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T R O U B L E D C O M P A N Y R E P O R T E R
Friday, October 30, 2020, Vol. 24, No. 303
Headlines
1234 PACIFIC: Court Enters Plan Confirmation Order
1234 PACIFIC: Plan of Reorganization Confirmed by Judge
1420 HOWE: Seeks Approval to Hire JTS Enginnering
1924 LUNA'S: Quik Capital Says It Should Be Secured in Plan
203-205 NORTH: Objects to Secured Creditors' Disclosure Statement
211 LLC: Seeks to Hire Belleh Law Group as Counsel
33 VALLEY LLC: Hires Hilco as Real Estate Broker
5019 PARTNERS: BNYM Says Plan Can't Be Confirmed
5019 PARTNERS: Seeks to Hire GA Appraisals as Appraiser
5019 PARTNERS: Unsecureds Owed $1.49M to Split $30K in Plan
7 HILLS INC: Has Nov. 2 Deadline to File Plan and Disclosures
ABA THERAPY: Unsecureds Owed $575K to Get $1,000 Per Quarter
ACCESSORAMA LLC: Hires G.R. Reid Associates as Accountant
ALDRICH PUMP: Asbestos Claimants Rep Taps Grier Wright as Counsel
ALDRICH PUMP: Asbestos Claimants Rep Taps Orrick as Legal Counsel
ALVIN ESCUE: Kizer, Bonds Represents Simmons Bank, Leaders Credit
APPVION INC: Court Junks Halperin, Davis Suit vs Richards et al.
AREU STUDIOS: Case Summary & 20 Largest Unsecured Creditors
ARTHUR AVERY: Can't Act on Company's Behalf, Court Declares
BAGELS N' CREAM: Trustee Selling Personal Property for $30K
BARBARA A. WIGLEY: Debt Owed to Lariat Not Dischargeable, BAP Says
BAY CLUB OF NAPLES: Court Approves Disclosure Statement
BAY CLUB OF NAPLES: Unsecureds to Be Paid From Sale Proceeds
BGF SERVICES: Case Summary & Unsecured Creditor
BLACK ELK: Trusts Remains Active, Court Rules
BORDEN DAIRY: KKR Credit Objects to BDC's Plan
BSI LLC: 800K Sale of Cartersville Property to Relstar Approved
BULLDOG DUMPSTERS: Case Summary & 17 Unsecured Creditors
CABLE ONE: S&P Rates New $500MM Senior Unsecured Notes 'BB-'
CALIFORNIA PIZZA: Betty Suit Stayed Pending Bankruptcy Proceeding
CARBONYX INC: Says Proponents' Plan Not Feasible
CARBONYX INC: Shareholders Object to Debtor's Plan
CARS.COM INC: S&P Assigns 'B' ICR; Outlook Positive
CCM MERGER: S&P Affirms 'B+' Issuer Credit Rating; Outlook Negative
CEC ENTERTAINMENT: S&P Rates $200MM DIP Term Loan 'B'
CENTER CITY: Hires Centurion to Auction Addt'l. Medical Equipment
CENTURY 21: Committee Taps AlixPartners LLP as Financial Advisor
CENTURY 21: Committee Taps Lowenstein Sandler as Legal Counsel
CHINA FISHERY: Hires Duff & Phelps as Financial Advisor
CIRCLE BAR: Reaches Deal With CCG; Plan Confirmed
CLAAR CELLARS: Unsecured Creditors to Paid in Full by 2025
COPSYNC INC: Trustee Wins $155,000 Award Against Flanagans
CRC BROADCASTING: Hires Angelo Bellone as Accountant
DALF ENERGY: Suit vs GS Oilfield et al., Moved to W.D. Texas
DAVID W. SORENSON: Selling 3 White Bear Lake Properties for $665K
DIMENSION DESIGN: Taps Levenfeld Pearlstein as Legal Counsel
DOMICIL LLC: No Unsecured Claims Expected in Case
DPW HOLDINGS: Issues $1.2 Million Promissory Notes to Investor
DPW HOLDINGS: Posts $1.4-Mil. Net Loss for Quarter Ended June 30
DPW HOLDINGS: Unit Gets a $1.4M Order from Medical Device Company
EASTSIDE DISTILLING: Has $2.19-Mil. Net Loss for June 30 Quarter
ECOARK HOLDINGS: Board OKs Appointment of Jim Galla sa CAO
EDISON NATION: Says Substantial Going Concern Doubt Exists
EDWARD MANDEL: Court Flips Order Dismissing WNS Suit vs Law Firm
ELIEZER C. RODRIGUEZ: $290K Sale of Las Vegas Property Approved
EMAGIN CORP: Reports $2.8M Net Loss for Quarter Ended June 30
ENDRA LIFE: Posts $2.9-Mil. Net Loss for Quarter Ended June 30
ENERGY 11: Discloses Substantial Doubt on Staying as Going Concern
ENSERVCO CORP: Posts $4.4-Mil. Net Loss for Quarter Ended June 30
EQUUS TOTAL: Discloses Going Concern Doubt for Equus Energy
EVEN STEVENS: Utah Landlord Objects to Plan & Disclosures
EVERETT C. MOULTON, III: Proposes an Auction of Fort Smith Property
FACEBANK GROUP: Amends March 31 Quarter Report with $56.3M Loss
FLEXPOINT SENSOR: Reports $179K Net Loss for Quarter Ended June 30
FOCUS UNIVERSAL: Has $628K Net Loss for the Quarter Ended June 30
FOURTH QUARTER: Unsecureds to Get Share of Net Income in Plan
FRANCHISE GROUP: S&P Assigns 'B+' ICR; Outlook Stable
FRE 355 INVESTMENT: Platinum Loan Objects to Plan & Disclosures
FRE 355 INVESTMENT: U.S. Trustee Objects to Plan & Disclosures
FRE 355 INVESTMENT: Unsecureds to Recover Between 6.8% and 17.12%
FRICTIONLESS WORLD: Trustee Taps Dickensheet as Auctioneer
FTS INT'L: Lugenbuhl, Stroock Update List of Term Lenders
FTS INTERNATIONAL: Hires Alvarez & Marsal as Financial Advisor
FTS INTERNATIONAL: Seeks to Hire Lazard Freres as Investment Banker
FULTON PROPERTIES: Taps Frederic P. Schwieg as Legal Counsel
FUSE MEDICAL: Discloses Substantial Doubt on Staying Going Concern
GALLEON CONTRACTING: Ally Switches to 'Yes'; Plan Confirmed
GARRETT MOTION: Hires FTI as Advisor to ASASCO Director
GARRETT MOTION: Hires Quinn Emanuel as Special Counsel
GARRETT MOTION: Hires Schulte as Counsel to Transaction Committee
GARRETT MOTION: Hires Simpson Thacher as ASASCO Counsel
GAUCHO GROUP: Reports $1.5-Mil. Net Loss for Quarter Ended June 30
GBT TECHNOLOGIES: Reports $3.6M Net Loss for the June 30 Quarter
GEVO INC: Reports $6.0-Mil. Net Loss for Quarter Ended June 30
GEX MANAGEMENT: Posts $63K Net Loss for the Quarter Ended June 30
GLOBAL EAGLE: Charts New Course Out of Chapter 11
GLOBAL EAGLE: Reports $58.0-Mil. Net Loss for June 30 Quarter
GOFBA INC: Discloses Substantial Doubt on Staying as Going Concern
GOOD DEED 317: Case Summary & 7 Unsecured Creditors
GRADE A HOME: Sale in 5 Years to Fund Payments to Unsecureds
GRAPEFRUIT USA: Reports $392K Net Income for Quarter Ended June 30
GREENPRO CAPITAL: Posts $563,000 Net Loss for the June 30 Quarter
GRIMMETT BROTHERS: Seeks to Hire Hoyle Partain as Accountant
GROWLIFE INC: Posts $611K Net Loss for the Quarter Ended June 30
GTY TECHNOLOGY: Reports $7.8-Mil. Net Loss for June 30 Quarter
GUARDION HEALTH: Has $707K Net Loss for Quarter Ended June 30
HARRIS PHARMACEUTICAL: Case Summary & 11 Unsecured Creditors
HAWAII MOTORSPORTS: AHFC Notes of Lift Stay Motion
HAWAII MOTORSPORTS: Automotive Finance Objects to Disclosures
HAWAII MOTORSPORTS: HSFCU Says Future Sales & Income Unrealistic
HAWAII MOTORSPORTS: SGG LLC Objects to Disclosure Statement
HAWAIIAN HOLDINGS: Incurs $97.1 Million Net Loss in Third Quarter
HEALTH-RIGHT DISCOVERIES: Divulges Substantial Going Concern Doubt
HELIX TECHNOLOGIES: Says Substantial Going Concern Doubt Exists
HERTZ GLOBAL: Reports $852-Mil. Net Loss for June 30 Quarter
HI-CRUSH INC: Reports $26.0-Mil. Net Loss for June 30 Quarter
HOMETOWN INTERNATIONAL: Discloses Substantial Going Concern Doubt
HRI HOLDING: Unsecured Creditors to Recover 3% in Liquidating Plan
HS REO 105: Dec. 1 Deadline to File Plan and Disclosures
HUNT COMMUNICATIONS: Unsecureds Will be Paid in Full in 36 Months
HUSSEIN TAWFIK: Court Narrows Claims Against Lenders
INTELLIGENT PACKAGING: S&P Alters Outlook to Neg., Affirms 'B' ICR
INTERSTATE COMMODITIES: $225K Sale of 45 Railcars to NSC Approved
JAMUNA TAXI: OSK Reaches Deal; Unsecureds to Get 100%
KC EQUIPMENT: Seeks to Hire Vannova Legal as Legal Counsel
KCST USA: Order Vacating Arbitration Award Against Axia Flipped
KHAN REAL ESTATE: HAB Buying Billings Property for $1.64 Million
KIM MORTIMER: Court Won't Delay Sale of New York Property
LITTLE DISCOVERIES: Penn Barton Objects to Disclosure Statement
LP&D INC: Trustee May Not Comply with EcoSource Deal, Suit Says
MATCHBOX FOOD: Seeks Approval to Hire BDO USA LLP as Auditor
MERIDIAN MARINA: Tranzon Driggers Auction of All Assets Approved
MICHAEL F. RUPPE: $424K Sale of Wharton Property to Konseka Okayed
MONKEY TOES: Has Until Oct. 30 to File Plan & Disclosures
NATIONWIDE AMBULANCE: Ruling on Shareholder Loan Upheld
NEW ACADEMY HOLDING: S&P Rates $400MM Senior Secured Notes 'B'
NEW HILLCREST: Seeks to Hire Ramsaur Law as Bankruptcy Counsel
NEW YORK OPTICAL: Hires Connolly Wasserstrom as Accountant
NEW YORK OPTICAL: Hires Leto Law Firm as Special Counsel
NEWSTREAM HOTEL: CNE Says Plan Disclosures Inadequate
NEWSTREAM HOTEL: UC Red Lion Says Plan Is 'Vague'
NEWSTREAM HOTEL: Westway Balks at Pro Construction Status in Plan
NORTH PACIFIC CANNERS: Court Approves Settlement With Farmers
NORTH PACIFIC CANNERS: Unsecureds to Recover 25% to 35% in Plan
NORTHERN HOLDINGS: Case Summary & 7 Unsecured Creditors
NUZEE INC: Signs $1 Million Common Stock Purchase Agreement
OCEAN POWER: Contracts With ACET for U.S. Navy SLAMR Initiative
OGGUSA INC: Unsecured Creditors to Have 0.35% to 3.29% in Plan
ONEWEB GLOBAL: FCC Approves Sale to British Government
ONPOINT OIL: Seeks Approval to Hire Gooding Law as Legal Counsel
P&L DEVELOPMENT: S&P Alters Outlook to Stable, Affirms 'B-' ICR
PARADOX ENTERPRISES: Has Until Nov. 2 to File Plan & Disclosures
PARK MONROE: MHANY Sale Plan Has 6% for Unsec. Creditors
PARK MONROE: To Seek Plan Confirmation Nov. 4
PRO-FIT DEVELOPMENT: Plan Hearing Continued to Dec. 16
PRO-FIT DEVELOPMENT: Says Revenue to Fund Plan Payments
PROVIDENT COMMONWEALTH: S&P Lowers 2018 Revenue Bond Rating to 'BB'
QUEENS BALLPARK: S&P Retains BB+ Secured Debt Ratings on Watch Neg.
QUICK CASH: Trustee Loses Clawback Suit vs Delgados
QUINCY STREET: Creditor ACF Proposes Plan for Townhomes II
RAM DMD: Hires Brevard Accounting as Accountant
RGN-GROUP HOLDINGS: Taps Kirkland & Ellis as Legal Counsel
RGN-GROUP HOLDINGS: Trustee Taps Berkeley as Financial Advisor
ROLTA INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors
RTI HOLDING: Seeks to Hire CR3 Partners as Financial Advisor
RTI HOLDING: Seeks to Hire Pachulski Stang as Legal Counsel
RTI HOLDING: Taps Cheng Cohen as Special Corporate Counsel
RTI HOLDING: Taps FocalPoint Securities as Investment Banker
RTW RETAILWINDS: Unsecureds Will Recover 31% to 38% in Plan
SECURITY FIRST: Amended Prepackaged Plan Confirmed by Judge
SECURITY FIRST: Unsecured Claims Unimpaired in ESW Plan
SELLING N ATLANTA: K Designs Buying Stockbridge Property for $115K
SHAHBAZ M. AKHTAR: Nguyens Buying Los Gatos Property for $1.5M
SHILOH INDUSTRIES: Committee Taps Morris James as Legal Counsel
SHILOH INDUSTRIES: To Proceed With Sale to MiddleGround's Grouper
SMYRNA READY: S&P Rates New $515MM Senior Secured Notes 'B+'
STEIN MART: Sale of for Non-Residential Property Leases Approved
STEPSTONE GROUP: S&P Withdraws 'BB+' Issuer Credit Rating
STOREWORKS TECHNOLOGIES: Creditors to Be Paid in Full in 5 Years
STUDIO MOVIE: Nov. 2 Deadline for Panel Formation Questionnaires
SUPERIOR ENERGY: Inks 2nd Amendment to Restructuring Support Deal
TASEKO MINES: Posts C$987K Net Income in Third Quarter
THOMAS DEE ENGINEERING: Taps Walsworth WFBM as Special Counsel
THOMAS R. MCCONNELL: Viswam Buying Muncie Property for $164K
TIKRAN ERITSYAN: Selling Granada Hills Property for $600K
TM HEALTHCARE: Seeks to Hire Farlie Turner as Investment Banker
TONOPAH SOLAR: Appeal vs Brahma Dismissed Due to Bankruptcy Filing
TRIVASCULAR SALES: Court Confirms Third Amended Joint Plan
TSC DORSEY: Settlement with AN&J Family Trust Approved
USG CORP: Court Tosses Former Stockholders' Suit
VELOCITY MANUFACTURING: Files for Chapter 7 Bankruptcy
VERDICORP INC: Unsecureds Will Get Share of Sale Proceeds
VIP CINEMA: Court Approves Procedures for Dismissal
VIVUS INC: Equity Committee Taps Morris Nichols as Legal Counsel
VIVUS INC: Equity Committee Taps Teneo Capital as Financial Advisor
WATSON GRINDING: January 24 Claimants Committee Propose Plan
WATSON GRINDING: Majority Owner Submits Liquidating Plan
WATSON GRINDING: Watson Valve Trustee Objects to Committee Plan
WPB HOSPITALITY: Unsecureds Payment to Rely on Litigation Proceeds
WSRE GEORGIA: ESRG Buying Atlanta Property for $93K
[*] Hospital Bankruptcy Surge Looms as Virus Rages, Stimulus Lapses
[*] Jones Day: Expanding Safe Harbor for Securities Transactions
[^] BOOK REVIEW: Macy's for Sale
*********
1234 PACIFIC: Court Enters Plan Confirmation Order
--------------------------------------------------
Judge Nancy Hershey Lord on Aug. 25, 2020, entered entered an order
confirming the Chapter 11 plan filed by 1234 Pacific Management
LLC, and on Aug. 31, 2020, entered an amended plan confirmation
order.
Judge Lord ordered that the Confirmation Order of 1234 Pacific
Management LLC is amended to reflect that the exit financing to be
provided by Axos Bank will be in the sum of $4,750,000 (from
$5,000,000), and the equity contributions shall be in the total sum
of $1,250,000 (raised from $500,000). That all other terms and
provisions in the Confirmation Order will remain unchanged.
About 1234 Pacific Management
1234 Pacific Management LLC's sole asset is the property located at
1232-1234 Pacific Street, Brooklyn, New York 11218 (Block 1206, Lot
28). The property consists of 12 one-bedroom residential apartment
units and 24 two-bedroom residential apartment units.
1234 Pacific Management filed a Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 19-40026) on Jan. 3, 2019. In the petition signed
by Isaac Schwartz, managing member, the Debtor disclosed $6,000 in
assets and $4,611,272 in liabilities. Judge Nancy Hershey Lord
oversees the case. KRISS & FEUERSTEIN LLP is the Debtor's counsel.
1234 PACIFIC: Plan of Reorganization Confirmed by Judge
-------------------------------------------------------
Judge Nancy Hershey Lord has entered findings of fact, conclusions
of law and order finally approving the Disclosure Statement and
confirming the Chapter 11 Plan of Reorganization of Debtor 1234
Pacific Management LLC.
The Plan has been proposed in good faith, and is the result of
arm's length negotiations between the Debtor, the First Mortgagee
and the Judgment Creditors.
The Plan satisfies Section 1129(a)(7) of the Bankruptcy Code in
that it was the general agreement among the parties that the
Debtor's Property has a current value of approximately $6.0
million. This is lower than the claims of the First Mortgagee and
Judgment Creditors which potentially exceed $8.0 million. Thus,
absent confirmation of the Plan, there would be no funds to pay
unsecured creditors.
The requirements of Section 1129(a)(8) of the Bankruptcy Code are
satisfied in that three impaired classes of claims (Class 2, Class
3 and Class 4) have voted to accept the Plan. None of the holders
of Class 5 General Unsecured Claims submitted ballots. Nonetheless,
the Plan is being confirmed under 11 U.S.C. Sec. 1129(a) and (b).
A full-text copy of the order dated August 25, 2020, is available
at https://tinyurl.com/y3dzyvlp from PacerMonitor.com at no
charge.
About 1234 Pacific Management
1234 Pacific Management LLC's sole asset is the property located at
1232-1234 Pacific Street, Brooklyn, New York 11218 (Block 1206, Lot
28). The property consists of 12 one-bedroom residential apartment
units and 24 two-bedroom residential apartment units.
1234 Pacific Management filed a Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 19-40026) on Jan. 3, 2019. In the petition
signed by Isaac Schwartz, managing member, the Debtor disclosed
$6,000 in assets and $4,611,272 in liabilities. Judge Nancy
Hershey Lord oversees the case. KRISS & FEUERSTEIN LLP is the
Debtor's counsel.
1420 HOWE: Seeks Approval to Hire JTS Enginnering
-------------------------------------------------
1420 Howe Business Center Rehabilitation LP seeks approval from the
U.S. Bankruptcy Court for the Eastern District of California to
employ JTS Enginnering Consultants, Inc. for the engineering,
surveying and civil engineering design services in conjunction with
the 1420 Howe Avenue project that are conditions for approval for
recordation of an approval tentative parcel map, special use permit
to "shovel ready" status.
The Debtor owns 5.59 acres of commercial land at 1420 Howe Avenue
in Sacramento County consisting of 10 parcel originally an office
condominium project with all but on building currently demolished.
After years of cost and effort, the Debtor received approval of a
tentative parcel map dividing the land into three retail parcels
fronting Howe Avenue and 2 parcels in the rear for an assisted
living facility with an approved special use permit.
The two principals of the Debtor will pay all costs necessary to
both record the Final Parcel Map and have all improvement plans
approved to a "shovel ready" status to facilitate the sales of the
Estate parcels to pay all claims. JTS Engineering will provide the
services essential to meet these requirements.
JTS Engineering will be paid from contributions from the principals
of the Debtor.
JTS Engineering is "disinterested" as defined in section 101(14) of
the Bankruptcy Code, according to court filings.
The firm can be reached through:
Javed T. Siddiqui
JTS Engineering Consultants, Inc.
1808 J Street
Sacramento, CA 95811
Phone: (916) 441-6708
FAX: (916) 441-5336
Email: javed.siddiqui@jtsengineering.com
About 1420 Howe Business Center Rehabilitation
1420 Howe Business Center Rehabilitation LP filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
E.D. Cal. Case No. 20-23543) on July 20, 2020. At the time of the
filing, Debtor had estimated assets of between $10 million and $50
million and liabilities of between $1 million and $10 million.
Judge Fredrick E. Clement oversees the case. James L. Brunello,
Esq., serves as Debtor's counsel.
1924 LUNA'S: Quik Capital Says It Should Be Secured in Plan
-----------------------------------------------------------
Quik Capital, LLC, d/b/a Quikstone Capital Solutions, submitted an
objection to the Amended Joint Disclosure Statement and the Amended
Joint Chapter 11 Plan of Reorganization filed by 1924 Luna's &
Associates and Tres Generaciones Luna's Inc.
According to Quik, the Amended Joint Disclosure Statement, and
Amended Joint Plan fail to treat Quik as a secured creditor, and
fail to explain why Quik is not being treated as a secured creditor
of debtor Tres. Further, the Amended Joint Disclosure Statement
and Amended Joint Plan fail to adequately describe the proposed
treatment of Quik, and do not adequately provide information as to
how the Debtors intend to address their contractual obligations to
Quik, which is a secured creditor of Debtor Tres.
Quik points out that instead of properly treating Quik's claim as
secured, the Debtors propose treatment of Quik's secured claim as a
Class 8 unsecured claim, without the debtors having filed any
objection to Quik's secured claim, or alternatively, without
explaining in the Amended Joint Disclosure Statement and Amended
Joint Plan, why Quikts secured claim is not being given the
appropriate classification and treatment as a secured creditor of
Debtor Tres.
Quik complains that on page 4 of both the Debtors' Motion to Use
Cash Collateral and the Debtors' Amended Motions to Use Cash
Collateral, the Debtors state that Quik is one of their secured
creditors, and further state that the Debtors will provide secured
creditors with replacement liens, which the Debtors have failed to
do in their Amended Joint Disclosure Statement and Amended Joint
Plan. Again, the Debtors fail to state any reasons why they have
not done what they promised.
Quik asserts that the Debtors' Amended Joint Disclosure Statement
and Amended Joint Plan do not provide for treatment of Quik's claim
as a secured creditor, or for full repayment to Quik's of its claim
based on its secured interest in all future MasterCard and Visa
receivables of Debtor Tres.
According to Quik, the UCC filed by Frost Bank is only as to Debtor
1924. Frost has not filed any UCC as to Debtor Tres. Therefore,
Quik has a valid, enforceable security interest in and lien on all
future MasterCard and Visa receivables of Debtor Tres, as is
further set out in the proof of claim filed by Quik on 10-22-2019
and the documents attached thereto (claim #2 of Tres's
Bankruptcy).
Quik points out that because the Amended Joint Disclosure Statement
and Amended Joint Plain fail to properly provide for treatment of
and payment of Quik's claim as a secured creditor, the Amended
Joint Plan is not feasible and cannot be confirmed.
Attorneys for Quik Capital:
Sharon E. Grass
HOFFMEYER & GRASS, INC.
112 S. Bryan-Beltline
Mesquite, Texas 75149
Tel: (972) 285-0391
Fax: (972) 285-0398
E-mail: hoffgrass@aol.com
About 1924 Luna's & Associates
1924 Luna's & Associates Inc., is a privately held company which
operates a tortilla factory in Dallas, Texas. 1924 Luna's sought
Chapter 11 protection (Bankr. N.D. Tex. Case No. 19-32637) on Aug.
5, 2019. In the petition signed by Fernando Luna, president, the
Debtor's total assets have estimated value of up to $50,000, while
its liabilities are estimated between $1 million and $10 million.
Tres Generaciones Luna, Inc., is a privately held company in the
Mexican restaurant business. It filed for protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-32638) on
Aug. 5, 2019. In the petition signed by Fernando Luna, president,
the Debtor estimated assets not exceeding $50,000, and liabilities
ranging between $1 million and $10 million.
Judge Stacey G. Jernigan is the case judge. Eric A. Liepins, P.C.,
is the Debtors' counsel.
203-205 NORTH: Objects to Secured Creditors' Disclosure Statement
-----------------------------------------------------------------
Debtor 203-205 North 8th Street Loft, LLC, objects to approval of
the disclosure statement filed by Secured Creditors 203-205 N 8th
Street LLC & North 8th Investor LLC.
The Debtor claims that Secured Creditor's disclosure statement
fails to discuss the consequences of several appeals in the
prepetition foreclosure action filed by the Debtor. If the Debtor
is successful in the appeals, Secured Creditor’s claim will be
substantially reduced which will affect the liquidation analysis
and also the distribution to creditors in the event of a sale.
The Debtor asserts that the Debtor filed this case on February 6,
2020. Since the filing, the state court receiver has continued in
possession and management of the Property. The disclosure statement
should contain the receiver's reports as well as a summary of
post-petition operations.
The Debtor points out that the disclosure statement discusses the
potential tax implications for creditors, but does not discuss the
tax implications of a sale on the Debtor including whether the
Debtor would incur any capital gains tax from the sale. Such taxes
would affect the administrative claims in the case.
Should the Secured Creditor file a disclosure statement that does
contain adequate information, the Debtor intends to object to
confirmation of the plan. The Debtor submits that the plan is
nothing more than an attempt to circumvent the state court
appellate process with no real benefit to any party other than
Secured Creditors.
A full-text copy of the Debtor's objection dated August 25, 2020,
is available at https://tinyurl.com/yymm4wp6 from PacerMonitor.com
at no charge.
Attorneys for Debtor:
ROSENBERG, MUSSO & WEINER, LLP
Bruce Weiner
26 Court Street, Suite 2211
Brooklyn, New York 11242
Tel: (718) 855-6840
About 203-205 North 8th Street Loft
On Feb. 6, 2020, 203-205 North 8th Street Loft, LLC, filed a
petition for Chapter 11 bankruptcy relief (Bankr. E.D.N.Y. Case No.
20-40793), which was executed by Johnathan Rubin, as President of
the Debtor. The Debtor was estimated to have less than $1 million
in assets and liabilities. The Debtor is represented by KRISS &
FEUERSTEIN LLP.
211 LLC: Seeks to Hire Belleh Law Group as Counsel
--------------------------------------------------
211, LLC, seeks authority from the U.S. Bankruptcy Court for the
Southern District of Florida to employ The Belleh Law Group,
P.L.L.C., as counsel to the Debtor.
211, LLC requires Belleh Law Group to:
a) render legal advice with respect to the Debtor's powers and
duties as a debtor in possession, the continued operation
of the Debtor's business;
b) prepare on behalf of the Debtor necessary motions,
applications, orders, reports, pleadings, and other legal
papers;
c) appear before this Court, any appellate courts, and the
U.S. Trustee to represent and protect the interests of the
Debtor;
d) take all necessary legal steps to confirm a plan of
reorganization;
e) represent the Debtor in all adversary proceedings,
contested matters, and matters involving administration of
this case, both in federal and in state courts;
f) represent the Debtor in negotiations with potential
financing sources and preparing contracts, security
instruments, or other documents necessary to obtain
financing; and
g) perform all other legal services that may be necessary for
the proper preservation and administration of this chapter
11 case.
Belleh Law Group will be paid based upon its normal and usual
hourly billing rates. The firm will also be reimbursed for
reasonable out-of-pocket expenses incurred.
Owei Z. Belleh, partner of The Belleh Law Group, P.L.L.C., 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.
Belleh Law Group can be reached at:
Owei Z. Belleh, Esq.
THE BELLEH LAW GROUP, PLLC
150 S. Pine Island Rd # 300
Plantation, FL 33324
Tel: (888) 450-7999
E-mail: owei@bellehlaw.com
About 211, LLC
211, LLC, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Fla. Case No. 20-18952) on Aug. 20, 2020. At the time
of the filing, Debtor had estimated assets of less than $50,000 and
liabilities of less than $50,000. Judge Peter D. Russin oversees
the case. The Belleh Law Group, PLLC serves as the Debtor's legal
counsel.
33 VALLEY LLC: Hires Hilco as Real Estate Broker
------------------------------------------------
33 Valley, LLC, seeks authority from the U.S. Bankruptcy Court for
the Central District of California to employ Hilco Real Estate,
LLC, as real estate broker to the Debtor.
33 Valley, LLC requires Hilco to market and sell the Debtor's real
property located at 14533 Valley Vista Boulevard, Sherman Oaks,
California 91403.
Hilco will be paid a commission of 5% of the sales price.
Hilco will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Jeffrey D. Azuse, senior vice president of Hilco Real Estate, LLC,
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.
Hilco can be reached at:
Jeffrey D. Azuse
HILCO REAL ESTATE, LLC
5 Revere Drive, Suite 320
Northbrook, IL 60062
Tel: (847) 418-2703
Fax: (847) 897-0826
E-mail: jazuse@hilcoglobal.com
About 33 Valley LLC
33 Valley, LLC is a privately held company whose principal assets
are located at 14533 Valley Vista Blvd., Sherman Oaks, Calif.
33 Valley sought Chapter 11 protection (Bankr. C.D. Cal. Case No.
20-10969) on May 26, 2020. At the time of the filing, the Debtor
was estimated to have assets of $1 million to $10 million and
liabilities of the same range. Judge Deborah J. Saltzman oversees
the case. The Debtor has tapped the Law Offices of Raymond H. Aver
as its legal counsel.
5019 PARTNERS: BNYM Says Plan Can't Be Confirmed
------------------------------------------------
The Bank of New York Mellon f/k/a The Bank of New York, as Trustee
and its successors and/or assignees, ("BNYM"), submitted objections
to Disclosure Statement and Confirmation of the Chapter 11
Disclosure Statement and Plan proposed by 5019 Partners, LLC.
BNYM objects to the Plan. It asserts that the Plan cannot be
confirmed in accordance with 11 U.S.C. Sec. 1129. Furthermore, it
notes that the Property is not necessary for an effective
reorganization because Debtor cannot reorganize and discharge the
underlying debt pursuant to 11 U.S.C. §1123(b)(5).
BNYM asserts that:
* The case violates 11 U.S.C. Sec. 524(e). The Debtor's filing
raises issues as to the issuance of a discharge and the effect of
the liability on the non-debtor borrower as to BNYM's Deed of Trust
in direct contravention to 11 U.S.C. Sec. 524.
* The Debtor seeks reorganization for improper purposes. Here,
several bad faith factors are applicable to this case. The property
was transferred to Debtor for no consideration. The Grant Deed
indicates that the consideration was less than $100 for a property
with a loan that originated in the amount of $1,000,000.
* The proposed treatment is vague. While the Plan indicates that
the property will be valued and the new loan paid at 3.25%, it does
not indicate the term of the loan.
* The plan fails to provide for treatment of real property taxes
and insurance.
Attorney for Secured Creditor the Bank of New York Mellon fka
The Bank of New York, as Trustee
For The Certificateholders of CWALT,
Inc. Alternative Loan Trust 2006-OA9,
Mortgage Pass-Through Certificates,
Series 2006-OA9, its successors and/
or assignees:
Kristin A. Zilberstein, Esq. (SBN 200041)
5501 LBJ Freeway, Suite 925
Dallas, Texas 75240
Tel: (850) 422-2520 Office, Ext. 7130
Cell: (858) 204-3449
Fax: (850) 422-2567
E-mail: Kris.Zilberstein@Padgettlawgroup.com
About 5019 Partners
5019 Partners, LLC, is a privately held company engaged in
activities related to real estate. 5019 Partners owns a single
family residential rental property in Encino, CA, having a current
value of $700,000, based on actual condition of the property.
The Company previously sought bankruptcy protection on May 22, 2008
(Bankr. C.D. Cal. Case No. 08-13370).
5019 Partners, LLC, based in Encino, CA, filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-10320) on Feb. 11, 2020. In
the petition signed by Tyler Murphy, managing member, the Debtor
disclosed $700,900 in assets and $1,035,236 in liabilities. The
Hon. Martin R. Barash is the presiding judge. Dana M. Douglas,
Esq., serves as bankruptcy counsel to the Debtor.
5019 PARTNERS: Seeks to Hire GA Appraisals as Appraiser
-------------------------------------------------------
5019 Partners, LLC seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire GA Appraisals, Inc.
as its appraiser.
The firm will advise the Debtor as to the value of the real
property located at 5019 Genesta Avenue in Encino, Calif., relating
to the Chapter 11 proceeding by evaluating the attributes and
amenities of the property, determining the overall condition of the
property and its attributes and amenities as to how these impact
the quality and value of the property, and evaluating the property
as compared to other similar-condition and quality properties and
sales thereof.
The firm will receive an appraisal fee in the amount of $1,000.
Glen A. Kangas, a residential property appraiser at GA Appraisals,
disclosed in court filings that his firm does not hold any interest
materially adverse to the Debtor, and is a "disinterested person"
as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Glen A. Kangas
5019 Partners, LLC
244 N Myrtle Ave
Monrovia, CA 91016
Telephone: (626) 803-4593
Email: gaappraisalsinc@gmail.com
About 5019 Partners
5019 Partners, LLC, is a privately held company engaged in
activities related to real estate. 5019 Partners owns a single
family residential rental property in Encino, CA, having a current
value of $700,000, based on actual condition of the property.
The Company previously sought bankruptcy protection on May 22, 2008
(Bankr. C.D. Cal. Case No. 08-13370).
5019 Partners, LLC, based in Encino, CA, filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-10320) on Feb. 11, 2020. In
the petition signed by Tyler Murphy, managing member, the Debtor
disclosed $700,900 in assets and $1,035,236 in liabilities.
The Hon. Martin R. Barash is the presiding judge.
Dana M. Douglas, Esq., serves as bankruptcy counsel to the Debtor.
5019 PARTNERS: Unsecureds Owed $1.49M to Split $30K in Plan
-----------------------------------------------------------
5019 Partners, LLC submitted a Plan and a Disclosure Statement.
Class 1a Secured Claim of BONY is impaired. Claim of the creditor
is secured by debtor's real property -- 5019 Genesta Ave., Encino
91316, having a collateral value $700,000. The first mortgage
originally $1,000,000, now $1,859,269.46 (per proof of claim 2)
HELOC originally $350,000. The creditor will be paid $4,214
monthly beginning on the Effective Date through term.
Class 1b Formerly Secured Claim of Koll/Per Calabasas LLC is
impaired. The Debtor proposes strip the Koll/Per Calabasas LLC,
which is a judicial lien arising out of a matter to which Debtor is
not a party. The unsecured claim will be paid pro rata with
general unsecured claims (class 3) in the plan.
Class 3 General unsecured claims totaling $1,486,867. Unsecured
creditors will be paid $500 monthly beginning on the Effective
Date. The total payout is 0.22% or $30,000.
The Plan will be funded by Debtor's rental income and principal
contributions.
A full-text copy of the Disclosure Statement dated August 31, 2020,
is available at https://tinyurl.com/y2ga5wfx from PacerMonitor.com
at no charge.
Attorney for 5019 Partners, LLC:
Dana M. Douglas (SBN 220053)
Attorney at Law
11024 Balboa Blvd., No. 431
Granada Hills, CA 91344
MAILING ADDRESS:
4712 Admiralty Way #1001
Marina del Rey, CA 90292
818-360-8295 Telephone
530-273-3702 Facsimile
dana@danamdouglaslaw.com
About 5019 Partners
5019 Partners, LLC, is a privately held company engaged in
activities related to real estate. 5019 Partners owns a single
family residential rental property in Encino, CA, having a current
value of $700,000, based on actual condition of the property.
The Company previously sought bankruptcy protection on May 22, 2008
(Bankr. C.D. Cal. Case No. 08-13370).
5019 Partners, LLC, based in Encino, CA, filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-10320) on Feb. 11, 2020. In
the petition signed by Tyler Murphy, managing member, the Debtor
disclosed $700,900 in assets and $1,035,236 in liabilities. The
Hon. Martin R. Barash is the presiding judge. Dana M. Douglas,
Esq., serves as bankruptcy counsel to the Debtor.
7 HILLS INC: Has Nov. 2 Deadline to File Plan and Disclosures
-------------------------------------------------------------
7 Hills, Inc., sought and obtained an order extending by 60 days
until Nov. 2, 2020, its deadline to file an Amended Disclosure
Statement and Amended Plan of Reorganization.
In seeking an extension, the Debtor explained that just as the
Debtor had opened one of its gas stations/convenience stores and
was about to open the other, the coronavirus epidemic occurred and
southwest Virginia currently experiences economic conditions that
are completely unpredictable. While all of its businesses are
currently open and operating, the economic slowdown resulting from
the coronavirus has put them in a position where they can afford to
pay operating expenses but no more. The Debtor is current with its
insurance premium obligations, payroll and payroll taxes, and
post-petition bills. In addition to light customer traffic however,
the Debtor is also subject to intermittent and inconsistent supply
from its food and beer suppliers.
The Court's order provides that should the Debtor fail to file its
Amended Disclosure Statement and Amended Plan of Reorganization on
or before Nov. 2, 2020, the Debtor is directed to appear before the
Court on Nov. 23, 2020 at 9:30 a.m. to show cause why this case
should not be converted or dismissed.
About 7 Hills Inc.
7 Hills, Inc., based in Shawsville, VA, filed a Chapter 11
bankruptcy petition (Bankr. W.D. Va. Case No. 19-70804) on June 12,
2019. In the petition signed by Rajendra Patel, president, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. The Hon. Paul M. Black oversees the case.
Andrew S. Goldstein, Esq., at Magee Goldstein Lasky & Sayers, P.C.,
serves as bankruptcy counsel to the Debtor.
ABA THERAPY: Unsecureds Owed $575K to Get $1,000 Per Quarter
------------------------------------------------------------
ABA Therapy Solutions, LLC, submitted a Plan and a Disclosure
Statement.
The Debtor believes that the risk of non-payment of the percentage
distribution to the unsecured creditors in the Chapter 11 is
greatly outweighed by the more substantial risk of non-payment
should this Bankruptcy be converted to a Chapter 7 Liquidation,
wherein the unsecured creditors would receive a distribution of
0%.
Class One (On Deck Capital, Inc.) is impaired. On Deck Capital's
claim in the amount of $150,579 (Claim #1) is secured by various
business assets. The Debtor will pay this claim with an interest
rate of 5.25% over 60 months and a monthly payment of $2,859 per
month.
Class Three (Ibex Funding Group, LLC) is impaired. Ibex Funding
Group's claim in the amount of $28,500 (Claim #10) is secured by
various business assets. The Debtor shall pay this claim with an
interest rate of 5.25% over 60 months and a monthly payment of
$541.10.
Class Four (TD Bank, N.A.) is impaired. TD Bank's claim in the
amount of $150,915 (Claim #11) is secured by various business
assets. The Debtor will pay this claim at the contract interest
rate of 5% over 60 months and a monthly payment of $2,848.
Class Five (EBF Partners, LLC) is impaired. EBF Partners' claim in
the amount of $40,092.50 (Claim #12) is secured by various business
assets. The claim will be paid at an interest rate of 5.25% over
60 months and a monthly payment of $761.20.
Class Six (WG Fund, LLC) is impaired. WG Fund's claim in the
amount of $46,168 (Claim #13) is secured by various business assets
secured by various business assets. The claim will be paid at an
interest rate of 5.25% over 60 months and a monthly payment of
$876.54.
Class Seven (Complete Business Solutions Group, Inc.) is impaired.
Complete Business Solution Group, Inc.'s claim in the amount of
$90,650 (Claim #14) is secured by various business assets. The
claim will be paid at an interest rate of 5.25% over 60 months and
a monthly payment of $1,721.
Class Eight (Forward Financing, LLC) is impaired. Forward
Financing's claim in the amount of $97,437.40 (Claim #15) is
secured by various business assets. The claim shall be paid at an
interest rate of 5.25% over 60 months and a monthly payment of
$1,850.
Class Ten (General Unsecured Claims) are impaired. The general
unsecured claims (prior to the filing of any objections) total the
amount of $575,347, which will be paid over the five-year term of
the Plan at the rate of $1,000 per quarter on a pro-rata basis.
The payments will commence on the Effective Date of the Plan.
Class Eleven (Equity Shareholders) are impaired. There will be no
distribution to the equity holders, Linda Peirce and Gary Peirce
under the confirmed Plan and no dividends to this class of
claimants.
The Debtor's primary source of revenue is payment from its clients'
various third party insurance companies.
A full-text copy of the Disclosure Statement dated August 31, 2020,
is available at https://tinyurl.com/y5q8sj7j from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Dana Kaplan, Esquire
KELLEY, FULTON & KAPLAN, P.L.
1665 Palm Beach Lakes Blvd.
The Forum - Suite 1000
West Palm Beach, Florida 33401
Telephone: (561) 491-1200
Facsimile: (561) 684-3773
About ABA Therapy Solutions
Founded in 2012 by Linda Peirce, ABA Therapy Solutions provides
in-home and clinic services covering language, behavioral,
self-help skills and social skills for individuals with autism
spectrum disorders, down syndrome and other developmental
disabilities.
ABA Therapy Solutions filed a voluntary Chapter 11 petition (Bankr
S.D. Fla. Lead Case No. 20-10208) on Jan. 7, 2020. In the petition
signed by Linda Peirce, managing member, the Debtor disclosed
$157,637 in assets and $1,342,155 in liabilities.
Judge Erik P. Kimball oversees the case.
The Debtor tapped Kelley Fulton & Kaplan, P.L. as its legal
counsel, and Jessica J. Sumner, EA, LLC as its accountant.
ACCESSORAMA LLC: Hires G.R. Reid Associates as Accountant
---------------------------------------------------------
Accessorama, LLC, seeks authority from the U.S. Bankruptcy Court
for the Southern District of Florida to employ G.R. Reid
Associates, LLP, as accountant to the Debtor.
Accessorama, LLC requires G.R. Reid Associates to:
(a) give advice to the Debtor with respect to the Debtor's
powers and duties as a debtor-in-possession and the
continued management of its business operations;
(b) advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the Court;
(c) assist in the preparation and filing of any and all tax
returns and other filings required of the respective
taxing authorities; and
(d) protect the interest of the Debtor in all matters pending
before the Court.
G.R. Reid Associates will be paid at these hourly rates:
Partners $350
Staffs $150
G.R. Reid Associates will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Richard A. Mills, partner of G.R. Reid Associates, LLP, 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.
G.R. Reid Associates can be reached at:
Richard A. Mills
G.R. REID ASSOCIATES, LLP
1515 North Federal Highway, Suite 404
Boca Raton, FL 33432
Tel: (561) 544-7050
About Accessorama, LLC
Accessorama, LLC, sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-19840) on Sept.
10, 2020. At the time of the filing, Debtor had estimated assets of
between $100,001 and $500,000 and liabilities of between $500,001
and $1 million. Behar Gutt & Glazer, P.A. serves as Debtor's legal
counsel.
ALDRICH PUMP: Asbestos Claimants Rep Taps Grier Wright as Counsel
-----------------------------------------------------------------
Joseph W. Grier, III, the duly appointed legal representative for
future asbestos claimants in the Chapter 11 cases of Aldrich Pump
LLC and its affiliates, received approval from the U.S. Bankruptcy
Court for the Western District of North Carolina to hire Grier
Wright Martinez, PA as his legal counsel.
The firm will provide the following services:
a. advise and consult with respect to Mr. Grier's powers and
duties;
b. prepare legal papers;
c. appear before the court in the Chapter 11 proceedings;
d. advise, assist and represent Mr. Grier regarding all
aspects of any Chapter 11 plan(s);
e. represent and advise Mr. Grier with respect to any
contested matter, adversary proceeding, lawsuit or other
proceeding; and
f. provide legal advice and perform legal services in
connection with the Debtors' case.
Grier Wright's billing rates range from $600 to $350 per hour for
partners, $360 to $225 for associates, and $175 for
paraprofessionals. The current hourly rates of the attorneys and
paraprofessionals likely to work on the matter are as follows:
Joseph W. Grier, III Member $600
A. Cotten Wright Member $400
Michael L. Martinez Member $350
Anna S. Gorman Staff Attorney $360
Abigail W. Henderson Associate $225
Brittany L. Franklin Paralegal $175
A. Cotten Wright, a member at Grier Wright, disclosed in court
filings that the firm is a "disinterested person" under the meaning
of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
A. Cotten Wright, Esq.
GRIER WRIGHT MARTINEZ, PA
521 E. Morehead Street, Suite 440
Charlotte, NC 28202
Telephone: (704) 375-3720
Email: cwrightr@grierlaw.com
About Aldrich Pump
Aldrich Pump LLC and Murray Boiler LLC are subsidiaries of Trane
Technologies, a publicly traded company. Trane Technologies is a
global climate innovator that brings efficient and sustainable
climate solutions to buildings, homes, and transportation. The
North American headquarters of Trane Technologies, as well as the
Debtors, are located in Davidson, North Carolina.
Aldrich Pump and Murray Boiler sought Chapter 11 protection (Bankr.
W.D.N.C. Lead Case No. 20-30608) on June 18, 2020. The Hon. Craig
J. Whitley oversees the case.
In the petition signed by Allan Tananbaum, chief legal officer, the
Debtor was estimated to have $100 million to $500 million in both
assets and liabilities.
The Debtors tapped Rayburn Cooper & Durham, P.A. and Jones Day as
legal counsel; Bates White, LLC, Evert Weathersby Houff, and K&L
Gates, LLP as special counsel; AlixPartners, LLP as financial
advisor; and Kurtzman Carson Consultants, LLC as claims and
noticing agent.
The Office of the U.S. Trustee appointed a committee of asbestos
personal injury claimants. The committee tapped Robinson & Cole,
LLP and Caplin & Drysdale, Chartered as its bankruptcy counsel. The
Committee also selected FTI as its financial advisor.
ALDRICH PUMP: Asbestos Claimants Rep Taps Orrick as Legal Counsel
-----------------------------------------------------------------
Joseph W. Grier, III, the court-appointed legal representative for
future asbestos claimants in the Chapter 11 cases of Aldrich Pump
LLC and its affiliates, received approval from the U.S. Bankruptcy
Court for the Western District of North Carolina to hire Orrick,
Herrington & Sutcliffe LLP as his legal counsel.
The firm will render the following services:
- provide legal advice and representation with respect to Mr.
Grier's powers and duties;
- prepare legal papers;
- appear before the court;
- represent and advise Mr. Grier with respect to any contested
matter, adversary proceeding, lawsuit or other proceeding;
- represent and advise Mr. Grier with respect to any plan or
plans of reorganization; and
- perform all other necessary legal services.
Orrick Herrington's current hourly rates range from $925 to $1,575
for partners, $895 to $1,325 for of counsel and other senior
lawyers, $350 to $915 for associates, and $215 to $435 for
paralegals. The current hourly rates of the professionals likely to
work on the matter are as follows:
Jonathan P. Guy, Senior Counsel $1,055
Debra L. Felder, Senior Associate $890
Lisa Temple, Senior Paralegal $345
Jonathan P. Guy, Esq., at Orrick Herrington, disclosed in court
filings that the firm is a "disinterested person" under the meaning
of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jonathan P. Guy, Esq.
Orrick, Herrington & Sutcliffe LLP
1152 15th Street, NW
Washington, D.C. 20005
Telephone: (202) 339-8516
Email: jguy@orrick.com
About Aldrich Pump
Aldrich Pump LLC and Murray Boiler LLC are subsidiaries of Trane
Technologies, a publicly traded company. Trane Technologies is a
global climate innovator that brings efficient and sustainable
climate solutions to buildings, homes, and transportation. The
North American headquarters of Trane Technologies, as well as the
Debtors, are located in Davidson, North Carolina.
Aldrich Pump and Murray Boiler sought Chapter 11 protection (Bankr.
W.D.N.C. Lead Case No. 20-30608) on June 18, 2020. The Hon. Craig
J. Whitley oversees the case.
In the petition signed by Allan Tananbaum, chief legal officer, the
Debtor was estimated to have $100 million to $500 million in both
assets and liabilities.
The Debtors tapped Rayburn Cooper & Durham, P.A. and Jones Day as
legal counsel; Bates White, LLC, Evert Weathersby Houff, and K&L
Gates, LLP as special counsel; AlixPartners, LLP as financial
advisor; and Kurtzman Carson Consultants, LLC as claims and
noticing agent.
The Office of the U.S. Trustee appointed a committee of asbestos
personal injury claimants. The committee tapped Robinson & Cole,
LLP and Caplin & Drysdale, Chartered as its bankruptcy counsel. The
Committee also selected FTI as its financial advisor.
ALVIN ESCUE: Kizer, Bonds Represents Simmons Bank, Leaders Credit
-----------------------------------------------------------------
In the Chapter 11 cases of Alvin Escue and Phyllis Escue, PLLC the
law firm of Kizer, Bonds, Hughes & Bowen, PLLC provided notice
under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to
disclose that it is representing the following creditors:
Simmons Bank
P.O. Box 733
Union City, TN 38281
Leaders Credit Union
214 Oil Well Road
Jackson, TN 38305
The Firm can be reached at:
Kizer, Bonds, Hughes & Bowen, PLLC
Stephen L. Hughes, Esq.
P. O. Box 320
Milan, TN 38358
Tel: (731) 686-1198
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/2G9nKkl
The Chapter 11 case is In re Alvin Escue and Phyllis Escue (Banks.
W.D. Tex. Case No. 20-11294).
APPVION INC: Court Junks Halperin, Davis Suit vs Richards et al.
----------------------------------------------------------------
District Judge William C. Griesbach granted the Defendants' motion
to dismiss the case captioned ALAN D. HALPERIN and EUGENE I.
DAVIS, Plaintiffs, v. MARK R. RICHARDS, et al., Defendants, Case
No. 19-C-1561 (E.D. Wis.).
In late 2001, the employees of Appvion, Inc. contributed nearly
$107 million from their 401(k) retirement accounts to an employee
stock ownership plan (ESOP), which was used to purchase all of the
common stock of Paperweight Development Corporation (PDC). PDC then
used the employee contributions, along with other financing, to
purchase Appvion from its parent company, Arjo Wiggins Appleton. On
Oct. 1, 2017, some 16 years later, Appvion filed voluntary
petitions for relief under Chapter 11. Under the Chapter 11 Plan of
Liquidation, the Plaintiffs were given authority to pursue certain
causes of action on behalf of the estate. The Plaintiffs commenced
an adversary proceeding in the U.S. Bankruptcy Court for the
District of Delaware on Nov. 30, 2018, for the benefit of certain
Appvion creditors, against a number of former Directors and
Officers of Appvion Inc.; Argent Trust Company, which served as the
trustee of the ESOP from 2014 to 2017; and Stout Risius Ross, Inc.
and Stout Risius Ross, LLC (Stout), which provided stock valuations
from 2014 to 2017.
The complaint alleged that the Director and Officer Defendants
breached their fiduciary duties (Counts I through III); that the
ESOP Committee Members, Argent, and Stout aided and abetted the
Director and Officer Defendants in breaching their fiduciary duties
(Counts IV through VI); and that certain Director and Officer
Defendants received illegal dividends in violation of Delaware
state law (Counts VII and VIII). The complaint also asserted
avoidance actions against certain Director and Officer Defendants,
Stout, and Argent (Counts IX through XVIII). The Plaintiffs filed a
first amended complaint on Feb. 19, 2019. On March 19, 2019, the
Director and Officer Defendants and Argent filed motions to
dismiss. The Plaintiffs filed a Second Amended Complaint and then a
Revised Second Amended Complaint. The parties stipulated that the
motions to dismiss had equal applicability to the Revised Second
Amended Complaint. On Oct. 23, 2019, the U.S. Bankruptcy Court for
the District of Delaware ordered that the venue of Counts I through
VIII be transferred to the district court.
The defendants filed a motion to dismiss. The defendants asserted
that the Plaintiffs' state law claims are preempted by the Employee
Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. section
1001, et seq. The purpose of ERISA preemption is to ensure
uniformity of benefit law and protect the interests of plan
beneficiaries. ERISA has two distinct preemption provisions:
complete preemption under ERISA section 502 and conflict
pre-emption under ERISA section 514. The parties agreed that claims
in this case raise questions concerning conflict preemption.
The Director and Officer Defendants assert that ERISA preempts the
Plaintiffs' claims against them because those claims relate to and
depend on the Appvion ESOP, which is an ERISA-governed plan. The
Plaintiffs asserted that they are pleading their claims based on
the corporate fiduciary duties owed by directors and officers to
their companies in general, not on the Director and Officer
Defendants' ERISA-based fiduciary duties. Citing Barry v. Trustees
of the International Association Full-Time Salaried Officers and
Employees of Outside Local Unions and District Counsel's (Iron
Workers) Pension Plan, 404 F.Supp.2d 145, 151 (D.D.C. 2005),
Plaintiffs asserted that, because ERISA acknowledges "that
individuals may be both ERISA plan fiduciaries and officers or
other employees in a corporation," their separate fiduciary
obligations imposed under ERISA are irrelevant to Plaintiffs'
claims of breaches of corporate fiduciary duties. Recognizing that
not every business decision of an individual who is both a plan
administrator and an employer will implicate the individual's ERISA
fiduciary obligations, ERISA imposes fiduciary obligations only
when an individual "exercises any discretionary authority or
discretionary control respecting management of such plan or
exercises any authority or control respecting management or
disposition of its assets."
In this case, the Plaintiffs' allegations relate to the Director
and Officer Defendants' management or administration of the ESOP
and the alleged breaches of their ERISA-governed fiduciary duties
and obligations. The Plaintiffs alleged that the Director and
Officer Defendants "artificially and materially inflated" the value
of the PDC stock by intentionally providing inaccurate information
to the ESOP's valuation firms, they knew that the stock was being
overvalued but did nothing to stop it, and they improperly forgave
intercompany debt and borrowed money from Appvion to fund the
ESOP's repurchase obligations. ERISA imposes specific duties on
ESOP fiduciaries regarding stock valuations and requires that
fiduciaries monitor and fund repurchase obligations as set out in
the plan's governing documents. The Director and Officer
Defendants' duties are not independent of ERISA, as they are based
on obligations under the ESOP, an ERISA-governed plan, and would
not exist absent the plan. The Plaintiffs' claims are grounded in
the Director and Officer Defendants' ERISA-related duties, not
their general corporate duties, and "relate to" the ESOP.
Therefore, ERISA preempts Plaintiffs' claims against the Director
and Officer Defendants.
Argent and Stout asserted that the aiding and abetting claims
against them also "relate to" the ESOP and are thus preempted by
ERISA because the Plaintiffs' claims are based on their performance
of their plan-related duties. The Plaintiffs claimed that Argent
and Stout aided and abetted the Director and Officer Defendants'
breaches of fiduciary duties. The Plaintiffs' claims against Argent
and Stout are premised on the existence of the ERISA plan and
relate to the plan's administration. In their complaint, the
Plaintiffs challenge Argent's conduct in discharging its duties as
the ESOP Trustee in determining the fair market value of PDC's
common stock. Argent's duties as the ESOP Trustee are governed by
ERISA and are central to the plan's administration. Argent engaged
Stout as an independent appraiser to prepare fair market value
determinations of the plan's stock holdings, an ERISA plan-required
function that was crucial to the ESOP's administration. The
Plaintiffs' claims of aiding and abetting, at their cores, are
premised on errors in administering an ERISA plan. According to
Judge Griesbach, because the Plaintiffs' claims against Argent and
Stout are predicated on conduct governed by ERISA, those claims are
preempted and must be dismissed.
A copy of the Court's Decision and Order is available at
https://bit.ly/3iMOXH3 from Leagle.com.
About Appvion Inc.
Appvion, Inc. -- http://www.appvion.com/-- produced thermal,
carbonless, security, inkjet, digital specialty, and colored
papers. The Company was the largest manufacturer of direct thermal
paper in North America. Headquartered in Appleton, Wisconsin,
Appvion operated coating and converting plants there and in West
Carrollton, Ohio, and a pulp and paper mill in Roaring Spring,
Pennsylvania. The Company employed approximately 1,400 people and
is 100% employee-owned.
Appvion, Inc., and five affiliated debtors each filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
D. Del. Lead Case No. 17-12082) on Oct. 1, 2017. The cases were
pending before the Honorable Kevin J. Carey.
Appvion Inc. disclosed total assets of $413,430,904 and total
liabilities of $714,758,194 as of Aug. 31, 2017.
DLA Piper served as legal counsel to Appvion, Guggenheim Securities
LLC served as the Company's investment banker, and Alan Holtz of
AlixPartners acted as the Company's Chief Restructuring Officer.
Prime Clerk LLC served as the claims and noticing agent.
On Oct. 11, 2017, Andrew Vara, acting U.S. trustee for Region 3,
appointed an official committee of unsecured creditors. The
Committee retained Lowenstein Sandler LLP, as counsel, Klehr
Harrison Harvey Branzburg LLP, as Delaware co-counsel.
On Dec. 1, 2017, the court appointed Justin R. Alberto as the fee
examiner. He tapped Bayard, P.A., as legal counsel.
On May 14, 2018, the Bankruptcy Court approved the sale of
substantially all of the Debtors' assets to a group of the
Company's lenders led by Franklin Advisers, Inc. The sale was
completed on June 13 that year. Appvion Inc. changed its name to
Oldapco, Inc. following the sale.
On May 23, 2018, the Debtors filed their Combined Plan of
Liquidation and Disclosure Statement. The Debtors' Plan was
confirmed Aug. 14, 2018.
AREU STUDIOS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Areu Studios, LLC
3133 Continental Colony Parkway SW
Atlanta, GA 30331
Business Description: Areu Studios, LLC owns and operates a movie
studio in Atlanta, Georgia.
Chapter 11 Petition Date: October 29, 2020
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 20-71228
Debtor's Counsel: Cameron M. McCord, Esq.
JONES & WALDEN, LLC
699 Piedmont Avenue, NE
Altanta, GA 30308
Tel: 404-564-9300
Email: info@joneswalden.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ozzie Areu, manager.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/CDQHA7A/Areu_Studios_LLC__ganbke-20-71228__0001.0.pdf?mcid=tGE4TAMA
ARTHUR AVERY: Can't Act on Company's Behalf, Court Declares
-----------------------------------------------------------
In the case captioned Arthur Avery, Jr., Plaintiff, v. Avery's Used
Cars & Trucks, Inc., et al., Defendants, Adv. No. 8:18-ap-00127-MGW
(Bankr. M.D. Fla.), Bankruptcy Judge Michael G. Williamson held
that Avery's Used Cars & Trucks is entitled to a final judgment for
declaratory and permanent injunctive relief, as well as an allowed
claim against Arthur Avery Jr.'s estate for $82,073.03. The Court
also held that Arthur Jr. is not entitled to recover from Avery's
Used Cars & Trucks and that his proof of claim should be disallowed
in its entirety.
When Arthur Avery Jr., former president of Avery's Used Cars &
Trucks, made his son, Arthur Avery III, the sole director of his
company 10 years ago, he had no idea he was giving his son the
power to remove him as president. But when the two had a falling
out over the business, that's exactly what the son did.
Things only went downhill from there. Arthur Jr. refused to accept
that he had been removed as president. So Avery's Used Cars &
Trucks was forced to sue for a declaration in state court that
Arthur Jr. had been removed as president; it was also forced to
obtain a preliminary injunction from state court enjoining Arthur
Jr. from acting on the company's behalf, which Arthur Jr. violated.
Arthur Jr. allegedly began competing with the company using a
deceptively similar name: "Avery's Original Used Cars, Trucks &
Buses."
The Court took into consideration whether Avery's Used Cars &
Trucks is entitled to a declaration that Arthur III properly
removed Arthur Jr. as president of the company and a permanent
injunction enjoining Arthur Jr. from acting on behalf of the
company. The Court also considered whether Arthur Jr. is liable to
Avery's Used Cars & Trucks for various trademark violations,
deceptive and unfair trade practices, and fraud for allegedly
competing with Avery's Used Cars & Trucks using a similar name
after he was removed as president, as well as whether he is liable
to Avery's Used Cars & Trucks for misappropriating corporate
assets.
In addition, the Court considered claims that Arthur Jr. brought
against Avery's Used Cars & Trucks and Arthur III -- i.e., whether
Avery's Used Cars & Trucks is liable to Arthur Jr. for improperly
seizing and selling vehicles that Arthur Jr. claims he bought, as
well as for unpaid distributions; and whether Arthur III is liable
to repay Arthur Jr. for money Arthur Jr. gave him to buy a house.
In its count for declaratory relief, Avery's Used Cars & Trucks,
asked the Court to declare that Arthur III properly removed Arthur
Jr. as president of the company, that the amendments to the
Articles of Incorporation that Arthur Jr. filed on April 12, 2017
had no legal effect, and that, because he is no longer president,
Arthur Jr. has no authority to transact business on behalf of
Avery's Used Cars & Trucks.
According to Judge Williamson, it may be true that Arthur Jr.
didn't fully understand the ramifications of naming Arthur III as
the company's sole director. He certainly didn't anticipate that he
was giving Arthur III the sole authority to remove him as president
should a dispute over management of the company arise. But that's,
in fact, what he did. Whether or not he understood the consequences
of what he was doing, the fact is that Arthur Jr. named Arthur III
as the company's sole director in 2008.
As the company's sole director, Arthur III had the authority to
remove Arthur Jr. as president, which he did. Once Arthur Jr. was
removed as president, he no longer had any authority to amend the
Articles of Incorporation or transact business on behalf of Avery's
Used Cars & Trucks. Avery's Used Cars & Trucks is therefore
entitled to a declaration that Arthur Jr. was properly removed as
president of the company, that the amendments to the Articles of
Incorporation that Arthur Jr. filed on April 12, 2017 had no legal
effect, and that, because he is no longer president, Arthur Jr. no
longer has authority to transact business on behalf of Avery's Used
Cars & Trucks.
Judge Williamson also held that Avery's Used Cars & Trucks has met
all the requirements for a permanent injunction. Avery's Used Cars
& Trucks had shown that (1) it has suffered an irreparable injury;
(2) that its remedies at law are inadequate; (3) the balance of
hardships weigh in its favor; and (4) a permanent injunction would
not disserve the public interest.
Most important, it prevailed on its declaratory judgment claim. The
Court has declared that Arthur Jr. was properly removed as
president of the company and no longer has authority to file
documents with the Florida Secretary of State or transact business
on behalf of the company. Moreover, it goes without saying that the
company will be irreparably harmed if Arthur Jr. acts on behalf of
the company without authority. And that harm cannot be remedied
with monetary damages. Arthur Jr., on the other hand, will not be
harmed at all if he is forbidden from doing something he has no
authority to do (i.e., acting on behalf of the company). Finally,
it is in the public interest to prevent Arthur Jr. from acting on
behalf of the company when he has no authority to do so.
Avery's Used Cars & Trucks is therefore entitled to an injunction
permanently enjoining Arthur Jr. from (1) filing any documents with
the Florida Secretary of State on the company's behalf; (2)
conducting business on the company's behalf; (3) entering into
contracts, sales, purchases, and other agreements on the company's
behalf; (4) taking possession of the company's assets; and (5)
using any advertisements or signs identifying Avery's Used Cars &
Trucks.
A full-text copy of the Court's Findings is available at
https://bit.ly/302abKu from Leagle.com.
Arthur B. Avery, Jr., sought Chapter 11 protection (Bankr. M.D.
Fla. Case No. 16-09606) on Nov. 13, 2017. The Debtor tapped Suzy
Tate, Esq., at Suzy Tate, P.A., as counsel.
BAGELS N' CREAM: Trustee Selling Personal Property for $30K
-----------------------------------------------------------
Nancy Isaacson, Subchapter V Trustee of Bagels N' Cream, LLC, asks
the U.S. Bankruptcy Court for the District of New Jersey to
authorize the private sale of personal property to Saygili Project
Development, Inc. for $30,000, subject to higher and better
offers.
A hearing on the Motion is set for Nov. 5, 2020 at 10:00 a.m.
Objections, if any, must be filed no later than seven days prior to
the return date.
On Sept. 21, 2020, A. Atkins Appraisal Corp. inspected and provided
a $14,905 appraisal of the personal property owned by Debtor and
used in its operation.
The Trustee has negotiated an Asset Purchase Agreement with Saygili
for the sale of Personal Property of the Debtor's Estate. She
believes the private sale of the Personal Property to Saygili
pursuant to the APA is in the best interests of the Debtor and the
Estate, as it provides value to the Debtor's Estate and will allow
her to administer the bankruptcy case efficiently and
expeditiously.
While she is prepared to consummate the sale of the Personal
Property to Saygili pursuant to the terms set forth in the Motion
and in the APA, in the event a party other than Saygili wishes to
purchase the Personal Property, the Trustee asks that the Court
approves the following overbid procedures:
a. Each Competing Bidder who wants to participate in the
overbid process must notify the Trustee of his/her intention to do
so in accordance with the Notice on or before the Response
Deadline;
b. the first overbid for the Personal Property by a Competing
Bidder must be at least $2,000 more than the Purchase Price;
c. each Competing Bidder must submit a Cashier’s Check to
the Trustee in the amount of such Competing Bidder's first overbid
at the time such overbid is made;
d. each subsequent overbid for the Personal Property must be
in additional increments of $1,000, unless otherwise agreed by the
parties or directed by the Court;
e. the bidder must purchase the Personal Property under the
same terms and conditions set forth in the APA, other than the
purchase price; and
f. in the event of an overbid that meets the foregoing
conditions, the Trustee will schedule an auction of the Personal
Property in advance of the hearing date and will ask that the Court
approves the winning bidder at the auction as the purchaser at the
hearing on the Motion.
A copy of the APA is available at https://tinyurl.com/y699a9xt from
PacerMonitor at no charge.
About Bagels N' Cream
Bagels N' Cream, LLC filed a Chapter 11 bankruptcy petition (Bankr.
D.N.J. Case No. 19-29019) on Oct. 7, 2019, estimating under $1
million in assets and liabilities. Judge Michael B. Kaplan
oversees the case.
The Debtor hired The Law Offices of Scott E. Kaplan, LLC as
bankruptcy counsel; the Law Offices of Sklar Smith-Sklar as special
counsel; and Anthony Nini, CPA, as accountant.
BARBARA A. WIGLEY: Debt Owed to Lariat Not Dischargeable, BAP Says
------------------------------------------------------------------
In the case captioned Lariat Companies, Inc., Plaintiff-Appellee,
v. Barbara A. Wigley, Defendant-Appellant, No. 18-6027 (BAP),
Debtor Barbara A. Wigley took an appeal from the judgment of the
bankruptcy court excepting from discharge a debt owed to Lariat
Companies, Inc. Upon review, the United States Bankruptcy Appellate
Panel for the Eighth Circuit affirmed the decision.
The Debtor, her spouse and Lariat have been enmeshed in more than a
decade of litigation relating to her spouse's personal guarantee of
a lease of real property from Lariat. One piece of that litigation
resulted in a state court judgment in Lariat's favor holding the
Debtor and her spouse jointly and severally liable for certain
fraudulent transfers from the spouse to the Debtor.
When the Debtor later filed a petition for relief under chapter 11,
Lariat asserted a claim for $1,030,916.74 against the Debtor based
on the state court judgment, and the Debtor objected to Lariat's
claim. The bankruptcy court overruled the Debtor's objection but
found Lariat's claim was for damages resulting from the termination
of a lease of real property -- i.e., the lease the Debtor's spouse
had personally guaranteed -- and was thus subject to 11 U.S.C.
section 502(b)(6)'s cap on such claims. The resulting appeal
culminated in the Eighth Circuit Court of Appeals' determination
that Lariat held a claim against the Debtor for $308,805 plus
applicable interest.
While the Debtor's objection to Lariat's claim was still pending
before the bankruptcy court, Lariat filed a complaint to except its
claim from discharge under 11 U.S.C. section 523(a)(2)(A). The
matter was tried, and the bankruptcy court issued detailed written
findings of fact, rendered an equally detailed oral ruling, and
entered a judgment excepting from discharge the debt owed to
Lariat. The Debtor timely appealed.
In discerning the Debtor's spouse's intent in transferring the
assets to the Debtor, the bankruptcy court considered the 11
"badges of fraud" set forth in MINN. STAT. sections 513.41-513.51
(the Minnesota Uniform Fraudulent Transfer Act):
(1) the transfer or obligation was to an insider;
(2) the debtor retained possession or control of the property
transferred after the transfer;
(3) the transfer or obligation was disclosed or concealed;
(4) before the transfer was made or obligation was incurred,
the debtor had been sued or threatened with suit;
(5) the transfer was of substantially all the debtor's
assets;
(6) the debtor absconded;
(7) the debtor removed or concealed assets;
(8) the value of the consideration received by the debtor was
reasonably equivalent to the value of the asset transferred or the
amount of the obligation incurred;
(9) the debtor was insolvent or became insolvent shortly after
the transfer was made or the obligation was incurred;
(10) the transfer occurred shortly before or shortly after a
substantial debt was incurred; and
(11) the debtor transferred the essential assets of the
business to a lienor that transferred the assets to an insider of
the debtor.
The bankruptcy court was free to consider these and any other
factors it deemed relevant.
The bankruptcy court found seven of these badges (nos. (1), (2),
(3), (4), (8), (9), and (10)) were present in this case. It also
considered other factors, including the spouse's admitted desire to
protect himself, his business, and his family, which the bankruptcy
court said was as close to a direct admission as one gets in a
fraudulent transfer case. And it considered and rejected any
suggestion of a "legitimate supervening purpose" for the transfers.
Based on these predicate findings, the bankruptcy court then found
the spouse transferred the assets to the Debtor with the actual
intent to hinder, delay, or defraud his creditors. The bankruptcy
court's findings regarding this element are supported by the
record.
In discerning the Debtor's intent in receiving the assets from her
spouse, the bankruptcy court looked to the totality of the
circumstances surrounding the transfers.
The bankruptcy court also found the Debtor was aware of the lawsuit
(commenced by Lariat) against her spouse that precipitated the
litigation between and among Lariat, the Debtor's spouse, and the
Debtor that followed over the ensuing years. It found the Debtor
was aware of the financial difficulties her spouse was encountering
at the time the transfers were made. It found the Debtor's
explanation that the transfers were made for estate planning
purposes was belied by her actions following the transfers. And it
found the Debtor's rationale for the transfer of one specific asset
was not credible. Based on these predicate findings, the bankruptcy
court then found the Debtor acted with actual fraudulent intent
when she received the assets from her spouse. The bankruptcy
court's findings regarding this element are also supported by the
record.
With respect to damages, the bankruptcy court found the state court
fraudulent transfer judgment established both the damages Lariat
suffered as a result of the fraudulent transfers and the Debtor's
liability to Lariat for those damages.
The Appellate Panel agreed.
The Panel noted that the Debtor attempted to paint a different
picture of the events surrounding the fraudulent transfers. Among
other things, she distinguished Husky Int'l Elec., Inc. v. Ritz,
which unquestionably involved more egregious conduct on the
debtor's part than shown in this case, but Husky does not suggest a
debtor's conduct must rise (or sink) to the same level to implicate
11 U.S.C. section 523(a)(2)(A). She pointed out the record does not
contain extrinsic evidence of fraud, which is not and has never
been an element of a claim under section 523(a)(2)(A). She took
exception to the bankruptcy court's finding that her spouse
concealed the fraudulent transfers, a finding that was supported by
the record but could be disregarded and still leave six other
badges of fraud to support the bankruptcy court's finding that the
Debtor's spouse transferred the assets to the Debtor with the
actual intent to hinder, delay, or defraud his creditors.
According to the Appellate Panel, the bankruptcy court viewed the
evidence as demonstrating the Debtor and her spouse participated in
a fraudulent conveyance scheme brought within the scope of section
523(a)(2)(A) by Husky. The bankruptcy court's view is certainly
permissible, the Panel said, in light of the entire record. For
that reason alone, even assuming arguendo a contrary view were also
permissible, the Appellate Panel said it could not say the
bankruptcy court's findings of fact were clearly erroneous.
A copy of the Appellate Panel's Ruling is available at
https://bit.ly/2GJgf3y from Leagle.com.
Barbara A. Wigley filed for chapter 11 bankruptcy protection
(Bankr. D. Minn. Case No. 16-43707) on Dec. 19, 2016.
BAY CLUB OF NAPLES: Court Approves Disclosure Statement
-------------------------------------------------------
Judge Caryl E. Delano has entered an order that the Disclosure
Statement of The Bay Club of Naples, LLC and The Bay Club of Naples
II, LLC is approved.
The Court will conduct a hearing on confirmation of the Plan
Proponent's plan of reorganization, including timely filed
objections to confirmation, motions for cramdown, applications for
compensation, and motions for allowance of administrative claims on
November 2, 2020, at 9:30 a.m. in Tampa, FL − Courtroom 9A, Sam
M. Gibbons United States Courthouse, 801 N. Florida Avenue.
The objections to confirmation shall be filed with the Court and
served no later than seven days before the first day of the
Confirmation Hearing.
The Court will conduct a status conference on Oct. 19, 2020, at
2:00 p.m. to discuss the conduct and logistics of the Confirmation
Hearing.
The Plan Proponent must file a ballot tabulation no later than two
days prior to the time set for the first day of the Confirmation
Hearing.
Parties in interest shall submit to the Clerk's office their
written ballot accepting or rejecting the Plan no later than seven
days before the first day of the Confirmation Hearing.
About The Bay Club of Naples
The Bay Club of Naples, LLC is a Naples, Fla.-based company engaged
in the business of real estate development.
The Bay Club of Naples and its affiliate, The Bay Club of Naples
II, LLC, concurrently filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No.
20-05008) on June 29, 2020. Harry M. Zea, manager, signed the
petition. At the time of the filing, each Debtor disclosed
estimated assets of $10 million to $50 million and estimated
liabilities of the same range.
Debtors have tapped Underwood Murray, P.A. as their bankruptcy
counsel. Becker & Poliakoff, P.A. and Genovese Joblove & Battista,
P.A. serve as Debtors' special counsel.
BAY CLUB OF NAPLES: Unsecureds to Be Paid From Sale Proceeds
------------------------------------------------------------
The Bay Club of Naples, LLC and The Bay Club of Naples II, LLC
filed with the U.S. Bankruptcy Court for the Middle District of
Florida, Fort Myers Division, a Joint Amended Disclosure Statement
in support of its Joint Plan of Reorganization on September 22,
2020.
The essential elements of the Plan include, among other things,
sale of the Project (a luxury 8-10 unit residential and lower-level
retail condominium in an optimal location on the Naples Bay in
Florida) and repayment of all creditors' claims in full through the
following courses of action:
* Acquisition and deployment of $12,000,000 million of
debtor-in-possession financing from EFO Financial Group, LLC in
exchange for a priming lien on the largely vacant South Property to
complete development of the Project.
* Acquisition and deployment of additional Plan Sponsor financing
of $5.5 million, 50% of which shall be in exchange for a second
priority lien on the North Property (behind Acres Capital, LLC) and
a third priority Lien on the South Property (behind EFO Financial
Group, LLC and Acres Capital, LLC) to complete the development of
the Project and to fund soft costs and expenses associated with the
Reorganization. The remaining 50% shall be the Plan Sponsor's
additional equity contribution to the Estates;
* Prosecution of the Adversary Proceeding against the Debtors'
primary secured creditor, Acres Capital, LLC, to resolve Acres'
Claim against the Estates and determination of the extent to which
Acres' Allowed Claim should be subordinated to all other
Claimants;
* Distributions to Allowed Secured Claimants in accordance with
the value of their Liens as soon as Economically Justified
following completion of development of the Project and sales of
Project units;
* Distributions to Allowed Unsecured Claimants as soon as
Economically Justified unless otherwise provided in the Plan or as
may be ordered by the Bankruptcy Court; and
* Retention by the Plan Sponsor of its Equity Interests in the
Reorganized Debtors.
In filing their Plan and Disclosure Statement, the Debtors believe
the as-built value of the Project is more than sufficient to pay
Acres' secured claim in full and obtain a meaningful distribution
for creditors. Moreover, Acres' Lien position will be improved by
the Plan and result in the indubitable equivalent of its Allowed
Secured Claim even if the Bankruptcy Court does not reduce that
Claim as a fraudulent transfer, for lender liability, for reasons
of equitable subordination, or otherwise.
To the extent the dispute with Acres proceeds through the State
Court Case, with any reduction in Acres Claim through the Adversary
Proceeding, the distributions and available proceeds will only be
greater. Absent these Bankruptcy Cases, all of that value will be
lost. Acres disagrees with the Debtors' of the history of the
Debtors and recitation of factors precipitating bankruptcy.
The Plan provides that each holder of an allowed general unsecured
claim in Class 5 its pro rata portion of the Net Sale Proceeds
generated by the Reorganized Debtors as soon as Economically
Justified, following the date upon which all Liens and Allowed
Class 1 to 4 Claims are paid. Allowed Class 5 claims will be paid
pro rata with Allowed Class 6 claims solely to the extent Class 6
is not subordinated to all other Classes of Claim.
A full-text copy of the Joint Amended Disclosure Statement dated
Sept. 22, 2020, is available at https://tinyurl.com/y3gx56gq from
PacerMonitor at no charge.
A full-text copy of the Joint Amended Disclosure Statement dated
Sept. 16, 2020, is available at https://tinyurl.com/y4jausol from
PacerMonitor.com at no charge.
Counsel to the Debtors:
Scott A. Underwood
Megan W. Murray
Adam M. Gilbert
UNDERWOOD MURRAY PA
100 N Tampa St. Suite 2325
Tampa, FL 33602
Tel: (813) 540-8401
E-mail: sunderwood@underwoodmurray.com
mmurray@underwoodmurray.com
agilbert@underwoodmurray.com
About The Bay Club of Naples
The Bay Club of Naples, LLC, is a Naples, Fla.-based company
engaged in the business of real estate development.
The Bay Club of Naples and its affiliate, The Bay Club of Naples
II, LLC, concurrently filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No.
20-05008) on June 29, 2020. Harry M. Zea, manager, signed the
petition. At the time of the filing, each Debtor disclosed
estimated assets of $10 million to $50 million and estimated
liabilities of the same range.
The Debtors tapped Underwood Murray, P.A. as their bankruptcy
counsel. Becker & Poliakoff, P.A. and Genovese Joblove & Battista,
P.A. serve as Debtors' special counsel.
BGF SERVICES: Case Summary & Unsecured Creditor
-----------------------------------------------
Debtor: BGF Services, LLC
8079 Lacy Dr #302
Manassas VA 20109
Business Description: BGF Services, LLC is engaged in activities
related to real estate.
Chapter 11 Petition Date: October 29, 2020
Court: United States Bankruptcy Court
Eastern District of Virginia
Case No.: 20-12393
Judge: Hon. Brian F. Kenney
Debtor's Counsel: Daniel M. Press, Esq.
CHUNG & PRESS, P.C.
6718 Whittier Ave. Ste. 200
McLean, VA 22101
Tel: 703-734-3800
Fax: 703-734-0590
Email: dpress@chung-press.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Bernard G. Farrell III, managing
member.
The Debtor listed Reston Association as its sole unsecured creditor
holding a claim of $1,000.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/X7QUZBA/BGF_Services_LLC__vaebke-20-12393__0001.0.pdf?mcid=tGE4TAMA
BLACK ELK: Trusts Remains Active, Court Rules
---------------------------------------------
Black Elk Energy Offshore Operations, LLC's chapter 11 plan created
two trusts for the purpose of winding up the company's affairs. The
Liquidation Trust was tasked with plugging and abandoning various
oil rigs in the Gulf of Mexico. The Litigation Trust pursued claims
against former officers and directors in order to maximize the
recovery of Black Elk's creditors. The Trustee filed an untimely
motion to extend both Black Elk Trusts. Numerous adverse litigants
with the Trusts objected, arguing that the Black Elk Trusts
dissolved by their terms in July 2019.
After careful consideration of the facts, Bankruptcy Judge Marvin
Isgur held that the dissolution of the Black Elk Trusts was not
self-executing. The Trusts remain active. However, because the
Trustee's Motion was untimely, extension of the Trusts is presently
contrary to the terms of the Trust Agreements.
Founded in 2007, Black Elk was an oil and gas producer that
developed hydrocarbons from abandoned wells that other operators
ignored. The 2008 financial crisis, followed by declining oil
prices, significantly impaired Black Elk's business operations.
Moreover, there were significant allegations of irregularity
against Black Elk and its affiliates.
On August 11, 2015, four petitioning creditors filed an involuntary
bankruptcy petition seeking an order for relief against Black Elk
under chapter 7. Black Elk filed its Consent to Order for Relief
and filed its Motion to Convert the Involuntary Chapter 7 Case to a
Voluntary Chapter 11 Case on August 31, 2015. The Court granted
those motions and converted the case to chapter 11.
The Court entered an order confirming Black Elk's Third Amended
Plan of Liquidation on July 14, 2016. The plan became effective on
July 25, 2016.
The Confirmation Order established both a Liquidation Trust and a
Litigation Trust to wrap up Black Elk's financial affairs. Richard
Schmidt was appointed to serve as the Trustee of both Black Elk
Trusts. Since his appointment as Liquidating Trustee, the Trustee
has primarily focused on plugging and abandoning work related to
over fifty wells formerly owned by Black Elk. The work is ongoing,
and performance of the plugging and abandoning obligations has
resulted in substantial litigation between the Trustee and
post-petition contractors. As Trustee for the Litigation Trust, the
Trustee has pursued claims against the recipients of allegedly
fraudulent transfers from Black Elk. Completion of the plugging and
abandoning work, and resolution the litigation, will determine the
funds available for distribution to Black Elk's creditors.
The Trustee's Motion for Entry of an Order Extending Dissolution
Deadlines of the Black Elk Litigation Trust and Black Elk
Liquidation Trust acknowledges that it was untimely filed, as the
Trust Agreements required that motions to extend the dissolution
deadlines be filed within the three months prior to the dissolution
date. The relevant deadline occurred three years after the
Effective Date of Black Elk's plan, July 25, 2019. Numerous
post-petition contractors and fraudulent transfer defendants
objected to the Motion.
On Dec. 6, 2019, JAB Energy Solutions, LLC ("JAB") filed a response
to the Trustee's Motion. JAB, a creditor of Black Elk, had
previously filed a proof of claim for $8,621,325.74 on account of
pre-petition decommissioning services on certain wells. During
Black Elk's bankruptcy case, JAB also performed post-petition
abandonment work. JAB and Black Elk resolved the full claim through
a series of stipulations. Although JAB does not object to extension
of the dissolution deadlines, it asks the Court to condition
extension on milestones assuring prompt payment of its claim.
On Dec. 17, 2019, Schlomo and Tamat Rechnitz filed an objection to
the Motion. The Rechnitz' are defendants in an adversary proceeding
brought by the Litigation Trust.
Twosons Corp., Fabrice Harari, and Raphael Harari filed an
objection to the Motion on Dec. 18, 2019. Like the Rechnitz', the
Twosons parties are also defendants in an adversary proceeding with
the Litigation Trust.
On December 18, 2019, Meridian Capital Foundation, the RZH
Foundation, the Interlink I Charitable Trust, and the Interlink III
Charitable Trust moved to join in the various objections to the
Motion. The RZH Charities are defendants in adversary proceeding
No. 19-03330. Grand Isle Shipyard, Inc. ("GIS") also moved to join
in the objections.
Beneficiaries of the Black Elk Trusts came forward in support of
the Trustee's Motion. Specifically, Delaware Trust Co. filed a
response in support of the Motion on Jan. 28, 2020. Delaware Trust
is the successor indenture trustee and collateral agent of Black
Elk's senior secured notes. As such, Delaware Trust is a
beneficiary of both Black Elk Trusts, and entitled to receive Trust
distributions on account of its $73,354,284.73 allowed claim.
The Trustee sought an order extending the Black Elk Trusts so he
may complete plugging and abandoning obligations, and continue
pursuing claims in both state court and the bankruptcy court.
Various provisions of the Black Elk Plan, Confirmation Order and
Trust Agreements are relevant to the questions of whether the Black
Elk Trusts automatically dissolved by their terms or whether
extension of the Trusts is now permitted. The Black Elk Trusts were
established pursuant to the Black Elk Plan.
The question before the Court was whether the Black Elk Trusts
dissolved by their terms on July 25, 2019, the date three years
after the Effective Date of the Black Elk Plan. It is undisputed
that the Trustee failed to move for an extension of the Black Elk
Trusts within the three-month window provided in Section 8.01 of
the Trust Agreements. Instead, the Trustee moved to extend the
Trusts nearly six months after July 25, 2019.
The text of the Black Elk Trust Agreements states that they "shall
be dissolved" three years after the Effective Date of the Black Elk
Plan, in accordance with Section 8.02, absent a timely extension of
the Trusts. All parties acknowledge that the Trustee's Motion to
extend the Black Elk Trusts was untimely. Although the Motion was
untimely, and the Trust Agreements may have required an act of
dissolution, no party moved to dissolve the Trusts. As such, the
Black Elk Trusts remain and the Trustee retains standing to pursue
litigation against the objecting parties. Had an interested party
moved to dissolve the Black Elk Trusts, the text of the Trust
Agreements may have commanded that dissolution occur. However, both
the Trustee and the beneficiaries of the Black Elk Trusts believe
that extension will further the purposes of the Trusts. While
extension would further the purposes of the Trusts, the Court
cannot authorize an extension that does not conform with the
language of the Trust Agreements.
The Objectors argue that Goldin v. Bartholow, 166 F.3d 710 (5th
Cir. 1999), mandates a finding that the Black Elk Trusts dissolved
on July 25, 2019. Judge Isgur said that, at first glance, the facts
of Goldin appear indistinguishable from the case at hand, but the
devil is in the details. While the facts of Goldin are nearly
identical, the language of the relevant trust agreements is not.
The distinctions warrant a different outcome in this case.
Dissolution of the trust in Goldin was self-executing; the Black
Elk Trusts require acts of dissolution. The Court has not acted to
dissolve the Trusts.
In sum, Judge Isgur held the Black Elk Trusts have not yet been
dissolved and the Trustee remains in position. Although the
objecting parties seek dissolution, they have no more standing to
seek dissolution now than they did when the trusts commenced. They
are not trust beneficiaries. Their interest in dissolution is
limited to whether their Plaintiff has standing against them. The
objecting parties lack standing to move to dissolve the Trusts or
to resist efforts to amend the Trusts.
The express language of the Trust Agreements, combined with the
Trustee's untimely Motion, has placed the Black Elk Trusts in
limbo. Dissolution, although arguably required by Section 8.01, has
not occurred. Meanwhile, the Trustee missed the three-month window
to move to extend the Trusts. For that reason, allowance of the
motion to extend would conflict with the Trust Agreements. For now,
the Court could not grant the Trustee's motion because it is not
consistent with the terms of the Trust Agreements.
A copy of the Court's Memorandum Opinion is available at
https://bit.ly/33zVjDW from Leagle.com.
About Black Elk
Black Elk Energy Offshore Operations, LLC, is a Houston,
Texas-based privately held limited liability company engaged in
the
acquisition, exploitation, development and production of oil and
natural gas properties primarily in the shallow waters of the Gulf
of Mexico near the coast of Louisiana and Texas.
Black Elk had total assets of $339.7 million and total debt of
$432.3 million as of Sept. 30, 2014.
Judge Letitia Z. Paul of the U.S. Bankruptcy Court in the Southern
District of Texas placed Black Elk under Chapter 11 bankruptcy
protection on Sept. 1, 2015, converting an involuntary Chapter 7
bankruptcy petition by its creditors. Thereafter, the Company
filed with the Court a voluntary Chapter 11 petition (Bankr. S.D.
Tex. Case No. 15-34287) on Sept. 10, 2015.
Judge Paul later recused herself from the case and the matter was
given to Judge Marvin Isgur, according to information posted on
the
case docket on Sept. 14.
The Debtor was represented by Elizabeth E. Green, Esq., of Baker &
Hostetler. Blackhill Partners' Jeff Jones served as the Debtor's
Chief Restructuring Officer. The Debtors hired Ryan LLC as tax
research consultant and Williamson, Sears & Rusnak, LLP as special
counsel.
Judy A. Robbins, U.S. Trustee for Region 7, appointed five
creditors to serve in the Official Committee of Unsecured
Creditors
in the Chapter 11 case of Black Elk Energy Offshore Operations,
LLC. Okin & Adams LLP is counsel to the Committee.
* * *
Black Elk Energy Offshore Operations' Third Amended Plan of
Liquidation became effective, and the Company emerged from Chapter
11 protection, according to a report by The Troubled Company
Reporter on July 28, 2016. The Court confirmed the Plan on July
13, 2016.
BORDEN DAIRY: KKR Credit Objects to BDC's Plan
----------------------------------------------
KKR Credit Advisors (US) LLC, on behalf of itself, certain of its
affiliates and its or their managed funds and accounts, as lenders
under the Debtors' prepetition $175 million term loan B facility,
filed an objection to debtors BDC Inc., et al.'s motion for entry
of an order approving the Combined Disclosure Statement and Plan
and the proposed solicitation procedures.
KKR, the largest unsecured creditor in the case, points out that
the Disclosure Statement does not contain adequate information
regarding (1) distributions to unsecured creditors and (2)
releases. According to KKR, here, the Disclosure Statement is
deficient in two ways:
* First, unsecured creditors are purported to receive their
respective share of "Distribution Proceeds," which is defined as
all cash after (i) payment in full or satisfaction of all
administrative claims, including professional fee claims, priority
tax claims, other priority claims and other secured claims, and
(ii) payment of, and reserving for, expenses of the Wind-Down
Administrator.
* Second, the Disclosure Statement does not contain adequate
information regarding the releases and exculpation provisions
contemplated by the Plan. Specifically, the Combined Plan and
Disclosure Statement fails to disclose what, if anything, the
Debtors' officers, directors and Related Parties, including the
Acon Entities contributed in exchange for those releases and
exculpation -- e.g., the "substantial contribution" the Released
Parties made to these Chapter 11 Cases, the "essential nature" of
the releases, and why the releases are necessary.
KKR further points out that the Disclosure Statement describes a
Plan that is patently unconfirmable. Here, the Debtors have not
provided any reason to support classifying the TLB Deficiency Claim
separately from other General Unsecured Claims.
Counsel to KKR Credit Advisors (US) LLC:
Robert J. Dehney
Matthew B. Harvey
Matthew O. Talmo
MORRIS NICHOLS ARSHT & TUNNELL LLP
1201 North Market Street, Suite 1600
Wilmington, DE 19801
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
E-mail: rdehney@mnat.com
mharvey@mnat.com
mtalmo@mnat.com
Roger G. Schwartz
Peter Montoni
Stephen M. Blank
KING & SPALDING LLP
1185 Avenue of the Americas, 34th Floor
New York, New York 10036
Telephone: (212) 556-2100
Facsimile: (212) 556-2222
E-mail: rschwartz@kslaw.com
pmontoni@kslaw.com
sblank@kslaw.com
About Borden Dairy
Borden Dairy Company -- http://www.bordendairy.com/-- is a
processor and direct-to-store distributor of fresh fluid milk,
dairy case products and other beverages. It produces and
distributes a wide variety of branded and private label
traditional, flavored and specialty milk, buttermilk, dips and sour
cream, juices, tea, and flavored drinks to mass merchandisers,
educational institutions, food service retailers, grocery stores,
drug stores, convenience stores, food and beverage wholesale
distributors, and retail warehouse club stores across the United
States.
Headquartered in Dallas, Borden Dairy operates 12 milk processing
plants and nearly 100 branches across the U.S. It was founded in
1857 by Gail Borden, Jr.
Borden Dairy and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 20-10010) on Jan. 5, 2020.
Judge Christopher S. Sontchi oversees the case.
Borden Dairy was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Debtors tapped Arnold & Porter Kaye Scholer LLP as general
bankruptcy counsel; Young Conaway Stargatt & Taylor LLP as special
counsel; and Donlin Recano as the claims agent.
Borden Dairy in July 2020 won court approval to sell its dairy
business for about $340 million. The Debtors were renamed to BDC
Inc., et al., following the sale.
BSI LLC: 800K Sale of Cartersville Property to Relstar Approved
---------------------------------------------------------------
Judge Paul W. Bonappfel of the U.S. Bankruptcy Court for the
Northern District of Georgia authorized BSI, LLC - 33 Smiley
Ingram's proposed sale of approximately 2.5-acre of improved real
property located in Cartersville, Bartow County, Georgia to Relstar
Properties, LLC for $800,000, cash, under the terms of their
Contract of Purchase and Sale, dated Aug. 9, 2020, subject to
higher and better offers.
The closing is to be held on Nov. 15, 20202.
From the Sale Proceeds, Movant is authorized to pay at closing as
follows:
(a) Pay all usual and customary closing costs and prorations
at closing;
(b) Pay a real estate commission in the amount of 4% of the
gross purchase price ($32,000) to be shared equally be the Seller's
Broker and the Buyer's Broker (i.e., $16,000.00 apiece);
(c) Pay any real estate taxes due to Bartow County Tax
Commissioner; and
(d) Pay the remaining balance to secured lien holder LGE in
reduction of its secured claim.
Interested parties may submit competing cash bids for the Sale
Property which exceed the Purchase Price by at least $10,000 with
no contingencies and the ability to close on Nov. 15, 2020.
Reference is made to that certain Motion that the Debtor filed on
Oct. 14, 2020 asking Court authorization to sell to Engineered
Systems, Inc. another portion of the overall Property on which LGE
Community Credit Union holds a secured lien. The closing of the
sale to Engineered Systems is scheduled for Nov. 15, 2020, being
the same date as the closing of the sale of the Sale Property to
the Buyer.
Notwithstanding anything contained in the Order to the contrary,
LGE will release its liens at the closing of both sales only
provided that its secured claim is paid in full. It is
contemplated that Brian Stewart, the Debtor's sole manager and
member, will have to pay a deficiency of approximately $250,000 to
LGE to fully pay LGE's secured claim as calculated on the day of
closing, LGE's secured claim will include all remaining principal,
interest, attorney’s fees and costs associated with the
underlying loan. LGE will provide a payoff, calculated as of the
day of closing with sufficient time prior to the closing to
determine whether its secured claim will be paid in full. Brian
Stewart personally guaranteed LGE's claim.
The sale is free and clear of all Interests of any kind or nature
whatsoever, with all such Interests of any kind or nature
whatsoever to attach to the net proceeds of the Sala.
The stay of orders authorizing the use, sale, or lease of property
as provided for in Bankruptcy Rule 6004(h) will not apply to the
Order, and the Order is immediately effective and enforceable.
As provided by Bankruptcy Rule 7062, the Order will be effective
and enforceable immediately upon entry. Time is of the essence in
closing the Transactions.
Therefore, any party objecting to this Order must exercise due
diligence in filing an appeal and pursuing a stay or risk their
appeal being foreclosed as moot.
The Movant's counsel will serve a copy of the Order upon the United
States Trustee, the Debtor, and any party having filed a Notice of
Appearance requesting service of notices, and will file a
Certificate of Service. The Movant will promptly file a report of
sale after this transaction closes and pay all outstanding United
States Trustee fees when due.
About BSI, LLC - 33 Smiley Ingram
BSI, LLC - 33 Smiley Ingram, a single asset real estate (as defined
in 11 U.S.C. Section 101(51B)), sought protection under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-40882) on May
4, 2020. The petition was signed by Brian Alan Stewar, Debtor's
manager. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge Paul W. Bonapfel oversees the case. The Debtor tapped
Paul Reece Marr, P.C. as legal counsel.
BULLDOG DUMPSTERS: Case Summary & 17 Unsecured Creditors
--------------------------------------------------------
Debtor: Bulldog Dumpsters, LLC
10800 Baseline Road
Little Rock, AR 72209
Business Description: Bulldog Dumpsters, LLC offers waste
collection services.
Chapter 11 Petition Date: October 29, 2020
Court: United States Bankruptcy Court
Eastern District of Arkansas
Case No.: 20-14072
Judge: Hon. Richard D Taylor
Debtor's Counsel: O.C. "Rusty" Sparks, Esq.
CADDELL REYNOLDS LAW FIRM
PO Box 184
Fort Smith, AR 72902-0184
Tel: 501-214-0856
Fax: 501-222-8824
Email: rsparks@justicetoday.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joseph Todd Raines, sole member of LLC.
A copy of the petition containing, among other items, a list of the
Debtor's 17 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/4L2XQVI/Bulldog_Dumpsters_LLC__arebke-20-14072__0001.0.pdf?mcid=tGE4TAMA
CABLE ONE: S&P Rates New $500MM Senior Unsecured Notes 'BB-'
------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level and '5' recovery
ratings to Phoenix-based cable TV and internet provider Cable One
Inc.'s $500 million senior unsecured notes due 2030. The '5'
recovery rating indicates its expectation of modest (10%-30%;
rounded estimate: 10%) recovery for lenders in the event of a
payment default.
S&P said, "We also affirmed our 'BB+' issue-level rating on Cable
One's secured debt following the company's proposed $300 million
incremental add-on to its $325 million term loan B-3 due in 2026,
the $150 million upsize to its $350 million revolving credit
facility due 2024, and the extension of the maturity of the term
loan B-3 and revolving credit facility to 2027 and 2025,
respectively. The '2' recovery rating indicates our expectation of
substantial (70%-90%; rounded estimate: 80%) recovery in the event
of a payment default."
"We expect Cable One to use the proceeds from the upsized term loan
and cash on hand to fully pay down the $485 million balance on its
term loan B-1 due 2024 and to use the proceeds from the unsecured
notes for general corporate purposes, which may include
acquisitions and strategic investments, including to help finance
the $574 million minority equity investment to acquire a 45%
interest in Mega Broadband Investments Intermediate I LLC (doing
business as Vyve Broadband)."
"Our 'BB' issuer credit rating and stable outlook on Cable One are
unchanged because we expect the company's pro forma net adjusted
leverage that proportionately consolidates Cable One's 45% minority
stake in Vyve to be about 2.8x, well below our 4.0x downgrade
threshold."
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P's simulated default scenario contemplates a deterioration
in Cable One's competitive position following an unforeseen
technological disruption that would allow rivals to offer
comparable broadband speeds. It believes that such a scenario would
affect the entire industry, particularly small and midsize cable
operators that depend more on broadband earnings than do their
larger peers. S&P's default scenario also considers competitive
pressures from cable overbuilders and the incumbent telephone
companies such as AT&T Inc. and CenturyLink Inc. if the cost of
fiber overbuilding substantially declines.
-- S&P values Cable One on a going-concern basis using a 6x
multiple of the rating agency's projected emergence EBITDA, which
the rating agency increased to $265 million from $246 million to
account for the incremental value from the unpledged Vyve
investment. Because S&P's simulated scenario envisions an
industry-wide issue, there would be only modest value at Vyve
available to secured and unsecured Cable One lenders in the event
of a default. The 6x valuation multiple is on the lower end of the
6x-7x range S&P typically uses for incumbent cable operators, given
Cable One's lower video and high-speed data penetration rates
relative to those of its peers.
-- Unsecured lenders share ratably in unpledged value from Cable
One's minority equity interests, which results in modest recovery
prospects despite secured lenders not being fully covered.
-- Other default assumptions include the $500 million revolver
being 85% drawn and that all debt includes six months of
prepetition interest.
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA at emergence: $265 million
-- EBITDA multiple: 6x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $1.5
billion
-- Valuation split (obligors/nonobligors): 92%/8%
-- Collateral value available to secured creditors: $1.4 billion
-- Secured debt: $1.8 billion
-- Recovery expectations: 70%-90% (rounded estimate: 80%)
-- Collateral value available to unsecured claims: $121 million
-- Senior unsecured debt and pari passu claims: $907 million
-- Recovery expectations: 10%-30% (rounded estimate: 10%)
CALIFORNIA PIZZA: Betty Suit Stayed Pending Bankruptcy Proceeding
-----------------------------------------------------------------
District Judge Stephen J. Murphy III stayed the case captioned
SUHAM BETTY, Plaintiff, v. CALIFORNIA PIZZA KITCHEN, INC.,
Defendant, Case No. 2:19-cv-12504 (E.D. Mich.) pending the
Defendant's bankruptcy.
On August 6, 2020, the Court received notice that Defendant filed
for Chapter 11 relief under the Bankruptcy Code in the United
States Bankruptcy Court for the Southern District of Texas.
When a corporation files for bankruptcy under Chapter 11, the
petition "operates as a stay" of any "judicial, administrative, or
other action or proceeding against the debtor that was . . .
commenced before the commencement of the [bankruptcy] case[.]" The
Plaintiff began the action against the Defendant before its
bankruptcy filing. The Court, therefore, stayed the case pending
the resolution of the bankruptcy proceeding. The Plaintiff may
revisit the claims after the termination of the automatic stay.
The Court ordered that the case be administratively closed. The
case, however, can be reopened upon motion of any party after the
completion of the Defendant's bankruptcy.
A copy of the Court's Order is available at https://bit.ly/3hVQk5H
from Leagle.com.
California Pizza Kitchen
California Pizza Kitchen, Inc. -- http://www.cpk.com/-- is a
casual dining restaurant chain that specializes in California-style
pizza. Since its opening in Beverly Hills in 1985, California
Pizza Kitchen has grown from a single location to more than 200
restaurants worldwide. Although California Pizza Kitchen's dine-in
restaurants are the primary way it serves its customers, the
restaurant chain also has a number of "off-premises" services and
licensing agreements that allow customers to get their favorite
dishes on the go.
California Pizza Kitchen and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-33752) on July 29,
2020. In the petitions signed by CEO James Hyatt, Debtors were
estimated to have assets in the range of $100 million to $500
million and $500 million to $1 billion in debt.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as bankruptcy counsel, Jackson Walker LLP as
local counsel, Guggenheim Securities, LLC as financial advisor and
investment banker, Alvarez & Marsal North America, LLC as
restructuring advisor, and Hilco Real Estate LLC as real estate
consultant and advisor. Prime Clerk --
https://cases.primeclerk.com/CPK -- is the claims agent.
CARBONYX INC: Says Proponents' Plan Not Feasible
------------------------------------------------
Debtor Carbonyx, Inc. objects to the Disclosure Statement and Plan
of Frank Rango, Bhavna Patel, River Partners 2012-CBX, LLC, C6
Ardmore Ventures LLC, Ingo Wagner And Harmir Realty Co., LLP
(collectively "Proponents").
The Proponents are disputed creditors of the Debtor. The
Proponents have filed a Disclosure Statement dated July 24, 2020
The Debtor objects to the Disclosure Statement in that it fails to
provide even rudimentary information from which any creditor or
investor would be able to figure out whether the Plan is feasible.
The Debtor adds that:
* The Disclosure Statement makes reference to numerous documents
upon which the creditors are to rely in making an informed decision
however, absolutely none of the supporting documents are provided
with the disclosure statement.
* The disclosure statement purports to rely on operations of the
Debtor, however, the disclosure statement fail identify how any
such operations could be maintained.
A full-text copy of the Debtor's objection dated August 14, 2020,
is available at https://tinyurl.com/y584j7fm from PacerMonitor at
no charge.
Attorneys for Debtor:
Eric A. Liepins
Eric A. Liepins, P.C.
12770 Coit Road
Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
About Carbonyx Inc.
Carbonyx, Inc., based in Plano, TX, filed a Chapter 11 petition
(Bankr. E.D. Tex. Case No. 20-40494) on Feb. 18, 2020. In the
petition signed by Hasmukh Patel, authorized agent, the Debtor was
estimated to have up to $50,000 in assets and $10 million to $50
million in liabilities. Eric A. Liepins, Esq., at partner of Eric
A. Liepins, P.C., serves as bankruptcy counsel.
CARBONYX INC: Shareholders Object to Debtor's Plan
--------------------------------------------------
Ashokkumar D. Patel, Atul T. Roy, Manher Patel, Niranjan K. Bhakta,
Patson Family Limited Partnership, and Tarun Patel (collectively
Shareholders) object to the First Amended Combined Plan and
Disclosure Statement of debtor Carbonyx, Inc.
Shareholders claim that the Debtor's Disclosure Statement should
not be finally approved because it does not contain adequate
information. Section 1129(a)(11) requires that, to be confirmable,
a plan must be feasible.
Shareholders state that the Debtor's Plan is based almost entirely
on the production of commercial quantities of foundry coke. There
is no likelihood of this happening. The facility in Oklahoma
cannot produce foundry coke.
Shareholders point out that the Disclosure Statement makes no
efforts to value those assets and provide the creditors with a
liquidation analysis to determine what is in their best interest.
Shareholders assert that the Disclosure Statement fails to specify
what purported claims, causes of action, lawsuits and litigation
could be brought against any current or former officers, directors
or employees of Debtor.
Shareholders further assert that the Proponents' Plan extinguishes
all existing Equity Interests and is proposed for the purpose of
eliminating the more than 400 shareholders who have invested over
$100 million since the Debtor's formation.
Shareholders say that the Plan incorrectly sets forth Debtor's
subsidiaries. Further, the Plan misstates Debtor's operations in
its Business Plan and has no financial information or projections.
A full-text copy of the Shareholders' objection dated October 9,
2020, is available at https://tinyurl.com/y6hpckpv from
PacerMonitor.com at no charge.
Attorneys for the Shareholders:
JONES, ALLEN & FUQUAY, L.L.P.
8828 Greenville Avenue
Dallas, Texas 75243
Telephone: (214) 343-7400
Facsimile: (214) 343-7455
Laura L. Worsham
About Carbonyx Inc.
Carbonyx, Inc., based in Plano, TX, filed a Chapter 11 petition
(Bankr. E.D. Tex. Case No. 20-40494) on Feb. 18, 2020. In the
petition signed by Hasmukh Patel, authorized agent, the Debtor was
estimated to have up to $50,000 in assets and $10 million to $50
million in liabilities. Eric A. Liepins, Esq., at partner of Eric
A. Liepins, P.C., serves as bankruptcy counsel to the Debtor.
CARS.COM INC: S&P Assigns 'B' ICR; Outlook Positive
---------------------------------------------------
S&P Global Ratings has assigned its 'B' issue-level and '4'
recovery ratings to Chicago-based Cars.com Inc.'s proposed $400
million unsecured notes due 2028. S&P did not rate the proposed
$230 million revolving credit facility (RCF) and $200 million term
loan A.
The positive outlook reflects S&P's view that barring downside
risks stemming from a weaker-than-expected economic recovery, in
addition to a resurgence of COVID-19 cases causing additional
shelter-in-place restrictions, Cars.com is well-positioned to
benefit from organic revenue and EBITDA growth and lower its
leverage toward the mid-4x area in 2021.
S&P's rating on Cars.com reflects its:
-- Participation in a highly competitive business providing online
customer lead generation for dealers;
-- Relatively small scale of operations;
-- Limited geographic diversity;
-- Reliance primarily on third-party search engines to acquire
about 49% of the traffic for its platform through paid search and
through search engine optimization; and
-- Exposure to cyclical new car auto sales and auto advertising.
The company's leverage pro forma for the proposed refinancing was
5.8x as of June 30, 2020, and it will remain elevated in the mid-5x
area in 2020 because of significant subscriber losses and pricing
concessions it made in second-quarter 2020 because its customers
were significantly affected by social-distancing efforts to slow
the spread of COVID-19.
These challenges are somewhat offset by:
-- The company's participation in the less-cyclical used car sales
market, with 85% of vehicle details page (VDP) views being for used
cars;
-- A subscription-based business model that partially offsets
risks stemming from the volatility in auto sales trends;
-- A diversified subscriber base;
-- Good brand recognition with most prospective car buyers
visiting the Cars.com platform either through its mobile phone app
or its website; and
-- The company's newer Dealer Inspire and Fuel products diversify
its product portfolio and increase its wallet share of dealer
marketing spend though additional subscription revenues for its
website, customer communication tools, and digital video
advertising.
Barring downside risks stemming from a weaker-than-expected
economic recovery in addition to a resurgence in COVID-19 cases
causing additional shelter-in-place restrictions, Cars.com is
well-positioned to benefit from organic revenue and EBITDA growth
and lower its leverage toward the mid-4x area in 2021.
Auto industry trends have steadied, and consumer preferences are
changing toward greater use of online tools.
The COVID-19 pandemic and associated recession had an immediate
impact on Cars.com. About 900 dealers (approximately 5% of total
dealer subscribers) either canceled or suspended their
subscriptions with the platform. In addition, national advertising
for autos experienced a significant contraction as auto original
equipment manufacturers (OEMs) cut advertising. Cars.com responded
by providing customer communication tools and temporarily reducing
subscription costs to support dealers and stem the decline in
subscription cancellations.
Consumers have been reluctant to use public transportation, which
has created a renewed demand for used and new car sales, though new
car sales remain well below historical levels. In addition,
consumers are increasingly conducting research and purchasing cars
online using tools such as virtual appointments and home delivery,
thus fueling the demand for Cars.com as well as traffic to dealer
websites. This reversed dealer attrition trends for Cars.com in
third-quarter 2020, with solid subscriber retention and sequential
growth in dealer subscriptions, average revenue per dealer, and
growth in traffic year over year.
Cars.com participates in a fragmented and competitive industry.
The company generates more than 80% of its revenue from its direct
business segment which includes its marketplace and website
platforms, which depend on subscription relationships with
franchise dealerships (65% of business) and independent dealers
(35% of business). About 20% of revenue comes from national
advertising from OEMs, as well as auto-adjacent companies. There is
significant competition in the fragmented industry from larger and
better-capitalized players. The online auto marketplaces include
CarGurus, TrueCar, Autotrader, Edmunds, and online dealers such as
Carvana and Vroom. In addition, eBay and Facebook provide broader
horizontal market places with sizable communities of vehicle buyers
and dealers advertising on their platforms.
The company's competitive position is supported by a
well-recognized brand, high percentage of organic traffic, and an
expanding array of dealer tools.
Cars.com has carved out a good market position via significant
brand awareness among consumers looking to buy a vehicle. It is the
No. 1 downloaded and rated auto marketplace app per App Annie
(August 2020), and about 77% of the customer traffic on its
platforms was organic through its app, direct links to its website,
or through search engine optimization. Cars.com has limited
customer concentration with more than 18,000 subscribing
dealerships as of June 30, 2020. Two-thirds of its subscribers are
OEM franchise dealerships. In addition, new products such as Dealer
Inspire and Fuel have seen good subscription momentum, allowing the
company to expand its wallet share with subscribers and bring in
new dealerships. Dealer Inspire provides white-label websites and
capabilities mainly to OEM franchise car dealers, allowing them to
list their inventory, schedule appointments, and interact with
customers. The growth momentum for Dealer Inspire is driven in part
by designation by various OEMs such as GM, Honda, and Nissan within
the past 12 months as Cars.com is now an approved partner.
Additionally, its Fuel product provides a subscription-like model
connecting dealers with in-market shoppers through a customized
video marketing platform.
The company's historical revenue growth was affected by its
conversion of all affiliates to direct control relationships.
Cars.com had previously maintained five affiliate agreements
(Gannett, McClatchy, TEGNA, tronc and the Washington Post). The
company charged affiliates 60% of the corresponding Cars.com retail
rate for products sold to affiliate dealer customers and recognized
revenue generated from these agreements as wholesale revenue. As of
Oct. 1, 2019, the company had successfully converted all affiliate
agreements to direct relationships. This means going forward all
dealer customers and recognized revenues are associated as retail
revenue rather than wholesale revenue. The company experienced
increased churn in dealer customers following the affiliate
conversion. As of July 2020, the company is no longer required to
make any further payments to the affiliates under these agreements.
Although this has resulted in one-time costs and compressed margins
over time, S&P forecasts EBITDA margins (including capitalized
software development costs of about $20 million annually) to
improve to the low-20% area before increasing by about 200-300
basis points (bps) in 2021.
Organic growth and cost savings should help improve EBITDA margins
and moderate leverage over the next 12 months.
The company's leverage pro forma for the proposed refinancing was
elevated at 5.8x as of June 30, 2020. This was in part because of
significant subscriber losses and pricing concessions it had made
in second-quarter 2020.
S&P said, "We expect leverage will remain elevated above 5x in 2020
and improve to the mid-4x area in 2021 as a result of a modest
industry rebound, gradual economic recovery, and an improving cost
base. We expect the company to generate healthy free operating cash
flow (FOCF) in 2020 and 2021."
The positive outlook reflects S&P's view that Cars.com is
well-positioned to benefit from organic revenue and EBITDA growth
such that it could lower its leverage toward the mid-4x area in
2021. This is barring downside risks stemming from a
weaker-than-expected economic recovery and a resurgence in COVID-19
cases that would lead to additional shelter-in-place restrictions.
S&P could raise the rating on Cars.com over the next 12 months if:
-- The company is able to achieve healthy organic revenue and
EBITDA growth over the next 12 months, such that:
-- Leverage declines below 5x on a sustained basis; and
-- The company maintains FOCF in the high-single-digit area on a
sustained basis.
S&P could revise the outlook to stable over the next 12 months if:
-- Leverage remains above 5x and FOCF to debt declines below 5%
likely due to:
-- Dealer subscription losses and reduced website traffic stemming
from a weakening economic environment or a resurgence of COVID-19
cases;
-- Lower-than-expected uptake of newer subscription products such
as Dealer Inspire and Fuel; or
-- Large debt-financed acquisitions, share repurchases, or
dividends.
CCM MERGER: S&P Affirms 'B+' Issuer Credit Rating; Outlook Negative
-------------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on
Detroit gaming operator CCM Merger Inc. The outlook is negative. At
the same time, S&P assigned its 'BB' issue-level rating and '1'
recovery rating to the proposed senior secured credit facility and
its 'B+' issue-level rating and '3' recovery rating to the senior
unsecured notes.
S&P said, "Despite incremental leverage to fund a distribution and
a slower recovery in the Detroit market, we are affirming the 'B+'
rating on CCM Merger because we believe that leverage will improve
below 5x in 2021. CCM Merger's MotorCity Casino reopened Aug. 5,
2020, which was later than our previous assumption that it would
resume operations on July 1, 2020. The casinos in the Detroit
market also opened under stricter capacity limitations than other
regional gaming operators outside of Michigan. These factors will
likely result in a slower recovery through the rest of 2020. In
addition, as part of its refinancing, CCM Merger plans to borrow
incremental debt to fund a $60 million distribution to its owner.
Nevertheless, despite the leveraging distribution, we believe that
the company's leverage will improve to the mid-4x area by the end
of 2021, providing adequate cushion relative to our 5x downgrade
threshold. The improvement in leverage follows a spike this year
due to the months-long closure of its casino amid the COVID-19
pandemic. CCM Merger, like all gaming operators that were required
to suspend operations, had a meaningful decline in revenue and cash
flow in the first half of this year."
"Despite the slower revenue recovery, we estimate that CCM Merger's
EBITDA will continue to increase over the next several quarters,
partly due to a modest improvement in its EBITDA margin relative to
2019 driven by the relatively high flow through from slot machines
and cost cuts management implemented over the past few months,
particularly related to its labor and marketing expenses. In
addition, our expectation that the company will improve its margin
reflects our view that many of its lower-margin or loss-leading
amenities, like buffets, will remain closed for some time to comply
with health and safety measures intended to limit the spread of the
coronavirus."
In its assumed recovery scenario, S&P believes it will likely take
more than a year for CCM Merger to recover to 2019 EBITDA levels.
S&P's revised base case assumes the following for 2021:
-- U.S. GDP contracts by 4% in 2020 and improves by 3.9% in 2021.
-- U.S. consumer spending declines 4.4% in 2020 and improves by
4.9% in 2021.
-- U.S. unemployment remains elevated in 2020 and 2021 at 8.4% and
6.7%, respectively.
-- S&P expects 2021 net revenue to be about 10% to 20% below 2019,
considering the more restrictive capacity limits placed on Detroit
commercial casinos upon reopening and its expectation that these
will be relaxed slowly through 2021.
-- S&P expects a modest improvement in 2021 EBITDA margin compared
with 2019 because of the relatively high flow through from slot
machines, its expectation that lower margin amenities might remain
closed for some time, and its expectation that some cost reductions
made during property closures might be more permanent, especially
in a scenario where demand does not recover to pre-pandemic levels
quickly; and
-- S&P assumes the company reduces capital expenditures (capex)
and tax distributions to owners this year in light of the casino
closures and the need to preserve liquidity. In 2021, the company
resumes some growth capex for completion of the parking garage and
hotel upgrades. If recovery continues at its current pace, S&P
assumes that distributions to owners might modestly exceed the
company's free operating cash flow, given that the credit agreement
permits the company to pay annual tax distributions and includes a
$50 million initial restricted payment basket for additional
dividends.
Based on these assumptions, S&P arrives at the following credit
measures in 2021:
-- Leverage in the mid-4x area.
-- FFO to debt between 15% and 18%.
-- EBITDA interest coverage in the 3.5x-4x range.
S&P said, "We expect that the company will successfully complete
its refinancing, which will ensure it has adequate liquidity.
Although we currently assess CCM Merger's liquidity as less than
adequate because its credit facility matures within a year, we
believe the proposed refinancing will ensure that company has
adequate liquidity going forward. The company plans to refinance
its term loan and revolver due in 2021 and its senior notes due
2022 by raising a $275 million term loan B and $275 million senior
secured notes, and upsizing its revolving credit facility to $45
million from $15 million. We believe CCM Merger's past track record
of debt repayment, good free operating cash flow generation under
our assumed recovery scenario, and location in a supply constrained
gaming market will allow it to refinance its debt maturing over the
next few years even if its interest costs are somewhat higher."
"The proposed refinancing increases CCM Merger's revolver capacity
by $30 million, which will provide the company additional
flexibility to better withstand operational disruption, including
potentially prolonged weakness in visitation or additional closures
or operating restrictions from a potential spike in cases. We
expect the revolver to be undrawn at close. Based on the company's
expected liquidity position at the close of the refinancing, we
estimate the company would have over two years of liquidity in a
zero revenue scenario. As a result, if the company is successful in
its refinancing efforts and eliminates near-term debt maturities,
we will revise our liquidity assessment to adequate from less than
adequate."
Capacity restrictions for Detroit's commercial casinos are among
the most stringent. In the Midwest, commercial casinos in Detroit
opened far later and under more stringent requirements.
Comparatively, commercial casinos in Ohio, Indiana, and Iowa all
opened in June at about 50% capacity. Illinois' casinos reopened
July 1 at 50% but in September, additional mitigation efforts in
the state led casinos to tighten capacity restrictions to 25%.
Nevertheless, Illinois' capacity restrictions are still more
lenient than in Detroit, where commercial casinos are limited to
15% capacity. In general, capacity restrictions and social
distancing requirements on casino floors do not pose much of a
problem for regional casino operators, given that historical
utilization rates on casino floors are often below these limits,
except possibly during peak hours over weekends and holidays. The
more stringent restrictions on Detroit casinos, however, could
impact visitation on weekends and during busy holidays especially
as temperatures cool, thus affecting revenue generation.
The negative outlook reflects the significant deterioration in CCM
Merger's credit measures this year and the elevated degree of
uncertainty in S&P's updated base case scenario around the extent
of the pandemic and the related recession's effect on the company's
performance. The negative outlook also reflects a weak
macroeconomic outlook into 2021 (particularly high levels of
unemployment), a high degree of uncertainty around the effective
containment and treatment of the virus (including the potential for
additional waves of infections), and the continued implementation
of social distancing measures and their impact on consumer
discretionary spending.
S&P said, "We could lower our ratings on CCM Merger if we no longer
believed leverage would recover and improve below 5x in 2021. This
could occur if its recovery were materially slower than we
currently expect because of persistent high unemployment or changes
in customer behavior stemming from the coronavirus or if an
increasing number of virus cases in Michigan led to more stringent
operating restrictions or additional suspensions of its casino
operations, reducing its EBITDA by 10% relative to our forecast. In
addition, we would lower our ratings if CCM Merger did not complete
this proposed refinancing transaction to address its near-term
maturities."
"It is unlikely that we will revise our outlook on CCM Merger to
stable over the next few quarters given our forecast that its
adjusted leverage will remain high and above our downgrade
threshold into 2021, as well as the company's need to refinance its
term loan maturing in the fourth quarter of 2021. That said, we
could revise our outlook to stable if we believed its operating
performance had stabilized and anticipated its leverage would
improve comfortably below our 5x downgrade threshold in 2021."
CEC ENTERTAINMENT: S&P Rates $200MM DIP Term Loan 'B'
-----------------------------------------------------
S&P Global Ratings assigned a 'B' rating to the $200 million
debtor-in-possession (DIP) term loan provided to Texas-based CEC
Entertainment Inc. (CEC).
CEC is operating under the protection of Chapter 11 of the U.S.
Bankruptcy Code following a voluntary filing on June 24, 2020.
S&P's 'D' issuer credit rating on CEC is unchanged.
The DIP financing facility will be refinanced with proceeds from
exit financing upon the company's emergence from bankruptcy later
this year or in early 2021.
S&P said, "The 'B' rating on the DIP primarily reflects our view of
the credit risk borne by the DIP term lenders and does not indicate
any ratings we might assign to the contemplated exit facilities or
to the reorganized firm after bankruptcy."
"The DIP rating is a point-in-time rating effective only for the
date of this report. We will not review, modify, or provide ongoing
surveillance of this rating."
"Our 'B' rating on CEC's DIP financing facility reflects our view
of the credit risk borne by the DIP lenders."
These risks include:
-- The company's ability to meet its financial commitments during
bankruptcy through S&P's debtor credit profile (DCP) assessment;
-- Prospects for full repayment through reorganization and
emergence from Chapter 11 via its capacity for repayment at
emergence (CRE) assessment; and
-- The potential for full repayment in a liquidation scenario via
its additional protection in a liquidation scenario (APLS)
assessment.
S&P said, "Our DCP assessment reflects our view of CEC's vulnerable
business risk profile and highly leveraged financial risk
profile."
"Our DCP assessment includes our consideration of applicable rating
modifiers, including our projected liquidity of CEC during
bankruptcy. The rating on the company's DIP also considers the
potential recovery prospects on the DIP loan, which are reflected
in our CRE and APLS assessments."
"Our CRE assessment of favorable coverage of the DIP debt in an
emergence scenario indicates coverage of 150%-250%."
"Our CRE assessment contemplates a reorganization and addresses
whether we believe the company would likely be able to attract
sufficient third-party financing at the time of emergence to repay
the DIP debt in full. Our CRE assessment of favorable coverage of
the DIP debt provides a one-notch uplift over the DCP assessment,
resulting in a 'B' rating. We assess repayment prospects for the
purposes of the CRE assessment on the basis that the company must
repay all of the DIP facility in full in cash at emergence,
consistent with super-priority status under the U.S. Bankruptcy
Code."
"Our APLS assessment indicates less than 100% total value coverage
and does not affect DIP ratings."
"Our DIP methodology also contemplates the ability to fully repay
DIP debt, even when the debtor cannot reorganize under bankruptcy
protection. Our APLS assessment indicates insufficient coverage
(estimated at 70%-90%) of the DIP term loan in a liquidation
scenario, and therefore, we do not provide an additional notch for
the APLS modifier."
"We attribute CEC's voluntary bankruptcy filing to the coronavirus
pandemic, various ongoing business challenges, and a weakened
competitive position."
CEC's bankruptcy filing and S&P's business risk assessment reflect
various ongoing business challenges, including:
-- S&P's expectation for economic weakness through the bankruptcy
period, along with business and operational disruptions because of
the COVID-19 pandemic;
-- Erosion in revenue and profitability because of increased
competition in the restaurant industry amid shifts in consumer
spending habits;
-- Changing consumer behavior, including increased adoption of
third-party delivery services and online purchasing, all resulting
in fewer customers and increased industry competition;
-- Investment market and operational disruptions that prevented
the company from adequately addressing its capital structure; and
-- These factors led to significant recent declines in sales,
profitability, and cash flow that resulted in a prepetition capital
structure that was unsustainable.
S&P said, "We believe many of these trends are secular and that
customer traffic will remain challenged for out-of-home
entertainment services, especially in regions experiencing
significant effects of the pandemic. This will make it difficult
for CEC to substantially reverse declines in sales and EBITDA
margins over the short term. We believe the company's competitive
position has materially weakened, largely because of these industry
trends and intensifying competition."
S&P holds this view despite believing that CEC's bankruptcy
restructuring initiatives could result in modest operating
performance improvements from:
-- Plans to remodel a number of stores and restructure franchising
opportunities;
-- Lease and rent negotiations with landlords that could lead to
concessions and cost reductions; and
-- Continued efforts to enhance the company's sales, along with
other long-term business plan and strategies.
From a financial risk perspective, S&P's DCP assessment reflects a
substantially reduced debt burden relative to EBITDA generation
during the bankruptcy period.
This is due to the stay on prepetition debt (about $1.1 billion at
the time of filing) and the relatively modest amount of funded DIP
debt (about $200 million). Still, the requirements of continuing
business operations and various bankruptcy costs diminish the cash
flow benefit during bankruptcy. S&P is also mindful of the level of
DIP debt relative to the company's expected EBITDA over the next 12
months, given the U.S. recession from the COVID-19 pandemic and its
effects on overall industry trends.
CENTER CITY: Hires Centurion to Auction Addt'l. Medical Equipment
-----------------------------------------------------------------
Center City Healthcare, LLC, and affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to authorize them to (i) employ
and retain Centurion Service Group, LLC, on a supplemental basis,
as their auctioneer; (ii) sell and liquidate additional medical
equipment listed on Exhibit C.
Pursuant to Order entered Nov. 25, 2019, the Court authorized the
Debtors to retain Centurion to sell by auction, free and clear of
all liens, claims and encumbrances, certain equipment, furniture
and inventory located in their Center City, Philadelphia campus.
The basic economic terms of the Prior Retention were as follows:
(i) Centurion made a "guaranteed" up-front payment to the Debtors,
in advance of the sale, in the amount of $1,597,750 and (ii) all
amounts realized from the sale in excess of $2,167,650 were shared
by the Debtors and Centurion pursuant to the following formula: 85%
(Debtors) and 15% (Centurion). Centurion duly completed the sale,
after which the Court approved its first and final fee application
by Order dated Sept. 4, 2020.
STC OpCo, LLC, the purchaser of St. Christopher's Hospital for
Children pursuant to Court Order entered Sept. 27, 2019, recently
informed the Debtors that it is in possession of certain items of
medical equipment that belong to the Debtors. The Debtors were not
previously aware of the equipment, which was not included either in
the sale of certain assets to STC OpCo that closed as of Dec. 15,
2019 or the auction sale conducted by Centurion pursuant to the
Prior Retention.
By the Motion, the Debtors ask authority to retain Centurion on a
supplemental basis to sell the Additional Equipment free and clear
of all liens, claims and encumbrances, pursuant to the same basic
terms and conditions that applied with respect to the Prior
Retention -- specifically, an 85% (Debtors) / 15% (Centurion) split
of the net proceeds of sale.
The terms of compensation proposed for Centurion are as follows,
subject to approval of the Court:
(a) Centurion will hold the net proceeds from all auction
sales, which will exclude any "Buyer's Premium," in trust, and in a
segregated account, until disbursed pursuant to the terms of the
Centurion Supplemental Engagement Agreement. Centurion will
disburse Net Proceeds as follows: All Net Proceeds will be shared
85% to the Debtors and 15% to Centurion.
(b) Centurion may charge a Buyer's Premium of up to 18% of
the amount of the purchase price for a given item of the Additional
Equipment sold at the auction sale, to be paid by the purchasers
thereof. Such Buyer's Premium will accrue exclusively for the
benefit of Centurion and will not be included in the Net Proceeds.
The Centurion Supplemental Engagement Agreement provides that the
Debtors will indemnify and hold harmless Centurion and its
employees, agents, members and managers, from any and all liability
or defense costs, including, without limitation, reasonable
attorneys' fees, arising out of or relating to any breach of the
Centurion Supplemental Engagement Agreement by the Debtors or any
intentional, reckless or grossly negligent actions by the Debtors
or their employees or agents concerning the Additional Equipment or
the Auction Sale.
The Debtors are not aware of any liens on, or other Interests in,
any of the Additional Equipment. As such, they believe that the
Additional Equipment may be sold free and clear of any and all
Interests.
A copy of the Exhibit C is availale at https://tinyurl.com/y3s7zs4g
from PacerMonitor.com free of charge.
About Center City Healthcare
Center City Healthcare, LLC, is a Delaware limited liability
company that operates Hahnemann University Hospital. Its parent
company is Philadelphia Academic Health System, LLC, which is also
the parent company of St. Christopher's Healthcare, LLC and its
affiliated physician groups.
Center City Healthcare and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
19-11466) on June 30, 2019. At the time of the filing, the Debtors
estimated assets of between $100 million and $500 million and
liabilities of the same range.
The cases are assigned to Judge Kevin Gross.
The Debtors tapped Saul Ewing Arnstein & Lehr LLP as legal counsel;
EisnerAmper LLP as restructuring advisor; SSG Advisors, LLC as
investment banker; and Omni Management Group, Inc. as claims and
noticing agent.
CENTURY 21: Committee Taps AlixPartners LLP as Financial Advisor
----------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Century 21 Department Stores LLC and its
affiliates seeks approval from the U.S. Bankruptcy Court for the
Southern District of New York to hire AlixPartners, LLP as its
financial advisor.
The firm will render the following services:
- review and evaluate the Debtors' current financial
condition, business plans and cash and financial forecasts, and
periodically report to the committee regarding the same;
- review the Debtors' cash management, tax sharing and
intercompany accounting systems, practices and procedures;
- review and investigate related party transactions and
selected other pre-petition transactions;
- identify and/or review potential preference payments,
fraudulent conveyances and other causes of action that the various
Debtors' estates may hold against third parties, including each
other;
- analyze the Debtors' assets and claims, and assess potential
recoveries to the various creditor constituencies under different
scenarios;
- evaluate any proposed sale process and related bids and
participate in any meetings with bidders or auction;
- assist in the development and/or review of the Debtors' plan
of reorganization and disclosure statement;
- review and evaluate court motions filed or to be filed by
the Debtors or any other parties-in-interest;
- render expert testimony and litigation support services;
and
- attend committee meetings and court hearings as may be
required in the role of advisors to the committee.
AlixPartners' current standard hourly rates for 2020 are as
follows:
Managing Director $1,000 - $1,195
Director $800 - $950
Senior Vice President $645 - $735
Vice President $470 - $630
Consultant $175 - $465
Kathryn McGlynn, a managing director at AlixPartners, disclosed in
court filings that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Kathryn McGlynn
AlixPartners, LLP
909 Third Avenue, Floor 30
New York, NY 10022
Telephone: (212) 490-2500
About Century 21
Century 21 Department Stores LLC and its affiliates are pioneers in
off-price retail offering access to designer brands at amazing
prices. They opened their iconic flagship location in downtown
Manhattan in 1961. As of the petition date, the Debtors have 13
stores across New York, New Jersey, Pennsylvania and Florida and an
online retail presence, operate seasonal pop-ups, and employ other
innovative retail concepts. Visit http://www.c21stores.comfor more
information.
Century 21 Department Stores LLC and its affiliates sought Chapter
11 protection (Bankr. S.D.N.Y. Lead Case No. 20-12097 on Sept. 10,
2020).
Century 21 was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Hon. Shelley C. Chapman is the case judge.
The Debtors have tapped Proskauer Rose LLP as their legal counsel,
Berkeley Research Group LLC as financial advisor, and Hilco
Merchant Resources LLC as liquidation consultant. Stretto is
Debtors' claims agent.
On September 16, 2020, the Office of the United States Trustee
appointed the official committee of unsecured creditors pursuant to
Section 1102(a)(1) of the Bankruptcy Code.
CENTURY 21: Committee Taps Lowenstein Sandler as Legal Counsel
--------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Century 21 Department Stores LLC and its
affiliates seeks approval from the U.S. Bankruptcy Court for the
Southern District of New York to hire Lowenstein Sandler LLP as its
legal counsel.
The professional services that Lowenstein Sandler will provide to
the committee include:
(a) advise the committee with respect to its rights, duties,
and powers;
(b) assist and advise the committee in its consultations with
the Debtors relative to the administration of the Chapter 11
cases;
(c) assist the committee in analyzing the claims of the
Debtors' creditors and the Debtors' capital structure;
(d) assist the committee in its investigation of the acts,
assets, liabilities, and financial condition of the Debtors;
(e) assist the committee in its investigation of the liens and
claims of the holders of the Debtors' prepetition debt;
(f) assist the committee in its analysis of, and negotiations
with, the Debtors or any third party concerning matters related to
disclosure statements and plan documents;
(g) assist and advise the committee as to its communications
to unsecured creditors;
(h) represent the committee at hearings and proceedings;
(i) review and analyze applications, orders, statements of
operations, and schedules filed with the court;
(j) assist the committee in preparing pleadings and
applications;
(k) prepare, on behalf of the committee, any pleadings; and
(l) perform such other legal services as may be required or
are otherwise deemed to be in the interests of the committee.
Lowenstein Sandler's current hourly rates are as follows:
Partners of the Firm $630 - $1,450
Senior Counsel and Counsel (generally
seven or more years' experience) $495 - $870
Associates (generally fewer than six
Years' experience) $395 - $675
Paralegals, Practice Support and Assistants $210 - $370
The hourly rates of the attorneys that will be primarily
responsible for the firm's representation in the case range from
$585 to $995.
Jeffrey Cohen, Esq., a partner at Lowenstein Sandler, disclosed in
court filings that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
Mr. Cohen also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: Lowenstein Sandler did not represent the Committee
prior to the Petition Date.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Lowenstein Sandler expects to develop a budget and
staffing plan to reasonably comply with the U.S. Trustee's request
for information and additional disclosures, as to which Lowenstein
Sandler reserves all rights. The Committee has approved Lowenstein
Sandler's proposed hourly billing rates. I hereby declare under the
penalty of perjury that the foregoing statements made by me are
true and correct to the best of my knowledge, information and
belief.
The firm can be reached through:
Jeffrey L. Cohen, Esq.
Lindsay H. Sklar, Esq.
LOWENSTEIN SANDLER LLP
1251 Avenue of the Americas
New York, NY 10020
Telephone: (212) 262-6700
Facsimile: (212) 262-7402
E-mail: jcohen@lowenstein.com
lsklar@lowenstein.com
- and -
Brent Weisenberg, Esq.
LOWENSTEIN SANDLER LLP
One Lowenstein Drive
Roseland, NJ 07068
Telephone: (973) 597-2500
Facsimile: (973) 597-2400
E-mail: bweisenberg@lowenstein.com
About Century 21
Century 21 Department Stores LLC and its affiliates are pioneers in
off-price retail offering access to designer brands at amazing
prices. They opened their iconic flagship location in downtown
Manhattan in 1961. As of the petition date, the Debtors have 13
stores across New York, New Jersey, Pennsylvania and Florida and an
online retail presence, operate seasonal pop-ups, and employ other
innovative retail concepts. Visit http://www.c21stores.comfor more
information.
Century 21 Department Stores LLC and its affiliates sought Chapter
11 protection (Bankr. S.D.N.Y. Lead Case No. 20-12097 on Sept. 10,
2020).
Century 21 was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Hon. Shelley C. Chapman is the case judge.
The Debtors have tapped Proskauer Rose LLP as their legal counsel,
Berkeley Research Group LLC as financial advisor, and Hilco
Merchant Resources LLC as liquidation consultant. Stretto is
Debtors' claims agent.
On September 16, 2020, the Office of the United States Trustee
appointed the official committee of unsecured creditors pursuant to
Section 1102(a)(1) of the Bankruptcy Code.
CHINA FISHERY: Hires Duff & Phelps as Financial Advisor
-------------------------------------------------------
China Fishery Group Limited (Cayman), and its debtor-affiliates
seek authority from the U.S. Bankruptcy Court for the Southern
District of New York to employ Duff & Phelps, LLC, as financial
advisor to the Debtor.
China Fishery requires Duff & Phelps to:
a. prepare financial models for underlying assets and
assessment of cash requirements;
b. prepare valuation and financial analysis of underlying
assets;
c. support litigation by providing expert testimony and
assistance with document requests;
d. provide expert testimony on valuation and/or plan
feasibility;
e. conduct a site visit of operating entities;
f. prepare financial analysis on recovery alternatives to all
stakeholders;
g. meet with creditors and other stakeholders;
h. assist in evaluation of post-petition cash requirements for
the Debtors;
i. assist with creditor negotiations; and
j. assist in the development and negotiation of a plan of
reorganization.
Duff & Phelps will be paid at these hourly rates:
Managing Director $1,120
Director $1,105
Vice President $875
Sr. Associate $665
Analyst $465
On September 22, 2020, the Debtors paid Duff & Phelps a retainer of
$250,000. Duff & Phelps will be paid at its usual and customary
hourly fees, subject to a monthly minimum amount of $25,000
("Monthly Minimum Fee") out of the retainer. Upon a Restructuring
Event, Duff & Phelps shall earn the Contingent Fee of $600,000
reduced by the amount of Monthly Fees earned by Duff & Phelps prior
to the Restructuring Event, but in no event shall the Contingent
Fee be reduced below $400,000.
Duff & Phelps will also be reimbursed for reasonable out-of-pocket
expenses incurred.
David W. Prager, managing director of Duff & Phelps, LLC, 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 Debtors and their estates.
Duff & Phelps can be reached at:
David W. Prager
DUFF & PHELPS
55 E. 52nd Street
New York, NY 10055
Tel: (212) 871-2000
About China Fishery Group Limited (Cayman)
China Fishery Group Limited (Cayman) and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 16-11895) on June 30, 2016.
In the petition signed by CEO Ng Puay Yee, China Fishery Group was
estimated to have assets at $500 million to $1 billion and debt at
$10 million to $50 million.
The cases are assigned to Judge James L. Garrity Jr.
Weil, Gotshal & Manges LLP has been tapped to serve as lead
bankruptcy counsel for China Fishery and its affiliates other than
CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal
replaces Meyer, Suozzi, English & Klein, P.C., the law firm
initially hired by the Debtors. The Debtors have also tapped
Klestadt Winters Jureller Southard & Stevens, LLP, as
conflictcounsel; Goldin Associates, LLC, as financial advisor; RSR
Consulting LLC as restructuring consultant; and Epiq Bankruptcy
Solutions, LLC, as administrative agent. Kwok Yih & Chan serves as
special counsel.
On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11
trustee for CFG Peru Investments Pte. Limited (Singapore), one of
the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as
the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as
special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves
as special litigation counsel.
CIRCLE BAR: Reaches Deal With CCG; Plan Confirmed
-------------------------------------------------
Judge David R. Duncan has ordered that the Disclosure Statement of
Circle Bar T Demolition and Grading, Inc. is finally approved, and
the Plan, as modified by the Plan Addendum and the specific
provisions of this Order, is confirmed.
The Debtor and it secured creditor, Commercial Credit Group Inc.,
have agreed to terms and conditions that will resolve CCG's
Objection to Confirmation [Doc. No. 128], and CCG's pending Motion
for Relief from the Automatic Stay [Doc. No. 130], which is deemed
withdrawn (collectively, the "Settlement"). As part and parcel of
the Settlement, and to implement the terms and provisions thereof,
the Debtor has agreed to, and does hereby, amend the treatment of
CCG and its claims. The terms agreed by the parties include:
a) CCG's will hold an allowed secured claim against the Debtor
in the amount of $300,000 (the "CCG Claim");
b) CCG will retain all liens and encumbrances that it held
against the Debtor's property prepetition;
c) Interest will accrue on the CCG Claim post-confirmation at the
rate of 6 percent per annum.
d) Beginning on the 20th day of the first month following the
Effective Date of the Plan, which will be deemed to be Aug. 20,
2020, the Debtor shall promptly make monthly payments to CCG of
$6,000 until the balance of the CCG Claim, including accruing
interest, has been paid in full.
The terms of the Settlement are a modification to the Plan, and
said modification of the Plan, as articulated in this Order, meets
the requirements of 11 U.S.C. Sec. 1127 and Fed. R. Bankr. Pro.
3019.
A copy of the Plan Confirmation Order is available at:
https://www.pacermonitor.com/view/VPATYBQ/Circle_Bar_T_Demolition_and_Grading__scbke-19-04350__0159.0.pdf?mcid=tGE4TAMA
About Circle Bar T Demolition
Circle Bar T Demolition and Grading, Inc., sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.S.C. Case No. 19-04350)
on Aug. 16, 2019. In the petition signed by Tom Coker Lee,
president, the Debtor was estimated to have assets of between
$100,001 and $500,000 and liabilities of between $500,001 and $1
million. The case is assigned to Judge David R. Duncan. The Debtor
is represented by Eddye L. Lane, Esq., and J. Carolyn Stringer,
Esq. No official committee of unsecured creditors has been
appointed in the Debtor's case.
CLAAR CELLARS: Unsecured Creditors to Paid in Full by 2025
----------------------------------------------------------
Claar Cellars, LLC and RC Farms, LLC submitted a First Amended
Disclosure Statement.
The Debtors believe that all creditors in Classes 1-12 will receive
payment of 100 percnet of the principal amount of their claims as
well as interest.
Class 3 Claims of HomeStreet Bank are impaired. The claim against
RC Farms includes the amount of the claims against Claar Cellars,
thus the full balance owed to HomeStreet by the Reorganized Debtor
under the Plan is $1,956,124.61. The Reorganized Debtor shall have
until December 31, 2025 (“Payoff Period”) in which to pay the
full HomeStreet Claim. The Reorganized Debtor may pay the
HomeStreet Claim through any method available to the Reorganized
Debtor including operations, sale, refinance, equity infusion or
otherwise.
Class 4 Secured Claim of Baker Boyer Bank is impaired. Baker Boyer
has filed a fully secured claim against the Debtor in the amount of
$796,253.16. The Reorganized Debtor shall have until December 31,
2025 in which to pay the full Baker Boyer Claim. The Reorganized
Debtor may pay the Baker Boyer Claim through any method available
to the Reorganized Debtor including operations, sale, refinance,
equity infusion or otherwise.
Class 5 Allowed Secured Claim of Farm Credit Leasing is impaired.
Farm Credit Leasing will have an allowed secured claim against the
Reorganized Debtor for $7,500 based upon the claim against RC
Farms. Farm Credit Leasing shall have an allowed secured claim
against the Reorganized Debtor for $7,217.49 based upon the claim
against Claar Cellars. Farm Credit Leasing Allowed Claims shall be
paid in five equal annual payments of principal and interest (at
the same rate established on the HomeStreet Claim), with the first
payment due on Dec. 31, 2021 and subsequent payments due on Dec. 31
of each subsequent year until Dec. 31, 2025 when the entire balance
of Farm Credit Leasing's Claims shall be due in full.
Class 6 Allowed Secured Claim of Financial Pacific Leasing. This
class is impaired. Financial Pacific Leasing will have an allowed
secured claim against the Reorganized Debtor for $27,420 based upon
the claim against RC Farms. Financial Pacific Leasing's Allowed
Claims will be paid in five equal annual payments of principal and
interest (at the same rate as that established on the HomeStreet
Claim), with the first payment due on Dec. 31, 2021 and subsequent
payments due on Dec. 31 of each subsequent year until Dec. 31, 2025
when the entire balance of Financial Pacific Leasing's Claims shall
be due in full.
Class 7 Allowed Secured Claim of Bank of the West/H&A. This class
is impaired. BOW will have an allowed secured claim against the
Reorganized Debtor for $37,514 based upon the claim against Claar
Cellars. BOW's Allowed Claims will be paid in five equal annual
payments of principal and interest (at the same rate as that
established on the HomeStreet Claim), with the first payment due on
Dec. 31, 2021 and subsequent payments due on Dec. 31 of each
subsequent year until December 31, 2025 when the entire balance of
BOW's Claims shall be due in full.
Class 8 Secured Claim of Alliance Funding/Hammi Bank is impaired.
Alliance shall have an allowed secured claim for the remaining
balance due under its purchase agreement (estimated to be $15,000)
based upon the claim against Claar Cellars. Alliance's Allowed
Claims shall be paid in five equal annual payments of principal and
interest (at the same rate as that established on the HomeStreet
Claim), with the first payment due on Dec. 31, 2021 and subsequent
payments due on December 31 of each subsequent year until Dec. 31,
2025 when the entire balance of Alliance's Claim shall be due in
full.
Class 10 Unsecured Claims are impaired. Unsecured Claims shall
accrue interest at the rate of 2.5 percent per annum (or such other
rate as the Court finds is required by the Bankruptcy Code) until
paid in full. Unsecured Creditor's Allowed Claims shall be paid in
five equal annual payments of principal and with the first payment
due on Dec. 31, 2021 and subsequent payments due on Dec. 31 of each
subsequent year until Dec. 31, 2025 when the entire balance of the
Unsecured Claims shall be due in full.
Class 11 Equity Claims includes the claims of the Reorganized
Debtor's members, Bob Whitelatch (30% interest), Crista Whitelatch
(30% interest), James Whitelatch (20% interest) and John Whitelatch
(20% interest). Bob Whitelatch, Crista Whitelatch, John Whitelatch
and James Whitelatch shall retain their interests in the
Reorganized Debtor, without payment of money, under the Plan.
Class 12 Secured Claims of Farm Credit Services of America PCA aka
AgDirect is impaired. Farm Credit Services shall have an allowed
secured claim against the Reorganized Debtor for $7,087 based upon
the claim against RC Farms. Farm Credit Services Allowed Claims
shall be paid in five equal annual payments of principal and
interest with the first payment due on Dec. 31, 2021 and subsequent
payments due on December 31 of each subsequent year until December
31, 2025 when the entire balance of Farm Credit Services Claims
shall be due in full.
The source of payments to creditors will be through the Debtors'
continued business operations, changes in operations for immediate
funding, refinancing and/or the proposed sale or refinance of
property.
A full-text copy of the First Amended Disclosure Statement dated
August 31, 2020, is available at https://tinyurl.com/y6f8vy4f from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Steven H. Sackmann, #00618
Sackmann Law Office
PO Box 409 - 455 E. Hemlock, #A
Othello, Washington 99344
(509) 488-5636 - phone
Toni Meacham, #35068
Attorney at Law
1420 Scooteney Rd
Connell, WA 99326
(509)488-3289
Roger W. Bailey #26121
Bailey & Busey, PLLC
411 N. 2nd Street
Yakima, WA 98901
(509) 248-4282 - phone
About Claar Cellars LLC and
RC Farms LLC
Claar Cellars LLC -- https://www.claarcellars.com/ -- is a
family-owned estate winery. It offers a selection of wines,
including Riesling, Cabernet Sauvignon, Merlot, Chardonnay,
Sauvignon Blanc, Syrah, Sangiovese, and newly planted Pinot Gris,
Viognier, Malbec and Petite Sirah.
Claar Cellars and its affiliate, RC Farms LLC, sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wash. Lead
Case No. 20-00044) on Jan. 9, 2020. At the time of the filing, the
Debtors each had estimated assets of between $10 million and $50
million and liabilities of between $1 million and $10 million.
Judge Whitman L. Holt oversees the cases.
The Debtors are represented by Steven H. Sackmann, Esq., at
Sackmann Law, PLLC; Toni Meacham, Esq., Attorney at Law; and Roger
W. Bailey, Esq., at Bailey & Busey, PLLC.
A committee of unsecured creditors has been appointed in Claar
Cellars' bankruptcy case. The committee is represented by Southwell
& O'Rourke, P.S.
COPSYNC INC: Trustee Wins $155,000 Award Against Flanagans
----------------------------------------------------------
The case captioned H. KENNETH LEFOLDT, JR., TRUSTEE OF THE COPSYNC,
INC. LIQUIDATION TRUST, v. BRANDON-COPSYNC, LLC, BRANDON FLANAGAN
AND DONALD FLANAGAN, ADV.P. No. 19-1004 (Bankr. E.D. La.) came
before the court on July 20-23, 2020 as a trial on the complaint of
H. Kenneth Lefoldt, Jr., in his capacity as the Trustee of the
COPsync, Inc. Liquidation Trust against defendants Brandon-COPsync,
LLC, Brandon Flanagan, and Donald Flanagan.
Upon analysis, Bankruptcy Judge Jerry A. Brown found that the
Trustee has proved his breach of contract claim and turnover claim
against the defendants, and the court awarded damages in the amount
of $155,184 jointly and severally against both Brandon and Donald
Flanagan. The court also awarded $32,500 against all defendants
jointly and severally as reasonable attorney's fees for abuses of
the discovery process.
COPsync, Inc., and BCS were parties to a distribution agreement
that was entered into on June 2, 2010 and renewed or renegotiated
several times thereafter. Founded in 2005, the debtor created a
software for a service platform for law enforcement to share
real-time information among counties, agencies and departments. The
software was sold and/or licensed under both the COPSYNC and
COPSYNC911 trademark. The agreement between the debtor and BCS
granted BCS a non-exclusive license to sell the software and
related goods and services in a limited geographic area in the
northeastern United States. The agreement was structured such that
BCS collected all the fees from its sales and was then obligated to
remit to the debtor a certain portion of the fees. This did not
always happen as it should have. On Sept. 29, 2017 when the debtor
filed a petition for relief under Chapter 11 of the U.S. Bankruptcy
Code1, it was owed significant sums by BCS for the debtor's share
of software sales that BCS failed to remit to the debtor. Further
complicating this was the failure of both BCS and the debtor to
adequately keep track of sales and invoiced amounts, so it was
unclear to the debtor how much BCS actually owed the debtor.
Prior to the trial in this matter, on May 6, 2020, the court
granted judgment on the pleadings in favor of the Trustee against
BCS "in the amount of $661,705.75 for the accounts receivable owed
to Copsync, Inc. as of Dec. 18, 2017, plus interest at the federal
rate from the date this adversary proceeding was filed." The court
also rendered judgment for an additional $69,534, which represented
the amount BCS "collected for the sale and/or license of the
debtor's software after the debtor's bankruptcy filing." These
numbers were arrived at by using the Trustee's calculations in the
motion for judgment on the pleadings. The Trustee in his post-trial
brief asked the court to enter judgment against the Flanagans in
the amount of $386,760 plus an additional $117,932.69 in attorneys'
fees and costs incurred by the Trustee in attempts to obtain
discovery from the Flanagans. The Trustee stated in his post-trial
brief that the $69,534 awarded by the court against BCS in the
judgment on the pleadings is duplicative of the $386,760 he sought
against the Flanagans, but he argued that the court should award
judgment of this amount against the Flanagans anyway.
After careful consideration of the facts presented, the court found
that BCS, through the Flanagans, and Ron Bienvenu of COPsync were
discussing the possibility of a merger or other way of combining
operations, and that the parties continued to work together to make
sales of software after the notice of default. The court also
found, however, that BCS did not make any payments to COPsync after
the payments totaling $108,000 related to the fourth amendment to
the distribution agreement. The court found that as to the
technical problems, COPsync failed to provide some of the support
services it should have, but BCS also should have provided
customers with services such as resetting passwords. The court
found that BCS was in breach of the contract for non-payment, but
it also found that COPsync shares some of the blame for the
situation. Additionally, COPsync continued to set up service for
the new customers BCS and/or the Flanagans brought in after the
default notice was issued. Although there is plenty of blame
assignable to both sides, the court found that any blame falling on
COPsync did not justify BCS or the Flanagans withholding COPsync's
share of the revenue from sales.
The Trustee is entitled to recover the amount of fees collected
that should have been paid to COPsync. The court has already
awarded judgment to the Trustee against BCS in the total amount of
$731,239.75. But, because BCS no longer exists and has no assets,
that judgment may be worthless. Thus, the Trustee further sought to
recover from the Flanagans individually.
The Trustee also pled a claim under section 542(a) of the
Bankruptcy Code. Section 541 of the Bankruptcy Code provides that a
debtor's estate is comprised of "all legal or equitable interests
of the debtor as of the commencement of the case." Here, the money
that BCS failed to pay to the debtor constituted property of the
estate.
The Trustee sought turnover of the funds received by BCS after June
30, 2017 from both Brandon and Donald Flanagan. The court said it
is clear from the evidence presented at trial that both Flanagans
were in control of and in possession of those funds: Brandon as an
officer/manager of BCS, and Donald as its sole member.
Additionally, the Trustee showed through Trial Exhibit 136 that
many thousands of dollars were transferred from the BCS bank
account to Brandon Flanagan's personal bank account during the time
period in question.
The court found that both Brandon and Donald Flanagan exercised
control over property of the estate in the amount of $155,184. It
further found that they shall turn over that property to the
Trustee.
A full-text copy of the Court's Memorandum Opinion is available at
https://bit.ly/36FYYDb from Leagle.com.
About COPsync
COPsync, Inc., was created in 2005 as a "software for a service or
platform for law enforcement to share real-time information amongst
counties, agencies, and departments.
COPsync completed a $10.6 million equity financing capital raise in
November 2015 and became listed on the Nasdaq Capital Market
exchange (COYN).
COPsync, Inc., filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 17-12625) on
Sept. 29, 2017. The Debtor estimated $1 million to $10 million in
both assets and liabilities.
The Debtor tapped John M. Duck, Esq., Robin B. Cheatham, Esq.,
Victoria P. White, Esq., and Scott R. Cheatham, Esq., at Adams and
Reese LLP, as counsel. Jones Walker, LLP, served as special
counsel. Alliance Overnight Document Service, LLC, served as the
Debtor's noticing agent.
CRC BROADCASTING: Hires Angelo Bellone as Accountant
----------------------------------------------------
CRC Broadcasting Company, seeks authority from the U.S. Bankruptcy
Court for the District of Arizona to employ Angelo Bellone, as
accountant to the Debtor.
CRC Broadcasting requires Angelo Bellone to assist the Debtor in
the preparation of necessary tax returns, financial statements,
monthly operating reports, and any other accounting matters that
may require assistance during the Chapter 11 proceeding.
Angelo Bellone will be paid at these hourly rates:
Accountants $100 to $200
Bookkeepers $75
Angelo Bellone will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Angelo Bellone 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.
Angelo Bellone can be reached at:
Angelo Bellone
12601 N Cave Creek Rd., Suite 109
Phoenix, AZ 85022
Tel: (602) 293-3902
About CRC Broadcasting Company
CRC Broadcasting Company, Inc., a broadcast media company based in
Scottsdale, Ariz., filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-02349) on March 6,
2020, listing under $1 million in both assets and liabilities.
Allan D. NewDelman, Esq., at Allan D. NewDelman, P.C., is the
Debtor's legal counsel.
DALF ENERGY: Suit vs GS Oilfield et al., Moved to W.D. Texas
------------------------------------------------------------
District Judge Matthew J. Kacsmaryk transferred the case captioned
TITANURBI21, LLC, DALF ENERGY, LLC, and TITAN VAC & FLOW, LLC
Plaintiffs, v. GS OILFIELD SERVICES, LLC, et. al., Defendants, No.
2:20-CV-069-Z (N.D. Tex.) to the Western District of Texas, San
Antonio Division as it is related to the bankruptcy case, In re
DALF Energy, LLC, Case No. 20-50369-CAG pending before the Hon.
Craig A. Gargotta.
TitanUrbi21, LLC is an investment holding company that owns DALF
Energy, LLC and Titan Vac & Flow, LLC -- entities that operate oil,
gas, and mineral interests. In 2015, DALF hired J.R. Scribner as an
independent contractor to locate and analyze potential oil and gas
investment opportunities. In 2016, Mr. Scribner contacted several
of the named Defendants (also oil and gas operating entities) on
behalf of DALF to purchase of oil and gas leases located in Archer,
Callahan, Gray, and Shackelford Counties, Texas.
After finalizing the sales, DALF discovered it was responsible for
operating allegedly worthless and non-profitable oil and gas wells,
twelve of which are subject to the Texas Railroad Commission's
plugging requirement ("shut-in wells"). On July 5, 2017, the
Plaintiffs filed a state court action against Defendants in the
223rd Judicial District Court for Gray County, Texas. While the
physical land and minerals at issue are located in Gray County, the
locations of the parties are mostly spread across Central and North
Texas.
The plaintiffs alleged that Scribner conspired with groups of
Defendants to assign and transfer oil leases through
misrepresentations and omissions of material fact to DALF.
Plaintiffs allege that Scribner misrepresented production output of
the leases. Additionally, the Plaintiffs claim that the purchase
agreements omitted material information regarding reservations of
an overriding royalty interest. Further, because many of the leases
at issue qualify as securities, the Plaintiffs allege that
Defendants were non-compliant with Texas and federal securities
law. Plaintiffs claim Defendants failed to ensure that DALF was
"well-informed" concerning its purchases as required by Texas
Administrative Code section 109.13(a)(1).
Since filing suit, DALF accrued a debt of over $1.1 million based
on the oil and gas sales at issue. Four of DALF's creditors filed
suit against DALF for breach of contract. Accordingly, DALF filed a
Voluntary Petition for Relief under Chapter 11 of Title 11 in the
United States Bankruptcy Court for the Western District of Texas,
San Antonio Division, on Feb. 17, 2020. This filing triggered an
automatic stay on the state action pursuant to 11 U.S.C. section
362(a). DALF claimed its lack of income inhibits it from paying
creditors and complying with the Texas Railroad Commission's
requirements for plugging shut-in wells. DALF listed its claims
against Defendants in this case as its primary bankruptcy estate
asset.
On March 18, 2020, the Plaintiffs removed the case to the District
Court. On April 15, 2020, approximately half of the thirty-one
Defendants filed the instant Motion for Remand.
According to Judge Kacsmaryk, the case should be transferred to the
district and division where DALF's bankruptcy proceeding is
pending. Under 28 U.S.C. section 1412, "a district court may
transfer a case or proceeding under title 11 to a district court
for another district, in the interest of justice or for the
convenience of the parties." Proceedings "related to" a bankruptcy
case should be transferred to the district court where the
bankruptcy proceedings are pending. Section 1412's "interest of
justice" prong contains a "strong presumption that proceedings
related to a bankruptcy case should be transferred to the district
where the bankruptcy proceedings are pending," because transfer
"would promote the efficient resolution of the bankruptcy estate by
consolidating the dispute into one forum." In determining whether
transfer is appropriate, the Court also considers: (1) the location
of the bankruptcy proceeding, (2) whether the interests of judicial
economy would be served by the transfer, (3) the possibility of a
fair trial, (4) either forum's interest in the controversy, (5) the
enforceability of any judgment obtained, and (6) the plaintiff's
original choice of forum.
Judge Kacsmaryk held transfer to the Bankruptcy Court is in the
interest of justice:
-- DALF's bankruptcy proceedings are pending in the Western
District of Texas, San Antonio Division.
-- The transfer promotes judicial efficiency in the
administration of the bankruptcy estate and reduces the risk of
conflicting rulings.
-- The Parties can rest assured that they will receive a fair
trial, and there is no evidence to the contrary.
-- While the Northern District of Texas has an interest in
this case because the properties at issue are located here, so too
does the Western District of Texas as DALF's headquarters are
located in San Antonio.
-- A judgment from the Bankruptcy Court will be equally as
enforceable as a judgment from either this Court or the state
court.
-- While Plaintiffs chose Gray County as their forum in 2017,
Plaintiffs removed this action to federal court and sought transfer
to district and division where they could have originally brought
suit -- the Western District of Texas, San Antonio Division.
Thus, balancing all factors, the Court concluded that transfer is
appropriate under section 1412. In sum, the economic and efficient
resolution of DALF's bankruptcy claim depends upon having the
state-law claims -- ones that could affect the bankruptcy
proceedings -- centralized in the most appropriate forum, and that
forum is the Western District of Texas, San Antonio Division.
A copy of the Court's Memorandum Opinion and Order is available at
https://bit.ly/3njgD9D from Leagle.com.
About DALF Energy, LLC
DALF Energy, LLC is a privately held company in the oil and gas
extraction business.
DALF Energy, LLC, filed its voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50369) on Feb.
17, 2020. In the petition signed by Carlos Sada Gonzalez,
co-manager, the Debtor estimated $1 million to $10 million in both
assets and liabilities. The law office of H. Anthony Hervol
represents the Debtor as counsel.
DAVID W. SORENSON: Selling 3 White Bear Lake Properties for $665K
-----------------------------------------------------------------
David W. Sorenson and Sandra L. Espe Sorenson ask the U.S.
Bankruptcy Court for the District of Minnesota to authorize the
sale of the following three rental properties located: (i) 997
Stillwater Street, White Bear Lake, Minnesota to VG Properties, LLC
for $185,000; (ii) 5353 LaValle Court, White Bear Lake, Minnesota
to Ryan Rich for $312,000; and (iii) 2101 Third Street, White Bear
Lake, Minnesota to Jerrold Ford for $179,725.
The Debtors are the owners of four real estate properties which
they operate as rental properties. They have received offers to
purchase three of the rental properties. They believe that it is
in the best interests of the estate and of creditors to sell these
properties.
The properties are subject to liens. The Debtors seek authority to
sell the properties free and clear of liens and interests; and to
apply the proceeds in reduction of the debts secured by these
properties.
The Debtors now ask authority to consummate these three
transactions. These rental properties were subject to foreclosure
proceedings which were pending at the time of the bankruptcy
filing. The properties are all subject to mortgages and tax liens
which exceed the value of the properties.
The Debtors desire to sell these two properties free and clear of
liens and encumbrances. The LaValle Court property is being sold
to the Sorensons' son-in-law.
The Debtors also ask authority to apply the proceeds from the sale
to pay usual and customary seller's closing costs and to be paid to
the secured creditors, as their interests appear.
The Stillwater Street property is legally described as: The East
73 feet of Lots 6 and 7, Block 1, Benson's Rearrangement of Block
12, Bald Eagle, Ramsey County, Minnesota. It is a single family
residential home and is currently rented. The rental income is
insufficient to pay the debt service on the Stillwater Street
property. The property has a current value of $185,000, based on
the appraisal dated Oct. 23, 2019.
The Stillwater Street property is subject to the following
voluntary liens and encumbrances in order of priority, as shown in
the Title Commitment: (i) Nationstar Mortgage, LLC (April 15, 2002)
- $98,143, (ii) Premier Bank (mortgage and assignment of rents)
(Dec. 31, 2008) - $772,302, and (iii) Premier Bank (June 17, 2013)
- $772,302.
In addition to the foregoing voluntary liens, the Internal Revenue
Service of the United States asserts interests in the Stillwater
Property by reason of filed tax liens. The following table
summarizes the tax liens: (i) March 20, 2015 - $158,482, (ii) April
3, 2015 - $333,926, (iii) Aug. 11, 2015 - $121,575, (iv) Dec. 24,
2015 - $26,989, (v) Dec. 28, 2016 - $52,253, (vi) July 5, 2017 -
$57,893, (vii) Feb. 28, 2019 - $11,079, and (viii) Aug. 16, 2019 -
$35,786.
In addition, the Debtors have the judgments of record which
constitute liens against real properties owned by the Debtors; and
consequently, the judgment creditors have interests in the subject
properties, including 62-CV-14-6249 Ramsey Civil - $41,628 and
62-CV-15-5518 Ramsey Civil - $2,474.
The Debtors have received a purchase agreement on the Stillwater
Street Property with an offer to purchase the property for the
amount of $185,000 form VG Properties on the terms of their
purchase agreement. The Debtors estimate that the Sellers' closing
costs in connection with transaction will be approximately $6,475.
If the instant motions are granted, the Debtors propose the
proceeds from the sale of the Stillwater Street property as
follows: (i) Burnet Title (closer), Sellers' closing costs -
$6,475; (ii) Mr Cooper Satisfaction of 1st mortgage - $98,143; and
(iii) Premier Bank Reduction of 2d mortgage - $89,382. The holder
of the first mortgage is entitled to the accrual and payment of
interest, so depending on the date of closing the payoff amount
will be higher.
So far as the Debtors are able to determine, none of the lien
claims and none of the judgment liens are superior to the rights,
claims and interests of the first and second mortgage holders. All
of the tax liens were filed on or after March 20, 2015. The
earliest judgment was filed Oct. 29, 2012; after both the first and
second mortgages were in place.
Since the Stillwater Street property is worth less than the
aggregate amount due on the first and second mortgages, the
remaining claims and interests are, and have to be treated as
unsecured claims; and consequently have no right to proceeds from
the sale of the Stillwater Street property.
The LaValle Court property is legally described as: Lot 7, Block 1,
LaValle Addition, Ramsey County, Minnesota. It is a single family
residential home and is currently rented. The rental income is
insufficient to pay the debt service on the LaValle Court property.
The property has a current value of $300,000 based on the
appraisal dated Oct. 23, 2019.
The LaValle Court property is subject to the following liens and
encumbrances in order of priority as shown in the Title Commitment:
(i) Citibank, NA (as trustee for New Rez LLC; assignee of 1st
mortgage) (April 15, 2002) - $169,265; and (ii) Premier Bank (June
17, 2013) - $755,988.2
The holders of the tax liens described and the judgment liens
described, may have or assert interests in the LaValle Court
property. The Debtors have received a purchase agreement on the
LaValle Court property for the amount of $312,000 from Ryan Rich.
If the instant motions are granted, the Debtors propose the
proceeds from the sale of the LaValle Court property as follows:
(i) Burnet Title (closer), Sellers' closing costs - $10,920; (ii)
Citibank, NA Satisfaction of 1st mortgage - $169,265; and (iii)
Premier Bank Reduction of 2d mortgage - $131,825. The holder of
the first mortgage is entitled to the accrual and payment of
interest, so depending on the date of closing the payoff amount
will be higher.
The Lavalle Court property is in substantially the same situation
as the Stillwater Street property that the aggregate amount of lien
claims exceed the current fair market value; and the proceeds of
sale are sufficient to pay closing costs, satisfy the first
mortgage and make a substantial but not complete paydown on the
second mortgage.
The Third Street property is legally described as: That part of Lot
9, lying West of a line drawn from a point on the North line of
said Lot 9, 45 feet Easterly of the Northwest corner thereof, to a
point on the South line of said Lot 9, 50 feet Easterly from the
Southwest corner of Lot 9, Block 7, Murray's Addition to White
Bear, Ramsey County, Minnesota. It is a single family residential
home and is currently rented. The rental income is insufficient to
pay the debt service on the LaValle Court property. The property
has a current value of $175,000 based on the appraisal dated Oct.
23, 2019.
The Third Street property is subject to the following liens and
encumbrances in order of priority as shown in the Title Commitment:
(i) New Rez LLC (assignee of 1st mortgage) (Dec. 28, 2001) -
$52,689, (ii) Premier Bank (mortgage and assignment of rents) (Dec.
31, 2008) - $772,302, and (iii) Premier Bank (mortgage) (June 17,
2013) - $772,302.
The Debtors have received a purchase offer to buy the Third Street
property for $179,725 from Mr. Ford on the terms of their purchase
agreement. As with the other two properties, the net proceeds are
less than the aggregate due on the first and second mortgages. The
junior liens are effectively unsecured.
If the instant motions are granted, the Debtors propose the
proceeds from the sale of the Third Street Court property as
follows: (i) Burnet Title (closer), Sellers' closing costs -
$6,290; (ii) Citibank, NA Satisfaction of 1st mortgage - $48,551;
and (iii) Premier Bank Reduction of 2d mortgage - $124,884. The
holder of the first mortgage is entitled to the accrual and payment
of interest, so depending on the date of closing the payoff amount
will be higher.
The Debtors ask that the sale of these three properties will be
free and clear of all liens, claims, interests and encumbrances.
They also ask authority to pay the Sellers' usual and customary
closing costs and to pay the secured creditors to the extent net
proceeds are available. In each case this will result in the full
satisfaction of the first mortgage liens on each property, and some
paydown on each of the second mortgages. The payment of the first
secured liens will suspend the accruing of interest. The reduction
of the second mortgages is a realistic and pragmatic outcome. The
alternative is to have the proceeds held by the Debtors subject to
Premier Bank's lien until the bank brings the inevitable relief
motion. Paying down the second mortgages averts delay and
litigation costs for all and maximizes the reduction of the
unsecured claim of Premier Bank - which redounds to the benefit of
all stakeholders.
A hearing on the Motion is set for Oct. 27, 2020 at 1:30 p.m. The
Objection Deadline is Oct. 22, 2020.
A copy of the Agreements is available at
https://tinyurl.com/y56kntwl from PacerMonitor.com free of charge.
David W. Sorenson and Sandra L. Espe Sorenson sought Chapter 11
protection (Bankr. D. Minn. Case No. 20-31456) on May 27, 2020.
The Debtor tapped Joseph Dicker, Esq., as counsel.
DIMENSION DESIGN: Taps Levenfeld Pearlstein as Legal Counsel
------------------------------------------------------------
Dimension Design, Inc. received approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to hire Levenfeld
Pearlstein, LLC as its legal counsel.
The firm will provide the following legal services:
a. advise the Debtor with respect to its powers and duties;
b. attend meetings and negotiate with representatives of
creditors and other parties in interest;
c. take all necessary action to protect and preserve the
Debtor's estate;
d. prepare legal papers;
e. take any necessary action on behalf of the Debtor to obtain
approval of a plan of reorganization;
f. represent the Debtor in connection with obtaining use of
cash collateral;
g. advise the Debtor in connection with any potential sale of
assets;
h. appear before the court;
i. perform all other necessary legal services to the Debtor.
The names, positions, and hourly rates for the 2020 calendar year
of the firm's professionals presently expected to be primarily
responsible for providing services are as follows:
Harold D. Israel Partner $570
Sean P. Williams Associate $435
Prior to the commencement of the Chapter 11 case, the firm received
$50,000 from the Debtor.
Harold D. Israel, Esq., at Levenfeld Pearlstein, disclosed in court
filings that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Harold D. Israel, Esq.
Sean P. Williams, Esq.
Levenfeld Pearlstein, LLC
2 North LaSalle Street, Suite 1300
Chicago, IL 60602
Telephone: (312) 346-8380
Facsimile: (312) 346-8434
E-mail: hisrael@lplegal.com
About Dimension Design, Inc.
Based in Glenview, Ill., Dimension Design, Inc. is an event and
experience agency that delivers custom environments to support the
face-to-face marketing activities of exhibit houses & brands and
turns visions into reality. With three U.S. locations, Dimension
Design offers designs, graphics, marketing agencies and
fabrication, on site set up installation and dismantle and asset
maintenance. Visit http://www.dimensiondesign.comfor more
information.
Dimension Design sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 20-17920) on Sept. 30,
2020. The petition was signed by Michael J. Rogers, president.
At the time of the filing, Debtor had estimated assets of between
$1 million and $10 million and liabilities of the same range.
Judge Lashonda A. Hunt oversees the case.
Levenfeld Pearlstein, LLC is Debtor's legal counsel.
DOMICIL LLC: No Unsecured Claims Expected in Case
-------------------------------------------------
Domicil, LLC, submitted a Plan and a Disclosure Statement.
Mayal initially obtained stay relief in order to proceed with its
foreclosure sale on or about July 11, 2019. However, on Sept. 16,
2019, the Court vacated the stay relief order based on issues of
improper service of the motion for stay relief. Domicil and Mayal
subsequently reached an agreement regarding adequate protection
payments. The Debtor made several payments under said order, but
unfortunately defaulted, and subsequently thereafter the
foreclosure sale was resent for July 18, 2020.
Class 3 Secured Claim of Ralph and Amanda Ellison totaling $600,792
is impaired.
Class 5 Lien Interest of the Village of Sea Ranch Lakes with a
claim of $90,000 is impaired. Class 6 Oakland Manors Apartments,
LLC with a claim of $56,805.50 is impaired. Class 7 Equity
Interests are impaired.
The amount of unsecured claims as of the Petition Date is believed
to be $0. This amount is based on the proof of claims, which have
been filed but may be subject to objections.
Preliminarily, the Debtor notes that the Class 2 and Class 4 claims
have already been paid in full. Thus, no additional amounts are
necessary to fund said classes. With regard to the remaining
claims, the largest claim in the case belonging to the Ellisons
will be satisfied by transferring the property at 7 Gatehouse Road
to the Ellisons in full satisfaction of the claim. All of the
remaining claims are disputed. If the Debtor prevails against
Oakland Manors, then Oakland Manors will not have a claim. The
Debtor asserts that the liens claimed by the Village of Sea Ranch
Lakes and Hodkin Law Group, P.A. are invalid and/or completely
unsecured, meaning that no distributions are due on them.
A full-text copy of the Disclosure Statement dated August 31, 2020,
is available at https://tinyurl.com/y3nec73z from PacerMonitor.com
at no charge.
Counsel for the Debtor:
ROBERT F. REYNOLDS
SLATKIN & REYNOLDS, P.A.
One East Broward Boulevard, Suite 609
Fort Lauderdale, Florida 33301
Telephone 954.745.5880
Facsimile 954.745.5890
rreynolds@slatkinreynolds.com
About Domicil LLC
Based in Fort Lauderdale, Fla., Domicil, LLC filed a voluntary
petition under Chapter 7 of the United States Bankruptcy Code
(Bankr. S.D. Fla. Case No. 19-17449) on June 4, 2019. Judge Scott
M. Grossman oversees the case. Robert F. Reynolds, Esq. at Slatkin
& Reynolds, P.C. represents the Debtor as counsel.
DPW HOLDINGS: Issues $1.2 Million Promissory Notes to Investor
--------------------------------------------------------------
DPW Holdings, Inc., issued to an institutional investor two
unsecured Promissory Notes in the aggregate principal face amount
of $1,200,000. The principal amount of $850,000 of the first Note
dated Oct. 27, 2020, together with all accrued unpaid interest at
an annual rate of 14%, is due and payable on Dec. 28, 2020. The
principal amount of $350,000 of the second Note dated Oct. 27,
2020, together with all accrued unpaid interest at an annual rate
of 14%, is due and payable on Jan. 7, 2021.
In connection with the Notes, the Company delivered to the Investor
(i) a warrant dated Oct. 27, 2020, to purchase 425,000 shares of
the Company's common stock at an exercise price of $2.20, subject
to adjustments, and (ii) a warrant dated Oct. 27, 2020, to purchase
148,936 shares of the Company's common stock at an exercise price
of $2.59, subject to adjustments. The exercise of the Warrants is
subject to approval of the NYSE American.
Each Note contains standard and customary events of default
including, but not limited to, failure to make payments when due
under the Note, failure to comply with certain covenants contained
in the Note, or bankruptcy or insolvency of the Company. After the
occurrence of any Event of Default that results in the eventual
acceleration of the Note, interest payable on the outstanding
principal of the Note shall bear interest at the then applicable
interest rate set forth therein plus 13% per annum or the maximum
rate permitted under applicable law.
The Warrants entitle the Investor to purchase an aggregate of
573,936 shares of Common Stock for a period of approximately 17
months, subject to certain beneficial ownership limitations. The
Warrants are immediately exercisable once the Company obtains
Exchange Approval. The exercise price of each Warrant is subject
to adjustment for customary stock splits, stock dividends,
combinations or similar events. Notwithstanding anything therein
to the contrary, the Warrants may be exercised via cashless
exercise at the option of the Investor.
If the Investor elects to exercise its Warrant on a cashless basis,
it will receive a number of shares of Common Stock derived from the
following formula:
Net Number = (A x B)/C
A= the total number of shares with respect to which the Warrant is
then being exercised.
B= Black Scholes Value.
C= the closing bid price of the Common Stock as of two trading days
prior to the time of such exercise, provided, however, that in no
event shall the closing bid price used for the purposes of
calculating the Net Number be less than $1.50 with respect to the
First Warrant or $1.65 with respect to the Second Warrant.
The maximum shares of common stock issuable upon the exercise of
the First Warrant on a cashless basis would be 542,300.
The maximum shares of common stock issuable upon the exercise of
the Second Warrant on a cashless basis would be 203,392.
About DPW Holdings
DPW Holdings, Inc. -- http://www.DPWHoldings.com/-- is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly and majority-owned subsidiaries and
strategic investments, the Company provides mission-critical
products that support a diverse range of industries, including
defense/aerospace, industrial, telecommunications, medical, and
textiles. In addition, the Company owns a select portfolio of
commercial hospitality properties and extends credit
toselectentrepreneurial businesses through a licensed lending
subsidiary. DPW's headquarters are located at 201 Shipyard Way,
Suite E, Newport Beach, CA 92663.
DPW Holdings recorded a net loss available to common stockholders
of $32.93 million for the year ended Dec. 31, 2019, compared to a
net loss available to common stockholders of $32.34 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$40.49 million in total assets, $37.46 million in total
liabilities, and $3.03 million in total stockholders' equity.
Ziv Haft., Certified Public Accountants (Isr.) BDO Member Firm, the
Company's auditor since 2012, issued a "going concern"
qualification in its report dated May 29, 2020 citing that the
Company has a working capital deficiency, has incurred significant
losses and needs to raise additional funds to meet its obligations
and sustain its operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
DPW HOLDINGS: Posts $1.4-Mil. Net Loss for Quarter Ended June 30
----------------------------------------------------------------
DPW Holdings, Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $1,375,533 on $5,400,980 of total revenue
for the three months ended June 30, 2020, compared to a net loss of
$4,058,897 on $4,986,935 of total revenue for the same period in
2019.
At June 30, 2020, the Company had total assets of $40,494,155,
total liabilities of $37,463,351, and $3,030,804 in total
stockholders' equity.
The Company said, "As of June 30, 2020, the Company had cash and
cash equivalents of $1,691,289, an accumulated deficit of
$96,564,940 and negative working capital of $20,818,885. The
Company has incurred recurring losses and reported losses for the
six months ended June 30, 2020 and 2019, totaling $7,907,081 and
$10,769,923, respectively. In the past, the Company has financed
its operations principally through issuances of convertible debt,
promissory notes and equity securities. During 2020, the Company
continued to successfully obtain additional equity and debt
financing and restructured existing debt.
"The Company expects to continue to incur losses for the
foreseeable future and needs to raise additional capital to
continue its business development initiatives and to support its
working capital requirements. During February 2020, the Company
entered into a Master Exchange Agreement with an entity that has
agreed to purchase up to approximately $7.7 million in certain
promissory notes previously issued by the Company. Management
believes that the Company has access to capital resources through
potential public or private issuances of debt or equity securities.
However, if the Company is unable to raise additional capital,
which ability could be adversely affected by the outbreak of
COVID-19, it may be required to curtail operations and take
additional measures to reduce costs, including reducing its
workforce and eliminating outside consultants to conserve its cash
in amounts sufficient to sustain operations and meet its
obligations. These matters raise substantial doubt about the
Company's ability to continue as a going concern."
A copy of the Form 10-Q is available at:
https://is.gd/sbXJcS
DPW Holdings, Inc., through its subsidiaries, designs, develops,
manufactures, and sells power system solutions for the
military/aerospace, medical, and industrial-telecommunication
industries in North America, Europe, the Middle East, and
internationally. The company offers custom power system solutions;
high-grade flexibility series power supply products, such as power
rectifiers; and value-added services for original equipment
manufacturers. It also provides power conversion and distribution
equipment, direct current/active current inverters, and
uninterrupted power supply (UPS) products; and radio frequency and
microwave filters, diplexers, multiplexers, detectors, switch
filters, integrated assemblies, and detector logarithmic video
amplifiers, as well as provides commercial loans and operates
MonthlyInterest.com, an online fintech portal. In addition, the
company distributes value added power supply solutions, UPS
systems, fans, filters, line cords, and other power-related
components; and manufactures specialized electronic systems for the
military market. It sells its products directly through its sales
force, as well as through independent manufacturer representatives
and distributors. The company was formerly known as Digital Power
Corporation and changed its name to DPW Holdings, Inc. in December
2017. DPW Holdings, Inc. was founded in 1969 and is headquartered
in Newport Beach, California.
DPW HOLDINGS: Unit Gets a $1.4M Order from Medical Device Company
-----------------------------------------------------------------
DPW Holdings, Inc.'s power electronics business, Coolisys
Technologies Corp., has received a $1.4 million order from an
existing global medical device customer.
Coolisys offers a variety of power electronic products, including
high-grade custom power supplies, feature rich power rectifiers and
value-added system solutions, as well as off-the-shelf products
from its in-house design team. Coolisys products are designed to
serve mission critical applications for lifesaving and
life-sustaining products across diverse markets. Coolisys medical
and healthcare power products are tailored for specific
applications and comply with rigorous medical safety standards and
FDA requirements for medical electrical equipment.
Coolisys' CEO, Amos Kohn said, "In addition to recent momentum in
rolling out new products for electric vehicle chargers and energy
storage systems, we are seeing an increase in demand for
next-generation products in the medical and healthcare sector. The
recent $1.4 million order is the result of a long-term relationship
with a global customer, coupled with the company's strong
reputation for delivering custom high-reliability power solutions
for the medical device industry."
About DPW Holdings
DPW Holdings, Inc. -- http://www.DPWHoldings.com-- is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly and majority-owned subsidiaries and
strategic investments, the Company provides mission-critical
products that support a diverse range of industries, including
defense/aerospace, industrial, telecommunications, medical, and
textiles. In addition, the Company owns a select portfolio of
commercial hospitality properties and extends credit
toselectentrepreneurial businesses through a licensed lending
subsidiary. DPW's headquarters are located at 201 Shipyard Way,
Suite E, Newport Beach, CA 92663.
DPW Holdings recorded a net loss available to common stockholders
of $32.93 million for the year ended Dec. 31, 2019, compared to a
net loss available to common stockholders of $32.34 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$40.49 million in total assets, $37.46 million in total
liabilities, and $3.03 million in total stockholders' equity.
Ziv Haft., Certified Public Accountants (Isr.) BDO Member Firm, the
Company's auditor since 2012, issued a "going concern"
qualification in its report dated May 29, 2020 citing that the
Company has a working capital deficiency, has incurred significant
losses and needs to raise additional funds to meet its obligations
and sustain its operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
EASTSIDE DISTILLING: Has $2.19-Mil. Net Loss for June 30 Quarter
----------------------------------------------------------------
Eastside Distilling, Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss attributable to common shareholders of
$2,186,415 on $4,013,468 of net sales for the three months ended
June 30, 2020, compared to a net loss attributable to common
shareholders of $2,948,487 on $3,739,268 of net sales for the same
period in 2019.
At June 30, 2020, the Company had total assets of $33,754,784,
total liabilities of $31,310,736, and $2,444,048 in total
stockholders' equity.
The Company said, "At June 30, 2020, the Company had $1.9 million
of cash on hand with a positive working capital of $0.4 million.
Our ability to meet our ongoing operating cash needs over the next
12 months depends on reducing our operating costs, utilizing our
inventory, raising additional debt or equity capital, selling
assets and generating positive operating cash flow, primarily
through increased sales, improved profit growth and controlling
expenses. We intend to implement actions to improve profitability,
by managing expenses while continuing to increase sales. If we are
unable to obtain additional financing, or additional financing is
not available on acceptable terms, we may seek to sell assets,
reduce operating expenses or reduce or eliminate marketing
initiatives, and take other measures that could impair our ability
to be successful.
"Although our audited financial statements for the year ended
December 31, 2019 were prepared under the assumption that we would
continue our operations as a going concern, the report of our
independent registered public accounting firm that accompanies our
financial statements for the year ended December 31, 2019 contains
a going concern qualification in which such firm expressed
substantial doubt about our ability to continue as a going concern,
based on the financial statements at that time. Specifically, we
have incurred operating losses since our inception, and even though
we have reduced our operating expenses and increased our available
capacity under our lines of credit, and have large inventory
balances to drawn from, we expect to continue to incur significant
expenses and operating losses for the foreseeable future. These
prior losses and expected future losses have had, and will continue
to have, an adverse effect on our financial condition. If we
cannot continue as a going concern, our stockholders would likely
lose most or all of their investment in us."
A copy of the Form 10-Q is available at:
https://is.gd/qezVSt
Eastside Distilling, Inc., manufactures, acquires, blends, bottles,
imports, exports, markets, and sells various alcoholic beverages.
The company sells its products on a wholesale basis to distributors
in the United States, as well as in Ontario, Canada. Eastside
Distilling, Inc. was founded in 2008 and is headquartered in
Portland, Oregon.
ECOARK HOLDINGS: Board OKs Appointment of Jim Galla sa CAO
----------------------------------------------------------
The Board of Directors of Ecoark Holdings, Inc. approved the
appointment of Mr. Jim Galla as the Company's chief accounting
officer, effective Oct. 22, 2020. Mr. Jay Puchir, the Company's
former chief accounting officer, will continue as the treasurer of
the Company and chief executive officer of Banner Midstream Corp.,
the Company's primary energy subsidiary.
Jim R. Galla, 53, had served as the Company's director of Financial
Reporting since July 20, 2020. From October 2017 to July 2020, Mr.
Galla served as VP, Financial Accounting Lead Analyst, Deputy
Controller Department of Citibank, Inc. Prior to that he worked at
Walmart Stores, Inc., holding the position of Senior Manager,
Finance Planning, Real Estate Finance from August 2010 to December
2016.
On June 21, 2020, the Company entered into an Employment Agreement
with Mr. Galla. The Employment Agreement has a four-year term,
unless terminated earlier by either party. Pursuant to the
Employment Agreement, Mr. Galla receives an annual base salary of
$120,000 and is eligible to receive a performance cash bonus of
$10,000 per quarter, provided certain conditions are met. Pursuant
to the Employment Agreement Mr. Galla has received a grant of
120,000 10-year non-qualified stock options. The Options have an
exercise price of $3.42 per share and vest in eight equal
semi-annual installments beginning on July 1, 2020.
On Oct. 27, 2020, the Board of Directors of the Company approved an
increase in the annual base salary of Mr. Randy May, the Chairman
and chief executive officer of the Company from $200,000 to
$400,000, effective July 29, 2020.
About Ecoark Holdings
Rogers, Arkansas-based Ecoark Holdings, Inc., founded in 2011,
Ecoark is a diversified holding company. Ecoark Holdings has four
wholly-owned subsidiaries: Ecoark, Inc., a Delaware corporation
which is the parent of Zest Labs, Inc., 440IoT Inc., Banner
Midstream Corp., and Trend Discovery Holdings Inc. Through its
subsidiaries, the Company is engaged in three separate and distinct
business segments: (i) technology; (ii) commodities; and (iii)
financial.
Ecoark reported a net loss of $12.14 million for the year ended
March 31, 2020, compared to a net loss of $13.65 million for the
year ended March 31, 2019. As of June 30, 2020, the Company had
$27.83 million in total assets, $30.50 million in total
liabilities, and a total stockholders' deficit of $2.67 million.
EDISON NATION: Says Substantial Going Concern Doubt Exists
----------------------------------------------------------
Edison Nation, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $1,602,139 on $6,880,026 of net revenues
for the three months ended June 30, 2020, compared to a net loss of
$1,775,065 on $5,968,255 of net revenues for the same period in
2019.
At June 30, 2020, the Company had total assets of $26,021,906,
total liabilities of $15,081,404, and $10,940,502 in total
stockholders' equity.
The Company said, "For the six months ended June 30, 2020, our
operations lost approximately $3,700,000, of which approximately
$2,200,000 was non-cash and approximately $366,000 was related to
transaction costs and restructuring charges for payroll and rents.
"At June 30, 2020, we had total current assets of $8,071,961 and
current liabilities of $11,317,275 resulting in negative working
capital of $3,245,314, of which $1,166,365 was related party notes
payable. At June 30, 2020, we had total assets of $26,021,906 and
total liabilities of $15,081,404 resulting in stockholders' equity
of $10,940,502.
"The foregoing factors raise substantial doubt about the Company's
ability to continue as a going concern for at least the next twelve
months from the date of issuance of these condensed consolidated
financial statements. The ability to continue as a going concern
is dependent upon the Company's ability to attract significant new
sources of capital, attain a reasonable threshold of operating
efficiencies and achieve profitable operations from the sale of its
products."
A copy of the Form 10-Q is available at:
https://is.gd/nARTrS
Edison Nation, Inc. (NASDAQ: EDNT) is a multifaceted ecosystem
which fosters innovation and drives IP, media and consumer
products. Edison offers innovation sourcing, product design,
sales, manufacturing, and fulfillment services. Edison Nation's
model is to source innovative ideas to launch internally or license
to brand partners. Edison Nation hopes to leverage its television
property, Everyday Edisons, to become the recognized leader in the
innovator community.
EDWARD MANDEL: Court Flips Order Dismissing WNS Suit vs Law Firm
----------------------------------------------------------------
In the appellate case captioned WHITE NILE SOFTWARE, INC.,
Appellant, v. CARRINGTON, COLEMAN, SLOMAN & BLUMENTHAL, LLP,
Appellee, No. 05-19-00780-CV (Tex. App.), Justice Leslie Osborne
reversed the trial court's final judgment dismissing with prejudice
White Nile Software, Inc.'s claims and awarding Carrington,
Coleman, Sloman & Blumenthal, LLP its attorneys' fees.
This appeal is part of a multi-year, multi-case saga that
originated in 2006 stemming from Carrington Coleman's
representation of White Nile and some of its directors in a lawsuit
against Steven Thrasher.
White Nile was formed in July 2005 by Thrasher and Edward Mandel to
develop Thrasher's concept for a new kind of search engine.
Eventually, others joined White Nile, including Paul Williams,
Jason Coleman, and Skinner Layne. Layne's parents also became
investors in White Nile. However, the relationship between Mandel
and Thrasher deteriorated. On Jan. 17, 2006, Mandel, Williams, and
Layne incorporated NeXplore Technologies, Inc., which Thrasher
claimed was for the purpose of using intellectual property they
misappropriated from Thrasher and White Nile.
In 2006, Mandel, Williams, and Layne retained Jeffrey Travis of
Calhoun & Travis, LLP to represent White Nile and Mandel, Williams,
and Layne, individually. On April 6, 2006, White Nile filed suit
against Thrasher. The Thrasher case was assigned to the 14th
district court. On Jan. 31, 2007, Thrasher filed his original
counterclaims and third-party petition, which alleged claims
against Mandel, Williams, Layne, and Layne's parents.
Carrington Coleman was retained by White Nile, Mandel, Williams,
Layne, and Layne's parents to appear as lead counsel in the
Thrasher case. Thereafter, Thrasher filed his second amended
counterclaim and third-party petition which asserted a derivative
claim in his capacity as a shareholder of White Nile against
Mandel, Williams, and Layne. He also filed a motion to disqualify
Carrington Coleman. On May 15, 2007, the 14th district court signed
an order authorizing Carrington Coleman to withdraw as counsel for
White Nile. However, it remained as counsel for Mandel, Williams,
Layne, and Layne's parents. Afterward, new counsel filed an
appearance in the Thrasher case on behalf of White Nile. Then, on
October 1, 2007, the 14th district court granted a motion to
substitute new counsel for Mandel, Williams, Layne, and Layne's
parents in place of Carrington Coleman.
On May 29, 2009, the 14th district court signed an order appointing
a receiver for White Nile. After the withdrawal of Carrington
Coleman and the appointment of a receiver, proceedings continued in
the Thrasher case.
On Jan. 25, 2010, Mandel filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code. On April 23, 2010, the
Thrasher case was removed to the bankruptcy court as an adversary
proceeding. There were numerous orders in and appeals of the
bankruptcy and adversary proceedings.
On March 21, 2011, the receiver filed her third motion to abstain
and remand the Thrasher case arguing in part that she had
identified potential new causes of action against third parties in
the Thrasher case that could be lost as a result of limitations on
May 29, 2011. On May 6, 2011, the bankruptcy court severed and
remanded all non-debtor claims in the Thrasher case back to the
14th district court.
On May 27, 2011, the receiver and Carrington Coleman signed an
agreement tolling limitations with regard to claims related to the
firm's representation of White Nile until July 27, 2011. Meanwhile,
on June 3, 2011, the receiver sought permission to engage
specialized professional malpractice counsel to investigate and, if
appropriate, initiate third-party claims. However, on August 3,
2011, the 14th district court denied the receiver's request with
respect to former White Nile professionals or any former White Nile
counsel.
On Nov. 12, 2018, approximately seven years after the 14th district
court denied the receiver's request to investigate and initiate any
third-party actions against White Nile's counsel, White Nile filed
its first original petition against Carrington Coleman alleging
claims for professional negligence, breach of fiduciary duty,
aiding and abetting breach of fiduciary duty, and conspiracy
(Carrington Coleman case). The Carrington Coleman case was assigned
to the 298th district court.
On April 9, 2019, Carrington Coleman filed an answer generally
denying the allegations and asserting the affirmative defenses of,
inter alia, statute of limitations and attorney immunity. Its
answer also included a "verified denial of capacity, standing [or]
authority of Plaintiff" alleging a receiver had been appointed for
White Nile, the receiver had not been discharged, and it did not
appear that the receiver had joined or authorized the filing of the
Carington Coleman case. On the same day, it also filed a motion to
dismiss pursuant to the TCPA arguing the claims brought against it
implicated its right to petition and of association. In addition,
Carrington Coleman claimed that White Nile could not meet its
burden to establish by clear and specific evidence a prima facie
case for each essential element of the claims. Further, Carrington
Coleman maintained that (1) White Nile's claims were barred by the
applicable statutes of limitation, (2) its claims for aiding and
abetting breach of fiduciary duty and conspiracy were barred by the
attorney immunity doctrine, and (3) White Nile lacked standing,
capacity, or authority to assert the claims against Carrington
Coleman.
On May 20, 2019, White Nile filed an amended motion to transfer the
Carrington Coleman case from the 298th district court, arguing the
14th district court had primary jurisdiction over the issues raised
because White Nile's claims arose from the same transactions or
occurrences at issue in the Thrasher case.
On May 21, 2019, White Nile filed its response to the motion to
dismiss in the 298th district court. On May 22, 2019, White Nile
filed a supplement to its response attaching the declaration of the
receiver. However, in that declaration, the receiver did not state
that she had initiated, authorized, or joined the Carrington
Coleman case.
On May 30, 2019, an order was signed granting White Nile's motion
to transfer the Carrington Coleman case to the 14th district court.
However, on June 1, 2019, the 298th district court granted
Carrington Coleman's motion to dismiss under the TCPA and set the
matter for a hearing on attorneys' fees. On June 18, 2019, White
Nile filed an amended motion for reconsideration and new trial in
the 14th district court, which was denied. On June 19, 2019, after
a hearing on attorneys' fees, the 14th district court signed a
final judgment dismissing all of White Nile's claims against
Carrington Coleman with prejudice and awarding Carrington Coleman
its attorneys' fees.
In this appeal, White Nile raised six issues, arguing the trial
court erred when it granted Carrington Coleman's motion to dismiss
White Nile's claims under the Texas Citizens Participation Act
(TCPA) because: (1) White Nile's claims against Carrington Coleman
are not related to or in response to Carrington Coleman's exercise
of free speech, the right to association, or the right to petition
under the TCPA; (2) the commercial speech exception applies to
White Nile's claims; (3) White Nile presented clear and specific
evidence supporting its breach of fiduciary duty claims; (4) it
presented clear and specific evidence supporting its professional
negligence claims; (5) it presented clear and specific evidence
supporting its civil conspiracy and aiding and abetting breach of
fiduciary duty claims; and (6) Carrington Coleman failed to
establish by a preponderance of the evidence its defenses of (a)
standing, capacity, and authority, (b) statute of limitations, and
(c) attorney immunity.
White Nile's claims did not allege that Carrington Coleman made any
communications. Rather, these claims are based on Carrington
Coleman's failure to communicate with or act on behalf of White
Nile, or its use of confidential information to its or its other
clients' benefit. White Nile's claims based on Carrington Coleman's
alleged failure to communicate are not subject to the TCPA, Judge
Osborne said.
However, to the extent White Nile's petition can be construed to
allege communications, Judge Osborne turned to Carrington Coleman's
motion to dismiss under the TCPA. In its motion to dismiss,
Carrington Coleman claimed that "[o]ther than the bare assertion
that Carrington Coleman had a conflict of interest, White Nile does
not identify any act or omission by Carrington Coleman that
allegedly breached a duty to White Nile or caused any actual injury
to White Nile."
Judge Osborne stated that Carrington Coleman did not plead or show
the content of any particular communications that White Nile's
claims are based on, relate to, or are in response to. This is
compounded by the fact that the alleged subjects of any
communications were Mandel, Williams, and Layne who are not parties
to the Carrington Coleman case.
In addition, in response to the motion to dismiss, White Nile
asserted that its claims were not subject to the TCPA and it did
not plead or provide evidence of any alleged communications or
their content.
Without pleadings or evidence of Carrington Coleman's alleged
"communications" and their contents, Judge Osborne stated it was
difficult to determine that those communications were protected by
and subject to the TCPA. White Nile's petition does not make clear
what communications, if any, its claims are based on, relate to, or
are in response to; neither Carrington Coleman's motion to dismiss
nor White Nile's response provide that information either.
Accordingly, Judge Osborne concluded that Carrington Coleman did
not meet its burden to establish by a preponderance of the evidence
that White Nile's claims are based on, relate to, or are in
response to Carrington Coleman's exercise of the right to petition
or of association.
A copy of the Court's Memorandum Opinion is available at
https://bit.ly/3jAazHH from Leagle.com.
About Edward Mandel
Edward Mandel filed for chapter 11 bankruptcy protection (Bankr.
E.D. Tex. Case No. 10-40219) on Jan. 25, 2019 with estimated assets
and liabilities of $1,000,001 to $10,000,000 respectively. The
petition was signed by Mr. Mandel.
ELIEZER C. RODRIGUEZ: $290K Sale of Las Vegas Property Approved
---------------------------------------------------------------
Judge Mike K. Nakagawa of the U.S. Bankruptcy Court for the
District of Nevada authorized the short sale proposed by Eliezer
Constantino Rodriguez and Marietta S. Rodriguez of the real
property located at 2920 Kildare Cove Court, Las Vegas, Nevada, APN
124-25-211-049, to Aaron and Crystal Hunsaker for $290,000.
A hearing on the Motion was held on Oct. 21, 2020 at 9:30 a.m.
The sale is free and clear of all liens.
The loan secured by the first lien on the Property will be
satisfied through an escrow and based on the approval statement
received directly from Select Portfolio Servicing.
Eliezer Constantino Rodriguez and Marietta S Rodriguez sought
Chapter 11 protection (Bankr. D. Nev. Case No. 16-15994) on Nov. 9,
2016. They tapped Michael J. Harker, Esq., as counsel.
EMAGIN CORP: Reports $2.8M Net Loss for Quarter Ended June 30
-------------------------------------------------------------
eMagin Corporation filed its quarterly report on Form 10-Q,
disclosing a net loss of $2,831,000 on $7,700,000 of total net
revenues for the three months ended June 30, 2020, compared to a
net loss of $2,337,000 on $5,361,000 of total net revenues for the
same period in 2019.
At June 30, 2020, the Company had total assets of $32,712,000,
total liabilities of $15,767,000, and $16,945,000 in total
shareholders' equity.
The Company said, "Due to continuing losses, the COVID-19 pandemic,
and uncertainty regarding the Company's need or ability to borrow
under its ABL Facility, or continue to raise funds under an ATM
facility, the Company may not be able to meet its financial
obligations as they become due without additional financing or
sources of capital. Therefore, in accordance with applicable
accounting guidance, and based on the Company's current financial
condition and availability of funds, there is substantial doubt
about the Company's ability to continue as a going concern through
twelve months from the date these financial statements were
issued."
A copy of the Form 10-Q is available at:
https://is.gd/EBaojz
eMagin Corporation designs, develops, manufactures, and markets
organic light emitting diode (OLED) displays on-silicon micro
displays; virtual imaging products that utilize OLED micro
displays; and related products. It offers super video graphics
array (SVGA) + OLED micro displays; digital SVGA OLED-XL; super
extended graphics array OLED-XL/XLS and OLED-XL; video graphics
array OLED-XL; and widescreen ultra-extended graphics array
OLED-XL/XLS. The company also provides design reference kits, which
include a micro display and associated electronics to help original
equipment manufacturers (OEMs) evaluate micro display products;
near-eye virtual imaging modules that incorporate its
OLED-on-silicon micro displays with its lenses and electronic
interfaces for integration into OEM products; immersive head
mounted display products; and night vision smartphone camera
attachment and goggles. It serves OEMs in the military, aviation,
and consumer market sectors. The company sells its products
directly in North America, Asia, and Europe; and through
distributors in Asia and South Korea. eMagin Corporation was
founded in 1996 and is headquartered in Hopewell Junction, New
York.
ENDRA LIFE: Posts $2.9-Mil. Net Loss for Quarter Ended June 30
--------------------------------------------------------------
ENDRA Life Sciences Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $2,893,872 on $0 of revenue for the three
months ended June 30, 2020, compared to a net loss of $2,334,371 on
$0 of revenue for the same period in 2019.
At June 30, 2020, the Company had total assets of $2,862,652, total
liabilities of $1,885,772, and $976,880 in total stockholders'
equity.
The Company said, "The Company has limited commercial experience
and had a cumulative net loss from inception to June 30, 2020 of
$51,434,106. The Company had working capital of $1,035,023 as of
June 30, 2020. The Company has not established an ongoing source
of revenue sufficient to cover its operating costs and to allow it
to continue as a going concern. The Company's cash resources will
likely be insufficient to meet its anticipated needs during the
next twelve months. The Company will require additional financing
to fund its future planned operations, including research and
development and commercialization of its products.
"The ability of the Company to continue as a going concern is
dependent on the Company obtaining adequate capital to fund
operating losses until it establishes a revenue stream and becomes
profitable. Management's plans to continue as a going concern
include raising additional capital through sales of equity
securities and borrowing. However, management cannot provide any
assurances that the Company will be successful in accomplishing any
of its plans. The COVID-19 pandemic has impacted our business
operations to some extent and is expected to continue to do so and,
in light of the effect of such pandemic on financial markets, these
impacts may include reduced access to capital. If the Company is
not able to obtain the necessary additional financing on a timely
basis, the Company will be required to delay, reduce the scope of
or eliminate one or more of the Company's research and development
activities or commercialization efforts or perhaps even cease the
operation of its business. The ability of the Company to continue
as a going concern is dependent upon its ability to successfully
secure other sources of financing and attain profitable operations.
There is substantial doubt about the ability of the Company to
continue as a going concern for one year from the issuance of the
accompanying consolidated financial statements."
A copy of the Form 10-Q is available at:
https://is.gd/HsY7wx
ENDRA Life Sciences Inc. develops medical imaging technology based
on the thermos-acoustic effect that improves the sensitivity and
specificity of clinical ultrasound. It offers diagnostic imaging
technologies, such as computed tomography, magnetic resonance
imaging, and ultrasound that allow physicians to look inside a
person's body to guide treatment or gather information about
medical conditions, such as broken bones, cancers, signs of heart
disease, or internal bleeding. It also offers Nexus-128 system that
combines light-based thermos-acoustics and ultrasound to address
the imaging needs of researchers studying disease models in
pre-clinical applications. ENDRA Life Sciences Inc. has
collaborative research agreement with General Electric Company. The
company was incorporated in 2007 and is based in Ann Arbor,
Michigan.
ENERGY 11: Discloses Substantial Doubt on Staying as Going Concern
------------------------------------------------------------------
Energy 11, L.P., filed its quarterly report on Form 10-Q,
disclosing a net loss of $4,441,521 on $4,752,518 of total revenue
for the three months ended June 30, 2020, compared to a net income
of $1,959,063 on $9,317,659 of total revenue for the same period in
2019.
At June 30, 2020, the Company had total assets of $345,176,048,
total liabilities of $63,532,997, and $281,643,051 in total
partners' equity.
The Company disclosed that substantial doubt exists about its
ability to continue as a going concern citing its outstanding debt
obligations totaling $55 million as of the date of filing of its
Form 10-Q that matures within one year of the filing of the Form
10-Q.
The Company said, "The Partnership's ability to continue as a going
concern is dependent on several factors including, but not limited
to, (i) the Partnership's ability to comply with its obligations
under its loan agreements; (ii) refinancing its existing debt
and/or securing additional capital; (iii) an increase in demand for
oil and natural gas as the global economy recovers from the effects
of the COVID-19 pandemic and the existing oversupply of oil in the
United States; and (iv) an increase in oil and natural gas market
prices, which will improve the Partnership's cash flow generated
from operations. The Partnership can provide no assurance that it
will be able to achieve any of these objectives. Refinancing its
existing debt or securing additional capital may not be available
on favorable terms to the Partnership, if it is available at all.
There also can be no assurance that economic activity and oil and
natural gas market conditions, including commodity prices, will
return to pre-COVID-19 levels, or that the Partnership will be able
to meet its operational obligations. If the Partnership is unable
to refinance or repay its debt obligations or is unable to meet its
operational obligations, the Partnership could be required to
liquidate certain of its assets used for collateral to satisfy
these obligations, which create the substantial doubt that exists
about the ability of the Partnership to continue as a going concern
for one year after the date these financial statements are
issued."
A copy of the Form 10-Q is available at:
https://is.gd/7xp5dH
Energy 11, L.P., formed in 2013, is a public non-traded limited
partnership formed to acquire and develop oil and natural gas
properties located onshore in the United States. Since its
formation, the Partnership has raised over $350 million and
invested the proceeds in non-operated working interests in
approximately 221 existing producing wells and approximately 247
future development locations in the Sanish field located in
Mountrail County, North Dakota. The Partnership's combined working
interests in these assets is approximately 25% to 26%. Energy 11
is committed to enhancing the value of its interests in the Sanish
field, while generating attractive returns for our limited
partners.
ENSERVCO CORP: Posts $4.4-Mil. Net Loss for Quarter Ended June 30
-----------------------------------------------------------------
ENSERVCO Corporation filed its quarterly report on Form 10-Q,
disclosing a net loss of $4,357,000 on $2,141,000 of total revenues
for the three months ended June 30, 2020, compared to a net loss of
$3,209,000 on $6,340,000 of total revenues for the same period in
2019.
At June 30, 2020, the Company had total assets of $32,969,000,
total liabilities of $42,473,000, and $9,504,000 in total
stockholders' deficit.
The Company said, "Our ability to continue as a going concern is
dependent on the renegotiation of the 2017 Credit Agreement and/or
raising further capital and our ability to further reduce costs, of
which there can be no assurance. These factors raise substantial
doubt over our ability to continue as a going concern and whether
we will realize our assets and extinguish our liabilities in the
normal course of business and at the amounts stated in the
financial statements. Given our current financial situation we may
be required to accept onerous terms on the transactions that we are
seeking."
A copy of the Form 10-Q is available at:
https://is.gd/rP6G42
ENSERVCO Corporation, through its subsidiaries Heat Waves Hot Oil
Service, LLC ("Heat Waves"), Adler Hot Oil Service, LLC ("Adler"),
and Heat Waves Water Management, LLC ("HWWM"), provides a range of
oil field services to the domestic onshore oil and gas industry.
The Company owns and operates through its subsidiaries a fleet of
more than 450 specialized trucks, trailers, frac tanks and other
well-site related equipment and serves customers in several major
domestic oil and gas areas including the DJ Basin/Niobrara area in
Colorado and Wyoming, the Bakken area in North Dakota, the San Juan
Basin in northwestern New Mexico, the Marcellus and Utica Shale
areas in Pennsylvania and Ohio, the Jonah area, Green River and
Powder River Basins in Wyoming, the Eagle Ford Shale in Texas and
the Stack and Scoop plays in the Anadarko Basin in Oklahoma.
EQUUS TOTAL: Discloses Going Concern Doubt for Equus Energy
-----------------------------------------------------------
Equus Total Return, Inc., filed its quarterly report on Form 10-Q,
disclosing a net investment loss of $663,000 on $104,000 of total
investment income for the three months ended June 30, 2020,
compared to a net investment loss of $796,000 on $91,000 of total
investment income for the same period in 2019.
At June 30, 2020, the Company had total assets of $68,767,000,
total liabilities of $27,298,000, and $41,469,000 in net assets.
The Company said, "The substantial recent downturn in world markets
has been prominent in the oil and gas sector, with crude prices
falling to 18-year lows in mid-March 2020. The collapse in prices
was the result of a price war between the Russian Federation and
Saudi Arabia and a massive drop in forecasted demand as a
consequence of the coronavirus. Although the price of crude has
recovered somewhat to $40.65 as of June 30, 2020 should prices not
increase to more sustainable levels, a number of smaller oil and
gas firms that have incurred leverage could experience severe
economic challenges, including insolvency and bankruptcy. Other
firms, such as Equus Energy, could see future capital expenditures
to generate additional reserves from existing mineral interests
postponed indefinitely, which could have a material adverse effect
upon the operations and financial condition of Equus Energy. The
substantial decrease in WTI spot prices during the first and second
quarters has had a similar effect upon the price at which the
operators of the various wells in which Equus Energy holds an
interest are able to sell hydrocarbons. This decrease, as well as
the shut-in of presently uneconomic wells due to low prices and
excess demand has had, and is expected to continue to have, is a
material adverse effect on the present and near-term cash flows of
Equus Energy. Should present conditions continue, Equus Energy may
request that its operators shut-in additional uneconomic wells to
conserve cash, may attempt to secure equity or debt financing from
one or more institutional sources to provide additional liquidity,
may sell certain of its oil and gas holdings to produce additional
cash, or may pursue a combination of the foregoing. However, we
cannot assure you that Equus Energy will be able to implement these
plans successfully, or that such plans will generate sufficient
liquidity to continue as a going concern. The factors, therefore,
raise substantial doubt about Equus Energy's ability to continue as
a going concern within the twelve-month period following the date
of issuance of this report on Form 10-Q."
A copy of the Form 10-Q is available at:
https://is.gd/wUN5oF
Equus Total Return, Inc. (NYSE: EQS) is a non-diversified,
closed-end management investment company that elects to be treated
as a BDC "Business Development Company". The - Fund's objective is
high total return, consisting of capital appreciation and c- urrent
income. Equus invests primarily in equity and equity oriented
securities issued by privately-owned companies.
EVEN STEVENS: Utah Landlord Objects to Plan & Disclosures
---------------------------------------------------------
BS Property, LLC (the "Utah Landlord"), a creditor for Even
Stevens, Utah, LLC, a debtor affiliate of Even Stevens Sandwiches,
LLC, objects to Debtors' Disclosure Statement and to confirmation
of Debtors' Joint Plan of Reorganization Dated July 17, 2020.
The Utah Landlord claims that the Plan and Disclosure Statement
cannot be approved because neither provide any information about
the proposed assignee, much less adequate assurance of future
performance. Indeed, it is not possible for Debtors to provide
adequate assurance given that the identity of the buyer is unknown
and will not be determined until the date of the sale.
The Utah Landlord points out that neither the Plan and nor the
Disclosure Statement contains any financial disclosures or other
information for Take 2 that provide Utah Landlord with any
assurance that Take 2 will timely perform under the Lease Agreement
after assumption.
The Utah Landlord reserves its rights to object to a specific buyer
and/or specific assignee if and when the Debtors provide adequate
information regarding the proposed party.
A full-text copy of the Utah Landlord's objection dated August 25,
2020, is available at https://tinyurl.com/y4de6psm from
PacerMonitor.com at no charge.
Attorneys for BS Property:
ENGELMAN BERGER, P.C.
Scott B. Cohen
Michael P. Rolland
2800 North Central Avenue, Suite 1200
Phoenix, Arizona 85004
Attorneys for Debtor:
Pernell W. McGuire
Aubrey Laine Thomas
Preston Gardner
DAVIS MILES MCGUIRE GARDNER PLLC
E-mail: pmcguire@davismiles.com
E-mail: athomas@davismiles.com
E-mail: pgardner@davismiles.com
About Even Stevens Sandwiches
Even Stevens Sandwiches, LLC, opened its first restaurant in
downtown Salt Lake City, Utah, in June 2014. It has eight
operating locations: seven in Utah and one in Idaho.
Even Stevens Sandwiches and its affiliates each filed voluntary
Chapter 11 petitions (Bankr. D. Ariz. Lead Case No. 19-03236) on
March 21, 2019. At the time of the filing, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities.
Pernell W. McGuire, Esq., at Davis Miles Mcguire Gardner, PLLC, is
the Debtor's legal counsel.
EVERETT C. MOULTON, III: Proposes an Auction of Fort Smith Property
-------------------------------------------------------------------
Everett C. Moulton, III, MD asks the U.S. Bankruptcy Court for the
Western District of Arkansas to authorize on an interim basis his
public auction sale of the real estate located at 3201 Free Ferry
Road, along with eight adjacent lots, located in Fort Smith,
Sebastian County, Arkansas.
Prior to filing the current Chapter 11 case, the Debtor had placed
his personal residence and additional adjacent acreage for sale.
He had not received any serious offers prior to his filing for
Chapter 11 protection. His personal residence and adjacent lots
are mortgaged to Armstrong Bank which holds the primary lien
position. There is a second mortgage on the property held by the
First National Bank of Fort Smith, in addition to statutory liens
of record filed in Sebastian County Arkansas by the Arkansas Dept.
of Fin. & Admin. and the Internal Revenue Service.
The Debtor has determined the continued costs to maintain his
personal residence, the increased utility and other related costs
are a drain on his liquidity, and attempting to restructure the
Armstrong Bank mortgage in the Chapter 11 and not in the best
interests of the Debtor or his estate. Based on his current
capital structure, liquidity constraints, and inability to sell his
personal residence using normal real estate marketing methods, it
has become necessary for him to ask to liquidate his personal
residence and adjacent lots, attempt to achieve maximum value for
his bankruptcy estate and his creditors, and to facilitate a prompt
sale of his personal residence and adjacent lots for the benefit of
all stakeholders.
The Debtor has determined that the best way to ensure that the
maximum value of his Real Estate Assets will inure to the benefit
of his estate is to conduct a public auction sale while maintaining
a minimum reserve requirement. Any proceeds received from a
successful public auction will be paid to Armstrong Bank in their
primary lien position and credited against the debts he owed to
Armstrong Bank. It is anticipated that the debt "pay down" will
facilitate the restructuring of the remaining secured debt owed to
Armstrong Bank, and assist in the finalization of a Chapter 11 Plan
of Reorganization.
There is not anticipated to be any funds available from the Auction
Sale to pay to First National Bank of Fort Smith, the ADF&A or the
IRS. If there is no bid received in excess of the Debtor's minimum
reserve, then there will be no finalization of any public auction
sale of the Real Estate Assets.
By the Auction Sale Motion, the Debtor respectfully asks entry of
the Interim Order approving the public auction, scheduled to be
held on Oct. 10, 2020, in connection with the Sale of the Real
Estate Assets, (b) approving the form and manner of notice of the
Final Hearing to Approve the Auction Sale Free and Clear of Liens,
Claims and Encumbrances, (c) scheduling a date for the Auction Sale
Final Hearing, and approving the form of the Notice of Final
Hearing on the Auction Sale.
To facilitate an orderly public auction sale process, the Debtor
has retained the services of Jan Nordin, an Arkansas licensed
Realtor/Auctioneer. He proposes to sell the Real Estate Assets
pursuant to the entry of the Interim Sale Order. Any Final Sale
Order will provide for the sale of the described Real Estate Assets
free and clear of all liens, claims, and encumbrances. The
official closing of any public auction sale will not occur until
the Court has entered its Final Order Approving the Auction Sale.
The Debtor believes that marketing for highest and best offers
through conducting the public auction, while maintaining a minimum
reserve, will enable him to maximize value for his estate. The
Debtor and Realtor/Auctioneer have currently scheduled a public
auction to be held on Oct. 10, 2020 on the site of the real estate
located in Fort Smith, Arkansas. The Debtor believes that the
proposed public auction is appropriate and will maximize potential
recovery for his estate.
The Debtor proposes that any person who wishes to participate in
the public auction process should attend the public auction and
submit a bid, subject to his right of a minimum reserve
requirement.
The Debtor proposes to serve the Notice of Final Hearing, the
Auction Sale Motion, and the proposed Interim Order, immediately
after the entry of the Interim Order, on the Notice Parties.
Immediately entry of the Interim Order, he or his authorized
representative shall serve a copy of the Auction Sale Motion, the
Interim Order, and copy of the Notice of Final Hearing on all
Notice Parties.
The Debtor further asks that the Court shortens the notice period
for the issuance of the Interim Order to seven days' premises upon
the basis that the current public auction sale is scheduled for
Oct. 10, 2020 and if any sale results from said public auction,
said sale cannot close until the Court holds a Final Hearing, if
objections are filed. However, if no objections are filed to the
entry of the Final Order then a full 21 days will have elapsed and
thus satisfied the requirements of F.R.B.P 2002. The Debtor
believes that the request is necessary and justified by the
circumstances.
Objections, if any, must be filed within 21 days from the date of
service.
Everett C. Moulton, III sought Chapter 11 protection (Bankr. W.D.
Ark. Case No. 20-71451) on June 19, 2020. The Debtor tapped Oswald
Sparks, Esq., as counsel. On Oct. 1, 2020, the Court appointed Jan
Nordin as realtor/auctioneer.
FACEBANK GROUP: Amends March 31 Quarter Report with $56.3M Loss
---------------------------------------------------------------
FaceBank Group, Inc. filed its amended quarterly report on Form
10-Q/A, disclosing a net loss of $56,343,000 on $7,295,000 of total
revenues for the three months ended March 31, 2020, compared to a
net loss of $2,867,000 on $0 of total revenues for the same period
in 2019.
The Company has previously disclosed a net loss of $5,175,000 on
$7,295,000 of total revenues for the three months ended March 31,
2020, compared to a net loss of $2,867,000 on $0 of total revenues
for the same period in 2019.
At March 31, 2020, the Company had total assets of $302,665,000,
total liabilities of $125,411,000, and $176,791,000 in total
stockholders' equity.
FaceBank Group said, "The Company had cash of $0.1 million, a
working capital deficiency of $31.4 million and an accumulated
deficit of $111.6 million at March 31, 2020. The Company incurred
a $56.3 million net loss for the three months ended March 31, 2020.
The Company expects to continue incurring losses in the
foreseeable future and will need to raise additional capital to
fund its operations, meet its obligations in the ordinary course of
business and execute its longer-term business plan. These factors
raise substantial doubt about the Company's ability to continue as
a going concern within one year from the date that those financial
statements are issued. The condensed consolidated financial
statements do not include any adjustments related to the
recoverability and classification of recorded asset amounts or the
amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern."
A copy of the Form 10-Q/A is available at:
https://is.gd/mKhMOW
FaceBank Group, Inc., is a digital human technology company,
focused on the development, collection, protection and preparation
of the personal digital likeness assets, of celebrities and
consumers, for use in artificial intelligence, entertainment,
personal productivity and social networking. The Company was
formerly known as Formerly Pulse Evolution Group, Inc., and changed
its name to FaceBank Group, Inc., in September 30, 2019.
FLEXPOINT SENSOR: Reports $179K Net Loss for Quarter Ended June 30
------------------------------------------------------------------
Flexpoint Sensor Systems, Inc., filed its quarterly report on Form
10-Q, disclosing a net loss of $178,943 on $42,195 of revenue for
the three months ended June 30, 2020, compared to a net loss of
$107,485 on $572,446 of revenue for the same period in 2019.
At June 30, 2020, the Company had total assets of $5,004,066, total
liabilities of $3,252,831, and $1,751,235 in total stockholders'
equity.
The Company continues to accumulate significant operating losses
and has an accumulated deficit of $29,221,211 at June 30, 2020.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
A copy of the Form 10-Q is available at:
https://is.gd/gk3nXT
Flexpoint Sensor Systems, Inc., designs, engineers, manufactures,
and sells bend sensor technology and products using its patented
Bend Sensor flexible potentiometer technology. The Company was
formerly known as Micropoint, Inc. and changed its name to
Flexpoint Sensor Systems, Inc. in July 1999. Flexpoint Sensor
Systems was founded in 1992 and is based in Draper, Utah.
FOCUS UNIVERSAL: Has $628K Net Loss for the Quarter Ended June 30
-----------------------------------------------------------------
Focus Universal Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $627,667 on $434,548 of total revenue for
the three months ended June 30, 2020, compared to a net loss of
$419,839 on $518,519 of total revenue for the same period in 2019.
At June 30, 2020, the Company had total assets of $6,429,768, total
liabilities of $748,466, and $5,681,302 in total stockholders'
equity.
Focus Universal said, "The continuation of the Company as a going
concern is dependent upon the continued financial support from its
shareholders, the ability of the Company to repay its debt
obligations, to obtain necessary equity financing to continue
operations, and the attainment of profitable operations. Recently,
the Company has devoted a substantial amount of resources to
research and development to bring the Ubiquitor and its mobile
application to full production and distribution. For the six
months ended June 30, 2020, the Company had net loss of $1,549,973
and negative cash flow from operating activities of $1,183,486. As
of June 30, 2020, the Company also had an accumulated deficit of
$8,728,974. These factors raise certain doubts regarding the
Company's ability to continue as a going concern. There are no
assurances, however, that the Company will be successful in
obtaining an adequate level of financing for the long-term
development and commercialization of its Ubiquitor product."
A copy of the Form 10-Q is available at:
https://is.gd/kmQVHC
Focus Universal Inc. develops and manufactures smart
instrumentation platform and device. The Company was founded in
2009 and is based in Ontario, California.
FOURTH QUARTER: Unsecureds to Get Share of Net Income in Plan
-------------------------------------------------------------
Fourth Quarter Properties XXXVIII, LLC, filed a Plan and a
Disclosure Statement.
The Debtor disclosed assets on its Schedules in the total amount,
as of the Petition Date, of $14,192,942, consisting of, among other
things: (i) real property valued at $7,500,000; (ii) leasehold
property valued at $6,500,000; (iii) lease receivables with a par
value of $190,932; and (iv) additional personal property, including
aviation fuel tanks scheduled with an unknown value.
Class 1 Allowed Secured Claim of Cornerstone Commercial Mortgages,
LLC, is impaired. The Allowed Secured Claim of Cornerstone
Commercial Mortgages, LLC is estimated by Cornerstone to total
approximately $3,736,110. The Allowed Class 1 Secured Claim will
be satisfied in full as follows: First, the Debtor will market for
sale the Real Property, which proceeds will be paid to the Holder
of the Allowed Class 1 Secured Claim. Second, to the extent that
the Net Proceeds from the sale(s) of the Real Property are
insufficient to satisfy Holder's Allowed Secured Claim, the
Reorganized Debtor shall pay any such remaining secured balance in
full, together with Plan Interest, amortized over 360 months, in 59
equal monthly payments of principal and interest, commencing on the
Payment Commencement Date.
Class 2 Allowed Secured Claim of South State Bank, N.A. (f/k/a
CenterState Bank, N.A.) is impaired. The Allowed Secured Claim of
South State Bank, N.A. is estimated by South State to total
approximately $491,000. The Allowed Class 2 Secured Claim will be
satisfied in full as follows: First, the Debtor will market for
sale the Real Property, which proceeds will first be paid to any
senior Allowed Secured Claim, with the remainder paid to the Holder
of the Allowed Class 2 Secured Claim. Second, to the extent that
the Net Proceeds from the sale(s) of the Real Property are
insufficient to satisfy Holder's Allowed Secured Claim, the
Reorganized Debtor will pay any such remaining secured balance in
full, together with Plan Interest, amortized over 360 months, in 59
equal monthly payments of principal and interest, commencing on the
Payment Commencement Date.
Class 3 Allowed Secured Claim of Hudland Holdings, LLC -- in the
amount of $21,750,000 -- is impaired. Class 4 Allowed Secured
Claim of Benjamin Carl Owen -- in the amount of $2,820,000 -- is
impaired.
The Allowed Classes 3 and 4 Secured Claims will be satisfied in
full as follows: The Reorganized Debtor shall pay the Holder of the
Allowed Classes 3 and 4 Secured Claims an amount equal to the Net
Proceeds received by the Reorganized Debtor, after payment in full
of all Allowed Secured Claims that are senior in priority to the
Allowed Classes 3 and 4 Secured Claims, from the sale or sales of
the Real Property. Any Deficiency Claim of the Holder of the
Allowed Secured Claims in Classes 3 and 4 shall be paid as an
Allowed Claim in Class 8.
Class 5 – Non-Tax Priority Claims are impaired. There are no
known claims in this Class. If such claims are Allowed by the
Bankruptcy Court, then, except to the extent the Holder of an
Allowed Class 5 Claim agrees to other, lesser treatment, each
holder of an Allowed Class 5 Claim shall be paid in full, together
with Plan Interest, on or before December 31, 2021.
Class 6 Allowed Convenience Class of $1,000 or less and claims
voluntarily reduced to $1,000 are impaired. Allowed Claims in Class
6 will be paid by the Reorganized Debtor the lesser of (i) 100% of
the Allowed Amount of such claims and (ii) $1,000.00, without
interest, within fourteen (14) days following the Effective Date,
in full satisfaction of such claims.
Class 7 General Unsecured Claims Other Than Unsecured Claims in
Classes 6, 8, and 9 are impaired. Holders of Allowed General
Unsecured Claims in Class 7 will, by the last day of April, receive
a payment equal to each Holder's pro rata share of the Reorganized
Debtor's net income for the prior calendar year. Holders of
Allowed Claims in Class 7 and Class 8 will share in such payments
pro rata based on the amount of their respective Allowed
Claims.`
Class 8 -- comprised of the Allowed Unsecured Deficiency Claims of
Holders of Allowed Secured Claims in Classes 1, 2, 3, and 4 -- is
impaired. The Allowed Unsecured Deficiency Claims of the Holders of
Allowed Secured Claims in Classes 1, 2, 3, and 4, if any, shall be
paid as provided in Class 7. Holders of Allowed Claims in Class 7
and Class 8 will share in such payments pro rata based on the
amount of their respective allowed claims.
Class 9 Insider and Affiliate Claims are impaired. Holders of
Allowed Claims in Class 11 shall receive no distribution under the
Plan until all other Allowed Claims have been paid as provided in
the Plan.
Class 10 Equity Interest Holders of the Debtor. The Equity Interest
Holders will retain their interest and all associated rights,
subject, however, to the provisions of this Plan.
The Reorganized Debtor may establish a Plan Expense Reserve for the
purpose of funding and implementing the Plan.
A full-text copy of the Disclosure Statement dated August 31, 2020,
is available at https://tinyurl.com/y2w32bux from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Ward Stone, Jr.
David L. Bury, Jr.
Matthew S. Cathey
Stone & Baxter, LLP
Fickling & Co. Building, Suite 800
577 Mulberry Street
Macon, Georgia 31201
About Fourth Quarter Properties XXXVIII
Fourth Quarter Properties XXXVIII, LLC, is a single asset real
estate debtor (as defined in 11 U.S.C. Section 101(51B)), whose
principal assets are located at 45, 47 and 49 Ansley DriveNewnan,
Ga.
Fourth Quarter Properties filed a Chapter 11 petition (Bankr. N.D.
Ga. Case No. 20-10883) on June 1, 2020. The Debtor previously
sought bankruptcy protection (Bankr. N.D. Ga. Case No. 13-10585) on
March 5, 2013. Judge W. Homer Drake oversees the case.
In the petition signed by Stanley E. Thomas, manager, the Debtor
was estimated $10 million to $50 million in both assets and
liabilities.
David L. Bury, Jr., Esq., at Stone & Baxter, LLP, is the Debtor's
bankruptcy counsel.
FRANCHISE GROUP: S&P Assigns 'B+' ICR; Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned its 'B+' issuer credit rating to
U.S.-based Franchise Group Inc. (FRG). At the same time, S&P
assigned its 'B+' issue-level rating and '4' recovery rating to the
$650 million in senior secured notes proposed by the company to
refinance its existing debt.
S&P said, "The stable outlook reflects our expectation for
improving EBITDA and cash flow generation as the company benefits
from cost synergies from its recent acquisitions."
"The 'B+' rating reflects our assessment of the company's limited
track record of operating multiple business segments offset by a
manageable debt level and our expectation for decent free operating
cash flow (FOCF) generation. The rating also incorporates our view
of the company's aggressive acquisition strategy that we expect
will continue and presents inherent integration risks."
"We expect adjusted leverage in the mid- to high-3x area in 2020,
declining to about 3x in 2021."
"We forecast improved operating performance and S&P Global Ratings'
adjusted EBITDA growth in the mid-teen range in 2021 driven by
margin improvement as businesses are integrated, and margin
pressure from the pandemic subsides."
"Franchise Group's goal is to become a diversified franchising
business, although we note that risks remain in achieving this
vision."
"Positive elements of the credit profile include the company's
diversification and somewhat franchised base of stores. Still, we
note that we view some of the concepts as turnarounds and expect
future acquisitions may be of businesses experiencing operational
performance issues, which adds incremental execution risk."
FRG's largest segment (by revenue), specialty health supplement
retail (The Vitamin Shoppe), is exclusively company-operated and
participates in a highly competitive market. S&P believes prospects
for franchising this operation will depend on FRG's ability to
demonstrate a sustainable competitive advantage through enhanced
omnichannel capabilities and improving overall operating
efficiency. The segment contributed close to half of revenue in the
first half of 2020 and saw increased demand in health and wellness
products at the onset of the pandemic as consumers focused on
health. Direct-to-consumer sales on its online platform increased
substantially as more consumers opted for e-commerce in the
social-distancing environment. However, the shift to e-commerce,
partly due to a less favorable mix of merchandise, pressured
margins. S&P expects the segment's profitability to rebound in
2021, as the segment grows its private label and invests in its
omnichannel.
FRG's furniture segment (American Freight) is composed of the
former Sears Outlet business and operates in the discount furniture
and appliance market, which has benefitted this year from consumers
spending more on household items as they spend more time at home.
The segment is largely company-operated and not franchised;
however, S&P believes it is relatively well positioned to
transition to a more stable cash flow franchise model in the
future. The rent-to-own segment (Buddy's Home Furnishings), which
is about 70% franchised, also benefited from the shift in consumer
spending as well as its positioning in the value segment.
Additionally, government stimulus, which increased disposable
income had a positive effect on both segments. S&P forecasts this
consumer trend slowing in 2021 given the fairly discretionary
nature of its products, and uncertainty regarding future government
stimulus.
FRG's tax preparation segment (Liberty Tax) is highly franchised
(over 90%); however, the seasonality of its products limit the
ability to generate a steady stream of cash flow. The segment was
hurt by delays in the tax filing season.
S&P anticipates FOCF generation of about $110 million-$130 million
in 2021.
S&P expects increasing EBITDA and a steady level of capital
expenditures around $30 million to support substantial free cash
flow generation. The company's segments face some seasonality, with
concentration in the first quarter of the year resulting from tax
season and increased disposable income from tax refunds, a key
spending stimulus for its target customers. This leads to working
capital inflows in the earlier half of the year and more outflows
in the latter. S&P expects the company to balance its working
capital needs and smooth seasonality through efforts such as cross
promoting across brands.
Franchise Group's highly acquisitive strategy leads to
significantly increased execution and integration risk.
The company has displayed an aggressive acquisition strategy,
having acquired three of its four core businesses over the past 18
months. This significantly increases the integration and execution
risks, especially at these recently acquired segments. In addition,
S&P expects the company will remain acquisitive as it seeks future
growth and diversification. Although acquisitions have been funded
by debt and equity issuance in the past, future acquisitions may
still lead to greater earnings and credit measure volatility,
including a leverage spike. As such, S&P assesses its comparable
ratings modifier as negative.
S&P said, "The stable outlook reflects our expectation for
improving EBITDA and FOCF generation in the $110 million-$130
million range as the company integrates it businesses and realizes
cost synergies from its recent acquisitions."
"We could lower the rating if deteriorating performance relative to
our forecast leads to leverage sustained above 4x. This could occur
if there is a decline in consumer spending. We could also lower the
rating if the company is unable to realize synergies related to its
recent acquisitions and EBITDA margins remain below 16.5%."
"We would consider an upgrade if performance strengthens based on a
clear track record of successful integration of the company's
recently acquired businesses, while it sustains leverage below 3x.
This could occur if revenue growth and operating performance exceed
our base case expectations. For an upgrade, we would also expect
the company to maintain a disciplined financial policy that
supports its leverage target of 2x-3x."
FRE 355 INVESTMENT: Platinum Loan Objects to Plan & Disclosures
---------------------------------------------------------------
Platinum Loan Servicing, Inc. ("PLS"), as servicing agent for the
beneficiaries of the mortgages on the real property owned by
Debtors FRE 355 dba FRE 355 Investment Group, LLC and Mora House,
LLC, objects to the Disclosure Statement for Plan of Reorganization
filed by Debtors.
PLS objects to the Debtors filing material amendments after the
objection deadline, which denies PLS the due process opportunity to
address the matter before a hearing thereon. This denial of due
process is especially acute in this case when the Debtors have
known for weeks of the need to amend the Disclosure Statement.
PLS adopts the UST Objections related to objections that render the
Debtor's plan patently unconfirmable. Courts will not approve a
disclosure statement that describes a "patently unconfirmable"
plan, that is, a plan that is incapable of confirmation as a matter
of law.
PLS points out that the Debtors' Disclosure Statement assumes no
post-petition accruals on the Blanchard first deed of trust on the
Mora Lot or property taxes. Worse, it assumes that PLS will be
paid a flat $13,000,000, when PLS's claim already exceeds that
amount and continues to accrue interest of $136,712.50 monthly at
the 15% default rate on the principal amount of $10,937,000.
PLS emphasizes the UST Objection related to failure to adequately
address the cram down provisions. This omission is again
significant because it will highlight the patent non-confirmability
of Debtors' plan.
PLS asserts that the plan does not provide for PLS to retain its
lien for the full amount of its allowed claim on the Mora Lot as
required by Sec. 1129(b)(2)(A)(i) but instead purports to release
that lien for a $500,000 payment notwithstanding the intended cram
down on PLS's claim.
A full-text copy of the Platinum Loan's objection to disclosure
statement and plan dated August 27, 2020, is available at
https://tinyurl.com/yxq7ubfn from PacerMonitor.com at no charge.
Attorney for Platinum Loan Servicing:
Lewis R. Landau
22287 Mulholland Hwy., # 318
Calabasas, California 91302
Voice & Fax: (888) 822-4340
E-mail: Lew@Landaunet.com
About FRE 355 Investment Group
FRE 355 Investment Group, LLC, is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)). FRE 355 Investment Group
filed a voluntary petition under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Cal. Case No. 20-50628) on April 13, 2020. In the
petition signed by Melvin Vaugh, managing member, the Debtor was
estimated to have $10 million to $50 million in both assets and
liabilities. Michael W. Malter, Esq. at BINDER & MALTER, LLP, is
the Debtor's counsel.
FRE 355 INVESTMENT: U.S. Trustee Objects to Plan & Disclosures
--------------------------------------------------------------
Tracy Hope Davis, United States Trustee for Region 17, objects to
the Disclosure Statement for Plan of Reorganization of Debtors FRE
355 Investment Group, LLC and Mora House, LLC.
The U.S. Trustee states that on Page 6 of the Disclosure Statement,
the Debtors indicated that the Properties have been marketed
concurrently. There is no discussion regarding the reasonable
probability of success if the Properties are sold concurrently for
$17,500,000 instead of separately for a total purchase price of
$18,499,000.
The U.S. Trustee claims that the Disclosure Statement does not
explain what property taxes and interest mortgage payments will
become due during this time or how they will be paid if the
Properties are not sold within 6 months of the Effective Date. The
Debtors should provide this information and explain how the plan
provision regarding feasibility will be affected.
The U.S. Trustee points out that on page 6 of the Disclosure
Statement, the Debtors indicate that if S&R receives $500,000 as a
principal paydown for the mortgage on the Properties, then the
Debtors will have an additional 6 months to sell the Properties.
There is no discussion how the Paydown to S&R will affect the
feasibility of the Plan.
The U.S. Trustee asserts that the Debtors initially listed EPS
holding a nonpriority unsecured creditor in the amount of $25,000,
but later amended Schedule E/F and EPS is no longer listed as a
creditor. Given the factual discrepancy and lack of information,
it is unclear why EPS was listed as a secured creditor in the
Disclosure Statement.
The U.S. Trustee further asserts that the Debtors' Plan states that
"following confirmation, Debtors will continue to pay quarterly
fees to the United States Trustee to the extent, and in the
amounts, required by 28 U.S.C. Sec. 1930(a)(6)." However, there is
no discussion regarding the Debtors' requirement to pay any
attendant interest in connection with any delinquent quarterly
fees.
A full-text copy of the U.S. Trustee's objection to disclosure
statement and plan dated August 27, 2020, is available at
https://tinyurl.com/y38b5kyw from PacerMonitor.com at no charge.
About FRE 355 Investment Group
FRE 355 Investment Group, LLC, is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)). FRE 355 Investment Group
filed a voluntary petition under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Cal. Case No. 20-50628) on April 13, 2020. In the
petition signed by Melvin Vaugh, managing member, the Debtor was
estimated to have $10 million to $50 million in both assets and
liabilities. Michael W. Malter, Esq. at BINDER & MALTER, LLP, is
the Debtor's counsel.
FRE 355 INVESTMENT: Unsecureds to Recover Between 6.8% and 17.12%
-----------------------------------------------------------------
Debtors FRE 355 Investment Group, LLC, d/b/a FRE 355 and Mora
House, LLC, filed with the U.S. Bankruptcy Court for the Northern
District of California, Division 5, a Chapter 11 Plan and a
Disclosure Statement on September 17, 2020.
The Debtors will advertise, market and close sales of the Mora
House and Mora Lot within 6 months after the Effective Date of the
Plan, the Initial Marketing Period, to pay secured claimants of
both properties in full and to pay a projected dividend of between
6.8% and 17.12% to unsecured claimants depending on whether one or
both of the properties are sold. If S&R receives a $500,000
principal paydown under the Addendum to Promissory Note prior to 6
months following the Effective Date, then S&R shall release its
lien against the Mora Lot, and the Debtors shall have the Extended
Marketing Period of six additional months to close sales of the
Mora House and Mora Lot.
The Blanchard Trust shall retain without modification the right to
advance $500,000 under the Addendum to Promissory Note to cause the
release of the S&R lien from the Mora Lot. If the properties are
not sold within six months of the Effective Date, or the extended
period following a $500,000 advance to S&R, Blanchard and S&R shall
have the right to asserts their liens and foreclose. Foreclosing
lenders are responsible for accrual on senior liens, including
property taxes.
Class 3A General Unsecured Claims of FRE 355 will receive payment
of the allowed amount of their claims, without interest, from the
net proceeds from sale of the Mora House after the full payment of
all secured and priority claims six months after the Effective
Date, unless S&R receives a $500,000 principal paydown under the
Addendum to Promissory Note, in which case payment will be made
twelve months after the Effective Date or at such time that the
Mora House and Mora Lot are sold, whichever is sooner.
Class 3B General Unsecured Claims of Mora House will receive a pro
rata distribution on the allowed amount of their claims, without
interest, from the net proceeds from sale of the Mora Lot after the
full payment of all secured and priority claims. Payment shall be
made six months after the Effective Date, unless S&R receives a
$500,000 principal paydown under the Addendum to Promissory Note,
in which case payment shall be made twelve months after the
Effective Date or at such time that the Mora House and Mora Lot are
sold, whichever is sooner.
Class 4A Equity Interests in FRE 355 and Class 4B Equity Interests
in Mora House will be retained.
Payment from escrow of the secured claims set forth in Classes
1A-2C at a sale price of $18,599,000 leaves a net $860,805 to pay
unsecured and priority claims, and a sale at $17,500,000 will leave
$430,606 in net proceeds for distribution to unsecured creditors in
Classes 3A and 3B. Subtracting the $25,663.49 for Class 3A from
$860,805 left after a higher, separate sale at $18,599,000 leaves
$835,141.51 for unsecured creditors. Subtracting the Class 3A debt
of $23,663.49 from the lower, combined sales price of $17,500,000
leaves $404,942.51 for distribution to unsecured creditors. In
either circumstance, a Chapter 7 would yield less than the
projected Chapter 11 Plan dividend.
A full-text copy of the Disclosure Statement dated September 17,
2020, is available at https://tinyurl.com/yytqh78g from
PacerMonitor.com at no charge.
The Debtors are represented by:
Michael W. Malter
Robert G. Harris
Julie H. Rome-Banks
Binder & Malter, LLP
2775 Park Avenue
Santa Clara, CA 95050
Telephone: (408) 295-1700
Facsimile: (408) 295-1531
E-mail: Michael@bindermalter.com
E-mail: Rob@bindermalter.com
E-mail: Julie@bindermatler.com
About FRE 355 Investment Group
FRE 355 Investment Group, LLC, is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)).
FRE 355 Investment Group filed a voluntary petition under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-50628) on
April 13, 2020. In the petition signed by Melvin Vaugh, managing
member, the Debtor was estimated to have $10 million to $50 million
in both assets and liabilities. Michael W. Malter, Esq. at BINDER
& MALTER, LLP, is the Debtor's counsel.
FRICTIONLESS WORLD: Trustee Taps Dickensheet as Auctioneer
----------------------------------------------------------
Tom H. Connolly, the appointed Chapter 11 trustee of Frictionless
World, LLC, seeks approval from the U.S. Bankruptcy Court for the
District of Colorado to hire Dickensheet & Associates, Inc. as his
auctioneer.
The firm will perform the following services:
a. secure the remaining inventory and store it at
Dickensheet's warehouse located at 1501 West Wesley, Denver,
Colorado 80223;
b. prepare the remaining inventory for sale;
c. advertise the remaining inventory for sale and advertise
the date and time of the online auction;
d. conduct the online auction;
e. collect and remit all proceeds of sale(s);
f. account for and pay all sales taxes due as a result of such
sale(s); and
g. prepare a report after sale showing the name of the
purchaser(s) and the sale price(s) of the inventory.
The firm will be compensated a commission at the rate of 15 percent
of the gross sale proceeds of the property, plus reasonable and
necessary costs and expenses incurred in connection with the sale,
in the maximum amount of $25,000.
Christine Dickensheet, of Dickensheet & Associates, disclosed in
court filings that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Christine Dickensheet
Dickensheet & Associates, Inc.
1501 W. Wesley Avenue
Denver, CO 80223
Telephone: (303) 934-8322
About Frictionless World
Frictionless World, LLC -- https://www.frictionlessworld.com/ --
provides professional grade outdoor power equipment, replacement
parts for tractors, hitches and agricultural implements, gate and
fence equipment, lithium ion powered tools, and ice fishing
equipment. It offers brands such as Dirty Hand Tools, RanchEx,
Redback, Trophy Strike and Vinsetta Tools.
Frictionless World sought Chapter 11 protection (Banks. D. Col.
Case No. 19-18459) on Sept. 30, 2019. The Hon. Michael E. Romero is
the case judge. In the petition signed by CEO Daniel Banjo, the
Debtor disclosed total assets of $14,600,503 and total liabilities
of $17,364,542.
The Debtor tapped Wadsworth Garber Warner Conrardy P.C. as
bankruptcy counsel; Thomas P. Howard, LLC as special counsel; r2
Advisors, LLC as financial advisor; and Three Twenty-One Capital
Partners, LLC as investment banker.
The Office of the U.S. Trustee appointed creditors to serve on the
official committee of unsecured creditors on Nov. 20, 2019. JW
Infinity Consulting LLC, is the financial advisor to the
Committee.
Tom Connolly was appointed as Chapter 11 trustee effective as of
October 1, 2020.
FTS INT'L: Lugenbuhl, Stroock Update List of Term Lenders
---------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard and
Stroock & Stroock & Lavan LLP submitted a first supplemental
verified statement to disclose an updated list of Ad Hoc Group of
Term Loan Lenders that they are representing in the Chapter 11
cases of FTS International, Inc., et al.
In April, 2020, the Ad Hoc Group of Term Loan Lenders retained
Stroock & Stroock & Lavan LLP as counsel in connection with a
potential restructuring of the Debtors. The Ad Hoc Group of Term
Loan Lenders subsequently retained Lugenbuhl, Wheaton, Peck, Rankin
& Hubbard as local counsel when informed by the Debtors that they
would pursue a reorganization in the United States Bankruptcy Court
for the Southern District of Texas.
On September 24, 2020, Stroock and Lugenbuhl filed the Verified
Statement of the Ad Hoc Group of Term Loan Lenders Pursuant to
Bankruptcy Rule 2019 [Docket No. 82]. Stroock and Lugenbuhl now
file this First Supplemental Verified Statement to further update
information contained in the Original Verified Statement.
Stroock represents only the Ad Hoc Group of Term Loan Lenders and
the Agent and does not represent or purport to represent any
persons or entities other than the Ad Hoc Group of Term Loan
Lenders or Agent in connection with the Debtors' chapter 11 cases.
Furthermore, as of the filing of this First Supplemental Verified
Statement, Lugenbuhl represents only the Ad Hoc Group of Term Loan
Lenders and the Agent and does not represent or purport to
represent any persons or entities other than the Ad Hoc Group of
Term Loan Lenders and the Agent in connection with the Debtors'
chapter 11 cases. In addition, as of the date of this First
Supplemental Verified Statement, the Ad Hoc Group of Term Loan
Lenders, both collectively and through its individual members, does
not represent or purport to represent any other entities in
connection with the Debtors' chapter 11 cases.
As of Oct. 28, 2020, members of the Ad Hoc Group of Term Loan
Lenders and their disclosable economic interests are:
Ares Management LLC
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
* $20,077,525.05 principal amount of Term Loans
* $17,185,000.00 principal amount of Secured Notes
Seix Investment Advisors LLC
1 Maynard Drive, Suite 3200
Park Ridge NJ, 07656
* $18,578,858.38 principal amount of Term Loans
Voya Alternative Asset Management LLC
7337 East Doubletree Ranch Road
Suite 100
Scottsdale, AZ 85258
* $11,053,376.00 principal amount of Term Loans
Neither Stroock nor Lugenbuhl owns, nor has Stroock or Lugenbuhl
ever owned, any claims against or interests in the Debtors except
for claims for services rendered to the Ad Hoc Group of Term Loan
Lenders and the Agent, nor do Stroock or Lugenbuhl own any equity
securities of the Debtors. However, each of Stroock and Lugenbuhl
has sought to have its fees and disbursements paid by the Debtors'
estates pursuant to title 11 of the United States Code or as
otherwise permitted in the Debtors' chapter 11 cases.
The information set forth in Exhibit A and herein is intended only
to comply with Bankruptcy Rule 2019 and is not intended for any
other purpose. Nothing contained in this First Supplemental
Verified Statement should be construed as a limitation upon, or
waiver of, the rights of any individual member of the Ad Hoc Group
of Term Loan Lenders, including, without limitation, the right to
assert, file and/or amend its claims in accordance with applicable
law and any orders entered in the Debtors' chapter 11 cases.
The information set forth in Exhibit A and herein is intended only
to comply with Bankruptcy Rule 2019 and is not intended for any
other purpose. Nothing contained in this First Supplemental
Verified Statement should be construed as a limitation upon, or
waiver of, the rights of any individual member of the Ad Hoc Group
of Term Loan Lenders, including, without limitation, the right to
assert, file and/or amend its claims in accordance with applicable
law and any orders entered in the Debtors' chapter 11 cases.
Counsel for Ad Hoc Group of Term Loan Lenders can be reached at:
LUGENBUHL WHEATON PECK RANKIN & HUBBARD
Benjamin W. Kadden, Esq.
Coleman L. Torrans, Esq.
Christopher T. Caplinger, Esq.
601 Poydras St.
New Orleans, LA 70130
Pan American Life Center, Ste. 2775
Telephone: (504) 568-1990
Facsimile: (504) 310-9195
E-mail: bkadden@lawla.com
ctorrans@lawla.com
ccaplinger@lawla.com
- and -
STROOCK & STROOCK & LAVAN LLP
Jayme T. Goldstein, Esq.
Allison Miller, Esq.
Daniel Ginsberg, Esq.
180 Maiden Lane
New York, NY 10038
Telephone: (212) 806-5400
Facsimile: (212)-806-6006
E-mail: bkadden@lawla.com
jgoldstein@stroock.com
amiller@stroock.com
dginsberg@stroock.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3myYu6y
About FTS International
Headquartered in Fort Worth, Texas, FTS International Inc. --
http://www.FTSI.com/-- is an independent hydraulic fracturing
service company and one of the only vertically integrated service
providers of its kind in North America.
As of March 31, 2020, the Company had $616 million in total assets,
$587 million in total liabilities, and $29 million in total
stockholders' equity.
On Sept. 22, 2020, FTS International and two affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34622) to
seek confirmation of a prepackaged plan.
Kirkland & Ellis LLP and Winston & Strawn LLP are acting as legal
counsel, Lazard Freres & Co., LLC is acting as financial advisor,
and Alvarez & Marsal LLP is acting as restructuring advisor to the
Company in connection with the restructuring. Epiq is the claims
and solicitation agent.
FTS INTERNATIONAL: Hires Alvarez & Marsal as Financial Advisor
--------------------------------------------------------------
FTS International Inc. and its debtor-affiliates seek authority
from the US Bankruptcy Court for the Southern District of Texas to
hire Alvarez & Marsal North America, LLC, as their financial
advisor.
The services Alvarez & Marsal will render are:
(a) assist the Debtors in the preparation of financial-related
disclosures required by the Court, including the Debtors' Schedules
of Assets and Liabilities, Statements of Financial Affairs and
Monthly Operating Reports;
(b) assist with the identification and implementation of
short-term cash management procedures;
(c) provide advisory assistance in connection with the
development and implementation of key employee compensation and
other critical employee benefit programs;
(d) assist with the identification of executory contracts and
leases and performance of cost/benefit evaluations with respect to
the affirmation or rejection of each;
(e) assist the Debtors' management team and counsel focused on
the coordination of resources related to the ongoing reorganization
effort;
(f) assist in the preparation of financial information for
distribution to creditors and others, including, but not limited
to, cash flow projections and budgets, cash receipts and
disbursement analysis, analysis of various asset and liability
accounts, and analysis of proposed transactions for which Court
approval is sought;
(g) attend at meetings and assist in discussions with
potential investors, banks, and other secured lenders, any official
committee(s) appointed in these chapter 11 cases, the United States
Trustee, other parties in interest and professionals hired by same,
as requested;
(h) analyse creditor claims by type, entity, and individual
claim, including assist with development of databases, as
necessary, to track such claims;
(i) assist in the preparation of information and analysis
necessary for the confirmation of a plan of reorganization in these
chapter 11 cases, including information contained in the disclosure
statement;
(j) assist in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and preferential
transfers; and
(k) render such other general business consulting or such
other assist as Debtors' management or counsel may deem necessary
consistent with the role of a financial advisor to the extent that
it would not be duplicative of services provided by other
professionals in this proceeding.
The firm's customary hourly billing rates are:
Managing Director $900-1,150
Director $700-875
Analysts/Associates $400-675
Alvarez & Marsal received $250,000 as a retainer in connection with
preparing for and conducting the filing of these Chapter 11 cases.
Ryan Omohundro, a managing director at Alvarez & Marsal, disclosed
in court filings that the firm is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Ryan Omohundro
Alvarez & Marsal North America, LLC
700 Louisiana Street, Suite 3300
Houston, TX 77002
Tel: +1 713 571 2400
Fax: +1 713 547 3697
About FTS International
Headquartered in Fort Worth, Texas, FTS International Inc. --
http://www.FTSI.com/-- is an independent hydraulic fracturing
service company and one of the only vertically integrated service
providers of its kind in North America.
As of March 31, 2020, the Company had $616 million in total assets,
$587 million in total liabilities, and $29 million in total
stockholders' equity.
On Sept. 22, 2020, FTS International and two affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34622) to
seek confirmation of a prepackaged plan.
Kirkland & Ellis LLP and Winston & Strawn LLP are acting as legal
counsel, Lazard Freres & Co., LLC is acting as financial advisor,
and Alvarez & Marsal LLP is acting as restructuring advisor to the
Company in connection with the restructuring. Epiq is the claims
and solicitation agent.
FTS INTERNATIONAL: Seeks to Hire Lazard Freres as Investment Banker
-------------------------------------------------------------------
FTS International Inc. and its debtor-affiliates seek authority
from the US Bankruptcy Court for the Southern District of Texas to
hire Lazard Freres & Co. LLC as their investment banker.
The Debtors require Lazard Freres to:
(a) review and analyze the Debtors' businesses, operations,
and financial projections;
(b) evaluate the Debtors' potential debt capacity in light of
its projected cash flows;
(c) assist in the determination of a capital structure for the
Debtors;
(d) assist in the determination of a range of values for the
Debtors on a going concern basis;
(e) advise the Debtors on tactics and strategies for
negotiating with the Stakeholders;
(f) render financial advice to the Debtors and participating
in meetings or negotiations with the Stakeholders and/or rating
agencies or other appropriate parties in connection with any
Restructuring;
(g) advise the Debtors on the timing, nature, and terms of new
securities, other consideration or other inducements to be offered
pursuant to any Restructuring;
(h) advise and assist the Debtors in evaluate any potential
Financing transaction by the Debtors, and, subject to Lazard's
agreement so to act and, if requested by Lazard, to execution of
appropriate agreements, on behalf of the Debtors, contacting
potential sources of capital as the Debtors may designate and
assist the Debtors in implementing such Financing;
(i) assist the Debtors in preparing documentation within
Lazard's area of expertise that is required in connection with any
Restructuring;
(j) attend and present at meetings of the Board of Directors
and any committees of the Board of Directors, as applicable, with
respect to matters on which Lazard has been engaged to advise
hereunder;
(k) provide testimony, as necessary, with respect to matters
on which Lazard has been engaged to advise hereunder in any
proceeding before the Bankruptcy Court; and
(l) provide the Debtors with other financial restructuring
advice.
The Debtors will compensate Lazard as follows:
(a) A monthly fee of $150,000, payable on August 1, 2020 and,
thereafter, on the first day of each month thereafter until the
earlier of the completion of the Restructuring or the termination
of Lazard's engagement pursuant to Section 10 of the Engagement
Letter.
Fifty percent of all Monthly Fees paid in respect of any months
following the fourth month of this engagement shall be credited
(without duplication) against any Restructuring Fee payable.
(b) A fee, payable upon consumption of a Restructuring (each,
a Restructuring Fee) equal to $3,750,000.
(c) A fee, payable upon consummation of a Financing, equal to
1.0 percent of
(i) the total gross proceeds raised in such Financing,
(each, a Financing Fee); provided, however, that for any proposed
"debtor-in-possession" Financing, the Financing Fee shall be earned
and shall be payable upon the execution of a definitive agreement
with respect to the Financing; and, provided, further, that to the
extent that Lazard is paid a fee in connection with a proposed
"debtor-in-possession" Financing and the Bankruptcy Court does not
provide any required approval with respect thereto, Lazard shall
return such fee to the Debtors. 50 percent of the Financing Fee
shall be credited against any Restructuring Fee.
(d) For the avoidance of any doubt, more than one fee may be
payable pursuant to each of clauses (a) through (c) above.
(e) In addition to any fees that may be payable to Lazard and,
regardless of whether any transaction occurs, the Debtors shall
promptly reimburse Lazard for all reasonable and documented
document production charges and all reasonable documented
out-of-pocket expenses incurred by Lazard (including travel and
lodging, data processing and communications charges, courier
services and other expenditures) and the reasonable fees and
reasonable and documented out-of-pocket expenses of external legal
counsel, if any, retained by Lazard, incurred after the date by
which the Engagement Letter was executed and upon prior written
notice to the
Debtors.
Brandon Aebersold, managing director at Lazard, attests that his
firm is a "disinterested person" within the meaning of section
101(14) of the Bankruptcy Code, as modified by section 1107(b) of
the Bankruptcy Code, and as required by section 327(a) of the
Bankruptcy Code.
Lazard can be reached through:
Brandon Aebersold
Lazard Freres & Co. LLC
30 Rockefeller Plaza
New York, NY 10020
Phone: 1-212-632-6000
About FTS International
Headquartered in Fort Worth, Texas, FTS International Inc. --
http://www.FTSI.com/-- is an independent hydraulic fracturing
service company and one of the only vertically integrated service
providers of its kind in North America.
As of March 31, 2020, the Company had $616 million in total assets,
$587 million in total liabilities, and $29 million in total
stockholders' equity.
On Sept. 22, 2020, FTS International and two affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34622) to
seek confirmation of a prepackaged plan.
Kirkland & Ellis LLP and Winston & Strawn LLP are acting as legal
counsel, Lazard Freres & Co., LLC is acting as financial advisor,
and Alvarez & Marsal LLP is acting as restructuring advisor to the
Company in connection with the restructuring. Epiq is the claims
and solicitation agent.
FULTON PROPERTIES: Taps Frederic P. Schwieg as Legal Counsel
------------------------------------------------------------
Fulton Properties of Ohio LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Ohio to hire Frederic
P. Schwieg, Attorney at Law, as its legal counsel.
The firm will provide the following services:
-- assist in the preparation of pleadings and services
incidental to the bankruptcy proceedings;
-- conduct examinations or depositions of witnesses;
-- participate in negotiations for the sale of assets of the
estate; and
-- assist in the production of related documents.
The firm will be paid at the hourly rate of $300 and will be
reimbursed for out-of-pocket expenses incurred.
Frederic Schwieg, Esq. disclosed in a court filing that the firm is
a "disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.
The attorney holds office at:
Frederic P. Schwieg, Esq.
Frederic P. Schwieg, Attorney at Law
19885 Detroit Rd #239
Rocky River, OH 44116
Telephone: (440) 499-4506
Facsimile: (440) 398-0490
Email: fschwieg@schwieglaw.com
About Fulton Properties of Ohio
Valley City, Ohio-based Fulton Properties of Ohio LLC is a single
asset real estate debtor (as defined in 11 U.S.C. Section
101(51B)).
Fulton Properties of Ohio previously sought bankruptcy protection
on May 20, 2020 (Bankr. N.D. Ohio Case No. 20-51057). On Oct. 15,
2020, Fulton Properties of Ohio filed again a Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ohio Case No. 20-51878). The petition
was signed by Douglas Perau, sole member and manager.
At the time of the filing, Debtor had estimated assets of between
$1 million and $10 million and liabilities of the same range.
Judge Alan M. Koschik oversees the case.
Frederick P. Schwieg Attorney at Law is Debtor's legal counsel.
FUSE MEDICAL: Discloses Substantial Doubt on Staying Going Concern
------------------------------------------------------------------
Fuse Medical, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $423,431 on $4,010,666 of net revenues for
the three months ended June 30, 2020, compared to a net loss of
$142,149 on $5,075,925 of net revenues for the same period in
2019.
At June 30, 2020, the Company had total assets of $16,296,944,
total liabilities of $18,899,409, and $2,602,465 in total
stockholders' deficit.
The Company said, "Through June 30, 2020, we had accumulated losses
of $4,303,243 and a stockholders' deficit of $2,602,465. Revenue
declined by $1,065,259 in the second quarter of 2020 versus the
same quarter in 2019, as we have been impacted by restrictions as a
result of the COVID-19 pandemic. At various times during 2018 and
2019, and for the first quarter ended March 31, 2020, we were out
of compliance with one or more covenants contained in our RLOC, but
obtained waivers from Amegy Bank to cure the violations, along with
reductions in our aggregate contractual borrowing limits under our
RLOC. We have determined that these conditions and events raise
substantial doubt about our ability to continue as a going
concern.
"Our ability to continue as a going concern for at least one year
beyond the date of this filing is dependent upon the easing of
restrictions imposed on elective surgeries by civil authority as a
result of COVID-19, as well as our (i) successful execution of key
branding initiatives, (ii) introduction, commercialization and
sales of new proprietary products and product lines, (iii)
increased sales of existing products, with strategic emphasis on
selling more Retail Cases and increasing the percentage of Retail
Cases sold as a percentage of all Cases we sell, and (iv) continued
cost reductions. Additionally, we will need to refinance our RLOC
with Amegy Bank, which is set to expire on November 4, 2020, with a
new credit facility on commercially reasonable terms or obtain
equity financing."
A copy of the Form 10-Q is available at:
https://is.gd/gR9N9W
Fort Worth, Texas-based Fuse Medical Inc. (OTC: FZMD) manufactures
and retails surgical products. The Company markets, distributes and
sells internal fixation, durable bone materials, biologics, and
tissue, all used in a variety of surgical procedures.
GALLEON CONTRACTING: Ally Switches to 'Yes'; Plan Confirmed
-----------------------------------------------------------
Judge Ronald B. King entered an order confirming Galleon
Contracting, LLC's Plan.
Galleon Contracting filed a First Amended Plan of Reorganization,
dated July 17, 2020. Ally Servicing LLC filed an objection to the
Plan. Ally's objection was later resolved.
Class 5 and 12 has accepted the Plan and Classes 1, 2, 3 and 13 has
accepted the Plan as modified by the Plan Confirmation Order.
The negative ballots by the Class 1, 2, & 3 creditor Ally Servicing
LLC as servicer for Ally Bank are withdrawn and changed to "Yes"
votes. Ally Servicing as servicer for Ally Bank, also casts a
"Yes" vote and ballot as a Class 13 creditors due to its
undersecured claims. Therefore, the First Amended Plan has been
accepted by Classes l, 2, 3, 5, 12 and 13.
The modifications set out below are proper and in the best interest
of the creditors. Only Class I, 2, 3 & 13 claims of Ally are
affected by the modifications. The Court finds that the
modifications improve the treatment of the Class I, 2, & 3, are
accepted by Ally, and that the modifications do not require a
Bankruptcy Rule 9019 motion or further notice to any creditors. The
Court hereby waives notice of such settlement under B.R. 9019. The
Court further finds that the provisions of Title 18 are not
triggered in that the settlements with the creditors in Classes 1,
2 & 3 are not a violation of Title 18 and are rather settlements of
good faith claims and are in the best interest of the Debtor, the
estate and the creditors, and should be approved as a condition for
confirmation.
By virtue of the acceptances of the First Amended Plan by the
creditor holding a claim in Classes 1, 2, 3, 5 & 12 which are
impaired by the First Amended Plan of Reorganization, at least one
class of claims that is impaired has accepted the First Amended
Plan, determined without including any acceptances of the First
Amended Plan by any insider holding a claim of such class.
The Court, having made these findings of fact and conclusions of
law, orders the following modification to the Plan:
* Class 1 pertains to the allowed claim of Ally Bank in the
amount of $30,606.80 with a lien on a 2018 Chevrolet Silverado
1500. Ally Bank shall have an allowed secured claim in the amount
of $27,850.00 to be paid in full in forty-nine (49) equal,
consecutive monthly installments of $635 including 5.5% interest,
with the first payment being made on first calendar day of the
first full month following the Effective Date. The unsecured
portion of the claim shall be paid in Class 13. Ally shall retain
its lien and all of its contractual lien rights and remedies on
default until the allowed secured claim is paid in full. Debtor
shall maintain casualty and liability insurance as required by the
Motor Vehicle Retail Installment Contract and pay ad valorem taxes
and any other costs and fees which may be assessed by local, state
or federal taxing authorities in connection with the Debtor's
business use of the vehicle.
* Class 2 pertains to the allowed claim of Ally Bank in the of
$27,916.83 with a lien on a 2016 Chevrolet Silverado 1500. Ally
Bank shall have allowed secured claim in the amount of $27,850 to
be paid in full in forty-nine (49) equal, consecutive monthly
installments of $550.00 including 5.5% interest, with the first
payment being made on first calendar day of the first full month
following the Effective Date. The unsecured portion of the claim
shall be paid in Class 13. Ally shall retain its lien and all of
its contractual lien rights and remedies on default until the
allowed secured claim is paid in full. Debtor shall maintain
casualty and liability insurance as required by the Motor Vehicle
Retail Installment Contract and pay ad valorem taxes and any other
costs and fees which may be assessed by local, state or federal
taxing authorities in connection with the Debtor's business use of
the vehicle.
* Class 3 pertains to the allowed secured claim of Ally Bank in
the amount of $15,880.51 with a lien on a 2015 Chevrolet Silverado
1500. Ally Bank shall have an allowed secured claim in the amount
of $15,880.51, to be paid in full in monthly installments of
$389.16 including 9.69 % interest, with the first payment being
made on first calendar day of the first full month following the
Effective Date until paid in full. Ally shall retain its lien and
all of its contractual lien rights and remedies on default until
the allowed secured claim is paid in full. Debtor shall maintain
casualty and liability insurance as required by the Motor Vehicle
Retail Installment Contract and pay ad valorem taxes and any other
costs and fees which may be assessed by local, state or federal
taxing authorities in connection with the Debtor's business use of
the vehicle.
Judge Ronald B. King has ordered that the First Amended Plan of
Reorganization of Galleon Contracting, LLC, as amended by this
Order, be and the same is in all respects confirmed.
The Debtor shall file objections to claims on or before ninety (90)
days from the date of this order.
Attorneys for the Debtor:
STEVEN G. CENNAMO
MALAISE LAW FIRM
909 N.E. Loop 410, Ste. 300
San Antonio, Texas 78209
Telephone: (210) 732-6699
Facsimile: (210) 732-5826
Attorneys Ally Servicing LLC as servicer for Ally bank:
H. GRAY BURKS, IV
SHAPRIO, SCHWARTZ, LLP
13105 Northwest Freeway, Suite 1200
Houston, TX 77040
About Galleon Contracting
Galleon Contracting, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tex. Case No. 19-52911) on Dec. 9,
2019. The petition was signed by its sole managing member, Maurice
Martinez. At the time of filing the Debtor was estimated to have
both assets and liabilities of less than $1 million. Judge Ronald
B. King oversees the case. The Debtor is represented by Todd J.
Malaise, Esq., at Malaise Law Firm.
GARRETT MOTION: Hires FTI as Advisor to ASASCO Director
-------------------------------------------------------
Garrett Motion Inc., and its debtor-affiliates, seek authority from
the U.S. Bankruptcy Court for the Southern District of New York to
employ FTI Consulting, Inc., financial advisor to Neal Goldman (the
"ASASCO Independent Director"), the independent director and sole
member of the ASASCO Transaction Committee.
The Firm will provide certain services relating to the ASASCO
Transaction Committee's evaluation and negotiation of an allocation
of distributable consideration between ASASCO and other Debtors
resulting from or in connection with a whole company transaction,
howsoever structured or implemented to be recommended to the Board
of Directors of ASASCO (the "Allocation Recommendation").
FTI Consulting will be paid at these hourly rates:
Senior Managing Directors $920 to $1,295
Directors/Senior Directors/
Managing Directors $690 to $905
Consultants/Senior Consultants $370 to $660
Administrative/Paraprofessionals $150 to $280
FTI Consulting will be paid a retainer in the amount of $200,000.
FTI Consulting will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Luke Schaeffer, partner of FTI Consulting, Inc., 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 Debtors and their estates.
FTI Consulting can be reached at:
Luke Schaeffer
FTI CONSULTING, INC.
1800 Century Park East, Suite 450
Tel: (213) 452-6396
E-mail: Luke.Schaeffer@fticonsulting.com
About Garrett Motion Inc.
Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs,
manufactures and sells highly engineered turbocharger and
electric-boosting technologies for light and commercial vehicle
original equipment manufacturers ("OEMs") and the global vehicle
and independent aftermarket.
Garrett Motion and its affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020.
Garrett disclosed $2,066,000,000 in assets and $4,169,000,000 in
liabilities as of June 30, 2020.
The Debtors tapped Sullivan & Cromwell LLP as counsel, Quinn
Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg
Partners and Morgan Stanley & Co. LLC as investment bankers, and
AlixpartnersLP as restructuring advisor. Kurtzman Carson
Consultants LLC is the claims agent.
The U.S. Trustee for Region Region 2 on Oct. 5, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 case
of Garrett Motion Inc. and its affiliates.
GARRETT MOTION: Hires Quinn Emanuel as Special Counsel
------------------------------------------------------
Garrett Motion Inc., and its debtor-affiliates, seek authority from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Quinn Emanuel Urquhart & Sullivan LLP, special counsel to
the Debtors.
Garrett Motion requires Quinn Emanuel to represent the Debtors in
connection with the adversary proceeding titled Garrett Motion
Inc., et al. v. Honeywell International Inc., et al., Adv. Pro. No.
20-1223 (the "Honeywell Action").
The Firm will assist the Debtors in and any claims, defenses,
appeals, contested matters, or other proceedings, or portions of
any of the foregoing, arising in or relating to that action or to
any claims that Honeywell International Inc. and its affiliates
(collectively, "Honeywell") has or may assert against the
bankruptcy estates or that may be asserted by the bankruptcy
estates against Honeywell (collectively the "Honeywell Claims").
Quinn Emanuel will be paid at these hourly rates:
Partners $745 to $1,59
Associates $625 to $1,270
Law Clerks $355 to $525
On September 14, 2020, the Debtor paid Quinn Emanuel the amount of
$250,000. As of the Petition Date, Quinn Emanuel holds as security
for payment of its fees and expenses a retainer in the amount of
$168,807.98.
Quinn Emanuel will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Matthew Scheck, partner of Quinn Emanuel Urquhart & Sullivan LLP,
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 Debtors and their
estates.
Quinn Emanuel can be reached at:
Matthew Scheck, Esq.
Razmig Izakelian, Esq.
QUINN EMANUEL URQUHART & SULLIVAN LLP
865 S. Figueroa Street, 10th Floor
Los Angeles, CA 90017
Tel: (213) 443-3000
Fax: (213) 443-3100
E-mail: matthewscheck@quinnemanuel.com
razmigizakelian@quinnemanuel.com
About Garrett Motion
Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs,
manufactures and sells highly engineered turbocharger and
electric-boosting technologies for light and commercial vehicle
original equipment manufacturers ("OEMs") and the global vehicle
and independent aftermarket.
Garrett Motion and its affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020.
Garrett disclosed $2,066,000,000 in assets and $4,169,000,000 in
liabilities as of June 30, 2020.
The Debtors tapped Sullivan & Cromwell LLP as counsel, Quinn
Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg
Partners and Morgan Stanley & Co. LLC as investment bankers, and
AlixpartnersLP as restructuring advisor. Kurtzman Carson
Consultants LLC is the claims agent.
The U.S. Trustee for Region Region 2 on Oct. 5, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 case.
GARRETT MOTION: Hires Schulte as Counsel to Transaction Committee
-----------------------------------------------------------------
Garrett Motion Inc., and its debtor-affiliates, seek authority from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Schulte Roth & Zabel LLP, as counsel to the Transaction
Committee appointed by the Board of Directors of the Debtors.
In August, the Boards of Directors of each of Garrett Motion
Holdings, Inc. and ASASCO established their respective Transaction
Committees (the "GMHI Transaction Committee" and the "ASASCO
Transaction Committee," respectively). The independent director
comprising the GMHI Transaction Committee is Alexander D. Greene.
The GMHI Transaction Committee and the ASACO Transaction Committee
have been tasked with analyzing the relative values of the ASASCO
Group and the GMI Group, negotiating a proposed settlement of the
aggregate amount of distributable value from the sale (or other
plan of reorganization) that should be allocable to the ASASCO
Group, on the one hand, and the GMI Group, on the other hand, and
recommending that settlement to the respective Boards of
Directors.
Garrett Motion requires Schulte to represent and advise the
Transaction Committees in the proposed settlement.
Schulte will be paid at these hourly rates:
Partners $1,095 to $1,550
Special Counsels/Associates $435 to $1,200
Legal Assistants $220 to $545
Schulte will be paid a retainer in the amount of $150,000.
Schulte will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Adam C. Harris, partner of Schulte Roth & Zabel LLP, 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 Debtors and their estates.
Schulte can be reached at:
Adam C. Harris, Esq.
SCHULTE ROTH & ZABEL LLP
919 Third Avenue
New York, NY 10022
Tel: (212) 756-2000
Fax: (212) 593-5955
About Garrett Motion Inc.
Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs,
manufactures and sells highly engineered turbocharger and
electric-boosting technologies for light and commercial vehicle
original equipment manufacturers ("OEMs") and the global vehicle
and independent aftermarket.
Garrett Motion and its affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020.
Garrett disclosed $2,066,000,000 in assets and $4,169,000,000 in
liabilities as of June 30, 2020.
The Debtors tapped Sullivan & Cromwell LLP as counsel, Quinn
Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg
Partners and Morgan Stanley & Co. LLC as investment bankers, and
AlixpartnersLP as restructuring advisor. Kurtzman Carson
Consultants LLC is the claims agent.
The U.S. Trustee for Region Region 2 on Oct. 5, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 case.
GARRETT MOTION: Hires Simpson Thacher as ASASCO Counsel
-------------------------------------------------------
Garrett Motion Inc., and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Simpson Thacher & Bartlett LLP, counsel to Neal Goldman, the
independent director of ASASCO (the "Independent Director") and
sole member of ASASCO's transaction committee (the "Transaction
Committee").
Garrett Motion requires Simpson Thacher to:
(a) advise the Independent Director with respect to the
exercise of his fiduciary duties;
(b) assist and advise the Independent Director in any
consultations with the Debtors, the U.S. Trustee and other
parties in interest relating to the administration of
these Chapter 11 Cases;
(c) assist and advise the Transaction Committee, along with
FTI Consulting, Inc., in determining the allocation of
potential value between ASASCO and other Debtors
(particularly the GMI Group) in connection with a Sale
Transaction or other restructuring plan of reorganization;
(d) assist and advise the Transaction Committee in connection
with the Stalking Horse Purchase Agreement, related bid
procedures and any sale of the Debtors' assets pursuant to
section 363 of the Bankruptcy Code through the closing
thereof;
(e) assist and advise the Independent Director with respect to
the debtor in possession financing and any other proposed
financings;
(f) assist the Independent Director in the review, analysis
and negotiation of any chapter 11 plan(s) and accompanying
disclosure statement(s) that may be filed;
(g) take all necessary action to protect and preserve the
interests of the Independent Director; and
(h) perform all other necessary legal services in these
Chapter 11 Cases.
Simpson Thacher will be paid at these hourly rates:
Partners $1,325 to $1,640
Senior Counsel $1,220
Counsel $1,190
Associates $590 to $1,145
Paraprofessionals $265 to $455
Simpson Thacher will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Sandeep Qusba, partner of Simpson Thacher & Bartlett LLP, 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 Debtors and their estates.
Simpson Thacher can be reached at:
Sandeep Qusba, Esq.
SIMPSON THACHER & BARTLETT LLP
425 Lexington Avenue
New York, NY 10017
Tel: (212) 455-2000
About Garrett Motion
Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs,
manufactures and sells highly engineered turbocharger and
electric-boosting technologies for light and commercial vehicle
original equipment manufacturers ("OEMs") and the global vehicle
and independent aftermarket.
Garrett Motion and its affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020.
Garrett disclosed $2,066,000,000 in assets and $4,169,000,000 in
liabilities as of June 30, 2020.
The Debtors tapped Sullivan & Cromwell LLP as counsel, Quinn
Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg
Partners and Morgan Stanley & Co. LLC as investment bankers, and
AlixpartnersLP as restructuring advisor. Kurtzman Carson
Consultants LLC is the claims agent.
The U.S. Trustee for Region Region 2 on Oct. 5, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 case
of Garrett Motion Inc. and its affiliates.
GAUCHO GROUP: Reports $1.5-Mil. Net Loss for Quarter Ended June 30
------------------------------------------------------------------
Gaucho Group Holdings, Inc., filed its quarterly report on Form
10-Q, disclosing a net loss of $1,506,237 on $117,332 of sales for
the three months ended June 30, 2020, compared to a net loss of
$1,993,018 on $268,733 of sales for the same period in 2019.
At June 30, 2020, the Company had total assets of $5,622,341, total
liabilities of $7,815,865, and $11,204,348 in total stockholders'
deficiency.
The Company said, "We have generated significant losses which have
resulted in a total accumulated deficit of approximately $90
million, raising substantial doubt that we will be able to continue
operations as a going concern. In the audit opinion for our
financial statements as of and for the year ended December 31,
2019, our independent auditors included an explanatory paragraph
expressing substantial doubt about our ability to continue as a
going concern based upon our accumulated deficit and our working
capital deficit as of December 31, 2019, and our need to raise
additional funds to meet our obligations and sustain our
operations. Our ability to execute our business plan is dependent
upon our generating cash flow and obtaining additional debt or
equity capital sufficient to fund operations. If we are able to
obtain additional debt or equity capital (of which there can be no
assurance), we hope to acquire additional management as well as
increase the marketing of our products and continue the development
of our real estate holdings.
"Our business strategy may not be successful in addressing these
issues and there can be no assurance that we will be able to obtain
any additional capital. If we cannot execute our business plan on
a timely basis (including acquiring additional capital), our
stockholders may lose their entire investment in us, because we may
have to delay vendor payments and/or initiate cost reductions and
possibly sell certain company assets, which would have a material
adverse effect on our business, financial condition and results of
operations, and we could ultimately be forced to discontinue our
operations, liquidate and/or seek reorganization under the U.S.
bankruptcy code. The conditions outlined above indicate that there
is substantial doubt about our ability to continue as a going
concern within one year after the financial statement issuance
date."
A copy of the Form 10-Q is available at:
https://is.gd/Z1AllX
Gaucho Group Holdings, Inc., through its subsidiaries, invests in,
develops, and operates real estate projects in Argentina. The
company was formerly known as Algodon Group, Inc., and changed its
name to Gaucho Group Holdings, Inc. in March 2019. Gaucho Group
was founded in 1999 and is headquartered in New York, New York.
GBT TECHNOLOGIES: Reports $3.6M Net Loss for the June 30 Quarter
----------------------------------------------------------------
GBT Technologies Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $3,596,363 on $4,074,102 of total sales
for the three months ended June 30, 2020, compared to a net loss of
$109,645,375 on $5,255,956 of total sales for the same period in
2019.
At June 30, 2020, the Company had total assets of $2,462,965, total
liabilities of $27,488,013, and $25,025,048 in total stockholders'
deficit.
GBT Technologies said, "The Company has an accumulated deficit of
$266,260,654 and has a working capital deficit of $14,950,571 as of
June 30, 2020, and is in default on a note payable and other
obligations, which raises substantial doubt about its ability to
continue as a going concern.
"The Company's ability to continue as a going concern is dependent
upon its ability to generate profitable operations in the future
and/or obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when
they come due. Management has plans to seek additional capital
through some private placement offerings of debt and equity
securities. These plans, if successful, will mitigate the factors
which raise substantial doubt about the Company's ability to
continue as a going concern."
A copy of the Form 10-Q is available at:
https://is.gd/Ghbxw5
GBT Technologies Inc. was incorporated on July 22, 2009 under the
laws of the State of Nevada. The Company is creating and patenting
innovative mobile microchip (ICs) and software technologies based
on the GopherInsight(TM) technology platform. Effective August 5,
2019, the Company changed its name from Gopher Protocol Inc. to GBT
Technologies Inc. The Company also offers prepaid cellular phone
minutes for both domestic and international carriers.
GEVO INC: Reports $6.0-Mil. Net Loss for Quarter Ended June 30
--------------------------------------------------------------
Gevo, Inc. filed its quarterly report on Form 10-Q, disclosing a
net loss of $6,043,000 on $988,000 of total revenues for the three
months ended June 30, 2020, compared to a net loss of $7,090,000 on
$5,086,000 of total revenues for the same period in 2019.
At June 30, 2020, the Company had total assets of $80,101,000,
total liabilities of $20,214,000, and $59,887,000 in total
stockholders' equity.
The Company said, "Existing working capital was not sufficient to
meet the cash requirements to fund planned operations through the
period that is one year after the date the Company's financial
statements for the six months ended June 30, 2020 were issued.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The Company's inability to
continue as a going concern may potentially affect the Company's
rights and obligations under its senior secured debt and issued and
outstanding convertible notes."
A copy of the Form 10-Q is available at:
https://is.gd/VcPgOd
Gevo, Inc., operates as a renewable fuels company. It
commercializes gasoline, jet fuel, and diesel fuel to achieve zero
carbon emissions, and reduce greenhouse gas emissions with
sustainable alternatives. The company uses low-carbon
renewable-resource-based carbohydrates as raw materials and is
developing renewable electricity and renewable natural gas for use
in production processes. It products also include renewable
biodiesel, isooctane, isobutanol, sustainable aviation fuel,
isobutylene, ethanol, and animal feed. The company was formerly
known as Methanotech, Inc. and changed its name to Gevo, Inc. in
March 2006. Gevo, Inc., was founded in 2005 and is headquartered
in Englewood, Colorado.
GEX MANAGEMENT: Posts $63K Net Loss for the Quarter Ended June 30
-----------------------------------------------------------------
Gex Management, Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $63,196 on $107,880 of total revenues for
the three months ended June 30, 2020, compared to a net loss of
$123,091 on $162,435 of total revenues for the same period in
2019.
At June 30, 2020, the Company had total assets of $3,861,458, total
liabilities of $5,295,926, and $1,434,468 in total shareholders'
deficit.
To date, the Company has funded its operations primarily through
public and private offerings of common stock, our line of credit,
short- term discounted and convertible notes payable. The Company
has identified several potential financing sources in order to
raise the capital necessary to fund operations through December 31,
2020.
Gex Management said, "To date, the Company has funded its
operations primarily through public and private offerings of common
stock, our line of credit, short- term discounted and convertible
notes payable. The Company has identified several potential
financing sources in order to raise the capital necessary to fund
operations through December 31, 2020.
"In addition to the aforementioned current sources of capital that
will provide additional short-term liquidity, the Company is
currently exploring various other alternatives including debt and
equity financing vehicles, strategic partnerships, government
programs that may be available to the Company, as well as trying to
generate additional sales and increase margins. However, at this
time the Company has no commitments to obtain any additional funds,
and there can be no assurance such funds will be available on
acceptable terms or at all. If the Company is unable to obtain
additional funding and improve its operations, the Company's
financial condition and results of operations may be materially
adversely affected and the Company may not be able to continue
operations, which raises substantial doubt about its ability to
continue as a going concern. Additionally, even if the Company
raises sufficient capital through additional equity or debt
financing, strategic alternatives or otherwise, there can be no
assurances that the revenue or capital infusion will be sufficient
to enable it to develop its business to a level where it will be
profitable or generate positive cash flow. If the Company raises
additional funds through the issuance of equity or convertible debt
securities, the percentage ownership of our stockholders could be
significantly diluted, and these newly issued securities may have
rights, preferences or privileges senior to those of existing
stockholders. If the Company incurs additional debt, a substantial
portion of its operating cash flow may be dedicated to the payment
of principal and interest on such indebtedness, thus limiting funds
available for business activities. The terms of any debt
securities issued could also impose significant restrictions on the
Company's operations. Broad market and industry factors may
seriously harm the market price of our common stock, regardless of
our operating performance, and may adversely impact our ability to
raise additional funds. Similarly, if the Company's common stock
is delisted from the public exchange markets, it may limit its
ability to raise additional funds.
"The consolidated financial statements for the twelve months ended
December 31, 2019 were prepared on the basis of a going concern
which contemplates that the Company will be able to realize assets
and discharge liabilities in the normal course of business.
Accordingly, they do not give effect to adjustments that would be
necessary should the Company be required to liquidate its assets.
The ability of the Company to meet its total liabilities of
$5,295,926 and to continue as a going concern is dependent upon the
availability of future funding, continued growth in billings and
sales contracts, and the Company's ability to profitably meet its
after-sale service commitments with its existing customers. The
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
"In addition, at this time we cannot predict the impact of COVID-19
on our ability to obtain financing necessary for the Company to
fund its working capital requirements. Also, it may hamper our
efforts to comply with our filing obligations with the Securities
and Exchange Commission."
A copy of the Form 10-Q is available at:
https://is.gd/6IM14A
Gex Management, Inc. provides business management, professional
employer organization, and staffing solutions for small to midsize
businesses. It primarily provides payroll processing, human
resources (HR), staffing and general business consulting services.
The company's payroll processing services include tax filling and
remittance, and quarterly payroll tax reporting; and staffing
services comprise interview vetting, background check, drug
screening, onboarding and termination guidance, and company
operation troubleshooting. Its HR services include performance
evaluation and discipline system, consulting on sensitive HR
issues, paperwork audit, employee handbook, benefit plan
administration, worker's compensation programs, and risk and
compliance services; and general business consulting services
comprise strategic planning, mission statement and values
discovery, goal sessions, and company operation troubleshooting GEX
Management, Inc. was founded in 2004 and is based in Dallas, Texas.
GLOBAL EAGLE: Charts New Course Out of Chapter 11
-------------------------------------------------
Seth Miller of Paxes.Aero reports that as Global Eagle finalizes
its financial plans for emergence from Chapter 11 Bankruptcy
protection there are plenty of questions about what the future of
the company will look like. Fortunately the most critical issue is
easy to answer: The Albatross test aircraft remains part of the
operation. Beyond that, however, the company sees the current
industry crisis as an opportunity to reinvent what the inflight
connectivity and entertainment business looks like.
"For companies across the IFEC space you need flexibility in this
environment. Any company that has a high leverage ratio is is going
to be handicapped in 2021 as airlines start to think about coming
back. So our goal has been to focus on getting the company out [of
Ch11] around the end of the year, with a clean balance sheet with
new liquidity, so that we have that flexibility that we need next
year," said Global Eagle CEO Josh Marks.
For now Global Eagle is, like the rest of the industry, shuffling
along. Flight levels are low. Passenger counts are low. Demand on
the content side, in particular, is low. President Per Noren notes
that in response "we started COVID packages that we put together
that were lower in cost and didn't have to follow the cycle timing"
on the content side, making sure that the offerings remain
available, but at a level the airlines can afford. Moreover,
inflight connectivity "has shown up to be not nice to have but
crucial to have" for the airlines during this lull.
Noren sees Global Eagles role not just as a supplier, but as as an
"advisor and a lever for our airline customers to use to keep the
business going and do it in a cost effective and qualitative way."
And that will lead to a company that looks and operates differently
coming out of the pandemic.
CEO Josh Marks sees the company's inflight connectivity segment as
a tailwind, helping support the operations, rather than draining
financial resources away. For an industry that has burned hundreds
of millions of dollars over the years such success might be hard to
believe. But the company believes its independent, flexible
positioning gives it a leg up on the owner-operator companies such
as Inmarsat, Viasat, and soon Intelsat.
About Global Eagle Entertainment
Headquartered in Los Angeles, Global Eagle Entertainment Inc. is a
provider of media, content, connectivity and data analytics to
markets across air, sea and land. It offers a fully integrated
suite of media content and connectivity solutions to airlines,
cruise lines, commercial ships, high-end yachts, ferries and land
locations worldwide. Visit http://www.GlobalEagle.comfor more
information.
Global Eagle Entertainment and its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-11835) on July 22,
2020. In the petition signed by CFO Christian M. Mezger, Global
Eagle disclosed $630.5 million in assets and $1.086 billion in
liabilities.
Judge John T. Dorsey oversees the cases.
Debtors have tapped Latham & Watkins LLP (CA) and Young Conaway
Stargatt & Taylor, LLP as legal counsel; Greenhill & Co., LLC as
investment banker; Alvarez & Marsal North America, LLC as financial
advisor; and PricewaterhouseCoopers LLP as tax advisor. Prime
Clerk, LLC is the claims and noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Aug. 5, 2020. The committee has tapped Akin Gump
Strauss Hauer & Feld LLP and Ashby & Geddes, P.A. as its legal
counsel, and Perella Weinberg Partners LP as its investment banker.
GLOBAL EAGLE: Reports $58.0-Mil. Net Loss for June 30 Quarter
-------------------------------------------------------------
Global Eagle Entertainment Inc. filed its quarterly report on Form
10-Q, disclosing a net loss of $58,033,000 on $83,041,000 of total
revenue for the three months ended June 30, 2020, compared to a net
loss of $38,460,000 on $157,467,000 of total revenue for the same
period in 2019.
At June 30, 2020, the Company had total assets of $567,981,000,
total liabilities of $1,080,839,000, and $512,858,000 in total
shareholders' deficit.
The Company said, "As a result of the Chapter 11 Cases, the
realization of assets and the satisfaction of liabilities are
subject to significant uncertainty. While operating as a
debtor-in-possession pursuant to the Bankruptcy Code, the Debtors
may sell, or otherwise dispose of or liquidate, assets or settle
liabilities, subject to the approval of the Bankruptcy Court or as
otherwise permitted in the ordinary course of business, for amounts
other than those reflected in the accompanying unaudited Interim
Consolidated Financial Statements. Further, a sale under section
363 of the Bankruptcy Code is likely to materially change the
amounts and classifications of assets and liabilities reported in
our unaudited Interim Consolidated Balance Sheet as of June 30,
2020. In addition, the COVID-19 pandemic has, and continues to
have, a material impact on the Company's business operations,
financial position, liquidity, capital resources and results of
operations. The risks and uncertainties surrounding the Chapter 11
Cases, the defaults under our debt agreements, and our financial
condition, raise substantial doubt as to the Company's ability to
continue as a going concern. Our future plans, including those in
connection with the Chapter 11 Cases, are not yet finalized, fully
executed or approved by the Bankruptcy Court, and therefore cannot
be deemed probable of mitigating this substantial doubt within 12
months of the date of issuance of these financial statements."
A copy of the Form 10-Q is available at:
https://is.gd/jXeRK6
About Global Eagle Entertainment
Headquartered in Los Angeles, Global Eagle Entertainment Inc. is a
provider of media, content, connectivity and data analytics to
markets across air, sea and land. It offers a fully integrated
suite of media content and connectivity solutions to airlines,
cruise lines, commercial ships, high-end yachts, ferries and land
locations worldwide. Visit http://www.GlobalEagle.com/for more
information.
Global Eagle Entertainment and its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-11835) on July 22,
2020. In the petition signed by CFO Christian M. Mezger, Global
Eagle disclosed $630.5 million in assets and $1.086 billion in
liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP (CA) and Young Conaway
Stargatt & Taylor, LLP as legal counsel; Greenhill & Co., LLC as
investment banker; Alvarez & Marsal North America, LLC as financial
advisor; and PricewaterhouseCoopers LLP as tax advisor. Prime
Clerk, LLC is the claims and noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Aug. 5, 2020. The committee has tapped Akin Gump
Strauss Hauer & Feld LLP and Ashby & Geddes, P.A., as its legal
counsel, and Perella Weinberg Partners LP as its investment banker.
GOFBA INC: Discloses Substantial Doubt on Staying as Going Concern
------------------------------------------------------------------
Gofba, Inc. filed its quarterly report on Form 10-Q, disclosing a
net loss of $638,000 on $0 of revenue for the three months ended
June 30, 2020, compared to a net loss of $596,000 on $43,000 of
revenue for the same period in 2019.
At June 30, 2020, the Company had total assets of $1,510,000, total
liabilities of $7,887,000, and $6,377,000 in total stockholders'
deficit.
The Company said, "We have no significant revenue-generating
operations, a material working capital deficit and a history of
experiencing operating losses. Historically, our primary sources
of liquidity have come from deposits on common stock subscriptions
and operating expenses paid on our behalf by our Chairperson,
President and majority stockholder. During 2019, and the
year-to-date period in 2020, we continue to develop our
technologies, our strategy to monetize our intellectual properties
and our business plan. Our management intends to rely on
additional sales of our common stock, as well as payments from our
Chairperson, President and majority stockholder, to provide
sufficient liquidity to meet our cash requirements for a period of
at least the next twelve months. Given the uncertain nature of our
plans, and our reliance on related parties, there is substantial
doubt about our ability to continue as a going concern."
A copy of the Form 10-Q is available at:
https://is.gd/j6tc9P
Ontario, California-based Gofba, Inc., provides Internet based
services. The Company offers chatting, email, offsite file
transfer, storage modules, and other related services. Gofba serves
customers in the United States.
GOOD DEED 317: Case Summary & 7 Unsecured Creditors
---------------------------------------------------
Debtor: Good Deed 317, LLC
3133 Continental Colony Parkway SW
Atlanta, GA 30331
Business Description: Good Deed 317, LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: October 29, 2020
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 20-71227
Debtor's Counsel: Cameron M. McCord, Esq.
JONES & WALDEN, LLC
699 Piedmont Avenue NE
Atlanta, GA 30308
Tel: 404-564-9300
Email: info@joneswalden.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Ozzie Areu, manager.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/52DUFBA/Good_Deed_317_LLC__ganbke-20-71227__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Seven Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. City of Atlanta Solid Waste $8,897
Department of Public Works
55 Trinity Ave, SW,
Suite 4700
Atlanta, GA 30303
2. City of Atlanta Solid Waste $7,397
Department of Public Works
55 Trinity Ave, SW,
Suite 4700
Atlanta, GA 30303
3. Fulton County Tax Realty Property $271,891
Commissioner
141 Pryor Street SW
#1085
Atlanta, GA 30303
4. Fulton County Tax Real Property $87,756
Commissioner
141 Pryor Street SW
#1085
Atlanta, GA 30303
5. Fulton County Tax Unimproved $31,742
Commissioner Property
141 Pryor Street SW
#1085
Atlanta, GA 30303
6. Fulton County Tax Unimproved $10,245
Commissioner Property
141 Pryor Street SW
#1085
Atlanta, GA 30303
7. TP Krog, LLC $300,000
541 Tenth Street,
#172
Atlanta, GA 30318
GRADE A HOME: Sale in 5 Years to Fund Payments to Unsecureds
------------------------------------------------------------
Grade A Home LLC submitted a Plan of Reorganization and Disclosure
Statement.
The total value of Debtor's estate is $285,504.22.
Class 1 Secured Claims are impaired. Class 1 is comprised of the
Allowed Claims of Toorak Capital Partners. Toorak Capital Partners
will receive 60 monthly cash payments of its allowed secured claim
based on a 25-year amortization with interest bearing on its
allowed secured claim at the rate of 5.25 percent per annum.
Payments will commence 30 days from the Effective Date with each
payment being due on the 1st of each consecutive month.
Class 3 General Unsecured Claims are impaired. Class 3 is
comprised of Allowed Unsecured General Unsecured Claims against
Grade A Home, including deficiency claims held by claimants in
Class 1. Holders of Secured Claims in Class 3 shall receive pro
rata cash payments based on their claims to the extent funds are
available from the sale of the Cliffwood, Woodvalley, and Braeswood
Properties, which will occur on or before 60 months following the
Effective Date.
Payments and distributions under the Plan will be funded the rental
income from the
Cliffwood, Woodvalley, and Braeswood Properties.
A full-text copy of the Plan of Reorganization and Disclosure
Statement dated August 31, 2020, is available at
https://tinyurl.com/y2yfx9ky from PacerMonitor.com at no charge.
ATTORNEYS FOR THE DEBTOR:
Susan Tran Adams | TBN: 24075648
Brendon Singh | TBN: 24075646
1010 Lamar St., Suite 1160
Houston TX 77002
Ph: (832) 975-7300
Fax: (832) 975-7301
STran@ts-llp.com
About Grade A Home
Grade A Home, LLC, a privately held company in Houston, Texas,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Tex. Case No. 20-31556) on March 2, 2020. 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. Judge
Eduardo V. Rodriguez oversees the case. The Debtor is represented
by Corral Tran Singh, LLP.
GRAPEFRUIT USA: Reports $392K Net Income for Quarter Ended June 30
------------------------------------------------------------------
Grapefruit USA, Inc., filed its quarterly report on Form 10-Q,
disclosing a net income of $392,181 on $880,652 of total revenues
for the three months ended June 30, 2020, compared to a net loss of
$422,434 on $3,345 of total revenues for the same period in 2019.
At June 30, 2020, the Company had total assets of $2,495,529, total
liabilities of $8,440,517, and $5,944,988 in total deficit.
The Company said, "During the three months ended June 30, 2020, we
incurred a net loss of $2,380,542, had a working capital deficit of
$6,074,365 and had an accumulated deficit of $9,645,040 at June 30,
2020. Our ability to continue as a going concern is dependent upon
our ability to generate profitable operations in the future and,
or, obtaining the necessary financing to meet our obligations and
repay our liabilities arising from normal business operations when
they come due. There is no assurance that these events will be
satisfactorily completed. As a result, there is substantial doubt
about our ability to continue as a going concern for one year from
the issuance date of these financial statements."
A copy of the Form 10-Q is available at:
https://is.gd/2GHrlh
Grapefruit USA, Inc., engages in the manufacture and distribution
of cannabis products. The company is headquartered in Los Angeles,
CA.
GREENPRO CAPITAL: Posts $563,000 Net Loss for the June 30 Quarter
-----------------------------------------------------------------
Greenpro Capital Corp. filed its quarterly report on Form 10-Q,
disclosing a net loss of $563,215 on $401,140 of total revenue for
the three months ended June 30, 2020, compared to a net loss of
$65,228 on $1,701,714 of total revenue for the same period in
2019.
At June 30, 2020, the Company had total assets of $11,526,034,
total liabilities of $5,006,461, and $6,519,573 in total
stockholders' equity.
Greenpro Capital said, "During the six months ended June 30, 2020,
the Company incurred a net loss of $805,730 and used cash in
operations of $871,698 and at June 30, 2020, the Company had a
working capital deficiency of $2,720,009. These factors raise
substantial doubt about the Company's ability to continue as a
going concern within one year of the date that the financial
statements are issued. In addition, the Company's independent
registered public accounting firm, in its report on the Company's
December 31, 2019 financial statements, has expressed substantial
doubt about the Company's ability to continue as a going concern.
"The Company's ability to continue as a going concern is dependent
upon improving its profitability and the continuing financial
support from its shareholders. Management believes the existing
shareholders or external financing will provide the additional cash
to meet the Company's obligations as they become due. Despite the
amount of funds that we have raised in the past, no assurance can
be given that any future financing, if needed, will be available
or, if available, that it will be on terms that are satisfactory to
the Company. Even if the Company is able to obtain additional
financing, if needed, it may contain undue restrictions on its
operations, in the case of debt financing, or cause substantial
dilution for its stockholders, in the case of equity financing."
A copy of the Form 10-Q is available at:
https://bit.ly/37TOZuQ
Greenpro Capital Corp., a multinational conglomerate, provides
financial consulting and corporate services to small and
medium-size businesses primarily in Hong Kong, Malaysia, and China.
The Company was formerly known as Greenpro, Inc. and changed its
name to Greenpro Capital Corp. in May 2015. Greenpro Capital Corp.
was founded in 2013 and is headquartered in Hung Hom, Hong Kong.
GRIMMETT BROTHERS: Seeks to Hire Hoyle Partain as Accountant
------------------------------------------------------------
Grimmett Brothers, Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to hire Hoyle, Partain, &
Company, LLC as its accountant.
The firm will provide the following services:
(a) advise the Debtor with regard to the tax liabilities of
the estate;
(b) prepare all necessary tax returns;
(c) perform all other accounting services for the Debtor.
Rod Partain, CPA of Hoyle Partain, disclosed in a court filing that
his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Rod Partain, CPA
Hoyle, Partain, & Company, LLC
3219 College Avenue
Snyder, TX 79549
About Grimmett Brothers
Grimmett Brothers, Inc. is a family owned Texas corporation that
operates as a service company to the oilfield, providing dirt, mud,
gravel and caliche to oil drilling sites. It builds oilfield
location sites, roads and pits in preparation for the drilling.
Grimmett Brothers filed a Chapter 11 petition (Bankr. N.D. Texas
Case No. 20-50184) on Sept. 25, 2020. Grimmett Brothers President
Billy Grimmett signed the petition. In the petition, the Debtor
estimated $1 million to $10 million in both assets and
liabilities.
Max Ralph Tarbox, Esq., at Tarbox Law, P.C., serves as Debtor's
bankruptcy counsel.
On September 30, 2020, Scott Seidel was appointed as the Subchapter
V trustee.
GROWLIFE INC: Posts $611K Net Loss for the Quarter Ended June 30
----------------------------------------------------------------
GrowLife, Inc., filed its quarterly report on Form 10-Q, disclosing
a net loss of $610,523 on $1,849,837 of net revenue for the three
months ended June 30, 2020, compared to a net loss of $1,690,941 on
$2,200,733 of net revenue for the same period in 2019.
At June 30, 2020, the Company had total assets of $4,355,580, total
liabilities of $9,821,853, and $5,466,273 in total stockholders'
deficit.
GrowLife said, "The Company anticipates that it will record losses
from operations for the foreseeable future. As of June 30, 2020,
the Company's accumulated deficit was $150,365,730. The Company
has limited capital resources, and operations to date have been
funded with the proceeds from private equity and debt financings.
These conditions raise substantial doubt about our ability to
continue as a going concern. The audit report prepared by the
Company's independent registered public accounting firm relating to
our consolidated financial statements for the year ended December
31, 2019 includes an explanatory paragraph expressing the
substantial doubt about the Company's ability to continue as a
going concern."
A copy of the Form 10-Q is available at:
https://is.gd/5z2Eh6
GrowLife, Inc., provides farming soil, hydroponics equipment,
organic plant nutrients, and other products to specialty grow
operations in the United States. Its hydroponics equipment include
indoor lighting systems, growing mediums and accessories, tools for
cutting and propagation, hydroponics systems, bulbs, ballasts,
reflectors, meters and timers, and climate control equipment for
the indoor plant cultivation and cannabis industries. The Company
distributes and sells its products through its e-commerce
distribution channel, such as GrowLifeEco.com, as well as retail
storefronts. GrowLife, Inc., is headquartered in Kirkland,
Washington.
GTY TECHNOLOGY: Reports $7.8-Mil. Net Loss for June 30 Quarter
--------------------------------------------------------------
GTY Technology Holdings Inc. filed its quarterly report on Form
10-Q, disclosing a net loss of $7,774,000 on $11,164,000 of
revenues for the three months ended June 30, 2020, compared to a
net loss of $10,402,000 on $8,246,000 of revenues for the same
period in 2019.
At June 30, 2020, the Company had total assets of $428,685,000,
total liabilities of $117,819,000, and $310,866,000 in total
shareholders' equity.
GTY Technology said, "The Company had an accumulated deficit of
approximately $108.6 million at June 30, 2020, a net loss of
approximately $23.6 million and approximately $14.3 million net
cash used in operating activities for the six months ended June 30,
2020. These factors raise substantial doubt about the Company's
ability to continue as a going concern."
A copy of the Form 10-Q is available at:
https://is.gd/2R9fqe
GTY Technology Holdings Inc. (NASDAQ: GTYH) operates as a holding
company. The Company, through its subsidiaries provides cloud-based
SaaS for state, local, and tribal governments in North America.
GUARDION HEALTH: Has $707K Net Loss for Quarter Ended June 30
-------------------------------------------------------------
Guardion Health Sciences, Inc. filed its quarterly report on Form
10-Q, disclosing a net loss of $707,160 on $1,190,909 of total
revenue for the three months ended June 30, 2020, compared to a net
loss of $3,048,348 on $260,970 of total revenue for the same period
in 2019.
At June 30, 2020, the Company had total assets of $14,034,003,
total liabilities of $1,338,363, and $12,695,640 in total
stockholders' equity.
The Company had a net loss of $3,054,073 and utilized cash in
operating activities of $4,020,731 during the six months ended June
30, 2020. The Company expects to continue to incur net losses and
negative operating cash flows in the near-term. As a result,
management has concluded that there is substantial doubt about the
Company's ability to continue as a going concern within one year of
the date that the financial statements are issued.
The Company's independent registered public accounting firm has
also included explanatory language in their opinion accompanying
the Company's audited financial statements for the year ended
December 31, 2019, stating there is substantial doubt about the
Company's ability to continue as a going concern.
A copy of the Form 10-Q is available at:
https://is.gd/QiiYzi
Guardion Health Sciences, Inc., is a specialty health sciences
company, develops, formulates, and distributes medical foods that
replenishes and restores the macular protective pigment under the
Lumega-Z(R) brand. The company also develops MapcatSF, a medical
device that measures the macular pigment optical density. It
distributes its products through e-commerce at guardionhealth.com.
Guardion Health Sciences, Inc., was founded in 2009 and is based in
San Diego, California.
HARRIS PHARMACEUTICAL: Case Summary & 11 Unsecured Creditors
------------------------------------------------------------
Debtor: Harris Pharmaceutical, Inc.
9090 Park Royal Dr
Fort Myers, FL 33908-9616
Business Description: Harris Pharmaceutical, Inc. is engaged in
the manufacturing of pharmaceutical and
medicine products.
Chapter 11 Petition Date: October 29, 2020
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 20-08071
Debtor's Counsel: Leon Williamson, Esq.
LAW OFFICE OF LEON A. WILLIAMSON, JR., P.A.
306 S Plant Ave Ste B
Tampa, FL 33606-2323
Tel: (813) 253-3109
Email: leon@lwilliamsonlaw.com
Total Assets as of September 30, 2020: $4,229,666
Total Liabilities as of September 30, 2020: $2,207,513
The petition was signed by Dr. Brian A. Harris, M.D., chief
executive officer.
A copy of the Debtor's list of 11 unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/4ZTACFA/Harris_Pharmaceutical_Inc__flmbke-20-08071__0002.0.pdf?mcid=tGE4TAMA
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/HSJ4UJA/Harris_Pharmaceutical_Inc__flmbke-20-08071__0001.0.pdf?mcid=tGE4TAMA
HAWAII MOTORSPORTS: AHFC Notes of Lift Stay Motion
--------------------------------------------------
American Honda Finance Corporation submitted a limited objection to
Hawaii Motorsports, LLC's Amended Disclosure Statement.
AHFC notes that the Disclosure Statement, at p. 27, refers to
certain guaranties of the debts owed to the Debtor, which were
executed by Messrs. Usher and Cebull. AHFC reaffirms the validity
and propriety of the guaranties and its right to immediately pursue
and enforce these guaranties.
AHFC points out that the DS is silent as to AHFC's pending Motion
to Modify Automatic Stay filed on July 14, 2020, which is presently
set for hearing on Oct. 29, 2020. In the Motion, AHFC asserts that
the motorcycles and other personal property identified in the
Motion are held in trust by the Debtor for the benefit of AHFC,
pursuant to a Wholesale Finance Agreement between the Debtor and
AHFC. If the Motion is granted, the estate's interest in the
personal property identified in the Motion would be affected. AHFC
believes that the Disclosure Statement (and the Amended Plan)
should revised and amended to reflect this possibility.
Attorneys for American Honda Finance Corporation:
STEVEN M. JOHNSON
CHURCH, HARRIS, JOHNSON & WILLIAMS, P.C.
114 3rd Street South
P.O. Box 1645
Great Falls, MT 59403
Telephone: 406-761-3000
Fax: 406-453-2313
SJohnson@chjw.com
THEODORE D. C. YOUNG
CADES SCHUTTE
A Limited Liability Law Partnership
Cades Schutte Building
1000 Bishop Street, Suite 1200
Honolulu, HI 96813-4212
Telephone: (808) 521-9200
Fax: (808) 521-9210
Email: tyoung@cades.com
About Hawaii Motorsports
Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii.
Hawaii Motorsports LLC, based in Kahului, HI, filed a Chapter 11
petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In
the petition signed by Barry Usher, manager, the Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities. The Hon. Benjamin P. Hursh is the
presiding judge. James A. Patten, Esq., at Patten Peterman
Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the
Debtor.
HAWAII MOTORSPORTS: Automotive Finance Objects to Disclosures
-------------------------------------------------------------
Automotive Finance Corporation submitted an objection to the
Amended Disclosure Statement filed by Hawaii Motorsports, LLC.
AFC's Plan objection is appropriate at the Disclosure Statement
phase. The Plan has numerous deficiencies. While some objections
may be resolved by the parties or the Court, others, like the one
set forth herein, are insurmountable and prevent confirmation as a
matter of law.
AFC points out that the Debtor may not effect a "ride-through" of
the note under the plan. Because the debtor has treated the note in
the plan, it cannot ride through and must either be assumed or
rejected. That process offers the Debtor no relief, however,
because the Note is one to "extend other debt financing or
financial accommodations" and may not be assumed under Section
365(c)(2).
AFC further points out that the Debtor may not assume the note
under Section 365 or 1123. As a general rule, a debtor may assume
an executory contract if certain conditions are met, even over the
counter-party’s objection. At the same time, there are some
contracts that may never be assumed. The Note is one of those
contracts.
Wells Fargo Commercial Distribution Finance, LLC, also objects to
the adequacy of Hawaii Motorsports LLC’s Amended Disclosure
Statement. Wells Fargo, which is also a floorplan lender, joins
in, incorporates, and adopts the objections raised by Automotive
Finance Corporation.
Attorneys for Automotive Finance Corporation:
Jeffery A. Hunnes
Joseph A. Soueidi
FELT MARTIN PC
2825 3rd Ave. N., Suite 100
Billings, MT 59101
Telephone: (406) 248-2646
Fax: (406) 245-3074
E-mail: jhunnes@feltmartinlaw.com
jsoueidi@feltmartinlaw.com
Attorneys for Wells Fargo Commercial Distribution Finance, LLC:
William D. Lamdin, III
Dylan D. Crouse
CROWLEY FLECK PLLP
500 Transwestern Plaza II
490 N. 31st St., Ste. 500
P.O. Box 2529
Billings, Montana 59103-2529
Telephone: (406) 252-3441
Facsimile: (406) 252-3181
E-mail: blamdin@crowleyfleck.com
dcrouse@crowleyfleck.com
About Hawaii Motorsports
Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii.
Hawaii Motorsports LLC, based in Kahului, HI, filed a Chapter 11
petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In
the petition signed by Barry Usher, manager, the Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities. The Hon. Benjamin P. Hursh is the
presiding judge. James A. Patten, Esq., at Patten Peterman
Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the
Debtor.
HAWAII MOTORSPORTS: HSFCU Says Future Sales & Income Unrealistic
----------------------------------------------------------------
Hawaii State Federal Credit Union (HSFCU) objects to the adequacy
of the Amended Disclosure Statement of Debtor Hawaii Motorsports
LLC.
HSFCU claims that the Debtor's plan is based upon continued floor
plan financing. The absence of any commitment or agreement for
future floor plan advances makes the disclosure statement
misleading and puts the feasibility of Debtor's operation and plan
into question.
HSFCU points out that Debtor disclosed that Wells Fargo terminated
its flooring for Debtor's bestselling and highest-margin brands.
However, it is material that Wells Fargo terminated future
financing because of out of trust sales.
HSFCU asserts that the Amended Disclosure Statement fails to
disclose that the State of Hawaii has imposed and extended a
mandatory 14-day quarantine of all arriving passengers. Job losses
and the economic crisis in Hawaii directly impact the feasibility
of Debtor's reorganization.
HSFCU further asserts that the Debtor's projections for future
sales and income are purely speculative and are unrealistic given
the magnitude of the economic crisis in Hawaii. The aggressive
growth projections coupled with inadequate cash reserves to fund
the Debtor to the July 2021 plan effective date makes the Amended
Disclosure Statement inadequate and seriously misleading.
A full-text copy of the HSFCU's objection to disclosure statement
dated August 28, 2020, is available at https://tinyurl.com/y4pthgh4
from PacerMonitor.com at no charge.
Attorneys for Hawaii State FCU:
Doug James
Bryce Burke
MOULTON BELLINGHAM PC
27 N. 27th Street, Suite 1900
P. O. Box 2559
Billings, Montana 59103-2559
Telephone: (406) 238-1578
E-mail: Doug.James@moultonbellingham.com
Bryce.Burke@moultonbellingham.com
About Hawaii Motorsports
Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii.
Hawaii Motorsports LLC, based in Kahului, HI, filed a Chapter 11
petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In
the petition signed by Barry Usher, manager, the Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities. The Hon. Benjamin P. Hursh is the
presiding judge. James A. Patten, Esq., at Patten Peterman
Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the
Debtor.
HAWAII MOTORSPORTS: SGG LLC Objects to Disclosure Statement
-----------------------------------------------------------
Creditor SGG, LLC, objects to the Disclosure Statement filed by
Debtor Hawaii Motorsports LLC on August 21, 2020.
SGG, LLC, claims that the Disclosure Statement as proposed fails to
provide adequate information as required by 11 U.S.C. Sec. 1125.
While it is true that Creditor and RJZ, LLC, have proposed a
month-to-month tenancy commencing as of the date of rejection,
there is no agreement between Debtor and Creditor at this time.
SGG, LLC points out that the Debtor again fails to disclose that it
still occupies the Premises and conducts business operations there
despite the statutory requirement that, immediately upon rejection
(which occurred May 22, 2020), it should have surrendered the
Premises. 11 U.S.C. § 365(d)(4)(A).
A full-text copy of SGG, LLC's objection to disclosure statement
dated August 27, 2020, is available at https://tinyurl.com/y4sr3tab
from PacerMonitor.com at no charge.
Attorneys for SGG:
Charles W. Hingle
HOLLAND & HART LLP
401 North 31st Street, Suite 1500
P.O. Box 639
Billings, MT 59103-0639
Tel: (406) 252-2166
Fax: (406) 252-1669
E-mail: chingle@hollandhart.com
About Hawaii Motorsports
Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii.
Hawaii Motorsports LLC, based in Kahului, HI, filed a Chapter 11
petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In
the petition signed by Barry Usher, manager, the Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities. The Hon. Benjamin P. Hursh is the
presiding judge. James A. Patten, Esq., at Patten Peterman
Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the
Debtor.
HAWAIIAN HOLDINGS: Incurs $97.1 Million Net Loss in Third Quarter
-----------------------------------------------------------------
Hawaiian Holdings Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $97.10 million on $75.98 million of total operating revenue for
the three months ended Sept. 30, 2020, compared to net income of
$80.07 million on $755.15 million of total operating revenue for
the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $348.37 million on $695.13 million of total operating
revenues compared to net income of $174.27 million on $2.12 billion
of total operating revenue for the same period last year.
As of Sept. 30, 2020, the Company had $4.09 billion in total
assets, $962.63 million in total current liabilities, $1.03 billion
in total long-term liabilities, $1.38 billion in other liabilities
and deferred credits, and $717.21 million in stockholders' equity.
"The COVID-19 pandemic and State of Hawai'i quarantines continued
to have a dramatic effect on our business in the third quarter,"
said Peter Ingram, Hawaiian Airlines president and CEO. "Despite
these monumental challenges, my colleagues throughout the business
have done an incredible job adapting to the evolving environment.
We have taken action to reduce expenses, preserve cash, bolster our
liquidity and care for our guests, positioning us to begin the
recovery process in earnest with the introduction of the State of
Hawai'i's pre-travel testing regime in the fourth quarter."
As of Sept. 30, 2020, the Company had:
* Unrestricted cash, cash equivalents and short-term investments
of $979 million
* Outstanding debt and finance lease obligations of $1,299
million
* Air traffic liability of $515 million
The State of Hawai'i was under mandatory 14-day self-quarantine for
all incoming travelers throughout the third quarter of 2020, and
for neighbor island travel starting from Aug. 11, 2020 and as a
consequence, the Company operated an extremely limited schedule
during the third quarter.
During the quarter, the Company implemented both permanent and
extended voluntary leave programs with each of its workgroups, and
prepared for involuntary reductions effective Oct. 1, 2020. In
total, the Company reduced its workforce by approximately 2,400
employees, or more than 32 percent of all employees, of which
almost 2,100 were through voluntary means.
To increase liquidity, the Company closed on approximately $421
million of new financing during the quarter, including:
* Raising approximately $114 million through the sale and
leaseback of two Airbus A321neo aircraft
* Raising approximately $262 million through the issuance of
Enhanced Equipment Trust Certificates backed by two Airbus
A330
aircraft and six Airbus A321neo aircraft
* Drawing approximately $45 million of the $420 million
available
through the Economic Relief Program ("ERP") loans offered
under
the Coronavirus Aid, Relief, and Economic Security Act (the
"CARES Act")
As of Sept. 30, 2020, the Company has received $240.6 million in
grants and $60.3 million in loans pursuant to the CARES Act Payroll
Support Program, of which $38 million was received in the third
quarter.
In October 2020, the Company executed an amendment with the U.S.
Treasury increasing the total amount of the ERP loan from $420
million to $622 million, of which $577 million is undrawn; the
Company has until March 2021 to determine how much of the remaining
ERP funds to borrow.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1172222/000117222220000085/ha-20200930.htm
About Hawaiian Holdings
Hawaiian Holdings, Inc.'s primary asset is sole ownership of all
issued and outstanding shares of common stock of Hawaiian Airlines,
Inc. The Company is engaged in the scheduled air transportation of
passengers and cargo amongst the Hawaiian Islands (the Neighbor
Island routes) and between the Hawaiian Islands and certain cities
in the United States (the North America routes together with the
Neighbor Island routes, the Domestic routes), and between the
Hawaiian Islands and the South Pacific, Australia, New Zealand and
Asia (the International routes), collectively referred to as its
Scheduled Operations. The Company offers non-stop service to
Hawai'i from more U.S. gateway cities (13) than any other airline,
and also provide approximately 170 daily flights between the
Hawaiian Islands. In addition, the Company operates various
charter flights.
As of June 30, 2020, the Company had $3.99 billion in total assets,
$1.04 billion in current liabilities, $792.77 million in long-term
debt, $1.34 billion in total other liabilities and deferred
credits, and total shareholders' equity of $825.93 million.
* * *
As reported by the TCR on July 17, 2020, S&P Global Ratings lowered
all ratings on Hawaiian Holdings Inc., including lowering the
issuer credit rating to 'CCC+' from 'B', and removed them from
CreditWatch, where it placed them with negative implications on
March 13, 2020. S&P expects Hawaiian to generate a significant
cash flow deficit in 2020 because of COVID-19's impact on air
travel.
HEALTH-RIGHT DISCOVERIES: Divulges Substantial Going Concern Doubt
------------------------------------------------------------------
Health-Right Discoveries, Inc., filed its quarterly report on Form
10-Q, disclosing a net loss of $398,887 on $373,446 of revenue for
the three months ended June 30, 2020, compared to a net loss of
$179,925 on $917,251 of revenue for the same period in 2019.
At June 30, 2020, the Company had total assets of $7,481,668, total
liabilities of $9,839,211, and $2,357,543 in total stockholders'
deficiency.
Health-Right Discoveries said, "The Company believes that its
existing capital resources when combined with anticipated cash flow
from operations, will allow it to fund its operations for 2020,
assuming, however, that the Company is able to refinance or
otherwise extend and/or modify the GPB Note prior to its maturity
in September 2020. There can be no assurance that we will be able
to do so or secure financing, when required, on commercially
reasonable terms. Any such additional financing may dilute the
interests of existing shareholders. The absence of additional
financing, when needed, could substantially harm the Company, its
business, results of operations and financial condition. These
factors among others, raise substantial doubt regarding the
Company's ability to continue as a going concern."
A copy of the Form 10-Q is available at:
https://is.gd/bIQIpI
Aventura, Florida-based Health-Right Discoveries, Inc., operates as
a biotechnology company. The Company develops and markets
prescription nutritional, over-the-counter monograph, and natural
products that focuses on factors relating to stress-induced
conditions and diseases. Health-Right Discoveries conducts
business in the United States.
HELIX TECHNOLOGIES: Says Substantial Going Concern Doubt Exists
---------------------------------------------------------------
Helix Technologies, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $3,125,145 on $4,762,711 of total revenues
for the three months ended June 30, 2020, compared to a net income
of $4,812,308 on $3,898,873 of total revenues for the same period
in 2019.
At June 30, 2020, the Company had total assets of $71,836,036,
total liabilities of $7,960,898, and $63,875,138 in total
shareholders' equity.
The Company said, "Management believes that we will continue to
incur losses for the immediate future. Therefore, we may either
need additional equity or debt financing until we can achieve
profitability and positive cash flows from operating activities, if
ever. These conditions raise substantial doubt about our ability
to continue as a going concern. Our condensed consolidated
financial statements do not include any adjustments relating to the
recovery of assets or the classification of liabilities that may be
necessary should we be unable to continue as a going concern. For
the six months ended June 30, 2020, we have generated revenue and
are trying to achieve positive cash flows from operations.
"As of June 30, 2020, we had a cash balance of $2,001,931, accounts
receivable, net of $1,350,513 and $6,148,926 in current
liabilities. At the current cash consumption rate, we may need to
consider additional funding sources toward the end of fiscal 2020.
We've taken proactive measures to reduce operating expenses, drive
growth in revenue and expeditiously resolve any remaining legal
matters.
"The successful outcome of future activities cannot be determined
at this time and there is no assurance that, if achieved, we will
have sufficient funds to execute our intended business plan or
generate positive operating results."
A copy of the Form 10-Q is available at:
https://is.gd/czaxE5
Helix Technologies, Inc., provides the legal cannabis industry with
the most powerful and effective operating services platform in the
market. Its suite of services enable business owners and operators
to better manage and mitigate risk while they focus on their core
business. Pursuant to the acquisition of the assets of Helix TCS,
LLC, the Company changed its name from Jubilee4 Gold, Inc. to Helix
TCS, Inc. effective October 25, 2015. Effective June 5, 2020, the
Company changed its name from Helix TCS, Inc. to Helix
Technologies, Inc.
HERTZ GLOBAL: Reports $852-Mil. Net Loss for June 30 Quarter
------------------------------------------------------------
Hertz Global Holdings, Inc. filed its quarterly report on Form
10-Q, disclosing a net loss of $852 million on $832 million of
total revenues for the three months ended June 30, 2020, compared
to a net income of $40 million on $2,511 million of total revenues
for the same period in 2019.
At June 30, 2020, the Company had total assets of $23,116 million,
total liabilities of $22,443 million, and $673 million in total
stockholders' equity.
Hertz Global said, "The Company's ability to continue as a going
concern is contingent upon its ability to successfully implement a
plan of reorganization, among other factors, and the realization of
assets and the satisfaction of liabilities are subject to
uncertainty. Further, any plan of reorganization could materially
change the amounts of assets and liabilities reported in the
accompanying condensed consolidated financial statements. The
accompanying condensed consolidated financial statements do not
include any adjustments that might be necessary should the Company
be unable to continue as a going concern or as a consequence of the
Chapter 11 Cases. As a result of the Company's financial
condition, defaults under certain debt agreements and the risks and
uncertainties surrounding the Chapter 11 Cases, substantial doubt
exists that the Company will be able to continue as a going concern
within one year from the issuance date of this Quarterly Report on
Form 10-Q."
A copy of the Form 10-Q is available at:
https://is.gd/eYY1h7
About Hertz Corp.
Hertz Corp. and its subsidiaries -- http://www.hertz.com/--
operate a worldwide vehicle rental business under the Hertz,
Dollar, and Thrifty brands, with car rental locations in North
America, Europe, Latin America, Africa, Asia, Australia, the
Caribbean, the Middle East, and New Zealand. The Company also
operates a vehicle leasing and fleet management solutions
business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court
(Bankr. D. Del. Case No. 20-11218).
The Hon. Mary F. Walrath is the presiding judge.
White & Case LLP is serving as legal advisor, Moelis & Co. is
serving as investment banker, and FTI Consulting is serving as
financial advisor. Richards, Layton & Finger, P.A., is the local
counsel. Prime Clerk LLC is the claims agent, maintaining the page
https://restructuring.primeclerk.com/hertz
HI-CRUSH INC: Reports $26.0-Mil. Net Loss for June 30 Quarter
-------------------------------------------------------------
Hi-Crush Inc. filed its quarterly report on Form 10-Q, disclosing a
net loss of $26,014,000 on $54,005,000 of revenues for the three
months ended June 30, 2020, compared to a net loss of $117,484,000
on $178,001,000 of revenues for the same period in 2019.
At June 30, 2020, the Company had total assets of $871,368,000,
total liabilities of $641,539,000, and $229,829,000 in total
stockholders' equity.
Hi-Crush said, "Recent developments have negatively impacted the
Company's financial condition and the Company's current forecast
gives doubt to the Company's available liquidity to repay its
outstanding debt balances or meet its obligations, such as its
Senior Notes semiannual interest payments and operating lease
obligations over the next twelve months. These conditions and
events indicate that there is substantial doubt about the Company's
ability to continue as a going concern within one year from the
issuance date of the financial statements.
"In response to the conditions, the Company filed for bankruptcy
under Chapter 11. Although we anticipate that the Chapter 11 Cases
will help address our liquidity concerns, there are a number of
risks and uncertainties surrounding the Chapter 11 Cases, including
the uncertainty remaining over the Bankruptcy Court's approval of a
plan of reorganization, that is not within our control. As such,
we have concluded that management's plans do not alleviate
substantial doubt about the Company's ability to continue as a
going concern."
A copy of the Form 10-Q is available at:
https://is.gd/IQxFiF
Hi-Crush Inc. provides proppant and logistics services for
hydraulic fracturing operations. It offers frac sand production,
advanced wellsite storage systems, flexible last mile services, and
innovative software for real-time visibility and management across
the entire supply chain. The Company is based in Houston, Texas.
HOMETOWN INTERNATIONAL: Discloses Substantial Going Concern Doubt
-----------------------------------------------------------------
Hometown International, Inc., filed its quarterly report on Form
10-Q, disclosing a net loss of $178,015 on $0 of sales for the
three months ended June 30, 2020, compared to a net loss of $49,852
on $4,205 of sales for the same period in 2019.
At June 30, 2020, the Company had total assets of $1,920,125, total
liabilities of $77,377, and $1,842,748 in total stockholders'
equity.
Hometown International said, "The Company used cash in operations
of $300,421 and has an accumulated deficit of $1,069,626 and a net
loss of $262,706 for the six months ended June 30, 2020. This
raises substantial doubt about our ability to continue as a going
concern. We may not have sufficient working capital to fund the
expansion of our operations and to provide working capital
necessary for our ongoing operations and obligations. We need to
raise significant additional capital to fund our operating
expenses, pay our obligations, and grow our company. Therefore,
our future operations may be dependent on our ability to secure
additional financing. The COVID-19 pandemic may have an adverse
impact on the Company's ability to raise capital or to continue as
a going concern. As a result of the above, there is substantial
doubt about the ability of the Company to continue as a going
concern and the accompanying consolidated financial statements have
been prepared assuming that the Company will continue as a going
concern. The accompanying consolidated financial statements do not
include any adjustments that may result from the outcome of this
uncertainty.
"As of March 23, 2020, we have temporarily closed the delicatessen
given the stay-at-home order issued by the governor of New Jersey
on March 9, 2020. As of the date of this report, although the
stay-at-home order has been lifted, the delicatessen remains
closed. On August 1, 2020, the governor signed Executive Order No.
171 which extends the public health emergency for another 30 days
until September 1, 2020, unless renewed. The deli has minimal
staff and is not in a position to stay open and remain profitable
while staying compliant with ongoing health requirements. We hope
to be in a position to re-open the deli in September 2020."
A copy of the Form 10-Q is available at:
https://is.gd/UzefWW
HRI HOLDING: Unsecured Creditors to Recover 3% in Liquidating Plan
------------------------------------------------------------------
HRI Holding Corp., et al. submitted a Plan and a Disclosure
Statement.
The Debtors propose to liquidate under chapter 11 of the Bankruptcy
Code. Under chapter 11, a debtor may reorganize or liquidate its
business for the benefit of its stakeholders. The consummation of a
chapter 11 plan of liquidation is the principal objective of these
Chapter 11 Cases. A chapter 11 plan sets forth how a debtor will
treat claims and equity interests.
Generally, the Plan:
* Vests the Remaining Estate Assets in the Post-Effective Date
Debtors for the purpose of distribution to holders of Allowed
Claims;
* Designates a Plan Administrator to wind-down the Debtors'
affairs, monetize
certain liquor licenses, reconcile Claims, pay Allowed Claims, and
administer the Plan in an efficacious manner;
* Effectuates the Global Settlement by and among the Debtors,
the Creditors'
Committee and the Prepetition Secured Lenders as memorialized in
the Plan Term Sheet; and
* Provides for 100 percent recoveries for holders of Allowed
Administrative Claims, Allowed Priority Tax Claims, Allowed Secured
Tax Claims, Allowed Other Secured Claims, and Allowed Other
Priority Claims.
Pursuant to the Plan, the Debtors, the Post-Effective Date Debtors
or the Plan Administrator will pay or provide for payments of
Claims as follows:
-- The Debtors or the Post-Effective Date Debtors shall pay
Allowed Administrative Claims, Allowed Priority Tax Claims and
Allowed Class 3 Other Priority Claims in full from the Priority
Claim Reserve;
-- The Debtors shall fund the Professional Fee Escrow Account,
which Professional Fee Escrow Account shall be used to pay Allowed
Professional Fee Claims;
-- Holders of Allowed Class 1 Secured Tax Claims shall receive,
at the option of the Plan Administrator: (a) payment in full in
Cash or (b) equal semi-annual Cash payments over 5 years with
interest at the applicable non-default rate under non-bankruptcy
law, subject to the option of the Plan Administrator to prepay the
entire amount during such time period;
-- Holders of Allowed Class 2 Other Secured Claims shall receive,
at the option of the Plan Administrator: (a) payment in full in
Cash; (b) the collateral securing such holder's Allowed Other
Secured Claim; (c) reinstatement of such holder's Allowed Other
Secured Claim; or (d) such other treatment rendering such holder's
Allowed Other Secured Claim Unimpaired;
-- Holders of Allowed Class 4 Prepetition Secured Claims shall
receive payment to the Administrative Agent of: (i) any Residual
Cash Reserve Amounts, (ii) Residual Cash and (iii) the Residual
Remnant Liquor License Proceeds, for a projected recovery of 65
percent;
-- Holders of Allowed Class 5 General Unsecured Claims shall
receive their Pro Rata share of Class A and Class B Interests, for
a projected recovery of 3 percent;
-- Holders of Allowed Class 6 Prepetition Secured Obligations
Deficiency Claims shall receive their Pro Rata share of Class B
Interests;
-- Existing Intercompany Interests will be cancelled without any
distribution to the holders of such Interests; and
-- Existing Interests in Holdco will be cancelled without any
distribution to the holders of such Interests.
Holders of Class 5 General Unsecured Claims will each receive its
pro rata share of Class A and Class B Interests, which shall
entitle such holder to its pro rata share after deducting the
expenses of the Plan Administrator of the following (A) on account
of its Class A Interests: (i) the Residual Retained Sale Proceeds,
(ii) the Residual Wind Down Amounts and (iii) the Identified Liquor
License Proceeds and (B) on account of its Class B Interests: the
Residual Excluded Liquor License Proceeds. The projected Plan
recovery on such Allowed Claims is 3 percent.
Nov. 5 Plan Hearing
A combined hearing to consider final approval of the Disclosure
Statement and confirmation of the Plan will commence on Nov. 5,
2020 10:30 a.m. (prevailing Eastern Time) before the Honorable Mary
F. Walrath, United States Bankruptcy Judge, in the United States
Bankruptcy Court for the District of Delaware, located at 824
Market Street, 5th Floor, Wilmington, DE 19801.
Objections to final approval of the Disclosure Statement and
confirmation of the Plan will be on Oct. 26, 2020 at 4:00 p.m.
(prevailing Eastern Time).
The deadline to vote on the Plan is Oct. 26, 2020 at 11:59 pm
(prevailing Eastern Time).
A full-text copy of the Disclosure Statement dated September 16,
2020, is available at https://tinyurl.com/y578r898 from
PacerMonitor.com at no charge.
A full-text copy of the Notice dated September 16, 2020, is
available at https://tinyurl.com/y5st4ofv from PacerMonitor.com at
no charge.
Counsel to the Debtors:
Adam G. Landis
Kimberly A. Brown
Matthew R. Pierce
Nicolas E. Jenner
LANDIS RATH & COBB LLP
919 Market Street, Suite 1800
Wilmington, Delaware 19801
Telephone: (302) 467-4410
Facsimile: (302) 467-4450
About HRI Holding Corp.
Formed in September 1992 under the name "Gilbert/Robinson, Inc.,"
and headquartered in Leawood, Kansas, HRI Holding Corp. and its
affiliated debtors own and operate 47 restaurants in 14 states
(Connecticut, Florida, Illinois, Indiana, Kansas, Michigan,
Missouri, Nebraska, New Jersey, New York, Ohio, Pennsylvania,
Texas, and Virginia). Debtors own Houlihan's Restaurant + Bar, J.
Gilbert's Wood-Fired Steak + Seafood, Bristol Seafood Grill, and
Devon Seafood Grill restaurants. As of the petition date, the
Debtors had 3,450 employees.
HRI Holding and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12415) on
Nov. 14, 2019. At the time of the filing, Debtors disclosed assets
of between $50 million and $100 million and liabilities of the same
range.
Debtors have tapped Landis Rath & Cobb, LLP as legal counsel, Piper
Jaffray & Co. as investment banker, Hilco Real Estate LLC as real
estate advisor, and Kurtzman Carson Consultants, LLC as claims and
noticing agent and administrative agent.
Andrew Vara, acting U.S. trustee for Region 3, appointeda a
committee of unsecured creditors on Nov. 22, 2019. The committee is
represented by Kelley Drye & Warren, LLP.
HS REO 105: Dec. 1 Deadline to File Plan and Disclosures
--------------------------------------------------------
Judge Christopher M. Alston has ordered that HS REO 105 LLC must
file a plan and Disclosure Statement by Dec. 1, 2020. The deadline
for non-governmental creditors to file proofs of claim is October
30, 2020.
HS Reo 105 LLC filed a Chapter 11 petition (Bankr. W.D. Wash. Case
No. 20-11973) on July 23, 2020. LAW OFFICE OF MARC S. STERN, led
by Marc S. Stern, is the Debtor's counsel.
HUNT COMMUNICATIONS: Unsecureds Will be Paid in Full in 36 Months
-----------------------------------------------------------------
Hunt Communications, LLC, submitted an Amended Disclosure Statement
explaining its Chapter 11 Plan.
Ally Bank is a holder of a secured claim in the amount of
$12,800.84. This claim is secured by a 2015 Dodge Ram 3500. The
Debtor will pay this claim in full plus 5.25% interest in monthly
installments and the claim will be paid in full in 24 equal monthly
payments. The payments will be approximately $575.00 per month with
the first monthly payment being due and payable on the 15th day of
the first full calendar month following 60 days after the effective
date of the plan.
GM Financial (AmeriCredit Financial Services) is a holder of a
secured claim in the amount of $42,647. This claim is secured by a
2018 GMC K2500. Debtor will pay these claims in full plus 5.25%
interest in monthly installments and the claim will be paid in full
in 24 equal monthly payments. The payments will be approximately
$1,900.00 per month with the first monthly payment being due and
payable on the 15th day of the first full calendar month following
60 days after the effective date of the plan.
Caterpillar Financial Services Corp. is a holder of a secured claim
in the amount of $42,669. This claim is secured by a Caterpillar
259D Compact Track Loader, and a Caterpillar 420F Backhoe Loader.
Debtor will pay this claim in full plus 5.25% interest in monthly
installments and the claim will be paid in full in 24 equal monthly
payments. The payments will be approximately $1,900 per month with
the first monthly payment being due and payable on the 15th day of
the first full calendar month following 60 days after the effective
date of the plan.
Enverto Leasing Co. is a holder of a secured claim in the amount of
$27,230.56. This claim is secured by a 2012 Vermeer Navigator
D24X40 Series II. Debtor will pay this claim in full plus 5.25%
interest in monthly installments and the claim will be paid in full
in 24 equal monthly payments. The payments will be approximately
$1,200.00 per month with the first monthly payment being due and
payable on the 15th day of the first full calendar month following
60 days after the effective date of the plan.
General Unsecured Claims (these claims are impaired). The allowed
general unsecured creditors will be paid in full within 36 months
of the effective date of the plan. The payments will be payable
15th day of the first calendar month after Class 1, 2, and 3 claims
are paid in full.
Insiders will not be paid any prepetition claims during the term of
the Plan and their claims will be discharged upon confirmation of
the Plan.
The Equity Interest Holder -- Monique Hunt -- will retain her
interest in the Reorganized Debtor but will not receive dividends
during the term of the plan of reorganization.
Payments and distributions under the Plan will be funded by through
future income from the operations of the company.
A full-text copy of the Amended Disclosure Statement dated August
31, 2020, is available at https://tinyurl.com/yxop9dy8 from
PacerMonitor.com at no charge.
About Hunt Communications
Hunt Communications, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-35732) on Oct. 10,
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 Christopher M. Lopez. The Debtor is
represented by Russell Van Beustring, Esq., at The Lane Law Firm,
PLLC.
HUSSEIN TAWFIK: Court Narrows Claims Against Lenders
----------------------------------------------------
In the case captioned HUSSEIN TAWFIK, et al., Plaintiffs, v.
JPMORGAN CHASE BANK, N.A., et al., Defendants, Case No.
20-cv-02946-JSC (N.D. Cal.), Magistrate Judge Jacqueline Scott
Corley granted JPMorgan Chase Bank, N.A.'s motion to dismiss, and
granted in part and denied in part Select Portfolio Servicing, Inc.
and U.S. Bank, NA's motion to dismiss.
Hussein Tawfik and Heidi Tawfik are residents of California. In or
around July 1977, the Plaintiffs purchased the property located at
660 Greenwich Lane, Foster City, California 94404. On Sept. 14,
2006, the Plaintiffs took out a $960,000.000 loan executing a Deed
of Trust and Promissory Note in favor of Washington Mutual. Chase
eventually acquired Washington Mutual and the loan. In August 2013,
after defaulting on the Foster City Loan, Plaintiffs entered into a
Loan Modification Agreement with Chase, who had acquired certain
Washington Mutual assets.
On May 18, 2006, Plaintiffs purchased property located at 492-496
N. Whisman Road, Mountain View, California 94043. To secure the
financing, Plaintiffs executed a Deed of Trust and Promissory Note
on the property in favor of Washington Mutual. U.S. Bank, NA,
acquired certain loans from Washington Mutual, including the
Mountain View Loan. A Notice of Default was recorded against the
Mountain View Property on Jan. 12, 2010. At all relevant times, SPS
operated as U.S. Bank's loan servicing agent.
Chase refused to abide by the contractual terms that govern its
relationship with Plaintiffs, insisting instead that the total
principal balance on the Foster City Loan is approximately $106,000
more than it actually is. Additionally, Chase has not been
reporting to credit agencies that the Plaintiffs have been making
monthly payments on their mortgage.
SPS and U.S. Bank have for years demanded more than is required
under the Mountain View Loan. SPS has charged the Plaintiffs
$4,370.89 monthly, despite monthly principal and interest payments
being fixed at $4,300.70. SPS has also failed to properly apply the
Plaintiffs' payments to the Mountain View Loan such that, in
January 2016, SPS claimed its unpaid principal balance was
$1,032,335.91. This amount does not account for approximately
$80,000.00 in payments the Plaintiffs made toward the loan. As
such, SPS has for years claimed Plaintiffs owe an inflated amount
on the Mountain View Loan and charged interest on an amount not
actually owed under it. SPS has not reported the Plaintiffs'
monthly payments to credit agencies, despite explicitly stating on
monthly statements sent to the Plaintiffs that it reports the
payments to credit agencies; this has severely damaged their credit
rating.
The plaintiffs filed their original complaint in the Superior Court
of the State of California for the County of San Mateo on March 25,
2020, asserting multiple claims under California law against Chase,
SPS and U.S. Bank. The complaint asserted a claim for declaratory
relief, as well as claims for breach of contract, unjust
enrichment, fraud, and violations of California's Unfair
Competition Law, California Business & Professions Code section
17200 ("UCL"). Chase removed the case to this district on April 29,
2020 on diversity jurisdiction grounds. Chase filed its motion to
dismiss on May 6, 2020. SPS and U.S. Bank filed their motion to
dismiss on May 18, 2020.
The plaintiffs' claims against Chase arose from the same theory:
Chase incorrectly insists that Plaintiffs owe approximately
$106,000 more in principal under the Foster City Loan than they
actually do. Because the Plaintiffs' theory fails as a matter of
law, Judge Corley dismissed all of their claims against Chase.
The Plaintiffs argued that the balance Plaintiffs owed following
the confirmation of their bankruptcy plan was $1,044,680, but that
Chase nonetheless insists that the amount owed is $106,000 more
than that amount. Chase responded that under the plain terms of the
Loan Modification Agreement there is an interest-bearing principal
amount plus $108,000 in deferred, non-interest bearing principal
and that the Plaintiffs still owe this amount. The Court agreed.
In the bankruptcy proceedings, the Plaintiffs and Chase stipulated
to the treatment of Chase's secured claim under the Chapter 11
reorganization plan; specifically, they stipulated that "[Chase's]
legal, equitable, and contractual rights shall remain unchanged
with respect to its security interest in the [Foster City]
Property." The confirmation plan did not alter the stipulation; to
the contrary, the confirmation plan specifically provides that "the
Debtors' combined plan of reorganization and proposed disclosure
statement . . . is confirmed . . . as modified by . . . the changes
to the treatment of Class 1A set forth in debtors' stipulation with
JPMorgan Chase Bank[.]" In its Class 1A table, Plaintiffs' Proposed
Chapter 11 Plan listed Chase as the creditor of "first mortgage on
660 Greenwich Lane, Foster City, CA[.]" Therefore, the confirmation
plan specifically adopted the parties' stipulation under which
Chase's rights remained unchanged, including its right to the
$108,000 in deferred non-interest bearing principal. Thus, to the
extent Plaintiffs' claims rest on the bankruptcy confirmation plan
erasing the additional $108,000 debt they fail as a matter of law,
Judge Corley said.
The Plaintiffs' contention that the $108,000 in deferred principal
on the Chase loan was eliminated by confirmation of the bankruptcy
plan is belied by the plan itself and the parties' stipulation.
Similarly, their insistence that the Adjustable Note Rider survived
the Loan Modification Agreement is contradicted by the plain and
ambiguous language of the Loan Modification Agreement. Accordingly,
Judge Corley dismissed the Plaintiffs' claims against Chase.
The Plaintiffs' claims against SPS and U.S. Bank arose from their
allegations that for years SPS has overcharged Plaintiffs for their
monthly loan payments on the Mountain View Loan, have failed to
credit the Plaintiffs for approximately $80,000 in payments made,
have charged Plaintiff's interest on amounts not actually owed, and
have failed to report the payments Plaintiffs have made to credit
reporting agencies.
According to Judge Corley, SPS has not met its burden in showing
that the Plaintiffs' claims based on SPS's failure to report the
Plaintiffs' payments to credit agencies are time-barred. The
complaint does not allege when SPS began not reporting to credit
agencies that the Plaintiffs have been making payments on their
mortgage. SPS argued that Plaintiffs should have known the credit
reporting was awry on the basis of SPS's January 2016 failure to
credit, and that this inaccuracy in crediting payments demonstrates
an inaccuracy in what SPS would have been reporting to credit
agencies. Thus, according to SPS, its improper or failed credit
reporting began at least that early and at that time was readily
apparent, such that the Plaintiffs' injury and their claims arising
from this injurious failure to report began to accrue in January
2016. The difficulty with this argument is that it assumes the
Plaintiffs' failure to report to credit agencies theory is based on
the January 2016 failure to credit $80,000 in payments, but the
vague complaint does not so allege, which is a problem different
from the statute of limitations.
In sum, the Plaintiffs' challenges to monthly overcharges that
occurred outside the limitations period are barred, but SPS has not
met its burden of showing that Plaintiffs cannot challenge monthly
overcharges made within four years of the complaint's filing or the
failure to credit for $80,000 in payments. Further, it has not
shown as a matter of law that the claim based on the failure to
report mortgage payments to credit reporting agencies is
time-barred.
In the Plaintiffs' fraud claim, Judge Corley held that the claim is
insufficiently particularized. The Plaintiffs claim only that SPS
made a false promise when it said in its monthly statements that it
reported to credit agencies, even though "it did not and did not
intend to." The Plaintiffs failed to state when or where
specifically SPS made its allegedly fraudulent statements; the
dates, and whether the statements were made on paper or
electronically, for instance, are not pled in the complaint.
Furthermore, the Plaintiffs did not allege any facts to support
their contention that SPS did not intend to report the Plaintiffs'
payments to credit reporting agencies. The Plaintiffs did not
provide sufficient allegations to discern whether they are alleging
SPS did not report any payments at all, or whether they only
reported partial amounts. Fundamentally, the Plaintiffs did not
provide SPS with a sufficient explanation of why SPS's statements
regarding the credit reporting were fraudulent. The Court,
therefore, granted SPS's motion to dismiss the Plaintiffs' fraud
claims with leave to amend.
A copy of the Court's Order is available at https://bit.ly/2RRoddh
from Leagle.com.
Hussein Tawfik and Heidi Tawfik filed for chapter 11 bankruptcy
protection on March 11, 2014. The Bankruptcy Court of the Northern
District of California confirmed their bankruptcy plan on August 4,
2015.
INTELLIGENT PACKAGING: S&P Alters Outlook to Neg., Affirms 'B' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook on Intelligent Packaging Sub
L.P. (IPL) to negative from stable and affirmed its 'B' issuer
credit rating. At the same time, S&P revised its recovery rating on
the company's pro forma $585 million senior secured notes to '4'
from '3' and affirmed its 'B' issue-level rating.
The negative outlook reflects the risk that weaker-than-expected
operating performance over the next 12 months combined with the
additional debt from the senior secured note add-on could cause
IPL's debt leverage to exceed 6.5x on a sustained basis.
The negative outlook reflects IPL's growing debt load and the
increased uncertainty around its deleveraging path. IPL is
pursuing a $100 million add-on to its senior secured notes to fund
several bolt-on acquisitions, which -- according to management --
will be modestly deleveraging. Pro forma for the proposed add-on,
the company will have approximately $585 million of senior secured
notes outstanding. As such, it will need to generate S&P-adjusted
EBITDA of approximately $95 million or higher to maintain debt
leverage of 6.5x or below, which S&P believes could be challenging
under the current macroeconomic environment and due to costs
stemming from the integration of its acquisitions. In addition, the
company is adding incremental debt only a few weeks after it was
taken private by Madison Dearborn (transaction closed Oct. 15,
2020). S&P views the timing for the proposed transaction as
aggressive given the recent ownership change and it demonstrates a
financial policy that allows for more risk taking.
S&P said, "A modest deviation from our base-case scenario could
cause the company's debt leverage to exceed our 6.5x downgrade
threshold. Our forecast assumes IPL's debt leverage will be in the
6.0x-6.5x range by the end of fiscal year 2021. Our forecast also
assumes minimal integration or restructuring costs associated with
these acquisitions and that the various businesses will be able to
maintain their operating performance as presented by management.
That said, a slight 100-basis point (bps) deviation from our
base-case scenario would cause IPL's leverage to exceed 6.5x. This
could occur if the company incurs larger-than-expected integration
and restructuring costs or if its acquired entities experience
modest operating margin compression."
The negative outlook reflects the risk that the incremental debt
from the add-on senior secured notes combined with a
weaker-than-expected operating performance could cause IPL's debt
leverage to exceed 6.5x on a sustained basis.
S&P said, "We could lower our ratings on IPL if we expect its debt
leverage to exceed 6.5x on a sustained basis over the next 12
months. Assuming the proposed add-on is completed, this could occur
if its operating margins decline by 100 bps relative to our 2021
base-case expectations. Under this scenario, we could see a
sustained fall-off in its large format and environmental (LF&E) and
returnable packaging solutions (RPS) segments, combined with a
slowdown in its consumer packaging solutions (CPS) business. We
could also lower our ratings if the company's free cash flows is
negative for an extended period, resulting in an increase and
sustained borrowings on its asset based lending (ABL) facility."
"We could revise the outlook on IPL to stable if it meets our 2021
base-case expectations such that debt leverage is below 6.5x,
including completing all of the potential acquisitions, and we are
confident it will be able to maintain or further strengthen its
credit metrics."
INTERSTATE COMMODITIES: $225K Sale of 45 Railcars to NSC Approved
-----------------------------------------------------------------
Judge Robert E. Littlefield, Jr. of the U.S. Bankruptcy Court for
the Northern District of New York authorized Interstate
Commodities, Inc.'s private sale of interests in 45 railcars to NSC
Minerals, Ltd. for $225,000.
A hearing on the Motion was held on Oct. 28, 2020.
In accordance with the resolution of the Limited Objection placed
on the record at the Hearing, the Debtor will deposit the proceeds
of the sale into a separate Debtor in Possession bank account with
any disbursements from such account subject to further Orders of
the Court.
The Debtor is authorized and directed to (a) consummate the sale of
the Railcars in accordance with the terms and conditions of the
Agreement and the instruments and agreements contemplated thereby
including transferring to the Purchaser good and marketable title
to Railcars; (b) take all further actions as may reasonably be
requested by the Purchaser for the purpose of transferring the
Railcars; and (c) expend such funds as are reasonably necessary to
consummate the transactions contemplated by the Agreement.
The Order will be effective immediately upon entry pursuant to
Bankruptcy Rules 7062 and 9014. The Court waives the 14-day stay
set forth in Bankruptcy Rules 6004(h) and 6006(d) in order that the
transactions described herein may be closed prior to the expiration
of such 14-day period.
About Interstate Commodities
Interstate Commodities Inc. engages in the merchandise of
commodities. It offers whole corn, soybean meal, soybeans, soy
hulls, soyhull pellets, corn gluten meal, canola meal, sunflower
meal, beet pulp pellets, citrus pulp pellets, and wheat.
Interstate Commodities filed a voluntary petition for relief under
chapter 11 of the Bankruptcy Code (Bankr. N.D.N.Y. Case No.
20-11139 on Aug. 26, 2020. The petition was signed by Michael G.
Piazza, chief operating officer. At the time of filing, the Debtor
disclosed $12,558,336 in assets and $25,513,305 in liabilities.
Gerard R. Luckman, Esq., at FORCHELLI DEEGAN TERRANA LLP, is the
Debtor's counsel.
JAMUNA TAXI: OSK Reaches Deal; Unsecureds to Get 100%
-----------------------------------------------------
Jamuna Taxi Corp. submitted an Amended Disclosure Statement
explaining its Chapter 11 Plan.
The parties have reached an agreement of mutually acceptable terms
in full resolution of all claims held by OSK VIII LLC, the majority
creditor in this case.
As per the terms of the referenced agreement, the Plan offers the
Secured Creditor, OSK VIII, LLC, the following treatment of its
claim no. 1 filed in this case. In summary, Debtor will retain
possession and use of the loan collateral consisting of One New
York City Taxi Medallion # 7E42. OSK VIII, LLC will agree to
reduce its Allowed Secured Claim to the amount $190,000, which
Debtor shall pay in 60 consecutive monthly installments of $1,777,
with a balloon payment due on the 61st Month. The Debtor's timely
payment of all amounts in full will be in full and final settlement
of the claim of OSK VIII, LLC.
In the present case, as the Debtor is offering unsecured creditors
full distributions of their unsecured claim amounts, liquidation
would not yield a larger recovery for the unsecured creditors.
The Debtor believes that its Plan of Reorganization will result in
creditors receiving the full value of their unsecured claims and
thus no less than they would under a hypothetical Chapter 7
liquidation and believes that Confirmation of the Plan of
Reorganization is in the best interests of creditors and interest
holders of the Debtor.
The Plan will be financed from income generated from the Debtor's
self-employment as a full time self-employed Yellow Taxi Cab
driver, as an owner operator of the referenced taxi medallion, as
he is at present.
A full-text copy of the Amended Disclosure Statement dated October
14, 2020, is available at https://tinyurl.com/yyg6uuun from
PacerMonitor.com at no charge.
Attorney for the debtor Jamuna Taxi Corp.:
Thomas A. Farinella, Esq.
Law Office of Thomas A. Farinella, P.C.
260 Madison Avenue, 8th
New York, New York 10016
tf@lawtaf.com
About Jamuna Taxi Corp.
Jamuna Taxi Corp., filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y. Case No. 19-13304) on Oct. 17, 2019, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by Thomas A. Farinella, Esq., at the Law Office of Thomas A.
Farinella, P.C.
KC EQUIPMENT: Seeks to Hire Vannova Legal as Legal Counsel
----------------------------------------------------------
KC Equipment Leasing, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Utah to hire Vannova Legal, PLLC as its
legal counsel.
The firm will provide the following services to the Debtor:
a. advise the Debtor of its rights, powers, and duties;
b. take all necessary action to protect and preserve the
estate of the Debtor;
c. prepare legal papers;
d. assist in presenting the Debtor's proposed plan of
reorganization;
e. perform all other necessary legal services to the Debtor.
The range of current hourly billing rates for firm attorneys is
$200 to $400. The hourly billing rate of Kathleen H. Van Sleen, a
non-attorney that serves as the firm administrator for Vannova
Legal, is $300.
Matthew K. Broadbent, Esq., managing attorney at Vannova Legal,
disclosed in a court filing that the firm, its attorneys and
managers, do not hold any interest adverse to the Debtor and its
estate and that the law firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Matthew K. Broadbent, Esq.
VANNOVA LEGAL, PLLC
49 West 9000 South
Sandy, Utah 84070
Telephone: (801) 349-1523
Facsimile: (801) 349-1524
Email: Law@VannovaLegal.com
About KC Equipment Leasing, LLC
KC Equipment Leasing, LLC is a contracting equipment rental company
based in Salt Lake City, Utah.
KC Equipment Leasing sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Utah Case No. 20-26065) on October 12,
2020. The petition was signed by Kathleen H. Van Sleen, the
Company's manager.
At the time of the filing, Debtor had estimated $100,001 to
$500,000 in both assets and liabilities.
Vannova Legal, PLLC is Debtor's legal counsel.
KCST USA: Order Vacating Arbitration Award Against Axia Flipped
---------------------------------------------------------------
In the case captioned AXIA NETMEDIA CORPORATION, Plaintiff,
Appellant, KCST USA, INC., Plaintiff, v. MASSACHUSETTS TECHNOLOGY
PARK CORPORATION, d/b/a Massachusetts Technology Collaborative,
Defendant, Appellee, No. 19-1649 (1st Cir.), the United States
Court of Appeals for the First Circuit reversed the district
court's ruling vacating a portion of the arbitration award against
Axia NetMedia Corporation, finding that the arbitrator did not
exceed the scope of his powers under section 10(a)(4) of the
Federal Arbitration Act (FAA).
Massachusetts Technology Park Corporation, an independent public
instrumentality of the Commonwealth of Massachusetts operating
under the name Massachusetts Technology Collaborative ("MTC"), owns
a fiber-optic network in western Massachusetts known as the
Massbroadband123 Network. Before the network was built, MTC
contracted with Axia NGNetworks USA, Inc. -- now called KCST USA,
Inc. -- to operate and market the network. MTC also secured a
guaranty of KCST's obligations under the contract from KCST's
parent company, Axia NetMedia.
In 2010, MTC received state and federal funding to build the
Massbroadband123 Network to provide high-speed broadband service to
underserved communities in western and north central Massachusetts.
Shortly before the funding was approved, MTC solicited proposals
from telecommunications companies to operate and market the
soon-to-be-built network. Axia, a Canadian company seeking to
expand into the United States market, submitted a bid on behalf of
its newly created United States subsidiary, KCST. MTC selected KCST
to be the network operator. On Feb. 25, 2011, MTC and KCST entered
into the Agreement for Network Operator Services, and MTC and Axia
entered into the Guaranty Agreement that is at issue in this
appeal.
Under the terms of the NOA, MTC was responsible for constructing
the network1 and turning it over to KCST in segments. The planned
network, as described in the NOA, would be "a 1,338-mile
fiber-optic network with new fiber running through or near 124
communities in western and north central Massachusetts" that
connected to 1,392 Community Anchor Institutions ("CAIs"). CAIs are
state or community facilities, like schools, libraries, hospitals
and police departments. These facilities "are directly connected to
the network[ and] serve as hubs of connectivity for extending the
network to other customers." The NOA defines a CAI as "any one of
the organizations and agencies identified in" a list that was
appended to the NOA, which was subject to revision by MTC "from
time to time in MTC's sole discretion."
The NOA details the many responsibilities that KCST agreed to
assume as the "Network Operator." In short, KCST was "responsible
for all aspects of the management, sales, monitoring, operations,
support, and maintenance of" the Massbroadband123 Network. Also, it
was responsible for "pay[ing] for all ongoing costs of operating"
the network "and all costs of compliance with the terms of" the
NOA. KCST, additionally, paid an annual fee to MTC. "In return,
KCST retained the network's revenue up to a defined threshold,
above which it agreed to share the revenue with MTC."
In the Guaranty, Axia promised that, should KCST "default in any of
its payment or performance obligations under the Network Operator
Agreement," Axia would "make all such payments and perform all such
obligations of the Network Operator" under the NOA, and would
"fully and punctually pay and discharge . . . any and all costs,
expenses and liabilities" associated with those obligations. The
Guaranty was "limited to and capped at the amount of" $4 million
and it provided that, should Axia "advance to MTC funds up to said
amount, [Axia] shall have no further obligation or liability under
this Agreement."
The Guaranty said nothing about what effect, if any, potential
breaches of the NOA by MTC would have on its continuing validity.
Both the NOA and the Guaranty address dispute resolution. The NOA
provides that any dispute between MTC and KCST that cannot be
resolved through informal dispute resolution procedures "will be
finally settled by binding arbitration conducted in accordance with
the [American Arbitration Association] Rules." Under the Guaranty,
all disputes between MTC and Axia that could not be resolved in
mediation would "be resolved by litigation in a court serving
Middlesex County, Massachusetts," unless "MTC elect[ed] arbitration
as the method of dispute resolution for a given dispute." The
Guaranty provides that, "at MTC's sole election, MTC may file a
demand for arbitration by the American Arbitration Association in
its office serving Boston, Massachusetts."
The relationship between MTC and Axia eventually deteriorated after
the network was built. Axia ultimately sued MTC in federal district
court over the guaranty agreement and MTC procured an order
compelling arbitration of the parties' dispute. The arbitrator
found that MTC had materially breached the underlying contract with
KCST, and, accordingly, that the guaranty agreement was void for
failure of consideration.
Axia sought confirmation of the arbitration award while MTC,
dissatisfied with the arbitrator's decision, sought vacatur or
modification of the arbitration award under section 10 of the FAA,
9 U.S.C. section 10(a). The district court concluded that the
arbitrator had exceeded the scope of his powers, and vacated the
portion of the arbitration award that voided the guaranty. Axia has
appealed that decision.
Upon review, the Appeals Court held that the district court's
disagreement with the arbitrator's factual finding as to the
necessity of the Guaranty was not an appropriate basis for vacating
the award. Federal courts "do not sit . . . to hear claims of
factual or legal error by an arbitrator or to consider the merits
of the award." Thus, even if the arbitrator committed serious
factual error by concluding that the record lacked "specific
persuasive evidence" that MTC would insist upon a Guaranty as part
of a renegotiation of the NOA, that would not "justify setting
aside the arbitral decision."
According to the Appeals Court, this is not a case where the
arbitrator "ignore[d] the contract and simply dispense[d] `his own
brand of industrial justice.'" To the contrary, the arbitration
award is grounded in the record and the parties' agreement. The
arbitrator did not exceed the scope of his powers under section
10(a)(4) of the FAA. Accordingly, the Appeals Court reversed the
district court's ruling and remanded the case with instructions to
enter a judgment confirming the arbitration award.
A copy of the Court's Ruling is available at https://bit.ly/3da5ao8
from Leagle.com.
About KCST USA, Inc.
KCST USA, Inc., based in Concord, Mass., filed a Chapter 11
petition (Bankr. D. Mass. Case No. 17-40501) on March 22, 2017. In
the petition signed by Terrence Fergus, its president, the Debtor
estimated $500,000 to $1 million in assets and $10 million to $50
million in liabilities. The Hon. Elizabeth D. Katz presides over
the case. Andrew G. Lizotte, Esq., and Harold B. Murphy, Esq., at
Murphy & King, P.C., served as bankruptcy counsel to the Debtor.
Stephen Darr of Huron Consulting Services, LLC, served as the chief
restructuring officer.
KHAN REAL ESTATE: HAB Buying Billings Property for $1.64 Million
----------------------------------------------------------------
Khan Real Estate, LLC, asks the U.S. Bankruptcy Court for the
District of Montana to authorize the sale of the real property
described as 3311 2nd Avenue North, Billings, Yellowstone County,
Montana, known as the Western Inn, to HAB Development Corp. for
$1.48 million, and $160,000 for the furnishings, fixtures and
equipment located thereon.
The parties have executed an Amendment to Agreement Between Parties
for Existing Terms and Conditions extending the closing date to
Oct. 7, 2020. The Buyer has informed the seller that if the sale
does not close by Oct. 7, 2020, they will not proceed with the
purchase of the property.
The pending litigation between the Debtor and Pender West Credit 1
Reit, LLC has been resolved and a Rule 9019 Motion is being filed
with the Amended Motion.
The following creditors have lien priorities on the subject
property and will be paid at time of closing:
a) Yellowstone County property taxes of approximately
$17,322.
b) Pender West Credit 1 Reit, LLC is owed approximately
$1,381,340 which amount is disputed. The parties have reached an
agreement that Pender West Credit 1 Reit LLC will be paid the sum
of $1.25 million from the sale proceeds.
c) Crowley Fleck is owed approximately $88,000. The parties
have reached an agreement that Crowley Fleck will be paid the sum
of $75,000 from the sale proceeds. It is expected Crowley Fleck
will file an Amended Proof of Claim on Oct. 5, 2020.
The Secured creditors will retain their priority liens on the sale
proceeds. Any remaining monies from the sale will go to Debtor to
be disbursed pursuant to a confirmed Plan.
If the sale is not timely approved, the Debtor's estate may suffer
irreparable harm. If the sale is approved, the existing secured
creditors will not be harmed as they will be paid in full as set
forth in the Motion. All other creditors will benefit as well.
Accordingly, in the event an objection is filed, the Debtor asks
that the Court schedules a hearing on shortened notice relative to
its Motion for Sale of Property, Free and Clear of Liens, with
regard to the sale of the real property set out in the Buy-Sell
Agreement. Pursuant to the Court's Order of Oct. 2, 2020, the
objections and the hearing are set for Oct. 6, 2020, at 1:30 p.m.
via Zoom.
Pursuant to F.R.B.P. 6004(h), the Debtor also asks that the Order
authorizing the sale of the property be effective immediately and
not stayed for 14 days.
A hearing on the Motion is set for Oct. 6, 2020 at 1:30 p.m.
A copy of the Agreement is available at
https://tinyurl.com/y6xo83bk from PacerMonitor.com free of charge.
About Khan Real Estate
Khan Real Estate LLC is a single asset real estate (as defined in
11 U.S.C. Section 101(51B)). Its principal assets are located in
Billings, Mont., having an appraised value of $1.69 million.
Khan Real Estate sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Mont. Case No. 20-10140) on July 27,
2020. The petition was signed by Mansoor A. Khan, member. At the
time of the filing, the Debtor disclosed total assets of $1,870,711
and total liabilities of $1,210,322. Judge Benjamin P. Hursh
oversees the case. Patten, Peterman, Bekkedahl & Green, PLLC is
the Debtor's legal counsel.
KIM MORTIMER: Court Won't Delay Sale of New York Property
---------------------------------------------------------
In the case captioned KIM MORTIMER, Appellant, v. HEIDI J. SORVINO,
Chapter 11 Trustee, et al., Appellees, No. 20 Civ. 4032 (LGS)
(S.D.N.Y.), District Judge Lorna G. Schofield denied Appellant Kim
Mortimer's motion to stay the marketing of and potential sale of
Appellant's apartment building located at 60 West 91st Street, New
York, New York 10024.
The district court, in determining whether to grant a stay,
considers four factors: (1) the likelihood that the party seeking
the stay will prevail on the merits on the appeal, (2) the
likelihood the moving party will be irreparably harmed absent a
stay, (3) the prospect that others will be harmed if a stay is
granted and (4) the public interest in granting the stay.
Upon analysis, Judge Schofield held that even assuming irreparable
harm, a stay is not warranted because the evidence does not support
finding any of the other factors, including importantly, the first
factor.
According to Judge Schofield, the first factor is a "critical"
factor in the analysis. The record does not show a probability,
much less a substantial possibility, of success on the appeal of
the Direction Order. Appellant argued a likelihood of success
because her Fourth Amendment and Sixth Amendment rights were
allegedly violated by the Chapter 11 Trustee, but the record
provided insufficient support for these allegations. To the extent
the argument is the same as that made before the Bankruptcy Court
on the initial motion to stay these alleged acts occurred
following the appointment of Appellee as Chapter 11 Trustee and
cannot make it more likely that the order directing the appointment
of a Chapter 11 Trustee was erroneous.
Regarding the third factor, the record does not show that the
"balance of harms tips in favor of granting the stay." Appellee has
explained that a stay would result in accruing interest on the
secured claim, which could likely harm other creditors. As to the
public interest, the record does not provide information on how the
public interest would be affected by denying the motion to stay. A
stay may very well impede the public interest in the administration
of bankruptcy estates. Accordingly, Judge Schofield denied the stay
motion.
A copy of the Court's Order is available at https://bit.ly/30H92It
from Leagle.com.
LITTLE DISCOVERIES: Penn Barton Objects to Disclosure Statement
---------------------------------------------------------------
Penn Barton Company, a secured creditor with regards to real
property located at 506 Ridgeview Drive, Bartonsville, PA 18321, in
accordance with an Installment Sale Agreement recorded by
Memorandum on July 13, 2007 at Monroe County Deed Book No. 2310
Page 6501, objects to the Disclosure Statement filed by Debtor
Little Discoveries Day Care Inc, aka Little Discoveries Day Care,
Inc., a/k/a Little Discoveries Day Care, aka Little Discoveries
Daycare.
Penn Barton claims that the Debtor's reliance on the amortization
schedule is misplaced because the amortization schedule does not
accurately reflect the terms of the Installment Sale Agreement.
Penn Barton points out that the amortization schedule does not show
that Debtor was to pay an additional reduction of the Installment
Principal Balance in the minimum amount of $28,000 per year with a
maximum aggregate additional installment principal balance
reduction of $140,000 during the five year installment period.
Penn Barton asserts that the Agreement contemplated the balance of
the purchase price after the initial five year installment period
and at the time of settlement in 2012 would be in the form of a
purchase money first mortgage and note repayable in consecutive
monthly installments commencing on July 1, 2012 and on the first
day of each month thereafter, amortized for a period of 10 years.
Penn Barton further asserts that the Agreement contemplated
payments would be completed by 2022. Despite the fact the
Agreement contemplated payment of the balance of the purchase price
by 2022, the amortization schedule shows installment payments of
$8,000 continuing until April 2028.
A full-text copy of Penn Barton's objection to disclosure statement
dated August 25, 2020, is available at https://tinyurl.com/y5y2rstk
from PacerMonitor.com at no charge.
Penn Barton is represented by:
NEWMAN WILLIAMS, P.C.
Robert J. Kidwell, Esq.
712 Monroe Street, P.O. Box 511
Stroudsburg, PA 18360-0511
Tel: 570-421-9090
About Little Discoveries Day Care
Little Discoveries Day Care, Inc. sought protection under Chapter
11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 20-00051) on
Jan. 8, 2020. At the time of the filing, the Debtor disclosed
assets of between $500,001 and $1 million and liabilities of the
same range. Judge Robert N. Opel II oversees the case. The Debtor
is represented by Philip W. Stock, Esq.
LP&D INC: Trustee May Not Comply with EcoSource Deal, Suit Says
---------------------------------------------------------------
The case captioned LP & D, Inc. ECOSOURCE, LLC, PAUL OLIVEIRA, LISA
ELLIS-OLIVEIRA, Appellants, v. JOHN J. AQUINO, CHAPTER 7 TRUSTEE
Appellee, Nos. 16-11129, 18-12135, 18-12139, 18-12142, 18-12163 (D.
Mass.) is a consolidated appeal from orders by the Bankruptcy Court
related to the Chapter 7 bankruptcy proceedings for the estate of
Debtor LP&D, Inc.
Appellants EcoSource, LLC, Paul Oliveira, and Lisa Ellis-Oliveira
sought review of orders denying their motion to compel the Chapter
7 Trustee's compliance with a purported agreement to settle an
adversary proceeding against them; allowing the Trustee's motion to
enter into a Claims Litigation Agreement with creditor CleanNet
USA, Inc., which permits CleanNet to prosecute the adversary
proceeding on behalf of the LP&D bankruptcy estate; and denying
their objections to claims asserted by CleanNet against the LP&D
bankruptcy estate.
After careful review of the voluminous record, District Judge
Indira Talwani affirmed the Bankruptcy Court's orders.
In 1997, LP&D, Inc. became an Area Operator for CleanNet, a
commercial cleaning franchisor. Under an Area Operator Agreement,
CleanNet designated LP&D a master franchisee for sale of CleanNet
commercial cleaning business franchises, and LP&D recruited "unit
franchisees" in certain Massachusetts counties.
Beginning in 2008, LP&D and CleanNet were named as defendants in a
number of lawsuits alleging that they had misclassified employees
as franchisees.
Among these actions was one filed on March 31, 2011, by a group of
CleanNet franchisees/cleaners in Suffolk County Superior Court
alleging violations of the Massachusetts Independent Contractor Law
and Wage Act and asserting common law claims, which CleanNet
removed to federal court.
In early 2012, Paul Oliveira helped set up EcoSource, LLC, another
commercial cleaning company.
On June 5, 2012, LP&D filed for bankruptcy under Chapter 11 of the
Bankruptcy Code. Nixon Peabody, LLP represented the bankruptcy
estate between 2012 and 2014 while the case proceeded under Chapter
11.
On Dec. 18, 2012, parties not currently before the court filed
proofs of claim numbered 4 through 6 asserting employee
misclassification claims against the LP&D estate. CleanNet
purchased those claims and on January 28, 2013, those claims were
assigned to CleanNet.
On Nov. 25, 2013, CleanNet entered into a stipulation of settlement
in the Sola class action. CleanNet agreed to pay the Sola
plaintiffs $7,500,000. As part of the settlement, all claims class
members had against LP&D were assigned to CleanNet.
On May 7, 2014, LP&D filed a notice to convert the case to a case
under Chapter 7 of the Bankruptcy Code. The Bankruptcy Court
appointed John Aquino as the Chapter 7 trustee for the LP&D estate,
Certificate of Appointment, and set Sept. 2, 2014, as the bar date
for filing proofs of claims.
On May 30, 2014, CleanNet filed proofs of claim 8 through 56,
asserting claims assigned to CleanNet pursuant to the Sola
Stipulation. On Sept. 2, 2014, CleanNet filed proof of claim 58 for
royalties.
On June 4, 2014, the Trustee initiated an Adversary Proceeding
against the EcoSource parties. The Trustee alleged that on June 1,
2012, LP&D transferred substantially all of its assets to EcoSource
in exchange for a cash payment of $12,500 and the assumption by
EcoSource of up to $97,300 of LP&D's obligations pursuant to a loan
agreement with People's United Bank. The Trustee alleged further
that, at the time of transfer, Paul Oliveira served as LP&D's
Secretary and Lisa Ellis-Oliveira served as LP&D's President and
Treasurer. The Trustee contended the Oliveiras fraudulently
conveyed LP&D's assets to EcoSource and sought to recover those
assets for the estate as well as equitable relief.
On Feb. 26, 2016, the Trustee and CleanNet agreed on economic terms
for an alternative arrangement where CleanNet would take over the
adversary proceeding on behalf of the bankruptcy estate, which the
Trustee found to be superior, in terms of returns to the bankruptcy
estate, to settlement with the EcoSource parties.
On March 4, 2016, counsel for the EcoSource parties sent the
Trustee an unsigned settlement agreement. The document stated the
EcoSource parties would pay $225,000 to the LP&D estate in return
for dismissal of the Adversary Proceeding.
The Trustee did not move forward with settlement, and later
testified that the document sent by the EcoSource parties' counsel
"deviated" from their prior discussions and included "provisions
and terms that were unacceptable to me." The Trustee did not engage
"in a detailed review of the settlement agreement" and did not
submit the draft to the Bankruptcy Court.
On March 23, 2016, the EcoSource parties filed a motion to compel
the Trustee to comply with the purported settlement.
On May 12, 2016, while the motion to compel was still pending, the
Trustee filed a motion seeking approval of a Claims Litigation
Agreement ("CLA") with CleanNet.
Following the evidentiary hearing and post-hearing briefing, the
Bankruptcy Court issued a Memorandum of Decision and three orders.
The court first denied the EcoSource parties' motion to compel the
trustee to comply with the alleged settlement agreement, finding
that there was no binding agreement between the EcoSource parties
and the Trustee.
The court next overruled the EcoSource parties' objections to
CleanNet's original claims. The court found the Original Objections
unpersuasive or inapplicable, the Supplemental Objections as
untimely insofar as the EcoSource parties attempted to object to
claims other than Amended Claim 58, and found additional objections
raised in the first instance at the evidentiary hearing and in
post-hearing filings also untimely. The court declined to rule on
the objections to CleanNet's Amended Claim 58, finding that the
Amended Claim added a claim for contribution only as an alternative
theory of recovery and that the contribution claim was moot in
light of the court's approval of the assigned claims.
Last, the Bankruptcy Court entered an order approving the Claims
Litigation Agreement, allowing the Trustee to transfer to CleanNet
the right to prosecute the Adversary Proceeding on behalf of the
LP&D estate.
On appeal, the EcoSource parties argue 1) the parties had in fact
agreed on the Nixon Peabody waiver and the Trustee used the issue
as a post hoc rationale for failing to review the settlement terms;
2) the contemplation of a future formal writing did not mean the
purported settlement agreement was not binding; and 3)
contemplation of court approval does not bar enforcing the
purported settlement agreement.
According to Judge Talwani, the parties did not have a meeting of
the minds on a material term. While it appears undisputed that the
Trustee insisted a settlement agreement include a "waiver" of Nixon
Peabody's administrative claims against the bankruptcy estate.
Thus, the proposal merely narrowed Nixon Peabody's avenue of
recovery, so that the law firm could not seek to recover from the
settlement proceeds, but otherwise allowed Nixon Peabody to retain
its claim and seek recovery from other assets.16 In essence, the
EcoSource parties made a counteroffer, asking the Trustee to accept
substantially different terms on the Nixon Peabody claim. As such,
no agreement had been reached at the time the EcoSource parties'
counsel forwarded the counteroffer and the Trustee was free to
reject it. Accordingly, based on the actions and writings of the
two parties presented to the Bankruptcy Court, the Bankruptcy Court
properly denied the EcoSource parties' motion to compel.
Judge Talwani also held the Bankruptcy Court properly found, under
the business judgment standard, that the CLA conferred material
benefits on the bankruptcy estate. At base, there are guaranteed
returns to the estate that are greater than the terms proposed in
the settlement agreement with the EcoSource parties. Judge Talwani
found no error in the Bankruptcy Court's determination that the
Trustee met his burden to establish the CLA was in the best
interest of the estate.
Appellants also challenged the Bankruptcy Court's order overruling
their objections to CleanNet's claims against the LP&D estate.
According to Judge Talwani, Appellants' objection that the
Bankruptcy Court did not require CleanNet to meet its burden of
proof as to the underlying elements of its claims ignores the
Bankruptcy Court's finding of waiver and ignores applicable due
process principles. The Bankruptcy Court set a firm deadline for
submissions of objections to CleanNet's original claims so that
CleanNet could provide a response prior to the evidentiary hearing
and so that the court could then properly adjudicate both the CLA
and the EcoSource parties' objections to CleanNet's claims. By
then, it was too late. The EcoSource parties had failed to provide
"reasonable notice" to CleanNet and the Bankruptcy Court as to
these arguments, in contravention of Fed. R. Bankr. P. 9014 and
common conceptions of due process. If the EcoSource parties needed
more time or needed additional discovery to properly object to
CleanNet's claims, they could have requested a continuance of the
deadline from the court.
Appellants' argument that they "rebutted the initial presumption of
the validity" of CleanNet's claims is thus meritless, Judge Talwani
said. The EcoSource parties provided no argument on appeal, and did
not point to any part of the record, to show that their three
timely objections contained the necessary "substantial evidence" to
rebut the presumption of validity or to show the Bankruptcy Court
erred in overruling those objections. Insofar as Appellants
contended here that objections raised in the first instance at or
after the evidentiary hearing rebutted the presumption of validity
of CleanNet's claims, those objections were rightfully deemed
waived.
A copy of the Court's Memorandum and Order is available at
https://bit.ly/3jIieUg from Leagle.com.
About LP&D, Inc.
Based in Stoneham, MA, LP&D, Inc. filed for chapter 11 bankruptcy
protection (Bankr. D. Mass. Case No. 12-14894) on June 5, 2012,
with estimated assets of $100,001 to $500,000 and estimated
liabilities of $1,000,001 to $10,000,000. The petition was signed
by Paul Oliveira, vice president.
The case was converted to chapter 7 on May 7, 2014.
MATCHBOX FOOD: Seeks Approval to Hire BDO USA LLP as Auditor
------------------------------------------------------------
Matchbox Restaurant Group, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Maryland to hire
BDO USA, LLP as their auditor.
The firm will provide the following services:
a. audit the statements of net assets available for benefits
as of December 31, 2019 for the Debtors' 401(k) plan and the
related statements of changes in net assets available for benefits
for the year and period then ended; and
b. provide such other services as may be requested by the
Debtors.
The firm's current hourly rates are as follows:
Partners/Director $535 - $750
Senior Managers $300 - $400
Managers $250 - $300
Seniors $190 - 250
Experienced Associates $160 - 190
Associates $150 - 160
BDO USA and the Debtors negotiated a flat fee of $10,300 for the
401(k) audit services.
As of the petition date, BDO USA held a sum of $10,300 as retainer
fee.
Amy Thorn, a BDO partner, disclosed in a court filing that the firm
is a "disinterested person" within the meaning of Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Amy Thorn, CPA
BDO USA, LLP
8401 Greensboro Drive Suite 800
McLean, VA 22102
Telephone: (703) 770-6318
E-mail: athorn@bdo.com
About Matchbox Food Group
Matchbox Food Group, LLC and affiliates operate a chain of
casual-dining brand restaurants.
On Aug. 3, 2020, Matchbox Food Group and affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Md. Lead Case No. 20-17250). The petitions were signed
by Edwin A. Sheridan IV, member.
At the time of the filing, Matchbox Food Group had estimated assets
of less than $50,000 and liabilities of between $50 million and
$100 million.
Judge Lori S. Simpson oversees the cases.
McNamee, Hosea, Jernigan, Kim, Greenan & Lynch, P.A. and The
Veritas Law Firm serve as Debtors' bankruptcy counsel and corporate
counsel, respectively.
MERIDIAN MARINA: Tranzon Driggers Auction of All Assets Approved
----------------------------------------------------------------
Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern
District of Florida authorized the bidding procedures proposed by
Meridian Marina & Yacht Club of Palm City, LLC, in connection with
the online auction sale of substantially all assets, free and clear
of liens, claims, and encumbrances.
A hearing on the Motion was held on Oct. 21, 2020 at 1:30 p.m.
The Purchase and Sale Agreement that all bidders will be required
to use in the matter approved to be included as part of the bidding
package related to the Auction and the Sale.
Tranzon Driggers is authorized to take any and all actions
necessary to implement the Bidding Procedures and to effectuate the
relief granted pursuant to the Order in accordance with the Motion.
Upon entry of the order approving these Bidding Procedures, all
past, present and future prospective purchasers will be subject to
these Bidding Procedures and the auction terms and conditions.
A hearing to approve the Auction Sale results will be held before
the Court three business days after the date set for the Auction
Sale, which hearing will be scheduled by separate document upon the
request of the Debtor's counsel.
The assets include:
a. The real property located at 1400 SW Chapman Way (Parcel ID
07-38-41-015-000-00010-0), together with the buildings and
improvements thereon and all right, title and interest of Seller in
and to appurtenances of the Land, including riparian rights,
easements and rights-of-way relating thereto, and, without
warranty, all right, title and interest of Seller in and to the
land lying within any street or roadway adjoining the Land or any
vacated or thereafter vacated street or alley adjoining said Land;
b. All of the Seller's right, title and interest, if any, in
and to all fixtures, furniture, equipment, and other tangible
personal property, if any, owned by Seller ("Personal Property")
presently located on the Land or used in connection with the
Property, including, without limitation, all: (i) vehicles and
watercraft, including trailers and travel-lifts; (ii) telephone
systems and computer equipment, including software installed
thereon; (iii) third party vendor parts and accessories located at
the Property or in transit to the Property on the Closing Date and
gasoline, motor oil, and other similar fuel and fluids currently
stored on the
Property;
c. 3.38 acres located at 1120 SW Chapman Way
(07-38-41-000-000-00010-7);
d. Water retention area (Parcel ID 07-38-41-015-000-00001-1);
and
e. Dock Parcels (Parcel IDs 07-38-41-017-000-00250-7,
07-38-41-017-000-00240-0, 07-38-41-017-000-00230-2).
The salient terms of the Bidding Procedures are:
a. Bid Deadline: At 4:00 p.m. (ET) the day of the bid opening
deadline which will be scheduled to occur no later than 75 days
from the Court Order approving the Bidding Procedures
b. Initial Bid: The gross contract price will be equal to a
high bid plus a 5% Buyer's Premium.
c. Deposit: $75,000
d. Auction: After the bids have been submitted to, recorded
and analyzed by Tranzon Driggers and Kelley, Fulton & Kaplan, P.L.,
Tranzon Driggers reserves the right to conduct a best and final
online auction that will begin at 11:00 a.m. (ET) the next business
day until 4:00 p.m. (ET), subject to the auto-extend features of
the Tranzon bidding platform.
e. Bid Increments: $25,000
f. Sale Hearing: A hearing to approve the sale will be
scheduled within three business days of the online auction event.
g. Closing: The closing will be within 30 days of the online
auction event, or within 10 days of a court order approving the
sale, whichever is longer.
h. The Secured Creditor, and/or its successors or assigns, and
the Stalking Horse bidder, if applicable, will be deemed qualified
to participate in the online auction.
i. Bid Protection: $50,000
The Debtor respectfully asks that the Court enters an Order
granting the relief sought, scheduling a hearing after completion
of the auction authorizing the proposed sale and for other such
relief as the Court deems just and proper.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y32au2g9 from PacerMonitor.com free of charge.
About Meridian Marina & Yacht Club
Meridian Marina & Yacht Club of Palm City, LLC, based in Palm City,
FL, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No.
19-18585) on June 27, 2019. In the petition signed by Timothy
Mullen, member and manager, the Debtor disclosed $8,528,155 in
assets and $5,790,533 in liabilities. The Hon. Erik P. Kimball
oversees the case. Craig I. Kelley, Esq. at Kelley Fulton &
Kaplan, P.L., serves as bankruptcy counsel to the Debtor.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case.
MICHAEL F. RUPPE: $424K Sale of Wharton Property to Konseka Okayed
------------------------------------------------------------------
Judge John K. Sherwood of the U.S. Bankruptcy Court for the
District of New Jersey authorized Michael F. Ruppe's sale of the
real property located at 81 Pine Street, Wharton, New Jersey to
Satya Konkesa for $424,000, cash.
A hearing on the Motion was held on Oct. 27, 2020.
Customary closing adjustments payable by the Debtor for municipal
charges, rent or utility adjustment, or assessments will be
satisfied from the proceeds of the sale at closing.
The Debtor is permitted to provide a credit to the Purchaser in the
amount of $8,000 and for such credit to be stated on the closing
settlement statement as a repair credit to the Purchaser.
The Debtor will pay the Realtor, Robert Sivori, 6% of the sale
proceeds from Sale of the Property, without a separate application
for compensation.
The Debtor will pay his Bankruptcy Counsel's allowed compensation
as approved by the Court from the sale proceeds from Sale of the
Property, without a separate application for compensation.
The following allowed secured claims will be paid at closing in
accordance with the written payoff: Mortgage lien held by Wells
Fargo Home Mortgage, recorded on Oct. 9, 2012, in the amount of
$239,986 (Proof of Claim No. 8).
Except for those allowed secured claims as listed, property taxes,
and municipal charges encumbering the Property, will be paid in
full at closing; thereafter title to the Property will pass to the
Purchaser free and clear of any and all Liens and Claims, with any
Liens and Claims to attach only to the Debtor's interest in the net
sale proceeds.
Wells Fargo Bank, N.A., will receive funds within 48 hours of the
closing. The Sale constitutes legal, valid, and effective
transfers and will vest the Purchaser with all right, title, and
interest of the Debtor in and to the Property.
The Debtor is required to obtain a Certificate of Habitability from
the Borough of Wharton prior to closing. As a condition precedent
to the Borough issuing a temporary Certificate of Habitability, the
Purchaser will be required to execute a writing expressly
confirming its agreement to satisfactorily complete all repairs to
the deck attached to the Property as required by the Borough no
later than 60 days after closing.
The net sale proceeds from the sale of the Property will be held in
the Debtor's Bankruptcy Counsel's Trust Account pending
confirmation of a Chapter 11 Plan of Reorganization or further
order of the Court.
Notwithstanding Bankruptcy Rules 6004(h), the Order will not be
stayed for 14 days after its entry but will be effective and
enforceable upon its entry.
A true copy of the Order will be served on all parties who received
notice of the Motion, within seven days from the entry of the
Order.
Michael F. Ruppe sought Chapter 11 protection (Bankr. D.N.J. Case
No. 20-10544) on Jan. 13, 2020. The Debtor tapped David L. Steven,
Esq., as counsel. On Feb. 10, 2020, the Court appointed Robert
Sivori as realtor.
MONKEY TOES: Has Until Oct. 30 to File Plan & Disclosures
---------------------------------------------------------
Judge Jerrold N. Poslusny, Jr. has entered an order within which
the deadline for Debtor Monkey Toes, LLC to file a Plan and
Disclosure Statement is October 30, 2020.
A full-text copy of the order dated August 25, 2020, is available
at https://tinyurl.com/y225rzj7 from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
Carrie J. Boyle, Esq.
Boyle & Valenti Law, P.C
10 Grove Street, 2nd Floor
Haddonfield, NJ 08033
Tel: (856) 499-3335
E-mail: cboyle@b-vlaw.com
About Monkey Toes
Monkey Toes, LLC, owns Sanctuary Gentlemen's Club, an adult
entertainment club in Vineland, New Jersey.
Monkey Toes, LLC d/b/a Sanctuary Gentlemen's Club, filed a Chapter
11 petition (Bankr. D.N.J. Case No. 19-31018) on Nov. 6, 2019. In
its petition, the Debtor disclosed $14,879 in assets and $1,022,443
in liabilities. The petition was signed by David Glassman,
managing member. The Hon. Jerrold N. Poslusny Jr. presides over
the case. Carrie J. Boyle, Esq., at Boyle & Valenti Law, P.C.,
serves as bankruptcy counsel.
NATIONWIDE AMBULANCE: Ruling on Shareholder Loan Upheld
-------------------------------------------------------
In the case captioned ALEXANDER IVCHENKO, Appellant, v. NANCY
ISAACSON, CHAPTER 7, TRUSTEE, Appellee, Civil Action No. 2:19-18584
(D.N.J.), Alexander Ivchenko took an appeal from the Sept. 6, 2019
opinion and judgment of the U.S. Bankruptcy Court for the District
of New Jersey. The Bankruptcy Court entered a judgment in the
amount of $206,920 in favor of the Chapter 7 Trustee for turnover
of a pre-petition shareholder loan made by Nationwide Ambulance
Services, Inc. to Ivchenko, its principal. Upon review, District
Judge Claire C. Cecchi affirmed the Bankruptcy Court's judgment.
Nationwide filed a voluntary petition for relief under Chapter 11
of the Bankruptcy Code on Jan. 11, 2013. Nationwide subsequently
engaged in reorganization efforts, which ultimately failed. On
April 22, 2015, the case was converted to a Chapter 7 proceeding.
On April 23, 2015, Isaacson was appointed as Chapter 7 trustee. She
retained the accounting services of Bederson LLP to investigate
Nationwide's books and records.
After Bederson's investigation, Appellee sent a demand letter to
the Appellant seeking repayment of the Shareholder Loan balance of
$206,920. Appellant, the sole shareholder of Nationwide, refused to
make payment. Appellee then commenced suit on Dec. 27, 2016, in the
Bankruptcy Court to recover the outstanding loan balance pursuant
to Section 542(b) of the Bankruptcy Code.
In a decision dated Sept. 6, 2019, the Bankruptcy Court found the
Shareholder Loan had been outstanding since 2012, was the property
of the estate, was a matured debt, and Appellee had met her burden
to recover the debt. The Bankruptcy Court made these determinations
after reviewing Nationwide's books and records, the 2014 tax
return, and Monthly Operating Reports. Shari Harstein, a Bederson
account manager, and Appellee both testified that the loan balance
had been outstanding since 2012.
The Appellant challenged the factual findings of the Bankruptcy
Court regarding the Shareholder Loan. The Appellant argued he was
not indebted to Nationwide at the time the company filed for
bankruptcy. The Appellant alleged the Shareholder Loan was repaid
between 2011 and 2012, but that it remained on Nationwide's records
due to accounting errors. Thus, the Appellant sought relief from
the Bankruptcy Court's judgment.
At the trial level, the Appellant's factual assertions were found
not to be credible. The Bankruptcy Court found the loan balance had
been outstanding since 2012. Additionally, the Bankruptcy Court
found the debt is matured, presently owed by the Appellant, and
payable on demand.
According to Judge Cecchi, the Bankruptcy Court's determinations
were supported by documentary evidence, the testimony of Harstein,
a Certified Public Accountant, and the testimony of Appellee.
Nationwide's books and records, 2014 tax return, and Monthly
Operating Reports all showed there was a Shareholder Loan which had
been outstanding since 2012. The Appellant himself confirmed and
certified (under penalty of perjury) Nationwide's Monthly Operating
Reports, which confirm the existence of the Shareholder Loan.
The Bankruptcy Court found both witnesses, Harstein and Appellee,
to be credible. Further, the Bankruptcy Court was satisfied with
Harstein's credentials and knowledge and experience in forensic
accounting of bankrupt entities. Harstein is a Certified Public
Accountant and a Certified Insolvency and Restructuring Advisor
with twenty years of experience in conducting forensic accounting
for bankrupt entities. Additionally, Harstein's testimony directly
rebutted the Appellant's unsupported argument that the Shareholder
Loan was repaid. Harstein determined all of the Appellant's loan
payments were recorded on Nationwide's QuickBooks file and the
Appellant failed to repay the loan in full.
Judge Cecchi said the Bankruptcy Court's findings are supported by
both documentary evidence and testimonial evidence. The Bankruptcy
Court's factual findings do not indicate a clear error has been
committed.
The Bankruptcy Court was also correct to find the Shareholder Loan
is property of the estate and was properly turned over to the
Appellee, Judge Cecchi said. The commencement of a bankruptcy case
creates an estate, which includes "all legal or equitable interests
of the debtor" as of the Petition Date. The loan balance was listed
as an asset on Nationwide's Balance sheet when it filed for relief
under Chapter 11 in 2013. Pursuant to 11 U.S.C. Section 541(a), the
loan balance became property of the estate at that time. Further,
the loan balance was correctly determined by the Bankruptcy Court
to be matured and payable on demand. By the Court's analysis of the
record and relevant legal authority, any questions of law in the
Bankruptcy Court's findings were correctly determined.
Judge Cecchi added that the Bankruptcy Court relied on documentary
evidence and witness testimony to find the Shareholder Loan was
outstanding at the Petition Date. The Bankruptcy Court's factual
findings do not indicate a clear error has been committed and the
Bankruptcy Court's legal conclusions were proper. Accordingly, the
Shareholder Loan was appropriately turned over to Appellee.
A copy of the Court's Opinion is available at
https://bit.ly/30JF32t from Leagle.com.
About Nationwide Ambulance
Based in Cranford, NJ, Nationwide Ambulance Services, Inc. filed
for chapter 11 bankruptcy protection (Bankr. D.N.J. Case No.
13-10559) on Jan. 11, 2013, with estimated assets of $0 to $50,000
and estimated liabilities of $1,000,001 to $10,000,000. The
petition was signed by Alex Ivchenko, president. The case was later
converted to one under chapter 7.
NEW ACADEMY HOLDING: S&P Rates $400MM Senior Secured Notes 'B'
--------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level and '3' recovery
ratings to U.S.-based outdoor and sports retailer New Academy
Holding Co. LLC's proposed $400 million senior secured notes. The
'3' recovery (50%-70%; rounded estimate: 50%) rating reflects the
value S&P attributes to Academy in a simulated default in addition
to the security pledge granted to the noteholders.
The company intends to use the proceeds along with about $600
balance sheet cash to repay a significant portion of the $1.4
billion existing term loan facility that matures in 2022 and to pay
other fees and expenses. The proposed notes, issued at New
Academy's wholly owned subsidiary Academy Ltd., will rank pari
passu with the previously announced $400 million secured term loan
offering and will mature in 2027.
S&P said, "Our 'B' issuer credit rating on New Academy reflects the
belief that the company will pursue a less-aggressive financial
policy despite the continued majority financial sponsor ownership.
This is reflected in the use of balance sheet cash to pay down
existing debt as a part of the proposed refinancing transactions.
Our ratings also consider Academy's participation in the highly
competitive and mature sports retailing industry, and our view that
the company is a smaller, regional player in a highly fragmented
and competitive market."
NEW HILLCREST: Seeks to Hire Ramsaur Law as Bankruptcy Counsel
--------------------------------------------------------------
New Hillcrest Inc. seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire Ramsaur Law Office
as its bankruptcy counsel.
The firm will render the following legal services in connection
with the Debtor's Chapter 11 case:
(a) advise the Debtor regarding matters of bankruptcy law;
(b) represent the Debtor in proceedings and hearings in the
court;
(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;
(e) assist the Debtor in the administration of the estate's
assets and liabilities;
(f) prepare 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 concerning the claims of secured and
unsecured creditors, prosecution or defense of all actions; and
(i) prepare, negotiate, prosecute and attain confirmation of a
plan of reorganization.
The firm will receive compensation on an hourly billing basis as
follows:
Brett H. Ramsaur $500
Counsel $395
Paralegal $150
Brett H. Ramsaur, Esq., a sole proprietor at Ramsaur Law, disclosed
in court filings that the firm is a "disinterested person" under
the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Brett H. Ramsaur, Esq.
RAMSAUR LAW OFFICE
27075 Cabot Road, Suite 110
Laguna Hills, CA 92653
Telephone: (949) 200-9114
Facsimile: (949) 222-3453
Email: brett@ramsaurlaw.com
About New Hillcrest Inc.
New Hillcrest Inc., a Cayman Islands company based in Beverly
Hills, Calif., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Cal. Case No. 20-18370) on September 15, 2020.
The petition was signed by Andre Djaafar, director.
At the time of the filing, Debtor had estimated between $10 million
and $50 million in both assets and liabilities.
Judge Neil W. Bason oversees the case.
Ramsaur Law Office is Debtor's legal counsel.
NEW YORK OPTICAL: Hires Connolly Wasserstrom as Accountant
----------------------------------------------------------
New York Optical-International, Inc., seeks authority from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Connolly Wasserstrom & Castillo, LLC, as accountant to the Debtor.
New York Optical requires Connolly Wasserstrom to:
(a) provide monthly, quarterly and annual reports and filings
for the Debtor-in-Possession; and
(b) assist the Debtor-in-Possession in complying with the
reporting requirements of the Office of the U.S. Trustee.
Connolly Wasserstrom will be paid at the hourly rate of $300.
Connolly Wasserstrom will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Andrew S. Wasserstrom, partner of Connolly Wasserstrom & Castillo,
LLC, 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.
Connolly Wasserstrom can be reached at:
Andrew S. Wasserstrom
CONNOLLY WASSERSTROM & CASTILLO, LLC
9190 Sunset Drive
Miami, FL 33173
Tel: (305) 275-0208
About New York Optical-International
New York Optical-International, Inc. is a company that offers
optical products. It conducts business under the name Tuscany
Eyewear.
New York Optical-International sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-17961) on July
22, 2020. The petition was signed by New York Optical-International
President Wayne R. Goldman.
At the time of the filing, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range.
Judge Scott M. Grossman oversees the case. David W. Langley, Esq.,
serves as the Debtor's bankruptcy attorney. Leto Law Firm, as
special counsel.
NEW YORK OPTICAL: Hires Leto Law Firm as Special Counsel
--------------------------------------------------------
New York Optical-International, Inc., seeks authority from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Leto Law Firm, as special counsel to the Debtor.
New York Optical requires Leto Law Firm to represent the Debtor in
a civil proceeding pending in the District Court for the Southern
District of Florida, Case No. 19-cv-62946-FAM, to enforce a German
arbitration award.
Leto Law Firm will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
To the best of the Debtor's knowledge, neither said attorney nor
his law firm are owed any fees by the Debtor, but counsel's prior
firm, Hall, Lamb, Hall & Leto, is owed $16,831.64 by the Debtor.
Based on an agreement between the firms the Leto Law Firm is
entitled to 25% of that fee.
Leto Law Firm can be reached at:
Matthew Leto, Esq.
LETO LAW FIRM
201 S Biscayne Blvd., Suite 2700
Miami, FL 33131
Tel: (303) 341-3155
About New York Optical-International
New York Optical-International, Inc., is a company that offers
optical products. It conducts business under the name Tuscany
Eyewear.
New York Optical-International sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-17961) on July
22, 2020. The petition was signed by New York
Optical-International President Wayne R. Goldman.
At the time of the filing, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range.
Judge Scott M. Grossman oversees the case. David W. Langley, Esq.,
serves as the Debtor's bankruptcy attorney. Leto Law Firm, is the
special counsel.
NEWSTREAM HOTEL: CNE Says Plan Disclosures Inadequate
-----------------------------------------------------
Constellation NewEnergy, Inc. ("CNE") objects to the Disclosure
Statement in Support of Plan of Reorganization of Debtor Newstream
Hotel Partner-IAH, LLC.
CNE claims that neither the Plan nor the Disclosure Statement
provides CNE or other contract counterparties with any information
concerning how their contracts will actually be treated and thus
how their claims arising from those contracts will actually be
treated.
CNE points out that a counterparty will have no idea prior to the
voting and Plan objection deadline whether the Debtor is likely to
dispute that counterparty's cure claim because the Debtor is not
even required to disclose proposed cure amounts for contracts that
may be assumed prior to the Plan objection deadline.
CNE asserts that the Disclosure Statement does not provide adequate
information because it does not timely provide CNE or other
contract counterparties with the information necessary to know,
definitively, and in sufficient time to effectively act, whether to
vote for or against the Plan and/or whether to object thereto.
CNE further asserts that the Plan purports to allow the Debtor to
delay until up to ninety days post-confirmation its decisions
whether to assume or reject contracts. Such authority is not
contained in and is contrary to the Bankruptcy Code. To be
confirmable, a plan must comply with all applicable provisions of
Title 11. 11 U.S.C. Sec. 1129(a)(1).
A full-text copy of CNE's objection to disclosure statement dated
August 27, 2020, is available at https://tinyurl.com/y2g2apaf from
PacerMonitor.com at no charge.
Co-Counsel for Constellation NewEnergy:
Weldon L. Moore III, Esq.
Sussman & Moore, LLP
4645 N. Central Expressway, Suite 300
Dallas, Texas 75205
Telephone: (214) 378-8270 x251
Facsimile: (214) 378-8290
E-mail: wmoore@csmlaw.net
- and -
Russell R. Johnson III, Esq.
Law Firm Of Russell R. Johnson III, PLC
2258 Wheatlands Drive
Manakin-Sabot, Virginia 23103
Telephone: (804) 749-8861
Facsimile: (804) 749-8862
E-mail: russell@russelljohnsonlawfirm.com
About Newstream Hotel Partner
Newstream Hotel Partner-IAH, LLC, is a single asset real estate (as
defined in 11 U.S.C. Section 101(51B)).
Newstream Hotel Partner-IAH sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Tex. Case No. 20-41064) on April
28, 2020. 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. Judge Brenda T. Rhoades oversees the case.
Pronske & Kathman, P.C., is the Debtor's legal counsel.
NEWSTREAM HOTEL: UC Red Lion Says Plan Is 'Vague'
-------------------------------------------------
Lender UC Red Lion Houston Holder, LLC objects to the Disclosure
Statement of Debtor Newstream Hotel Partners-IAH, LLC.
Lender objects to the Disclosure Statement and Plan on the grounds
that it does not contain adequate or accurate information
concerning the Lender's plan treatment and is, at best, ambiguous,
often using defined terms that are either undefined or are
described differently in different places.
Lender claims that the Plan is vague, and occasionally
inconsistent, when it comes to details as to the sources of the
various funds, payments, and reserves provided for in the Plan,
this is vital, especially since the Debtor proposes to disburse
some part of Lender's collateral to inferior lienholders with M&M
Liens.
Lender points out that the Disclosure Statement fails to adequately
or accurately disclose material information concerning how the
various reserves and payments contemplated in the Plan will be
funded.
Lender asserts that the Disclosure Statement fails to state how, or
when, the Debtor will be able to resume operations, what the
resumption of operations will cost and how the Debtor will service
the note provided for Lender in the Plan.
Lender further asserts that the Disclosure Statement is completely
lacking in any information on or details concerning the promissory
note that Lender is to be provided under the Plan, apart from basic
information on the amount, interest rate, amortization and
repayment.
A full-text copy of the Lender's objection to disclosure statement
dated September 1, 2020, is available at
https://tinyurl.com/y578x5sj from PacerMonitor.com at no charge.
Attorneys for UC Red Lion:
STROMBERG STOCK, PLLC
Mark Stromberg
Campbell Centre I
8350 North Central Expressway, Suite 1225
Dallas, Texas 75206
Telephone: (972) 458-5353
Facsimile: (972) 861-5339
E-mail: mark@strombergstock.com
Eric W. Pinker
E-mail: epinker@lynnllp.com
Sara Chelette
E-mail: schelette@lynnllp.com
LYNN PINKER HURST & SCHWEGMANN, LLP
2100 Ross Avenue, Suite 2700
Dallas, Texas 75201
Tel: (214) 981-3800
Fax: (214) 981-3839
About Newstream Hotel Partners-IAH
Newstream Hotel Partner-IAH, LLC, is a single asset real estate (as
defined in 11 U.S.C. Section 101(51B)).
Newstream Hotel Partner-IAH sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Tex. Case No. 20-41064) on April
28, 2020. 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. Judge Brenda T. Rhoades oversees the case.
Pronske & Kathman, P.C., is the Debtor's legal counsel.
NEWSTREAM HOTEL: Westway Balks at Pro Construction Status in Plan
-----------------------------------------------------------------
Creditor Westway Construction Services, LLC objects to the
Disclosure Statement in support of Plan of Reorganization filed by
Debtor Newstream Hotel Partners - IAH, LLC.
Westway Construction claims that Debtor's Schedules list Pro
Construction, LLC as unsecured creditor on Schedule F. Both the
Disclosure Statement and Plan state that Pro Construction is
secured and imply that it has valid mechanic's lien claim, despite
the lack of any claim filed by Pro Construction, LLC. There appears
to be no information or support for Pro Constructions, LLC's
inflated status in the Plan and Disclosure Statement.
Westway Construction objects to the Disclosure Statement as Pro
Construction, LLC's claim is unsecured and belongs to a different
class. Westway requests that the Debtor amend its Disclosure
Statement and Plan to place Pro Construction, LLC's claim in the
unsecured class.
A full-text copy of Westway Construction's objection to disclosure
statement dated September 3, 2020, is available at
https://tinyurl.com/y2qa2f5c from PacerMonitor.com at no charge.
Attorneys for Westway Construction:
HOOVER SLOVACEK LLP
PAUL A. PILIBOSIAN
ANGELINE V. KELL
5051 Westheimer, Suite 1200
Galleria Tower II
Houston, Texas 77056
Telephone: (713) 977-8686
Facsimile: (713) 977-5395
E-mail: pilibosian@hooverslovacek.com
kell@hooverslovacek.com
About Newstream Hotel Partners-IAH
Newstream Hotel Partner-IAH, LLC, is a single asset real estate (as
defined in 11 U.S.C. Section 101(51B)). Newstream Hotel
Partner-IAH sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Tex. Case No. 20-41064) on April 28, 2020. 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. Judge Brenda T. Rhoades oversees the case. Pronske &
Kathman, P.C., is the Debtor's legal counsel.
NORTH PACIFIC CANNERS: Court Approves Settlement With Farmers
-------------------------------------------------------------
The Associated Press reports that a bankruptcy judge has approved a
settlement agreement between the former NORPAC Foods processing
company and some 100 member farms, which means they'll collectively
receive $4.5 million.
Continued litigation between the defunct food processor and growers
would have been highly complex and could have derailed the current
bankruptcy process, the Capital Press reported.
U.S. Bankruptcy Judge Peter McKittrick said during a court hearing
that the court appreciates the work that went into the settlement.
Settlements have been reached in almost all the major lawsuits
involving the cooperative, which is now called North Pacific
Canners & Packers after selling its name and intellectual
property.
Earlier this year, the judge warned attorneys that NORPAC's
bankruptcy was turning into a "big pile of litigation" that could
lead to "fighting over an administratively insolvent estate if
we’re not careful."
If the deal between farmers and the cooperative had collapsed, it
likely would have forced the bankruptcy to convert from a Chapter
11 debt restructuring into a more time-consuming Chapter 7
dissolution, according to Albert Kennedy, lawyer for NORPAC.
In that case, it would have meant the end for the cooperative's
proposed bankruptcy plan, under which $28 million would be
distributed to unsecured creditors who'd be repaid for about 25% to
50% of what they're owed by year’s end, he said.
Payments to individual growers will range from about $1,400 to
$300,000 under the settlement deal, though the $4.5 million
represents less than 28% of what the farmers said they were owed
for crop deliveries.
About NORPAC Foods
Founded in 1924 and headquartered in Salem, Ore., NORPAC Foods,
Inc. (www.norpac.com), a farmer-owned cooperative, along with its
wholly-owned subsidiaries Hermiston Foods, LLC and Quincy Foods,
LLC is an independent, standalone processor of organic and
conventional frozen vegetables and fruits in the Pacific Northwest.
NORPAC is a cooperative owned by more than 140 members.
Quincy and Hermiston are single-member limited liability companies
whose sole member is NORPAC. The Debtors own and operate raw
processing plants in Brooks and Stayton, Ore., a packaging plant in
Salem, Ore., and a raw processing, packaging, and roasting facility
in Quincy, Wash. The Debtors have more than 1,125 full-time
employees along with up to 1,100 seasonal employees. The Debtors
have a diverse supplier base built on an extensive network of more
than 220 contract growers made up of family-owned farms (145 farms
in Oregon and 75 farms in Washington) spanning more than 40,000
acres.
North Pacific Canners & Packers, Inc. (formerly known as NORPAC
Foods, Inc.), Hermiston Foods and NPCP Quincy, LLC (formerly known
as Quincy Foods, LLC), sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ore. Lead Case No. 19-62584) on Aug. 22,
2019.
At the time of the filing, NORPAC Foods was estimated to have
assets of between $100 million and $500 million and liabilities of
the same range. The other debtors had estimated assets of between
$10 million and $50 million and liabilities of between $100 million
and $500 million.
Judge Peter C. McKittrick oversees the cases.
The Debtors tapped Tonkon Torp LLP as legal counsel;
SierraConstellation Partners LLC as restructuring advisor; and
Kurtzman Carson Consultants LLC as noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Aug. 30, 2019. The committee tapped Lowenstein
Sandler as bankruptcy counsel; Leonard Law Group LLC as local
counsel; and Alvarez & Marsal North America, LLC as financial
advisor.
NORTH PACIFIC CANNERS: Unsecureds to Recover 25% to 35% in Plan
---------------------------------------------------------------
Debtors North Pacific Canners & Packers, Inc. (formerly known as
NORPAC Foods, Inc.), Hermiston Foods, LLC, and NPCP Quincy, LLC
(formerly known as Quincy Foods, LLC), and the official committee
of unsecured creditors filed the Second Amended Joint Disclosure
Statement along with an Amended Joint Plan of Liquidation dated
September 11, 2020.
The Debtors currently estimate that there are approximately 600
holders of claims in Class 3 Convenience Class Unsecured Claims
with total Unsecured Claims of approximately $1,150,000, who would
receive a total distribution of approximately $575,000 promptly
following the Effective Date.
The Debtors estimate that the percentage recovery on General
Unsecured Claims may range between 25% and 35%. The Debtors
further estimate that, absent unforeseen delays, an Initial
Distribution to each holder of a General Unsecured Claim in the
range of 20% to 30% of the total amount of such Allowed General
Unsecured Claim, will be made before the end of 2020.
For the avoidance of doubt, Members who are eligible for payment
under the Member Settlement Agreement and that become a party to
the Member Settlement Agreement prior to the Effective Date will
receive the treatment agreed to in the Member Settlement
Agreement.
A full-text copy of First Amended Disclosure Statement dated August
25, 2020, is available at https://tinyurl.com/y4cykkmy from
PacerMonitor.com at no charge.
A full-text copy of the Second Amended Joint Disclosure Statement
dated September 11, 2020, is available at
https://tinyurl.com/yyurhtck from PacerMonitor.com at no charge.
Attorneys for the Debtors:
Albert N. Kennedy
Michael W. Fletcher
Ava L. Schoen
Danny F. Newman
TONKON TORP LLP
888 S.W. Fifth Avenue, Suite 1600
Portland, OR 97204-2099
Telephone: 503-221-1440
Facsimile: 503-274-8779
E-mail: al.kennedy@tonkon.com
michael.fletcher@tonkon.com
ava.schoen@tonkon.com
danny.newman@tonkon.com
Attorneys for the Creditor's Committee:
Bruce S. Nathan
Telephone: 212.204.8686
Email: bnathan@lowenstein.com
LOWENSTEIN SANDLER LLP
One Lowenstein Drive
Roseland, NJ 07068
– and –
Timothy A. Solomon
Telephone: 971.634.0194
Email: tsolomon@llg-llc.com
LEONARD LAW GROUP LLC
One SW Columbia Street, Suite 1010
Portland, OR 97258
About NORPAC Foods
Founded in 1924 and headquartered in Salem, Ore., NORPAC Foods,
Inc. (www.norpac.com), a farmer-owned cooperative, along with its
wholly-owned subsidiaries Hermiston Foods, LLC and Quincy Foods,
LLC is an independent, standalone processor of organic and
conventional frozen vegetables and fruits in the Pacific Northwest.
NORPAC is a cooperative owned by more than 140 members.
Quincy and Hermiston are single-member limited liability companies
whose sole member is NORPAC. The Debtors own and operate raw
processing plants in Brooks and Stayton, Ore., a packaging plant in
Salem, Ore., and a raw processing, packaging, and roasting facility
in Quincy, Wash. The Debtors have more than 1,125 full-time
employees along with up to 1,100 seasonal employees. The Debtors
have a diverse supplier base built on an extensive network of more
than 220 contract growers made up of family-owned farms (145 farms
in Oregon and 75 farms in Washington) spanning more than 40,000
acres.
North Pacific Canners & Packers, Inc. (formerly known as NORPAC
Foods, Inc.), Hermiston Foods and NPCP Quincy, LLC (formerly known
as Quincy Foods, LLC), sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ore. Lead Case No. 19-62584) on Aug. 22,
2019.
At the time of the filing, NORPAC Foods was estimated to have
assets of between $100 million and $500 million and liabilities of
the same range. The other debtors had estimated assets of between
$10 million and $50 million and liabilities of between $100 million
and $500 million.
Judge Peter C. McKittrick oversees the cases.
The Debtors tapped Tonkon Torp LLP as legal counsel;
SierraConstellation Partners LLC as restructuring advisor; and
Kurtzman Carson Consultants LLC as noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Aug. 30, 2019. The committee tapped Lowenstein
Sandler as bankruptcy counsel; Leonard Law Group LLC as local
counsel; and Alvarez & Marsal North America, LLC as financial
advisor.
NORTHERN HOLDINGS: Case Summary & 7 Unsecured Creditors
-------------------------------------------------------
Debtor: Northern Holdings, LLC
143 1/2 S. Olive Street
Orange, CA 92866
Chapter 11 Petition Date: October 28, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-13014
Judge: Hon. Mark S. Wallace
Debtor's Counsel: Matthew D, Resnik, Esq.
RESNIK HAYES MORADI, LLP
17609 Ventura Blvd.
Ste. 314
Encino, CA 91316
Tel: (818) 285-0100
Fax: (818) 855-7013
Email: matt@rhmfirm.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Leroy Codding, managing member.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/ZHVOUEY/Northern_Holdings_LLC__cacbke-20-13014__0001.0.pdf
List of Debtor's Seven Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Bank of America $21,533
PO Box 15019
Wilmington, DE 19850
2. Capital One $3,039
P.O. Box 60599
City Of Industry, CA
91716
3. Electro-Steam $5,382
Generator Corp.
50 Indel Avenue
Rancocas, NJ 08073
4. Erich Russell $6,400,000
2380 Live Oak Road
Paso Robles, CA 93446
5. PG&E $27,346
P.O. Box 99700
Sacramento, CA 95899-7300
6. Sunbelt Rentals $12,894
P.O. Box 409211
Atlanta, GA 30384
7. West Coast Wine $13,630
Partners
134 Church Street
Sonoma, CA 95476
NUZEE INC: Signs $1 Million Common Stock Purchase Agreement
-----------------------------------------------------------
NuZee, Inc. entered into a Common Stock Purchase Agreement on Oct.
26, 2020, with Triton Funds LP pursuant to which the Company may
offer to the Investor and sell to the Investor shares of the
Company's common stock having an aggregate offering price of up to
$1,000,000 during a seven calendar-day period commencing on the
Execution Date. The Investor's purchase price for each share will
be equal to 90% of the lowest closing price of the Company's common
stock on the NASDAQ Capital Market for the five trading days
preceding the closing date.
The Company intends to deliver to the Investor as soon as
practicable the purchase notice exercising the Company's put option
for the full $1,000,000 investment amount under the Purchase
Agreement, and expects that the closing of the Offering and receipt
of payment for the shares of common stock issued pursuant to the
Offering will be completed no later than Nov. 2, 2020, which is the
final date of the Commitment Period. The Offering is being made
pursuant to a prospectus supplement to the Company's effective
shelf registration statement on Form S-3 (Registration No. 333-
248531).
The Purchase Agreement contains customary representations and
warranties by the Company.
The Company estimates it will receive net proceeds of the sale of
its common stock pursuant to the Offering, before deducting
offering expenses payable by the Company, of approximately
$1,000,000, at an assumed offering price to the Investor of $13.707
per share, which is equal to 90% of the closing price of the
Company's common stock on the NASDAQ Capital Market on Oct. 26,
2020. The Company intends to use the proceeds from the Offering
for working capital and general corporate purposes.
Each $1.00 increase in the assumed offering price to the Investor
of $13.707 per share, which is equal to 90% of the closing price of
the Company's common stock on the NASDAQ Capital Market on Oct. 26,
2020, would decrease the number of shares the Company issues to the
Investor in the Offering by approximately 5,000 shares and each
$1.00 decrease in the assumed offering price to the Investor would
increase the number of shares the Company issues to the Investor by
approximately 5,700 shares. The Company does not expect that a
change in the number of shares by these amounts would have a
material effect on its intended uses of the net proceeds from the
Offering.
About Nuzee
NuZee, Inc. (d/b/a Coffee Blenders) is a specialty coffee company
and a single-serve pour-over coffee producer and co-packer. The
Company owns sophisticated packing equipment developed in Asia for
pour over coffee production and it believes its long-standing
experience with this equipment and associated pour over filters,
and its relationships with their manufacturers provide the Company
with an advantage over its North American competitors.
NuZee reported a net loss of $12.21 million for the year ended Dec.
31, 2019, compared to a net loss of $3.57 million for the year
ended Dec. 31, 2018. As of June 30, 2020, the Company had $8.57
million in total assets, $1.77 million in total liabilities, and
$6.79 million in total stockholders' equity.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2013, issued a "going concern" qualification in its report dated
Dec. 24, 2019, citing that the Company has suffered recurring
losses from operations that raises substantial doubt about its
ability to continue as a going concern.
OCEAN POWER: Contracts With ACET for U.S. Navy SLAMR Initiative
---------------------------------------------------------------
Ocean Power Technologies, Inc. has been contracted by Reston,
Virginia-based Adams Communications & Engineering Technology (ACET)
to conduct a feasibility study. The evaluation of a PB3 PowerBuoy
power and 5G communications solution comes in support of the U.S.
Navy's Naval Postgraduate School's (NPS) Sea, Land, Air, Military
Research (SLAMR) Initiative, which conducts interdisciplinary
research in unmanned and robotic systems.
ACET President and CEO Charles Adams stated, "ACET's subcontract
with OPT brings this potential technology solution one step closer
to reality through the SLAMR research initiative at NPS and
demonstrates our commitment to deliver products that meet or exceed
our customer's needs."
"This NPS initiative is about exploiting cutting edge technologies
in autonomous systems for marine defense. We are proud to be part
of this effort," said George Kirby, president and chief executive
officer of OPT. "Working closely with the U.S. Navy, ACET, and the
SLAMR initiative, we believe that OPT's solutions can be a focal
point of the SLAMR mission profile."
OPT and ACET will review, validate, and determine the cost and
configuration of integrating OPT solutions as the basis of an
autonomous offshore 5G communications system. The study will
detail preliminary operational, deployment, and maintenance plans,
and regulatory approval requirements to support the SLAMR
initiative's focus on unmanned and robotic systems.
About Ocean Power Technologies
Headquartered in Monroe Township, New Jersey, Ocean Power
Technologies, Inc. -- http://www.oceanpowertechnologies.com-- is a
marine power solutions provider that designs, manufactures, sells,
and services its products while working closely with partners that
provide payloads, integration services, and marine installation
services.
Ocean Power reported a net loss of $10.35 million for the 12 months
ended April 30, 2020, compared to a net loss of $12.25 million for
the 12 months ended April 30, 2019. As of July 31, 2020, the
Company had $14.40 million in total assets, $4.28 million in total
liabilities, and $10.12 million in total stockholders' equity.
KPMG LLP, in Philadelphia, Pennsylvania, the Company's auditor
since 2004, issued a "going concern" qualification in its report
dated June 29, 2020, citing that the Company has suffered recurring
losses from operations and has an accumulated deficit that raise
substantial doubt about its ability to continue as a going concern.
OGGUSA INC: Unsecured Creditors to Have 0.35% to 3.29% in Plan
--------------------------------------------------------------
Debtors OGGUSA, Inc., f/k/a GenCanna Global USA, Inc. ("GCG
Parent"), OGG, Inc., f/k/a GenCanna Global, Inc. ("GCG Opco") and
Hemp Kentucky, LLC ("Hemp KY") filed a solicitation version of the
Disclosure Statement explaining their Second Amended Joint Plan of
Liquidation on Oct. 12, 2020.
The Debtors have won approval of the Disclosure Statement
explaining their Chapter 11 Plan and are slated to present the Plan
to Court for confirmation.
Class 4 Allowed Unsecured Claims in the amount of $112.8 million to
$154 million will have a projected recovery of 0.35% to 3.29% in
the Plan. Except to the extent that a Holder of an Allowed General
Unsecured Claim agrees to less favorable treatment, in full and
final satisfaction, compromise, settlement, and release of and in
exchange for such Allowed General Unsecured Claim, each Holder of
an Allowed General Unsecured Claim shall receive on account of such
Allowed Unsecured Claim against a Debtor, its Ratable Share of
Senior Beneficial Interests in the Wind-Down Trust. Class 4 is
Impaired under the Plan. Holders of Allowed General Unsecured
Claims are entitled to vote to accept or reject the Plan.
In the hypothetical chapter 7 scenario in which the MGG Settlement
is not consummated, with respect to the Prepetition Obligations,
MGG and the other Prepetition Secured Parties would not be bound by
their commitments in the MGG Settlement Agreement to, among other
things, (a) waive any rights to assert the Prepetition Liens, the
Adequate Protection Liens or Adequate Protection Superpriority
Claims, or (b) subordinate in rights of priority and payment to the
Holders of Allowed General Unsecured Claims. Accordingly, the
Prepetition Secured Parties would be Holders of Claims on account
of the Prepetition Obligations potentially totaling $27,016,182 or
more that may, at least in part, be Secured and/or have
administrative or superpriority status relative to Administrative
Claims, Other Priority Claims, Priority Tax Claims, Gap Claims and
General Unsecured Claims.
A full-text copy of the solicitation version of the Disclosure
Statement dated October 12, 2020, is available at
https://tinyurl.com/y3qbtavq from PacerMonitor.com at no charge.
A full-text copy of the Second Amended Joint Plan of Liquidation
dated October 9, 2020, is available at https://tinyurl.com/y566twga
from PacerMonitor at no charge.
Counsel for the Debtors:
DENTONS BINGHAM GREENEBAUM LLP
James R. Irving
April A. Wimberg
Christopher B. Madden
3500 PNC Tower
101 South Fifth Street
Louisville, Kentucky 40202
Telephone: (502) 587-3606
E-mail: james.irving@dentons.com
april.wimberg@dentons.com
chris.madden@dentons.com
- and -
Michael J. Barrie
William M. Alleman, Jr.
Gregory W. Werkheiser
BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP
1313 North Market Street, Suite 1201
Wilmington, DE 19801
Telephone: (302) 442-7010
E-mail: mbarrie@beneschlaw.com
walleman@beneschlaw.com
gwerkheiser@beneschlaw.com
- and -
Elliot M. Smith
BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP
200 Public Square, Suite 2300
Cleveland, OH 44114
Telephone: (216) 363-4500
E-mail: esmith@beneschlaw.com
About GenCanna Global USA
GenCanna Global USA, Inc. -- https://www.gencanna.com/ -- is a
vertically-integrated producer of hemp and hemp-derived CBD
products with a focus on delivering social, economic and
environmental impact through seed-to-scale agricultural
production.
GenCanna Global USA was the subject of an involuntary Chapter 11
proceeding (Bankr. E.D. Ky. Case No. 20-50133) filed on Jan. 24,
2020. The involuntary petition was signed by alleged creditors
Pinnacle, Inc., Crawford Sales, Inc., and Integrity/Architecture,
PLLC.
On Feb. 6, 2020, GenCanna Global USA consented to the involuntary
petition and on Feb. 5, 2020, two affiliates, GenCanna Global Inc.
and Hemp Kentucky LLC, filed their own voluntary Chapter 11
petitions.
Laura Day DelCotto, Esq., at DelCotto Law Group PLLC, represents
the petitioners.
The Debtors tapped Benesch Friedlander Coplan & Aronoff, LLP and
Dentons Bingham Greenebaum, LLP as legal counsel, Huron Consulting
Services, LLC as operational advisor, and Jefferies, LLC as
financial advisor. Epiq is the claims agent, which maintains the
page https://dm.epiq11.com/GenCanna
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Feb. 18, 2020. The committee tapped Foley & Lardner
LLP as its bankruptcy counsel, DelCotto Law Group PLLC as local
counsel, and GlassRatner Advisory & Capital Group, LLC as financial
advisor.
* * *
In May 2020, the Company won court approval to sell for $77 million
substantially all of its assets to funds managed by its long-term
investor, MGG Investment Group. The Debtors changed their names to
Oggusa, Inc., et al., following the sale.
ONEWEB GLOBAL: FCC Approves Sale to British Government
------------------------------------------------------
Jane Edwards of GovConWire reports that the Federal Communications
Commission has cleared the sale of satellite company OneWeb to the
U.K. government and Bharti Global, SpaceNews reported Wednesday.
FCC approved the transfer of control of OneWeb's licenses for
ground stations and market access for a satellite broadband system
to new owners under a reorganization plan as the satellite company
works to emerge from Chapter 11 bankruptcy, according to a public
notice published Tuesday, October 27, 2020.
Bharti Global and the U.K. government will each own a 42.2% stake
in the reorganized OneWeb, while SoftBank will have a 12.3 percent
interest in the satellite company, according to the FCC notice.
The FCC approval came weeks after a federal bankruptcy court
approved a reorganization plan clearing the sale of OneWeb to
Bharti and the British government.
Hughes Network Systems agreed in July to make an in-principle
investment of $50M in a consortium with the U.K. government and
Bharti that offered $1B to acquire OneWeb, which filed for a
Chapter 11 bankruptcy protection in March 2020.
About OneWeb Global Limited
Founded in 2012, OneWeb Global Limited is a global communications
company developing a low-Earth orbit satellite constellation system
and associated ground infrastructure, including terrestrial
gateways and end-user terminals, capable of delivering
communication services for use by consumers, businesses,
governmental entities, and institutions, including schools,
hospitals, and other end-users whether on the ground, in the air,
or at sea.
OneWeb's business consists of the development of the OneWeb System,
which has included the development of small-next generation
satellites that have been mass-produced through a joint venture and
the development of specialized connections between the satellite
system and the internet and other communications networks through
the SNPs. For more information, visit https://www.oneweb.world/
OneWeb Global Limited and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
20-22437) on March 27, 2020. At the time of the filing, Debtors
disclosed assets of between $1 billion and $10 billion and
liabilities of the same range.
Judge Robert D. Drain oversees the cases.
The Debtors tapped Milbank LLP as counsel; Guggenheim Securities,
LLC as investment banker; FTI Consulting, Inc. as financial
advisor; Grant Thornton LLP as tax consultant; and Dixon Hughes
Goodman LLP as tax consulting and compliance services provider.
Omni Agent Solutions is the claims, noticing and solicitation
agent.
ONPOINT OIL: Seeks Approval to Hire Gooding Law as Legal Counsel
----------------------------------------------------------------
OnPoint Oil & Gas, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Oklahoma to hire The Gooding Law
Firm, P.C. as its legal counsel.
The firm will provide the following services:
a. provide the Debtor legal advice with respect to its powers
and duties;
b. provide the Debtor legal advice with respect to the
preparation of the filing of the Debtor's amendments;
c. provide the Debtor legal advice with respect to the
preparation, approval, and confirmation, of Debtor's disclosure
statement and plan of reorganization;
d. provide the Debtor legal advice with respect to any
litigation for the recovery of preferential transfers, fraudulent
conveyances or similar conveyances;
e. prepare necessary legal papers; and
f. perform all other legal services for the Debtor.
Gooding Law will be paid at its current hourly rates as follows:
O. Clifton Gooding $400
Mark B. Toffoli $400
Angela N. Stuteville $325
Legal assistants $125
The firm received a retainer in the amount of $8,000. Gooding Law
also requested the Debtor to provide a minimum monthly payment of
$2,500 which will be accounted for in the firm's monthly operating
reports.
Gooding Law does not represent or hold any interest adverse to the
Debtor or its estate, according to a court filing.
The firm can be reached through:
O. Clifton Gooding, Esq.
Mark B. Toffoli, Esq.
Angela N. Stuteville, Esq.
THE GOODING LAW FIRM
A Professional Corporation
204 North Robinson Avenue, Suite 650
Oklahoma City, OK 73102
Telephone: (405) 948-1978
Facsimile: (405) 948-0864
E-mail: cgooding@goodingfirm.com
mtoffoli@goodingfirm.com
angela@goodingfirm.com
About OnPoint Oil & Gas, LLC
Oklahoma City, Okla.-based OnPoint Oil & Gas, LLC is a privately
held company in the oil and gas extraction industry.
OnPoint Oil & Gas sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. WD. Okla. Case No. 20-13383) on October 14,
2020. The petition was signed by Brent Cook, owner.
At the time of the filing, Debtor had total assets of $129,668 and
total liabilities of $2,840,455.
The Gooding Law Firm, P.C. is Debtor's legal counsel.
P&L DEVELOPMENT: S&P Alters Outlook to Stable, Affirms 'B-' ICR
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
U.S.-based P&L Development Holdings LLC (PLD) and revised the
outlook to stable from negative.
S&P is assigning its 'B-' issue-level rating to the company's
proposed five-year senior secured notes. The recovery rating is
'4', reflecting S&P's expectation for average recovery (30%-50%,
rounded estimate: 40%) for secured creditors in the event of a
payment default.
S&P said, "The stable outlook reflects our expectation for solid
sales and profit growth over the next year supported by new product
introductions and COVID-19 tailwinds, such that leverage improves
to the low-7x area."
"We expect stronger credit metrics over the next year despite the
increased debt burden of about $80 million. We expect adjusted
leverage to improve to the low-7x area as of Dec. 31, 2021,
compared to trailing-12-month pro forma adjusted leverage well
above 10x as of Sept. 30, 2020. The improvement reflects our
expectation for solid sales and profit growth, driven by new
customer contracts and elevated consumer demand for sanitation
products. Although there is some seasonality in the business,
annualized third-quarter (ended Sept. 30, 2020) results point to
adjusted leverage below 8x. Note that we classify the company's
preferred equity as debt in our credit ratios. We will withdraw our
rating on PLD's existing first-lien term loan once the transaction
closes and it has been repaid."
"We expect PLD will continue to benefit from COVID-19 tailwinds
through 2021 as demand for sanitation products remains elevated.
Consumer focus on hygiene in response to the pandemic has led to a
surge in consumption of products such as isopropyl alcohol (IPA)
and hand sanitizers. As a supplier of private label IPA products,
PLD has won new contracts with several large retailers and expanded
contracts with existing customers. The company is also filling and
packaging hand sanitizer for a nationally branded player that has
faced capacity constraints in the face of unprecedented demand. Our
forecast incorporates our expectation that PLD will continue to
generate significant profits from these products through 2021,
though volumes may begin to moderate later in the year, especially
if a vaccine becomes widely available and fear of the virus
dissipates."
"Our forecast assumes revenue growth is largely supported by the
company's existing product portfolio and not reliant on drug
regulatory approvals. The company missed our expectations in 2019
and the first half of 2020 because of delayed regulatory approval
of certain Abbreviated New Drug Applications (ANDA),
longer-than-expected retailer due diligence on its nicotine
replacement (NRT) products, and supply chain disruptions in the
early stages of the pandemic. Our current forecast does not
contemplate any material contribution from ANDAs yet to be approved
by the U.S. federal drug administration (FDA). The company has
taken steps to address the significant disruption and inventory
shortages caused by the pandemic in the fiscal second quarter and
is working to expand capacity through new supplier arrangements.
However, we believe the company is still not able to fully meet
customer demand in some product categories and additional supply
chain disruptions could cause financial performance to deviate from
our expectations."
"We assume Avema will not have a near-term material impact on
financial results. Avema is a contract development and
manufacturing organization that was spun out of PLD in 2013 but is
under common ownership. Avema is not profitable but management
believes the combination will provide significant synergies and
enhance PLD's business model. Given its small scale and lack of
profitability, we assume Avema will not materially impact financial
performance in the next couple of years. At the same time, we do
not believe there are significant integration risks given its
common ownership and combination in the past."
"Our ratings continue to reflect PLD's narrow focus as a
private-label over-the-counter (OTC) pharmaceutical and consumer
health care provider. PLD has little pricing power as a private
label manufacturer. The low costs demanded by retailers and the
lack of a brand make it difficult for private-label manufacturers
to raise prices to offset potential input cost inflation. PLD's
largest customer has significant leverage because it accounts for
over 25% of the company's sales. PLD also competes against industry
leader Perrigo Co. plc, which has shifted focus back to its legacy
businesses, including its U.S. OTC store brand portfolio. Pricing
actions by financially stronger national branded players could also
hurt PLD's profitability since private-label competitors need to
maintain sufficient price gaps against brands. Nevertheless,
underlying demand for U.S. consumer health care products tends to
be stable and noncyclical. In addition, retailers are increasingly
emphasizing their store brands as quality, affordable alternatives
to more expensive national brands, especially since the retailer
margin is higher on store brands."
"The stable outlook reflects our expectation that PLD will generate
solid sales and profit growth over the next year, supported by new
contract wins across different product categories, as well as
increased demand for sanitation products due to COVID-19. We expect
this will result in materially improved leverage that will be
sustained in the low-7x area."
"We could lower our rating over the next 12 months if operating
performance weakens and we no longer believe the company's cash
generating capacity can support its capital structure, potentially
illustrated by EBITDA cash interest coverage below 1.5x or adjusted
leverage sustained above 9x. This could occur if the company fails
to execute on its new contracts, retailers demand lower prices,
pandemic tailwinds prove to be short-lived, the company cannot
manage input cost volatility, or if competition from Perrigo
intensifies."
"We could raise the rating over the next 12 months if the company
continues to win new contracts and diversify its customer base,
while generating free cash flow of at least $20 million and
maintaining leverage below 7x. An upgrade would be predicated on
our view that operating performance will not weaken as tailwinds
from the COVID-19 pandemic recede."
PARADOX ENTERPRISES: Has Until Nov. 2 to File Plan & Disclosures
----------------------------------------------------------------
Judge Nicholas W. Whittenburg of the U.S. Bankruptcy Court for the
Eastern District of Tennessee, Winchester Division, has entered an
order within which debtor Paradox Enterprises, LLC will file a
Disclosure Statement and Plan no later than Nov. 2, 2020.
A full-text copy of the order dated August 27, 2020, is available
at https://tinyurl.com/yyadwtn4 from PacerMonitor.com at no
charge.
Counsel for the Debtor:
KIOUS, RODGERS, BARGER, HOLDER & KING, PLLC
Jason N. King
503 North Maple Street
Murfreesboro, Tennessee 37130
Tel: (615) 895-5566
Fax: (615) 895-8452
E-mail: jking@krbhk.com
Counsel for Tri-County Bank:
MAYFIELD & LESTER
Justin Layne
Mayfield & Lester, Attorneys
P.O. Box 789
Chattanooga, Tennessee 37401
Phone: (423) 622-2021
E-mail: JustinHLayne@mayfield-lester.com
About Paradox Enterprises
Paradox Enterprises, LLC, based in Manchester, Tennessee, filed a
Chapter 11 petition (Bankr. E.D. Tenn. Case No. 19-12162) on May
24, 2019. In the petition signed by Eric Shelley, owner, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. The Hon. Shelley D. Rucker oversees the
case. Jason N. King, Esq., at Kious Rodgers Barger Holder & King,
PLLC, serves as bankruptcy counsel.
PARK MONROE: MHANY Sale Plan Has 6% for Unsec. Creditors
--------------------------------------------------------
Park Monroe Housing Development Fund Corporation, a New York
not-for-profit corporation, filed with the U.S. Bankruptcy Court
for the Eastern District of New York a Disclosure Statement in
support of its Chapter 11 Plan dated August 28, 2020.
The Debtor's chapter 11 plan provides for the Debtor to sell its
key assets, and pay creditors from the proceeds thereof. The sale
is contemplated to achieve proceeds sufficient to provide a return
to Allowed Administrative, Priority and Remaining Secured Claims in
full, and otherwise provide a return to Unsecured Claims subject to
certain limitations.
Class 4 General Unsecured Claims will be paid by the Debtor, in
Cash, on a pro-rata basis, either on the Effective Date; or as soon
as practicable after such Claim becomes an Allowed Claim; or as may
be otherwise mutually agreed in writing between the Debtor and the
Holders of such General Unsecured Claims. Such Claims are Impaired
and are entitled to vote. Based on certain assumptions, an
estimated distribution of approximately 6 cents on the dollar on
general unsecured Claims, which include certain claims of
affiliates of the Debtor.
The proceeds of the sale are the source of funds to implement the
Plan. The sale is not subject to higher and better offers and the
Property will not be marketed.
The purchaser was located with the assistance of New York
Department of Housing Preservation and Development, which is
expected to approve the Sale. The proposed purchaser is MHANY
Mother Gaston Housing Development Fund Corporation, a special
purpose entity organized by MHANY Management, Inc. (MHANY). MHANY
asserts that the purchaser will have the financial resources to
consummate the transaction once the necessary Bankruptcy Court
approvals are obtained. A s set forth in the Sale Contract,
$200,000.00 has been agreed to as a liquidated damages amount for
failure of the Purchaser to close.
New York City Department of Housing Preservation and Development
has approved of the Sale and the Purchaser, as set forth in the
Sale Contract. The Sale Contract is for all of Debtor's right,
title and interest in and to the Property, together with all
related fixtures, improvements and development rights, and subject
to all deed restrictions, zoning and other potential restrictions
including, but not limited to, the current regulatory agreement
with the City. The Purchaser will become responsible for violations
and repairs on the Effective Date. The Sale Contract also includes
the Debtor's assumption and assignment of all residential leases
designated by the Purchaser. The Sale Contract does not include the
Debtor's other property including books and records, cash, deposits
with third parties, intellectual property, goodwill, tax
attributes, claims and causes of action.
A full-text copy of the disclosure statement dated August 28, 2020,
is available at https://tinyurl.com/yyz8pozz from PacerMonitor.com
at no charge.
Counsel for Park Monroe Housing:
ARCHER & GREINER, P.C.
1211 Avenue of the Americas, Suite 2750
New York, New York 10036
Tel: (212) 682-4940
Allen G. Kadish
Harrison H.D. Breakstone
E-mail: akadish@archerlaw.com
hbreakstone@archerlaw.com
About Park Monroe Housing Development
Park Monroe Housing Development Fund Corporation is a
not-for-profit and tax-exempt corporation that develops a housing
project for persons of low income, pursuant to Section 573 of
Article XI of the New York Private Housing Finance Law. The
Company's primary tangible assets are located at 477 Saratoga
Avenue a/k/a 1352-1354 East New York Avenue, Brooklyn, N.Y.; 1350
Park Place, Brooklyn, N.Y.; 180 Grafton Street, Brooklyn, N.Y.; 257
Mother Gaston Boulevard, Brooklyn, N.Y.; and 249-251 Mother Gaston
Boulevard, Brooklyn, N.Y.
984-988 Greene Avenue Housing Development Fund is a not-for-profit
corporation whose tangible assets are properties located at 984-988
Greene Avenue, Brooklyn, N.Y. Its assets are used consistent with
its charitable purposes of providing affordable housing units for
families of low income in the central sections of Brooklyn, N.Y.
Northeast Brooklyn Partnership is a for-profit partnership whose
primary tangible assets are properties located at 409 Kosciuszko
Street, Brooklyn, N.Y.; 403 Kosciuszko Street, Brooklyn, N.Y.; 399
Kosciuszko Street, Brooklyn, N.Y.; 397 Kosciuszko Street, Brooklyn,
N.Y.; 675 Halsey Street, Brooklyn, N.Y.; and 671 Halsey Street,
Brooklyn, N.Y.
Park Monroe and its affiliates sought Chapter 11 protection (Bankr.
E.D.N.Y. Case Nos. 19-40820 to 19-40823) on Feb. 11, 2019. The
petitions were signed by Jeffrey E. Dunston, president and CEO. At
the time of filing, the Debtors were each estimated to have assets
and liabilities under $10 million. The Debtors are represented by
Allen G. Kadish, Esq., of Archer & Greiner, P.C.
PARK MONROE: To Seek Plan Confirmation Nov. 4
---------------------------------------------
Judge Alan S. Trust has entered an order ruling that the Disclosure
Statement of Park Monroe Housing Development Fund Corporation, et
al. contains "adequate information" as such term is defined in 11
U.S.C. Sec. 1125(a) and is approved.
The hearing on confirmation of the Plan is scheduled for Wednesday,
Nov. 4, 2020 at 2:30 P.M.
Any objections to the Plan will be filed and served no later than
Friday, October 30, 2020 at 5:00p.m.
The executed ballots of holders of claims in Class 4 must be
received on or before Friday, October 30, 2020 at 5:00p.m.
About Park Monroe Housing Development
Park Monroe Housing Development Fund Corporation is a
not-for-profit and tax-exempt corporation that develops a housing
project for persons of low income, pursuant to Section 573 of
Article XI of the New York Private Housing Finance Law. The
Company's primary tangible assets are located at 477 Saratoga
Avenue a/k/a 1352-1354 East New York Avenue, Brooklyn, N.Y.; 1350
Park Place, Brooklyn, N.Y.; 180 Grafton Street, Brooklyn, N.Y.; 257
Mother Gaston Boulevard, Brooklyn, N.Y.; and 249-251 Mother Gaston
Boulevard, Brooklyn, N.Y.
984-988 Greene Avenue Housing Development Fund is a not-for-profit
corporation whose tangible assets are properties located at 984-988
Greene Avenue, Brooklyn, N.Y. Its assets are used consistent with
its charitable purposes of providing affordable housing units for
families of low income in the central sections of Brooklyn, N.Y.
Northeast Brooklyn Partnership is a for-profit partnership whose
primary tangible assets are properties located at 409 Kosciuszko
Street, Brooklyn, N.Y.; 403 Kosciuszko Street, Brooklyn, N.Y.; 399
Kosciuszko Street, Brooklyn, N.Y.; 397 Kosciuszko Street, Brooklyn,
N.Y.; 675 Halsey Street, Brooklyn, N.Y.; and 671 Halsey Street,
Brooklyn, N.Y.
Park Monroe and its affiliates sought Chapter 11 protection (Bankr.
E.D.N.Y. Case Nos. 19-40820 to 19-40823) on Feb. 11, 2019. The
petitions were signed by Jeffrey E. Dunston, president and CEO. At
the time of filing, the Debtors were each estimated to have assets
and liabilities under $10 million. The Debtors are represented by
Allen G. Kadish, Esq., of Archer & Greiner, P.C.
PRO-FIT DEVELOPMENT: Plan Hearing Continued to Dec. 16
------------------------------------------------------
Judge Michael G. Williamson has convened a hearing on Oct. 28,
2020, on Pro−Fit Development, Inc.'s Chapter 11 Plan and
Disclosure Statement.
The U.S. Small Business Administration submitted an objection.
Judge Williamson ordered that the hearing is continued to Dec. 16,
2020 at 10:00 a.m. The deadlines are extended.
The Court on Sept. 2, 2020, ordered that the Disclosure Statement
of Pro−Fit Development is conditionally approved. The Court set
a confirmation hearing for Oct. 28 and set a deadline -- that is 7
days before the hearing -- for objections to confirmation.
About Pro-Fit Development
Pro-Fit Development, Inc. filed a chapter 11 petition (Bankr. M.D.
Fla. Case No. 16-06717) on Aug. 4, 2016. The Debtor listed total
assets of $1.53 million and total liabilities of $1.41 million. The
Debtor is represented by Buddy D. Ford, Esq., Jonathan A. Semach,
Esq., and J. Ryan Yant, Esq., at Buddy D. Ford, P.A. The case is
assigned to Judge Rodney K. May. No official committee of
unsecured creditors has been appointed in the case.
PRO-FIT DEVELOPMENT: Says Revenue to Fund Plan Payments
-------------------------------------------------------
Pro-Fit Development, Inc. submitted a Plan and a Disclosure
Statement.
Shortly after filing bankruptcy, the Debtor reached agreement with
Rainmaker360, LLC, which provided the Debtor with time to refinance
the Debtor's real property located at 4007 N. Taliaferro Avenue.
Unfortunately, the Coronavirus spread throughout the United States
soon thereafter. Due to the pandemic, the Debtor was unable to
refinance its loan and Taliaferro was ultimately sold at a
foreclosure sale.
The Debtor's Plan will be funded by revenue generated from the
Debtor's post-confirmation operations.
Under the Plan, each holder of an allowed unsecured claim will
receive, on account of such allowed claim, a pro rata distribution
of cash from the Plan Trust.
The Plan is based upon the Debtor's belief that liquidation of the
assets would yield only minimal distribution, at best to general
unsecured creditors. The present management and ownership of the
corporation will be retained post-confirmation. Steps will be taken
to reduce overhead and expenses in order to effectuate repayment of
the creditors in accordance with the Plan.
A full-text copy of the Disclosure Statement dated August 31, 2020,
is available at https://tinyurl.com/yxzeddbb from PacerMonitor.com
at no charge.
Attorney for the Debtor:
Buddy D. Ford, Esquire
Jonathan A. Semach, Esquire
Heather M. Reel, Esquire
BUDDY D. FORD, P.A.,
9301 West Hillsborough Avenue
Tampa, Florida 33615-3008
Telephone #: (813) 877-4669
Facsimile #: (813) 877-5543
Office Email: All@tampaesq.com
Email: Buddy@tampaesq.com
Email: Jonathan@tampaesq.com
Email: Heather@tampaesq.com
About Pro-Fit Development
Pro-Fit Development, Inc. filed a chapter 11 petition (Bankr. M.D.
Fla. Case No. 16-06717) on Aug. 4, 2016. The Debtor listed total
assets of $1.53 million and total liabilities of $1.41 million. The
Debtor is represented by Buddy D. Ford, Esq., Jonathan A. Semach,
Esq., and J. Ryan Yant, Esq., at Buddy D. Ford, P.A. The case is
assigned to Judge Rodney K. May.
No official committee of unsecured creditors has been appointed in
the case.
PROVIDENT COMMONWEALTH: S&P Lowers 2018 Revenue Bond Rating to 'BB'
-------------------------------------------------------------------
S&P Global Ratings lowered its rating on Massachusetts Development
Finance Agency's series 2018 project revenue bonds, issued for
Provident Commonwealth Educational Resources II (PCER) to 'BB' from
'BBB-'. PCER is a not-for-profit corporation organized for the sole
purpose of constructing and operating a new housing facility on the
University of Massachusetts Dartmouth (UMass Dartmouth) campus,
which is part of the University of Massachusetts System (UMass
System). In addition, S&P Global Ratings removed the rating from
CreditWatch, where it had been placed with negative implications on
Aug. 5, 2020. The outlook is negative.
"The downgrade and negative outlook reflect operating pressure that
PCER faces since it was only able to open with limited occupancy
for fall 2020 whereas it was anticipated to finish construction
this summer and open with full occupancy—these are a direct
result of the COVID-19 pandemic," said S&P Global Ratings analyst
Jessica Goldman. There remains uncertainty about when occupancy
might reach a level that would be consistent with the ability to
pay debt service. In addition, enrollment at UMASS Dartmouth has
declined in the last two years.
The downgrade reflects S&P's opinion of the operating pressure that
faces the project due to the rating agency's view of the sudden
loss of rental revenue as students vacated the residence facility
following the onset of the COVID-19 pandemic. UMass Dartmouth
transitioned to remote learning in an effort to protect the health
and safety of students, and limit the community spread of COVID-19.
S&P views the risks posed by COVID-19 to public health and safety
as a social risk under its ESG factors. Despite the elevated social
risk, S&P believes the project's environmental and governance risk
are in line with its view of the sectors as a whole.
"The negative outlook reflects our expectation that debt service
coverage could be sufficient due to the availability of capitalized
interest during the fall and some modest rental revenues; however
there is uncertainty regarding coverage over the longer term and
the limited occupancy for fall 2020 and into 2021."
QUEENS BALLPARK: S&P Retains BB+ Secured Debt Ratings on Watch Neg.
-------------------------------------------------------------------
S&P Global Ratings retained its 'BB+' ratings on Queens Ballpark
Co. LLC's (QBC) senior secured ratings on CreditWatch with negative
implications. It estimates that QBC could draw on a minor amount
(7%) of its $66.3 million debt service reserve account to meet its
December 2020 debt payment, absent team support or favorable ticket
presales.
In March, S&P placed its then 'BBB' ratings on QBC's senior secured
ratings on CreditWatch with negative implications due to the
uncertainty of the stadium's financial performance in 2020 and 2021
due to the coronavirus pandemic. In June, S&P lowered the ratings
two notches based on the likelihood of a shortened 2020 season,
likely without fan attendance, and future pressures in 2021.
S&P's revised base case and downside case financial projections
suggest QBC's debt service coverage ratios will be substantially
weaker in 2021-2023 due to the combined headwinds from the
coronavirus and a potential player strike in 2022. At the same
time, it has an 18-month debt service reserve.
QBC operates Citi Field, a 42,000-seat, open-air baseball stadium
in Queens, N.Y., that is home to Major League Baseball's (MLB) New
York Mets. New York City Industrial Development Agency (NYCIDA)
owns the ballpark and leases it to QBC under a long-term agreement.
The initial lease expires alongside the final debt maturity. QBC is
a wholly owned subsidiary of Sterling Mets L.P. (SMLP), which owns
the Mets. QBC's stadium-use agreement with the Mets requires the
team to play substantially all of its home games in the stadium.
Ballpark operating rights are conveyed to QBC under the lease. The
project keeps the retained rights revenue and passes all other
stadium revenue to Sterling Mets L.P. under the stadium-use
agreement. Retained rights revenue includes luxury suite premiums,
specific seats, concessions, merchandise, signage, advertising,
naming rights, and specific parking revenue. The NYCIDA is
servicing the payment-in-lieu-of-tax (PILOT) bonds, installment
purchase bonds, and lease revenue bonds with the payments it
receives from QBC. QBC uses the retained rights revenue to fund its
PILOT, installment purchase, and rent payments. QBC and Sterling
Mets L.P. covenant not to materially change the retained rights.
Recent cash contributions from sponsors have alleviated near-term
liquidity concerns. Recent capital injections from SMLP have
reduced a large portion of cash flow needed for the $22 million
debt service payment due on Dec. 1, 2020, but the project will
still depend on operational cash flow to make its payment.
S&P said, "Due to the need to credit fans approximately $49 million
of tickets for games not played in the 2020 baseball season, we
forecast cash receipts for 2021 pre-season ticket sales net of
credits to be weak. Due to the amount of ticket credits that we
assume will offset 2021 ticket sales, and also our demand stress
assumptions, we forecast QBC could draw $4.7 million, or 7% of its
DSRA in December 2020 to make its twice-yearly debt service
payment."
In a normal year, QBC typically receives a substantial amount of
its advertising revenue in the first half of the year, offering a
stable source of cash flows to make the June 2021 debt service
payments of approximately $22 million.
S&P said, "Under our revised forecast, we expect these revenues
will fall just slightly short in covering the June 2021 debt
service payment, requiring a further draw of $3.9 million on the
DSRA based on our best estimates. The following December 2021 debt
service payment will depend directly on residual ticket sales and
game-day stadium revenue for the 2021 season, so we see negative
pressure on the rating until we have a clearer line of sight on how
the pandemic will unfold and how it will affect sporting events."
Uncertainty regarding the 2021 season directly translates into
uncertainty around the size of reserve draws needed to make
December 2021 debt payments, which in turn will be a factor in
whether the rating is maintained."
Social distancing guidelines might limit attendance, and the
pandemic could mute fan attendance after such guidelines are
lifted. The Mets completed their 2020 MLB regular season, playing
60 games with no fans in attendance. Fans who purchased tickets to
2020 games have the option to request a refund or receive a credit
for future seasons. As of October 2020, it is unclear whether the
2021 season will proceed as originally scheduled and to what extent
social distancing guidelines may affect the stadium's permitted
capacity. S&P believes there will be reduced demand for advance
tickets given that some fans might take a wait-and-see approach and
believe the uncertain economic climate stemming from COVID-19 might
cause consumers to reduce their discretionary spending.
S&P said, "Our financial forecast continues to have a significant
degree of uncertainty around it. As a result, we are looking to the
downside resilience of our forecast to affirm the rating but have
updated both our base case and downside financial forecasts. Our
base case attendance assumption shows declines of 20% next year and
5% in 2022, reflecting our estimate that fans might feel initially
lukewarm about returning to the stadium. In addition, we are
reducing our 2021 revenue forecast to account for ticket credits
owed to fans due to cancelled tickets from the 2020 season. As of
October 2020, management estimated these credits totaled roughly
$49 million. We view these credits as a reduction against QBC's
cash flows available for debt service next year. Despite our
expectation of minor draws on the DSRA under these assumptions, the
project could have sufficient cash collections on ticket presales
to make the upcoming December 2020 debt payment without a reserve
draw, which is management's expectation. We would note, however,
that ticket presales largely depend on consumer behavior, which is
increasingly difficult to forecast accurately."
"Our 2021 forecast assumes further draws on the DSRA in 2021,
driven by our assumptions around demand recovery for out-of-home
entertainment. We expect a more substantial draw down (34%) of the
$66.3 million DSRA in 2021, but this could be offset by ticket
presales for the following 2022 baseball season, particularly if
fan participation after COVID-19 returns to normal."
"Outside of our base case and downside case forecasts, we also
looked at two alternate scenarios . Under these scenarios, social
distancing requirements reduce stadium capacity by 50% and 75%,
respectively, which could lead to a default under a 75% reduction
scenario if a strike also occurs. (The MLB collective bargaining
agreement with its players runs through the end of the 2021
baseball season). If social distancing requirements are more
modest, or a strike does not occur, we expect QBC to have
sufficient cash and liquidity to survive our forecast. We do not
factor a 2021 season delay into our forecast but would note that
Major League Baseball has the ability to delay their season
opening, which could provide important flexibility to mitigate the
impacts of COVID-19, assuming a vaccine is not widely available
until mid-2021. Our current break-even analysis suggests that the
stadium would be unable to withstand a more than 60% reduction in
its typical attendance in 2021 without fully depleting its debt
service reserves by year end."
"The fact that a strike could occur in 2022 complicates the
stadium's credit profile. Under our downside case, we assess the
project's performance in the event of a work stoppage after the
current MLB collective bargaining agreement (CBA) expires in
December 2021. In such a scenario, we expect its DSCR to fall to
0.24x. Under our downside, we expect that the project would need to
draw on roughly 79% of this reserve to service its debt during the
stoppage, with full replenishment occurring three years later, in
2025. If more onerous social distancing occurs in addition to our
downside, this could trigger a default, but for the moment we
consider this combination to be possible but unlikely."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
S&P said, "The CreditWatch with negative implications status
reflects the uncertainty around the stadium's performance due to
the possibility for reduced ticket demand beyond our base case
assumptions, as well as social distancing requirements that limit
capacity, which we do not currently assume due to the uncertainty.
Either condition would reduce QBC's game-day revenue, which would
weaken its coverage ratios relative to our base case assumptions
and could lead us to lower our ratings by one or more notches. With
time, it will become evident whether or not distancing will apply
to next season. We do assume that demand for in-person attended
sporting events could be impaired until 2023. Under our forecast,
QBC will have insufficient cash on hand to make the Dec. 1, 2020
debt service payment and require a minor draw on the DSRA. We will
reassess QBC's credit profile in December to determine actual draws
on the DSRA, along with the ticket presales for the 2021 baseball
season and update our forecast if needed then."
"We could lower our ratings on the bonds if the project's cash
flows and liquidity position deteriorated such that there were a
substantial draw on the DSRA in December beyond our expectations
without near-term replenishment in sight. Because we expect a large
portion of 2021 season ticket revenue to be offset by ticket
credits granted to fans during the 2020 season, we forecast that
QBC might depend on its debt service reserve account as soon as
December 2020, absent strong ticket presales or further team
support. If the 2021 baseball season and associated revenues are
affected as we forecast, there could another draw on the DSRA in
June 2021. We note that the 20% sales reduction in our base case
forecast is based on our best assessment given the unprecedented
nature of this pandemic."
"We could remove the ratings from CreditWatch if it appeared that
the project's performance were on track to return to pre-COVID-19
levels and the possibility for an extension of social distancing
requirements materially subsided. The downside risk is substantial
but could subside if QBC's ticket sales and advertising revenue
exceeded our projections, which would provide QBC with a greater
cushion in its cash flows available for debt service. Our
methodology assumes no team support is provided because the Mets
are under no obligation to provide the stadium with capital
injections. We also do not assess the credit quality of the team.
However, we note it is likely that the team and its owners would
have incentives to support the stadium if it became troubled given
that a working stadium is essential to preserving the value of the
franchise. The Mets are currently in the final process of a sale to
Steven A. Cohen. Cohen is paying $2.45 billion for a 95% share of
the team and QBC. The sale is expected to be complete by year end.
As a nationally recognized baseball franchise, we view it as
unlikely that current or new owners would allow the stadium to
default. At the same time, we would not expect the team owners to
necessarily defend the credit profile of the stadium as it weakens
in the face of an unprecedented pandemic."
QUICK CASH: Trustee Loses Clawback Suit vs Delgados
---------------------------------------------------
Bankruptcy Judge David T. Thuma tried the merits of the amended
complaint filed by Yvette J. Gonzalez, Quick Cash, Inc.'s chapter 7
Trustee, against defendants Timothy and Stacey Delgado, the
debtor's owners.
Plaintiff sought judgment against the Delgados for the value of a
large number of transfers made by the Debtor between July 2, 2013
and June 29, 2015. Her theory of recovery is that the transfers
were to or for the benefit of the Delgados, the Debtor was
insolvent when the transfers were made, and the Debtor did not
receive reasonably equivalent value in exchange. In addition, one
count relates to alleged preferential transfers.
Judge Thuma, however, has concluded that the trustee did not meet
her burden of proving that the Debtor was insolvent when the
transfers were made. The Court, therefore, entered judgment in the
Delgados' favor on all counts.
Debtor Quick Cash Inc., doing business as Cash Cow Loan Company,
Cash Cow Furniture, and Cash Cow Tires & Service, is a New Mexico
corporation headquartered in Gallup. Formed in 2003, Quick Cash is
wholly owned by the Delgados. Quick Cash's operations included
consumer lending, tax refund lending, a retail furniture business,
and an automobile tire and service center. Most of Quick Cash's
revenue came from high-interest purchase or loan contracts. Because
of the nature of its business, Quick Cash was not "bankable." Mr.
Delgado dealt with this problem by seeking loans from friends and
business associates to provide operating capital.
In 2013 Quick Cash had a $1.2 million profit. Around the end of
2013, Mr. Delgado was introduced by a friend to an owner of an
Oklahoma corporation called Superior Fabrication Inc. (SFI). The
business relationship between Quick Cash and SFI apparently began
when SFI considered lending money to Quick Cash for operating
capital. After doing some research and auditing Quick Cash's
operations, SFI expressed interest in merging with or acquiring
Quick Cash. SFI's due diligence led it to conclude that Quick Cash
was worth $13.5 million. At the beginning of 2014 Quick Cash signed
a purchase agreement with SFI under which SFI would buy half of
Quick Cash's stock for $6.5 million. The deal was set to close in
May 2014. On Jan. 3, 2014, in connection with the purchase
agreement, Quick Cash borrowed $3.5 million from SFI. The
understanding of the parties was that the loan would be forgiven
when the sale closed. Quick Cash used the loan proceeds to retire
$2.7 million of debt and to operate its business.
In May 2014, Mr. Delgado and his family went to Oklahoma to close
the deal on SFI's purchase of one half of Quick Cash. The meeting
led to further negotiations, prompted by SFI's interest in
purchasing Quick Cash's entire operation. SFI's offer to acquire
100 percent of Quick Cash -- which would include Mr. Delgado
sitting on the board of SFI -- was appealing to the Delgados, so
instead of closing their original deal, Quick Cash and SFI signed a
new purchase agreement. Under the new agreement SFI was to buy all
of Quick Cash's assets or stock (the record does not indicate
which) for $13.5 million, with a closing date of July 1, 2014. The
new agreement was finalized on May 13, 2014. On the same day, Quick
Cash borrowed an additional $500,000 from SFI.
Quick Cash's loans from SFI were personally guaranteed by the
Delgados and secured by Quick Cash's assets.
Between March and November 2014, customers of Quick Cash brought a
number of actions against it, alleging violations of the federal
Truth in Lending Act. Several lawsuits were brought in Gallup and a
class action was brought in federal court in New Mexico. The class
action lawsuit was filed 10 days after SFI and Quick Cash signed
the May 13, 2014 purchase agreement.
The lawsuits were front page news in Gallup for four days. Owing
partly to publicity and partly to word of mouth -- Quick Cash's
customers are part of a close-knit Gallup community -- Quick Cash
began to have some difficulty collecting from its customers.
In mid-2014, after Quick Cash failed to settle the class action
lawsuit, SFI backed out of the purchase agreement. This left Quick
Cash owing SFI $4 million, with monthly interest payments of
$20,000 and a maturity date of Dec. 31, 2018. To recapitalize the
business, the Delgados turned to friends and business acquaintances
for a new round of loans. From July 2014 through April 2015, Quick
Cash borrowed about $2 million from these sources. Quick Cash
managed to make a $548,000 profit in 2014.
Ultimately, however, Quick Cash was not able to work its way out of
the problems caused by the lawsuits. On July 6, 2015, Quick Cash
filed for Chapter 11. On the petition date, Quick Cash's total
liabilities were scheduled as $7,067,815.61, and its total assets
were scheduled as $9,662,518.06.
The United States Trustee's office appointed a Committee of
Unsecured Creditors (UCC) and a Consumer Claimants Committee (CCC),
representing claimants with pending lawsuits against Quick Cash.
On March 16, 2016, Quick Cash, SFI, and the committees agreed on
the terms of a plan of reorganization. For reasons not in the
record, Quick Cash later backed out of the deal.
On Dec. 29, 2016, the CCC filed a motion to convert the case to
chapter 7. The motion was strongly opposed by SFI and the UCC, who
preferred to give Quick Cash "the opportunity to succeed" in
reorganizing. The motion was denied on March 22, 2017.
In an order entered June 29, 2017, the Court granted the CCC
authority to file fraudulent transfer claims on behalf of the
bankruptcy estate and ordered that if the case converted to chapter
7, the chapter 7 trustee would be substituted for the CCC in the
adversary proceeding.
On June 30, 2017, Quick Cash moved to dismiss its chapter 11
bankruptcy case. A week later, the CCC filed a second motion to
convert the case to chapter 7. The conversion motion was granted,
and the motion to dismiss denied, on August 11, 2017.
Gonzales was appointed chapter 7 trustee. She filed an amended
complaint in this proceeding on Nov. 1, 2017. By her amended
complaint the trustee sought to recover $1,273,027.09 from the
Delgados that Quick Cash transferred to third parties for the
benefit of the Delgados. The Transfers were booked as shareholder
distributions. Approximately 650 transfers, ranging from $2.47 to
$18,421.30 are at issue. The Transfers were made between July 2,
2013 and June 29, 2015.
By the trial date, all claims against the defendants other than the
Delgados had been settled or dismissed. Further, at trial the
trustee stipulated to the dismissal of all claims against the
Delgados except Counts II, V, and VI. Finally, the trustee
stipulated that her claims are based on the premise that Quick Cash
was "balance sheet" insolvent during the Transfer Period.
Conceding that Quick Cash's bankruptcy schedules reflect solvency
on the petition date, the trustee argued that the values of six of
its largest assets were significantly overstated. In the trustee's
view, Quick Cash's assets on the petition date, which were
scheduled at $9,662,518.06, were worth only $1,947,815.10.
According to Judge Thuma, the problem with the trustee's revised
asset values for the consumer loans and the furniture inventory is
that they are liquidation values rather than going concern values.
If these two assets are valued at going concern values on the
petition date, then Quick Cash was solvent even if the trustee's
other adjustments are accurate.
Judge Thuma also stated that there is no evidence that Quick Cash
was "on its deathbed" during the Transfer Period, such that
liquidation value, rather than a going concern value, would be the
appropriate method of valuation. In 2013 through the beginning of
2014, the unrefuted evidence is that Quick Cash was a profitable
business, worth $13.5 million. By the end of 2014 Quick Cash,
albeit facing several lawsuits, was operating and making a profit.
When Quick Cash filed this case in July 2015 it was a going
concern. It operated as a debtor in possession for more than two
years. Seventeen months after the petition date SFI still believed
in Quick Cash's continued viability and opposed conversion to
chapter 7. Quick Cash's success in 2013, its continued
profitability in 2014, and its post-petition operations show that
going concern value, not liquidation value, is the appropriate way
to value its assets during the Transfer Period.
While Quick Cash's accounts receivable likely were not 100%
collectible, even as a going concern,12 there is no evidence of
what a realistic going concern value was during the Transfer
Period. Accountants with expertise in valuing accounts receivable
could have provided reliable valuation estimates.
At some point, most likely post-petition, Quick Cash was "on its
deathbed" and a liquidation value of its assets would be proper.
During the Transfer Period, on the other hand, the evidence
supports the use of a going concern value. Using a going concern
value results in Quick Cash's balance sheet solvency during most or
all of the Transfer Period. Even if Quick Cash slipped into
insolvency at some point during the Transfer Period, the Court has
no way of knowing when that might have happened. In sum, Judge
Thuma said that the trustee did not carry her burden of proving
that Quick Cash was insolvent during the Transfer Period.
A copy of the Court's Opinion is available at
https://bit.ly/3lkgkJR from Leagle.com.
The adversary case is in re: YVETTE J. GONZALES, chapter 7 trustee,
Plaintiff, v. TIMOTHY DELGADO, STACEY DELGADO, PAT MATAYA, MATAYA
CONSTRUCTION CO., INC., GALLUP LUMBER & SUPPLY CO., RED MESA
ELECTRIC ENTERPRISES, LLC, ELKHORN CABINETS, LLC, REHOBOTH
CHRISTIAN SCHOOL, ONEMAIN FINANCIAL F/K/A CITIFINANCIAL, SYNCHRONY
BANK, NEW YORK LIFE INSURANCE COMPANY, FIDELITY AND GUARANTEE LIFE
INSURANCE COMPANY, and NAEL AL-ASSI, Defendants, Adv. No. 17-1051-t
(Bankr. D.N.M.).
About Quick Cash Inc.
Quick Cash Inc. doing business as Cash Cow Loan Company, Cash Cow
Furniture, and Cash Cow Tires & Service, is a New Mexico
corporation headquartered in Gallup. Formed in 2003, Quick Cash is
wholly owned by Timothy and Stacey Delgado. Quick Cash's operations
included consumer lending, tax refund lending, a retail furniture
business, and an automobile tire and service center.
Quick Cash filed for chapter 11 bankruptcy protection (Bankr D.N.M.
Case No. 15-11800-t7) on July 6, 2015. The case was converted under
chapter 7 on August 11, 2017.
QUINCY STREET: Creditor ACF Proposes Plan for Townhomes II
----------------------------------------------------------
Creditor ACF Holding DE LLC, filed with the U.S. Bankruptcy Court
for the District of Columbia a proposed Plan of Liquidation for
Quincy Street Townhomes II LLC, a debtor-affiliate of lead debtor
Quincy Street Townhomes I LLC.
ACF (through an affiliate) funded a loan of $1,865,000 to the
Debtor to finance the acquisition and the costs of renovation and
conversion of the Real Property to a three-unit condominium. That
loan is secured by a first deed of trust recorded among the
District of Columbia land records. On the Petition Date, the amount
owed by the Debtor to ACF on account of that first trust loan (the
Allowed ACF Senior Claim) stood at $2,431,477.58. See ACF Proof of
Claim, Case No. 19-00827, Claim No. 7-1.
The Debtor did not complete the renovation of the Real Property
within the time required by the relevant ACF loan documents. ACF
declared its loans in default and initiated a foreclosure against
the Real Property. The Debtor filed the Bankruptcy Case to stay the
foreclosure.
The Plan provides for the sale, transfer and assignment to ACF free
and clear of Liens and Claims of (i) good and marketable fee simple
title to the Real Property, insurable by a standard ALTA owner’s
policy at normal rates, and (ii) the Permits and Approvals, and for
ACF’s contribution of the Property Purchase Price comprised of
the Cash Consideration and the Credit Bid Consideration. The Plan
further provides for ACF’s additional contribution of $25,000 for
distribution to the Allowed Class 5 Claims.
Class 5 Allowed Unsecured Claims including Unsecured Mechanic's
Lien Claims. Each Allowed Class 5 Claim will be paid its Pro Rata
Share of: (i) $25,000, which ACF will contribute; and (ii) the
recoveries, if any, from Avoidance Actions and Causes of Action. If
a Class 5 Claim is a Disputed Claim it will not receive any
Distribution unless and until it becomes an Allowed Claim. No
distributions to Class 5 Claims will be made until all objections
to Class 5 Claims are resolved by Final Order. The Mechanic’s
Lien Claims are not Secured Claims and the mechanics’ liens will
be released at the Closing.
The Holders of the Class 6 Interests are Potomac Development
Holdings L.L.C. and Eric Hirshfield, each owning a 50% membership
interest in the Debtor. Potomac Development Holdings L.L.C. is the
managing member of the Debtor. Matthew Shkor is the sole member of
Potomac Development Holdings L.L.C. Both Shkor and Hirshfield are
personal guarantors of the entire amount owed by the Debtor to
ACF.
Effective on the Confirmation Date and the appointment of the Plan
Administrator, all governance interests in the Debtor that the
Holders of the Interests would otherwise have under the District of
Columbia Uniform Limited Liability Company Act of 2010 will
transfer to the Plan Administrator and the Holders will thereafter
have no right, title or interest to such rights. The Interest
Holders will receive no Distribution on account of their economic
interests in the Debtor.
ACF has agreed with Shkor and Hirshfield that, if Potomac
Development Holdings L.L.C., Shkor, and Hirshfield cooperate with
the confirmation, consummation and implementation of the Plan; the
Sale; the completion of the renovation of the Property; the
development of the condominium; and the marketing and sale of the
condominium units, ACF will take no action to enforce their
guaranties and, when ACF has closed on the sales of all six
condominium units ACF will release their guaranties.
A full-text copy of the ACF's Disclosure Statement and Liquidating
Plan dated August 27, 2020, is available at
https://tinyurl.com/y53tezud from PacerMonitor at no charge.
Counsel for Plan Proponent ACF:
Mary Joanne Dowd
Arent Fox LLP
1717 K Street, NW
Washington, DC 20036-5342
Telephone: (202) 857-6059
Facsimile: (202) 857-6395
E-mail: mary.dowd@arentfox.com
About Quincy Street Townhomes I
Washington, DC-based Quincy Street Townhomes I, LLC is engaged in
activities related to real estate.
Quincy Street Townhomes I and its affiliates, Quincy Street
Townhomes II, LLC and Potomac Construction Flats, LLC, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.D.C.
Case No. 19-00826) on Dec. 16, 2019. At the time of the filing,
the Debtor disclosed assets of between $1 million and $10 million
and liabilities of the same range. Judge Martin S. Teel, Jr.
oversees the case. Whiteford, Taylor & Preston L.L.P. is the
Debtor's legal counsel.
RAM DMD: Hires Brevard Accounting as Accountant
-----------------------------------------------
RAM DMD PLLC, seeks authority from the U.S. Bankruptcy Court for
the Middle District of Florida to employ Brevard Accounting Group,
CPA's, PA, as accountant to the Debtor.
RAM DMD requires Brevard Accounting to:
a. prepare financial reports including but not limited to
statement of cash flows, balance sheet and profit and loss;
b. assist the Debtor and Debtor's counsel in addressing any
inquiries from the Trustee, US Trustee's office, creditors
or any other interested party;
c. assist in the preparation of the Small Business Monthly
Operating Report, account reconciliations including but not
limited to bank reconciliations;
d. prepare and file any necessary tax filings with federal,
state and county tax authorities; and
e. provide general tax and accounting consulting services
where necessary to assist the Debtor and the Debtor's
counsel in the reorganization process.
Brevard Accounting will be paid at the hourly rate of $200.
Brevard Accounting will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Christopher Davis, partner of Brevard Accounting Group, CPA's, PA,
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.
Brevard Accounting can be reached at:
Christopher Davis
BREVARD ACCOUNTING GROUP, CPA'S, PA
150 Fortenberry Road
Merrit Island, FL 32952
Tel: (321) 452-5061
About RAM DMD PLLC
RAM DMD, PLLC, filed a Chapter 11 bankruptcy petition (Bankr. M.D.
Fla. Case No. 20-05340) on Sept. 23, 2020, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by Widerman Malek PL.
RGN-GROUP HOLDINGS: Taps Kirkland & Ellis as Legal Counsel
----------------------------------------------------------
RGN-Group Holdings, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Kirkland
& Ellis LLP and Kirkland & Ellis International LLP as their legal
counsel.
The firm will render the following legal services:
a. advise the Debtors with respect to their powers and
duties;
b. advise and consult on the conduct of these Chapter 11
cases;
c. attend meetings and negotiate with representatives of
creditors and other parties in interest;
d. take all necessary actions to protect and preserve the
Debtors' estates;
e. preparing pleadings in connection with the Chapter 11
cases;
f. represent the Debtors in connection with obtaining
authority to continue using cash collateral and postpetition
financing;
g. advise the Debtors in connection with any potential sale of
assets;
h. appear before the court;
i. advise the Debtors regarding tax matters;
j. take any necessary action on behalf of the Debtors to
negotiate, prepare, and obtain approval of a disclosure statement;
k. perform all other necessary legal services for the
Debtors.
Kirkland & Ellis' current hourly rates for matters related to the
Chapter 11 cases range as follows:
Partners $1,075 - $1,845
Of Counsel $625 - $1,845
Associates $610 -$1,165
Paraprofessionals $245 - $460
Chad J. Husnick, Esq., a partner at Kirkland & Ellis, disclosed in
court filings that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
Mr. Husnick also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the U.S. Trustee Guidelines:
a. Question: Did Kirkland agree to any variations from, or
alternatives to, Kirkland's standard billing arrangements for this
engagement?
Answer: No. Kirkland and the Debtors have not agreed to any
variations from, or alternatives to, Kirkland's standard billing
arrangements for this engagement. The rate structure provided by
Kirkland is appropriate and is not significantly different from (a)
the rates that Kirkland charges for other non-bankruptcy
representations or (b) the rates of other comparably skilled
professionals.
b. Question: Do any of the Kirkland professionals in this
engagement vary their rate based on the geographic location of the
Debtors' chapter 11 cases?
Answer: No. The hourly rates used by Kirkland in
representing the Debtors are consistent with the rates that
Kirkland charges other comparable chapter 11 clients, regardless of
the location of the chapter 11 case.
c. Question: If Kirkland has represented the Debtors in the 12
months prepetition, disclose Kirkland's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If Kirkland's billing
rates and material financial terms have changed postpetition,
explain the difference and the reasons for the difference.
Answer: Kirkland's current hourly rates for services
rendered on behalf of the Debtors range as follows:
Billing Category U.S. Range
Partners $1,075-$1,845
Of Counsel $625-$1,845
Associates $610-$1,165
Paraprofessionals $245-$460
d. Question: Have the Debtors approved Kirkland's budget and
staffing plan, and, if so, for what budget period?
Answer: Yes, for the period from September 16, 2020,
through February 16, 2021.
The firm can be reached through:
Chad J. Husnick, Esq.
Kirkland & Ellis LLP
Kirkland & Ellis International LLP
300 North LaSalle
Chicago, IL 60654
Email: chad.husnick@kirkland.com
About RGN-Group Holdings
RGN-Group Holdings, LLC and its affiliates are primarily engaged in
renting and leasing real estate properties.
On Aug. 17, 2020, RGN-Group Holdings and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 20-11961).
At the time of the filing, RGN-Group Holdings disclosed total
assets of $1,005,956,000 and total liabilities of $946,016,000.
Judge Brendan Linehan Shannon oversees the cases.
Debtors have tapped Faegre Drinker Biddle & Reath LLP as their
bankruptcy counsel, Alixpartners as financial advisor, Duff &
Phelps LLC as restructuring advisor, and Epiq Corporate
Restructuring LLC as claims and noticing agent.
Natasha Songonuga is the Subchapter V trustee for the estates of
RGN-Group Holdings, LLC and its affiliates. The trustee is
represented by Gibbons P.C.
RGN-GROUP HOLDINGS: Trustee Taps Berkeley as Financial Advisor
--------------------------------------------------------------
Natasha Songonuga, the Subchapter V trustee for the estates of
RGN-Group Holdings, LLC and its affiliates, seeks approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Berkeley
Research Group, LLC as her financial advisor.
The firm will render the following services:
a) assist the trustee in the performance of her duties;
b) assist the trustee with respect to any debtor-in-possession
financing arrangements and/or use of cash;
c) provide the trustee assurance of the Debtors' compliance
with the approved uses of cash collateral;
d) scrutinize cash disbursements and capital requirements on
an on-going basis;
e) evaluate relief requested in the Debtors' intercompany
motion;
f) assist the trustee in the investigation of properly
perfected liens;
g) analyze both historical and ongoing related party
transactions of the Debtors and non-Debtor affiliates;
h) provide electronic forensic assistance as necessary;
i) advise and assist the trustee in her analysis and
monitoring of the Debtors' and non-Debtor affiliates' historical,
current, and projected financial affairs;
j) develop a periodic monitoring report to enable the trustee
to evaluate effectively the Debtors' financial performance;
k) assist the trustee and counsel in reviewing and evaluating
any court motions, applications, or other forms of relief;
l) advise and assist the trustee in identifying and/or
reviewing any preference payments, fraudulent conveyances, and
other potential causes of action;
m) analyze the Debtors' and non-Debtor affiliates' assets and
possible recoveries to creditor constituencies under various
scenarios;
n) review and provide analysis of any bankruptcy plan relating
to the Debtors;
o) advise and assist the trustee in its assessment of the
Debtors' employee needs and related costs;
p) monitor the Debtors' claims management process;
q) analyze and monitor any prior sale processes and
transactions and assess the reasonableness of the process and the
consideration received;
r) assess the Debtors' international operations and in
particular the Debtors' affiliate cases in Canada;
s) work with the Debtors' and/or the trustee's tax advisors to
ensure that any restructuring or sale transaction is structured to
minimize tax liabilities to the estate; and
t) perform other potential services as may be requested from
time to time by the trustee and her counsel.
The current standard hourly rates for Berkeley Research
professionals anticipated to be assigned to the engagement are as
follows:
Christopher Kearns $1,095
Finbarr O'Connor $1,040
Michael Canale $500
Quynh Tran $570
Finbarr O'Connor, managing director at Berkeley Research, disclosed
in court filings that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Finbarr O'Connor
Berkeley Research Group, LLC
810 Seventh Avenue, Suite 4100
New York, NY 10019
Telephone: (212) 782-1403
Email: foconnor@thinkbrg.com
About RGN-Group Holdings
RGN-Group Holdings, LLC and its affiliates are primarily engaged in
renting and leasing real estate properties.
On Aug. 17, 2020, RGN-Group Holdings and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 20-11961).
At the time of the filing, RGN-Group Holdings disclosed total
assets of $1,005,956,000 and total liabilities of $946,016,000.
Judge Brendan Linehan Shannon oversees the cases.
Debtors have tapped Faegre Drinker Biddle & Reath LLP as their
bankruptcy counsel, Alixpartners as financial advisor, Duff &
Phelps LLC as restructuring advisor, and Epiq Corporate
Restructuring LLC as claims and noticing agent.
Natasha Songonuga is the Subchapter V trustee for the estates of
RGN-Group Holdings, LLC and its affiliates. The trustee is
represented by Gibbons P.C.
ROLTA INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Six affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Rolta International, Inc. 20-82282
725 Adams St. SE
Huntsville, AL 35801
Rolta, LLC 20-82283
Rolta Global B.V. 20-82284
Rolta Middle East FZ-LLC 20-82285
Rolta Americas LLC 20-82286
Rolta UK Limited 20-82287
Business Description: Rolta International, Inc. provides
information technology solutions,
services, and software.
Chapter 11 Petition Date: October 29, 2020
Court: United States Bankruptcy Court
Northern District of Alabama
Judge: Hon. Clifton R. Jessup Jr.
Debtors' Counsel: Stuart M. Maples, Esq.
MAPLES LAW FIRM, PC
200 Clinton Ave. West, Ste 1000
Huntsville, AL 35801
Tel: (256) 489-9779
Fax: (256) 489-9720
Rolta International's
Estimated Assets: $0 to $50,000
Rolta International's
Estimated Liabilities: $500 million to $1 billion
The petitions were signed by Preetha Pulusani, president
International Operations.
Copies of the petitions are available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/ANPQTWI/Rolta_International_Inc__alnbke-20-82282__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/ATDTF4Y/Rolta_LLC__alnbke-20-82283__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/OPJYWWY/Rolta_Global_BV__alnbke-20-82284__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/ORG2NCI/Rolta_Middle_East_FZ-LLC__alnbke-20-82285__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PHOFMDY/Rolta_Americas_LLC__alnbke-20-82286__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PJ7FBDI/Rolta_UK_Limited__alnbke-20-82287__0001.0.pdf?mcid=tGE4TAMA
List of Rolta International's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. AdvizeX Trade Debt $6,232,474
Technologies RAX
Integration AP
6480 Rockside Woods Blvd Suite 190
Independence, OH 44131
2. Citicorp International Limited Indenture $300,000,000
39/F Citibank Tower
Garden Road, Central Hong Kong
3. Data Glove Inc Trade Debt $43,010
DBA Trimax Americas
Trimax Americas
125 Village Blvd
Suite 27
Princeton, NJ 08540
4. Deutsche Bank $200,000,000
Trust Company Americas
c/o Deutsche Bank
National Trust Company
100 Plaza One Mailstop
JCY03-0699
Jersey City, NJ
07311
5. ESRI Trade Debt $40,416
380 New York Street
Redlands, CA 92373-8100
6. Global PTM, Inc. Trade Debt $33,655
435 East North Street
PO Box 302
Greenville, SC 29615
7. Huron Consulting Services LLC Trade Debt $148,395
550 W. Van Buren Street
Chicago, IL 60607
8. Lanier Ford Shaver $444,479
& Payne P.C.
2101 West Clinton Ave
Suite 102 Huntsville, AL 35805
9. Merrill Communications LLC Trade Debt $30,992
PO Box 74007252
Chicago, IL 60674
10. Pala Assets $187,098,105
Holdings Ltd.
White & Case LLP
1221 Avenue of the Americas
New York, NY 10020
11. Project Partners, LLC Trade Debt $35,541
520 Purissima Street
Half Moon Bay, CA 94019
12. RAX Integration AP Trade Debt $2,525,966
6480 RocksideWoods Blvd
Suite 190
Independence, OH 44131
13. Reliable Software Trade Debt $64,467
Resources, Inc.
22260 Haggerty Rd
Suite 285
Northville, MI 48167
14. Rolta Americas, LLC $75,568,737
5865 North Point Pkwy
Alpharetta, GA30022
15. Rolta India Limited $303,317
Rolta Tower A, Rolta
Technology Park
MIMIDC, Andheri (East) India
16. Rolta LLC $34,342,580
5865 North Point Parkway
Alpharetta, GA 30022
17. Rolta Saudi Arabia Ltd $48,461
PO Box No. 68371
Riyadh 11527 SA
18. Rolta UK Ltd $95,134
100 Longwater Avenue Green Park
Reading RG2 6GP
United Kingdom GB
19. Siri & Glimstad LLP $117,192
200 Park Avenue
Seventeen Floor
New York, NY 10166
20. Syndicated Bank -UK $4,060,973
UK King William
House 2A
Eastcheap London EC3M 1LH
United Kingdom GB
RTI HOLDING: Seeks to Hire CR3 Partners as Financial Advisor
------------------------------------------------------------
RTI Holding Company, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire CR3
Partners, LLC as their financial advisor.
The firm will provide the following services:
a. provide financial analysis and assist the Debtors in
matters related to business plan/projection, liquidity/cash
management, and management on vendor discussions;
b. assist the Debtors in bankruptcy preparation and
administration;
c. perform other tasks mutually agreed to by the Debtors.
The hourly rates of the firm's professionals who will be primarily
responsible for the completion of the engagement are as follows:
William Snyder Partner $795
Sugi Hadiwijaya Partner $695
David Tiffany Partner $695
Alex Boerema Manager $450
CR3 Partners has received a retainer of $592,730 from the Debtors
for fees, charges and disbursements incurred prior to the petition
date. During the 90 days immediately preceding the petition date,
the firm applied payments totaling $508,623.50, and holds
$84,106.50 as a net post-petition retainer.
William K. Snyder, a partner at CR3 Partners, disclosed in court
filings that the firm is a "disinterested person" as defined by
Section 101 (14) of the Bankruptcy Code.
The firm can be reached through:
William K. Snyder, Esq.
CR3 Partners, LLC
13355 Noel Road, Suite 2005
Dallas, TX 75240
Telephone: (214) 415-7167
Email: william.snyder@cr3partners.com
About RTI Holding Company, LLC
RTI Holding Company, LLC and its affiliates develop, operate, and
franchise casual dining restaurants in the United States, Guam, and
five foreign countries under the Ruby Tuesday brand. The
company-owned and operated restaurants (i.e., non-franchise) are
concentrated primarily in the Southeast, Northeast, Mid-Atlantic
and Midwest regions of the United States.
RTI Holding Company and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
20-12456) on October 7, 2020. The petitions were signed by Aziz
Hashim, managing member of Manager, NRD Capital Management II,
LLC.
At the time of the filing, RTI Holding Company had estimated assets
of between $100 million and $500 million and liabilities of the
same range.
Judge John T. Dorsey oversees the case.
Pachulski Stang Ziehl & Jones LLP is Debtors' legal counsel. CR3
Partners, LLC is Debtors' financial advisor; Epiq Corporate
Restructuring, LLC is their claims, noticing, solicitation agent
and administrative advisor.
RTI HOLDING: Seeks to Hire Pachulski Stang as Legal Counsel
-----------------------------------------------------------
RTI Holding Company, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire
Pachulski Stang Ziehl & Jones LLP as their legal counsel.
The professional services that the firm will provide include:
a. provide legal advice with respect to the Debtors' powers
and duties;
b. prepare legal papers;
c. appear in court on behalf of the Debtors; and
d. perform other legal services for the Debtors.
The current standard hourly rates of the firm's professionals are:
Partners $750 to $1,495
Of Counsel $675 to $1,125
Associates $625
Paraprofessionals $395 to $425
James E. O'Neill, Esq., a partner at Pachulski Stang, disclosed in
court filings that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under United
States Code by Attorneys in Larger Chapter 11 Cases, the following
is provided in response to the request for additional information:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Answer: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Answer: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and reasons for the difference.
Answer: The material financial terms for the prepetition
engagement remained the same as the engagement was hourly-based.
The billing rates and material financial terms for the postpetition
period remain the same as the prepetition period. The standard
hourly rates of PSZ&J are subject to periodic adjustment in
accordance with the firm's practice.
Question: Has your client approved your respective budget and
staffing plan, and, if so, for what budget period?
Answer: The Debtors and PSZ&J expect to develop a prospective
budget and staffing plan to comply with the U.S. Trustee's request
for information and additional disclosures. In accordance with the
2013 UST Guidelines, any budget may be amended as necessary to
reflect changed circumstances or unanticipated developments.
The firm can be reached through:
Richard M. Pachulski, Esq.
Malhar S. Pagay, Esq.
James E. O'Neill, Esq.
Victoria A. Newmark, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Telephone: (302) 652-4100
Facsimile: (302) 652-4400
Email: rpachulski@pszjlaw.com
mpagay@pszjlaw.com
joneill@pszjlaw.com
vnewmark@pszjlaw.com
About RTI Holding Company, LLC
RTI Holding Company, LLC and its affiliates develop, operate, and
franchise casual dining restaurants in the United States, Guam, and
five foreign countries under the Ruby Tuesday brand. The
company-owned and operated restaurants (i.e., non-franchise) are
concentrated primarily in the Southeast, Northeast, Mid-Atlantic
and Midwest regions of the United States.
RTI Holding Company and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
20-12456) on October 7, 2020. The petitions were signed by Aziz
Hashim, managing member of Manager, NRD Capital Management II,
LLC.
At the time of the filing, RTI Holding Company had estimated assets
of between $100 million and $500 million and liabilities of the
same range.
Judge John T. Dorsey oversees the case.
Pachulski Stang Ziehl & Jones LLP is Debtors' legal counsel. CR3
Partners, LLC is Debtors' financial advisor; Epiq Corporate
Restructuring, LLC is their claims, noticing, solicitation agent
and administrative advisor.
RTI HOLDING: Taps Cheng Cohen as Special Corporate Counsel
----------------------------------------------------------
RTI Holding Company, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Cheng
Cohen LLC as their special counsel.
The firm will provide the following services:
a. represent the Debtors in general corporate matters,
including financing representation;
b. provide day-to-day advice regarding employment matters;
c. consult with the Debtors regarding matters of franchise law
and the Debtors' relationships and transactions with franchisees;
d. assist with the preparation of agreements and other
documents in connection with the transactions contemplated in the
plan to be proposed by the Debtors; and
e. provide mergers and acquisition advice in connection with a
sale of substantially all assets of the Debtors.
The firm's current range of standard hourly rates are:
$495 to $625 Partners
$345 to $445 Associates
$225 Paralegals
Amy Cheng, Esq., a partner at Cheng Cohen, disclosed in court
filings that the firm is a "disinterested person" as defined by
Section 101 (14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under United
States Code by Attorneys in Larger Chapter 11 Cases, the following
is provided in response to the request for additional information:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Answer: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Answer: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and reasons for the difference.
Answer: On August 1, 2020 we stopped giving the client the
hourly rate discounts for certain attorneys that it previously
received given the amount of past due invoices still outstanding.
In April 2020, we began requiring a $50,000 retainer and on August
1, 2020 we increased the retainer to $100,000.
Question: Has your client approved your respective budget and
staffing plan, and, if so, for what budget period?
Answer: Yes.
The firm can be reached through:
Amy Cheng, Esq.
CHENG COHEN LLC
363 W Erie St Ste 500
Chicago, IL 60654
Telephone: (312) 243-1701
About RTI Holding Company, LLC
RTI Holding Company, LLC and its affiliates develop, operate, and
franchise casual dining restaurants in the United States, Guam, and
five foreign countries under the Ruby Tuesday brand. The
company-owned and operated restaurants (i.e., non-franchise) are
concentrated primarily in the Southeast, Northeast, Mid-Atlantic
and Midwest regions of the United States.
RTI Holding Company and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
20-12456) on October 7, 2020. The petitions were signed by Aziz
Hashim, managing member of Manager, NRD Capital Management II,
LLC.
At the time of the filing, RTI Holding Company had estimated assets
of between $100 million and $500 million and liabilities of the
same range.
Judge John T. Dorsey oversees the case.
Pachulski Stang Ziehl & Jones LLP is Debtors' legal counsel. CR3
Partners, LLC is Debtors' financial advisor; Epiq Corporate
Restructuring, LLC is their claims, noticing, solicitation agent
and administrative advisor.
RTI HOLDING: Taps FocalPoint Securities as Investment Banker
------------------------------------------------------------
RTI Holding Company, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire
FocalPoint Securities, LLC as their investment banker.
The firm will provide the following services:
(a) assist the Debtors in evaluating, structuring, negotiating
and implementing the terms and conditions of any proposed
transaction;
(b) assist the Debtors in preparing, revising, or updating
marketing materials;
(c) prepare, revise, or update a list or lists of potential
purchasers and financiers;
(d) contact potential purchasers to solicit their interest in
any transaction and to provide them with the confidential
information memorandum under a confidential disclosure agreement;
(e) compile and disseminate due diligence materials to
prospective purchasers and maintain a secure data vault for review
of due diligence materials;
(f) participate in due diligence visits, meetings and
consultations between the Debtors and interested potential
purchasers, and coordinate and track distribution of all
information related to a transaction with such parties;
(g) assist the Debtors with evaluating offers, indications of
interest, negotiating agreements and definitive contracts;
(h) determine a range of values for the Debtors and any
instruments that the Debtors offer or propose to offer in
connection with a restructuring;
(i) evaluate the Debtors' debt capacity in light of its
projected cash flows and assist in the determination of an
appropriate capital structure;
(j) attend auctions and upon request, attend meeting of the
Debtors' Board of Directors and other interested parties, as
necessary; and
(k) provide affidavits and other testimony in support of
Debtors' motions in the Bankruptcy Court.
FocalPoint will be paid as follows:
(a) Commencing as of the date of the Original Agreement,
whether or not a transaction is proposed or consummated, an
advisory fee of $50,000 per month during the term hereof.
(b) A fee of $600,000, payable upon the earlier of: (a) the
completion of any restructuring including, without limitation, the
confirmation and effectiveness of a plan of reorganization; or (b)
the closing of any restructuring or sale transaction, provided that
the completion fee shall be fully creditable against any financing
fee or against any sale fee without duplication or sale
transaction.
(c) In the event that the Debtors consummate a financing, a
financing fee shall be paid either as underwriting discounts,
placement fees or other compensation upon the closing of any
Financing equal to the greater of (i) $600,000 and (ii) the sum
of:
i. 2 percent of the gross amount of funder or committed
straight indebtedness that is secured by a first lien up to $40
million;
ii. 3 percent of (i) the gross amount of funded or
committed straight indebtedness that is secured by a first lien in
excess of $40 million and (ii) the gross amount of any other funded
or committed straight indebtedness that is not secured by a first
lien; and
iii. 5.25 percent of the gross amount of any funded or
committed preferred or common equity, convertible or otherwise
equity-linked debt or equity securities or obligations.
iv. Any amounts advanced, or committed to, by the Debtors'
existing lenders - Goldman Sachs Specialty Lending Group and
TCW/Crescent Mezzanine - or by NRD Capital Management or its
affiliates (to include LPs of its various investment funds), or
funds that the Company may directly source with its own efforts via
a governmental lending program (such as the Main Street Lending
Program under the CARES Act) shall be excluded in calculating any
Financing Fee.
(d) In the event that the Company consummates a sale, a fee
shall be paid upon the closing of any sale equal to the greater of
(i) $600,000 and (ii) 2.5 percent of the transaction value.
(e) The Debtors and FocalPoint acknowledge that, pursuant to
the Engagement Agreement, FocalPoint may become entitled to either
a financing fee or sale fee, but not both.
(f) FocalPoint shall credit 50 percent of the first four
monthly advisory fees paid to Focal Point against any financing fee
or sale fee, without duplication.
(g) Expenses will be invoiced separately by FocalPoint each
month and will be reimbursed by the Debtors in accordance with the
Engagement Agreement, in addition to the fees mentioned. The
expenses incurred will consist of, but are not limited to, postage
and shipping charges, use of third-party databases, telephone
copying, facsimiles, printing, travel, lodging, overtime meals,
transportation, and other miscellaneous engagement expenses,
including, but not limited to, the reasonable fees and expenses of
its outside legal counsel incurred in connection with the
performance of the Engagement Agreement and the matters
contemplated therewith. FocalPoint shall not incur more than
$15,000 of expenses without the Debtors' preapproval.
Richard F. NeJame, managing director at FocalPoint, disclosed in
court filings that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Richard F. NeJame
FocalPoint Securities, LLC
11150 Santa Monica Blvd., Suite 1550
Los Angeles, CA 90025
About RTI Holding Company, LLC
RTI Holding Company, LLC and its affiliates develop, operate, and
franchise casual dining restaurants in the United States, Guam, and
five foreign countries under the Ruby Tuesday brand. The
company-owned and operated restaurants (i.e., non-franchise) are
concentrated primarily in the Southeast, Northeast, Mid-Atlantic
and Midwest regions of the United States.
RTI Holding Company and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No.
20-12456) on October 7, 2020. The petitions were signed by Aziz
Hashim, managing member of Manager, NRD Capital Management II,
LLC.
At the time of the filing, RTI Holding Company had estimated assets
of between $100 million and $500 million and liabilities of the
same range.
Judge John T. Dorsey oversees the case.
Pachulski Stang Ziehl & Jones LLP is Debtors' legal counsel. CR3
Partners, LLC is Debtors' financial advisor; Epiq Corporate
Restructuring, LLC is their claims, noticing, solicitation agent
and administrative advisor.
RTW RETAILWINDS: Unsecureds Will Recover 31% to 38% in Plan
-----------------------------------------------------------
RTW Retailwinds, Inc., et al., submitted a Liquidating Plan and a
Disclosure Statement.
Pursuant to the Plan, the Debtors or the Liquidation Trustee will
pay or provide for payments of Claims as follows:
* The Debtors or the Liquidation Trustee will pay Allowed
Administrative Claims, Allowed Professional Fee Claims, Allowed
Secured Tax Claims, Allowed Other Secured Claims, Allowed Other
Priority Claims and Allowed Prepetition Credit Parties Claims in
full in Cash.
* The Debtors shall fund the Professional Fee Escrow Account,
which Professional Fee Escrow Account shall be used to pay Allowed
Professional Fee Claims.
* Holders of Allowed General Unsecured Claims will receive their
pro rata share of the Beneficial Trust Interests, which Beneficial
Trust Interests shall entitle the holders thereof to receive their
pro rata share of the Liquidation Trust Assets. Creditors will
recover 31% to 38% of claims.
* Existing Intercompany Claims will be cancelled without any
distribution to the holders of such Intercompany Claims.
* Subordinated Claims will be cancelled without any distribution
to the holders of such Subordinated Claims.
* Existing Interests in the Debtors will be cancelled without
any distribution to the holders of such Interests.
The Debtors believe that the Plan is in the best interests of the
Estates and urge such holders to vote to accept the Plan.
Distributions under the Plan on account of the Beneficial Trust
Interests will be funded by the Liquidation Trust Assets.
A full-text copy of the Disclosure Statement dated September 30,
2020, is available at https://tinyurl.com/y389tr9j from
PacerMonitor.com at no charge.
Attorneys for the Debtors:
Michael D. Sirota, Esq.
E-mail: msirota@coleschotz.com
Stuart Komrower, Esq.
E-mail: skomrower@coleschotz.com
Ryan T. Jareck, Esq.
E-mail: rjareck@coleschotz.com
Matteo Percontino, Esq.
E-mail: mpercontino@coleschotz.com
COLE SCHOTZ P.C.
Court Plaza North
25 Main Street
P.O. Box 800
Hackensack, New Jersey 07602-0800
Tel: (201) 489-3000
Fax: (201) 489-1536
About RTW Retailwinds
RTW Retailwinds, Inc. [OTC PINK:RTWI], formerly known as New York &
Company, Inc., is a specialty women's omni-channel retailer with a
powerful multi-brand lifestyle platform providing curated fashion
solutions that are versatile, on-trend, and stylish at a great
value. The specialty retailer, first incorporated in 1918, has
grown to now operate 378 retail and outlet locations in 32 states
while also growing a substantial eCommerce business. The Company's
portfolio includes branded merchandise from New York & Company,
Fashion to Figure, and Happy x Nature. The Company's branded
merchandise is sold exclusively at its retail locations and online
at http://www.nyandcompany.com/,http://www.fashiontofigure.com/,
http://www.happyxnature.com/,and through its rental subscription
businesses at http://www.nyandcompanycloset.com/and
http://www.fashiontofigurecloset.com/
RTW Retailwinds, Inc. and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 20-18445)
on July 13, 2020. The petitions were signed by Sheamus Toal, CEO,
CFO and treasurer.
As of July 13, 2020, the Debtors reported total assets of
$405,356,610 and total liabilities of $449,962,395.
The Hon. John K. Sherwood presides over the cases.
Michael D. Sirota, Esq., Stuart Komrower, Esq., Ryan T. Jareck,
Esq., and Matteo W. Percontino, Esq. of Cole Schotz P.C. serve as
counsel to the Debtors. Berkeley Research Group, LLC, has been
tapped as financial advisor to the Debtors; B. Riley FBR, Inc. as
investment banker; and Prime Clerk, LLC as claims and noticing
agent.
SECURITY FIRST: Amended Prepackaged Plan Confirmed by Judge
-----------------------------------------------------------
Judge Brendan L. Shannon has entered findings of fact, conclusions
of law and order approving the Disclosure Statement and confirming
the First Amended Prepackaged Plan of Reorganization of Security
First Corp.
The Plan has been proposed by the Debtor in good faith and in the
belief that the proposed reorganization and establishment of the
Distribution Trust will maximize value for the Debtor's creditors.
The Plan is the direct result of extensive good faith, arm's length
negotiations between the Debtor and ESW Capital (Plan Sponsor) and
reflects significant benefit to the Debtor's estate.
The unimpaired plan treatment of all holders of allowed claims in
Classes 2, 3 and 4 (including the provision of the payment in full
in cash to all holders of allowed general unsecured claims in
Class 4), demonstrates that the Plan was proposed in good faith,
according to the order.
The Plan has been proposed with the legitimate and honest purpose
of implementing a reorganization of the Debtor and maximizing the
value of the Estate to achieve the best interests of the Debtor's
creditors. In so finding, the Court has considered the totality of
the circumstances in this Chapter 11 Case.
A full-text copy of the order dated October 16, 2020, is available
at https://tinyurl.com/y5layr9v from PacerMonitor.com at no
charge.
About Security First
Security First Corp. is a developer of advanced data-centric cyber
security solutions. Visit https://securityfirstcorp.com for more
information.
Security First sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del., Lead Case No. 20-12053) on Aug. 31, 2020.
Pankaj Parekh, chief executive officer, signed the petition. At
the time of the filing, Debtor had estimated assets of $1 million
to $10 million and estimated liabilities of $10 million to $50
million.
Judge Brendan Linehan Shannon oversees the cases.
William D. Sullivan, Esq., at Sullivan Hazeltime Allinson LLC,
serves as Debtor's legal counsel.
SECURITY FIRST: Unsecured Claims Unimpaired in ESW Plan
-------------------------------------------------------
Security First Corp. submitted a Prepackaged Plan of Reorganization
and an explanatory Disclosure Statement.
ESW Capital, LLC is the Plan Sponsor and the DIP Lender. The Plan
generally provides for ESW to provide consideration of (i)
$6,000,000 in cash to be funded by ESW on the Effective Date, plus
(ii) additional Cash to be funded by ESW in an amount equal to the
undrawn amount of the DIP Financing as of the Effective Date. That
consideration will be distributed through the Plan to pay
administrative, priority and unsecured creditors in full, and then
to the SFC Secured Creditors Trust and the Officers, pursuant to
the Officer Agreements.
Class 1: Consenting Lender Claim is impaired. The holder of the
Allowed Consenting Lender Claim against the Debtor shall receive on
or about the Effective Date, on account of and in full and complete
settlement, release and discharge of, and in exchange for, such
Allowed Consenting Lender Claim, the Consenting Lender Recovery.
Class 4: General Unsecured Claims are unimpaired. Each holder of an
Allowed General Unsecured Claim shall receive, on account of and in
full and complete settlement, release and discharge of, and in
exchange for its Allowed General Unsecured Claim, payment in full
in Cash.
Class 5: Series A Preferred Stock Interests are impaired. Each
holder of an Allowed Series A Preferred Stock Interest in the
Debtor shall receive on or about the Effective Date, on account of
and in full and complete settlement, release and discharge of, and
in exchange for, such Allowed Series A Preferred Stock Interest,
the Series A Preferred Stock Treatment.
Class 6: Common Stock Interests are impaired. Class 6 Common Stock
Interests shall be automatically cancelled, released, and
extinguished without further action by the Debtor or the
Reorganized Debtor, and any and all obligation of the Debtor and
the Reorganized Debtor thereunder shall be discharged. Each holder
of an Allowed Common Stock Interests in the Debtor shall receive on
or about the Effective Date, on account of and in full and complete
settlement, release and discharge of, and in exchange for, such
Allowed Common Stock Interests, its Pro Rata Share of the Equity IP
Recovery (if any).
A full-text copy of the Disclosure Statement dated August 31, 2020,
is available at https://tinyurl.com/y37engc5 from PacerMonitor.com
at no charge.
Proposed Attorneys for the Debtor:
William D. Sullivan
William A. Hazeltine
SULLIVAN · HAZELTINE ·ALLINSON LLC
919 North Market Street, Suite 420
Wilmington, Delaware 19801
Tel: (302) 428-8191
Fax: (302) 428-8195
Email: bsullivan@sha-llc.com
whazeltine@sha-llc.com
About Security First Corp.
Beginning in the first quarter of 2020 through mid-May, management
engaged in a comprehensive full-scale search for new investments in
and/or a purchaser of the Debtor. In connection with this search,
the Company canvassed a wide range of potential partners, including
public companies, private companies, venture capitalists,
investment bankers and private equity firms. Over time, the Company
determined that it was unable to attract additional investment; no
existing or potential investor was willing to serve as the lead
investor for another round of investment. It became clear to the
Debtor that a sale of the Debtor was the most realistic option,
although most of the companies that were contacted had no interest
in the Debtor because it lacked any existing customers. The Debtor
eventually had discussions with several entities regarding
proposals for a potential sale of the Company, including the
proposal from ESW. In evaluating the proposals, SFC determined that
the proposal from ESW represented the best possible scenario for
SFC stakeholders, principally its secured and general unsecured
creditors. Debtor is represented by SULLIVAN · HAZELTINE
·ALLINSON LLC.
SELLING N ATLANTA: K Designs Buying Stockbridge Property for $115K
------------------------------------------------------------------
Selling N Atlanta, LLC, asks the U.S. Bankruptcy Court for the
Northern District of Georgia to authorize the sale of the real
property located at 110 Shepherd Dr., Stockbridge, Georgia to K
Designs for $115,000.
The Debtor's primary business is the purchase, sale, and renovation
of residential real estate. As of the Petition Date, the Debtor
held an interest in three residential properties: (i) 925
Greenville St., La Grange, GA 30241; (ii) the Property; and (iii)
111 Shepherd Dr., Stockbridge, GA 30281.
Harmony Capital, LLC asserts a lien against the Property. The
Debtor listed Harmony on its schedules as a secured creditor with a
disputed claim in the amount of $62,902.
The Debtor wishes to sell the Property to the Buyer for $115,000,
subject to adjustment for ad valorem property taxes, community
association fees, solid waste and governmental fees and utility
bills for which service cannot be terminated as of the date of
closing will be prorated as of the date of closing, pursuant to the
terms of that certain Purchase and Sale Agreement for Real Property
dated as of Oct. 4, 2020.
The Property will be sold "as is." The Buyer either has or will
provide Debtor with an earnest money deposit in the amount of
$5,000 to be held in escrow by the Law offices of Sam Maguire Jr.
Law Firm, the closing agent. The Buyer will not assume any
liabilities of the Debtor in connection with the Property.
The Debtor also asks authorization to take such action and to
execute and deliver any warranty deeds, bills of sale, and other
documents, agreements, and instruments that may be necessary or
advisable to effectuate the terms of the sale. The closing date
pursuant to the Agreement is Nov. 4, 2020.
The Debtor proposes to sell the Property to Buyer free and clear of
any and all liens, claims, interests, and encumbrances under the
terms and conditions set forth in the Agreement, with any valid,
perfected, and enforceable liens to attach to the net proceeds
generated from the sale of the Property.
The Debtor has made reasonably diligent efforts to market the
Property for sale. It believes that the Purchase Price offered for
the Property as set forth in the Agreement reflects the highest and
best price that could realistically be obtained for the Property
within the foreseeable future under the current circumstances. It
believes that the Purchase Price will be sufficient to satisfy all
valid creditor claims in the bankruptcy case. Hence, the Debtor
has exercised its sound business judgment in proposing the sale of
the Property. Accordingly, ample cause exists for the proposed
sale of the Property to the Buyer.
Finally, because of the parties' desire to close the transaction
contemplated as promptly as possible (the current closing date is
Nov. 4, 2020), the Debtor asks that the Court orders and directs
that the order approving this Motion will not be automatically
stayed for 14 days.
About Selling N Atlanta
Selling N Atlanta, LLC, sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-67875) on
July 7, 2020, listing under $1 million in both assets and
liabilities. Leron E. Rogers, Esq. at LEWIS BRISBOIS BISGAARD &
SMITH, LLP, is the Debtors' counsel.
SHAHBAZ M. AKHTAR: Nguyens Buying Los Gatos Property for $1.5M
--------------------------------------------------------------
Shahbaz Muhammad Akhtar asks the U.S. Bankruptcy Court for the
Northern District of California to authorize the sale of his
principal residence located at 445 Los Gatos Blvd, Los Gatos,
California to Nam H. Nguyen and Nikki B. Nguyen for $1.475 million,
cash.
The Debtor is the owner of the Los Gatos Property. He disclosed
the Los Gatos Property on his schedules, and has been actively
marketing the Los Gatos Property for sale throughout his Chapter 11
bankruptcy case.
The Debtor has filed a Second Amended Combined Disclosure Statement
and Plan. The Plan proposes that he will sell the Los Gatos
Property by Oct. 30, 2020, and further that through the sale
escrow, he will pay all allowed secured claims and all allowed
unsecured claims as set forth in The Plan.
The Debtor has obtained and accepted an offer to purchase the Los
Gatos Property for $1.475 million, cash, to the Purchasers, on the
terms of their executed purchase agreement. As set forth on the
estimated settlement statement, the sale proceeds will
substantially exceed the encumbrances and creditors paid through
escrow, and the Debtor will receive approximately $1.05 million in
net proceeds after completion of the sale.
The sale of the Los Gatos Property will pay off substantially all
payments required by The Plan. The Debtor understands that he must
still pay United States Trustee fees and fees for administrative
claims, which he expects to do shortly after consummation of the
sale and after fee applications with the Court.
The Debtor asks authority through the Motion to complete the sale
of the Los Gatos Property on the express condition that all demands
of secured claims are paid in full through escrow, and further that
all unsecured claims are paid through escrow as set forth on the
estimated settlement statement.
He has received authorization from the Court to employ Thomas
Rollett and Intero Real Estate as his real estate broker for the
sale of the Los Gatos Property. The Court initially authorized
employment of Intero on Dec. 2, 2019 and extended through Nov. 1,
2020 in an Order dated June 30, 2020.
The Debtor asks that the Court authorizes him to pay the estate's
share of certain obligations from the sale proceeds, as set forth
on Exhibit C, including:
a. The Claims Secured by Liens are: 1) Secured Deed of Trust
– Bahram Abolmoluki and Zohreh Abolmoluki – estimated $193,191;
2) Secured Claim – County of Santa Clara (Property Taxes) –
estimated $56,494; 3) Secured Claim – Charles Jay Conover –
estimated $59,832; and 4) Secured Claim – Franchise Tax Board –
estimated.
b. The Commissions and Cost of Sale are: 1) Seller's
Commission (Intero Real Estate) - $22,125; 2) Buyer's Commission
(James Richard Tygerson, Broker) - $36,875; 3) Title and Escrow
Charges - $5,791; 4) Government Charges - $1,623; and 5) Notary Fee
- $200.
The Debtor anticipates closing escrow imminently after the hearing
on the Motion, if the Motion is approved, for a number of reasons
including ensuring that the Buyers do not back out of the proposed
sale as the extension in the Purchase Agreement is valid through
Oct. 23, 2020. For these reasons, the Debtor asks that the Court
orders and authorizes that the sale may be effectuated immediately
upon entry of its order.
Based on the foregoing, the Debtor asks the Court to (i) authorize
the sale of his Real Property on the terms and conditions set forth
in the Purchase Agreement; (ii) authorize him to pay, from the
estate's share of proceeds of such sale, the estate's share of the
liens and encumbrances against the Los Gatos Property, according to
the demands of such secured lienholders; (iii) authorize him to
pay, from the estate's share of proceeds of such sale, compensation
to the real estate broker employed by the estate, compensation to
the Buyers' real estate broker, and closing costs; and (iv) order
that its Order approving the sale will be effective immediately
upon entry and no automatic stay of execution pursuant to
Bankruptcy Rules 6004(h) will apply with respect to the Order.
A copy of the Agreement is available at
https://tinyurl.com/y4wlf5yq from PacerMonitor.com free of charge.
Shahbaz Muhammad Akhtar filed for bankruptcy protection under
Chapter 13 of the Bankruptcy Code on Sept. 3, 2019. The case was
converted to Chapter 11 (Bankr. N.D. Cal. Case No. 19-51790-SLJ) on
Oct. 17, 2019.
SHILOH INDUSTRIES: Committee Taps Morris James as Legal Counsel
---------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Shiloh Industries, Inc. and its affiliates
seeks approval from the U.S. Bankruptcy Court for the District of
Delaware to hire Morris James LLP as its legal counsel.
Morris James will render to the committee the following services:
a. provide legal advice and assistance to the committee
relative to the Debtors' administration of its reorganization;
b. review and analyze all applications, motions, orders,
statements of operations and schedules filed with the court by the
Debtors or third parties;
c. prepare necessary legal papers;
d. represent the committee at hearings before the court; and
e. perform other legal services for the committee.
The firm's principal attorneys and paralegals presently expected to
represent the committee are as follows:
Eric J. Monzo Partner $565
Brya M. Keilson Counsel $505
Jason S. Levin Associate $350
Stephanie Lisko Paralegal $250
Eric J. Monzo, Esq., of Morris James disclosed in court filings
that the firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the
following is provided in response to the request for additional
information:
a. Morris James did not agree to a variation of its standard
or customary billing arrangements for this engagement;
b. None of the professionals included in this engagement have
varied their rate based upon the geographic location of the Chapter
11 Cases; and
c. The Committee retained Morris James on September 17, 2020.
The billing rates for the period prior to this application are the
same as indicated in this application;
d. Morris James anticipates filing a budget at the time it
files its interim fee applications, and any such budget it may file
will be prior approved by the Committee. In accordance with the
United States Trustee Guidelines, the budget may be amended as
necessary to reflect changed circumstances or unanticipated
developments.
The firm can be reached through:
Eric J. Monzo, Esq.
MORRIS JAMES LLP
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801
Telephone: (302) 888-6800
Facsimile: (302) 571-1750
E-mail: emonzo@morrisjames.com
About Shiloh Industries
Shiloh Industries, Inc. and its subsidiaries are global innovative
solutions providers focusing on lightweighting technologies that
provide environmental and safety benefits to the mobility markets.
On Aug. 30, 2020, Shiloh Industries and its subsidiaries sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 20-12024). The petitions were signed by Lillian
Etzkorn, authorized person.
The Debtors reported total consolidated assets of $664,170,000 and
total consolidated debts of $563,360,000 as of April 30, 2020.
The Debtors have tapped Jones Day and Richards, Layton & Finger
P.A. as their legal counsel; Houlihan Lokey Capital Inc. as
financial advisor, Ernst & Young LLP as restructuring advisor, and
Prime Clerk LLC as claims and noticing agent.
On September 15, 2020, the United States Trustee appointed the five
member official committee of unsecured creditors. On or about
September 17, 2020, the committee selected Foley & Lardner LLP as
its lead counsel, and soon thereafter Morris James was selected to
serve as Delaware counsel to the committee.
SHILOH INDUSTRIES: To Proceed With Sale to MiddleGround's Grouper
-----------------------------------------------------------------
Shiloh Industries, Inc. (OTCMKTS: SHLOQ), an environmentally
focused global supplier of lightweighting, noise and vibration
solutions, announced Oct. 28, 2028 that it has completed the
marketing process approved by the U.S. Bankruptcy Court for the
District of Delaware and is moving forward under the previously
announced asset purchase agreement with Grouper Holdings, LLC, a
subsidiary of MiddleGround Capital LLC. MiddleGround is expected
to acquire substantially all of the Company's assets, including the
equity interests of certain of the Company's direct and indirect
subsidiaries.
"We believe this outcome is in the best interests of Shiloh and our
stakeholders, and we look forward to building on our unique
strengths as part of MiddleGround," said Cloyd J. Abruzzo, interim
chief executive officer of Shiloh. "MiddleGround has expressed a
strong interest in supporting Shiloh from the outset of our
restructuring process and has a successful track record investing
in companies that supply the automotive industry. We are confident
that they will be a strong partner as we enter this new chapter for
our company. Importantly, we expect the transaction to be completed
quickly and the transition to be seamless for our customers,
partners and dedicated employees."
John Stewart, Partner at MiddleGround commented, "We look forward
to working with Shiloh’s employees and management team to
continue providing customers with highly competitive lightweighting
products and technologies. We believe that MiddleGround's
experience and knowledge of the industry will enhance Shiloh's
portfolio of differentiated product solutions and accelerate its
growth within the automotive sector."
On August 30, 2020, MiddleGround was named the "stalking horse
bidder" in a court-supervised auction and sale process. Pursuant to
the bid procedures approved by the Court, qualified bidders were
required to submit competing bids before 4:00 p.m. Eastern Time on
Monday, October 26, 2020. While Shiloh received other bids, none
were higher or better than MiddleGround's stalking horse bid.
Accordingly, a hearing to seek required Court approval for the
MiddleGround transaction is scheduled for November 10, 2020. The
transaction is also subject to certain other closing conditions.
Shiloh anticipates the closing of the sale will occur no later than
December 15, 2020.
Additional information is available on Shiloh's restructuring
website at www.shilohrestructuring.com, or by calling Shiloh's
Restructuring Hotline at (877) 462-4380 (toll-free in the U.S. and
Canada) or (347) 817-4091 (for calls originating outside the U.S.
and Canada). Court documents and additional information about the
court-supervised process are available on a separate website
administered by Shiloh’s claims agent, Prime Clerk, at
https://cases.primeclerk.com/shiloh.
Jones Day is serving as legal counsel to Shiloh, Houlihan Lokey
Capital Inc. is serving as financial advisor, and Ernst & Young LLP
is serving as restructuring advisor. Baker McKenzie LLP is serving
as legal counsel to MiddleGround.
About MiddleGround Capital
MiddleGround Capital -- http://www.middlegroundcapital.com/-- is a
private equity firm that makes control equity investments in lower
middle market North American companies in the B2B industrial and
specialty distribution sectors. MiddleGround works with its
portfolio companies to create value through a hands-on operational
approach and partners with its management teams to support
long-term growth strategies. MiddleGround is currently investing
out of its first fund and headquartered in Lexington, KY with a
second office in New York City.
About Shiloh Industries
Shiloh Industries, Inc. and its subsidiaries are global innovative
solutions providers focusing on lightweighting technologies that
provide environmental and safety benefits to the mobility markets.
On Aug. 30, 2020, Shiloh Industries and its subsidiaries sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 20-12024). The petitions were signed by Lillian
Etzkorn, authorized person.
The Debtors reported total consolidated assets of $664,170,000 and
total consolidated debts of $563,360,000 as of April 30, 2020.
The Debtors have tapped Jones Day and Richards, Layton & Finger
P.A. as their legal counsel; Houlihan Lokey Capital Inc. as
financial advisor, Ernst & Young LLP as restructuring advisor, and
Prime Clerk LLC as claims and noticing agent.
SMYRNA READY: S&P Rates New $515MM Senior Secured Notes 'B+'
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level and '3' recovery
ratings to Smyrna, Tenn.-based Smyrna Ready Mix Concrete's proposed
$515 million senior secured notes due 2028. The '3' recovery rating
reflects S&P's expectation for meaningful (50%-70%, rounded
estimate: 55%) recovery in the event of default. The construction
materials company will use the proceeds to fund acquisitions,
refinance indebtedness, and for general corporate purposes.
S&P said, "We expect Smyrna Ready Mix Concrete (SRM) to continue to
improve its market presence through the end of 2020 and into 2021
via planned acquisitions and organic growth and we expect further
EBITDA growth due to improvements in residential and commercial
construction. We also expect margin improvement through realization
of synergies from acquisitions. We anticipate leverage to remain
above 4x into 2021, on a pro forma basis, with potential for
further improvement in EBITDA margins and leverage metrics
thereafter, depending on the success of existing integration
efforts and future acquisition activity. SRM's primary growth
strategy is to consolidate the highly fragmented ready-mix concrete
segment through acquisition. We view this growth strategy as having
the potential to add volatility to earnings because acquisitions
carry inherent integration and leveraging risks."
"Despite COVID-19-related impacts in the U.S, we expect earnings to
be upheld by stronger-than-anticipated home building numbers and
growth from recent acquisitions. Pandemic-related uncertainties
have eased as the company was able to grow adjusted EBITDA every
month in the second quarter. SRM is poised to benefit from strong
new single-family construction sales and cost-saving measures that
will improve operating expenses. To help offset some of the
near-term volatility and provide financial flexibility, SRM pursued
various cost-saving initiatives to preserve its margins (and
leverage) in the event of flatter revenue generation."
As of Oct 21, 2020, Smyrna had full availability under its
revolving credit facility which, along with $125 million in free
cash flow, provide ample liquidity. Shifting its nearest maturity
to 2028 and performing strongly through the third quarter give the
company cushion at its current rating. As of October 2020, Smyrna's
debt leverage was in excess of 4x.
STEIN MART: Sale of for Non-Residential Property Leases Approved
----------------------------------------------------------------
Judge Jerry A. Funk of the U.S. Bankruptcy Court for the Middle
District of Florida authorized the sale proposed by Stein Mart,
Inc. and affiliates of the unexpired non-residential real property
leases listed in Exhibit 1.
A hearing on the Motion was held on Oct. 22, 2020.
Pursuant to Bankruptcy Code sections 105 and 363 and the terms of
each respective Lease Termination Agreement listed on Exhibit 1,
the Debtors are authorized to terminate the leases reflected in
Exhibit 1 and the Court approves the Lease Termination Agreements.
Neither the Lease Termination Agreements nor the Order will in
anyway effect the rights, interests, remedies or privileges of
Hitachi Capital America Corp. in the Lighting Equipment that is the
subject to that certain Agreed Order Granting Hitachi's Motion For
Order Granting Motion For Relief From Automatic Stay and
Abandonment of Personal Property.
As to the Lease Termination Agreements for Store 381 located at
5116 Commons Drive, Rocklin, California and Store 373 located at
7707 Laguna Boulevard, Suite 100, Elk Grove California, the cure
amounts cited in the consideration represent the amounts that the
debtor listed in its motion to sell, which the respective Landlords
have advised was incorrect. As to Store 373 and Store 381, in
addition to the waiver of certain taxes set forth in each Lease
Termination Agreement, the entire prepetition claim is waived
pursuant to the terms of the Lease Termination Agreement.
The proceeds of the Sale of the Cooper City Lease and Lease
Termination Agreements will be subject to the Final Order (I)
Authorizing Use of Cash Collateral and Affording Adequate
Protection; (II) Modifying Automatic Stay; and (III) Granting
Related Relief.
The Debtors' counsel is directed to serve a copy of the Order on
interested parties who do not receive service by CM/ECF and file a
proof of service within three days of entry of the Order.
A copy of the Exhibit 1 is available at
https://tinyurl.com/y3gsx8rm from PacerMonitor.com free of charge.
About Stein Mart
Stein Mart, Inc. (NASDAQ: SMRT) -- http://www.SteinMart.com/-- is
a national specialty omni off-price retailer offering designer and
name-brand f ashion apparel, home decor, accessories and shoes at
everyday discount prices. Stein Mart provides real value that
customers love every day. The company operates 281 stores across 30
states.
Stein Mart Inc. and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. M.D. Fla. Case Nos. 20-02387 to
20-02389) on Aug. 12, 2020. As of May 2, 2020, the Debtors had
total assets of $757.6 million and total liabilities of $791.2
million.
Judge Jerry A. Funk oversees the cases.
The Debtors tapped Foley & Lardner LLP as their legal counsel,
Clear Thinking Group LLC as financial advisor, and Stretto as
claims and noticing agent.
STEPSTONE GROUP: S&P Withdraws 'BB+' Issuer Credit Rating
---------------------------------------------------------
S&P Global Ratings withdrew its 'BB+' issuer credit rating on
StepStone Group L.P. at the company's request. At the time of the
withdrawal, the outlook was stable.
The withdrawal follows StepStone's IPO of 20.125 million shares
(including the greenshoe) of A common stock, raising $337.8 million
net. Concurrent with the IPO, the company repaid the entirety of
its term loan, reducing leverage to zero. As a result, on Sept. 18,
2020, S&P raised its issuer credit rating to 'BB+' from 'BB' and
removed the rating from CreditWatch, where it had placed it with
positive implications.
STOREWORKS TECHNOLOGIES: Creditors to Be Paid in Full in 5 Years
----------------------------------------------------------------
StoreWorks Technologies, Limited, and ATA Development, LLC,
submitted a Second Amended Disclosure Statement explaining their
Chapter 11 Plan.
On the effective date of the Plan, all assets of the bankruptcy
estates will vest with the Debtors and the Debtors will continue to
operate their businesses. Proceeds from the operation of the
Debtors' businesses will be used to pay all holders of allowed
claims in full over the five-year term of the Plan.
Class 1-A: Secured Claim - Choice. The Debtors estimate that the
amount of the Allowed Class 1-A claim shall be $1,191,528.56, plus
interest, attorneys' fees, and costs on the Effective Date. On and
after the Effective Date, interest shall accrue on the unpaid
balance at the rate of 6% per annum. If the SBA continues with or
reenacts the SBA Debt Relief Program after September 27, 2020, or
if the SBA or any other federal or state government or agency
enacts a debt relief program similar to the SBA Debt Relief Program
in which (a) the Reorganized Debtors qualify to participate and (b)
the SBA or federal or state government or agency makes payments on
behalf of or for the benefit of the Reorganized Debtors, then the
holder of the Class 1-A claim shall be entitled to the monthly
principal and interest payments under the Choice Loan Documents,
which the Debtors estimate to be $31,061, or the specific amount
provided for in the applicable program for as long as the SBA or
other federal or state government or agency makes such payment on
behalf of or for the benefit of the Reorganized Debtors pursuant to
the terms of the applicable program.
Class 1-B: Secured Claim - BlueStar. The Debtors estimate that the
amount of the Allowed Class 1-B claim shall be $1,138,141.34 plus
reasonable attorneys' fees on the Effective Date. On and after the
Effective Date, interest shall accrue on the unpaid balance at the
rate of 4.5% per annum. The Reorganized Debtors shall pay the
holder of the Class 1-B claim monthly installments.
Class 1-C: Secured Claim - SBA. The holder of the Class 1-C claim
shall have an Allowed secured claim in the amount of $150,000. On
and after the Effective Date, the Reorganized Debtors shall
continue to perform under the EIDL, with the Reorganized Debtors
making monthly installment payments in the amount of $731 for 348
months. The first monthly payment shall begin on the 1st day of
July, 2021, and additional monthly payments shall continue to be
paid on the 1st day of each successive month for
348 months.
Class 1-D: Secured Claim - PIRS. The remaining amount owed by the
Debtors to PIRS was $33,468. The Plan does not treat the Class 1-D
claim as a properly-perfected secured claim and the holder of the
Class 1-C claim shall receive the same treatment as holders of
Class 2-A claims as described in Section 4.5 of the Plan.
Class 2-A: StoreWorks Unsecured Claims. Holders of Allowed Class
2-A claims shall receive 100% of their Allowed claims, with no
interest. Payments on Allowed Class 2-A claims shall be made
through quarterly payments and a balloon payment of the remaining
balance at the end of the Plan Term.
Class 2-B: ATA Unsecured Claims. The Debtors estimate that there
are no Allowed claims in Class 2-B. Holders of Allowed Class 2-B
claims shall receive 100% of their Allowed claims, with no
interest.
Class 2-C: Intercompany Claims. The Debtors estimate that there
are no Allowed claims in Class 2-C. After all payments are made to
holders of Class 1-A, Class 1-B, Class 2-A, Class 2-B, and Class
2-D claims, holders of Class 2-C claims shall receive payment of
100% of the value of their claims.
Class 2-D: Insider Claims. Holders of Allowed Class 2-D Claims
shall receive 100% of their Allowed claims, with no interest,
except for any portion of their Class 2-D claim that is an Insider
Indemnification Claim. Payments on Allowed Class 2-D claims shall
be made through monthly payments and a balloon payment of the
remaining balance at the end of the Plan Term.
Class 3-A: Equity Holders of StoreWorks. The holders of Class 3-A
claims shall retain their ownership interests in StoreWorks.
Class 3-B: Equity Holders of ATA. The holders of Class 3-B claims
shall retain their ownership interests in ATA.
A full-text copy of the First Amended Disclosure Statement dated
October 5, 2020, is available at https://tinyurl.com/y5tvlre9 from
PacerMonitor.com at no charge.
A full-text copy of the Second Amended Disclosure Statement dated
October 14, 2020, is available at https://tinyurl.com/y2wpdwr5 from
PacerMonitor.com at no charge.
ATTORNEYS FOR STOREWORKS TECHNOLOGIES, LIMITED AND ATA DEVELOPMENT,
LLC:
Ryan T. Murphy
Steven R. Kinsella
Samuel M. Andre
FREDRIKSON & BYRON, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, MN 55402-1425
Telephone: 612.492.7000
E-mail: rmurphy@fredlaw.com
skinsella@fredlaw.com
sandre@fredlaw.com
About StoreWorks Technologies
StoreWorks Technologies, Limited -- https://www.storeworks.com/ --
is a computer systems design company located in Eden Prairie,
Minn., with a goal to revolutionize retail operation through the
application of technology. StoreWorks provides comprehensive
solutions to retailers in these segments: kiosk, mobility payments,
digital signage, store-level peripherals, back office revolution
and network infrastructure.
StoreWorks Technologies sought Chapter 11 protection (Bankr. D.
Minn. Case No. 19-43814) on Dec. 20, 2019. In the petition signed
by CEO Anil Konkimalla, the Debtor was estimated to have between $1
million and $10 million in both assets and liabilities. Judge
Katherine A. Constantine oversees the case. Fredrikson & Byron,
P.A., is the Debtor's legal counsel.
STUDIO MOVIE: Nov. 2 Deadline for Panel Formation Questionnaires
----------------------------------------------------------------
The U.S. Trustee is soliciting members for an unsecured creditors
committee in the bankruptcy cases of Studio Movie Grill Holdings,
LLC, et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a required
Questionnaire Form and return it to the Office of the United States
Trustee no later than 4:00 p.m. (Central Standard Time), on Monday,
November 2, 2020 by email to lisa.l.lambert@usdoj.gov ATTN: Lisa L.
Lambert.
About Studio Movie Grill
Studio Movie Grill and its affiliates operate a chain of movie
theatres that include full-service dining during the show. Studio
Movie Grill is based in Dallas and runs 33 theater-restaurants.
Studio Movie Grill Holdings, LLC, and its affiliates sought Chapter
11 protection (Bankr. N.D. Tex., Case No. 20-32633) on Oct. 23,
2020. Studio Movie Grill was estimated to have $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Stacey G. Jernigan is the case judge. The Law Offices of
Frank J. Wright, PLLC is the Debtors' counsel.
SUPERIOR ENERGY: Inks 2nd Amendment to Restructuring Support Deal
-----------------------------------------------------------------
As previously announced, on Sept.29, 2020, Superior Energy
Services, Inc. and certain of its direct and indirect wholly-owned
domestic subsidiaries, including SESI, L.L.C., entered into a
Restructuring Support Agreement, which was amended by that certain
First Amendment to Restructuring Support Agreement dated as of Oct.
14, 2020, with certain holders of SESI's outstanding (i) 7.125%
senior unsecured notes due 2021 and (ii) 7.750% senior unsecured
notes due 2024. As set forth in the RSA, the parties to the RSA
have agreed to the principal terms of a proposed financial
restructuring of the Company, which is contemplated to be
implemented through a prepackaged chapter 11 plan of
reorganization.
On Oct. 22, 2020, the Company and the Consenting Noteholders
entered into the Second Amendment to Restructuring Support
Agreement, which amends and restates section 4 of the RSA in its
entirety by extending the following milestones. The Required
Consenting Noteholders (as defined in the Amended RSA) may extend
or waive the Milestones in writing.
* Commencement of solicitation of votes on the Plan (as defined
in the Amended RSA) no later than Nov. 2, 2020 (extended from
the original Oct. 21, 2020 deadline);
* Commencement of the Chapter 11 Cases (as defined in the
Amended
RSA) no later than Nov. 3, 2020 (extended from the original
Oct. 22, 2020 deadline);
* Filing of the Plan, the related disclosure statement, and a
motion seeking to schedule a combined hearing on the Plan and
the Disclosure Statement, no later than Nov. 4, 2020
(extended
from the original Oct. 23, 2020 deadline);
* Entry of an order by the bankruptcy court granting the relief
requested in the Combined Hearing Motion no later than Nov.
9,
2020 (extended from the original Oct. 27, 2020 deadline);
* Entry of an order confirming the Plan and approving the
Disclosure Statement no later than Dec. 8, 2020 (extended
from
the original Nov. 26, 2020 deadline); and
* The occurrence of the effective date of the Plan no later
than
Dec. 18, 2020 (extended from the original Dec. 10, 2020
deadline).
Although the Company intends to pursue the Transaction in
accordance with the terms set forth in the Amended RSA, there can
be no assurance that the Company will be successful in completing
the Transaction, whether on the same or different terms, including
the Milestones.
About Superior Energy Services
Headquartered in Houston, Texas, Superior Energy Services (NYSE:
SPN) -- htttp://www.superiorenergy.com/ -- serves the drilling,
completion and production-related needs of oil and gas companies
worldwide through a diversified portfolio of specialized oilfield
services and equipment that are used throughout the economic life
cycle of oil and gas wells.
Superior Energy incurred net losses of $255.7 million in 2019,
$858.1 million in 2018, and $205.92 million in 2017. As of June
30, 2020, the Company had $1.73 billion in total assets, $222.9
million in total current liabilities, $1.28 billion in long-term
debt, $135.7 million in decommissioning liabilities, $54.09 million
in operating lease liabilities, $2.53 million in deferred income
taxes, $125.74 million in other long-term liabilities, and a total
stockholders' deficit of $95.13 million.
On March 30, 2020, the Company received a written notice from the
New York Stock Exchange notifying the Company that it was not in
compliance with the continued listing standards set forth in
Section 802.01B of the NYSE Listed Company Manual because the
average global market capitalization of the Company's common stock
over a consecutive 30 trading-day period was less than $50 million
and, at the same time, its stockholders' equity was less than $50
million.
TASEKO MINES: Posts C$987K Net Income in Third Quarter
------------------------------------------------------
Taseko Mines Limited reported net income of C$987,000 on C$87.78
million of revenues for the three months ended Sept. 30, 2020,
compared to a net loss of C$24.51 million on C$82.44 million of
revenues for the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of C$29.22 million on C$255.87 million of revenues
compared to a net loss of C$43.45 million on C$239.23 million of
revenues for the same period during the prior year.
As of Sept. 30, 2020, the Company had C$896.79 million in total
assets, C$609.36 million in total liabilities, and C$287.43 million
in equity.
Taseko said, "The Company will continue to closely monitor the
potential impact of COVID-19 on its business. Should the duration,
spread or intensity of the COVID-19 pandemic deteriorate in the
future, there could be a potentially material and negative impact
on the Company's operating plan, its liquidity and cash flows, and
the valuation of its long-lived assets due to sustained decreases
in metal prices, potential future decreases in revenue from the
sale of its products and the profitability of its ongoing
operations. Impacts from COVID-19 could also include a temporary
cessation of mining operations at the Gibraltar Mine due to a
localized outbreak amongst personnel at the mine site or in the
Company's supply chain. The Company's access to financing to
support its ongoing operations including the development of its
other mineral properties could also be negatively impacted or
delayed as a result of COVID-19."
Cash flow provided by operations during the three and nine months
ended Sept. 30, 2020 was $31.0 million and $85.8 million,
respectively, compared to $15.2 million and $33.4 million for the
same periods in 2019 and increased due to higher revenues and lower
operating costs for the quarter and nine months ended September 30,
2020. In April 2020, Taseko also concluded an amendment to its
silver stream with Osisko and received $8.5 million in funds
available for general working capital purposes.
Cash used for net investing activities during the three and nine
months ended Sept. 30, 2020 was $18.0 million and $38.8 million,
respectively, compared to $18.4 million and $39.2 million for the
same periods in 2019. Investing cash flows in the three months
ended Sept. 30, 2020 includes $3.2 million of expenditures at the
Florence Project, $3.8 million for capitalized stripping costs and
$6.9 million for other capital expenditures at Gibraltar.
Investing cash flows in the nine months ended Sept. 30, 2020
includes $11.4 million of expenditures at the Florence Project,
$25.1 million for capitalized stripping costs and $9.8 million for
other capital expenditures at Gibraltar. In the nine months ended
Sept. 30, 2020, the Company received net proceeds of $7.3 million
from the sale of marketable securities of a publicly traded company
and $6.1 million from copper put options.
Net cash used for financing activities in the three and nine months
ended Sept. 30, 2020 includes principal payments for equipment
loans and leases. At Sept. 30, 2020, the Company had cash and
equivalents of $72.7 million (December 31, 2019 - $53.2 million).
Although interest and principal repayments for leases and equipment
loans amortize over their term, there are no principal payments
required on the senior secured notes until the maturity date in
June 2022. The next US$10.9 million semi-annual interest payment on
the senior secured notes is due on Dec. 15, 2020.
On Oct. 20, 2020, Gibraltar entered in a $9 million credit facility
with a Canadian commercial bank for the purpose of providing
letters of credit (LC) to key suppliers of the Gibraltar Mine to
assist with ongoing trade finance and working capital needs. Any
LCs issued under the facility will be guaranteed by Export
Development Canada under its Account Performance Security Guarantee
program.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/878518/000106299320005159/exhibit99-1.htm
About Taseko
Taseko Mines Limited -- http://www.tasekomines.com/esg-- is a
mining company that seeks to create long-term shareholder value by
acquiring, developing, and operating large tonnage mineral deposits
which, under conservative forward metal price assumptions, are
capable of supporting a mine for ten years or longer. The
Company's sole operating asset is the 75% owned Gibraltar Mine,
which is located in central British Columbia and is one of the
largest copper mines in North America. Taseko also owns the
Florence Copper Project, which is advancing towards production, as
well as the Yellowhead copper, New Prosperity gold-copper, Aley
niobium and Harmony gold projects.
* * *
As reported by the TCR on Aug. 31, 2020, Moody's Investors Service
revised the rating outlook for Taseko Mines Limited to stable from
negative. "The outlook revision to stable reflects our expectation
the company will generate marginally positive free cash flow as
copper prices have strengthened," said Jamie Koutsoukis, Moody's
Vice President, Senior Analyst.
In March 2020, S&P Global Ratings lowered its ratings on Taseko
Mines Ltd., including its issuer credit rating (ICR) on the
company, to 'CCC+' from 'B-'. "The downgrade reflects our view of
the heightened risk to Taseko's liquidity position.
THOMAS DEE ENGINEERING: Taps Walsworth WFBM as Special Counsel
--------------------------------------------------------------
Thomas Dee Engineering Co., Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to hire
Walsworth WFBM LLP as its special asbestos litigation counsel.
The firm will provide the following services:
(a) assist the Debtor in drafting the liquidation trust and
trust distribution procedures for the Debtor's plan of
liquidation;
(b) provide expert and percipient testimony in opposition to
litigation motion;
(c) defend asbestos personal injury claims filed against the
estate; and
(d) advise the Debtor specifically on issues involving the
prompt and efficient liquidation of asbestos personal injury claims
against the estate.
The firm will be billed at the following hourly rates:
Attorney (Partner/Shareholder) $495
Associate Attorney $395
Paralegals $200
Michael McCall, the partner at Walworth, disclosed in court filings
that the firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael McCall, Esq.
Walsworth WFBM LLP
One City Boulevard West, Fifth Floor
Orange, CA 92868
Telephone: (714) 634-2522
E-mail: mmccall@wfbm.com
About Thomas Dee Engineering
Thomas Dee Engineering Co, Inc., is a foundation, structure, and
building exterior contractor headquartered in San Rafael,
California.
Thomas Dee Engineering sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Cal. Case No. 18-31266) on Nov. 26,
2018. At the time of the filing, the Debtor was estimated to have
assets of $1 million to $10 million and liabilities of $10 million
to $50 million.
The case has been assigned to Judge Hannah L. Blumenstiel.
The Debtor tapped Goodrich & Associates as its legal counsel.
THOMAS R. MCCONNELL: Viswam Buying Muncie Property for $164K
------------------------------------------------------------
Thomas R. McConnell and Susan K. McConnell ask the U.S. Bankruptcy
Court for the Southern District of Indiana to authorize the private
sale of the parcel of real property located at 2113 W. Washington
Street, Muncie, Indiana to Vishal Viswam for $164,000.
The Debtors are the co-owners of the Real Estate. Said Real Estate
consists solely of separate rental units A, B, C, and D. The Real
Estate was listed on the Debtors' Amended Schedule A/B under Item
1.3 at a fair market value of $145,000. For a number of years, and
up to the present, the Debtors have derived rental income from said
Units.
There are presently no liens, mortgages, or encumbrances on said
Real Estate. However, three of the four Units are presently
occupied by certain tenants.
On Feb. 17, 2020, the Sellers entered into a listing contract with
Scott Locke, an Indiana licensed real estate agent with the
Coldwell Banker Real Estate Group, for the purpose of marketing the
Real Estate for sale. Pursuant to said listing contract, the List
Price of the Real Estate was $141,000.
Prior to the sale contemplated, an offer was made in March 2020 for
$125,000. The Sellers rejected the offer. The name of the
prospective purchaser of the Real Estate is Viswam. The sales
price is $164,000. The Purchaser and the Sellers are to equally
split closing costs. The consummation of the sale is contingent
upon the Purchaser obtaining financing, which is reasonably
expected to occur. The Purchase Agreement was executed by the
parties between the dates of Sept. 8, 2020 and Sept. 14, 2020.
Pursuant to Addendum # 1 of the Purchase Agreement, all units to be
vacant within 60 days of accepting offer. Tenants will be given
written notice by owner to vacate the premises. All leases will be
terminated -- null and void prior to closing.
The present rental status of the Units (as of the date of the
filing of the Motion) is as follows:
Unit Letter Current Tenant Status
A Tim Best No lease. 30-day option by L/T.
B Jim Hiday No lease. 30-day option by L/T.
C Theresa Ingle Lease expired. Eviction
pending.
D Vacant N/A
Pursuant to the signed Purchase Agreement, closing is to occur by
Nov. 9, 2020, depending on the date that the last of the Units'
tenants have vacated the premises. In addition to the notice
listed, the Debtors/Sellers will be providing the 30-day Notice to
Terminate a month-to-month tenancy. Said 30-day Notice was served
on Sept. 17, 2020. Upon information and belief, there are no
issues which might pose an impediment to the proposed sale. The
Debtors have previously asserted an exemption of $3,500 relating to
the Real Estate.
The anticipated proceeds of the sale of the Real Estate breaks down
as follows:
Purchase Price: $164,000
Less:
Sales costs (10%): ($16,400)
Estimated net proceeds: $147,600
The sale of the Real Estate is expressly contemplated under the
Debtors' Amended Plan of Reorganization insofar as all or some of
the proceeds from the anticipated sale of said Real Estate have
been designated as funds to be held in a restricted escrow account
for the purpose of satisfying federal tax liabilities that may be
determined by the Court under adversarial proceeding 20-50031.
Said Plan has not yet been confirmed by the Court. In the event
the Plan is confirmed, the Internal Revenue Service would be deemed
to have an interest in a material portion of the Real Estate sale
proceeds, pending the outcome of the adversarial proceeding noted.
In consideration of the foregoing, and pending the Court's approval
of the Debtors' Plan, te Debtors propose that the net proceeds
shown above be allocated as follows: The sum of $112,100 would be
earmarked to pay any outstanding federal tax liabilities, as
referenced above, and deposited into a restricted escrow DIP
account and disbursed pursuant to an order of the Court. The
remaining net proceeds of $35,500 would be deposited into the
Debtors' DIP business account ending in 5679.
This amount is computed thusly:
Return of renovation costs incurred: $29,000
Garage tear-down costs (Ex. B, Addendum # 2): $ 3,000
Exemption claimed on real estate: $ 3,500
Total to Debtors: $35,500
To the extent not stated previously, any and all distributions of
net proceeds from the sale of the Real Estate referenced s subject
to the approval of the Court.
Objections, if any, must be filed within 21 days from the date of
service.
Thomas R. McConnell and Susan K. McConnell sought Chapter 11
protection (Bankr. S.D. Ind. Case No. 19-07217) on Sept. 26, 2019.
The Debtors tapped John Woodrow Nelson, Esq., at Law Offices of
John Nelson, as counsel.
TIKRAN ERITSYAN: Selling Granada Hills Property for $600K
---------------------------------------------------------
Tikran Eritsyan asks the U.S. Bankruptcy Court for the Central
District of California to authorize the sale of the real property
located at 15632 Viewridge Lane, Granada Hills, California to Argam
Yeghiazaryan for $600,000, subject to overbid.
As of the Petition Date, the Debtor was the sole owner of the
Property. The Property is a residential real property that the
Debtor purchased in 2016 for purpose of renovation and sale. The
remodeling work on the Property is finished and the Debtor believes
that the Property is ready to be sold. The Property is currently
occupied by the Debtor as his principal residence and does not
produce any income for the estate.
The Debtor entered into an agreement with the Buyer for the
purchase price of $600,000. The Property is to be sold "as-is,"
free and clear of liens. An escrow has been opened and the Buyer
has made an earnest money deposit of $3,000. The purchase price is
subject to overbid.
The Debtor initially scheduled the Property to be valued at
$420,000 in his schedules A/B. That estimate was based on sales of
comparable residences in the area of the Property. Turns out, the
Debtor's estimate undervalued the property, since he currently has
an offer to sell the Property at $600,000 to the Buyer, on the
terms of their purchase agreement.
The Property is subject to the following liens and encumbrances in
order of priority:
1. First Priority deed of trust lien in favor of Bank of
America, N.A., and currently serviced by Mr. Cooper in the amount
of $206,190.
2. Second Deed of Trust in favor of AIAA Home Holdings, LLC
in the amount of $115,590.
3. Third Deed of Trust in favor of AIAA Hoem Holdings, LLC in
the amount of $$32,325.
4. Third Deed of Trust in Favor of AIAA Home Holdings, LLC in
the amount of $64,233 (the lien is cross-collateralized by the
Property and the Debtor's other property located at 1356 Elm Ave.,
Glendale, CA 91201).
5. A homeowners association assessment lien of Granada Ridge
HOA, in the amount of $8,340.
By the Motion, the Debtor asks an order authorizing Debtor to pay
from the sale proceeds and through escrow certain undisputed liens
and encumbrances, and other ordinary costs of sale, including
escrow fees and closing costs:
1. Any unpaid property taxes in favor of Los Angeles County
Tax Collector, estimated to be in the amount of $5,459.
2. The debt secured by a first deed of trust lien in favor of
MERs as nominee for Bank of America, N.A. in the amount of $206,190
subject to the payoff demand provided to the escrow company.
3. The seller’s closing costs.
4. The debt secured by a second deed of trust in favor of
AIAA Home Holdings, LLC in the amount of $115,590.
5. The debt secured by a third deed of trust in favor of AIAA
Hoem Holdings, LLC in the amount of $$32,325.
6. The debt secured by a fourth Deed of Trust in Favor of
AIAA Home Holdings, LLC in the amount of $64,233.
7. A homeowners association assessment lien of Granada Ridge
HOA in the amount of $8,340.
The following demonstrates the estimated payoff amounts as of the
Nov. 5, 2020 hearing date, not including the closing costs based on
the preliminary report and payoff demands submitted by the lender:
a. No. 2 - Los Angeles County Tax Collector (Not made) -
$5,459
b. No. 18 - Deed of Trust to secure indebtedness to MERS as a
nominee for Bank of America, N.A. Mr. Cooper ($206,190) - $206,190
c. No. 19 - Second deed of trust held by AIAA Home Holdings,
LLC ($115,590) - $115,590
d. No. 20 - Third deed of trust held by AIAA Home Holdings,
LLC ($32,325) - $32,325
e. No. 21 - Fourth deed of trsut held by AIAA Home Holdings,
LLC ($64,233) - $64,233
f. No. 22 - Homeowners association lien of Granada Ridge HOA
($8,340) - $8,340
In order to save on the costs of sale of the Property, the Debtor
mainly marketed the Property to potential investors. The
residential purchase agreement does not contemplate payment of real
estate broker commission since none was involved in the marketing
and sale of the Property.
The proposed bid procedures are intended to permit a fair and
efficient, competitive sale of the Property, and to identify
competing and alternative bids.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: No later than three court days prior to the
date of the hearing on the Motion to Sell
b. Initial Bid: $605,000
c. Deposit: $18,000 made payable to KG LAW, APC
d. Auction: The auction sale of the Property will be conducted
at the hearing of the Motion to Sell. If more than one bidder
appears at the auction, the bidding order will be randomly
selected.
e. Bid Increments: $5,000
By the Motion to sell, the Debtor asks an order authorizing me to
pay from the sale proceeds and through escrow certain undisputed
liens and encumbrances, other ordinary costs of sale, including
escrow fees and closing costs.
Finally, the Debtor asks that the Court waives the 14-day stay
imposed by FRBP 6004(h). It is not anticipated that any creditor
of party in interest will object to the proposed sale. The parties
wish to complete the sale as quickly as possible and, therefore,
Debtor asks permission to proceed with the sale immediately.
A hearing on the Motion is set for Nov. 5, 2020 at 1:30 p.m.
Objections, if any, must be filed not later than 14 days before the
hearing.
A copy of the Agreement is available at
https://tinyurl.com/y699sgr9 from PacerMonitor.com free of charge.
Tikran Eritsyan sought Chapter 11 protection (Bankr. C.D. Cal. Case
No. 20-10924) on May 18, 2020. The Debtor tapped Vahe Khojayan,
Esq., as counsel.
TM HEALTHCARE: Seeks to Hire Farlie Turner as Investment Banker
---------------------------------------------------------------
TM Healthcare Holdings, LLC and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Florida to
hire Farlie Turner & Co., LLC as its investment banker.
The firm will provide the following services:
(a) assist the Debtors in evaluating its strategic options
with respect to a recapitalization or sale of its business;
(b) assist the Debtors in preparing descriptive materials to
be provided to potential parties to a transaction;
(c) assist in identifying and screening potential parties to a
transaction;
(d) assist in soliciting and evaluating preliminary proposals
received regarding a transaction;
(e) assist in preparing a management presentation to be
delivered to selected potential parties to a transaction;
(f) assist in coordinating the gathering of due diligence
materials to prepare a "data room" for selected potential parties
to a transaction;
(g) assist the Debtors in the facilitation of an auction;
(h) assist in structuring a transaction and negotiate
definitive documentation for the transaction; and
(i) provide testimony as appropriate in connection with a
transaction.
The firm will be paid as follows:
(a) Monthly Advisory Fee: A monthly advisory fee of $22,500,
with the first payment due and payable upon execution of this
agreement and each additional payment due and payable on each
monthly anniversary of the effective date thereafter through the
third monthly anniversary, subject to bankruptcy court approval.
For the sake of clarity, there will be a maximum total of four
monthly advisory fee payments. There will be no additional monthly
advisory fees owed beyond the first three monthly advisory fees in
the event that a transaction closes within 90 days of the effective
date. The monthly advisory fee shall be fully earned upon Farlie
Turner's receipt thereof, in advance of services being performed,
in consideration of Farlie Turner accepting this engagement and
performing services as described herein. The Monthly Advisory Fee
shall be deemed paid in the ordinary course of Farlie Turner and
the Debtors' business, plus
(b) Transaction Fee: If a sale transaction, as defined below,
a nonrefundable cash fee deemed earned upon the closing of a
transaction and approval by the bankruptcy court, and payable
immediately and directly from the proceeds of such transaction or
from the Debtors, as a necessary and reasonable cost of such
transaction, equal to the greater of the following:
i. $500,000, or
ii. 2.5 percent of all consideration up to $20 million,
plus 3 percent of consideration between $20 million and $25
million, plus 3.5 percent of consideration between $25 million and
$35 million; plus 4 percent of consideration between $35 million
and $40 million, and 4.5 percent of consideration above $40
million.
If a Restructuring, as defined below, occurs in lieu of a sale
transaction, then the transaction fee shall equal $200,000.
Scott J. Saunders, a managing director at Farlie Turner, disclosed
in court filings that the firm is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Scott J. Saunders
Farlie Turner & Co., LLC
401 E. Las Olas Boulevard, Suite 2360
Fort Lauderdale, FL 33301
Telephone: (954) 358-3800
Facsimile: (954) 358-3838
E-mail: ssaunders@farlieturner.com
About TM Healthcare Holdings
TM Healthcare Holdings, LLC, a Stuart, Fla.-based company in the
health care business, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-20024) on Sept. 17,
2020. The petition was signed by CFO Paul Kamps.
At the time of the filing, Debtor had estimated assets of less than
$50,000 and liabilities of between $50 million and $100 million.
Judge Erik P. Kimball oversees the case.
Shraiberg Landau & Page P.A. is the Debtor's legal counsel.
TONOPAH SOLAR: Appeal vs Brahma Dismissed Due to Bankruptcy Filing
------------------------------------------------------------------
The Supreme Court of Nevada dismissed the appellate case captioned
TONOPAH SOLAR ENERGY, LLC, A DELAWARE LIMITED LIABILITY COMPANY,
Appellant, v. BRAHMA GROUP, INC., A NEVADA CORPORATION, No. 78092
(Nev.).
Tonopah is taking an appeal from an order denying a motion to
expunge a mechanic's lien and awarding fees and costs.
Tonopah filed a notice of bankruptcy, informing the appellate court
that it has filed a voluntary petition for Chapter 11 bankruptcy in
the United States Bankruptcy Court for the District of Delaware.
The filing of a bankruptcy petition operates to stay,
automatically, the "continuation" of any "judicial ... action ...
against the debtor." An appeal, for purposes of the automatic stay,
is considered a continuation of the action in the trial court.
Consequently, an appeal is automatically stayed if the debtor was
the defendant in the underlying trial court action.
Given the applicability of the automatic stay, the appeal may
linger indefinitely on the court's docket pending final resolution
of the bankruptcy proceedings. Accordingly, the court concluded
that judicial efficiency will be best served if the appeal is
dismissed without prejudice. Because a dismissal without prejudice
will not require the court to reach the merits of this appeal and
is not inconsistent with the primary purposes of the bankruptcy
stay, the court further concluded that dismissal will not violate
the bankruptcy stay.
The Court said the dismissal is without prejudice to the
appellant's right to move for reinstatement of this appeal within
90 days of either the lifting of the bankruptcy stay or final
resolution of the bankruptcy proceedings, if the appellant deems
such a motion appropriate at that time.
A copy of the Nevada Court's Order is available at
https://bit.ly/3ltCBW1 from Leagle.com.
In a Sept. 25, 2019 order, District Judge Richard Boulware II
denied Brahma Group, Inc.'s motion to stay the suit against Tonopah
to amend the complaint. Brahma sued Tonopah in state court on July
17, 2018, asserting claims for breach of contract, breach of the
implied covenant of good faith and fair dealing, unjust enrichment,
and a violation of Nevada Revised Statutes 624.609 and 624.610.
Judge Boulware denied Brahma's motion for a stay and granted TSE's
motion for permanent injunction to enjoin Brahma from litigating
its contract claims against TSE in state court. A copy of the Sept.
25, 2019 order is available at https://bit.ly/3lowrWU.
About Tonopah Solar Energy
Tonopah Solar Energy, LLC, owns and operates a net 110-megawatt
concentrated solar energy power plant located near Tonopah in Nye
County, Nevada. The Power Plant is also known as the Crescent
Dunes Solar Energy Project. The Project is the first
utility-scale
concentrated solar power plant in the United States to be fully
integrated with energy storage technology. The Power Plant uses
solar power technology to concentrate and convert sunlight into
heat energy, which is stored and converted, through a series of
heat exchangers, to generate high-pressure steam.
Tonopah Solar Energy filed a Chapter 11 petition (Bankr. D. Del.
Case No. 20-11884) on July 30, 2020. The Hon. Karen B. Owens
oversees the case.
At the time of filing, the Debtor was estimated to have $500
million to $1 billion in assets and $100 million to $500 million in
liabilities.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP, and Willkie
Farr & Gallagher LLP as counsel.
TRIVASCULAR SALES: Court Confirms Third Amended Joint Plan
----------------------------------------------------------
Bankruptcy Judge Stacey G. Jernigan issued her findings and
conclusions regarding the confirmation of Debtors TriVascular Sales
LLC and affiliates' third amended joint plan of reorganization.
According to Judge Jernigan, the Debtors have complied with the
applicable provisions of the Bankruptcy Code, thereby satisfying 11
U.S.C. section 1129(a)(2). Specifically, the Debtors are proper
debtors under section 109 of the Bankruptcy Code, and the Debtors
have complied with the applicable provisions of the Bankruptcy
Code, the Bankruptcy Rules, the Local Rules, and the Disclosure
Statement Order in transmitting the Plan, the Disclosure Statement,
the Ballots and all related documents and notices, and in
soliciting and tabulating votes on the Plan.
The Debtors engaged in extensive, arm's-length and good faith
negotiations with certain key constituencies, the results of which
are reflected in the Plan. Therefore, the Bankruptcy Court found
and concluded that the Debtors have proposed the Plan -- including
the Plan Supplement and all other agreements, documents and
instruments necessary to effectuate the Plan -- in good faith and
not by any means forbidden by law, and the Debtors have acted, and
are presently acting, in good faith in conjunction with all aspects
of the Plan, thereby satisfying section 1129(a)(3) of the
Bankruptcy Code. All transactions contemplated by the Plan were
negotiated and consummated at arms' length, without collusion, and
in good faith. In determining that the Plan has been proposed in
good faith, the Bankruptcy Court has examined the facts and records
of these Chapter 11 Cases and the totality of the circumstances
surrounding the formulation of the Plan, the solicitation of the
Plan, the Disclosure Statement and the hearings thereon and the
record of the Confirmation Hearing and other proceedings held in
these Chapter 11 Cases. Consistent with the overriding purpose of
the Bankruptcy Code, the Chapter 11 Cases were filed, and the Plan
was proposed, with the legitimate and honest purpose of
reorganizing the Debtors and maximizing the value of the Debtors'
assets.
The Bankruptcy Court found and concluded that the Plan satisfies
section 1129(a)(7) of the Bankruptcy Code. The liquidation analysis
set forth in Exhibit E of the Disclosure Statement and other
evidence proffered or adduced at the Confirmation Hearing: (i) are
reasonable, persuasive and credible; (ii) utilize reasonable and
appropriate methodologies and assumptions; (iii) have not been
controverted by any other evidence; and (iv) establish that each
Holder of a Claim or Equity Interest in an Impaired Class either
(a) has accepted the Plan or (b) will receive or retain under the
Plan, on account of such Claim or Equity Interest, property of a
value, as of the Effective Date of the Plan, that is not less than
the amount that it would receive if the Debtors were liquidated
under Chapter 7 of the Bankruptcy Code on such date.
Because the Plan is sufficiently funded from, among other things,
proceeds of the DIP Facility, the Exit Facility and the Debtors'
Cash on hand, and because the Professional Fee Escrow Account will
be funded with Cash equal to the Professional Fee Reserve Amount on
and after the Effective Date, the evidence proffered or adduced at
the Confirmation Hearing with respect to feasibility including the
Confirmation Brief and the Confirmation Declarations, (i) is
reasonable, persuasive and credible, (ii) utilizes reasonable and
appropriate methodologies and assumptions, (iii) has not been
controverted by other evidence, and (iv) establishes that the Plan
is feasible and that there is a reasonable prospect of the Debtors
being able to meet their financial obligations under the Plan and
that Confirmation of the Plan is not likely to be followed by the
need for further financial reorganization of the Reorganized
Debtors or any successor to the Reorganized Debtors, thereby
satisfying the requirements of section 1129(a)(11) of the
Bankruptcy Code.
In addition, the Bankruptcy Court found that the Debtors have also
exercised their reasonable business judgment in determining whether
to assume or reject Executory Contracts and Unexpired Leases
pursuant to Article V of the Plan. Each assumption, assumption and
assignment, and rejection of an Executory Contract or Unexpired
Lease pursuant to Article V of the Plan shall be legal, valid and
binding to the same extent as if such assumption, assumption and
assignment, or rejection, as applicable, had been effectuated
pursuant to an order of the Bankruptcy Court under section 365 of
the Bankruptcy Code entered before entry of this Confirmation
Order. Moreover, the Debtors have cured, or provided adequate
assurance that the Debtors or Reorganized Debtors will cure,
defaults (if any) under or relating to each of the Executory
Contracts and Unexpired Leases that are being assumed by the
Reorganized Debtors pursuant to the Plan.
A full-text copy of the Court's decision is available at
https://bit.ly/2T6eeBk from Leagle.com.
About TriVascular Sale
TriVascular Sales, LLC and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No.
20-31840) on July 5, 2020. At the time of the filing, TriVascular
Sales had estimated assets of less than $50,000 and liabilities of
between $100 million to $500 million. Judge Stacey G. Jernigan
oversees the cases.
The Debtors tapped DLA Piper LLP (US) as their legal counsel, and
FTI Consulting, Inc., as their financial advisor. Omni Agent
Solutions is the claims, noticing and administrative agent.
The Office of the U.S. Trustee appointed a committee to represent
unsecured creditors in Debtors' bankruptcy cases.
TSC DORSEY: Settlement with AN&J Family Trust Approved
------------------------------------------------------
Merrill Cohen, serving as the Plan Administrator, Chapter 7
Trustee, or Chapter 11 Trustee in the bankruptcy cases of seven
related debtors, filed a motion seeking approval of a settlement
with the AN&J Family Trust, which owns all or substantially all of
the seven debtors, and S. Bruce Jaffe, who is the trustee of the
Trust and managed the debtors before Mr. Cohen's appointment. The
settlement resolves claims that the Trust improperly withdrew funds
from the debtor-in-possession accounts of six of the debtors, as
determined by G. Richard Gray, the court-appointed examiner. The
settlement proposes to satisfy the claims from the Trust's 100%
equity ownership in the Debtor, TSC Dorsey Run Road -- Jessup, LLC,
which is the seventh related debtor.
Bankruptcy Judge Thomas J. Catliota ruled that the Application to
Compromise Controversy is granted.
Under the Debtor's confirmed plan, all parties agreed that the net
proceeds from the sale of the Debtor's real property after payment
of all claims (i.e., the Trust's equity) would be held by Mr.
Cohen, the Debtor's then Chapter 11 Trustee and now Plan
Administrator, until he investigated the claims identified by the
Examiner and obtained satisfaction of those claims. The plan
contemplated that the Trust's equity in the Debtor would be used to
satisfy those claims. The settlement achieves this result. Mr.
Cohen will transfer the funds he holds as the Trust's equity
ownership in the Debtor to the six debtors to satisfy the claims
they have against the Trust for the improper DIP account
withdrawals.
Mr. Cohen, as Plan Administrator of the Debtor, filed the motion
for approval of the settlement with the Trust and Mr. Jaffe on Dec.
2, 2019. Under the settlement, Mr. Cohen, as Plan Administrator in
the Debtor's case, will pay $486,441.48 of the Plan Funds to the
Six Related Entities. The payments will satisfy the Six Related
Entities' claims against the Trust for recovery of the DIP account
funds.
Mr. Cohen, in his capacity as Chapter 7 Trustee or Chapter 11
Trustee of the Six Related Entities, also entered into a separate
settlement agreement with the Trust in each of the Six Related
Entities' cases. The agreements provide that the funds he pays to
each entity from the Plan Funds will resolve that entity's claims
against the Trust for recovery of the DIP account funds.
Capital Bank, N.A., a creditor of the Trust, objected to the
settlement. It obtained a charging order against the Trust's
economic interest in the Debtor and argued the funds must be
disbursed to it on account of the Trust's interest in the Debtor
before the funds can be used to satisfy other claims.
The Bank argued that under Maryland law and by operation of the
plan, the Plan Administrator must distribute the Plan Funds to it,
and cannot use the funds to make the payments to the Six Related
Entities pursuant to the settlement. It argued that in essence, the
Plan Funds are being distributed first from the Debtor to the
Trust, and then from the Trust to the Six Related Entities. It
argued that the charging order requires the distribution must be
made to it, rather than to the Trust.
The Bank pointed to the language in the settlement agreements that
the Trust agrees to "contribute, from payments to which they
otherwise would be entitled under the [Debtor's] Plan, the amount .
. . in order to repay amounts transferred from . . . DIP Account."
According to the Bank, this means Plan Funds are effectively first
being distributed to the Trust, which then transfers them back to
the Plan Administrator for delivery to the Six Related Entities.
The Bank argued that, because Plan Funds are first being
distributed to the Trust, its charging order requires the funds be
distributed to it. The Court said that this claim is unavailing.
As established, under the plan, no distributions were to be made to
the Trust until the claims identified by the Examiner were
satisfied, as determined by the Plan Administrator and approved by
the court.
According to the Court, the Bank reads too much into the language
of the settlement agreements. Each agreement provides that "the
[Debtor's] Plan Administrator may transfer to the Estate[s] [of the
Six Related Entities] the full amount of the Settlement Payment."
Thus, the funds are being transferred directly to the Six Related
Entities by the Plan Administrator. They never leave his control,
and the settlement payments effectuate the Plan.
But for the Plan requirement that the Plan Funds be retained by the
Plan Administrator, the Plan Funds would be distributed to the
Trust on account of its equity interest under Maryland law or the
original plan. Under the amended plan, however, the claims
identified by the Examiner "require payment prior to distributions
to equity holders of the Debtor." Language in the settlement
agreements that Plan Funds would otherwise have gone to the Trust
simply recognizes the fundamental distribution scheme under limited
liability company law in the absence of the amended confirmed
plan.
A copy of the Court's Memorandum Decision is available at
https://bit.ly/3nXMnl4 from Leagle.com.
About TSC Dorsey Run Road-Jessup
TSC Dorsey Run Road - Jessup, LLC, is a privately held company
engaged in activities related to real estate. The Company is the
fee simple owner of a property located at 7869 Dorsey Run Road in
Jessup, Maryland having a current value of $2.45 million.
TSC Dorsey Run Road - Jessup, LLC, based in Columbia, Md., filed a
Chapter 11 petition (Bankr. D. Md. Case No. 18-25597) on Nov. 28,
2018. The Hon. Michelle M. Harner oversees the case. The Law
Offices of David W. Cohen, led by founding partner David W. Cohen,
serves as bankruptcy counsel. In the petition signed by Bruce S.
Jaffe, manager, the Debtor disclosed $2,450,000 in assets and
$2,359,552 in liabilities.
USG CORP: Court Tosses Former Stockholders' Suit
------------------------------------------------
The Delaware Court of Chancery granted the Defendants' motion and
dismissed the case captioned IN RE USG CORPORATION STOCKHOLDER
LITIGATION, Consolidated C.A. No. 2018-0602-SG (Del. Ch.).
The case involved the acquisition of USG Corporation, a building
materials company, by a strategic buyer, Gebr. Knauf KG. Former
USG stockholders allege USG's directors breached fiduciary duties
in connection with USG's sale to Knauf. They sought monetary
damages.
The original complaint was filed on August 13, 2018. After two
substantially similar putative class actions challenging the
Acquisition were consolidated, the Court heard oral argument on the
Plaintiffs' motion for preliminary injunction seeking to enjoin the
Acquisition on the basis that the Plaintiffs were likely to succeed
in showing that the Acquisition violated 8 Del. C. section 203 and
that the Proxy Statement failed to make material disclosures. The
Court denied the Plaintiffs' motion for preliminary injunction on
Sept. 25, 2018. The Acquisition closed on April 24, 2019.
The Plaintiffs filed the Amended Complaint on Nov. 26, 2019. The
Amended Complaint pled one count: breach of fiduciary duty against
each of USG's directors at the time of the Acquisition. The Amended
Complaint alleged that USG's stockholders "did not receive the
highest available value for their equity interest in USG," and
"suffered the injury of an uninformed stockholder vote"; the
Plaintiffs sought damages including by way of quasi-appraisal.
The Defendants moved to dismiss this Action on Feb. 5, 2020. The
Court heard Oral Argument on the Defendants' Motion on June 22,
2020, and considered the matter submitted for decision on that
date.
The Court said this raised the question of what bearing the
determination has on the balance of the Defendants' Motion to
Dismiss, which alleged that the Plaintiffs have failed to state a
claim upon which relief can be granted against the Defendants. Due
to an exculpation clause in USG's charter, the Plaintiffs were
required to demonstrate a breach of the duty of loyalty, or its
doppelganger bad faith, to recover damages. It became clear in
briefing and at Oral Argument that the Plaintiffs made two
assumptions that the Court found unwarranted. The first was that,
having pled facts that raised a reasonable inference of disclosure
deficiencies sufficient to scuttle the Defendants' defense under
Corwin v. KKR Financial Holdings, LLC, 125 A.3d 304 (Del. 2015),
they had necessarily cleared the bar of pleading bad faith on the
part of the Defendant directors for purpose of withstanding a
dismissal under Fed.R.Civ.P. 12(b)(6). Doctrinally, however, the
concept of bad faith, and the determination of adequate disclosure
for Corwin purposes, are fundamentally separate. They involve
different inquiries, the outcomes of which are not necessarily
mutually supportive.
In the Court's view, civil litigation, in general, can be seen as
akin to a steeplechase, where the plaintiff must clear a series of
obstacles: first, sufficient pleading to state a claim and
withstand a motion to dismiss under 12(b)(6); next, amassing a
record sufficient to carry across a motion for summary judgment,
and finally proof by a preponderance of the evidence at trial.
After having cleared such hurdles the plaintiff would be entitled
to a remedy. But fiduciary duty litigation in the corporate arena,
is designed to address problems of agency, and where fiduciaries
can eliminate agency problems by satisfying Corwin, they may seek
dismissal on that ground. Then, the course is never run: the
starting tape never drops to allow the steeplechase to begin. Where
a court determines that Corwin does not apply, conversely, the race
is on; the starter calls, the tape falls away, and the litigants
are off -- to run the same course that lies in front of them just
as they would have the defendants never sought to dismiss under
Corwin.
The Plaintiffs' second assumption -- erroneous, in the Court's view
-- is that they must simply plead claims that are reasonably
conceivable as a breach of duty under Revlon, Inc. v. MacAndrews &
Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986) and its progeny to
withstand a motion to dismiss. That is, according to the
Plaintiffs, they have stated a claim by merely alleging facts that
make it reasonably conceivable that the Defendant directors did not
act reasonably with regard to achieving maximum value for USG's
stockholders via the Acquisition. In this post-closing damages
action, however, the Defendants are exculpated from liability for
damages by a provision in USG's charter, absent breach of the duty
of loyalty or bad faith. Therefore, to plead a claim sufficient to
withstand the Defendants' Motion to Dismiss, the Plaintiffs must
plead facts that make it reasonably conceivable that the Defendants
have acted with the requisite culpability. The Court found that the
disclosure deficiency alleged, although it prevents the application
of Corwin, was insufficient to reasonably imply bad faith, and that
the other facts alleged likewise failed to state a claim of breach
of the duty of loyalty or reasonably imply actions taken in bad
faith. Accordingly, the Court granted the Defendants' Motion to
Dismiss.
A copy of the Court's Memorandum Opinion is available at
https://bit.ly/3nqvb7B from Leagle.com.
Blake A. Bennett , of COOCH & TAYLOR, P.A., Wilmington, Delaware;
OF COUNSEL: Michael J. Palestina , of KAHN SWICK & FOTI, LLC, New
Orleans, Louisiana; Juan E. Monteverde and Miles D. Schreiner , of
MONTEVERDE & ASSOCIATES, New York, New York, Attorneys for
Plaintiffs.
Raymond J. Dicamillo , Srinivas M. Raju , Robert L. Burns , Matthew
D. Perri , and Angela Lam , of RICHARDS, LAYTON & FINGER, P.A.,
Wilmington, Delaware; OF COUNSEL: Robert S. Faxon , Andrienne F.
Mueller , and Robert E. Johnson , of JONES DAY, Cleveland, Ohio,
Attorneys for Defendants.
About USG Corporation
Based in Chicago, Ill., USG Corporation -- http://www.usg.com/--
through its subsidiaries, manufactures and distributes building
materials producing a wide range of products for use in new
residential, new nonresidential and repair and remodel
construction, as well as products used in certain industrial
processes.
The company filed for Chapter 11 protection on June 25, 2001
(Bankr. Del. Case No. 01-02094). When the Debtors filed for
protection from their creditors, they disclosed $3.252 billion in
assets and $2.739 billion in liabilities. The Debtors emerged from
bankruptcy protection on June 20, 2006.
VELOCITY MANUFACTURING: Files for Chapter 7 Bankruptcy
------------------------------------------------------
Albion, Michigan-based Velocity Manufacturing filed for Chapter 7
bankruptcy on Oct. 23, 2020 (Bankr. W.D. Mich. Case No. 20-03276).
The Debtor's counsel:
Michael Aaron Brandess
Sugar Felsenthal Grais & Helsinger LLP
E-mail: mbrandess@sfgh.com
The Chapter 7 Trustee:
Thomas C. Richardson
PO Box 51067
Kalamazoo, MI 49005
The meeting of creditors is slated for Nov. 23, 2020.
Jayson Bussa of MiBiz reports that against the backdrop of the
COVID-19 pandemic that has ravaged some segments of the
manufacturing industry, Velocity Manufacturing LLC has filed for
Chapter 7 bankruptcy.
The Chapter 11 filing shows plummeting revenue paired with mounting
debt.
Velocity -- located at 921 Elliot St. in Albion -- specializes in
four different areas: maintenance, repair and operations for parts
and assemblies; custom food and beverage processing and packaging
machines; tube and small parts production; and manufacturing
services and supply chain management.
Per the filing, the certified minority-owned company claimed just
less than $100,000 in assets, with $8,363 in cash, $30,219.79 in
accounts receivables and $61,249.99 in inventory.
In 2018 gross revenues for the company sat at $978,889 before
dipping to $844,668 in 2019. Since Jan. 1, 2020 Velocity had only
generated $150,806 in revenue.
The company listed Homestead Savings Bank as its only secured
creditor for a $34,589 loan it provided in October 2018. That loan
came with an equipment lien.
Among the unsecured creditors is Albion Machine and Tool LLC for
$53,777 and $3,250 in parts and rent, respectively. Chicago-based
professional business services and facility management firm Vargas
Group Inc. is also an unsecured creditor with a $55,000 promissory
note dated Dec. 17, 2004.
Interest was not included in the claim as Jamie Cruz is an owner of
both Vargas Group and Velocity Manufacturing, where he has a 66.7
per
`cent ownership stake, according to the filing. The estate of
former vice president William Stoffer, which the filing states
passed away in December 2019, retains 33.3 percent ownership in the
company.
As the COVID-19 pandemic wears on, manufacturers are left to
contend with the economic fallout. Experts have said PPP loans and
other relief have deferred financial distress for some
manufacturers. However, those financial struggles could become more
pronounced as that money runs out.
VERDICORP INC: Unsecureds Will Get Share of Sale Proceeds
---------------------------------------------------------
Verdicorp, Inc. submitted a Plan and a Disclosure Statement.
The Debtor's assets consisted of real property located at 4030 N.
Monroe Street, in Tallahassee, Florida, intellectual property
rights under contracts between the Debtor and Danfoss Turbocor
Compressors, Inc., and all furniture, fixtures, equipment and
machinery located at the 4030 N. Monroe location.
Class 1: Super-Priority Claims are impaired. In order to facilitate
the bankruptcy filing and confirmation of a Plan of Reorganization,
Multistack International Limited loaned $282,600 to the Debtor,
which was approved by the Court as a super-priority unsecured
lending facility. In conjunction with the Debtor’s sale of
substantially all assets, Multistack signed binding consents
waiving all rights to repayment of the Super-Priority lending
facility.
Class 4: Secured Loan Claims (Capital City Bank) are impaired. The
Secured Loan Claim of Capital City Bank is Allowed in the aggregate
amount of $815,000.00. Each holder of a Class 3 Secured Loan Claim
shall receive, in full and final satisfaction of such Claim, either
(A) $815,000.000 on or before June 25, 2019, or (B) a warranty deed
for the property located at 4030 North Monroe Street.
Class 5: Pre-Petition Loan Claims to Enable the Bankruptcy Filing
is impaired. Each holder of a Class 4 claim shall receive, in full
and final satisfaction of such Claim, a fifty percent (50%) return
on all amounts loaned to acquire the Farmers and Merchant’s Bank
loan.
Class 6: General Unsecured Claims are impaired. Holders of each
such Allowed General Unsecured Claim shall receive a pro rata share
of Cash from the Debtor's sale of all assets from the Plan
Administrator.
Class 7: Equity Interests are impaired. Equity Interests shall be
deemed cancelled, and the holders of Equity Interests shall not
receive or retain any property under the Plan on account of such
Equity Interests.
A full-text copy of the Disclosure Statement dated August 31, 2020,
is available at https://tinyurl.com/y3ohywcn from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Michael H. Moody, Esq.
MICHAEL H. MOODY LAW, P.A.
1881A Northwood Center Blvd.
Tallahassee, FL 32303
Mail: P.O. Box 4363
Tallahassee, FL 32315
Tel/Fax: (850) 739-6970
Michael.Moody@MichaelHMoodyLaw.com
About Verdicorp Inc.
Verdicorp Inc. -- http://www.verdicorp.com/-- is an innovation
company formed in 2009. Its areas of interest include heating,
ventilation and air-conditioning (HVAC), energy generation,
recovery and storage systems, and water desalination, treatment and
pumping.
Verdicorp sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Fla. Case No. 19-40427) on Aug. 14, 2019. At the time
of the filing, the Debtor had estimated assets of between $500,000
and $1 million and liabilities of between $10 million and $50
million. The case has been assigned to Judge Karen K. Specie. The
Debtor is represented by Michael H. Moody Law Firm PLLC.
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case.
VIP CINEMA: Court Approves Procedures for Dismissal
---------------------------------------------------
At the behest of VIPC Holdings Liquidating Inc., formerly VIP
Cinema Holdings Inc., and its affiliates, the U.S. Bankruptcy Court
for the District of Delaware entered an order establishing
procedures for the dismissal of the Chapter 11 cases of the
Debtors.
The Sept. 29, 2020 order signed by Judge Mary Walrath ordered
professionals to file a final fee application within 30 days. The
Court will hold the final fee application hearing, if necessary, on
Dec. 1, 2020 at 12:30 p.m. (prevailing Eastern Time) to resolve any
objections.
For the case to be dismissed, the Debtors are required to complete
(a) the filing of all monthly operating reports of the Debtors,
including the report for the month in which the Chapter 11 Cases
are to be dismissed; (b) the payment of all quarterly fees due and
owing in the Chapter 11 Cases to the Office of the United States
Trustee pursuant to 28 U.S.C. § 1930, including those for the
quarter in which the Chapter 11 Cases are to be dismissed (the
“Quarterly Fees”); (c) the payment in full of all professional
fees and expense requested by the DIP Professionals; and (d) the
payment of all professional fees and expenses requested by the
Retained Professionals and approved on a final basis (to the extent
applicable), up to the amount of funds available.
Leslie A. Pappas of Bloomberg Law reported that the estate of the
former VIP Cinema Holdings Inc. sought dismissal of its its Chapter
11 case because it can no longer finance its bankruptcy. The
company was the world's largest manufacturer of luxury recliner
seating for movie theaters when it filed for bankruptcy in February
2020 with a prepackaged reorganization plan. N ow called VIPC
Holding Liquidation Inc., the movie-seat maker was forced to
abandon that plan in April after theaters were shut down as part of
government measures to stop the spread of Covid-19. VIP's estate
still owes $20,690,725 on the $33 million it borrowed to finance
the bankruptcy.
About VIP Cinema
VIP Cinema is the largest manufacturer of luxury movie-theatre
seating in the U.S. with 70% of the domestic market share. Steve
Simons started VIP in 2008 as a residential furniture manufacturer
based in New Albany, Mississippi. VIP was later amongst the first
in the U.S. to introduce and sell to exhibitors a premium,
reclining movie theatre chair, to replace and upgrade existing
low-profile, metal chairs. VIP began ramping up production and
created a "first-mover advantage" by working closely with and
becoming a key supplier to AMC Theatres.
VIP Cinema Holdings and 4 affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 20-10344) on Feb. 18, 2020 with a
prepackaged plan that would cut $200 million of funded debt in
half.
VIP Cinema was estimated to have at least $100 million in assets
and liabilities as of the filing.
VIP tapped the law firm of Ropes & Gray LLP, as the Company's
counsel; UBS Securities LLC, as the Company's investment banker;
and AP Services LLC as financial advisor. Omni Agent Solutions is
the claims agent.
VIVUS INC: Equity Committee Taps Morris Nichols as Legal Counsel
----------------------------------------------------------------
The official committee of equity security holders appointed in the
Chapter 11 cases of Vivus, Inc. and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to hire
Morris, Nichols, Arsht & Tunnell LLP as its legal counsel.
Morris Nichols will provide the following services:
a. provide legal advice and assistance to the committee
concerning the administration of these Chapter 11 cases;
b. advise the committee with respect to the investigation of
the acts, conduct, assets, liabilities, and financial condition of
the Debtors;
c. negotiate and formulate a plan of reorganization;
d. advise the committee of its fiduciary duties and
responsibilities to the equity security holders of VIVUS;
e. evaluate and potentially pursue certain claims and causes
of action for or on behalf of VIVUS or its estate;
f. represent the committee's interest in any hearings before
the court;
g. review and analyze all applications, motions, pleadings,
orders, statements of operation, and schedules filed with the
court;
h. assist the committee in preparing applications, motions,
and orders in support of positions taken by the committee;
i. monitor actions taken, or to be taken, by the Debtors in
connection with the disposition of property of the estates;
j. confer with the accountants and any other professionals
retained by the committee;
k. assist the committee as conflicts counsel, should the need
arise;
l. assist the committee in the determination of whether to,
and if so, how to, sell the assets of the Debtors for the highest
and best price; and
m. assist the committee generally in performing such other
services.
Morris Nichols' current hourly rates are as follows:
Partners $710 – $1,200
Associates $435 – $725
Paraprofessionals $285 – $335
Case Clerks $175
Robert J. Dehney, Esq., a partner at Morris Nichols, disclosed in
court filings that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
Mr. Dehney also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Response: Not applicable.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: The Committee, Morris Nichols and Skadden expect to
develop a prospective budget and staffing plan to comply with the
U.S. Trustee's requests for information and additional disclosures,
and any other orders of the Court, recognizing that in the course
of these chapter 11 cases there may be unforeseeable fees and
expenses that will need to be addressed by the Committee, Morris
Nichols and Skadden.
The firm can be reached through:
Robert J. Dehney, Esq.
Eric D. Schwartz, Esq.
Andrew R. Remming, Esq.
Joseph C. Barsalona II, Esq.
Michelle M. Fu, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market St., 16th Floor
Wilmington, DE 19801
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
Email: rdehney@mnat.com
eschwartz@mnat.com
aremming@mnat.com
jbarsalona@mnat.com
mfu@mnat.com
About Vivus Inc
Vivus Inc -- https://www.vivus.com/ -- is a biopharmaceutical
company committed to the development and commercialization of
innovative therapies that focus on advancing treatments for
patients with serious unmet medical needs. VIVUS has three approved
therapies and one product candidate in clinical development. Qsymia
(phentermine and topiramate extended release) is approved by FDA
for chronic weight management. The Company commercializes Qsymia in
the U.S. through a specialty sales force supported by an internal
commercial team and license the commercial rights to Qsymia in
South Korea. VIVUS was incorporated in 1991 in California and
reincorporated in 1996 in Delaware. As of the Petition Date, VIVUS
is a publicly traded company with its shares listed on the Nasdaq
Global Market LLC under the ticker symbol "VVUS." The Company
maintains its headquarters in Campbell, California.
Vivus Inc and three of its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del., Case No.
20-11779) on July 7, 2020. The petitions were signed by Mark Oki,
chief financial officer. Hon. Laurie Selber Silverstein presides
over the cases.
As of May 31, 2020, the Debtors reported total assets of
$213,884,000 and total liabilities of $281,669,000.
Weil Gotshal & Manges LP serves as general counsel to the Debtors,
while Richards, Layton & Finger, P.A. acts as local counsel to the
Debtors. Ernst & Young is the Debtors' financial advisor, and Piper
Sandler Companies acts as investment banker. Stretto is claims and
noticing agent to the Debtors.
On Sept. 22, 2020, the United States Trustee appointed the official
committee of equity security holders. The equity committee is
represented by Morris, Nichols, Arsht & Tunnell LLP.
VIVUS INC: Equity Committee Taps Teneo Capital as Financial Advisor
-------------------------------------------------------------------
The official committee of equity security holders appointed in the
Chapter 11 cases of Vivus, Inc. and its affiliates seeks approval
from the U.S. Bankruptcy Court for the District of Delaware to hire
Teneo Capital LLC as its financial advisor and investment banker.
The firm will provide the following financial advisory and
investment banking services:
a. analyze the Debtors' business, operations, assets,
financial condition, business plan, strategy, and operating
forecasts;
b. advise and attend meetings of the committee as well as
meetings with the Debtors or other third parties;
c. advise and assist the committee in evaluating the financial
aspects of any potential transaction by the Debtors;
d. review any valuation of the Debtors or its assets;
e. review and analyze any proposed capital structure for the
Debtors;
f. analyze any proposed financing(s);
g. assist the committee in developing, evaluating, structuring
and negotiating the terms and conditions of a restructuring, plan
of reorganization, or sale transaction;
h. analyze any merger, divestiture, joint-venture, or
investment transaction;
i. analyze any new debt or equity capital;
j. review and analyze any potential sale, merger, divestiture
or other transaction process;
k. assist the committee or participate in negotiations with
the Debtors, other creditor groups and any potential sale, merger
or divestiture parties;
l. provide expert testimony and litigation support as mutually
agreed between the firm and the committee; and
m. provide the committee with other general restructuring
advice as the firm and the committee and its counsel deem
appropriate.
Teneo Capital shall be paid for professional time expended by its
relevant personnel at their usual and customary rates as follows:
Senior Managing Directors and Managing Directors $800 -
$1250
Consultants, VPs, Directors and equivalents $500 - $800
Associates and Analysts $300 - $500
Administrative Staff $175 - $325
Christopher K. Wu, a senior managing director at Teneo Capital,
disclosed in court filings that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Christopher K. Wu
TENEO CAPITAL LLC
280 Park Ave, 4th Floor
New York, NY 10017
Telephone: (212) 886-1600
About Vivus Inc
Vivus Inc -- https://www.vivus.com/ -- is a biopharmaceutical
company committed to the development and commercialization of
innovative therapies that focus on advancing treatments for
patients with serious unmet medical needs. VIVUS has three approved
therapies and one product candidate in clinical development. Qsymia
(phentermine and topiramate extended release) is approved by FDA
for chronic weight management. The Company commercializes Qsymia in
the U.S. through a specialty sales force supported by an internal
commercial team and license the commercial rights to Qsymia in
South Korea. VIVUS was incorporated in 1991 in California and
reincorporated in 1996 in Delaware. As of the Petition Date, VIVUS
is a publicly traded company with its shares listed on the Nasdaq
Global Market LLC under the ticker symbol "VVUS." The Company
maintains its headquarters in Campbell, California.
Vivus Inc and three of its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del., Case No.
20-11779) on July 7, 2020. The petitions were signed by Mark Oki,
chief financial officer. Hon. Laurie Selber Silverstein presides
over the cases.
As of May 31, 2020, the Debtors reported total assets of
$213,884,000 and total liabilities of $281,669,000.
Weil Gotshal & Manges LP serves as general counsel to the Debtors,
while Richards, Layton & Finger, P.A. acts as local counsel to the
Debtors. Ernst & Young is the Debtors' financial advisor, and Piper
Sandler Companies acts as investment banker. Stretto is claims and
noticing agent to the Debtors.
On Sept. 22, 2020, the United States Trustee appointed the official
committee of equity security holders. The equity committee is
represented by Morris, Nichols, Arsht & Tunnell LLP.
WATSON GRINDING: January 24 Claimants Committee Propose Plan
------------------------------------------------------------
January 24 Claimants Committee submitted a Combined Disclosure
Statement and Plan of Liquidation of Watson Grinding & Manufaturing
co. under Chapter 11 of the Bankruptcy Code.
On Feb. 10, 2020, the Court ordered the United States Trustee to
appoint "an official committee to represent the interests of all
persons and governmental units with monetary claims arising out of
the January 24, 2020 explosion". On Feb. 21, 2020, the United
States Trustee appointed the following members of the Committee:
(i) Travis Horton, (ii) Massiel Nunez, (iii) Houston Corvette
Service, (iv) Margarita Flores, (v) Phillip Burnam, (vi) Janette
Thomas, and (vii) Gerardo Castorena, Jr. (Doc. No. 89).
To date, the Estate has collected, or is anticipated to collect
prior to the Confirmation Hearing, the following insurance
proceeds: (i) $3 million in business personal property insurance
which was used to satisfy the claim of Texas Capital Bank, (ii)
approximately $1.5 million in business interruption insurance,
(iii) approximately $1.75 million additional in business personal
property insurance, and (iv) approximately $1.65 million in real
property insurance.
The Committee Plan proposes to treat claims as follows:
* Class 3 January 24 Claims. This class is impaired with
estimated total claims of $250 million -$500 million. Each Holder
of an Allowed January 24 Claim shall receive their pro rata
distribution of the January 24 Claims Recovery. Creditors may
recover 1% - 22.8%, depending on insurance recovery and liquidated
amount of claims.
* Class 4 Minor Damage Claims. This class is impaired with
estimated total claims of $500,000 - $750,000. Each Holder of an
Allowed Minor Damage Claim will receive Cash on the Initial
Distribution Date equal to the lesser of (a) the face amount of
their Claim, or (b) $2,000.00. Creditors may recover 40% to 100%,
depending on amount of the claim.
* Class 5 Pre-Existing Claims. This class is impaired with
estimated total claims of $3,418,550. Each Holder of an Allowed
Pre- Existing Claim will receive their pro rata distribution of
$350,000 on the Initial Distribution Date. Creditors may recover
10% of claims.
* Class 6 Subordinated Claims. This class is impaired. the
Holders of Allowed Subordinated Claims will receive their pro rata
share of any remaining Liquidating Trust Cash.
* Class 7 Interests. This class is impaired. Interests shall be
cancelled and discharged, with the Holders of such Interests
receiving no Distribution on account of such Interests.
A full-text copy of the January 24 Claimants Committee's Combined
Disclosure Statement and Plan of Liquidation dated August 31, 2020,
is available at https://tinyurl.com/y4opa6xb from PacerMonitor.com
at no charge.
Counsel to the January 24 Claimants Committee:
Joshua W. Wolfshohl
Aaron J. Power
PORTER HEDGES LLP
1000 Main Street, 36th Floor
Houston, Texas 77002
Telephone: (713) 226-6600
Facsimile: (713) 226-6628
Email: jwolfshohl@porterhedges.com
apower@porterhedges.com
About Watson Grinding & Manufacturing
Watson Grinding & Manufacturing Co. --
http://www.watsongrinding.com/-- provides precision machined
parts, thermal spray coatings and grinding services to companies in
the oil and gas, chemical, and mining industries.
Watson Valve Services, Inc., -- http://watsonvalve.com/-- is a
turn-key OEM manufacturer of severe service ball valves.
Additionally, Watson Valve provides hydrostatic and pneumatic
pressure testing; oxygen service cleaning; on-site and off-site
installation support and troubleshooting; valve dis-assembly,
analysis, repair, and rebuilding; actuation system mounting and
installation; CNC and manual machining; grinding; thermal spray
coatings; coatings analysis; and non-destructive testing.
Watson Grinding and Watson Valve sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case Nos. 20-30967 and
20-30968) on Feb. 6, 2020.
At the time of the filing, Watson Grinding disclosed assets of
between $10 million and $50 million and liabilities of the same
range. Watson Valve had estimated assets of between $10 million and
$50 million and liabilities of between $500,000 and $1 million.
Judge Marvin Isgur oversees the cases.
The Debtors tapped McDowell Hetherington, LLP and Jones, Murray &
Beatty, LLC, as their legal counsel.
On Feb. 21, 2020, the United States Trustee for the Southern
District of Texas appointed the Official Committee of January 24
Claimants. The Committee retained Porter Hedges LLP, and Burns
Bowen Bair LLP, as counsel.
WATSON GRINDING: Majority Owner Submits Liquidating Plan
--------------------------------------------------------
John M. Watson, a creditor and the majority equity interest holder
of Watson Grinding & Manufacturing Co. and the majority equity
interest holder of Watson Valve Services, Inc., submitted a
proposed plan of liquidation of the Debtors.
The Plan resolves the dispute as to liability of the Valve Estate
with respect to the explosion that occurred on January 24, 2020.
Specifically, if the Class of January 24 Claims votes to approve
the Plan then one-third (1/3) of Valve's January 24 Claim Against
Grinding and all of the Remaining Valve January 24 Causes of Action
will be transferred to the Grinding Liquidating Trust for the
benefit of the Grinding Liquidating Trust's beneficiaries.
The Plan Proponent contends that this Plan is superior to the
chapter 11 plan filed by the Committee [Case No. 20-30967, Docket
No. 844, Case No. 20-30968, Docket No. 404] (the "Committee's
Plan") for the following reasons:
* This Plan allows the Bankruptcy Court to estimate the numerous
contingent and unliquidated claims asserted against the Debtors and
preserves the rights for parties in interest, including the
Liquidating Trustees, to object to claims, all to provide for an
efficient administration of the above-referenced bankruptcy cases;
while the Committee's Plan summarily cuts off the rights of parties
in interest, including the Liquidating Trustees, to seek estimation
of claims and to object to claims that are in the Removed
Lawsuits.
* The Committee has not been appointed in the Valve bankruptcy
case and has no standing to propose a plan for the Valve Estate –
a plan which improperly strips the assets of the Valve Estate to
enhance the recovery for the Committee's constituents to the
detriment of Valve's Estate's constituents, including John M.
Watson, the largest equity holder of Valve.
Watson's Plan proposes to treat claims and interests as follows:
* Class 1 Landlord Claims. Unless the Landlord has already agreed
to an alternative treatment, no later than seven (7) days after the
Effective Date, United Fire shall distribute the Real Property
Insurance Proceeds to each of the Landlords or the applicable loss
payee under the Real Property Insurance Policy.
* Class 3 January 24 Claims. If the Class of January 24 Claims
vote to accept this Plan, then as of the Effective Date, one-third
(1/3) of Valve's January 24 Claim Against Grinding and all of the
Remaining Valve January 24 Causes of Action shall be transferred to
the Grinding Liquidating Trust and the January 24 Claimholders
shall receive a Non-Contingent Beneficial Interests in the Grinding
Liquidating Trust.
* Class 4 Minor Damage Claims. This class is impaired (Entitled
to Vote) , except if January 24 Class does not accept the Plan then
as against Valve, Unimpaired. The estimated recovery of the
creditor is $500,000 - $750,000 40% to 100%, depending on insurance
recovery and liquidated amount of the claims. Each Holder of an
Allowed Minor Damage Claim will receive Cash on the Initial
Distribution Date equal to the lesser of (a) the face amount of
their Claim, or (b) $2,000.00; provided, however, that any Minor
Damage Claim that was asserted against both Grinding and Valve
shall be permitted only a single recovery based on the Allowed
amount of the Minor Damage Claim.
* Class 5.b. Valve Other General Unsecured Claims. If the holders
of the January 24 Claims vote to accept the Plan, then each holder
of an Allowed Valve Other General Unsecured Claims shall receive a
payment amount of its Allowed Claim on the Initial Distribution
Date or within 90 days of when such claim becomes an Allowed Claim.
If the holders of the January 24 Claims do not vote to accept the
Plan, then each holder of an Allowed Valve Other General Unsecured
Claims shall receive (i) a pro rata distribution of $350,000 on the
Initial Distribution Date, and (ii) a Non-Contingent Beneficial
Interests in the Valve Liquidating Trust in an amount equal to the
Allowed Valve Other General Unsecured Claim less the amount of the
distribution made under (i).
* Class 6.a. Grinding Indemnity Claims. This class is impaired.
Each holder of an Allowed Indemnity Claim against Grinding shall
receive a Non-Contingent Beneficial Interests in the Grinding
Liquidating Trust in the amount equal to the Allowed Grinding
Indemnity Claim. The estimated recovery of the creditor is 1% -
100%, depending on insurance recovery and liquidated amount of the
claims.
* Class 6.b. Valve Indemnity Claims. This class is Impaired
(Entitled to Vote), except if the Valve Indemnity Claim Class does
not accept the Plan then as against Valve, Unimpaired. If the
holder of the Indemnity Claims against Valve vote to accept the
Plan, then each holder of an Allowed Indemnity Claim against
Grinding shall receive a Pro Rata share of one-third (1/3) of
Valve's January 24 Claim Against Grinding; provided that if the
total Allowed amount of such Indemnity Claims is less than such
one-third (1/3) of Valve's January 24 Claim Against Grinding then
the remaining distribution of such one-third (1/3) of Valve's
January 24 Claim Against Grinding shall be distributed Pro Rate to
the Valve Interests. If the holders of the Indemnity Claims against
Valve do not vote to accept the Plan, then the Indemnity Claims
against Valve will be Allowed in an amount estimated by the
Bankruptcy Court at or prior to the Confirmation Hearing and shall
receive such treatment such that its legal, equitable, and
contractual rights against Valve are unaltered. The estimated
recovery of the creditor is 1% - 100%.
January 24 Claim Holder Lawsuits
Following the commencement of these Bankruptcy Cases, numerous
plaintiffs
commenced lawsuits against the Debtors. The Debtors caused these
lawsuits to be removed to the Bankruptcy Court. These Removed
Lawsuits are pending as adversary proceedings related to these
Bankruptcy Cases.
On and prior to August 31, 2020, numerous motions for remand were
filed in Removed Lawsuits seeking to remand the Lawsuits back to
state court. Hearings on the motions for remand are set for October
22, 2020.
On September 2, 2020, the Valve Chapter 11 Trustee filed multiple
motions to dismiss in each of the Removed Lawsuits. Hearings on the
motions to dismiss are set for October 22, 2020.
Estimation of Claims
Pursuant to the Plan, the following claims will be estimated:
-- Valve's January 24 Claim Against Grinding. This claim serves
as the basis of
distribution for three classes of claims and interests in Valve and
by estimating this claim for allowance it will avoid undue delay
with the administration of both bankruptcy cases. Valve's January
24 Claim Against Grinding shall be estimated pursuant to section
502(c) of the Bankruptcy Code for allowance and distribution under
the Plan at the Confirmation Hearing.
-- January 24 Claims Against Valve. While the Plan Proponent
believes that Valve has no liability for the January 24 Explosion,
under the Valve Liability Insurance, there is up to $26 million of
insurance proceeds that can be used to satisfy any January 24
Claim, including any personal injury claims or wrongful death
claims, which are ultimately liquidated and allowed against the
Valve Estate and in order to determine confirmability and
feasibility of the Plan the aggregate of these claims will be
estimated. The January 24 Claims shall be estimated against Valve
pursuant to section 502(c) of the Bankruptcy Code at the Valve
Estimation Hearing (with the purposes of the estimation set forth
in the definition of Valve Estimation Hearing).
-- January 24 Claims Against Grinding. As discussed in more
detail in Article III.C, the Settlement Oversight Committee will
have the authority to make distributions on account of settled
claims and the Settlement Oversight Committee will make its
determination of the permitted distributions to such settled
claims, in part, based on the estimated aggregate claims against
the Grinding Liquidating Trust. The January 24 Claims shall be
estimated against Grinding pursuant to section 502(c) of the
Bankruptcy Code at the Valve Estimation Hearing (with the purposes
of the estimation set forth in the definition of Grinding
Estimation Hearing).
-- Indemnity Claims. If the Indemnity Claims against each
Grinding and Valve shall be estimated against each Grinding and
Valve, respectively, pursuant to section 502(c) of the Bankruptcy
Code for the purposes of allowance and distribution at the Grinding
Estimation Hearing and the Valve Estimation Hearing, respectively.
While the Plan Proponent is not taking a position with respect to
the motions for remand which are set to be heard by the Bankruptcy
Court on October 22, 2020, the Plan Proponent believes that the
evidence presented at the hearing will show the that it will likely
take years for this complex litigation to finally resolved in any
court, thus establishing one of the elements for estimation under
section 502(c).
Settlement Oversight Committees
Under the Plan, there shall be established, as an adjunct to the
Grinding Liquidating Trust, a Settlement Oversight Committee
comprised of the following three members: (i) the Grinding
Liquidating Trustee, (ii) Ron Bankston (the designee of the January
24 Committee), and (iii) a designee made by the Grinding Liability
Insurance carriers (and if the Grinding Liability Insurance
carriers do not make a designation with sufficient time to include
in the Plan Supplement, then the Plan Proponent shall make such
designation).
The Settlement Oversight Committee shall establish the SOC
Protocols for the purpose allowing the Grinding Liquidating Trustee
to make distributions to January 24 Claimholders who settle and
compromise their January 24 Claims. In connection with establishing
the SOC Protocols, the Settlement Oversight Committee shall
consider the objectives of (i) timely making distributions to those
Holders of January 24 Claims who elect to settle their claims by
avoiding the need for waiting for liquidation of all January 24
Claims, and (ii) ensuring the Pro Rata treatment of the January 24
Claims as set forth in the Plan is maintained. In establishing the
SOC Protocols, the Settlement Oversight Committee shall also take
into account the proportional liability for the January 24
Explosion among all relevant parties and the circumstances of the
specific settling January 24 Claimholder (including medical needs,
age, etc.).
The Settlement Oversight Committee shall retain authority to settle
the Allowed amount of January 24 Claims by filing a motion to
compromise pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure.
Valve Settlement Oversight Committee
If the January 24 Claimholders Class votes to reject the Plan, then
there shall be established, as an adjunct to the Valve Liquidating
Trust, a Settlement Oversight Committee comprised of the following
three members: (i) the Valve Liquidating Trustee, (ii) Ron Bankston
(the designee of the January 24 Committee), and (iii) a designee
made by the Valve Liability Insurance carriers (and if the Valve
Liability Insurance carriers do not make a designation with
sufficient time to include in the Plan Supplement, then the Plan
Proponent shall make such designation).
The Settlement Oversight Committee shall establish the SOC
Protocols for the purpose allowing the Valve Liquidating Trustee to
make distributions to January 24 Claimholders who settle and
compromise their January 24 Claims against the Valve Estate. In
connection with establishing the SOC Protocols, the Valve
Settlement Oversight Committee shall consider the objectives of (i)
timely making distributions to those Holders of January 24 Claims
who elect to settle their claims by avoiding the need for waiting
for liquidation of all January 24 Claims, and (ii) ensuring the Pro
Rata treatment of the January 24 Claims as set forth in the Plan is
maintained. In establishing the SOC Protocols, the Settlement
Oversight Committee shall also take into account the proportional
liability for the January 24 Explosion among all relevant parties
and the circumstances of the specific settling January 24
Claimholder (including medical needs, age, etc.).
The Settlement Oversight Committee shall retain authority to settle
the Allowed amount of January 24 Claims by filing a motion to
compromise pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure.
A full-text copy of Watson's Disclosure Statement dated October 19,
2020, is available at https://tinyurl.com/y5nq332a from
PacerMonitor.com at no charge.
Counsel for John M. Watson:
Lenard M. Parkins PLLC
Charles M. Rubio P.C.
PARKINS LEE & RUBIO LLP
Pennzoil Place
700 Milam Street, Suite 1300
Houston, Texas 77002
Email: lparkins@parkinslee.com
crubio@parkinslee.com
Phone: 713-715-1660
About Watson Grinding & Manufacturing
Watson Grinding & Manufacturing Co. --
http://www.watsongrinding.com/-- provides precision machined
parts, thermal spray coatings and grinding services to companies in
the oil and gas, chemical, and mining industries.
Watson Valve Services, Inc., -- http://watsonvalve.com/-- is a
turn-key OEM manufacturer of severe service ball valves.
Additionally, Watson Valve provides hydrostatic and pneumatic
pressure testing; oxygen service cleaning; on-site and off-site
installation support and troubleshooting; valve dis-assembly,
analysis, repair, and rebuilding; actuation system mounting and
installation; CNC and manual machining; grinding; thermal spray
coatings; coatings analysis; and non-destructive testing.
Watson Grinding and Watson Valve sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case Nos. 20-30967 and
20-30968) on Feb. 6, 2020.
At the time of the filing, Watson Grinding disclosed assets of
between $10 million and $50 million and liabilities of the same
range. Watson Valve had estimated assets of between $10 million
and $50 million and liabilities of between $500,000 and $1
million.
Judge Marvin Isgur oversees the cases.
The Debtors tapped McDowell Hetherington, LLP and Jones, Murray &
Beatty, LLC, as their legal counsel.
On Feb. 21, 2020, the United States Trustee for the Southern
District of Texas appointed the Official Committee of January 24
Claimants. The Committee retained Porter Hedges LLP, and Burns
Bowen Bair LLP, as counsel.
WATSON GRINDING: Watson Valve Trustee Objects to Committee Plan
---------------------------------------------------------------
Robert E. Ogle, chapter 11 trustee for Watson Valve Services, Inc.,
objects to the Combined Disclosure Statement and Plan of
Liquidation of Debtor Watson Grinding & Manufacturing Co. under
Chapter 11 of the Bankruptcy Code filed by the January 24 Claimants
Committee.
Watson Valve claims that the Disclosure Statement describes a Plan
that is not a workable framework because it assumes the remand of
the lawsuits, provides for a special master that may adversely
affect the rights of Watson Valve, and does not provide for a Plan
B if the Lawsuits are not remanded to state court.
Watson Valve states that the Disclosure Statement and Plan,
admittedly, seeks to limit the co-defendants' ability to challenge
the Motions to Remand by seeking a confirmation hearing on the same
day the Motions for Remand are set to be heard, October 22, 2020.
Watson Valve points out that the Disclosure Statement and Plan are
premature and an attempt by the January 24 Claimants Committee to
end run around arguing the Motions to Remand. The lack of an
alternative seems to indicate that this Disclosure Statement and
Plan is more of a litigation tactic.
Watson Valve has asserted and will continue to assert that it has
no liability with respect to the January 24 Explosion. All the
combustible gas, gas storage tanks, and other equipment belonged
and were under the control of Watson Grinding.
The Trustee plans on submitting his own plan of reorganization for
Watson Valve that narrowly addresses the distribution of Watson
Valve's assets and defense of the Lawsuits without affecting the
bankruptcy case and related lawsuits of Watson Grinding.
A full-text copy of Watson Valve's objection is available at
https://tinyurl.com/y6p7ndux from PacerMonitor.com at no charge.
Counsel to Robert E. Ogle:
OKIN ADAMS LLP
Matthew S. Okin
Email: mokin@okinadams.com
James W. Bartlett, Jr.
Email: jbartlett@okinadams.com
Edward A. Clarkson, III
Email: eclarkson@okinadams.com
1113 Vine St. Suite 240
Houston, TX 77002
Tel: (713) 228-4100
Fax: (888) 865-2118
About Watson Grinding & Manufacturing
Watson Grinding & Manufacturing Co. --
http://www.watsongrinding.com/-- provides precision machined
parts, thermal spray coatings and grinding services to companies in
the oil and gas, chemical, and mining industries.
Watson Valve Services, Inc. -- http://watsonvalve.com/-- is a
turn-key OEM manufacturer of severe service ball valves.
Additionally, Watson Valve provides hydrostatic and pneumatic
pressure testing; oxygen service cleaning; on-site and off-site
installation support and troubleshooting; valve dis-assembly,
analysis, repair, and rebuilding; actuation system mounting and
installation; CNC and manual machining; grinding; thermal spray
coatings; coatings analysis; and non-destructive testing.
Watson Grinding and Watson Valve sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case Nos. 20-30967 and
20-30968) on Feb. 6, 2020.
At the time of the filing, Watson Grinding disclosed assets of
between $10 million and $50 million and liabilities of the same
range. Watson Valve had estimated assets of between $10 million
and $50 million and liabilities of between $500,000 and $1
million.
Judge Marvin Isgur oversees the cases.
The Debtors tapped McDowell Hetherington, LLP and Jones, Murray &
Beatty, LLC, as their legal counsel.
On Feb. 21, 2020, the United States Trustee for the Southern
District of Texas appointed the Official Committee of January 24
Claimants. The Committee retained Porter Hedges LLP, and Burns
Bowen Bair LLP, as counsel.
WPB HOSPITALITY: Unsecureds Payment to Rely on Litigation Proceeds
------------------------------------------------------------------
WPB Hospitality, LLC, submitted an Amended Chapter 11 Plan of
Reorganization.
Unsecured creditors holding allowed claims will receive
distributions, which the proponent of this Plan has valued at
approximately 100 cents (100%) on the dollar based upon potential
litigation proceeds.
Class 4 - General Unsecured Creditors (excluding Abbas and Frisco -
Amended Claims 2, 3 and 4) are impaired. There are a total of
eight Class 4 creditors totaling $102,715.89. Assuming the
disallowance of the ALC claim the Class 1 Priority claim and the
Class 4 Creditors will be paid in full from the NorthEast Bank
Account. If needed to pay 100%, the allowed claims of shall
additionally be paid pursuant to the Subordination Agreement with
Wanda Bertoia and Alpine Hospitality, Inc. all of the creditors of
the Debtor will be paid first from all proceeds of any kind from
the litigation and the subordination agreement.
Class 5 - Unsecured creditors are impaired. Abbas Consulting, Inc.
and Frisco Acquisition, LLC purchased certain liens that were
previously recorded against the Debtor's property, including a lien
previously held by Rio Grande Co. in the amount of $45,353.70
recorded on November 6, 2017 at reception number 2017145592; a lien
previously held by O'Brien Concrete Pumping in the amount of
$10,997.94 recorded on November 13, 2017, at reception number
2017147829; and a lien previously held by HD Construction Supply in
the amount of $3,556.12 recorded January 16, 2018, at reception
number 2018005377. ALC and these creditors ended up in litigation
which resulted in a consensual settlement. As part of that
settlement these creditors purchased the subject property with
participatory financing from ALC. The Debtor filed objections to
these claims.
Class 6 - Insider unsecured claims against the Debtor are impaired.
Class 6 consists of the unsecured claim of Alpine Hospitality,
Inc. for $5,784,158.53 based upon Proof of Claim No. 5. This claim
will receive no distribution unless and until all Superior Claims
above are paid in full.
Class 7 - Equity Security Holders of the Debtor are impaired.
Wanda Bertoia is the sole Equity Security Holder for the Debtor.
The prepetition membership interest shall be cancelled. Class 6
will receive no funds until all other allowed claims are paid in
full.
Wanda Bertoia and/or Alpine Hospitality, Inc., have agreed to fund
the Debtor's current and potential litigation.
A full-text copy of the Disclosure Statement dated August 31, 2020,
is available at https://tinyurl.com/y2p6c89z from PacerMonitor.com
at no charge.
Attorney for the Debtor:
Arthur Lindquist-Kleissler #9822
LINDQUIST-KLEISSLER & COMPANY, LLC
950 S. Cherry Street #418
Denver CO 80246
tele: (303) 691-9774
fax: (303) 200-8994
E-Mail: arthuralklaw@gmail.com
About WPB Hospitality
WPB Hospitality, LLC is a single asset real estate company (as
defined in 11 U.S.C. Section 101(51B)) whose principal assets are
located at 16161 E. 40th Ave., Denver, Colorado.
WPB Hospitality sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 18-18636) on Oct. 3,
2018. In the petition signed by Wanda Bertoia, owner, the Debtor
was estimated to have assets of less than $50,000 and liabilities
of $10 million to $50 million. Judge Elizabeth E. Brown oversees
the case. The Debtor tapped Lindquist-Kleissler & Company, LLC as
its legal counsel and CBRE, Inc. as broker.
WSRE GEORGIA: ESRG Buying Atlanta Property for $93K
---------------------------------------------------
WSRE Georgia, LLC, asks the US Bankruptcy Court for the Northern
District of Georgia to authorize the sale of its residential
property located 1941 Akron Dr., Atlanta, Georgia to ESRG JV for
$93,000, subject to adjustments.
The Debtor's primary business is the purchase, sale, and renovation
of residential real estate. As of the Petition Date, it held an
interest in the Property.
Atlanta Home Providers, LLC ("AHP") asserts a lien against the
Property. The Debtor listed AHP on its schedules as a secured
creditor with a disputed claim in the amount of $75,884.
Pursuant to the Motion, the Debtor asks to sell the Property to the
Buyer for $93,000, subject to adjustment for ad valorem property
taxes, community association fees, solid waste and governmental
fees and utility bills for which service cannot be terminated as of
the date of closing will be prorated as of the date of closing,
pursuant to the terms of that certain Purchase and Sale Agreement
for Real Property dated as of Oct. 5, 2020.
The Property will be sold "as is." The Buyer either has or will
provide the Debtor with an earnest money deposit in the amount of
$1,000 to be held in escrow by the Law offices of Sam Maguire Jr.
Law Firm, the closing agent. It will not assume any liabilities of
the Debtor in connection with the Property; provided, however, that
any accrued but unpaid real property taxes will be prorated between
the Debtor and the Buyer. Debtor also seeks authorization to take
such action and to execute and deliver any warranty deeds, bills of
sale, and other documents, agreements, and instruments that may be
necessary or advisable to effectuate the terms of the sale. The
closing date pursuant to the Agreement is Nov. 4, 2020.
The Debtor proposes to sell the Property to Buyer free and clear of
any and all liens, claims, interests, and encumbrances under the
terms and conditions set forth in the Agreement, with any valid,
perfected, and enforceable liens to attach to the net proceeds
generated from the sale of the Property.
The Debtor has made reasonably diligent efforts to market the
Property for sale. It believes that it has appropriately and
sufficiently marketed the Property based on all of the foregoing
facts. Indeed, it believes that the Purchase Price will be
sufficient to satisfy all valid creditor claims in the bankruptcy
case.
The Debtor believes that any entity asserting a security interest
in the Property, including AHP, would consent to the sale of the
Property provided that its security interest attaches to the sale
proceeds. Also, it believes that the Purchase Price is greater
than the aggregate value of any liens on the Property, including
any asserted lien by AHP.
Finally, because of the parties desire to close the transaction
contemplated herein as promptly as possible (the current closing
date is Nov. 4, 2020), the Debtor asks that the Court orders and
directs that the order approving the Motion will not be
automatically stayed for 14 days.
A copy of the Agreement is available at
https://tinyurl.com/y699sgr9 from PacerMonitor.com free of charge.
About WSRE Georgia
WSRE Georgia, LLC, sought protection for relief under Chapter 11 of
the Bankruptcy Code ( Bankr. N.D. Ga. Case No. 20-67876) on July 7,
2020, listing under $1 million in both assets and liabilities.
Leron E. Rogers, Esq. at LEWIS BRISBOIS BISGAARD & SMITH, LLP,
represents the Debtor.
[*] Hospital Bankruptcy Surge Looms as Virus Rages, Stimulus Lapses
-------------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that hospitals and other
health-care providers are bracing for a bankruptcy wave as the
government stimulus aid that gave a lifeline to the industry dries
up.
Even before the Covid-19 pandemic, providers were pushed to their
breaking points, especially those in rural areas. At least 30
hospitals entered bankruptcy in 2019, and at least three dozen have
done the same so far this year, according to data compiled by
Bloomberg.
Chapter 11 filings had been poised to go higher with the
coronavirus inflating costs for protective equipment and impeding
revenue-generating elective procedures. The CARES Act and
accelerated Medicare advance payments helped to forestall the
anticipated increase.
The stopgap assistance allowed struggling hospitals to stay out of
bankruptcy and remain open for patients, said health-care
transactions lawyer Bobby Guy of Polsinelli PC.
But Congress and the Trump administration have been unable to agree
on further coronavirus relief, and health-care bankruptcies and
out-of-court restructurings could accelerate early next year,
attorneys say.
"If there's not more stimulus, we're going to see a lot of cash
crunches," Guy said. "The bill will come due."
Healthcare sectors have been in upheaval for years as reimbursement
rates have fallen, the cost of care has increased, and rural
populations have declined.
Polsinelli's quarterly "distress index" that tracks health-care
bankruptcy filings has exceeded a 2010 benchmark in every quarter
since the latter half of 2015. The firm’s most recent report
shows that distress in the industry is more than five times what it
was in 2010 when Polsinelli began tracking, Guy said.
Thomas Health System Inc. and its two West Virginia hospitals went
bankrupt in January. Quorum Health Corp., the operator of two dozen
rural and mid-size market hospitals, filed for Chapter 11 in early
April.
The American Hospital Association estimates that the nation’s
hospital and health systems will report $323 billion in net loss
this year, due in large part to lower non-Covid patient volumes.
Federal coronavirus stimulus packages kept an earlier bankruptcy
wave at bay by handing hospitals and healthcare providers $175
billion to cover expenses or lost revenue this 2020. The government
also distributed $100 billion in emergency Medicare advancement
loans.
"In some respects, more than any other industry, health care has
really been propped up by stimulus money," said Haynes and Boone
LLP attorney Matt Ferris. "You had those types of providers that
really had zero revenue for a few months."
Struggles Continue
But "the pre-pandemic stresses come back" when the stimulus money
starts to slow down, said Andrew Sherman, bankruptcy practice
co-chair at Sills Cummis & Gross PC. "Those same issues are going
to come to light, and maybe even worse post-pandemic."
Rural hospitals in particular are going to continue to struggle, as
will senior living centers, Ferris said.
"There's a world of haves and have nots," said attorney Sam Maizel,
who specializes in health-care restructuring at Dentons LLP. Large
private hospitals generally have been doing well, while small rural
hospitals "live hand to mouth" and lack the resources to sustain
themselves, he said.
"That's been horribly exacerbated by Covid-19," he said.
Even with additional funding that may come from Congress, it
doesn't change the underlying causes of distress, said Cynthia
Romano, a global director of restructuring at CohnReznick LLP.
"In the short term, I don't think it matters which party is
elected," she said.
Staving off Bankruptcy
The emergency cash infusion temporarily rescued some providers that
would have gone bankrupt even without the pandemic.
A distressed small critical access hospital looking for a buyer,
but the company put those plans on hold after receiving $1 million
in government aid, according to Tim Gary, CEO of consulting firm
Crux Strategies , referring to Crux's discussions with the
hospital.
Several facilities "were on the edge before this all started," but
stimulus funds helped them stay in business, he said.
But that funding wasn't a cure-all.
New Hampshire hospital group LRGHealthcare received a $5.25 million
state loan in April and about $15 million from the CARES Relief
Fund.
The company filed for bankruptcy Oct. 19.
Government funding allowed the company to keep its doors open while
running at 80% of pre-pandemic revenue. But persistent liquidity
problems jeopardized its chances of staying in business "without a
cash infusion or finding a partner to take-over the venture," it
said in court papers.
LRGHealthcare likely won't be alone.
"I call it being in the blender, and it's waiting for someone to
push the button," said bankruptcy attorney Carolyn Johnsen of
Dickinson Wright PLLC.
[*] Jones Day: Expanding Safe Harbor for Securities Transactions
----------------------------------------------------------------
Mark Douglas and Charles Oellermann of Jones Day wrote an article
on JDSurpra titled "Expanding the Scope of the Bankruptcy Safe
Harbor for Securities Transactions."
In 2019, the U.S. Court of Appeals for the Second Circuit made
headlines when it ruled that creditors' state law fraudulent
transfer claims arising from the 2007 leveraged buyout ("LBO") of
Tribune Co. ("Tribune") were preempted by the safe harbor for
certain securities, commodity or forward contract payments
contained in section 546(e) of the Bankruptcy Code. The Second
Circuit concluded that a debtor may itself qualify as a "financial
institution" covered by the safe harbor, and thus avoid the
implications of the U.S. Supreme Court's decision in Merit Mgmt.
Grp., LP v. FTI Consulting, Inc., 138 S. Ct. 883 (2018), by
retaining a bank or trust company as an agent to handle LBO
payments, redemptions and cancellations.
Picking up where the Second Circuit left off, the U.S. Bankruptcy
Court for the Southern District of New York recently held in
Holliday v. K Road Power Management, LLC (In re Boston Generating
LLC), 2020 WL 3286207 (Bankr. S.D.N.Y. June 18, 2020), that: (i)
section 546(e) preempts intentional fraudulent transfer claims
under state law because the intentional fraud exception expressly
included in section 546(e) applies only to intentional fraudulent
transfer claims under federal law; and (ii) payments made to the
members of limited liability company ("LLC") debtors as part of a
pre-bankruptcy recapitalization transaction were protected from
avoidance under section 546(e) because the debtors were "financial
institutions," as customers of banks that acted as their
depositories and agents in connection with the transaction.
The Section 546(e) Safe Harbor
Section 546 of the Bankruptcy Code imposes a number of limitations
on a bankruptcy trustee's avoidance powers, which include the power
to avoid certain preferential and fraudulent transfers. Section
546(e) provides that the trustee may not avoid, among other things,
a pre-bankruptcy transfer that is a settlement payment "made by or
to (or for the benefit of) a … financial institution [or a]
financial participant…, or that is a transfer made by or to (or
for the benefit of)" any such entity in connection with a
securities contract, "except under section 548(a)(1)(A) of the
[Bankruptcy Code]." Thus, the section 546(e) "safe harbor" bars
avoidance claims challenging a qualifying transfer unless the
transfer was made with actual intent to hinder, delay, or defraud
creditors under federal law, as distinguished from being
constructively fraudulent because the debtor was insolvent at the
time of the transfer (or became insolvent as a consequence) and
received less than reasonably equivalent value in exchange.
Section 101(22) of the Bankruptcy Code defines the term "financial
institution" to include:
[A] Federal reserve bank, or an entity that is a commercial or
savings bank, industrial savings bank, savings and loan
association, trust company, federally-insured credit union, or
receiver, liquidating agent, or conservator for such entity and,
when any such Federal reserve bank, receiver, liquidating agent,
conservator or entity is acting as agent or custodian for a
customer (whether or not a "customer", as defined in section 741)
in connection with a securities contract (as defined in section
741) such customer….
11 U.S.C. § 101(22) (emphasis added).
The purpose of section 546(e) is to prevent "the insolvency of one
commodity or security firm from spreading to other firms and
possibly threatening the collapse of the affected market." H.R.
Rep. No. 97-420, at 1 (1982). The provision was "intended to
minimize the displacement caused in the commodities and securities
markets in the event of a major bankruptcy affecting those
industries." Id.
In Deutsche Bank Trust Co. Ams. v. Large Private Beneficial Owners
(In re Tribune Co. Fraudulent Conveyance Litig.), 818 F.3d 98 (2d
Cir. 2016) ("Tribune 1"), the U.S. Court of Appeals for the Second
Circuit affirmed lower court decisions dismissing creditors' state
law constructive fraudulent transfer claims arising from the 2007
LBO of Tribune. According to the Second Circuit, even though
section 546(e) expressly provides that "the trustee" may not avoid
certain payments under securities contracts unless such payments
were made with the actual intent to defraud, section 546(e)'s
language, its history, its purposes, and the policies embedded in
the securities laws and elsewhere led to the conclusion that the
safe harbor was intended to preempt constructive fraudulent
transfer claims asserted by creditors under state law.
Prior to the Supreme Court's ruling in Merit, there was a split
among the circuit courts of appeals concerning whether the section
546(e) safe harbor barred state law constructive fraud claims to
avoid transactions in which the financial institution involved was
merely a "conduit" for the transfer of funds from the debtor to the
ultimate transferee. The Second Circuit ruled that the safe harbor
applied under those circumstances in In re Quebecor World (USA)
Inc., 719 F.3d 94 (2d Cir. 2013). The Supreme Court resolved the
circuit split in Merit.
In Merit, a unanimous Supreme Court held that section 546(e) does
not protect transfers made through a "financial institution" to a
third party, regardless of whether the financial institution had a
beneficial interest in the transferred property. Instead, the
relevant inquiry is whether the transferor or the transferee in the
transaction sought to be avoided overall is itself a financial
institution. Because the selling shareholder in the LBO transaction
that was challenged as a constructive fraudulent transfer was not a
financial institution (even though the conduit banks through which
the payments were made met that definition), the Court ruled that
the payments fell outside of the safe harbor.
In a footnote, the Court acknowledged that the Bankruptcy Code
defines "financial institution" broadly to include not only
entities traditionally viewed as financial institutions, but also
the "customers" of those entities, when financial institutions act
as agents or custodians in connection with a securities contract.
The selling shareholder in Merit was a customer of one of the
conduit banks, yet never raised the argument that it therefore also
qualified as a financial institution for purposes of section
546(e). For this reason, the Court did not address the possible
impact of the shareholder transferee's customer status on the scope
of the safe harbor.
In April 2018, the Supreme Court issued an order that, in light of
its ruling in Merit, the Court would defer consideration of a
petition seeking review of Tribune 1. The Second Circuit later
suspended the effectiveness of Tribune 1 "in anticipation of
further panel review." In a revised opinion issued in December
2019, In re Tribune Co. Fraudulent Conveyance Litig., 946 F.3d 66
(2d Cir. 2019), reh'g denied, No. 13-3992 (L) (2d Cir. Feb. 6,
2020) ("Tribune 2"), the Second Circuit reaffirmed the court's
previous decision that creditors' state law constructive fraudulent
transfer claims were preempted by the section 546(e) safe harbor.
The Second Circuit acknowledged that one of the holdings in Tribune
1 (as well as its previous ruling in Quebecor) was abrogated by
Merit's pronouncement that the section 546(e) safe harbor does not
apply if a financial institution is a mere conduit. However, the
court again concluded that section 546(e) barred the creditors'
state law avoidance claims, but for a different reason.
The Second Circuit explained that, under Merit, the payments to
Tribune's shareholders were shielded from avoidance under section
546(e) only if either Tribune, which made the payments, or the
shareholders who received them, were "covered entities." It then
concluded that Tribune was a "financial institution," as defined by
section 101(22)(A) of the Bankruptcy Code, and "therefore a covered
entity."
According to the Second Circuit, the entity Tribune retained to act
as depository in connection with the LBO was a "financial
institution" for purposes of section 546(e) because it was a trust
company and a bank. Therefore, the court reasoned, Tribune was
likewise a financial institution because, under the ordinary
meaning of the term as defined by section 101(22), Tribune was the
bank's "customer" with respect to the LBO payments, and the bank
was Tribune's agent according to the common law definition of
agency. "Section 546(e)'s language is broad enough under certain
circumstances," the Second Circuit wrote, "to cover a bankrupt
firm's LBO payments even where, as here, that firm's business was
primarily commercial in nature."
Boston Generating
Boston Generating LLC ("BosGen"), its holding company EBG Holdings
LLC ("EBG"), and their subsidiaries (collectively, "debtors") owned
and operated electric power generating facilities near Boston. In
November 2006, BosGen and EBG launched a leveraged recapitalization
transaction whereby they borrowed approximately $2.1 billion from
lenders, in part to fund a $925 million tender offer for EBG's
member units and the distribution of $35 million in dividends to
EBG's members. The Bank of New York ("BNY") acted as a depository
and agent for both BosGen and EBG in connection with the tender
offer.
The $2.1 billion cash infusion from the credit facilities was
deposited into BosGen and EBG bank accounts at U.S. Bank National
Association ("U.S. Bank") and later transferred to their accounts
at BNY. In December 2006, as part of consummating the
recapitalization transaction, EBG directed BNY to pay approximately
$1 billion to EBG's members in the form of unit redemptions,
warrant redemptions, and other distributions (collectively,
"payments").
The debtors filed for chapter 11 protection in the Southern
District of New York in August 2010. After authorizing the sale of
substantially all of the debtors' assets, the bankruptcy court
confirmed a liquidating chapter 11 plan for the debtors in August
2011. The plan created a liquidating trust to pursue claims on
behalf of the debtors' general unsecured creditors. The liquidating
trustee commenced an adversary proceeding seeking, among other
things, to avoid and recover the payments as intentional and
constructive fraudulent transfers under the New York Debtor &
Creditor Law. The defendants moved to dismiss, arguing that the
transfers were safe-harbored under section 546(e).
The Bankruptcy Court's Ruling
The bankruptcy court granted the motion to dismiss the liquidating
trustee's fraudulent transfer claims. The court ruled that: (i)
section 546(e) preempted the claims; and (ii) the payments were
protected by the section 546(e) safe harbor because BosGen and EBG
were "financial institutions," as customers of U.S. Bank and/or
BNY.
Initially, the court acknowledged that, although neither Tribune 1
nor Tribune 2 addressed whether section 546(e) preempts intentional
(as distinguished from constructive) fraudulent transfer claims
under state law, the court saw "no reason why Tribune's reasoning
does not extend to intentional state law fraudulent transfer
claims." Examining the plain language of section 546(e), the court
declined to extend section 546(e)'s exception for federal
intentional fraudulent transfer claims under section 548(a)(1)(A)
to include state law intentional fraudulent transfer claims.
According to the court:
Congress may have specifically excluded state law intentional
fraudulent transfer claims from section 546(e)'s exception having
determined the need for stability in the securities markets
overrode the potential danger of creditors escaping claims for
intentional fraud based on a fear that inconsistent application of
fifty (50) states' fraudulent transfer statutes would result in
instability in the securities markets.
Looking at the series of transfers involving the payments as an
"integrated transaction," the bankruptcy court determined that the
payments satisfied the requirements for the safe harbor because:
(i) "a transfer of cash to a financial institution made to
repurchase and cancel securities—in other words, to complete a
securities transaction—qualifies for the safe harbor as a
settlement payment"; (ii) the LLC member units and warrants
qualified as "securities" under the Bankruptcy Code's broad
definition; (iii) the payments were made "in connection with a
securities contract"—the tender offer; (iv) BosGen qualified as a
"financial institution" by virtue of its relationship with U.S.
Bank, which acted as the agent of its customers BosGen and EBG in
connection with the tender offer; and (v) additionally, or in the
alternative, both BosGen and EBG qualified as "financial
institutions" as customers of BNY, which acted as their agent in
connection with the tender offers.
Finally, the court also ruled that section 546(e) preempted the
liquidating trustee's constructive fraudulent transfer claims under
state law—an issue that was conceded by the trustee.
Outlook
Merit potentially opened the door for state law constructive
fraudulent transfer claims against selling equity holders in many
LBOs or other recapitalization transactions. Such payments
typically pass through financial intermediaries that would be
considered "financial institutions" and, before Merit, were
considered to be protected from such claims by the safe harbor in
many circuits.
Post-Merit case law, however, appears to close the door, at least
in the Second Circuit, on such fraudulent transfer claims. In
handing down its ruling in Boston Generating, the bankruptcy court
employed substantially the same reasoning articulated by the Second
Circuit in Tribune 2 and the U.S. District Court for the Southern
District of New York in related litigation involving the Tribune
litigation trustee's federal constructive fraudulent transfer
claims. See In re Tribune Co. Fraudulent Conveyance Litig., 2019 WL
1771786 (S.D.N.Y. Apr. 23, 2019). Each of these decisions suggests
that the results of Merit might be avoided by structuring
transactions so that the target or recapitalized entity is a
"customer" of the financial intermediaries involved. Boston
Generating adds an additional gloss to the analysis by concluding
that state law intentional fraudulent transfer claims asserted on
behalf of creditors are also preempted by section 546(e).
[^] BOOK REVIEW: Macy's for Sale
--------------------------------
Author: Isadore Barmash
Paperback: 180 pages
List price: $34.95
Review by Henry Berry
Order your personal copy today at
http://www.beardbooks.com/beardbooks/macys_for_sale.html
Isadore Barmash writes in his Prologue, "This book tells the story
of Macy's managers and their leveraged buyout, the newest and most
controversial device in the modern financial armament" when it took
place in the 1980s. At the center of Barmash's story is Edward S.
Finkelstein, Macy's chairman of the board and chief executive
office. Sixty years old at the time, Finkelstein had worked for
Macy's for 35 years. Looking back over his long career dedicated
to the department store as he neared retirement, Finkelstein was
dismayed when he realized that even with his generous stock
options, he owned less than one percent of Macy's stock. In the
years leading up to his unexpected, bold takeover, Finkelstein had
made over Macy's from a run-of-the-mill clothing retailer into a
highly profitable business in the lead of the lucrative and growing
fashion and "lifestyle" field.
To aid him in accomplishing the takeover and share the rewards with
him, Finkelstein had brought together more than three hundred of
Macy's top executives. To gain his support for his planned
takeover, Finkelstein told them, "The ones who have done the job at
Macy's are the ones who ought to own Macy's." Opposing Finkelstein
and his group were the Straus family who owned the lion's share of
Macy's and employees and shareholders who had an emotional
attachment to Macy's as it had been for generations, "Mother
Macy's" as it was known. But the opponents were no match for
Finkelstein's carefully laid plans and carefully cultivated
alliances with the executives. At the 1985 meeting, the
shareholders voted in favor of the takeover by roughly 80%, with
less than 2% opposing it.
The takeover is dealt with largely in the opening chapter. For the
most part, Barmash follows the decision making by Finkelstein, the
reorganization of the national company with a number of branches,
the activities of key individuals besides Finkelstein, Macy's moves
in the competitive field of clothing retailing, and attempts by the
new Macy's owners led by Finkelstein to build on their successful
takeover by making other acquisitions. Barmash allows at the
beginning that it is an "unauthorized book, written without the
cooperation of the buying group." But as he quickly adds, his
coverage of Macy's as a business journalist and his independent
research for over a year gave him enough knowledge to write a
relevant and substantive book. The reader will have no doubt of
this. Barmash's narrative, profiles of individuals, and analysis
of events, intentions, and consequences ring true, and have not
been contradicted by individuals he writes about, subsequent
events, or exposure of material not public at the time the book was
written.
First published in 1989, the author places the Macy's buyout in the
context of the business environment at the time: the aggressive,
largely laissez-faire, Reagan era. Without being judgmental, the
author describes how numerous corporations were awakened from their
longtime inertia, while many individuals were feeling betrayed,
losing jobs, and facing uncertain futures.
Isadore Barmash, a veteran business journalist and author, was
associated with the New York Times for more than a quarter-century
as business-financial writer and editor. He also contributed many
articles for national media, Reuters America, and the Nihon Kenzai
Shimbun of Japan. He has published 13 books, including a novel and
is listed in the 57th edition of Who's Who in America.
*********
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