a working capital reserve for the Debtor’s ongoing
business operations.
The Debtor intends to use approximately $60,000 from accumulated
cash on hand along with contribution of $20,000 by Mark E. Smith to
pay allowed administrative expenses (including quarterly fee
obligations to the United States Trustee) and other exit payments.
A full-text copy of the Amended Disclosure Statement dated Oct. 17,
2019, is available at https://tinyurl.com/y5g7gjmw from
PacerMonitor.com at no charge.
About M.E. Smith
M.E. Smith, Inc., is a Massachusetts corporation providing
construction and maintenance of municipal water utilities. The
company filed a Chapter 11 petition (Bankr. D. Mass. Case
No.19-40235) on Feb. 12, 2019. The Hon. Elizabeth D. Katz is the
case judge. The Debtor is represented by Michael Van Dam, Esq. at
Van Dam Law LLP.
MARGARET SCHMIDT: Proposes a Sale of New Port Richey Property
-------------------------------------------------------------
Margaret Schmidt asks the U.S. Bankruptcy Court for the Middle
District of Florida to authorize the bidding procedures in
connection with the auction sale of Assisted Living of Pasco, Inc.,
a Florida corporation doing business as Forest Glen Lodge, and the
underlying real property located at 7435 Plathe Road, New Port
Richey, Florida.
The Debtor has determined that it would be in the best interest of
creditors to market the Assets for sale.
Its Real Property is encumbered by liens and security interests of
Comerica Bank, Wells Fargo Bank, as well as other consensual liens.
The Debtor desires to sell the Assets to a third party pursuant to
an Asset Purchase Agreement. Although she does not have a current
offer to purchase the Assets, she believes that the value of the
Assets would be maximized by a competitive sale process. The
Debtor asks authority to sell the Assets free and clear of all
liens, claims, and encumbrances.
The Debtor has sound business justifications for selling the
Assets. Based on a financial analysis of the Assets and recent
interest, the Purchase Price proposed is reasonable. The proposed
Purchase Price is sufficient to pay all allowed claims pursuant to
the terms of the confirmed Chapter 11 Plan. Accordingly, the
Debtor believes that the sale of the Assets presents the best
opportunity for the Debtor to pay creditors and achieve a
successful result.
On Oct. 14, 2019, the Real Property Seller filed her Bid Procedures
Motion, asking the entry of an order approving the sale of the
Purchased Assets to a purchaser pursuant to the terms of the
Agreement, subject to higher and better bids, and approving certain
bidding procedures and bid protections.
The Debtor will continue to market the Assets up until the Bid
Deadline by continuing to engage prospective purchasers in bidding
for the Assets and providing parties with continued access to
information related to the Assets to all Qualified Bidders. In
this way, the Debtor intends to maximize the number of participants
who may participate as bidders at the sale and thereby maximize the
value to be achieved from the sale of the Assets.
The Debtor submits that the Agreement constitutes (or will
constitute) the best offer for the Assets, and will provide a
greater recovery for her estate than would be provided by any
available alternative. Thus, her entry into the Agreement or
Marked Agreement (as defined in the Bid Procedures Motion), as the
case may be, represents a sound exercise of their reasonable
business judgment.
The Debtors asks authority to assume and assign the Assumed
Contracts that may be identified in the Agreement (if applicable).
She asserts that they will have met all requirements of sections
365(b) and 365(f) of the Bankruptcy Code and should be permitted to
assume and assign Assumed Contracts to the Purchaser (or a
Successful Bidder other than the Purchaser), as the case may be.
Upon satisfaction of indebtedness of Comerica Bank and Wells Fargo
Bank, the net proceeds of the Sale Transaction will pay the allowed
claims of creditors in the order of their priority. It is
contemplated that the sale proceeds will be sufficient to pay the
allowed claims of creditors pursuant to the terms of the confirmed
Plan.
A copy of the form of the APA attached to the Motion is available
for free at:
http://bankrupt.com/misc/Margaret_Schmidt_158_Sales.pdf
Counsel for the Debtor:
Barbara A. Hart, Esq.
STICHTER, RIEDEL, BLAIN & PROSSER, P.A.
110 East Madison Street, Suite 200
Tampa, FL 33602
Telephone: (813) 229-0144
Facsimile: (813) 229-1811
E-mail: bhart@srbp.com
Margaret Schmidt sought Chapter 11 protection (Bankr. M.D. Fla.
Case No. 16-10622) on Dec. 14, 2016. The Debtor tapped Suzy Tate,
Esq., at Suzy Tate, P.A. as counsel. On Aug. 21, 2017, the Court
confirmed the Debtor's Chapter 11 Plan.
MARSALRET LLC: Case Summary & 16 Unsecured Creditors
----------------------------------------------------
Debtor: Marsalret, LLC
d/b/a Mamma Lucia by the Bay
2885 Dunleigh Dr.
Dunkirk, MD 20754
Business Description: Marsalret, LLC is a Maryland Domestic
LLC in the Italian restaurant business.
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Case No.: 19-24474
Judge: Hon. Thomas J. Catliota
Debtor's Counsel: Steven L. Goldberg, Esq.
MCNAMEE, HOSEA, JERNIGAN, KIM, GREENAN &
LYNCH, P.A
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
Tel: (301) 441-2420
E-mail: sgoldberg@mhlawyers.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Maria Lubrano, authorized
representative.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 16 unsecured creditors is available for free
at:
http://bankrupt.com/misc/mdb19-24474.pdf
MAURICE SPORTING: Gun Auctions Buying Gun Inventory for $97K
------------------------------------------------------------
Maurice Sporting Goods, Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to authorize the
private sale of Maurice Sporting Goods' collectible firearm
inventory to Gun Auctions USA, LLC for $97,001.
A hearing on the Motion is set for Nov. 6, 2019 at 1:00 p.m. (ET).
The objection deadline is Oct. 30, 2019 at 4:00 p.m. (ET).
The Debtors are now in the process of winding down their estates,
including through the reconciliation of claims against their
estates and the formulation of an efficient exit from bankruptcy.
The Property includes the Debtors' inventory of approximately 180
collectibles, antique firearms, including rifles, pistols, and
shotguns, and related accessories, such as presentation cases. A
detailed listing of the Property is provided on Schedule 1 to the
Purchase Agreement.
The Property was not sold to the to the stalking horse bidder as
part of the Going Concern Sale of substantially all assets. As
part of the Debtors' efforts to wind down their estates, the
Debtors and their professionals have evaluated the best manner in
which to maximize the value of the Property for the benefit of the
estates. The sale of firearms is heavily regulated and, as a
result,
the pool of potential purchasers is limited. Although the Debtors
solicited proposals from two auctioneers to conduct a public
auction on their behalf, the Debtors ultimately determined that
selling the Property for a fixed price would maximize the value
received for the Property.
After receiving initial bids, the Debtors conducted a private
auction to obtain the highest and best bid. At the conclusion of
the Private Auction, the Debtors determined that the bid submitted
by the Purchaser for an aggregate purchase price of $97,001 was the
highest and best bid for the Property.
Prior to the Going Concern Sale, the common stock of Maurice
Sporting Goods was owned by Michael Olshansky, Jory Katlin, and
Andy Katlin ("Former Shareholders"). As a result of their
discussions, the Debtors, the Former Shareholders, and the agent
for the Debtors' prepetition and postpetition lenders have agreed
to distribute the cash proceeds of the Sale as follows upon
Closing: (a) 75% of the proceeds will be distributed to the Agent
for the benefit of the Lenders (as defined in the Final DIP Order)
in accordance with the terms and conditions of the Final DIP Order;
and (b) 25% of the proceeds will be distributed to the Former
Shareholders. In exchange, the Former Shareholders have agreed not
to object to the Sale. The Former Shareholders Settlement in
incorporated in the Proposed Order.
Pursuant to their terms and conditions of the Asset Purchase
Agreement, dated as of Oct. 11, 2019 (as may be amended,
supplemented, or otherwise modified from time to time), and subject
to the Court's approval, the Debtors propose to sell to the
Purchaser the Property on an "as is, where is" basis, free and
clear of all liens, claims, encumbrances and other interests.
The salient terms of the Agreement are:
a. Seller - Maurice Sporting Goods
b. Purchaser - Gun Auctions USA, LLC
c. Property Being Sold - The Property consists of all of the
Seller's right, title and interest, in and to the collectible
firearm inventory, as set forth in Schedule 1 attached to the
Purchase Agreement.
d. Purchase Price - $97,001
e. Private Sale / No Competitive Bidding - The Debtors are
asking approval of a private sale without a public auction process.
f. Closing - The Closing will take place at the offices of
Development Specialists, Inc., 10 S. LaSalle Street, Suite 3300,
Chicago, IL 60603, or at such other place and/or date as mutually
agreed to by the Purchaser and the Seller, provided that the
Purchase Agreement has not been otherwise terminated.
g. Good Faith Deposit - $10,000
h. Credit Bid - Not applicable.
i. Brokers - Not applicable.
There is more than ample business justification to sell the
Property through a private sale to the Purchaser, rather than
conducting a public auction process. The Debtors and their
professionals evaluated the best manner in which to sell the
Property and maximize value for the estates. After considering
various options, the Debtors solicited proposals from interested
parties and held the Private Auction. In light of the marketing
efforts to date and the limited market for the Property, the
Debtors believe further marketing fforts would be costly and
impractical. Accordingly, the Debtors believe that the Sale -- as
opposed to a lengthy, public auction process -- represents the best
opportunity to extract immediate and meaningful value from the
Property in the amount of the Purchase Price.
The Debtors believe that the Former Shareholders Settlement is in
the best interests of all creditors and satisfies the applicable
Martin factors. Accordingly, they respectfully submit that the
Former Shareholders Settlement should be approved.
Finally, the Debtors ask that the Court waives the 14-day stay
period under Bankruptcy Rule 6004(h).
A copy of the Sale Agreement and the list of assets to be sold
attached to the Motion is available for free at:
http://bankrupt.com/misc/Maurice_Sporting_733_Sales.pdf
The Purchaser:
GUN AUCTIONS USA, LLC
Attn: Richard Franklin
13200 Belcher Road, S.
Largo, FL 33773
About Maurice Sporting Goods
Maurice Sporting Goods, Inc., established in 1923, is a
family-owned distributor of outdoor sporting goods specializing in
fishing; marine; sports licensed products and souvenirs; outdoor
gifts and decor; hunting; and camping and outdoor recreation.
Collectively, Maurice Sporting Goods services more than 15,000
store fronts across the United States, Canada, South America, and
Europe.
Maurice Sporting Goods, Inc., and 4 affiliated companies sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 17-12481) on
Nov. 20, 2017. Maurice Sporting Goods estimated $10 million to $50
million in total assets and $100 million to $500 million in total
liabilities.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as
counsel; Patrick J. O'Malley of Development Specialists, Inc., as
restructuring advisor; Silverman Consulting as financial advisor;
Livingstone Partners LLC as investment banker; and Epiq Bankruptcy
Solutions, LLC, as claims, solicitation and balloting agent.
MCCLATCHY COMPANY: Moody's Lowers CFR to Ca, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
for The McClatchy Company to Ca from Caa1, and the Probability of
Default Rating to Ca-PD from Caa1-PD primarily due to concerns
regarding the company's liquidity position in light of the pending
pension plan payments of approximately $120 million in 2020. The
liquidity concerns are exacerbated by continued sustained
deterioration in the company's operating performance in the
declining newspaper publishing industry. In addition, Moody's
downgraded the company's Senior Secured First Lien Notes due 2026
to Ca from B1. The rating outlook is Stable. Speculative Grade
Liquidity rating is downgraded to SGL-4 from SGL-3.
A summary of the actions is as follows:
Issuer: McClatchy Company (The)
Corporate Family Rating, downgraded to Ca from Caa1
Probability of Default Rating, downgraded to Ca-PD from Caa1-PD
Senior Secured First Lien Notes due 2026, downgraded to
Ca (LGD4) from B1 (LGD2)
Speculative Grade Liquidity Rating, downgraded to SGL-4 from
SGL-3
Outlook is Stable
RATINGS RATIONALE
McClatchy's downgrade reflects liquidity concerns amid a continued
deterioration in the company's operating performance as it seeks to
expand revenue from digital sources while managing the costs
related to attrition of its print business. McClatchy is required
to contribute $120 million towards its underfunded pension plan in
2020, with the majority of the payments due in the second half of
the year. McClatchy has requested a waiver from the IRS for its
required minimum pension plan contributions, which has not been
granted yet. Moody's notes that if the waiver is not granted or
pension contribution laws are not changed in the next nine months,
McClatchy may not have sufficient liquidity to address the required
pension plan payments. Even if the company addresses the upcoming
pension plan contribution, Moody's believes that McClatchy's
current debt capital structure is unsustainable given the pervasive
decline of the print newspaper business.
Though McClatchy continues to make strides in improving its digital
subscriptions, and tightening pay-walls, the company's performance
remains weak and reliant on cyclical advertising spending, which
has continued to move towards more savvy digital platforms. While
digital revenue increased during 2018, the trend has reversed in
the first half of 2019, and McClatchy's digital advertising revenue
declined due to restructuring of a advertising sales function and
reduced traffic due to tighter paywalls, with some impact on its
traffic due to change in search engine algorithms, which also
impacted other publishing companies. McClatchy remains hampered by
its high leverage, including the underfunded pension plan. Though
McClatchy retains its strong market position in local news in the
markets where it publishes, Moody's expects McClatchy and its
traditional news publishing peers will continue to face growing
competition with technology driven changes in media consumption and
shifts by advertisers away from print media, creating ongoing
pressure on revenue and margins.
The Ca rating and LGD4 assessment on McClatchy's $268 million
senior secured notes reflect the first priority claim on the assets
and cash flow of the company relative to the Junior Lien term loans
(totaling $425.5 million) and $14.9 million in unsecured notes due
to the security interest and upstream guarantees from material
domestic subsidiaries. The company had $14.3 million of operating
lease expense for FY 2018 and $661 million of unfunded pension
obligations as of FYE 2018 which are accounted for within its
adjusted debt figure and LGD framework. Moody's anticipates that
expected recovery on the secured debt will be low due to high
balance of the unfunded pension obligations, which may be preserved
or prioritized in the event of a potential restructuring.
The secured notes are backed by a first lien on essentially all
tangible and intangible assets. The notes rank junior to ABL
Priority Collateral and those assets that are not part of the Notes
Priority Collateral. In addition, the $35 million LC credit
facility is secured by cash. As a result, Moody's ranks the $100
million of combined credit facilities ahead of the secured notes in
Moody's Loss Given Default framework.
McClatchy's SGL-4 speculative-grade liquidity rating reflects its
expectation for material challenges in the company's liquidity over
the next 12 months, as it is unlikely to have sufficient cash flow
to fund its pending $120 million in pension payments. As of the end
of Q2 2019, McClatchy had approximately $39.4 million available
under its ABL revolver due 2023. In addition, $26.7 million of LC's
related primarily to workers compensation are supported by a
separate collateralized LC facility due 2023, with a maximum LC
draw of up to $35 million. McClatchy had $20 million in cash on its
balance sheet as of June 30, 2019. Alternate sources of liquidity
are limited. Under the indenture, net proceeds from asset sales
have to be used to pay down debt within 60 days.
Social risks are considered low-to-medium, consistent with
publishing and broadcasting sectors. McClatchy's publications are
subject to changing consumer preferences, and evolving demographic
and societal trends. As online readership grows, publishers seek to
monetize their investments in online platforms through fee
subscriptions and/or online advertisements, or designing digital
advertising campaigns on behalf of their community business
partners. To best target viewers and subscribers, McClatchy
collects user data, exposing it to data security and customer
privacy risks. Moody's views the company's financial strategy as
moderate, as it has continued to reduce its debt levels without
distributing cashflow towards shareholders. The McClatchy family
members and trusts, formed for the benefit of the McClatchy family,
own approximately 31% of the economic interest in the company and
control approximately 82% of voting power through a dual class
share structure. Moody's does not believe McClatchy will make
shareholder distributions over the next 12 months. A number of
companies with newspaper operations, including closely held
publishers, have chosen to divest newspaper operations or acquire
non-publishing assets. Notwithstanding management's responsibility
as a public company to review offers for its assets, Moody's
believes management is comfortable with its existing portfolio of
newspapers; however, the industry remains active with mergers and
acquisitions. Moody's also notes that Chatham Asset Management has
made significant equity and debt investments across McClatchy's
capital structure.
The stable rating outlook reflects its expectation that McClatchy
will likely have a restructuring action over the next 12-18 months,
resulting in a Moody's default event. Moody's expects overall
liquidity position to remain weak even if the company's pension
payment waiver is granted, as the pressure on its top-line
continues despite improvements in digital subscriber base and
continued cost management. Moody's anticipates that debt-to-EBITDA
leverage will remain elevated as McClatchy continues to re-align
its operations towards a stronger product offering. Moody's expects
the company to continue its real estate disposition strategy, and
using proceeds to repay or repurchase debt.
McClatchy's ratings could be downgraded further if liquidity or
free cash flow deteriorates further or the prospect of a distressed
exchange or other event of default increases.
Ratings upgrade is unlikely at this point.
The McClatchy Company, headquartered in Sacramento, CA, is one of
the largest newspaper companies in the U.S., with 30 daily
newspapers, community newspapers, websites, mobile news and
advertising, niche publications, direct marketing and direct mail
services. The McClatchy family members and trusts, formed for the
benefit of the McClatchy family, own approximately 31% of the
economic interest in the company and control approximately 82% of
voting power through a dual class share structure. Revenue for the
LTM ended June 30, 2019 was approximately $763 million.
The principal methodology used in these ratings was Media Industry
published in June 2017.
MI WINDOWS: S&P Assigns 'B+' Issuer Credit Rating; Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issuer credit rating to Gratz,
Pa.-based MI Windows and Doors LLC (MIWD). The rating agency also
assigned its 'BB-' issue-level and '2' recovery ratings to the $675
million senior secured term loan B proposed by the company in
connection with its acquisition of Milgard Windows.
MIWD has entered into an agreement to acquire Milgard Windows from
Masco Corp. for $725 million. The company is pursuing financing
consisting of a $75 million asset-based revolving credit facility
(unrated) and a $675 million term loan B. MIWD Holdco II LLC will
also be a co-borrower with MIWD on this term loan.
In addition to the proposed financing, an affiliate of Koch Equity
Development (Koch) will provide $350 million in preferred equity to
MIWD Holdco, which will contribute the funds as common stock to
MIWD. Proceeds will be used to partially fund the acquisition,
repay existing debt, and pay a $100 million dividend to MIWD's
existing equity owners.
"Our 'B+' rating on MIWD reflects its position as the
second-largest provider of vinyl windows in the U.S. residential
windows market. The acquisition of Milgard will increase its
position in the highly competitive and still fragmented windows
segment in the U.S.," S&P said, adding that the acquisition will
also expand MIWD's geographic presence to the western U.S., giving
it nearly nationwide coverage.
The stable outlook on MIWD reflects S&P's expectation of
high-single-digit percent revenue growth and stable EBITDA margins
that reduce debt to EBITDA to less than 5x over the next 12 months.
S&P expects the Milgard acquisition and steady demand in
residential window markets will allow for synergies and increased
market penetration.
"We could downgrade the company over the next 12 months if leverage
approaches 6x or if interest coverage approaches 2x, which could
occur if EBITDA margins deteriorated by 200 basis points," S&P
said. Such a scenario could come from unexpected high inflation in
resin or transportation costs due to rising crude oil prices, along
with an inability to increase prices, or if volumes declined
drastically due to a housing recession or a steep decline in
residential remodeling spending, according to the rating agency.
"An upgrade of MIWD is unlikely over the next year. However, this
could happen if the company sustained leverage of less than 4x
while further expanding and diversifying its product lines, whether
through organic growth or acquisitions," S&P said. S&P estimates
this world require about a 200-bps improvement over the projected
combined EBIDTA margins of MIWD and Milgard.
MIWD HOLDCO II: Moody's Assigns B2 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating and
a B2-PD Probability of Default Rating to MIWD Holdco II LLC, and a
B2 rating to its proposed $675 million first lien senior secured
term loan B due 2026. The outlook is stable.
In the proposed transaction, MIWD will acquire Milgard
Manufacturing, Inc., a window and patio door manufacturer in the
Western US from its current owner Masco Corporation for $725
million. The acquisition will be financed with the proceeds from
the $675 million first lien senior secured term loan and a $350
million preferred equity investment from an affiliate of Koch
Equity Development LLC. These proceeds will also finance a $100
million distribution to existing MIWD shareholders. At the same
time, the company will also put in place a $75 million ABL
revolving credit facility expiring in 2024.
The following rating actions were taken:
Issuer: MIWD Holdco II LLC
Corporate Family Rating, assigned B2
Probability of Default Rating, assigned B2-PD
Proposed $675 million first lien senior secured term loan
due 2026, assigned B2 (LGD4)
The outlook is stable
RATINGS RATIONALE
The B2 Corporate Family Rating reflects the company's: 1) good
position in manufacturing of vinyl and aluminum doors and windows
and improved revenue scale following the acquisition of Milgard; 2)
expanded national footprint through the combination and good
diversity of product price points and distribution channels; 2)
solid operating margin profile and positive free cash flow; 3)
financial strategy that outlines plans for deleveraging; and 4)
Moody's expectation that residential and repair and remodeling end
markets will demonstrate stable trends over the next 12 to 18
months, supporting the company's performance.
On the other hand, the rating considers: 1) limited operating
history in current configuration; 2) risks associated with the
integration of the acquisition, which could include incurrence of
higher costs, performance below expectations, or operational
disruptions; 3) volatility in margins and pricing inherent in the
windows and doors manufacturing sector given the cyclicality of the
end markets, and highly competitive industry environment; 4)
aggressive financial policies, which include preferred equity
financing that has a PIK component and debt-like characteristics;
5) high leverage of 4.4x Moody's-adjusted debt to EBITDA, and 6.5x
including the preferred instrument; and 6) moderately high customer
concentration with top ten customers representing about one third
of total revenue.
The B2 rating on first lien senior secured term loan, at the same
level with CFR, reflects the preponderance of this class of debt in
the company's capital structure. MI Windows and Doors, LLC and its
parent MIWD Holdco II LLC are joint borrowers under the term loan.
The loan benefits from guarantees of all subsidiaries of MIWD
Holdco II LLC.
The stable outlook reflects Moody's expectations for stable
conditions in the US residential and repair and remodeling end
markets, and smooth integration of the company's transformative
acquisition.
MIWD will have good liquidity, supported by positive free cash
flow, available ABL capacity, springing financial covenant and an
extended debt maturity profile.
Ratings could be upgraded if the company exercises conservative
financial strategies and delevers below 3.0x (and 5.0x on a
fully-adjusted basis), accomplishes the successful, seamless
integration of the transformative acquisition and continues to
improve its scale, while end markets remain supportive of stable
operating performance, including maintenance of margins.
Ratings could be downgraded if the company experiences difficulties
in the integration of the acquired business, if operating margins
were to deteriorate, including due to weakening in the company's
end markets, or if financial policies grew more aggressive,
including if fully-adjusted leverage were to exceed 7.5x.
The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.
MI Windows and Doors, LLC is a manufacturer of vinyl and aluminum
windows and patio doors in the US, serving the residential end
markets of new construction and repair and remodeling. The company
also extrudes the majority of its vinyl and aluminum needs in
house. In Q4 2019, MIWD will acquire Milgard, the manufacturer of
vinyl, aluminum, fiberglass, and wood windows and patio door
products in the Western US with in-house vinyl extrusion,
fiberglass pultrusion, and fiberglass tempering capabilities. In
the LTM period ended June 30, 2019, the company generated
approximately $1.2 billion in pro forma revenue.
MOUNTAIN INVESTMENTS: Hearing on Plan Outline Continued to Nov. 7
-----------------------------------------------------------------
The hearing on Mountain Investments, LLC's fourth amended
disclosure statement explaining its plan of reorganization dated
Sept. 26, 2019, has been continued for Nov. 7, 2019, at 1:30 p.m.
As reported by Troubled Company Reporter, Mountain Investments
filed a plan of reorganization dated Sept. 26, 2019, that provides
for general unsecured creditors to receive a one time payment of
$38,640 on the 60th month following the plan effective date. They
will not recoup any interest. This translates to a 3.9% recovery
of their allowed claims. The Plan proposes to pay off secured
claims of Bank of America and Specialized Loan Servicing, LLC, in
installments, in 360 monthly payments, ending in 2049.
A full-text copy of the disclosure statement dated Sept. 26, 2019,
is available at https://tinyurl.com/yyrbj5v7 from PacerMonitor.com
at no charge.
About Mountain Investments
Mountain Investments, LLC, is a limited liability company formed in
2008 by Michael and Brenda Noble. The Nobles purchased seven
rental properties in the Gulfport area of Mississippi after
Hurricane Katrina devastated Mississippi and Louisiana in 2005.
The Nobles intended to rehabilitate the properties to provide
affordable housing for local residents.
Property values in and around Gulfport declined precipitously
beginning in 2008 and have yet to recover. The rents generated by
the properties were insufficient to pay the amounts due for each
note secured by the properties. The divorce settlement required
Mr. Noble to transfer the properties to Mountain Investments, LLC,
and to indemnify and hold harmless Brenda Noble for any liability
on the notes secured by the properties.
In order to enjoin the pending foreclosures and reorganize, Mr.
Noble authorized Mountain Investments to seek bankruptcy
protection.
Mountain Investments, LLC, f/d/b/a WIS Holdings, LLC, f/d/b/a
Wealth Investment Solutions, LLC, sought Chapter 11 protection
(Bankr. N.D. Cal. Case No. 16-50906) on March 28, 2016. In the
petition signed by Michael T. Noble, managing member, the Debtor
was estimated to have $1 million to $10 million in both assets and
liabilities. The case is assigned to Judge Stephen L. Johnson.
The Debtor is represented by Ralph P. Guenther, Esq., at Dougherty
& Guenther, APC.
MURRAY ENERGY: Moody's Lowers Corp. Family Rating to 'C'
--------------------------------------------------------
Moody's Investors Service downgraded Murray Energy Corporation's
Probability of Default Rating to D-PD from Ca-PD and Corporate
Family Rating to C from Ca. Moody's also downgraded the company's
senior secured bank credit facilities due 2020 and senior secured
bank credit facilities due 2022 to C from Ca and confirmed its
senior secured notes at C. The action follows Murray's announcement
on October 29, 2019 that the company has entered into a
restructuring support agreement with more than 60% of existing
lenders and filed voluntary petitions for all of the company's main
operating subsidiaries to initiate Chapter 11 bankruptcy
proceedings in the United States Bankruptcy Court for the Southern
District of Ohio. The action concludes the review for downgrade
initiated on October 4, 2019.
Subsequent to the actions, Moody's will withdraw all of Murray
Energy Corporation's ratings due to the bankruptcy filing.
Downgrades:
Issuer: Murray Energy Corporation
Probability of Default Rating, Downgraded to D-PD from Ca-PD
Corporate Family Rating (Local Currency), Downgraded to C from Ca
Senior Secured Bank Credit Facility, Downgraded to C (LGD5) from
Ca (LGD4)
Guaranteed Senior Secured Bank Credit Facility, Downgraded to
C (LGD3) from Ca (LGD3)
Confirmations:
Issuer: Murray Energy Corporation
Senior Secured Regular Bond/Debenture, Confirmed at C (LGD5)
Outlook Actions:
Issuer: Murray Energy Corporation
Outlook, Changed To Stable From Rating Under Review
RATINGS RATIONALE
Moody's believes that debtholders will sustain significant losses
relative to the face value of the company's debt. A lender group
will serve as a stalking horse bidder for substantially all of the
company's assets and substantially all of the company's
pre-petition funded debt would be eliminated through this
transaction. Murray intends to finance its operations with a
combination of cash on hand and a new $350 million
debtor-in-possession facility, which remains subject to court
approval. The company intends to continue operations and several
key subsidiaries, including subsidiaries related to Foresight
Energy and the metallurgical coal mines acquired recently through
the bankruptcy of Mission Coal, are not included in the bankruptcy
filing.
Murray's management has responded aggressively to the ongoing
secular decline in demand for thermal coal in the United States by:
(i) consolidating a portion of the thermal coal industry through
numerous acquisitions since inception in 1988, including buying
Consolidation Coal Company from CONSOL Energy in 2013, acquiring
effective control of Foresight Energy in 2015, two thermal coal
mines in Colombia in 2015, three thermal coal mines in the Illinois
Basin in 2018, and two metallurgical coal assets from the
bankruptcy of Mission Coal in 2019; (ii) investing in coal mining
assets to lower cash costs and improve competitive positioning; and
(iii) incrementally restructuring its balance sheet through a
series of distressed debt exchange transactions. While the company
has developed a track record for acquiring and improving the
operating performance of coal mines, a substantive deterioration in
export prices and increasing domestic competition is a major
challenge for the company, which is operating with a
highly-leveraged balance sheet that reduces financial flexibility
and competing with better-capitalized companies, many of whom
recapitalized through bankruptcy protection earlier in the decade
and have substantially lower debt service costs.
The C CFR reflects the company's high financial leverage for a coal
company (low 5 times Debt/EBITDA including adjustments; LTM
6/30/2019), expected negative free cash flow given the significant
drop in prices for export thermal coal and drop in prices for
domestic thermal coal, and high likelihood of a debt restructuring
involving substantial losses in the near term. Fundamentally, the
company's credit profile is principally constrained by the
challenges of operating with a leveraged balance sheet in an
industry experiencing ongoing secular decline in domestic demand
for thermal coal. Murray is a diversified producer of thermal coal
with twelve active mining operations in three domestic coal basins
(Illinois Basin, Northern Appalachia, and Uintah) and one
international basin (Colombia). The company has good access to
domestic utilities operating coal-fired power plants and to the
export markets. Domestic demand for thermal coal has declined
significantly over the past decade and a continuation of this trend
expected through the medium term will create ongoing headwinds for
the company's earnings and cash flow generation even if export
pricing is strong.
Environmental, social, and governance factors are important factors
influencing Murray Energy's credit quality. The company is exposed
to ESG issues typical for a company in the coal mining industry,
including increasing global demand for renewable energy that is
detrimental to demand for coal, especially in the United States and
Western Europe. From an environmental perspective, the coal mining
sector is also viewed as: (i) very high risk for air pollution and
carbon regulations; (ii) high risk for soil and water pollution,
land use restrictions, and natural and man-made hazards; and (iii)
moderate risk for water shortages. Social issues include specific
health risks, such as black lung disease, and typical safety issues
associated with mining. Governance issues include financial policy
challenges associated with a privately owned firm. Murray Energy's
ESG profile includes significant exposure to legacy liabilities,
including a meaningful position in the 1974 UMWA Pension Plan.
Murray Energy Corporation is the largest privately-owned coal
producer in the United States. The company was founded by its
current Chairman Robert E. Murray, in 1988. Ownership of the
company is closely held by the Chairman and his family, and the
senior management team includes family members, including
newly-named CEO, Robert Moore. The company operates nineteen active
mines, including Foresight Energy L.P., in five domestic coal
basins -- Illinois Basin, Northern Appalachia, Central Appalachia,
Warrior, and Uintah (Utah) -- and one international basin --
Colombia, and generated 76.0 million clean tons in 2018. With the
recent acquisitions of Murray Maple Eagle Coal, LLC, and Murray Oak
Grove Coal, LLC, Murray has the ability to produce an additional
4.0 million clean tons of metallurgical coal per year. The company
has 80% voting interest in Foresight Energy GP LLC, and
approximately 52% of the outstanding limited partner units in
publicly-traded Foresight Energy LP (common and subordinated
units). Headquartered in St. Clairsville, Ohio, Murray, including
all of its subsidiary operations, generated about $3.7 billion in
revenue for the twelve months ended 30 June 2019.
The principal methodology used in these ratings was Mining
published in September 2018.
MWM OIL: Seeks to Hire Butler County Auction as Auctioneer
----------------------------------------------------------
RAG Oil Co., Inc. and MWM Oil Company, Inc. seek authority from the
U.S. Bankruptcy Court for the District of Kansas (Wichita) to
employ Butler County Auction, LLC, as an auctioneer to assist the
Debtors in liquidation of vehicles and real estate located at 424
E. Main St., Towanda, Kansas.
Butler will receive a commission of 28% of gross sale proceeds of
the Vehicles, and 8% of proceeds of the Real Estate after payment
of unpaid and prorated ad valorem taxes on the Real Estate, and
$42,500 to the mortgage holder, Towanda State Bank; commissions are
inclusive of advertising costs; additionally, there is a buyer's
commission of 15% of gross sale proceeds of the Vehicles and Real
Estate, which Butler County Auction pays to EquipBid.com Inc.
Carl Mandina of Butler County Auction, LLC, assures the court that
the firm does not hold or represent any interest adverse to that of
the applicants or the bankruptcy estates and that said auctioneer
is a disinterested person
within the meaning of 11 U.S.C. Sec. 101(14).
The auctioneer can be reached at:
Carl Mandina
Butler County Auction, LLC
704 E. Main
Towanda, KS 67144
Phone: +1 316-854-0550
About RAG Oil Co., Inc.
Based in Towanda, Kansas, RAG Oil Co., Inc. & MWM Oil Company, Inc.
filed voluntary bankruptcy petitions under Chapter 11 (Bankr. D.
Kan. Case No. 19-11405 & Case No. 19-11404, respectively) on July
26, 2019. The Debtors are represented by William B. Sorensen, Jr.
at Morris Laing Evans Brock And Kennedy.
MWM OIL: Seeks to Hire Evenson Auctioneer as Auctioneer
-------------------------------------------------------
RAG Oil Co., Inc. and MWM Oil Company, Inc. seek authority from the
U.S. Bankruptcy Court for the District of Kansas (Wichita) to
employ Evenson Auctioneers, Inc., as a specialized auctioneer to
assist the Debtors in liquidation of oil and gas leasehold
interests and equipment.
Evenson will receive commission of 6% of gross sale proceeds of the
Oil & Gas Interests, and 10% of the gross proceeds of the Oil & Gas
Equipment; commissions are inclusive of advertising costs.
Mark Evenson of Evenson Auctioneers, Inc. assures the court that
the firm does not hold or represent any interest adverse to that of
the applicants or the bankruptcy estates and that said auctioneer
is a disinterested person within the meaning of 11 U.S.C. Sec.
101(14).
The auctioneer can be reached through:
Mark Evenson
Evenson Auctioneers, Inc.
260 N Rock Rd # 140
Wichita, KS 67206
Phone: +1 316-683-7733
About RAG Oil Co., Inc.
Based in Towanda, Kansas, RAG Oil Co., Inc. & MWM Oil Company, Inc.
filed voluntary bankruptcy petitions under Chapter 11 (Bankr. D.
Kan. Case No. 19-11405 & Case No. 19-11404, respectively) on July
26, 2019. The Debtors are represented by William B. Sorensen, Jr.
at Morris Laing Evans Brock And Kennedy.
NAJEEB KHAN: Wife Selling Edwardsburg Property to Slocums for $750K
-------------------------------------------------------------------
Nancy L. Khan, the wife of Najeeb Ahmed Khan, asks the U.S.
Bankruptcy Court for the Western District of Michigan to authorize
the sale of the real property commonly known as 23411 Lakeview
Drive, Edwardsburg, Michigan to Jonathan T. Slocum and Lindsay A.
Slocum for $750,000.
Mrs. Khan is the Debtor's wife of nearly 30 years. On Aug. 9,
2019, Mrs. Khan filed an action for separate maintenance, which is
pending in the 43rd Circuit Court for Cass County Michigan, Family
Court before the Hon. Mark A. Herman, Case No. 19-00418-DO. Among
other relief, Ms. Khan has requested that Judge Herman determine
spousal support and the equitable division of marital assets
acquired during her marriage to the Debtor pursuant to MCL 552.7.
On Sept. 23, 2019, Mrs. Khan's Motion for a Temporary Order was
heard before Cass County Circuit Court attorney referee Melissa
Sytsma. The Family Court has ordered the parties to submit an
order consistent with that proceeding. The Separate Maintenance
Action was scheduled for mediation before Mr. Frederick D. Dilley
on Oct. 16 and Oct. 23, 2019. On Oct. 11, 2019, the parties
submitted a Stipulation to Stay Proceedings, pending further order
of the Bankruptcy Court. The Family Court has not yet acted on
that stipulation.
On Oct. 16, 2019, Mrs. Khan filed her Motion for Relief from the
Automatic Stay, and requested that the automatic stay be lifted to
permit her to: (i) mediate and otherwise litigate to judgment the
property-related and other matters in the Separate Maintenance
Action; and (ii) allow Judge Herman in the Family Court to
equitably divide Debtor and Mrs. Khan's marital assets according to
Michigan law and enter a judgment.
Mrs. Khan is the sole title holder of the Lakeview Property.
Though Debtor does not hold record title to the Lakeview Property,
the Debtor may hold a contingent interest in the Lakeview Property
as marital property subject to equitable division. For this
reason, and out of an abundance of caution, Mrs. Khan files the
Motion for approval of the sale of the Lakeview Property. She does
not believe there is any other person or entity that has an
interest in the Lakeview Property.
Pursuant to the Buy and Sell Agreement, the Buyers have agreed to
purchase the Lakeview Property for the sum of $750,000. The real
estate broker is At Home Realty Group. The commission is a flat
rate of $10,000. The Buyers are disinterested. The Buy and Sell
Agreement was negotiated, proposed, and entered into by Mrs. Khan
and the Buyers without collusion and in good faith, and resulted
from an arms'-length transaction.
As adequate protection, Mrs. Khan asks that: (i) the sale proceeds
be escrowed pending final determination by the Family Court of Mrs.
Khan and the Debtor's respective interests in the Lakeview
Property; and (ii) Mrs. Khan's claim to and interest in the
Lakeview Property be preserved and continue in the sale proceeds
unaffected in any way by the sale of the Lakeview Property, with
Mrs. Khan's claim and interest in the sale proceeds to be
determined as if the Lakeview Property had not been sold.
Because the case is a liquidation case, the sale of the Lakeview
Property is in the best interest of the bankruptcy estate and its
stakeholders.
Mrs. Khan has agreed to hold the proceeds of the sale of the
Lakeview Property in escrow pending determination of her and the
Debtor's respective interest in the Lakeview Property.
Mrs. Khan asks the Court (i) grants her permission to sell the
Lakeview Property; (ii) authorizes the sale to take immediate
effect such that the 14-day period set forth in Fed. R. Bankr. P.
6004(h) not apply so that the sale may close immediately following
entry of the order; (iii) orders that the proceeds from the sale be
placed in an escrow account pending determination from Judge Herman
pending Judge Herman's ruling on equitable division of marital
property.
A copy of the Agreement attached to the Motion is available for
free at:
https://tinyurl.com/yyjc9cjd
Najeeb Ahmed Khan sought Chapter 11 protection (Bankr. W.D. Mich.
Case No. 19-04258) on Oct. 8, 2019. The Debtor tapped Denise D.
Twinney, Esq., and Robert F. Wardrop, II, Esq., at Wardrop &
Wardrop. P.C., as counsel.
NEW GOLD: S&P Alters Outlook to Stable, Affirms 'B' ICR
-------------------------------------------------------
S&P Global Ratings revised its outlook on Toronto-based gold
producer New Gold Inc. to stable from negative and affirmed all of
its ratings on the company, including its 'B' issuer credit rating
on the company.
The outlook revision reflects the improved prospects for New Gold's
credit measures over the next two years. S&P estimates New Gold
will generate credit metrics that are stronger than the rating
agency's previous expectations, including adjusted debt-to-EBITDA
declining to the mid-3x area in 2020 (compared with more than 4x).
The revision to S&P's estimates incorporates recent debt reduction
-- namely, the repurchase of US$100 million of the company's
unsecured notes due 2022 with proceeds from its C$150 million
equity issuance. In addition, S&P expects the upward revision to
its gold price assumptions will underpin the expected increase in
the company's earnings and cash flow.
The stable outlook reflects S&P Global Ratings' expectation for New
Gold to generate improved credit measures with adjusted
debt-to-EBITDA trending toward the mid-3x area in 2020. The outlook
also reflects S&P's expectation that the company will generate
neutral-to-positive free cash flows starting next year and maintain
stable debt levels and liquidity.
"We could consider a downgrade if, over the next 12 months, we
expect New Gold to generate and sustain adjusted debt-to-EBITDA
well above 5x. In this scenario, we would expect a significant drop
in gold prices from current levels, operational issues that lead to
slower-than-expected Rainy River production ramp-up, or higher-than
expected capital expenditures. The corresponding free cash flow
deficits would presumably lead to increased debt levels and
deteriorating liquidity," S&P said.
"Although unlikely over the next 12 months, we could take a
positive rating action if we believe New Gold can sustain an
adjusted debt-to-EBITDA of about 3x while generating meaningful
positive free cash flows. In such a scenario, we would expect Rainy
River's all-in sustaining costs to meaningfully improve, and the
company's liquidity position to strengthen and support development
projects," S&P said.
NEWMARK GROUP: S&P Affirms 'BB+' Long-Term ICR; Outlook Stable
--------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' long-term issuer credit
rating on Newmark Group Inc. The outlook remains stable.
At the same time, S&P affirmed its 'BB+' ratings on the company's
unsecured notes and its '3' recovery rating. The '3' recovery
rating indicates S&P's expectation for meaningful recovery
(50%-70%; rounded estimate 65%) in the event of payment default.
The ratings affirmation reflects S&P's expectation that Newmark
will continue to operate with leverage within the rating agency's
expected range of 1.5x to 2.0x over the next 12 months while
maintaining solid EBITDA margins. Newmark's limited track record as
a public company and weaker quality of its earnings compared to its
peers continue to weigh on the ratings.
S&P has revised its measure of Newmark' debt to include
exchangeable preferred units (EPUs) the company issued in 2018.
These totaled approximately $325 million as of June 30, 2019,
though the rating agency expects approximately $90 million of these
to be redeemed during the last quarter of 2019 and the remaining to
be redeemed by the end of 2022. Contractually, these EPUs, which
are held by a small group of investors, convert to common equity,
though Newmark has the option to utilize NASDAQ shares earned
toward the redemption of the EPUs. The company currently expects to
exercise their forward contract to use NASDAQ shares earned from
2019 through 2022 to redeem the EPUs. The forward contract also
contains a put option on the NASDAQ shares that protects the
company from a reduction in the price of NASDAQ shares through
2022. S&P's calculation of debt continues to include the company's
unsecured notes that totaled $539.2 million as of June 30, 2019;
any draws on the company's credit facility; and the rating agency's
operating lease adjustment of approximately $260 million.
The stable outlook on Newmark reflects S&P's view that the company
will operate with net debt to EBITDA between 1.5x-2.0x over the
next 12 months. Although it expects smaller acquisitions, the
rating agency does not incorporate any large merger and acquisition
deals in its rating.
"We could lower our rating on Newmark if net debt to adjusted
EBITDA rises above 2.0x either because of an increase in leverage
or a decline in EBITDA. A large acquisition that results in an
increase in leverage could also lead to a downgrade. Likewise,
capital transfers from Newmark to Cantor Fitzgerald or related
parties may lead to a negative rating action," S&P said.
"An upgrade is unlikely over the next 12 months. Over time, we
could raise the rating if we expect net debt to EBITDA to decline
below 1.5x on a sustained basis and the company demonstrates a
longer track record of stable operating performance," S&P said.
OWENS-ILLINOIS INC: S&P Cuts ICR to BB-; Outlook Stable
-------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating to 'BB-' from
'BB' reflecting its expectations that Owens-Illinois Inc.'s (OI)
adjusted debt-to-EBITDA will remain above 5x for at least the next
12 months.
S&P also lowered the issue-level ratings on the company's debt,
including the OI European Group B.V. unsecured notes to 'BB-' from
'BB' and Owens-Brockway unsecured debt to 'B+' from 'BB-'. The
recovery ratings remain unchanged.
The company lowered cash flow guidance in Q3 to $100 million, down
from $260 million.
Deceleration in some end-markets has been sudden; in markets such
as China and the U.S., the slowdown in volumes has offset organic
growth elsewhere in the organization. S&P suspects the declining
U.S. beer trend is particularly heightened for glass manufacturers
as customers substitute aluminum cans for glass to save on costs.
S&P notes the company took a $595 non-cash impairment charge in the
third quarter, primarily reflecting the trends in its U.S. beer
demand markets. As OI is shifting its production mix in the U.S.
and Europe, it is also running into higher operational costs
resulting from complexities of switching product mix and
curtailment of facilities. Maintenance outages have also been a
headwind this year, particularly in China, though the company
should see benefits as they move past those facility outages. In
addition, foreign exchange also continues to weigh on results,
resulting in expected diminished cash flows over previous
expectations.
S&P said, "The stable outlook on OI reflects our expectations that
the company's adjusted debt-to-EBITDA should be in the mid-5x area
by year-end 2020, based on our expectations for a decline in
organic revenues driven by softer beer and non-beer sales in the
U.S. and volume declines in China, offset by strong growth in other
markets.
"We could lower the rating if the OI's adjusted debt to EBITDA were
to increase above 6x on a sustained basis, which could occur if the
company is unable to contain costs and end-markets continue to
decelerate beyond what we project," S&P said.
"We could raise the rating if the company reduces leverage such
that our adjusted debt-to-EBITDA is sustained below 5x. This could
happen if OI lowers costs, grows opportunistically across different
geographies, manages asbestos and pension liabilities, and makes
material asset sales to pay down debt," the rating agency said.
PARKINSON SEED: Trustee Selling Ashton Property for $525K Cash
--------------------------------------------------------------
Gary L. Rainsdon, the Chapter 11 Trustee of Parkinson Seed Farm,
Inc., asks the U.S. Bankruptcy Court for District of Idaho to
authorize the private sale of the real property consisting of
approximately 560 acres of farm ground located at 600 North 3600
East, Ashton, Fremont County, Idaho, to Mark Mickelsen or assigns
for $525,000, cash, subject to higher offers.
A hearing on the Motion is set for Nov. 19, 2019 at 9:00 a.m.
(MST). The objection deadline is Nov. 12, 2019.
Realtor Henri LeMoyne of LeMoyne Realty & Appraisals listed the
property for a commission of 4% on the gross amount of money
received from the sale of the property. In addition to the sale of
the property, by the Motion the Trustee also asks authority to pay
4% real estate commission to the Realtor.
The Trustee has received and accepted from the Buyer, subject to
higher offers and Court approval, an offer of $525,000 cash for the
Purchase of the Real Property. The parties executed their Real
Estate Purchase and Sale Agreement (and counteroffers). To the
best of the Trustee's knowledge, information, and belief, the Buyer
has no connection to the Debtor.
The Buyer has delivered to the Trustee's Realtor earnest money of
$5,000. If the Buyer is the successful purchaser and closes the
sale, the $5,000 earnest money will be applied and credited toward
the purchase price. The earnest money will be nonrefundable in the
event the Buyer fails to pay the remaining purchase price or
withdraws its offer prior to bankruptcy court approval of the sale.
The earnest money will be fully refundable to the Buyer if the
bankruptcy court fails to approve the sale or an objection to the
proposed sale is filed and the Buyer is not the successful
purchaser.
The Trustee proposes to sell said Real Property in accordance with
the terms and provisions contained in the Motion to the BUyer "as
is," free and clear of any and all liens, mortgages, encumbrances,
or interest, of any nature whatsoever and without warranty of any
nature either express or implied.
In the alternative, if the Court does not approve the private sale,
the Trustee proposes that the Court implements the terms and
provisions of 11 U.S.C. Section 363, and Rule 6004 of the Federal
Rules of Bankruptcy Procedure which authorizes the Court to either:
(a) sell at public auction to third parties on the same terms and
provisions as provided for cash or cashier's check in a greater
amount to be received from said third parties; or (b) establish its
own terms and conditions and hold a public auction of said Real
Property.
The Court shall, in its sole discretion, on said date:
(i) Determine whether or not to approve the described private
sale, on the terms and provisions therein contained;
(ii) Determine whether or not to approve the described private
sale on terms and provisions imposed by the Court; or
(iii) Determine whether or not to conduct a public auction of
said Real Property. Any person or entity desiring to participate
in a public auction of the Real Property conducted by the Judge in
open court must be a "Qualified Bidder." To be deemed a "Qualified
Bidder" a party must do the following:
(1) Timely file an objection to this Motion to Sell Real
Property as described.
(2) Tender to the Trustee, by no later than 5:00 p.m. on
Nov. 12, 2019, a deposit in the amount of $5,000 in certified
funds, payable to "Gary L. Rainsdon, Trustee." The deposit will be
held in escrow in a segregated account of Trustee pending the
closing of the sale.
(3) Provide proof of funds satisfactory to Trustee
evidencing that the bidder has the financial wherewithal to timely
consummate the purchase of the Real Property.
If an objection to the proposed sale is filed and the
bankruptcy court conducts an auction on the sale of the real
property, bid amounts will be in increments of not less than
$1,000. Nothing in the Motion will preclude the Buyer from bidding
at any court ordered auction.
All bidders will be deemed to have consented to the core
jurisdiction of the bankruptcy court, and to have waived any right
to a jury trial in connection with any disputes relating to the
auction and sale ofthe Real Property.
(iv) Determine whether or not to establish and impose its own
terms and provisions and conduct in open court, a public auction of
the estate's interest in said Real Property.
The Closing will take place as soon after court approval of the
sale as can be arranged by the Trustee, or such other time as the
Court will impose. The Real Property is to be sold free and clear
of all liens and encumbrances with all valid liens (if any) to
attach to the sale proceeds.
The Trustee has marketed the Real Property through Henri LeMoyne of
LeMoyne Realty & Appraisals. Except for the offer from the Buyer,
no other offers have been received. The assessed value ofthe Real
Property is $539,480. In its schedules, the Debtor values the Real
Property at $672,000. The Trustee believes the purchase price of
$525,000 is approximate to the fair market value of the Real
Property, based upon his discussion with his realtor and current
market conditions.
The Trustee has obtained a Preliminary Title Report for the Real
Property. That report identifies these existing and/or potential
liens, interests, and/or encumbrances:
a. Fremont County (Property Taxes) - Estimated to be $928
(the actual Amount to be determined prior to closing)
b. First National Acceptance Co. (Mortgage dated July 20,
2011, and recorded on July 25, 2011 as Fremont County Recorder's
Instrument No. 534882, by assignment recorded on Oct. 6, 2014 as
Fremont County Recorder's Instrument No. 550597) - $156,561.26 (as
of Nov. 15, 2019) plus any accruing interest, fees and costs to
the date of closing)
The Trustee proposes that the purchase price be distributed as
follows: (i) Estimated Unpaid Property Taxes - $928 (actual amount
to be determined prior to closing); (ii) Realtor's Commission (4%)
- $21,000; (iii) Estimated Closing Costs - $2,000; and (iv) First
National Acceptance Co. - $156,561. The remaining proceeds will be
in the amount of $180,489. The amount paid to First National
Acceptance Co. will also include accrued and accruing interest at
the rate of $21 per diem, fees and costs to the date of closing.
From the Remaining Proceeds, the Trustee intends to pay: (i) Any
Capital Gains Tax; and (ii) All proceeds existing after the
payments described above will be retained by the Bankruptcy Estate.
Actual deductions for unpaid property taxes, closing costs, etc.,
may vary depending on the actual closing date and/or sale amount.
Any liens currently attached to the Real Property will attach to
the proceeds of the sale.
The Trustee believes the proposed sale is in the best interest of
the estate and creditors.
Finally, the Trustee asks that approval of the sale be effective
immediately and the 14-day stay imposed by Rule 6004(h) and other
rules be waived.
A copy of the Agreement attached to the Motion is available for
free at:
https://tinyurl.com/y3ak88x4
About Parkinson Seed Farm
Located in Saint Anthony, Idaho, Parkinson Seed Farm, Inc. --
http://www.parkinsonseedfarm.com/-- farms approximately 7,200
acres of potatoes. It raises seed potatoes, hard red and hard
white wheat, as well as a small amount of alfalfa (mostly to feed
horses for recreational purposes). The company raises 11 of what
it considers to be more mainstream varieties such as the Russet
Burbank, Ranger, three different line selections of Russet
Norkotah, white varieties such as Cal Whites and Atlantics, and
reds like the Dark Red Norland. The company was founded in 1937.
Parkinson Seed Farm sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Idaho Case No. 18-40412) on May 15,
2018. In the petition signed by Dirk Parkinson, president, the
Debtor disclosed $6.11 million in assets and $26.92 million in
liabilities. Judge Joseph M. Meier oversees the case. Parkinson
Seed Farm hired Robinson & Associates as its legal counsel. Henri
LeMoyne of LeMoyne Realty & Appraisals is the Debtor's realtor.
PG&E CORP: Noteholders Want Own Plan Considered Ahead of Debtors'
-----------------------------------------------------------------
A group of PG&E Corp. noteholders want its $29.2 billion competing
reorganization plan to be considered by the bankruptcy court ahead
of the plan proposed by the power producer.
The Ad Hoc Committee of Senior Unsecured Noteholders says it is in
the best interests of the Debtors' estates, the tens of thousands
of fire victims waiting for payment of their claims, as well as all
other creditors of the estates, for a plan of reorganization that
meets the requirements of A.B. 1054 to be confirmed well in advance
of the June 30, 2020, deadline under A.B. 1054.
In order to maximize the likelihood of satisfying the A.B. 1054
deadline, the Noteholders say the Court should implement a
confirmation scheduled that allows the plan of reorganization
proposed by the Official Committee of Tort Claimants and the Ad Hoc
Committee (the "TCC/AHC Plan") to proceed to solicitation ahead of
the Debtors' amended plan of reorganization.
According to the Noteholders, the parties disagree with respect to
the timeline for these cases.
The Noteholders note that the Debtors' proposed schedule would have
the disclosure statement process and solicitation begin after the
conclusion of the estimation proceeding currently pending in the
District Court, which would result in a confirmation hearing
beginning in early June, precariously close to the June 30
deadline.
"The reason the Debtors seek such an extended schedule is now
abundantly clear: the financing for the Debtor Plan and, therefore,
its viability, hinges entirely on a favorable result in the
estimation proceeding and the Tubbs Fire trial pending in
California Superior court. However, the Debtors' and their equity
holders' strategy, which can only be successful if the Fire Victim
Claims (including all claims of non-settling governmental/public
entities) are estimated at less than $6.9 billion to comply with
the financing commitments for the Debtor Plan, jeopardizes the
successful reorganization of the estates and forces the fire
victims and other creditors to bear unacceptable risk solely to
benefit the Debtors' shareholders."
"On the other hand, as the Court is aware, the TCC/AHC Plan and the
committed financing for the plan, is not tied to a particular
result being obtained in the estimation proceeding. As the TCC/AHC
Plan provides for a settlement of the aggregate amount of Fire
Victim Claims, the plan can be confirmed by the Court pursuant to
Section 1129 of the Bankruptcy Code, without estimation," says
Ashley Vinson Crawford, of Akin Gump Strauss Hauer & Feld LLP,
counsel to the Noteholders.
"Under the Ad Hoc Committee's proposed timeline, the TCC and AD Hoc
Committee can filed a disclosure statement in early November,
obtain approval of the disclosure statement in December, solicit
votes immediately thereafter and proceed to confirmation of the
TCC/AHC Plan before the start of the estimation trial."
According to the Ad Hoc Committee, the merits of its proposal are
clear:
1. The more quickly a plan of reorganization is confirmed, the
sooner the paramount goal of these causes, the assurance of a plan
that pays the claims of the thousands of fire victims, can be
achieved.
2. Confirmation of the TCC/AHC Plan makes the estimation
proceeding unnecessary.
3. The TCC/AHC Plan unimpairs all Utility Senior Notes by (i)
reinstating the Utility Long-Term Senior Notes and (ii) paying in
full the Utility Short-Term Senior Notes, including postpetition
interest at the applicable contract rate and a small make-whole
premium. This treatment resolves any controversy regarding the
Utility noteholders' entitlement to vote and reduces significantly
the amounts in dispute relate to postpetition interest and
make-whole premiums.
4. The Ad Hoc Committee's approach provides sufficient time for
the CPUC's regulatory approval process.
Akin Gump Strauss Hauer & Feld LLP, led by Ashley Vinson Crawford,
Michael S. Stamer, Ira S. Dizengoff, David H. Botter, and Abid
Qureshi, represents the Ad Hoc Committee of Noteholders.
PG&E's Response
"What has become patently clear is that rather than engaging in a
good faith effort to comply with the Court's directive to agree
with the Debtors on (a) a briefing schedule as to the issues of the
appropriate rate of postpetition interest and the applicability of
make-whole premiums, and (b) a schedule as to how competing plans
should move forward, the TCC and the Ad Hoc Noteholders Committee
intentionally delayed and frustrated this effort in a strategic
ploy designed to promote their attempt to move their competing plan
forward ahead of the Debtors, after having stated to the Court that
the competing plans should move forward together. They have done
this because they are not satisfied with the termination of
exclusivity; instead, the TCC and the Ad Hoc Noteholders Committee
now seek to usurp exclusivity for themselves in direct
contravention of section 1121 of the Bankruptcy Code," says Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, counsel to PG&E.
Mr. Karotkin adds that any suggestion that estimation is not
required by the TCC/Ad Hoc Noteholder plan simply is wrong.
"At a minimum, the TCC/Ad Hoc Noteholder plan requires estimation
of the claims held by the TCC's constituency in order to determine
whether the TCC/Ad Hoc Noteholder plan can satisfy the absolute
priority rule. Moreover, estimation is also required under the
TCC/Ad Hoc Noteholder Plan to determine the ultimate amount of the
consideration to be provided to the class of individual wildfire
claimants."
Competing Plans
As reported, PG&E Corp. noteholders said in court filings on Sept.
26, 2019, that they are ready to invest $29.2 billion into the
power producer as part of a reorganization plan that will pay off
liabilities from wildfires that drove it to bankruptcy. The rival
plan, drawn up by bondholders including Pacific Investment
Management Co. and Elliott Management Corp., and supported by
wildfire victims with claims against the utility companies, offer
to pay up to $14.5 billion for wildfire victims, in contrast to the
up to $8.4 billion offered by PG&E.
Members of the Ad Hoc Committee of Unsecured Noteholders hold in
excess of $10 billion of funded debt claims against the Debtors.
As of Oct. 21, 2019, members of the Ad Hoc Committee are:
(1) Apollo Global Management LLC
(2) Aurelius Capital Management, LP
(3) Canyon Capital Advisors LLC
(4) Capital Group
(5) CarVal Investors, LLC
(6) Castle Hook Partners LP
(7) Citadel Advisors LLC
(8) Davidson Kempner Capital Management LP
(9) Deutsche Bank Securities Inc.
(10) Diameter Capital Partners LP
(11) Elliott Management Corporation
(12) Farallon Capital Management, L.L.C.
(13) Fir Tree Partners
(14) Marathon Asset Management
(15) Oak Hill Advisors, L.P.
(16) Oaktree Capital Management, L.P.
(17) Pacific Investment Management Company LLC
(18) Pacific Life Insurance Company
(19) P. Schoenfeld Asset Management LP
(20) Sculptor Capital Investments, LLC
(21) Senator Investment Group LP
(22) Silver Rock Financial LP
(23) Taconic Capital Advisors LP
(24) Third Point LLC
(25) Varde Partners, Inc.
A copy of the TCC/AHC Plan is available at https://is.gd/ImdZoZ
from PacerMonitor.com free of charge.
PG&E has filed a bankruptcy-exit plan that proposes to pay off
wildfire claims as follows:
(x) payment of $11 billion to insurers to address insurance
subrogation claims totaling $20 billion;
(y) distribution of $1 billion to a group of local governments
and state agencies; and
(z) creation of a trust capped at $8.4 billion to resolve other
wildfire claims, including those of individual victims.
A copy of the PG&E Plan is available for free at:
http://bankrupt.com/misc/PGE_3841_Exit_Plan.pdf
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
As of Sept. 30, 2018, the Debtors, on a consolidated basis, had
reported $71.4 billion in assets on a book value basis and $51.7
billion in liabilities on a book value basis.
PG&E Corp. and Pacific Gas employ approximately 24,000 regular
employees, approximately 20 of whom are employed by PG&E Corp. Of
Pacific Gas' regular employees, approximately 15,000 are covered by
collective bargaining agreements with local chapters of three labor
unions: (i) the International Brotherhood of Electrical Workers;
(ii) the Engineers and Scientists of California; and (iii) the
Service Employees International Union.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088).
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, said they are facing extraordinary challenges
relating to a series of catastrophic wildfires that occurred in
Northern California in 2017 and 2018. The utility said it faces an
estimated $30 billion in potential liability damages from
California's deadliest wildfires of 2017 and 2018.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are
serving as PG&E's legal counsel, Lazard is serving as its
investment banker and AlixPartners, LLP is serving as the
restructuring advisor to PG&E. Prime Clerk LLC is the claims and
noticing agent.
In order to help support the Company through the reorganization
process, PG&E has appointed James A. Mesterharm, a managing
director at AlixPartners, LLP, and an authorized representative of
AP Services, LLC, to serve as Chief Restructuring Officer. In
addition, PG&E appointed John Boken also a Managing Director at
AlixPartners and an authorized representative of APS, to serve as
Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and
their colleagues at AlixPartners will continue to assist PG&E with
the reorganization process and related activities. Morrison &
Foerster LLP, is special regulatory counsel.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Feb. 12, 2019. The Committee retained
Milbank LLP as counsel; FTI Consulting, Inc., as financial advisor;
Centerview Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
PHILMONT AVENUE LOWER: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Philmont Avenue Lower Moreland, LP
2381 Philmont Ave.
Huntington Valley, PA 19006
Business Description: Philmont Avenue Lower Moreland, LP is a
lessor of real estate in Huntington Valley,
Pennsylvania.
Chapter 11 Petition Date: October 30, 2019
Court: United States Bankruptcy Court
Eastern District of Pennsylvania (Philadelphia)
Case No.: 19-16760
Judge: Hon. Ashely M. Chan
Debtor's Counsel: Thomas Daniel Bielli, Esq.
BIELLI & KLAUDER, LLC
1500 Walnut Street, Suite 900
Philadelphia, PA 19102
Tel: 215-642-8271
Fax: 215-754-4177
E-mail: tbielli@bk-legal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Vincent Anastasi, managing member of
general partner.
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/paeb19-16760.pdf
PILGRIM'S PRIDE: S&P Raises ICR to 'BB'; Outlook Stable
-------------------------------------------------------
S&P Global Ratings raised the issuer credit rating on Pilgrim's
Pride Corp. (PPC) to 'BB' from 'BB-'.
S&P also raised the issue-level rating on Pilgrim's Pride's senior
secured debt to 'BBB-' from 'BB+', and the rating on the company's
senior unsecured debt to 'BB' from 'BB-'. The '1' recovery rating
(90%-100%; rounded estimate 95%) on the senior secured debt and the
'3' (50%-70%; rounded estimate 65%) recovery rating on the senior
unsecured debt remain unchanged.
The upgrade and stable outlook follow a similar action on Pilgrim's
Pride's parent JBS S.A., a Brazil-based protein processor. The
upgrade reflects JBS' strong cash flows and S&P's expectation that
JBS will continue to reduce leverage to below 3.0x over the next
year. S&P believes Pilgrim's is a highly strategic subsidiary of
JBS and although the rating agency views Pilgrim's stand-alone
credit profile (SACP) as stronger than JBS (who owns 78% of the
company), the current rating can only be as high as JBS (given its
JBS' ownership and board control). S&P believes Pilgrim's will
maintain a leverage target in the 2.0x-3.0x range. Debt to EBITDA
for trailing-12-month ending June, 30, 2019 was 2.4x, but the
rating agency expects leverage will decline closer to 2.0x over the
next year as earnings rebound and cash flows are applied to debt
repayment.
The stable outlook reflects the stable ratings outlook on JBS, and
S&P's opinion that Pilgrim's Pride will remain a highly strategic
subsidiary of JBS, which effectively ties the ratings on Pilgrim's
Pride to those of its parent. The stable outlook on JBS reflects
S&P's expectation that it will deliver consistent and increasing
free cash flow generation, enabling it to maintain a debt to EBITDA
below 3x, FFO to debt above 30%, and EBITDA interest coverage above
6x. The stable outlook incorporates such metrics despite potential
tuck-in acquisitions or weaker industry conditions, such as
declining global protein prices and higher raw material (cattle and
grains) costs. S&P expects JBS' approach toward dividends and share
repurchases to be prudent. Although it's difficult to estimate
potential fines or liabilities from the U.S. Department of Justice
or corruption investigation in Brazil, S&P believes JBS' balance
sheet has sufficient room to meet payments of about R$5 billion
without jeopardizing JBS's financial profile.
On a stand-alone basis, S&P expects Pilgrim's Pride's credit
metrics to rebound from 2018 levels, including debt to EBITDA near
2x and FFO to debt above 35% in 2019 and approaching 40% in 2020.
Those metrics reflect contributions from better mix of
higher-margin value-added products and better pricing for chicken.
The rating on Pilgrim's Pride will remain capped due to controlling
ownership by JBS.
"We could lower the ratings on Pilgrim's Pride following a similar
action on JBS. A downgrade on JBS could result from its inability
to contain leverage, amid less favorable protein prices, and weak
working capital management. In this scenario, debt to EBITDA would
be above 3x, FFO to debt below 30%, and FOCF could considerably
weaken, with FOCF to debt below 10%," S&P said.
"Reputational risks arising from ongoing investigations of JBS and
its parent in Brazil and the U.S. could prompt us to revise our
view of its governance to a weaker category with potential impact
on JBS' ability to maintain strong liquidity and refinance its
debt," the rating agency said.
Although unlikely over the next 12 months, S&P said it could lower
the rating on Pilgrim's Pride if operating performance deteriorates
such that debt to EBITDA is sustained above 3.5x. That could result
from a decline of roughly 400 bps in EBITDA margin (which has
occurred in very weak operating cycles the last of which occurred
in 2012) or additional debt of roughly $2.5 billion, according to
the rating agency. S&P considers both unlikely over the next 12
months.
"We could raise our rating Pilgrim's Pride if we raise the ratings
on JBS, and Pilgrim's Pride remains a highly strategic JBS
subsidiary. We could upgrade JBS if we see a longer track record of
predictable financial metrics despite the volatility of the
business, while JBS pursues acquisitions," S&P said.
"We would also need to observe a longer track of the board's
oversight of risks and proven ability to mitigate the company's
risks. Finally, ongoing deleveraging, bringing debt to EBITDA below
2x, FFO to debt above 45%, and FOCF to debt above 25% on a
consistent basis, amid more difficult industry conditions would
result in an upgrade," the rating agency said.
PIXIUS COMMUNICATIONS: Taps Farhang & Medcoff as Special Counsel
----------------------------------------------------------------
Pixius Communications LLC seeks authority from the United States
Bankruptcy Court for the District of Kansas (Wichita) to hire
Farhang & Medcoff as special counsel.
Farhang & Medcoff will represent the Debtor in an Arizona Superior
Court action. Such representation is limited to filing a Notice of
Removal of Case No. CV 2019-011629, from the Arizona Court to this
court.
Farhang & Medcoff will charge $325-$400 per hour for its services.
Farhang & Medcoff is a "disinterested person" as defined in
section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
John C. Smith, Esq.
Cody D. Vandewerker, Esq.
Adam Peterson, Esq.
Farhang & Medcoff
4801 E. Broadway Boulevard, Suite 311
Tucson, AZ 85711
Tel: 520-790-5433
Fax: 520-790-5736
Email: jsmith@fmlaw.law
Email: cvandewerker@fmlaw.law
Email: apeterson@fmlaw.law
About Pixius Communications
Pixius Communications LLC -- https://www.pixius.com/ -- is an
internet service provider in Wichita, Kansas. The Company offers
comprehensive solutions to its customers to meet their internet and
technology needs, where traditional services fail or do not reach.
Pixius Communications sought Chapter 11 protection in the U.S.
Bankruptcy Court for the District of Kansas (Bankr. D. Kan. Case
No. 19-11749) on Sept. 13, 2019. The Debtor was estimated to have
assets between $1 million and $10 million, and liabilities between
$10 million to $50 million. Hon. Robert E. Nugent is the case
judge. KLENDA AUSTERMAN LLC is the Debtor's counsel. The petition
was signed by Michael Langer, manager.
PLAZA PATISSERIE: Unsecureds to Recover 10% Under Plan
------------------------------------------------------
Plaza Patisserie, Inc., d/b/a Akrotiri, filed with the U.S.
Bankruptcy Court for the Eastern District of New York a chapter 11
plan of reorganization and disclosure statement.
Under the Plan, the Debtor will make a first and final Pro Rata
distribution of cash to each holder of an Allowed Class 2 General
Unsecured Claim in an amount equal to 10% of its allowed claim, on
the Effective Date in full satisfaction of such Claim.
Mr. Christos Kouvaros has asserted that he holds 100% of the
interests in the Debtor. However, Mr. Sasa Femic has asserted that
he holds 50% of the interests in the Debtor as a result of his
alleged purchase thereof from Ms. Tatiana Dimakis, which has been
disputed by Mr. Kouvaros. Under the Plan, these and any other
potential Interests in the Debtor will be cancelled on the
Effective Date.
The Debtor submits that Mr. Kouvaros proposed receipt of a 100%
equity interest in the Reorganized Debtor does not run afoul of the
absolute priority rule for several reasons. In this regard, Mr.
Kouvaros has pledged to make a cash contribution from his personal
funds to the Debtor for the purposes of funding the initial
Distributions and disbursements to be made under the Plan. The
Debtor submits that such amount represents sufficient new value for
the equity interests in the Reorganized Debtor which Mr. Kouvaros
is proposed to receive under the Plan.
Since the Debtor's assets do not have any significant value,
creditors' best hope is for the Plan to be confirmed so as to
receive their share of the Kouvaros Cash Contribution and for the
Reorganized Debtor to operate post-Confirmation under the
reorganized debt structure proposed under the Plan. The Debtor
submits that Mr. Kouvaros' continued involvement with the
management of the Reorganized Debtor’s affairs is vital to its
future prospects.
A full-text copy of the Disclosure Statement dated Oct. 17, 2019,
is available at https://tinyurl.com/y49eo74n from PacerMonitor.com
at no charge.
About Plaza Patisserie
Plaza Patisserie, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 19-40361) on Jan. 22,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $500,000 and liabilities of $500,000. The case
is assigned to Judge Carla E. Craig. Pick & Zabicki LLP is the
Debtor's counsel.
PRINCE FASHIONS: Gets More Time to File Chapter 11 Plan
-------------------------------------------------------
Judge Robert Drain extended Prince Fashions, Inc.'s exclusive
period to file a Chapter 11 plan through and including the
"disposition date" that is 30 days after the date of an order,
judgment or decree adjudicating the company's "renewal motion"
currently pending in the Supreme Court of the State of New York,
County of New York in the action styled, Prince Fashions, Inc. v.
60G 542 Broadway Owner, LLC (Index No. 651255/2016).
Judge Drain also extended the company's exclusive period to solicit
acceptances for the plan through and including the date that is 60
days after the disposition date.
About Prince Fashions
Prince Fashions, Inc. is a corporation established in 1974 under
the laws of New York. The company, as tenant, manages a parcel of
commercial real estate located at 542 Broadway, N.Y., pursuant to a
99-year lease with landlord 542 Holding Corp.
Prince Fashions sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-23079) on May 29,
2019. At the time of the filing, the Debtor estimated assets of
between $10,000,001 and $50 million and liabilities of between
$500,001 and $1 million. The case is assigned to Judge Robert D
Drain. Rosen & Associates, P.C., is the Debtor's counsel.
RALPH BURNETT: Selling San Ana Residential Property for $1.24M
--------------------------------------------------------------
Ralph Maxwell Burnett, III and Shelley Lynn Burnett ask the U.S.
Bankruptcy Court for the Central District of California to
authorize the sale of their interest in the residential real estate
located at 13341 Sandhurst Place, Santa Ana, California, APN
395-062-03, to Raul Cuellar and Erika C. Casas for $1.24 million,
free and clear of liens (with known liens to be paid through
escrow), pursuant to the terms and conditions set forth in their
California Residential Purchase Agreement and Escrow Instructions,
subject to overbid.
A hearing on the Motion is set for Nov. 13, 2019 at 10:00 a.m.
The Property is currently owned by the Debtors as their primary
residential real estate. It has a fair market value of $1.25
million. The Debtors believe that the proposed sale to the Buyers
on the terms stated is in the best interests of the Estate, and the
Debtors are proposing that the offer be subject to overbid.
At no time has any offer for the sale of the Property been made in
excess of the $1.24 million. The Debtors agree that the property
would not sell on the open market for more than the $1.24 million.
They base their valuation upon their knowledge of the property, its
condition, the rental market, the area where the property is
located, and the actual sales price of similar properties in the
immediate area.
The Buyers are not related to anyone connected with the Debtor, the
Estate, the Office of the US Trustee or the Court. They're not
"insider" of any of those stated parties. Commission charges in
the estimated amount of $31,000. Escrow, title and miscellaneous
costs are reflected in the Seller's Estimated Settlement Statement
(Exhibit D). Under the foregoing terms, the sale of the Property
is projected to yield no less than $56,393 in net proceeds for the
Estate
The Debtors are informed that the Property is encumbered by the
following:
a) A deed of trust in favor of Superior Loan Servicing in the
amount of $987,915.
b) A deed of trust in favor of Kelly P. Dudley and Sherry L.
Dudley in the amount of $50,000.
The Debtors propose to distribute the sale proceeds for the payment
of the costs of sale as follows: (i) for normal closing costs,
including escrow and title costs; (ii) for the payment of real
estate taxes owing on the Property, if any; (iii) for the payment
of all liens on the property; (iv) for payment of real estate
commissions; and (v) for such other unanticipated incidental or
nominal items as may be necessary to close escrow on the Property,
pursuant to a demand in distribution.
The Debtors ask the Court to authorize them to hold the remaining
funds from the liquidation of the Property in their DIP account,
and to distribute said funds only in accordance with a confirmed
Chapter 11 Plan or further order of the Court.
A copy of the Agreement attached to the Motion is available for
free at:
https://tinyurl.com/y4mmkyuz
Ralph Maxwell Burnett, III and Shelley Lynn Burnett sought Chapter
11 protection (Bankr. C.D. Cal. Case No. 19-13493) on Sept. 9,
2019. The Debtors tapped Michael Jones, Esq., at M Jones &
Associates, PC as counsel.
RED LOBSTER: S&P Affirms 'B-' ICR; Outlook Negative
---------------------------------------------------
S&P Global Ratings affirmed all its ratings on U.S.-based
seafood-restaurant operator Red Lobster Intermediate Holdings LLC,
including the 'B-' issuer credit rating.
The ratings affirmation and negative outlook reflect S&P's
expectation for continued weak operating performance and a need for
Red Lobster to reinvigorate its brand (following recent missteps
this fiscal year) to drive traffic and improve low profitability.
Industry challenges remain rampant, including a highly competitive
environment, S&P's expectation for continued weak customer traffic
(particularly for casual dining concepts), cost increases
especially from higher labor rates, and an oversupply of casual
dining restaurants. Despite these challenges and S&P's expectation
for lower revenue and EBITDA, the affirmation also reflects the
company's significant balance-sheet cash of nearly $260 million as
of August 2019 (versus $356 million of funded debt) and cost
initiatives that S&P expects to partially offset sales deleverage.
The negative outlook reflects S&P's expectation that Red Lobster's
operating results are weighed down by heightened competitive
pressures, negative customer traffic, and a weakening economy. The
negative outlook also reflects the persistently tight credit market
for restaurant and retail companies. Red Lobster's upcoming
maturities include the revolver due in June 2020 and term loan
maturing in July 2021.
"We could lower the rating to the 'CCC' category if we do not
believe the company has a clear pathway to refinance upcoming
maturities in a timely fashion, including the term loan that goes
current in July 2020. Delays in refinancing could expose Red
Lobster to increased capital market risk. In addition, operating
performance deterioration could also call into question the
viability of the concept and result in a downgrade," S&P said.
"We could revise the outlook to stable if we believe Red Lobster
would adequately refinance its upcoming maturities, including the
$380 million term loan. This scenario would likely coincide with
overall improved operating results including same-store sales
stabilization, better EBITDA generation, and positive FOCF," the
rating agency said.
REGIONAL SITE: Bankruptcy Administrator to Form Committee
---------------------------------------------------------
William Miller, U.S. bankruptcy administrator, on Oct. 29, 2019,
filed with the U.S. Bankruptcy Court for the Middle District of
North Carolina a notice of opportunity to serve on the official
committee of unsecured creditors in Regional Site Solutions, Inc.'s
Chapter 11 case.
Unsecured creditors willing to serve on the committee are required
to file a response within 10 days from Oct. 29.
An organizational meeting will be scheduled after the committee is
appointed, according to the filing.
Mr. Miller can be reached through:
Susan O. Gattis
Bankruptcy Analyst
101 S. Edgeworth Street
Greensboro, NC 27401
Fax: 336-291-9913
Email: susan_gattis@ncmba.uscourts.gov
About Regional Site Solutions
Regional Site Solutions, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. N.C. Case No. 19-11191) on Oct.
28, 2019. At the time of the filing, the Debtor had estimated
assets of between $500,000 and $1 million and liabilities of
between $1 million and $10 million. The case is assigned to Judge
Lena M. James. Dirk W. Siegmund, Esq., at Ivey, McClellan, Gatton
& Siegmund, LLP, is the Debtor's legal counsel.
RILEY DRIVE: Case Summary & 12 Unsecured Creditors
--------------------------------------------------
Debtor: Riley Drive Entertainment XV, Inc.
d/b/a Saints Lenexa
8847 Penrose Lane, Ste 108
Lenexa, KS 66219
Case No.: 19-41328
Business Description: Riley Drive Entertainment XV, Inc. --
http://rileydrive.com/-- is a hospitality
and management company. Founded by Marc
Mundt and Scott Anderson in 2005, the
Company owns and operates numerous
restaurants and bars in the Des Moines and
Kansas City metro areas.
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
District of Kansas (Topeka)
Judge: Hon. Dale L. Somers
Debtor's Counsel: Jonathan A. Margolies, Esq.
MCDOWELL, RICE, SMITH & BUCHANAN, PC
605 W. 47th Street, Suite 350
Kansas City, MO 64112
Tel: 816-753-5400
Fax: 816-753-9996
E-mail: jmargolies@mcdowellrice.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Scott Anderson, president.
A copy of the Debtor's list of 12 unsecured creditors is available
for free at:
http://bankrupt.com/misc/ksb19-41328_creditors.pdf
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/ksb19-41328.pdf
RITE AID: Fitch Lowers LT IDR to B-, Outlook Stable
---------------------------------------------------
Fitch Ratings downgraded Rite Aid Corporation's Long-Term Issuer
Default Rating to 'B-' from 'B'. The Rating Outlook is Stable.
The downgrade reflects continued operational challenges at Rite
Aid, which have heightened questions regarding the company's
longer-term market position and the sustainability of its capital
structure. Persistent EBITDA declines have led to negligible to
modestly negative FCF and elevated adjusted debt/EBITDAR in the
mid-7.0x range, despite some signs of pharmacy sales stabilization
over the past year. Fitch believes that operational challenges
include both a challenged competitive position in retail and, more
recently, sector-wide gross margin contraction resulting from
reimbursement pressure.
Mitigating factors to these concerns continue to include Rite Aid's
ample liquidity of well over $1 billion, supported by a rich asset
base of pharmaceutical inventory and prescription files. Other
positives include the somewhat more stable EnvisionRx pharmacy
benefits manager (PBM) business, representing around one-third of
total EBITDA, and Rite Aid's good real estate position in local
markets, somewhat mitigated by lack of broad-based national
presence. The company also has no near-term maturities, with
nothing due prior to its approximately $1.75 billion notes maturity
in April 2023.
KEY RATING DRIVERS
Competition Intensifying: Drug retail competition is intensifying
from current and newer players. Existing participants are exploring
partnerships and M&A to reduce costs and strengthen customer
connections. CVS Health Corp's acquisition of insurer Aetna Inc.
and Walgreens' numerous partnerships across healthcare, retail and
technology are examples of leading drug retailers exploiting their
scale to fortify share. These retailers are also increasingly
negotiating narrow and preferred networks to fortify market share.
Finally, there exists some threat of new entrants, most notably
from Amazon.com, Inc. (A+/Positive), which acquired online pharmacy
Pillpack in 2018.
Rite Aid Structurally Disadvantaged: While Rite Aid has good local
market share positions, its scale and geographic concentration
relative to Walgreens and CVS may negatively impact its ability to
compete for inclusion in pharmaceutical contracts, particularly as
these players explore preferred and narrow contracts. Following the
transfer of approximately 40% of its store base to Walgreens in
2017/2018, Rite Aid's footprint includes approximately 2,500
stores, almost half of which are in four states, compared with the
national footprints of approximately 9,900 and 9,400 for CVS and
Walgreens U.S., respectively. In addition, Rite Aid's limited FCF
generation yields reduced ability to make customer-facing
investments to drive loyalty and traffic.
Gross Margin Pressure: Reimbursement pressure on gross margin
appears to be intensifying across the retail pharmacy industry.
Structural margin pressure has been a consequence of increased
penetration of the government as a pharmaceutical payer under the
Medicare and Medicaid programs, ongoing pressure from commercial
payers and a mix shift toward the "90-day at retail" offering.
Growth in preferred/narrow networks may also be a factor, as
players sacrifice margin for network inclusion to drive volume.
This pressure was somewhat mitigated by the growth in generic
penetration over the last few years, though this has tapered off
somewhat given a lighter calendar of branded expirations.
Weakening Retail Operations: Rite Aid's pro forma EBITDA steadily
declined from approximately $850 million in 2015 to $500 million in
the TTM ending Aug. 31, 2019. Weak pharmacy trends drove overall
pro forma same store sales (SSS) to negative 2.2% in 2016 and
negative 2.9% in 2017, while SSS improved to 0.5% in 2018 as
pharmacy sales improved but front-end sales worsened. Negative SSS
and declining reimbursement rates drove EBITDA margins to
approximately 2.2% in the TTM from the 4% range in 2015. Fitch
believes a protracted transaction process with Walgreens, which
originally proposed to acquire Rite Aid in October 2015, created
uncertainty about Rite Aid's future, affecting its strategic
planning and pharmacy contract negotiations.
Relatively Stable PBM Business: Results at EnvisionRx have been
more stable than retail albeit somewhat disappointing relative to
original expectations, with around $160 million of EBITDA in the
TTM ending Aug. 31, 2019, below full-year EBITDA of around $190
million in 2016 and 2017. The 2015 acquisition of EnvisionRx
allowed Rite Aid to diversify its business and provide exposure to
the relatively faster growing specialty pharmaceuticals business
and the mail-order channel. Fitch believes this business was also
negatively impacted by the Walgreens transaction process and
expects EnvisionRx, now representing one-third of Rite Aid's
overall EBITDA, to grow modestly beginning 2019.
EBITDA Around $500 Million: Fitch projects annualized EBITDA in the
$500 million range beginning 2019 compared with approximately $560
million in 2017, pro forma for store divestitures. Revenue is
expected to be steady near $22 billion on near-flat comps and
minimal change to store count. EBITDA margins are projected to
trend in the 2.4% range, as ongoing gross margin pressure is
mitigated by proactive cost reductions.
Challenged FCF: FCF in 2017 was modestly positive at $52 million
but turned negative at nearly negative $500 million in 2018 due to
working capital and other balance sheet movements related to the
store sale to Walgreens. Fitch expects FCF beginning 2019 to be
breakeven to modestly negative, assuming around $500 million of
EBITDA, and approximately $250 million each of interest expense and
capex. Rite Aid's minimal cash flow generation limits its ability
to invest in its business and address its capital structure.
Elevated Leverage; Opportunistic Repayments: Adjusted debt/EBITDAR,
which was elevated at around 7.0x in 2016 prior to store
divestitures, could be approximately 7.5x beginning 2019 given
EBITDA declines somewhat mitigated by debt reduction with store
sale proceeds. Rite Aid's next maturity is $1.75 billion of notes
due 2023, but it will need to address this debt prior to Dec. 31,
2022; otherwise the company's ABL revolver and FILO term loan
mature on this date.
In October 2019, the company announced a below-par tender for up to
$100 million principal amount of its 2027/2028 notes and indicated
that it privately repurchased $84 million principal amount of these
notes from a seller, also below par. Fitch views these actions as
opportunistic as it is using asset sale proceeds to proactively
reduce the debt balance.
Strong Liquidity and Asset Base: Rite Aid's ample liquidity of over
$1 billion should provide flexibility to navigate through its
current operating challenges. Given the reduced store portfolio,
Rite Aid replaced its $3.7 billion revolving credit facility with a
$2.7 billion facility, adding a $450 million FILO term loan in
December 2018. Fitch expects that proceeds from the FILO term loan
were used to reduce revolver borrowings, providing Rite Aid with
additional liquidity. Rite Aid's asset value is supported by the
11.5x EBITDA multiple implied by Walgreens' original offer to buy
it in 2015 for $17.2 billion and the 16.0x multiple Walgreens paid
for 1,932 stores.
Complex Industry Fundamentals: Despite projections of continued
modest growth in pharmaceuticals revenue, the healthcare industry
remains complex given intricate relationships between critical
constituents in the industry, strategic initiatives by large
players and regulatory overlay. Rite Aid benefits from close
relationships with end customers, which Fitch believes is a
critical structural advantage for drug retailers, and some business
diversification through EnvisionRx. However, Rite Aid's challenged
operations and regional focus following its store divestiture has
weakened its competitive positioning, particularly given the rise
of preferred and narrow pharmaceutical networks.
DERIVATION SUMMARY
Rite Aid's 'B-' rating incorporates its weak position in the
relatively stable U.S. drug retail business and its high lease
adjusted leverage (capitalizing rent expense at 8x), which Fitch
forecasts at 7.4x for 2019. The company's drug retail business,
representing approximately two-thirds of total EBITDA following the
sale of roughly 43% of stores to Walgreens Boots Alliance, Inc.
(BBB/Negative), is expected to continue losing share, although the
company's EnvisionRx PBM -- representing Rite Aid's remaining
EBITDA -- should grow modestly over time.
Rite Aid has significantly smaller scale and weaker operating
metrics than Walgreens and CVS Health Corp., which may have a
negative impact on its relative ability to compete for inclusion in
pharmacy networks. Rite Aid's cash flow is minimal to modestly
negative, and its leverage profile is significantly higher than its
larger peers at close to 7.5x, limiting its ability to invest
meaningfully in its business.
Rite Aid's B-rated non-food retail peers include GNC Holdings, Inc.
(B-/Negative), whose rating considers recent market share declines,
driven by encroaching competition and executional missteps, which
in concert with recent financial policy decisions, have weakened
the company's leverage profile to over 6.5x on a lease adjusted
basis for the TTM period ended Sept. 30, 2019. The Negative Outlook
reflects continued declines in comparable sales trends and material
concerns about the company's ability to refinance a projected,
approximately $400 million of term loans due March 2021.
J.C. Penney Company, Inc.'s 'CCC+' rating reflects the significant
EBITDA erosion in 2018, with EBITDA declining to approximately $560
million from $886 million in 2017. Fitch expects further EBITDA
erosion towards the $450 to $500 million range in 2019 on comp
decline in the mid to high single digits, or slightly less than
Fitch's forecast for Rite Aid 2019 EBITDA at around $500 million.
The deterioration reflects significant execution issues, and in the
near term, sales could be hampered by Sears Holding Corp's store
closing liquidation sales (even if Sears emerges as a smaller chain
but still closes a significant number of stores). Adjusted leverage
is currently projected in the mid 8x range for 2019, or a full turn
higher in comparison to Rite Aid at around 7.5x.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Rite Aid's EBITDA is expected to decline to the low $500
million range in 2019, compared with around $538 million and $566
million in 2018 and 2017, primarily due to gross margin contraction
from reduced reimbursement rates and efforts to re-orient the
company's product distribution operations following its sale of
stores. SSS, which were around 0.5% in 2018, are slightly positive
through the six months of 2019 and are expected to be near-flat for
the full year 2019. Transition support services fees from Walgreens
are expected to decline from around $40 million in 2019 to near
zero in 2020, but lost income should be mitigated by expense
reductions.
-- Fitch projects flat to slightly negative SSS beginning 2020,
assuming continued low single digit growth in the pharmaceuticals
industry and modest share loss by Rite Aid. Retail gross margins
are expected to decline on reimbursement rate pressure, mitigated
somewhat by ongoing expense management efforts as Rite Aid adjusts
its cost structure to its smaller footprint. Retail EBITDA, which
is projected around $350 million in 2019, could therefore remain
near this level over the next several years.
-- Fitch expects EnvisionRx, which generates approximately
one-third of Rite Aid's EBITDA, to produce 2019 EBITDA around $150
million, compared with around $160 million in 2018. The decline is
likely due to contract negotiation challenges during the Walgreens
transaction process, exacerbated by an aborted attempt to merge
with Albertsons Companies in 2018. Fitch expects that barring
further business interruptions, EnvisionRx could grow topline and
EBITDA in the 3% range on net contract wins and growth in its
specialty business.
-- Fitch expects Rite Aid's EBITDA to remain pressured near $500
million over the next several years, with revenue remaining near
$21.5 billion to $22 billion and margins close to 2.3% through
Fitch's forecast.
-- Fitch expects FCF could be around break even to modestly
negative through 2023 on a combination of neutral working capital
and capital expenditure of $250 million annually. Adjusted leverage
is expected to trend in the 7.4x range over the next two to three
years, assuming around $500 million of ongoing EBITDA and
unadjusted debt levels around $3.4 billion. The company has
announced or tendered for $184 million in 2027/2028 notes in 2019,
which Fitch expects will be funded by $150 million in proceeds from
Walgreens for distribution center sales and cash on hand.
-- Fitch has not currently modeled any impact on total coverage,
volume or pricing based on potential changes to the Affordable Care
Act (ACA) or other legislative activity affecting the
pharmaceutical industry.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Sustained positive SSS leading to EBITDA growth toward $600
million level, which would yield positive FCF, adjusted
debt/EBITDAR (capitalizing leases at 8x) below 7x (assuming steady
debt levels) and increased confidence in the company's longer term
competitive position.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Deteriorating sales and profitability trends that lead to
EBITDA declining toward $400 million, consistently negative FCF and
adjusted debt/EBITDAR over 8.0x (assuming steady debt levels). Rite
Aid's inability to stabilize operations would raise concerns
regarding the company's capital structure sustainability, which is
more representative of the 'CCC' category.
LIQUIDITY AND DEBT STRUCTURE
Ample Liquidity: Rite Aid had liquidity of $1.5 billion as of Aug.
31, 2019, supported by $1.4 billion in availability under the $2.7
billion ABL facility, net of letters of credit, and $142 million in
cash on hand. The company refinanced its prior credit facility with
a $2.7 billion ABL and a $450 million FILO term loan in December
2018, extending maturities to December 2023. The company's closest
debt maturity is the $1.75 billion 6.125% guaranteed unsecured
notes which mature April 2023. However, the company will face a
springing maturity under the secured credit facility on December
31, 2022 if they fail to refinance the 6.125% notes prior to this
date.
On Oct. 15, 2019, Rite Aid announced a tender offer to repurchase
up to $100 million of the, outstanding as of Oct. 15, 2019, $339
million unguaranteed unsecured notes maturing 2027/2028. The $339
million balance already reflects a privately negotiated repurchase
of $84 million which the company has financed with available
liquidity. Fitch expects the company to repurchase an additional
$100 million with available liquidity inclusive of approximately
$150 million in expected cash proceeds this year, stemming from
their asset divestiture of distribution centers to Walgreens. Total
pro forma debt as of Aug. 31, 2019 is $3.7 billion, consisting of
$1.25 billion in ABL borrowings, $450 million FILO term loan, $1.75
billion guaranteed unsecured notes, $239 million in unguaranteed
unsecured notes, and $33 million in finance lease obligations.
Fitch projects total adjusted leverage to be around 7.4x for 2019.
Rite Aid maintains solid liquidity given its valuable asset base,
despite a history of operating challenges. The value of Rite Aid's
asset base is supported by the 11.5x EBITDA multiple implied by
Walgreen's original offer to buy Rite Aid in October 2015 for $17.2
billion and the 16.0x multiple Walgreens paid for 1,932 stores.
Following the transfer Walgreens announced plans to close 600 of
these stores and transfer prescription files to nearby Walgreens
locations, further illustrating the value placed on prescription
files.
Recovery
Rite Aid's business profile could yield a distressed enterprise
value of approximately $4.7 billion on Rite Aid's estimated $3.5
billion liquidation value on inventory, receivables, prescription
files, owned real estate and a $1.2 billion enterprise value for
EnvisionRx. The $1.2 billion for the healthy EnvisionRx business
values the company at 7.0x EBITDA of $170 million, slightly above
the $160 million Fitch is forecasting for EnvisionRX over the next
12 to 24 months. This is well below the $2 billion, or 13.0x EBITDA
Rite Aid paid for the business in 2015. PBM valuations declined
over the past several years, although Express Scripts Holding Co.
(BBB-/Stable) was acquired by Cigna Corporation at an enterprise
valuation of approximately 9.0x TTM EBITDA.
The $4.7 billion in resulting liquidation value exceeds Fitch's
assessment of Rite Aid's $3.0 billion valuation as a going concern.
The going concern valuation is based upon $500 million in
distressed EBITDA, similar to the current run rate, as Fitch views
Rite Aid's current operating trajectory as somewhat distressed.
Fitch assumes Rite Aid could generate a 6.0x EBITDA multiple in a
going-concern sale, somewhat lower than valuations implied in the
Walgreens process due to ongoing declines in the company's
operations.
The company replaced its $3.7 billion ABL facility with a new $2.7
billion ABL facility, given lower collateral levels, and
subsequently issued a $450 million FILO term loan in late December
2018. As a result, Rite Aid's current capital structure includes
the downsized $2.7 billion credit facility, $450 million FILO term
loan due 2023, $1.75 billion in guaranteed unsecured notes due 2023
and $239 million in nonguaranteed unsecured notes due 2027/2028.
The $239 million in non-guaranteed notes is stated on pro forma
basis inclusive of the proposed and executed tender offer of $184
million, which the company announced on Oct. 15, 2019.
Given a $4.7 liquidation value, the ABL which Fitch assumes to be
80% drawn, $450 FILO term loan, and the $1.75 billion of guaranteed
unsecured notes would be expected to have outstanding recovery
prospects (91%-100%) and are thus rated 'BB-'/'RR1'. The
approximately $239 million unsecured nonguaranteed notes would be
expected to have poor (0%-10%) recovery prospects and are therefore
rated 'CCC'/'RR6'.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical and projected EBITDA is adjusted to add back non-cash
stock-based compensation and exclude charges related to LIFO
adjustments, mergers & acquisitions, restructuring, and legal
settlements. For example, Fitch added back $12 million in non-cash
stock-based compensation and $84 million in other excluded charges
to its EBITDA calculation for the year ended March 2nd, 2019. Fitch
has adjusted historical and projected debt by adding 8x yearly
operating lease expense.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
RITORI LLC: Case Summary & 4 Unsecured Creditors
------------------------------------------------
Debtor: Ritori, LLC
2885 Dunleigh Drive
Dunkirk, MD 20754
Business Description: Ritori LLC is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Case No.: 19-24473
Judge: Hon. Lori S. Simpson
Debtor's Counsel: Steven L. Goldberg, Esq.
MCNAMEE, HOSEA, JERNIGAN, KIM, GREENAN &
LYNCH, P.A
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
Tel: (301) 441-2420
E-mail: sgoldberg@mhlawyers.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Maria Lubrano, authorized
representative.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at:
http://bankrupt.com/misc/mdb19-24473.pdf
ROBINSON AEROSPACE: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Robinson Aerospace, Inc. 19-44385
13901 Aviator Way
Fort Worth, TX 76177-4308
Robinson Aircraft Interiors, Inc. 19-44386
13901 Aviator Way
Fort Worth, TX 76177-4308
Business Description: Robinson Aircraft Interiors, Inc. --
http://robinsonair.com/-- is an aircraft
interior fabrication and refurbishment
company. The Company manufactures interior
monuments, upholsters complete interiors,
and fabricates structural/decorative
interior sheet metal and machined
components.
Chapter 11 Petition Date: October 30, 2019
Court: United States Bankruptcy Court
Northern District of Texas (Ft. Worth)
Judge: Hon. Edward L. Morris (Case No. 19-44385)
Hon. Mark X. Mullin (Case No. 19-44386)
Debtors' Counsel: Melissa S. Hayward, Esq.
HAYWARD & ASSOCIATES PLLC
10501 N. Central Expry, Ste. 106
Dallas, TX 75231
Tel: 972-755-7100
Fax: 972-755-7104
E-mail: MHayward@HaywardFirm.com
Robinson Aerospace's
Estimated Assets: $1 million to $10 million
Robinson Aerospace's
Estimated Liabilities: $10 million to $50 million
Robinson Aircraft's
Estimated Assets: $1 million to $10 million
Robinson Aircraft's
Estimated Liabilities: $10 million to $50 million
The petitions were signed by Jeff Robinson, president.
The Debtors failed to include in the petitions lists of their 20
largest unsecured creditors.
Full-text copies of the petitions are available for free at:
http://bankrupt.com/misc/txnb19-44385.pdf
http://bankrupt.com/misc/txnb19-44386.pdf
RVT, INC: Hires Oaktree Law as General Bankruptcy Counsel
---------------------------------------------------------
RVT Inc. seeks authority from the U.S. Bankruptcy Court for the
Central District of California (Riverside) to employ Oaktree Law as
general bankruptcy counsel.
Legrace requires Oaktree to:
a. advise the Debtor regarding matters of bankruptcy law and
concerning the requirement of the Bankruptcy Code, and Bankruptcy
Rules relating to the administration of this case, and the
operation of the Debtor's estate as a debtor in possession;
b. represent the Debtor in proceedings and hearings in the
court involving matters of bankruptcy law;
c. assist in compliance with the requirements of the Office of
the United States trustee;
d. provide the Debtor legal advice and assistance with respect
to the Debtor's powers and duties in the continued operation of the
Debtor's business and management of property of the estate;
e. assist the Debtor in the administration of the estate's
assets and liabilities;
f. prepare necessary applications, answers, motions, orders,
reports and/or other legal documents on behalf of the Debtor;
g. assist in the collection of all accounts receivable and
other claims that the Debtor may have and resolve claims against
the Debtor's estate;
h. provide advice, as counsel, concerning the claims of
secured and unsecured creditors, prosecution and/or defense of all
actions;
i. prepare, negotiate, prosecute and attain confirmation of a
plan of reorganization.
The firm's hourly rates are:
Julie Villalobos, Esq. $400
Larry Fieselman, Esq., $400
Ryan Moradi $150
Oaktree Law received a pre-bankruptcy retainer in the sum of
$20,000.
Ms. Villalobos, owner of Oaktree Law, disclosed in a court filing
that she does not hold any interests adverse to the Debtor's
estate, creditors or equity security holders.
The firm can be reached through:
Julie J. Villalobos, Esq.
Oaktree Law
10900 183rd St., Suite 270
Cerritos, CA 90703
Tel: 562-741-3938
Fax: 888-408-2210
Email: julie@oaktreelaw.com
About RVT Inc.
Based in Fontana, California, RVT Inc. filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 19-17552) on Aug. 28, 2019, listing
under $1 million in both assets and liabilities. The Hon. Mark S.
Wallace is the case judge. OAKTREE LAW represents the Debtor.
S.A.S.B., INC: Seeks to Hire Kelley Fulton as Legal Counsel
-----------------------------------------------------------
S.A.S.B., Inc. seeks authority from the U.S. Bankruptcy Court for
the Southern District of Florida (West Palm Beach) to hire Craig I.
Kelley, Esq. and the law firm Kelley, Fulton & Kaplan, P.L. as
attorney.
Meridian Marina requires Kelley Fulton to:
a. advise the Debtor of its powers and duties in the continued
management of its business operations;
b. advise the Debtor of its responsibilities in complying with
the U.S. Trustee's Operating Guidelines and Reporting Requirements
and with the rules of the court;
c. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the case;
d. protect the interest of the Debtor in all matters pending
before the bankruptcy court; and
e. represent the Debtor in negotiation with its creditors in
the preparation of a plan.
Kelley Fulton will be paid at the hourly rate of $450. Kelley
Fulton will be paid a retainer in the amount of $20,000. It will
also be reimbursed for reasonable out-of-pocket expenses incurred.
Craig I. Kelley, partner of Kelley Fulton & Kaplan, P.L., assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Kelley Fulton can be reached at:
Craig I. Kelley, Esq.
KELLEY & FULTON, PL
1665 Palm Beach Lakes Blvd Suite 1000
West Palm Beach, FL 33401
Tel: (561) 491-1200
E-mail: craig@kelleylawoffice.com
About S.A.S.B., Inc.
Based in Okeechobee, Florida, S.A.S.B., Inc. filed its Voluntary
Petition for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-23357) on October 4,
2019, listing under $1 million in both assets and liabilities.
Craig I. Kelley, Esq. at Kelley, Fulton & Kaplan, P.L. is the
Debtor's counsel.
SOUTHCROSS ENERGY: Disclosure Statement Hearing Reset to Nov. 5
---------------------------------------------------------------
On October 4, 2019, Southcross Energy Partners, L.P., Southcross
Energy Partners GP, LLC, and Southcross' wholly owned direct and
indirect subsidiaries filed a Chapter 11 Plan and Disclosure
Statement.
The hearing on the Disclosure Statement was scheduled to commence
before the Honorable Mary F. Walrath, United States Bankruptcy
Judge on October 28, 2019, in the United States Bankruptcy Court
for the District of Delaware, 824 N. Market Street, 5th Floor,
Courtroom No. 4, Wilmington, Delaware 19801. With the permission
of the Bankruptcy Court, the Disclosure Statement Hearing has been
rescheduled for November 5, 2019 at 2:00 p.m.
In connection therewith, the Debtors are resetting the Confirmation
Hearing and certain other Confirmation Deadlines as follows:
* Record Date: November 5, 2019
* Solicitation Deadline: November 8, 2019
* Deadline To File Rule 3018 Motions: The fifth day after the
later of (i) service of the Confirmation Notice and (ii) service of
notice of an objection, if any, to such Claim
* Deadline To File Plan Supplement: November 25, 2019
* Deadline To Object to Rule 3018 Motions: November 27, 2019
* Voting Deadline:November 27, 2019
* Deadline To Object to Plan Confirmation: November 27, 2019
* Deadline for Replies to Plan Objections: December 6, 2019
* Confirmation Hearing: December 9, 2019 at 2:00 p.m. (ET)
About Southcross Energy Partners
Southcross Energy Partners, L.P. --http://www.southcrossenergy.com/
-- is a publicly traded company that provides midstream services to
natural gas producers and customers, including natural gas
gathering, processing, treatment and compression, and access to
natural gas liquid (NGL) fractionation and transportation services.
It also purchases and sells natural gas and NGLs. Its assets are
located in South Texas, Mississippi and Alabama, and include two
cryogenic gas processing plants, a fractionation facility and
approximately 3,100 miles of pipeline. The South Texas assets are
located in or near the Eagle Ford shale region. Southcross Energy
is headquartered in Dallas, Texas.
Southcross Energy Partners and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case
No. 19-10702) on April 1, 2019. The Debtors disclosed total assets
of $610.4 million and total liabilities of $614.3 million as of
April 1, 2019.
The cases are assigned to Judge Mary F. Walrath.
The Debtors tapped Davis Polk & Wardwell LLP as bankruptcy counsel;
Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel; Alvarez &
Marsal as financial advisor; Evercore Group LLC as investment
banker; and Kurtzman Carson Consultants LLC as notice and claims
agent and administrative advisor.
STEPHANIE SARRIA: Sets Bidding Procedures for Brooklyn Property
---------------------------------------------------------------
Stephanie Sarria, also known as Stephanie Colangelo and as
Stephanie Riddle, ask the U.S. Bankruptcy Court for the Eastern
District of New York to authorize her bidding procedures in
connection with the auction sale of the residential real property
located at 536 Willoughby Avenue, Brooklyn, New York.
A hearing on the Motion is set for Nov. 5, 2019, at 3:30 p.m. (ET).
The objection deadline is Nov. 1, 2019 at 5:00 p.m.
The Property is a multi- family home. It was recently valued by
the mortgage holder at $1.1 million. It is encumbered by a
mortgage with a balance of approximately $800,000 held by Select
Portfolio Servicing, Inc., as servicer for Deutsche Bank National
Association, as trustee ("SPS").
The Debtor is an individual who filed for Chapter 11 relief to
address the mortgage debt on the Property. Prior to the petition
date, she entered into the Broker Agreement with Benjamin Adams to
sell the Property. Through Adams' efforts, the Debtor entered into
the Spitz Contract which provided that the Property would be sold
to Spitz for $1.35 million free of all tenants. Adams, as real
estate broker, procured Spitz as a purchaser.
The Debtor moved the Court to assume the Spitz Contract and the
Broker Contract and sought approval of sale. The six tenants
occupying the Property objected to the sale arguing primarily that
no sale could be effectuated free of their interests. SPS, which
holds the mortgage on the Property, also objected on similar
grounds.
After evaluating the merits of the Tenants' claims and considering
the costs and time associated with a potential eviction, the Debtor
decided to proceed to an auction sale. The Debtor contacted
Richard Maltz of Maltz Auctions. Maltz inspected the Property and
advised that an auction sale subject to the Tenants' rights may
inure to the benefit of the Debtor, her estate and the creditors
therein. After conferring with Maltz, the Debtor decided to
proceed to an auction sale with a "floor" of $975,000.
Because the Debtor is unable to deliver the Property to Spitz
vacant and free of Tenants and cannot effectively consummate a
sale, the Debtor asks to reject the Spitz Contract.
An application to retain Maltz has been drafted and forwarded to
the office of the United States Trustee ("UST"). The UST has
provided comments and has requested clarification as to certain
aspects of the application. The counsel is addressing same.
In order to ensure that the highest and best price is received for
the assets, the Debtor has established the proposed Bidding
Procedures and Terms of Sale to govern the submission of competing
bids at an auction. Maltz provided the counsel for Debtor with the
standard procedures that have been utilized in other cases.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: TBD
b. Initial Bid: $975,000
c. Deposit: $80,000. The balance of the purchase is due in 30
days from Court approval with a 30-day extension available.
d. Auction: An auction is proposed for Dec. 12, 2019 at the
LaGuardia Airport Hotel.
e. Bid Increments: TBD
The sale is "as is," free of liens, claims and encumbrances but
subject to the rights, if any, of the Tenants.
Maltz will receive a commission of 6% from the successful bidder
(i.e. the auctioneer's commission is paid by the buyer). A
licensed broker who registers a successful bidder, will be entitled
to a commission of 2% paid by the successful bidder. It is
submitted that his "sharing" of a commission paid by the buyer will
promote bids.
The Debtor proposes to comply with these requirements by serving
within three business days of entry of the Sale Procedures Order
copies of: (i) the Sale Procedures Order and (ii) the Bidding
Procedures upon all interested parties. In addition, Maltz will
extensively advertise and promote the Property including posting
signs, sending out e-mail blasts to known real estate investors,
and advertising it on its website.
The Debtor submits that, given the "hot" market in Brooklyn and the
issues with the Spitz Contract and difficulties in conveying the
Property subject to the rights, if any, of the Tenants, an auction
sale will generate the highest and best sale price. In her sound
business judgment, an auction sale offers the greatest benefit to
her estate, and is an exercise of her sound business judgment.
The Debtor intends to soon file a chapter 11 plan of liquidation
which will be funded by the proceeds of the auction sale. Pursuant
to N.Y. Tax Law Section 1405(b)(8), the Debtor submits that the
Sale is exempt from New York State real estate transfer tax because
it pursued under the Bankruptcy Code and is an integral part of the
chapter 11 plan to be filed.
A copy of the Bidding Procedures & the Agreement attached to the
Motion is available for free at:
https://tinyurl.com/yxe5tqlm
Stephanie Sarria sought Chapter 11 protection (Bankr. E.D.N.Y. Case
1-19-42830) on May 7, 2019.
Counsel for the Debtor:
Anne Penachio, Esq.
PENACHIO MALARA, LLP
245 Main Street Suite 450
White Plains, NY 10601
Telephone: (914) 946-2889
TAJAY RESTAURANTS: Exclusivity Period Extended to Jan. 15
---------------------------------------------------------
Judge Tony M. Davis of the U.S. Bankruptcy Court for the Western
District of Texas extended the period during which only Tajay
Restaurants, Inc. and its affiliates can file a Chapter 11 plan to
Jan. 15, 2020, and the period to solicit acceptances for the plan
to March 15, 2020.
According to court filings, the extension will provide the
companies with sufficient time to complete the sale of their assets
and negotiate a successful completion of their Chapter 11 cases.
The companies currently are working towards the sale with the
support and consent of the lender, the unsecured creditors'
committee and other key stakeholders. They anticipate closing the
sale by Dec. 31, and anticipate promptly filing a plan to
successfully conclude their cases immediately following the sale.
About Tajay Restaurants
Restaurant owners Tajay Restaurants Inc. and its subsidiaries
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Tex. Lead Case No. 19-70067) on May 16, 2019. The petitions
were signed by Omar Misleh, authorized agent. At the time of the
filing, the Debtors estimated assets of between $1 million and $10
million, and liabilities of the same range. The cases are assigned
to Judge Tony M. Davis. Waller Lansden Dortch & Davis, LLP is
serving as its legal counsel.
No request for the appointment of a trustee or examiner has been
made. An official committee of unsecured creditors was appointed on
June 4, 2019.
TIGER OAK MEDIA: Two Creditors Appointed as Committee Members
-------------------------------------------------------------
James Snyder, acting U.S. trustee for Region 12, filed an amended
notice with the U.S. Bankruptcy Court for the District of Minnesota
that as of Oct. 29, 2019, these companies serve as members of the
official committee of unsecured creditors in Tiger Oak Media,
Inc.'s Chapter 11 case:
(1) D&J Printing, Inc.
dba Hess Print Solutions
3765 Sunnybrook Road
Brimfield, OH 44240
Contact Person: Brianna Blazek
Phone: 800-678-1222
Email: Brianna.blazek@cjkgroup.com
(2) Monique Kleinhuizen
15840 Jeffrey Avenue North
Hugo, MN 55038
Contact Person: Monique Kleinhuizen
Phone: 262-352-3482
Email: mkleinhuizen@gmail.com
About Tiger Oak Media Inc
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 was estimated to have 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: S&P Alters Outlook to Stable, Affirms 'B+' ICR
-------------------------------------------------------------
S&P Global Ratings affirmed its ratings on TransDigm Inc.,
including the 'B+' issuer credit rating, and revised the outlook to
stable from negative.
At the same time, S&P assigned its 'B-' issue-level rating and '6'
recovery rating to TransDigm's proposed $2.15 billion subordinated
notes due 2027, which the company will use to refinance existing
debt and add cash to the balance sheet.
The outlook revision reflects the faster-than-expected improvement
in margins at Esterline, which the company acquired in March 2019.
TransDigm has been able to increase margins at the former Esterline
operations, which it acquired in March, faster than S&P had
expected. The company achieved this as a result of improved pricing
and the elimination of corporate overhead costs. The company is
also in the process of divesting certain businesses of Esterline,
EIT and Souriau-Sunbank, that did not fit its model of having a
high proportion of proprietary and aftermarket parts and had the
least opportunities for strengthening margins. The company expects
additional margin improvement as it enhances productivity at the
remaining acquired operations. S&P now expects TransDigm's EBITDA
margin to be 42%-46% for fiscal 2020 (which ends Sept. 30, 2020)
compared to the rating agency's previous expectations of 37%-41%,
reflecting further pricing and productivity improvements, along
with the removal of transaction and synergy-related fees and
expenses.
The stable outlook on TransDigm reflects the company's success thus
far with the integration of Esterline, resulting in margins
improving faster than S&P had expected. It expects the company's
pro forma debt to EBITDA to be about 6.5x-7.0x for fiscal 2019
because of the increase in leverage from the proposed transaction.
While S&P expects debt to EBITDA to decline below 6.5x in 2020 as
earnings increase, the rating agency expects it to average in the
6x-7x range for the next few years as the company continues to
pursue acquisitions and uses cash and debt to fund shareholder
returns.
"We could lower our rating on TransDigm if debt to EBITDA increases
above 7x over the next 12 months and we do not expect it to
improve. This could be due to adopting an even more aggressive
financial policy wherein management is comfortable with the company
sustaining higher leverage to support larger shareholder returns
and acquisitions," S&P said.
"Although unlikely, we could raise our rating on TransDigm if debt
to EBITDA improves below 6x over the next 12 months and we expect
it to remain there. This would require the company committing to a
less aggressive financial policy while continuing to improve
margins," the rating agency said.
TRIPLET LLC: Case Summary & 11 Unsecured Creditors
--------------------------------------------------
Debtor: Triplet, LLC
d/b/a Mamma Lucia Italian Restaurant
2885 Dunleigh Drive
Dunkirk, MD 20754
Business Description: Triplet, LLC is a privately held company
in the food service industry.
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
District of Maryland (Greenbelt)
Case No.: 19-24475
Judge: Hon. Wendelin I. Lipp
Debtor's Counsel: Steven L. Goldberg
MCNAMEE, HOSEA, JERNIGAN, KIM, GREENAN &
LYNCH, P.A.
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
Tel: (301) 441-2420
E-mail: sgoldberg@mhlawyers.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Maria Lubrano, authorized
representative.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at:
http://bankrupt.com/misc/mdb19-24475.pdf
TTK RE ENTERPRISE: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: TTK RE Enterprise LLC
207 Shore Road
Somers Point, NJ 08244
Business Description: TTK RE Enterprise LLC is a privately held
company in Somers Point, New Jersey. The
Company is the 100% owner of 48 real estate
properties in New Jersey having a total
current value of $9,265,000.
Chapter 11 Petition Date: October 29, 2019
Court: United States Bankruptcy Court
District of New Jersey (Camden)
Case No.: 19-30460
Judge: Hon. Jerrold N. Poslusny Jr.
Debtor's Counsel: E. Richard Dressel, Esq.
FLASTER GREENBERG PC - CHERRY HILL
1810 Chapel Avenue West, 3rd Floor
Cherry Hill, NJ 08002
Tel: (856) 661-1900
E-mail: rick.dressel@flastergreenberg.com
Total Assets: $9,269,950
Total Liabilities: $6,432,457
The petition was signed by Emily K. Vu, president.
The Debtor stated it has no unsecured creditors.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/njb19-30460.pdf
UNITED METHODIST: Seeks to Hire Parrott Real Estate as Auctioneer
-----------------------------------------------------------------
The United Methodist Village, Inc. files an amended application
seeking authority from the U.S. Bankruptcy Court for the Southern
District of Illinois to employ Zane Parrot and Parrott Real Estate
and Auction as auctioneer with regards to the liquidation of the
real and personal asset of the Debtor.
Parrott's compensation on the sale of real estate is 6% buyers
premium on the sales. The Debtor pays reasonable advertising costs
up to a limit of $7,500. Parrott agrees to pay 50% of the closing
costs.
Parrott's compensation on the sale of personal property is 14%
buyers premium on all sales with a 4% discount to buyers who pay in
cash rather than credit card. Parrott will be paid $13 per hour for
auctioneer's labor. The Debtor agrees to pay advertising costs with
a limit of $3,000.
Parrott Real Estate does not represent any interest adverse to the
Debtor and is disinterested as defined in 11 U.S.C. 101(14),
according to court filings.
The auctioneer can be reached through:
Zane Parrot
Parrott Real Estate & Auction
1205 State Street,
Lawrenceville, IL 62439
Phone: (618) 943-4905
About The United Methodist Village Inc.
The United Methodist Village, Inc. is a non-profit nursing home
based in Lawrenceville, Illinois.
The United Methodist Village, Inc. filed for bankruptcy protection
under Chapter 11 (Bankr. S.D. Ill. Case No. 19-60046) on February
22, 2019. In the petition signed by Ashli Wesley, administrator,
the Debtor estimated $13,779,571 in assets and $7,164,533 in
liabilities.
The case has been assigned to Judge Laura K. Grandy. Roy J. Dent,
Esq., at Dent Law Office, Ltd. represents the Debtor as counsel.
WASTE SERVICES: Plan Filing Deadline Extended to Feb. 8
-------------------------------------------------------
The Bankruptcy Court has extended Waste Services, Inc.'s deadline
to file a Chapter 11 plan and disclosure statement to Feb. 8, 2020.
The time within which the Debtor may solicit acceptances for a
plan is extended to April 8, 2020.
In seeking an extension of its exclusive period to propose a plan,
the Debtor pointed out that:
* On May 20, 2019, the Court entered an order approving the sale
of certain of the Debtor's assets to Oak Ridge Waste and Recycling
of CT, LLC. On Aug. 1, 2019, the Debtor and Oak closed on the
Sale. Pursuant to a stipulation approved by the Court, the Debtor
used a portion of the proceeds from the Sale to pay certain
obligations owed to the Trustees of the Local 813 Insurance Trust
Fund, the Local 813 Pension Trust Fund, and the Nurses and Local 13
Retirement Trust Fund. The Funds have since withdrawn their claims
against the Debtor.
* As the Court is aware, the Debtor has been litigating in a
dispute (the "Licensing Dispute") with the Westchester County Solid
Waste Commission over its license to operate a waste hauling
business in Westchester County. The Licensing Dispute has involved
not only motion practice and multiple hearings before the
Bankruptcy Court, but also necessitated the Debtor's attendance at
an administrative hearing held by the Commission as well as the
filing of an Article 78 proceeding in New York State Court. As a
result of the Commission's most recent recommendation to revoke the
Debtor's License, the Village of Pelham filed a motion to compel
the Debtor's assumption or rejection of a municipal waste hauling
contract between the two parties. A hearing on the Motion to
Compel was scheduled for Oct. 7, 2019. The disposition of the
Pelham contract may have a significant effect on the terms of a
plan.
* The Debtor and its professionals have completed a review of
all claims filed in the Chapter 11 Case. The Debtor intends to file
certain claims objections based upon the Claims Review.
About Waste Services
Waste Services, Inc., is a provider of garbage collection services.
The Company focuses on developing and implementing environmentally
friendly waste disposal solutions. Waste Services is headquartered
in Mamaroneck, New York.
Waste Services sought Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 19-22260) on Feb. 13, 2019. In the petition signed by Joseph
Spiezio, III, president, the Debtor estimated $1 million to $10
million in both assets and liabilities. The Hon. Robert D. Drain
oversees the case. Tracy L. Klestadt, Esq., at Klestadt Winters
Jureller Southard & Stevens, LLP, serves as bankruptcy counsel.
WATERLOO AFFORDABLE: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Waterloo Affordable Housing LLC
d/b/a Heritage Homes
d/b/a Heritage Apartments
740 S. 75th St
Omaha, NE 68144
Business Description: Waterloo Affordable Housing LLC is a
lessor of real estate in Omaha, Nebraska.
Chapter 11 Petition Date: October 30, 2019
Court: United States Bankruptcy Court
District of Nebraska (Omaha Office)
Case No.: 19-81610
Judge: Hon. Thomas L. Saladino
Debtor's Counsel: Robert Vaughan Ginn, Esq.
ROBERT V. GINN, ATTORNEY
1337 South 101 Street, #209
Omaha, NE 68124
Tel: 402-398-5434
E-mail: rvginn@cox.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by John C. Foley, managing member of
Central States Development, LLC, managing member of the Debtor.
The Debtor stated it has no unsecured creditors.
A full-text copy of the petition is available for free at:
http://bankrupt.com/misc/neb19-81610.pdf
WELDED CONSTRUCTION: Michels Buying Perrysburg Property for $2.27M
------------------------------------------------------------------
Welded Construction, LP and Welded Construction Michigan, LLC, ask
the U.S. Bankruptcy Court for the District of Delaware to authorize
the private sale of Welded Construction, LP's real and personal
property located at 26933 Eckel Road, Perrysburg, Ohio, along with
certain improvements and fixtures, to Michels Corp. for an
aggregate purchase price of $2,706,000.
A hearing on the Motion is set for Nov. 18, 2019 at 10:00 a.m.
(ET). The objection deadline is Nov. 8, 2019 at 4:00 p.m. (ET).
The Property consists of (i) one parcel encompassing approximately
35 acres including all buildings, structures, parking areas, and
other improvements, which the Debtors have used for, among other
things, their corporate headquarters; and (ii) certain personal
property owned by the Seller and used in connection with the
ownership, use, repair or maintenance thereof identified on
Schedule 1.01.03.
The Debtors' paramount goal in the Chapter 11 Cases is to maximize
the value of their estates for the benefit of their creditor
constituencies and other stakeholders. To promote this goal, on
Oct. 29, 2018, they retained Zolfo Cooper Management, LLC, nunc pro
tunc to the Petition Date, to perform a variety of restructuring
related services. As a result of their robust analysis, the
Debtors concluded that, under the circumstances of the Chapter 11
Cases, the best way to maximize the value of their Assets for the
benefit of creditors was to conduct an orderly sale process for
their equipment, the Property, and other assets.
The Equipment Sale Process culminated in the entry into that
certain Agency Agreement, dated March 22, 2019 (as amended) with
Gordon Brothers Commercial & Industrial, LLC and Ritchie Bros.
Auctioneers (America) Inc., for, among other things, the sale and
auction of the Equipment Assets. The Debtors entry into the Agency
Agreement and the sale of the Equipment Assets pursuant to the
Agency Agreement was approved by the Court on April 17, 2019.
Following entry of the Agency Agreement Order, over the course of
several months, the Debtors collaborated with the Agent to sell the
Equipment Assets through several auctions.
The Debtors commenced the second leg of the Sale Process in August
2019 by engaging the services of a real estate broker to market the
Property. They entered into the Broker Agreement with Reichle
Klein Group, Inc. to market the Property beginning in August 2019
in exchange for a 6% commission on the gross proceeds of the sale
of the Property.
The Real Property consists of approximately 35 acres of land and
various improvements and is used primarily for the storage of the
Debtors' heavy construction equipment and as their business
headquarters. In consultation with the Broker, the Debtors
determined that, given the nature and historical use of Property,
the optimal purchaser for the Property was an entity engaged in the
construction (or similar) industry.
The Debtors received an offer from the Purchaser, a utility and
infrastructure contractor, and engaged in substantial due diligence
and negotiations. As a result of those negotiations, the Debtors
and the Purchaser agreed to the terms of the sale of the Property
for an aggregate purchase price of $2,706,000. Pursuant to the
terms and conditions of the Purchase Agreement, and subject to the
Court's approval, the Debtors propose to sell to the Purchaser the
Property on an "as is, where is basis," free and clear of all
liens, claims, encumbrances and other interests.
The Real Estate Purchase Price is $2.7 million and the Personal
Property Purchase Price is $6,000. The Debtors are asking approval
of a private sale without an auction process. The Purchaser will
deposit $100,000 with Midland Title and Escrow, Ltd. The Deposit
will be applied toward the Purchase Price, subject to the terms of
the Purchase Agreement. The Seller agrees that it will be solely
liable for payment of the Commission due Broker, which is 6% of the
Purchase Price.
The Property consists of (i) the real property owned by the Seller
located at 26933 Eckel Road, Perrysburg, Ohio 43551, together with
all buildings and improvements thereon and all fixtures and
appurtenances thereto; and (ii) certain personal property owned by
Seller located on the Property and used in connection with the
ownership, use, repair or maintenance thereof, identified on
Schedule 1.01.03 to the Purchase Agreement. For informational
purposes, the tax parcel numbers of the Property are:
Q61-100-654103048000, Q61-100-654103049000, Q61-100-654406001002,
Q61-100-654406003001, Q61-400-070302001000, Q61-400-070302001003,
Q61-400-670402011001.
To implement the foregoing immediately, the Debtors ask a waiver of
the 14-day stay of an order authorizing the use, sale, or lease of
property under Bankruptcy Rule 6004(h).
A copy of the Agreement attached to the Motion is available for
free at:
https://tinyurl.com/y36u6ogw
About Welded Construction
Perrysburg, Ohio-based Welded Construction, L.P, is a mainline
pipeline construction contractor capable of executing pipeline
construction projects in lengths ranging from a few hundred feet to
over 200 miles.
Welded Construction, L.P., and Welded Construction Michigan, LLC,
sought bankruptcy protection on Oct. 22, 2018 (Bankr. D. Del. Lead
Case No. Case No. 18-12378). The jointly administered cases are
pending before Judge Kevin Gross.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as counsel;
and Kurtzman Carson Consultants LLC as claims and noticing agent
and administrative advisor. The Debtors also tapped Zolfo Cooper
Management, LLC and the firm's managing director Frank Pometti who
will serve as their chief restructuring officer.
WHEATON MEDICAL: Exclusive Period to File Plan Extended to Dec. 23
------------------------------------------------------------------
Judge Donald Cassling of the U.S. Bankruptcy Court for the Northern
District of Illinois extended the exclusive period for Wheaton
Medical, S.C. to file its plan of reorganization and disclosure
statement to Dec. 23, and the exclusive period to solicit
acceptances for the plan to Feb. 18, 2020.
About Wheaton Medical
Wheaton Medical, S.C., is a medical group offering non-surgical,
non-invasive treatment for chronic and severe back pain.
Wheaton Medical sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-17922) on June 24,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $50,000 and liabilities of between $1 million
and $10 million. The case is assigned to Judge Donald R. Cassling.
Lynch Law Offices, P.C., is the Debtor's bankruptcy counsel.
WINNEBAGO INDUSTRIES: S&P Revises CreditWatch Implications to Pos.
------------------------------------------------------------------
S&P Global Ratings revised the CreditWatch implications on the 'BB'
issue-level rating on Forest City, Iowa-based recreational vehicle
manufacturer Winnebago Industries Inc.'s term loan B to positive
from negative. The company has signed a definitive agreement to
acquire Newmar Corp. for approximately $364 million, which it plans
to finance with a mix of debt and an equity issuance of two million
shares. Winnebago has decided to issue unrated senior unsecured
convertible notes of up to $300 million rather than issue secured
notes as contemplated in September 2019.
The rating action reflects Winnebago's plan to issue unsecured
notes instead of secured notes and S&P's expectation that Newmar's
assets will be pledged to secured asset-based lending (ABL)
revolver and term loan B lenders. S&P plans to resolve the
CreditWatch and raise the rating one notch to 'BB+' when Winnebago
closes on the acquisition of Newmar Corp. in a few weeks.
Because of the change in financing, S&P expects improvement in
recovery prospects for term loan B lenders instead of the
previously anticipated deterioration. In September, Winnebago
announced that it intended to issue senior secured notes to fund
the acquisition of Newmar. Winnebago has since altered its plans
and will issue convertible unsecured notes to finance the
acquisition. S&P expects that subsequent to the acquisition closing
in the next few weeks, Newmar's assets will be pledged to ABL and
term loan B lenders through a joinder agreement. At that time, S&P
plans to raise its assumed emergence valuation for Winnebago to
reflect the pledge of Newmar's assets to secured lenders. The
rating agency expects ABL lenders will have a first-priority claim
to Newmar's working capital assets, and that term loan B lenders
will have second-priority claim to Newmar's working capital assets
and a first-priority claim on all other Newmar assets. As a result,
S&P expects term loan B lenders' recovery prospects in a
hypothetical default scenario would improve. It plans to raise the
term loan B's issue-level rating to 'BB+' from 'BB', and raise the
recovery rating to '1' from '2' to indicate very high recovery
(90%-100%; rounded estimate: 95%).
"The 'BB-' issuer credit rating and stable outlook on Winnebago are
unchanged. Incorporating a pro forma level of EBITDA from Newmar,
S&P forecasts Winnebago's adjusted debt to EBITDA will be in the
mid-2x area at the end of fiscal 2020.
WMC KIM: Seeks to Hire Robl Law Group as Legal Counsel
------------------------------------------------------
WMC Kim Holdings, LLC seeks authority from the U.S. Bankruptcy
Court for the Northern District of Georgia to employ Robl Law
Group, LLC as its legal counsel.
Robl Law Group will advise the Debtor of its powers and duties
under the Bankruptcy Code and will provide other legal services in
connection with its Chapter 11 case. The firm's hourly rates are:
Michael D. Robl, Esq. $375
Max Bowen, Esq. $250
Lelena Kassa (Paralegal) $150
The Debtor paid the firm a pre-bankruptcy retainer in the amount of
$12,500.
Robl Law neither holds nor represents an interest adverse to the
Debtor's bankruptcy estate, according to court filings.
The firm can be reached at:
Michael D. Robl, Esq.
Robl Law Group, LLC
3754 Lavista Road, Suite 250
Tucker, GA 30084
Tel: (404) 373-5153
Fax: (404) 537-1761
Email: michael@roblgroup.com
About WMC Kim Holdings
WMC Kim Holdings, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 19-64014) on Sept. 3,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $50,000 and liabilities of less than $500,000.
The case has been assigned to Judge Barbara Ellis-Monro. The
Debtor is represented by Michael D. Robl, Esq., at Robl Law Group
LLC.
WOODS INLET: Taps A. Bruce Wilson as Special Counsel in BOKF Suit
-----------------------------------------------------------------
Woods Inlet, Corp. seeks authority from the U.S. Bankruptcy Court
for the Northern District of Texas to employ A. Bruce Wilson,
Attorney at Law as its special counsel.
The firm will represent the Debtor in an adversary case (Case No.
19-04101) filed by BOKF, N.A., which seeks a court order requiring
the Debtor to convey the property where it operates its business to
Wildcat Canyon, LLC.
A. Bruce Wilson will be paid at the hourly rate of $300 and will be
reimbursed for work-related expenses incurred.
The firm is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
A. Bruce Wilson can be reached at:
A. Bruce Wilson, Esq.
A. Bruce Wilson, Attorney at Law
6300 Ridglea Place, Suite 1111
Fort Worth, TX 76116
Telephone: (817) 377-0500
Facsimile: (817) 377-1232
Email: Wilson@abwilsonlaw.com
About Woods Inlet Corp.
Woods Inlet Corp., filed a Chapter 11 bankruptcy petition (Bankr.
N.D. Tex. Case No. 19-42388) on June 10, 2019, disclosing under $1
million in both assets and liabilities. The Debtor tapped Norred
Law, PLLC as its bankruptcy counsel.
WSLD LLC: Taps McIntyre Thanasides as Legal Counsel
---------------------------------------------------
WSLD LLC received approval from the U.S. Bankruptcy Court for the
Middle District of Florida to hire McIntyre Thanasides Bringgold
Elliott Grimaldi Guito & Matthews, P.A. as its legal counsel.
The firm will provide these legal services in connection with the
Debtor's Chapter 11 case:
a. advise the Debtor of its powers and duties in the continued
operation of its business and the management of its property;
b. prepare on behalf of Debtor motions, reports and other
legal papers;
c. appear before the bankruptcy court and the Office of the
U.S. Trustee to represent and protect the interests of the Debtor;
d. take all necessary legal steps to confirm a proper plan of
reorganization;
e. represent the Debtor in all adversary suits, contested
matters and matters involving administration of its bankruptcy
case;
f. represent the Debtor in negotiations with potential
financing sources and prepare contracts, security instruments or
other documents necessary to obtain financing;
g. take necessary actions to recover voidable transfers and to
avoid liens against the Debtor's property obtained within 90 days
of its bankruptcy filing; and
h. enjoin or stay suits against the Debtor, which affect its
ability to continue in business or which affect the property in
which the Debtor has equity.
McIntyre Thanasides will be paid based upon its normal hourly
billing rates and will be reimbursed for work-related expenses
incurred. Prior to the petition date, the firm received a retainer
in the amount of $30,000.
James Elliott, Esq., a partner at McIntyre Thanasides, assured the
court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estate.
McIntyre Thanasides can be reached at:
James W. Elliott, Esq.
McIntyre Thanasides Bringgold Elliott
Grimaldi Guito & Matthews, P.A.
500 E. Kennedy Blvd., Suite 200
Tampa, FL 33602
Tel: (813) 223-0000
Fax: (813) 899-6069
E-mail: james@mcintyrefirm.com
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 Grimaldi Guito & Matthews,
P.A. represents the Debtor.
XEROX CORP: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings affirmed Xerox Corporation's Long-Term Issuer Default
Rating at 'BB' and unsecured ratings at 'BB'/'RR4', resolving the
Rating Watch Negative, following the company's announcement that it
intends to retain its customer financing business. Fitch has also
assigned a 'BB' IDR to Xerox Holdings Corporation. The Rating
Outlook is Stable.
The move reduces acute risk Xerox could sell the financing business
without reducing debt by a corresponding amount. Additionally,
Xerox has thus far not utilized its holding company structure to
move assets or issue debt that benefit from a guarantee at the
holding company level. Xerox faces approximately $1.6 billion in
maturities through 2020. The company has stated it remains well
within its 2x core debt to annual FCF implying refinancing
capacity. Fitch believes Xerox has a range of financing options
available to it including unsecured and secured markets.
Fitch will continue to monitor Xerox's actions within the context
of its financial policy and operating performance. While revenue
declines continue, management has indicated sequential improvement
in the current quarter is a sign that its roadmap is realizing
results. Fitch expects Xerox will update its 2020 outlook to
reflect any momentum in its turnaround plan. To the extent Xerox is
not able to demonstrate progress towards revenue stabilization in
conjunction with maintenance of its margin and FCF profile,
negative rating action could be warranted.
KEY RATING DRIVERS
Revenue Trajectory: Xerox's revenue trajectory improved somewhat in
3Q with equipment sales posting their smallest constant currency
decline since 2Q'18, although this does appear to be due in part to
some pull forward in U.S. mid-range. Management stated it is
beginning to see improvement in supplies and IT services sales
through the Xerox Business Services (XBS) channel but continues to
guide to negative 6% constant currency for the year. Total revenue
declines for the year are on track to be 2-3 points worse than
Fitch originally expected; and therefore, Fitch is reducing its
expectation of improvement over the rating horizon, although this
is subject to uncertainty.
Strategy: Management indicated investments in supplies and IT
services helped XBS improve its trend decline. The company
continues to stress growing software and services is key to
improving long-term revenue trends. While management cited some
specific client wins in the government space, Fitch remains
skeptical whether these initiatives will become material over the
rating horizon. Similarly, workflow and 3D printing products are
only approaching commercialization. Market conditions, particularly
in Europe remain challenging, across the industry even for much
stronger players. However, Xerox continues to manage its cost
structure effectively to keep pace with revenue declines and
remains on track to deliver $640 million of gross savings this
year.
Financial Policy: Xerox's capital allocation under new management
and board membership has been more weighted towards shareholder
return as opposed to organic investments as evidenced by reduced
capex and tuck-in M&A. However, share repurchases year-to-date have
been trending below previous guidance to at least $600 million
annually, although Fitch expects the company will hit this target
by year end. Xerox repaid $406 million principal senior notes due
2019. The company has stated it has cash and revolver availability
to meet its $554 million principal note maturing in December. The
company remains well inside of its core debt target of less than 2x
annual FCF, implying Xerox could pursue additional leverage.
Group Structure: The decision to retain the customer financing
business reduces an acute risk to existing bondholders. Xerox's
former investment grade capital structure does not provide
protections to limit moving assets to Xerox Holding Corporation
and/or issuing debt that would be structurally senior. Xerox faces
$1.6 billion of maturities through the end of 2020. Fitch will
continue to monitor the evolution of Xerox's capital structure and
the utilization if any of the holding company structure.
DERIVATION SUMMARY
Xerox is among the larger print technology companies with a leading
share in the A3 MFP space. According to IDC, Xerox's closest peer,
HP Inc. (BBB+/Stable) held the number one worldwide hardcopy
peripherals market share, based on units. Xerox's margin is higher
than HP because HP derives more than 60% of its revenue from its
lower margin PC business. HP's printer business is more than twice
the size of Xerox's on a revenue basis, while Xerox's operating
EBITDA margin is approximately eight points higher when comparing
the companies' most recent results on an LTM basis. HP has a much
more significant share in A4 but through acquisitions has increased
its A3 market share materially. HP does not have a customer leasing
business.
Xerox's core business has been in decline for several years and
recent product refreshes do not appear to be successfully turning
around mid-single-digit declines in its post-sale business, which
represents more than three quarters of revenue. Fitch expects Xerox
to continue to experience negative revenue growth over the ratings
horizon with only diminished prospects for modest improvement,
confirmed in part by recent results. Additionally, Xerox has
continued its retreat from conservative financial policies by
recommencing a sizable share repurchase program. While Xerox's
liquidity position at present is adequate and the company
previously took steps to improve its balance sheet, a continued
deterioration in Xerox's market position associated with lack of a
turnaround in its core business bears risk to the company's
operational position and prospective financial position as a result
over the rating horizon.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Mid-single-digit revenue decline sustained throughout the
rating horizon;
-- Stable operating EBITDA margins to reflect cost savings as
offset by loss of operating leverage at lower revenue levels;
-- Allocation of the bulk of post-dividend FCF to share
repurchases and acquisitions;
-- Utilization of revolver borrowing and cash on hand to
address December maturity; assumed refinancing of 2020
maturities.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Improving constant currency revenue trends approaching flat
to neutral;
-- Total debt with equity credit to operating EBITDA (excluding
financing debt by Fitch's calculation; "core leverage")
sustained below 2x;
-- Recommitment to a more conservative financial policy.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Organic, constant currency declines greater than
mid-single-digits;
-- Decline in operating margin below current levels on a
sustained basis;
-- Core leverage sustained above 3x;
-- FCF adjusted for the change in financing assets sustained
below low single digits as a percentage of revenue;
-- Shift to a more aggressive financial policy.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Xerox had $979 million of cash and cash
equivalents at Sept. 30, 2019, including $57 million of restricted
cash. Xerox maintains access to its $1.8 billion revolving credit
facility, which was undrawn at Sept. 30, 2019. The credit facility
has an accordion feature that allows Xerox to increase, with the
consent of its lenders, the overall size of the facility by $750
million. Xerox also has the right to request a one year extension.
Liquidity is also supported by Fitch's expectation that Xerox will
generate approximately $860 million in FCF (post-dividend) in 2019,
declining to approximately $600 million over the rating horizon.
Fitch anticipates that Xerox will utilize the majority of its FCF
to repurchase stock or make acquisitions as opposed to reducing its
debt.
Debt Structure: Xerox faces a staggered but sizable maturity ladder
over the ratings horizon. $554 million of 5.625% notes mature Dec.
15, 2019. More than $2.1 billion of aggregate principal outstanding
bonds mature over 2020 and 2021, approximately half of that amount
in each year. Fitch assumes Xerox will refinance these maturities
as they come due, predicated upon Xerox stabilizing its operational
profile and maintaining sufficient market access.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
Xerox has an ESG Relevance Score of 4 for Management Strategy due
to the company's shift to a more aggressive financial policy and
inability to address core revenue declines, and has a negative
impact on the credit profile and is relevant to the rating in
conjunction with other factors.
Xerox has an ESG Relevance Score of 4 for Governance Structure due
to the board representation weighted towards activist shareholders,
and has a negative impact on the credit profile, and is relevant to
the rating in conjunction with other factors.
Xerox has an ESG Relevance Score of 4 for Group Structure due to
the imposition of a holding structure that could be detrimental to
unsecured creditors, and has a negative impact on the credit
profile, and is relevant to the rating in conjunction with other
factors.
XTL-PA INC: Committee Taps Miller Coffey Tate as Financial Advisor
------------------------------------------------------------------
The official committee of unsecured creditors of XTL, Inc. and
XTL-PA, Inc. received approval from the U.S. Bankruptcy Court for
the Eastern District of Pennsylvania to retain Miller Coffey Tate
LLP as its financial advisor and bankruptcy consultant.
The firm will provide these services to the committee in connection
with the Debtors' Chapter 11 cases:
a. assist the committee in the analysis of the current
financial position of the Debtors;
b. assist the committee in its analysis of the Debtors'
business plans, cash flow projections, restructuring programs,
asset sales and other analyses or reports prepared by the Debtors;
c. assist the committee in its analysis of proposed
transactions or other actions for which the Debtors or other
parties in interest seek court approval;
d. assist the committee in its analysis of the Debtors'
internally prepared financial statements and related documentation
in order to evaluate their performance as compared to their
projected results;
e. attend meetings;
f. assist the committee in the development, evaluation and
documentation of any plan of reorganization or strategic
transaction; and
g. assist the committee in its analysis of the Debtors'
hypothetical liquidation analyses under various scenarios.
Miller Coffey's hourly fees are:
Partners/Principals $455 - $750
Managers $340 - $450
Senior Accountants $225 - $335
Staff Accountants/Paraprofessionals $100 - $220
Matthew Tomlin, Esq., a partner at Miller Coffey, attests that the
firm is a disinterested person within the meaning of Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Matthew R. Tomlin, CPA
Miller Coffey Tate LLP
Eight Penn Center, Suite 950
1628 John F. Kennedy Blvd.
Philadelphia, PA 19103
Tel: (215) 561-0950
Fax: (215) 561-0330
About XTL Inc.
XTL, Inc. is a transportation and logistics company that provides
customized logistics solutions for warehousing and inventory
control of commodities and finished goods.
XTL and its subsidiaries sought Chapter 11 protection on Aug. 1,
2019 (Bankr. E. D. Penn. Lead Case No. 19-14844) in Philadephia,
Pa. In the petitions signed by Louis J. Cerone, president, XTL
disclosed $10 million to $50 million in assets and $10 million to
$50 million in liabilities
Hon. Eric L. Frank presides over the cases. XTL tapped Allen B.
Dubroff, Esq., at Allen B. Dubroff, Esq. & Associates, LLC, as its
legal counsel.
[*] BOOK REVIEW: Bankruptcy and Secured Lending in Cyberspace
-------------------------------------------------------------
Author: Warren E. Agin
Publisher: Bowne Publishing Co.
List price: $225.00
Review by Gail Owens Hoelscher
Red Hat Inc. finds itself with a high of 151 5/8 and low of 20 over
the last 12 months! Microstrategy Inc. has roller-coasted from a
high of 333 to a low of 7 over the same period! Just when the IPO
boom is imploding and high-technology companies are running out of
cash, Warren Agin comes out with a guide to the legal issues of the
cyberage.
The word "cyberspace" did not appear in the Merriam-Webster
Dictionary until 1986, defined as "the on-line world of computer
networks." The word "Internet" showed up that year as well, as "an
electronic communications network that connects computer networks
and organizational computer facilities around the world."
Cyberspace has been leading a kaleidoscopic parade ever since, with
the legal profession striding smartly in rhythm. There is no
definition for the word "cyberassets" in the current
Merriam-Webster. Fortunately, Bankruptcy and Secured Lending in
Cyberspace tells us what cyberassets are and lays out in meticulous
detail how to address them, not only for troubled technology
companies, but for all companies with websites and domain names.
Cyberassets are primarily websites and domain names, but also
include technology contracts and licenses. There are four types of
assets embodied in a website: content, hardware, the Internet
connection, and software. The website's content is its fundamental
asset and may include databases, text, pictures, and video and
sound clips. The value of a website depends largely on the traffic
it generates.
A domain name provides the mechanism to reach the information
provided by a company on its website, or find the products or
services the company is selling over the Internet. Examples are
Amazon.com, bankrupt.com, and "swiggartagin.com." Determining the
value of a domain name is comparable to valuing trademark rights.
Domain names can come at a high price! Compaq Computer Corp. paid
Alta Vista Technology Inc. more than $3 million for "Altavista.com"
when it developed its AltaVista search engine.
The subject matter covered in this book falls into three groups:
the Internet's effect on the practice of bankruptcy law; the ways
substantive bankruptcy law handles the impact of cyberspace on
basic concepts and procedures; and issues related to cyberassets as
secured lending collateral.
The book includes point-by-point treatment of the effect of
cyberassets on venue and jurisdiction in bankruptcy proceedings;
electronic filing and access to official records and pleadings in
bankruptcy cases; using the Internet for communications and
noticing in bankruptcy cases; administration of bankruptcy estates
with cyberassets; selling bankruptcy estate assets over the
Internet; trading in bankruptcy claims over the Internet; and
technology contracts and licenses under the bankruptcy codes. The
chapters on secured lending detail technology escrow agreements for
cyberassets; obtaining and perfecting security interests for
cyberassets; enforcing rights against collateral for cyberassets;
and bankruptcy concerns for the secured lender with regard to
cyberassets.
The book concludes with chapters on Y2K and bankruptcy; revisions
in the Uniform Commercial Code in the electronic age; and a
compendium of bankruptcy and secured lending resources on the
Internet. The appendix consists of a comprehensive set of forms for
cyberspace-related bankruptcy issues and cyberasset lending
transactions. The forms include bankruptcy orders authorizing a
domain name sale; forms for electronic filing of documents;
bankruptcy motions related to domain names; and security agreements
for Web sites.
Bankruptcy and Secured Lending in Cyberspace is a well-written,
succinct, and comprehensive reference for lending against
cyberassets and treating cyberassets in bankruptcy cases.
*********
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.
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affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
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
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Each Friday's edition of the TCR includes a review about a book of
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available at your local bookstore or through Amazon.com. Go to
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Monthly Operating Reports are summarized in every Saturday edition
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The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
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*********
S U B S C R I P T I O N I N F O R M A T I O N
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Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
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Copyright 2019. All rights reserved. ISSN: 1520-9474.
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