/raid1/www/Hosts/bankrupt/TCR_Public/201120.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, November 20, 2020, Vol. 24, No. 324
Headlines
13 MARCUS GARVEY: Unsecured Creditors to Recover 20% Over 10 Years
37 CALUMET STREET: Voluntary Chapter 11 Case Summary
ADIO PHARMACY: Case Summary & 20 Largest Unsecured Creditors
ADMI CORP: Moody's Reviews B2 CFR for Downgrade
ALPINE 4 TECHNOLOGIES: Incurs $1.40 Million Net Loss in 3rd Quarter
AMERILIFE HOLDINGS: S&P Rates New First-Lien Term Loan Add-On 'B'
APCO HOLDINGS: S&P Alters Outlook to Stable, Affirms 'B' ICR
ARANDELL HOLDINGS: Nov. 24 Hearing on $31M All Assets Sale to AAC
ARCHDIOCESE OF SANTA FE: $152K Sale of Sandia Park Property Okayed
ARCHES INTERMEDIATE: S&P Assigns 'B' ICR, Outlook Stable
AREWAY ACQUISTION: Plan Has 8.3 Cents on Dollar for Unsecureds
ASSURANT INC: Moody's Assigns Ba1(hyb) Rating on $250MM Sub. Notes
ASSURANT INC: S&P Rates Subordinated Notes 'BB+'
ASTROTECH CORP: Incurs $2.1 Million Net Loss in First Quarter
BIOSTAGE INC: Incurs $660K Net Loss in Third Quarter
BLACK DOG CHICAGO: Parent Petroleum Objects to Amended Disclosure
BLACK DOG CHICAGO: U.S. Trustee Objects to Third Amended Plan
BLACKJEWEL LLC: 0% to 15% for Unsecureds in Committee-Backed Plan
BLUE DOLPHIN: Incurs $4.6 Million Net Loss in Third Quarter
BOY SCOUTS OF AMERICA: Wants to Settle Abuse Claims
CAH ACQUISITION 1: Court Confirms Liquidating Plan
CAPITAL TRUCK: Wins March 12 Plan Exclusivity Extension
CASA SYSTEMS: Moody's Affirms B3 CFR; Alters Outlook to Stable
CATHEDRAL PLACE: Creditors to Be Paid in Full After Refinancing
CCM MERGER: S&P Affirms 'B+' Issuer Credit Rating; Outlook Negative
CHARTER DAY SCHOOL: Moody's Rates 2020A/B Revenue Bonds 'Ba1'
CLAROS MORTGAGE: S&P Rates New $250MM Secured Term Loan Add-On 'B+'
COMCAR INDUSTRIES: Bulk Buying Low Value Assets for $61.5K
COMCAR INDUSTRIES: C&D Logistics Buying Low Value Assets for $5.3K
COMCAR INDUSTRIES: Global Exports Buying Low Value Assets for $1K
COMCAR INDUSTRIES: Howell Buying Low Value Assets for $1.6K
COMCAR INDUSTRIES: TAC Auction Buying Low Value Assets for $7.3K
CORNERSTONE PAVERS: West Bend Mutual Objects to Disclosure
CUENTAS INC: Posts $1.7 Million Net Loss in Third Quarter
CURE TOPCO: S&P Affirms 'B' ICR on New Term Loan Issuance
CURVATURE INC: S&P Withdraws 'CCC' Issuer Credit Rating
DAH-ON INC: Unsecured Creditors to Split $105K Over 5 Years
DATA STORAGE: Posts $42K Net Income in Third Quarter
DIOCESE OF CAMDEN: Selling Two New Jersey Properties for $4M
DOUBLE EAGLE III: S&P Assigns 'B-' ICR; Outlook Stable
ELITE PHARMACEUTICALS: Posts $2.5 Million Net Income in 2nd Quarter
EVOQUA WATER: S&P Upgrades ICR to 'B+' on Lower Financial Leverage
FIRST BRANDS: S&P Affirms B' ICR on Proposed Acquisition
FITNESS INTERNATIONAL: S&P Cuts Senior Secured Debt Rating to CCC+
FLOOR AND DECOR: Moody's Affirms Ba3 CFR; Alters Outlook to Stable
FOUNDATION BUILDING: S&P Places 'B+' ICR on Watch Negative
FRONTIER COMMUNICATIONS: Fitch Affirms BB-(EXP) LT IDR
FTS INTERNATIONAL: Successfully Completes Restructuring
GATES GLOBAL: S&P Alters Outlook to Stable, Affirms 'B+' ICR
GATOR HOLDCO: S&P Affirms B- ICR on Debt Issuance, Outlook Stable
GB SCIENCES: Incurs $805K Net Loss in Second Quarter
GFL ENVIRONMENTAL: Moody's Rates New $500MM Unsec. Notes B3
GFL ENVIRONMENTAL: S&P Rates New Senior Secured Notes 'B-'
GORHAM PAPER: Hires Donlin Recano as Claims and Noticing Agent
GORHAM PAPER: Hires Financial Advisor and Investment Banker
GROWLIFE INC: Incurs $1.06 Million Net Loss in Third Quarter
GUITAR CENTER: Reaches RSA With Key Stakeholders
GULFPORT ENERGY: Gets Court Approval for $90 Million DIP Financing
H-CYTE INC: Posts $3.9 Million Net Income in Third Quarter
HD SUPPLY: S&P Puts 'BB+' ICR on Watch Positive on Home Depot Deal
HENRY FORD: Seeks to Tap RBC Capital Markets as Investment Banker
HERITAGE RAIL: Committee Gets Approval to Hire Legal Counsel
HILTON DOMESTIC: Moody's Gives Ba2 Rating to New $1B Unsec. Notes
HILTON DOMESTIC: S&P Rates New Senior Unsecured Notes 'BB'
HILTON GRAND: S&P Affirms 'BB' ICR; Ratings Off Watch Negative
HOBERT K. SANDERSON: Son Buying Equipment for $10K
HOSPITALITY INVESTORS: Has $20.6M Net Loss for Sept. 30 Quarter
HYCROFT MINING: Has Substantial Doubt on Staying as Going Concern
IBH MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors
ICONIC BRANDS: Has $1.2M Net Loss for Quarter Ended Sept. 30
ICONIX BRAND: Reports $46.7M Net Income for Sept. 30 Quarter
ICORECONNECT INC: Posts $774,000 Net Loss for Sept. 30 Quarter
IFRESH INC: Reports $3.6-Mil. Net Income for Quarter Ended June 30
IMAGEWARE SYSTEMS: Says Substantial Going Concern Doubt Exists
IMERYS TALC: Morris, Brown Represent Litigation Claimants
IMPRIVATA INC: Moody's Assigns B2 CFR, Outlook Stable
JAB OF ROCKLAND: Gets OK to Hire BC Commercial as Broker
JAGUAR HEALTH: Incurs $7.9 Million Net Loss in Third Quarter
JCK LEGACY: Amended Joint Plan Confirmed by Judge
JONAH ENERGY: S&P Lowers ICR to 'D' on Missed Deficiency Payment
LAS LOMAS: Acknowledges Feasilibility Issue; No Plan So Far Filed
LATEX FOAM: Unsecured Creditors to Have 0% to 8% Recovery in Plan
LIBERTY COMMUNICATIONS: S&P Raises ICR to 'B+'; Outlook Stable
LINDEN PONDS: Moody's Affirms BB Rating on $117MM Revenue Bonds
LIVE NATION: S&P Lowers ICR to 'B'; Outlook Negative
LRGHEALTHCARE: Other Possible Bidders Emerge to Buy Assets
LRGHEALTHCARE: Sets Bidding Procedures for Substantially All Assets
MALLINCKRODT PLC: Can't Stop Antitrust Claims, Says Illinois City
MATCHBOX FOOD: Has New Owner, To Open New Locations
MERITOR INC: Fitch Assigns BB- Rating to New $275MM Unsec. Notes
MERITOR INC: Moody's Assigns B1 Rating to New $275MM Unsec. Notes
MERITOR INC: S&P Rates New $275MM Senior Unsecured Notes 'BB-'
MLK ALBERTA: Court Confirms Reorganization Plan
MONTAGE RESOURCES: S&P Raises ICR to 'BB-' on Southwestern Deal
MONUMENT BREWING: Plan Confirmation Hearing Continued to Dec. 7
MONUMENT BREWING: Unsecured Creditors to Recover 30% in Plan
NOBLE ACADEMY: S&P Cuts 2014A-B Lease-Revenue Bond Rating to 'BB'
NOBLE CORPORATION: Seeks to Hire KPMG LLP as Tax Consultant
NORTHEAST GAS: Iroquois Gas Objects to Disclosure Statement
NORTHEAST GAS: Unsecureds to Have 3% to 12% Recovery in Joint Plan
NPC INTERNATIONAL: Wendy's to Buy 400 Eateries Out of Bankruptcy
NRG ENERGY: S&P Affirms 'BB+' Issuer Credit Rating
PANKEY'S TRANSPORTATION: Plan of Reorganization Confirmed by Judge
PANKEY'S TRANSPORTATION: Unsecureds to Receive $3K Per Quarter
PENOBSCOT VALLEY: Dec. 17 Plan Confirmation Hearing Set
PENOBSCOT VALLEY: Keybank Says Disclosure Is Inadequate
PENOBSCOT VALLEY: United States Objects to Plan Disclosures
PENOBSCOT VALLEY: Unsecureds Get Releases of Causes of Action
PPV INC: David R. Burns Says Disclosure Too Vague & Speculative
PPV INC: Leonite Capital Objects to Joint Disclosure Statement
PRESSURE BIOSCIENCES: Incurs $3.67 Million Net Loss in 3rd Quarter
PRESSURE BIOSCIENCES: Signs 3rd Amended Binding LOI with Cannaworx
PROVIDENT FUNDING: Fitch Assigns B+ LT IDR, Outlook Stable
PWR INVEST: Dec. 8 Plan & Disclosure Hearing Set
PWR INVEST: Gaedeke Says Trustee's Plan Unconfirmable
PWR INVEST: Unsecureds to Have 90% to 100% Recovery in Joint Plan
QUARTER HOMES: $225K Sale of Spur House to Progress Approved
R & H MACHINERY: Seeks Court Approval to Hire Accountant
RACKSPACE TECHNOLOGY: Moody's Affirms B2 CFR, Outlook Stable
RACKSPACE TECHNOLOGY: S&P Rates New $550MM Senior Notes 'B-'
RAYSHAWN L. ROBINSON: Glenn Dale Property Sale to Eccles Approved
RED ROSE: Sets Bidding Procedures for Substantially All Assets
RGN-GROUP: Regus Units Seek $47 Million More to Finance Chapter 11
RICHARD MARVIN CRONK: $510K Sale of Vegas Property to Jalaf Okayed
ROBERT D. SPARKS: $625K Sale of Lubbock Property to CH Withdrawn
ROSEGARDEN HEALTH: Trustee Seeks to Hire 401(k) Plan Administrator
ROYALE ENERGY: Incurs $612K Net Loss in Third Quarter
SINTX TECHNOLOGIES: Posts $2.51 Million Net Loss in Third Quarter
SOUTHERN FOODS: Court Extends Plan Exclusivity Thru November 26
SPRINGFIELD HOSPITAL: Dec. 9 Plan Confirmation Hearing Set
SPRINGFIELD HOSPITAL: Unsecureds Payouts Rely on Avoidance Suits
STOHNE RENTALS: Seeks to Hire KC Cohen as Counsel
TATUNG COMPANY: Dec. 8 Hearing on Disclosures and Plan
TATUNG COMPANY: Unsecured Creditors to Have 20% Recovery in Plan
TD HOLDINGS: Posts $1.2 Million Net Income in Third Quarter
TRANSOCEAN LTD: S&P Downgrades ICR to 'SD' on Distressed Exchanges
TUESDAY MORNING: Faegre Drinker Represents Trade Claimants
USA GYMNASTICS: Taps Krieg DeVault as 'Ordinary Course' Counsel
VECTOR LAUNCH: Court Clears Liquidation Plan for Creditor Voting
VECTOR LAUNCH: Unsecureds to Recover 2% to 7% in Liquidating Plan
VIZIV TECHNOLOGIES: Hires Beckham Group as Litigation Counsel
VYCOR MEDICAL: Posts $360K Net Loss in Third Quarter
WALDEN PALMS: Granted Cash Collateral Access Thru Dec. 3
WAYNE P. BURICK: $500K Sale of New Wilmington Property Confirmed
WEISS BUSH: Seeks Approval to Hire Pittman & Pittman as Counsel
WELLFLEX ENERGY: Sale of All Assets to PetroSmith Approved
WESTERN URANIUM: CEO Gets $150K Annual Salary Under New Contract
WESTERN URANIUM: Incurs $366K Net Loss in Third Quarter
WILSON SALON: Seeks Approval to Tap Julianne Frank as Legal Counsel
YOGAWORKS INC: Committee Seeks to Hire Morris James as Counsel
YOGAWORKS INC: Committee Taps Kilpatrick Townsend as Counsel
YOGAWORKS INC: Hires Cozen O'Connor as Delaware Counsel
YOGAWORKS INC: Seeks to Tap Dundon Advisers as Financial Advisor
[*] Colorado Has Early Lead in Commercial Bankruptcies in Region
[^] BOOK REVIEW: Macy's for Sale
*********
13 MARCUS GARVEY: Unsecured Creditors to Recover 20% Over 10 Years
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13 Marcus Garvey, LLC filed with the U.S. Bankruptcy Court for the
Eastern District of New York a Plan of Reorganization and a
Disclosure Statement on Sept. 22, 2020.
Class 2 is comprised of the Allowed Secured Claim asserted by
Chondrite REO, LLC. The Holders of the Allowed Class 2 Claims
shall receive, in full satisfaction, settlement, release,
extinguishment, and discharge of such Claims: $1,500,000 in cash on
or as soon as reasonably practicable after the later of the
Effective Date, the date on which such Allowed Claim becomes
Allowed, and a date agreed to by the Debtor or the Reorganized
Debtor, as the case may be, and the Holder of such Allowed Claim;
the Holders of the Allowed Class 2 Claims shall also be assigned
the accounts receivables of the Debtor with an approximate value of
$100,000.
Class 3 is comprised of all Allowed General Unsecured Claims that
are not classified within any other Class under the Plan.
Beginning 30 days after the Effective Date, the Reorganized Debtor
shall make payments in equal installments for a period of 10 years,
paying 20% of each claim. The payments contemplated under this
provision shall be made from the revenues of the Property, ongoing
business operations and/or owners' contributions. Payment in full
or partial satisfaction of the Allowed Class 3 Claim may be made at
any time without pre-payment penalty.
The Debtor has secured Debtor-in-Possession Financing in the amount
of $1.5 million upon court approval and on the Effective Date, the
Debtor will distribute $1.5 million. The DIP Financing has an
initial term of one year at a rate of 12% with interest only
payments. The payments contemplated under this provision shall be
made from the revenues of the Property, ongoing business operations
and/or owners' contributions. At the end of the year, the Debtor
will secure traditional financing and continue operations. The
Holders of the Allowed Class 2 Claims shall also be assigned the
accounts receivables of the Debtor with an approximate value of
$100,000.
A full-text copy of the Disclosure Statement dated September 22,
2020, is available at https://tinyurl.com/yy4xmml2 from
PacerMonitor at no charge.
The Debtor is represented by:
SOBERS LAW, PLLC
Vivian Sobers, Esq.
11 Broadway, Suite 615
New York, New York 10004
Telephone: (917) 225-4501
About 13 Marcus Garvey
13 Marcus Garvey LLC is a Single Asset Real Estate (as defined in
11 U.S.C. Section 101(51B)). 13 Marcus Garvey LLC filed a Chapter
11 Petition (Bankr. E.D.N.Y. Case No. 20-42043) on May 13, 2020.
Hon. Carla E. Craig oversees the case. Vivian Sobers, Esq. of
SOBERS LAW, PLLC, is the Debtor's counsel.
At the time of filing, the Debtor has $1 million to $10 million and
$1 million to $10 million estimated liabilities.
37 CALUMET STREET: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: 37 Calumet Street LLC
41 Calumet Street
Boston, MA 02120
Business Description: 37 Calumet Street LLC's primary assets are
located at 37 Calumet Street, Boston, MA.
Case No.: 20-12253
Chapter 11 Petition Date: November 19, 2020
Court: United States Bankruptcy Court
District of Massachusetts
Judge: Hon. Frank J. Bailey
Debtor's Counsel: Gary W. Cruickshank, Esq.
GARY W. CRUICKSHANK
21 Custom House Street
Suite 920
Boston, MA 02110
Tel: 617-330-1960
Fax: 617-330-1970
Email: gwc@cruickshank-law.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Patricia Hounsell, manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/MIOBFTQ/37_Calumet_Street_LLC__mabke-20-12253__0001.0.pdf?mcid=tGE4TAMA
ADIO PHARMACY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: ADiO Pharmacy Distribution Services PLLC
DBA Four Rivers Pharmacy
415 Broadway
Paducah, KY 42001
Business Description: ADiO Pharmacy Distribution Services PLLC --
https://www.adiopharmacy.com -- operates
full-service pharmacies.
Chapter 11 Petition Date: November 19, 2020
Court: United States Bankruptcy Court
Western District of Kentucky
Case No.: 20-50588
Debtor's Counsel: David M. Cantor, Esq.
SEILLER WATERMAN LLC
22nd Floor - Meidinger Tower
462 S 4th Street
Louisville, KY 40202
Tel: 502-584-7400
Fax: 502-583-2100
Email: cantor@derbycitylaw.com
Total Assets: $351,496
Total Liabilities: $5,797,269
The petition was signed by Vivek Swaminathan, CEO.
A copy of the petition containing, among other items, a list of the
Debtor's 11 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/NKMVCSY/ADiO_Pharmacy_Distribution_Services__kywbke-20-50588__0001.0.pdf?mcid=tGE4TAMA
ADMI CORP: Moody's Reviews B2 CFR for Downgrade
-----------------------------------------------
Moody's Investors Service placed the ratings of ADMI Corp.'s on
review for downgrade. These include its B2 Corporate Family Rating,
B2-PD Probability of Default Rating, and B2 Senior Secured Bank
Credit Facility ratings.
The review was prompted as the company has signed a definitive
agreement to acquire CC Dental a dental service organization. The
acquisition will be near fully debt-funded. ADMI expects this
transaction to close in late 2020. While the acquisition will
improve ADMI's scale and diversification, it will significantly
increase leverage as well as presenting integration risks.
Ratings placed on review for downgrade include:
ADMI Corp.
Corporate Family Rating currently rated B2
Probability of Default Rating currently rated B2-PD
Senior Secured Bank Credit Facilities currently rated B2 (LGD3)
Outlook action:
Outlook, changed to ratings under review from Stable.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Excluding the review, Aspen Dental's B2 Corporate Family Rating
reflects its moderately high financial leverage and aggressive
growth strategy, with 70 to 80 new office openings per year.
Moody's expects that these factors will constrain profitability
margins and free cash flow over the next several years. The rating
is also constrained by the high proportion of self-pay revenues, as
patients typically are responsible for a large portion of their
bill and rely on third-party financing arrangements. The rating
also reflects the lingering operating uncertainty due to the
coronavirus pandemic. Despite these challenges, the rating reflects
the company's strong market position as one of the largest dental
service organizations (DSO) in the US. The rating also takes into
account Aspen's good geographic diversity and solid track record of
business execution and growth.
The ratings review will focus on the overall impact of the
acquisition on ADMI's business profile, and its ability to manage
integration risk. The review will also focus on ADMI's plans and
ability to reduce leverage, and maintain adequate liquidity
throughout the integration process.
Moody's considers coronavirus to be a social risk given the risk to
human health and safety. Aside from coronavirus, Aspen Dental faces
other social risks such as the rising concerns around the access
and affordability of healthcare services. However, Moody's does not
consider the DSOs to face the same level of social risk as many
other healthcare providers. From a governance perspective, Moody's
expects Aspen Dental's financial policies to remain aggressive due
to its private equity ownership.
Aspen Dental provides business support services to its 843
affiliated dental offices across 42 states. The company is
privately-held and majority-owned by Ares Management, LP and
Leonard Green & Partners, L.P., with the remaining 20% owned by
American Securities, management and dentists. The company's audited
financials do not consolidate the practice ownership program
("POP") practices. As of Sept. 30, 2020, excluding POP offices, the
company generated net revenues of approximately $863 million, while
the consolidated net revenues for all dental offices, including POP
offices, was approximately $1.4 billion for the same period.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
ALPINE 4 TECHNOLOGIES: Incurs $1.40 Million Net Loss in 3rd Quarter
-------------------------------------------------------------------
Alpine 4 Technologies Ltd. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $1.40 million on $8.73 million of revenue for the three months
ended Sept. 30, 2020, compared to net income of $2.80 million on
$7.09 million of revenue for the three months ended Sept. 30,
2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $3.71 million on $26.61 million of revenue compared to
a net loss of $1.16 million on $20.69 million of revenue for th
same period during the same period last year.
As of Sept. 30, 2020, the Company had $36.59 million in total
assets, $50.16 million in total liabilities, and a total
stockholders' deficit of $13.57 million.
Alpine stated that, "The working capital of the Company is
currently negative and causes doubt as to the ability of the
Company to continue. The Company requires capital for its
operational and marketing activities. The Company's ability to
raise additional capital through the future issuances of common
stock is unknown. The obtainment of additional financing, the
successful development of the Company's plan of operations, and its
ultimate transition to the attainment of profitable operations are
necessary for the Company to continue operations. The ability to
successfully resolve these factors raise substantial doubt about
the Company's ability to continue as a going concern. The
financial statements of the Company do not include any adjustments
that may result from the outcome of these aforementioned
uncertainties.
"In order to mitigate the risk related with the going concern
uncertainty, the Company has a three-fold plan to resolve these
risks. First, the acquisitions of QCA, Morris, Deluxe and Excel
have allowed for an increased level of cash flow to the Company.
Second, the Company is considering other potential acquisition
targets that, like QCA, Morris, Deluxe and Excel should increase
income and cash flow to the Company. Third, the Company plans to
issue additional shares of common stock for cash and services
during the next 12 months and has engaged professional service
firms to provide advisory services in connection with that capital
raise."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1606698/000109690620000297/alpp_10q.htm
About Alpine
Alpine 4 Technologies Ltd. is a publicly traded enterprise with
business related endeavors in, software, automotive technologies,
electronics manufacturing, and energy services & fabrication
technologies. As of June 1, 2020, the Company was a holding
company that owned seven operating subsidiaries: ALTIA, LLC;
Quality Circuit Assembly, Inc.; American Precision Fabricators,
Inc.; Morris Sheet Metal, Corp; and JTD Spiral, Inc.; Deluxe Sheet
Metal, Inc,; and Excel Fabrication, LLC.
Alpine 4 Technologies reported a net loss of $3.13 million for the
year ended Dec. 31, 2019, compared to a net loss of $7.91 million
for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company
had $35.80 million in total assets, $47.77 million in total
liabilities, and a total stockholders' deficit of $11.97 million.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
June 1, 2020 citing that the Company has suffered recurring losses
from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
AMERILIFE HOLDINGS: S&P Rates New First-Lien Term Loan Add-On 'B'
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S&P Global Ratings said it assigned its 'B' issue rating to
AmeriLife Holdings LLC's proposed $80 million first-lien term loan
add-on and its 'CCC+' issue rating to the company's $45 million
second-lien term loan add-on. The recovery rating on the first-lien
add-on is '3', indicating its expectation for meaningful recovery
(50%-70%; rounded estimate: 50%) in the event of a payment default,
while the recovery rating on the second-lien add-on is '6',
indicating its expectation for negligible recovery (0%-10%; rounded
estimate: 5%). All the terms for the additional debt are the same
as for the existing term loans. In S&P's view, the additional debt
does not affect its 'B' issuer credit rating or stable outlook on
AmeriLife Holdings LLC.
AmeriLife will use the debt proceeds to finance a series of
acquisitions through the rest of 2020. After being acquired by the
private equity firm Thomas H. Lee Partners, the company has entered
into a new strategic state where acquisitions will play a larger
role. While it's still early, AmeriLife's recent acquisitions have
been executed with no major issues and have contributed to overall
earnings growth.
S&P said, "After this acquisition and the add-on in August, we
expect AmeriLife's credit quality measures to temporarily
deteriorate. We expect pro forma adjusted debt to EBITDA (including
operating leases and a full year of acquisition EBITDA) to increase
to just above 7x by year-end 2020. We also expect AmeriLife to
reduce leverage pro forma to 6.5x-7.0x in 2021.
"We think AmeriLife's growing scale, highly variable cost
structure, and senior health/life insurance focus will provide it
with some resilience through macroeconomic and pandemic-related
headwinds. Its Medicare growth has been strong (5% year-over-year
revenue growth as of Sept. 30, 2020) due to favorable demographic
trends. Meanwhile, its annuity and registered investment adviser
businesses have provided balanced diversification, as well as
similar organic revenue growth."
The company's life business saw a slight deterioration in revenue
(down 12% year over year as of Sept. 30, 2020) due to COVID-19,
since customers could not purchase the product due to an inability
to take diagnostic tests. But life products represent only a small
portion of the company's overall business (about 10% of revenue),
so S&P thinks AmeriLife can offset a small setback in its life
business with good growth in other products, achieving single-digit
organic growth for year-end 2020.
APCO HOLDINGS: S&P Alters Outlook to Stable, Affirms 'B' ICR
------------------------------------------------------------
S&P Global Ratings said it revised its outlook on APCO Holdings LLC
to stable from negative and affirmed its 'B' long-term issuer
credit rating.
At the same time, S&P affirmed its 'B' rating on APCO's $240
million first-lien credit facility ($20 million revolver due 2023
and $220 million term loan due 2025). The recovery rating remains
at '3', indicating S&P's expectation that lenders would receive
meaningful (50%-70%; rounded estimate: 50%) recovery in the event
of a payment default.
The revised outlook reflects S&P's expectation that APCO's adjusted
leverage will remain below 5.5x, with EBITDA of $48 million-$56
million for the next 12-24 months. S&P attributes APCO's resilience
in 2020 to:
-- Better-than-expected light-vehicle sales due to a higher
proportion of the used-car market, which is generally more
resilient than the new car market during tough economic periods
with higher attachment points;
-- More favorable product mix with a higher proportion of Vehicle
Service Contracts (VSC);
-- An asset sale;
-- Expense actions taken to limit cash outflows; and
-- Stronger profit-sharing benefits from lower driving activity
and fewer servicing requests.
S&P believes these actions supported the business throughout the
year, leading to both modest revenue growth (mainly due to profit
sharing) and stronger EBITDA and cash flow generation eliminating
covenant pressures on the company early in the second quarter,
giving the company the ability to likely repay a portion of debt in
the fourth quarter.
APCO's narrow focus in the competitive and highly fragmented
vehicle service contract and ancillary finance and insurance
markets weighs on its business risk assessment. But, the company
demonstrates key competitive strengths--namely long-standing
product expertise, national service capabilities, innovation to
enhance existing partnerships, long-term relationships with dealer
partners benefiting from multiyear contracts, and multichannel
distribution model. As light-vehicle sales drop, dealers rely on
these products to sustain profitability, enabling APCO to enhance
its relationships with dealer partners during challenging economic
conditions.
Since APCO does not take underwriting risk, its earnings are
somewhat less volatile than its closest peers, with upside coming
in strong underwriting years through the one-sided profit-sharing
commission it receives. These benefits helped improve margins in
the first nine months of the year and stabilize revenue despite the
reduction in light-vehicle sales. Its historical EBITDA margins
have been strong and stable, while year-to-date margins have
improved by over 10 points, benefiting from expense actions taken
to protect cash flows at the height of the pandemic, business mix
changes (higher VSC relative to other benefit sales), and
profit-sharing commissions. S&P expects margins to moderate in 2021
because of the reintroduction of temporary cost savings, lower
profit-sharing benefits, and a more normal product mix.
Offsetting these factors is its relatively small size/scale, narrow
product scope, and targeted customer base of small franchise
dealers exposed to consolidation or other potential pressures as a
result of the COVID-19 pandemic. It focuses on local/regional
franchise and independent auto dealers, which are generally a
higher-margin business than the original equipment manufacturer and
national dealer customer segments, but also are more at risk for
consolidation or economic stresses affecting sustainability of the
dealership.
To offset some of these concerns, APCO partners with dealers to
provide financing so it can better manage cash flow needs without
any material impact on cash flow this year despite challenges faced
as a result of the pandemic.
APCO has aggressive financial policies due to its financial sponsor
ownership, as well as weak credit ratios.
S&P said, "We expect that APCO's adjusted leverage will remain
below 6.0x, benefiting from enhanced dealer relationships, higher
levels of profit sharing, more optimal product mix, and the
expectation for debt paydown in the fourth quarter. We believe
these factors provide the company a greater cushion--from a
leverage perspective."
"Our financial leverage and EBITDA interest coverage calculations
do not include APCO's preferred stock of $166 million and accrued
interest. Following its amendment to its preferred shareholder
agreement in April 2018, we continue to treat the preferred units
as equity instead of debt. Although, majority-owner Ontario
Teachers' Pension Plan (OTPP) generally issued preferred and common
units as a stapled set, aligning the economic interest with the
holder of the class A common units. In addition to the stapling,
the preferred units meet all other requirements for equity
treatment."
"The stable outlook reflects our view that despite the COVID-19
pandemic weighing on the auto warranty segment production, strong
profit-sharing benefits leading to debt reduction will provide the
company greater cushion if it faces additional challenges in 2021.
We expect improved light-vehicle sales offset by lower
profit-sharing benefits will lead to modest growth in both revenue
and EBITDA in 2021, improving debt to EBITDA metrics 4.2-4.5 in
2020 before moderating to 4.8-5.1 in 2021 while coverage improves
to 2.8-3.2 over the same time period."
S&P could downgrade the company in the next 12 months if production
and profit-sharing levels are weaker than expected or the downturn
lasts longer than the rating agency anticipates. Some indications
of this could include:
-- APCO's debt-to-EBITDA ratio rising above 7x and its coverage
deteriorating to below 2x, indicating sustained pressure on
servicing obligations; or
-- Its liquidity deteriorating further.
S&P said, "We consider an upgrade unlikely in the next year given
the company's reliance on auto sales, limited scale in the market
in which it competes, and lack of presence with the larger national
players and original equipment manufacturers. However, we could
raise the ratings if APCO improves product and client
diversification and gains more profitable scale. We could also
consider an upgrade if it significantly improves operating
performance or repays debt, so that leverage decreases to less than
5x on a sustained basis and EBITDA interest coverage increases to,
and remains at, about 3x."
ARANDELL HOLDINGS: Nov. 24 Hearing on $31M All Assets Sale to AAC
-----------------------------------------------------------------
Arandell Holdings, Inc. and affiliates filed with the U.S.
Bankruptcy Court for the District of Delaware a notice of their
proposed bidding procedures in connection with the sale of
substantially all assets of Arandell Corp. and Arandell Holdings to
Arandell Acquisition Co. for $30,832,878 in cash (subject to
adjustments), including, (i) the assumption of certain liabilities,
plus, (ii) a credit bid in the amount of $2.4 million, subject to
overbid.
On Oct. 16, 2020, the Court entered the Bidding Procedures Order
approving, among other things, the Bidding Procedures, which
establish the key dates and times related to the Sale Transaction
and the Auction.
Copies of the Bidding Procedures Motion, the Bidding Procedures,
and the Bidding Procedures Order, as well as all related exhibits,
including the Stalking Horse Asset Purchase Agreement and all other
documents filed with the Court, are available free of charge on the
Debtors' case information website, located at
https://bmcgroup.com/arandell or can be requested by e-mail at
arandell@bmcgroup.com.
Important dates and deadlines relating to the sale include:
a. Bid Deadline: Nov. 13, 2020 at 5:00 p.m. (ET)
b. Auction: In the event that the Debtors timely receive a
Qualified Bid in addition to the Qualified Bid of the Stalking
Horse Bidder and subject to the satisfaction of any further
conditions set forth in the Bidding Procedures, the Debtors intend
to conduct an Auction for the Purchased Assets. The Auction, if
one is held, will commence on Nov. 18, 2020 at 10:00 a.m. (ET) at
the offices of Young Conaway Stargatt & Taylor, LLP, Rodney Square,
1000 N. King Street, Wilmington, Delaware 19801, or such other
date, time, and location, or by videoconference (or such other form
of remote communication established by the Debtors in consultation
with the Consultation Parties) as will be timely communicated to
all parties entitled to attend the Auction. Any party in interest
may attend (but not participate in) the Auction if any such party
in interest provides the Debtors with written notice of its
intention to attend the Auction five business day prior to the
Auction, which written notice will be sent to the counsel for the
Debtors via electronic mail, to Matthew P. Milana
(mmilana@ycst.com).
c. Sale Objection Deadline: Nov. 17, 2020 at 5:00 pm. (ET)
d. Auction Objection Deadline: Nov. 23, 2020 at 12 noon
e. Sale Hearing: Nov. 24, 2020 at 3:00 p.m. (ET)
About Arandell Holdings
Arandell -- https://www.arandell.com/ -- is a commercial printing
company that is located in Menomonee Falls, Wisconsin. The
Company's largest customers are blue chip major retailers and
recognized brands using direct mail catalogs to promote both
in-store and e-commerce sales. Arandell's products and services
include the production and delivery of higher-end catalogs and
other promotional products along with related data analytics
services supporting the needs of marketers.
Arandell Holdings, Inc., based in Menomonee Falls, WI, and its
debtor-affiliates sought Chapter 11 protection (Bankr. D. Del. Lead
Case No. 20-11941) on Aug. 13, 2020. The Hon. John T. Dorsey
presides over the case.
In the petition signed by Bradley J. Hoffman, president and CEO,
Arandell was estimated to have $10 million to $50 million in assets
and $100 million to $500 million in liabilities.
The Debtors tapped STEINHILBER SWANSON LLP, and YOUNG CONAWAY
STARGATT & TAYLOR, LLP, as counsel. VON BRIESEN & ROPER S.C., is
special corporate counsel. HARNEY PARTNERS, is the financial
advisor. PROMONTORY POINT CAPITAL, is the investment banker. BMC
GROUP, INC., is the claims and noticing agent.
ARCHDIOCESE OF SANTA FE: $152K Sale of Sandia Park Property Okayed
------------------------------------------------------------------
Judge David T. Thuma of the U.S. Bankruptcy Court for the District
of New Mexico authorized Roman Catholic Church of The Archdiocese
of Santa Fe's sale of approximately 10 acres of vacant land on La
Madera Road, Sandia Park, New Mexico to David and Jennifer Soule
for $152,000, pursuant to the Purchase Agreement.
The Broker's commission and applicable tax is allowed as an
administrative expense of the Estate. The Debtor is authorized to
pay Broker's commission and applicable tax, in full, at closing,
pursuant to the terms of the Listing Agreement.
All closing costs and expenses due pursuant to the terms of the
Contract are allowed as administrative expenses of the Estate and
the Debtor is authorized to pay all closing costs and expenses at
closing and pursuant to the terms of the Contract.
The sale is free and clear of all Claims.
The Order is not stayed as provided by Rule 6004(h) and the Debtor
and the Buyers may close on the sale set forth in the Contract
immediately.
About Roman Catholic Church
of The Archdiocese of Santa Fe
The Roman Catholic Church of the Archdiocese of Santa Fe --
https://www.archdiosf.org/ -- is an ecclesiastical territory or
diocese of the southwestern region of the United States in the
state of New Mexico. At present, the Archdiocese of Santa Fe
covers an area of 61,142 square miles. There are 93 parish seats
and 226 active missions throughout this area.
The Archdiocese of Santa Fe sought Chapter 11 protection (Bankr.
D.N.M. Case No. 18-13027) on Dec. 3, 2018, to deal with child abuse
claims. It reported total assets of $49,184,579 and total
liabilities of $3,700,000 as of the bankruptcy filing.
Judge David T. Thuma oversees the case.
The archdiocese tapped Elsaesser Anderson, Chtd. and Walker &
Associates, P.C., as bankruptcy counsel; Stelzner, Winter,
Warburton, Flores, Sanchez & Dawes, P.A as special counsel; and
REDW, LLC as accountant. Liz McGuire, associate broker with
Coldwell Banker Legacy, is the real estate broker.
ARCHES INTERMEDIATE: S&P Assigns 'B' ICR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings assigned a 'B' issuer credit rating to Arches
Intermediate Inc. following Blackstone's acquisition of
Ancestry.com Holdings LLC (Ancestry)for $4.7 billion in a partially
debt-funded transaction. The debt will be issued at subsidiary
Arches Buyer Inc. S&P anticipated withdrawing the existing ratings
on Ancestry when the transaction closes.
At the same time, S&P assigned a 'B' issue-level and '3' recovery
rating to Arches Intermediate Inc.'s new $1.8 billion term loan due
2027, pari passu $450 million senior secured notes due 2028, and
$250 million senior secured revolving credit facility due 2025.
S&P also assigned a 'CCC+' issue-level and '6' recovery rating to
the company's new $550 million senior unsecured notes due 2028.
S&P said, "Our 'B' issuer credit rating on Ancestry reflects its
concentration in the niche family history genealogy business,
declining DNA kit sales, and its high leverage pro forma for the
transaction. These challenges are somewhat offset by the company's
strength in its family history business, usage of which has
increased as consumers social distance to stem the spread of the
COVID-19 pandemic and spend more time utilizing online services
such as Ancestry.com. In addition, the company has pursued
significant cost reduction initiatives in 2020 that are expected to
support maintaining free operating cash flow (FOCF) to debt of over
5%, which we believe is comparable to other 'B' rated companies in
our universe despite the increased leverage from the transaction."
The core genealogy business has been resilient to declines in DNA
kit sales and the coronavirus pandemic.
S&P said, "Ancestry exceeded our expectations for subscriber growth
in 2020 and demonstrated it can maintain and expand its subscriber
base, even as declines in DNA kit sales led to declines in
subscriber additions from cross-selling. However, a portion of the
subscriber additions could be one-off and driven by users having
more time to spend online, particularly in the quarter ended June
2020, as they social distanced to mitigate the COVID-19 pandemic.
We believe there are risks to net subscriber growth in 2021 as
competition from entertainment alternatives increases, especially
when a vaccine or treatment for the coronavirus becomes widely
available. We believe subscriber churn could be elevated with
continued declines in DNA cross-sell additions."
Cost reduction initiatives and a resilient subscription business
help support the 'B' rating despite the increase in leverage and
declining DNA kit sales.
Pro forma for the transaction, Ancestry's leverage as of the
quarter ended September 2020 will increase to the low-8x area from
the low-6x area, which S&P expects will cause the company's annual
interest expense to increase roughly $55 million-$60 million.
However, these negative factors are largely offset by the
significant cost reduction actions it undertook to right-size its
DNA business in the first half of 2020. These initiatives primarily
included reductions in marketing as well as personnel costs.
S&P said, "We expect the cost savings and growth in subscription
revenue will offset the incremental interest expense and will allow
the company to generate FOCF to debt of 5%-6% in 2021 and 6%-7% in
2022. We believe the company's healthy cash flow should allow it to
withstand some volatility stemming from the uncertainty in the pace
of DNA kit sales declines and its impact on subscriber additions
for the family history business, as well as the potential for
higher churn in 2021 as the company will have to compete with
alternative in-person entertainment options once a vaccine becomes
widely available."
The Ancestry.com genealogy product is highly discretionary and
requires investments in new content to keep customers engaged.
The company spent aggressively on content to build out its
genealogy database. But the pace of content acquisition has
moderated, and S&P expects content spending to remain flat at
roughly 2% of revenue over the next 12-24 months. Although this
spending reduces FOCF, more content provides an incentive for
subscribers to continue using the service and provides the
foundation for Ancestry.com to launch new services in more
countries. While the ability to acquire new content is a risk,
S&P's view the company's collection of genealogy records as a
significant barrier to entry to the business.
S&P said, "The stable outlook reflects our expectation that
Ancestry's leverage will decline below 7.5x and the company will
generate FOCF to debt between 5% and 6% over the next 12 months, as
mid-single-digit percent growth in subscription revenue offsets
declines in DNA origins kit sales. It also reflects our expectation
that cost-cutting efforts and the shift in the revenue mix toward
the higher-margin subscription business will lead to a roughly
300-basis-point (bps) annual increase in EBITDA margin in both 2020
and 2021."
S&P could lower the rating over the next year if it expects the
company's FOCF to debt to decline below 5% and its leverage to
remain above 7.5x for a prolonged period. This could occur if:
-- The company's subscription revenue growth stalls.
-- Total revenue growth remains negative.
-- Cost-cutting efforts are insufficient to maintain an EBITDA
margin of above 30%.
-- Reductions in marketing spending in its DNA segment leads to
accelerated declines in DNA kit sales and subscriber additions from
DNA cross-sells.
Although unlikely, an upgrade could occur if the company broadens
its diversity of operations and commits to a less aggressive
financial policy. This would require:
-- Consistent FOCF to debt of over 10%.
-- A commitment that any future re-leveraging activity will be
limited with leverage sustained below 6x.
AREWAY ACQUISTION: Plan Has 8.3 Cents on Dollar for Unsecureds
--------------------------------------------------------------
Yourway Coatings, LLC, a debtor-affiliate of Areway Acquisition,
Inc., filed a Second Amended Plan of Reorganization.
The Plan under chapter 11 of the Bankruptcy Code proposes to pay
Creditors of the Debtor from the projected cash flow of the
Reorganized Debtor's operations, recoveries from the Bankruptcy
Causes of Action and/or borrowings against its unencumbered assets
as illustrated in the projections.
The Plan will pay in full all Allowed Administrative Expenses,
Allowed Secured Claims and Allowed Priority Claims. Non-Priority
Non-Insider Unsecured Creditors holding Allowed Claims will also
receive distributions under this Plan, which the Debtor estimates
to be and values at approximately 8.3 cents on the dollar paid from
Net Distributable Income of the business of the Debtor over a
period of three years. This amount depends mainly upon the
performance of the Debtor and may be more or less. Regardless,
Non-Priority Insider Unsecured Creditors will receive
no distribution under this Plan.
Class 1.01 (Allowed Non-Priority Non-Insider Unsecured Claims) is
impaired. Holders of Allowed Non-Priority Non- nsider Unsecured
Claims will, at the sole election of the Reorganized Debtor,
receive either (a) Pro Rata annual distributions of the Debtor's
Net Distributable Income in accordance with the Projections and
this Plan within 60 days following the first, second and third
anniversary of the Confirmation Date in full satisfaction of such
Claims, or (b) the present value of the Net Distributable Income
projected in the Projections to be distributed under the Plan in
the 3- year period.
Class 1.02 (Non-Priority Insider Unsecured Claims) is impaired.
Holders of Allowed Non-Priority Insider Unsecured Claims have
voluntarily waived distribution on account of such Claims.
A full-text copy of the Disclosure Statement dated August 20, 2020,
is available at https://tinyurl.com/yypmj2rg from PacerMonitor at
no charge.
A full-text copy of the Disclosure Statement dated September 14,
2020, is available at https://tinyurl.com/y3jgkln2 from
PacerMonitor.com at no charge.
Counsel for Yourway Coatings:
Jeffrey M. Levinson
Levinson LLP
55 Public Square, Suite 1750
Cleveland, Ohio 44113
(216) 514-4935
jml@jml-legal.com
About Areway Acquisition
Areway Acquisition, Inc. -- http://arewayacq.com/-- is a supplier
of finished forged and cast metal products with complete in-house
machining, automated polishing and buffing, powder and liquid
painting, and an ISO certified quality control system capable of
ASTM, SAE, and OEM specification testing.
Areway Acquisition sought Chapter protection (Bankr. N.D. Ohio Case
No. 20-11065) on Feb. 25, 2020. At the time of the filing, the
Debtor was estimated to have between $1 million and $10 million in
both assets and liabilities. Judge Jessica E. Price Smith oversees
the case. Jeffrey M. Levinson, Esq., at Levinson LLP, is the
Debtor's legal counsel.
ASSURANT INC: Moody's Assigns Ba1(hyb) Rating on $250MM Sub. Notes
------------------------------------------------------------------
Moody's Investors Service has assigned a Ba1(hyb) rating to
Assurant, Inc.'s (Assurant; NYSE: AIZ, Baa3 stable) $250 million of
subordinated notes due 2061. The company is issuing the notes off
its existing multi-purpose shelf registration. Assurant expects to
use net proceeds from the offering along with cash on hand to
finance the HYLA Mobile acquisition, with any remainder for general
corporate purposes. The rating outlook for Assurant remains
stable.
RATINGS RATIONALE
According to Moody's, Assurant's ratings are based on the group's
strong market position in a number of niche specialty P&C insurance
products including lender-placed homeowner insurance, extended
service contracts/ warranties, mobile handset protection, credit
insurance/protection and multifamily housing. These lines of
business generally have limited market competition and the company
maintains very good relationships with various distributors which
leads to enhanced profitability. These strengths are offset by the
company's catastrophe exposures from its lender-placed homeowner
business, particularly in Florida and Texas, and exposure to
adverse changes in the legal and regulatory environment given its
niche products.
In October 2020, Assurant announced the acquisition of HYLA Mobile,
a leading provider of smartphone software, trade-in and upgrade
services, in a transaction valued at $325 million. The transaction
is expected to close by the end of 2020, subject to regulatory and
other customary closing approvals. The rating agency said that pro
forma financial leverage as of Sept. 30, 2020 is expected to remain
below 30%.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to an upgrade of Assurant's
ratings: (i) significant reduction in gross and net catastrophe
exposures over multiple years, (ii) consolidated financial leverage
meaningfully below 25%, (iii) improved capitalization and strong
profitability, and (iv) holding company liquid resources (cash &
short-term assets) around $500 million.
The following factors could lead to a downgrade of Assurant's
ratings: (i) significant increase in catastrophe exposure (on gross
or net basis) as a percentage of shareholder equity, or a 10% or
more decline in shareholder equity, (ii) consolidated adjusted
financial leverage above 35%, (iii) earnings coverage of interest
less than 4x for an extended period, or (iv) holding company liquid
resources (cash and short-term assets) significantly below $250
million.
Moody's has assigned the following rating to Assurant:
$250 million of subordinated notes due 2061 at Ba1(hyb).
The rating outlook for Assurant is stable.
The principal methodology used in these ratings was Property and
Casualty Insurers Methodology published in November 2019.
Assurant, Inc. is a New York-based holding company whose
subsidiaries write a broad range of P&C insurance products. For the
first nine months of 2020, the company reported revenues of about
$7.5 billion and net income of $289 million. Stockholders' equity
was $5.9 billion as of Sept. 30, 2020.
ASSURANT INC: S&P Rates Subordinated Notes 'BB+'
------------------------------------------------
S&P Global Ratings said it assigned its 'BB+' debt rating to
Assurant Inc.'s (AIZ; BBB/Stable/A-2) subordinated notes due
January 2061.
"We expect AIZ to use the proceeds, along with cash on hand, to
fund the acquisition of HYLA Mobile, with any remainder to be used
for general corporate purposes. We classify the notes as having
intermediate equity content. We include securities of this nature,
up to a maximum of 15%, in our calculation of total adjusted
capital, which forms the basis of our consolidated risk-based
capital analysis of insurance companies," S&P said.
S&P expects, pro forma for this transaction, financial leverage to
be about 33% (including capitalized lease obligations) at year-end
2020. Over the next 24 months, the rating agency expects financial
leverage to decline to below 30%. S&P expects fixed-charge coverage
to be around 5x in 2020, then return to about 6x in 2021 and 2022.
ASTROTECH CORP: Incurs $2.1 Million Net Loss in First Quarter
-------------------------------------------------------------
Astrotech Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.11 million on $140,000 of revenue for the three months ended
Sept. 30, 2020, compared to a net loss of $2.07 million on $1,000
of revenue for the three months ended Sept. 30, 2019.
"We are excited to have passed the $1 million milestone for our
TRACER 1000 in October. We believe we offer the most advanced ETD
on the market and we are excited to be nearing completion of
detection testing with the TSA," stated Thomas B. Pickens III,
chairman and chief executive officer of Astrotech Corporation. "We
are also thrilled to have entered into a partnership between
BreathTech and Cleveland Clinic, one of the world's leading breath
analysis institutions. Dr. Dweik and his colleagues at Cleveland
Clinic have successfully led many clinical trials applying mass
spectrometry to identify unique metabolites using breath samples.
We believe that our technology has the potential to play an
important role in providing a quick, non-invasive, easy-to-use
screening device that can be utilized in numerous locations
including hospitals, nursing homes, schools, and airports as we
look to get all of our lives back to normal again."
As of Sept. 30, 2020, the Company had $3.18 million in total
assets, $4.63 million in total liabilities, and a total
stockholders' deficit of $1.44 million.
The Company's annual report on Form 10-K for the fiscal year ended
June 30, 2020 indicated substantial doubt as to its ability to
continue as a going concern. On Oct. 23, 2020, the Company
completed a public offering of its common stock, raising gross
proceeds of $18.0 million, and on Oct. 30, 2020, the Company also
completed a registered direct offering of its common stock, raising
gross proceeds of $6.2 million. The Company believes that this
solves its liquidity issue, and the Company no longer has
substantial doubt about its ability to continue as a going
concern.
Impact of COVID-19 Pandemic
Astrotech said, "The Company has taken what it believes are
necessary precautions to safeguard its employees from the COVID-19
pandemic. The Company continues to follow the Centers for Disease
Control and Prevention’s ("CDC") guidance and the recommendations
and restrictions provided by state and local authorities. All of
the Company's employees who do not work in a lab setting are
currently on a telecommunication work arrangement and have been
able to successfully work remotely. The Company's lab requires
in-person staffing and the Company has been able to continue to
operate its lab, minimizing infection risk to lab staff through a
combination of social distancing and appropriate protective
equipment. There can be no assurance, however, that key employees
will not become ill or that the Company will be able to continue to
operate its labs.
"The continuing impact that the COVID-19 pandemic will have on the
Company's operations, including duration, severity, and scope,
remains highly uncertain and cannot be fully predicted at this
time. Accordingly, the Company believes that the COVID-19 pandemic
could continue to adversely impact its results of operations, cash
flows, and financial condition in the future.
"As the Company's business operations continue to be impacted by
the pandemic, the Company continues to monitor the situation and
the guidance that is being provided by relevant federal, state, and
local public health authorities. The Company may take additional
actions based upon their recommendations. However, it is possible
that the Company may have to make further adjustments to its
operating plans in reaction to developments that are beyond its
control."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1001907/000156459020053794/astc-10q_20200930.htm
About Astrotech
Astrotech (NASDAQ: ASTC) -- http://www.astrotechcorp.com/-- is a
science and technology development and commercialization company
that launches, manages, and builds scalable companies based on
innovative technology in order to maximize shareholder value. 1st
Detect develops, manufactures, and sells trace detectors for use in
the security and detection market. AgLAB is developing chemical
analyzers for use in the agriculture market. BreathTech is
developing a breath analysis tool to provide early detection of
lung diseases. Astrotech is headquartered in Austin, Texas.
Astrotech reported a net loss of $8.31 million for the year ended
June 30, 2020, compared to a net loss of $7.53 million for the year
ended June 30, 2019. As of June 30, 2020, the Company had $5.93
million in total assets, $5.30 million in total liabilities, and
$625,000 in total stockholders' equity.
Armanino LLP, in San Francisco, California, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated Sept. 8, 2020, citing that the Company has suffered recurring
losses from operations and has net cash flows deficiencies that
raise substantial doubt about its ability to continue as a going
concern.
BIOSTAGE INC: Incurs $660K Net Loss in Third Quarter
----------------------------------------------------
Biostage, Inc., filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $660,000
on $0 of revenues for the three months ended Sept. 30, 2020,
compared to a net loss of $2.38 million on $0 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 $3.84 million on $0 of revenues compared to a net loss
of $6.73 million on $0 of revenues for the nine months ended Sept.
30, 2019.
As of Sept. 30, 2020, the Company had $3.02 million in total
assets, $1.01 million in total liabilities, and $2.01 million in
total stockholders' equity.
Going Concern
The Company has incurred substantial operating losses since its
inception, and future losses are anticipated. As of Sept. 30,
2020, the Company has an accumulated deficit of approximately $67.9
million and will require additional financing to fund future
operations. The Company expects that its operating cash on-hand at
Sept. 30, 2020 of $2.0 million, and SBIR grant funds anticipated to
be collected in the fourth quarter will enable it to fund its
operating expenses and capital expenditure requirements into the
first quarter of 2021. In addition, on Jan. 30, 2020 the World
Health Organization declared the COVID-19 outbreak a "Public Health
Emergency of International Concern" and on March 11, 2020, declared
it a pandemic. The full extent to which the COVID-19 pandemic may
directly or indirectly impact our business, results of operations
and financial condition, expenses, clinical trial, research and
development costs and employee-related amounts, will depend on
future developments that are highly uncertain, including as a
result of new information that may emerge concerning COVID-19 and
the actions taken to contain it or treat COVID-19, as well as the
economic impact that may impact the Company. Therefore, these
conditions have caused management to determine there is substantial
doubt about the Company's ability to continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1563665/000110465920125113/tm2029528-1_10q.htm
About Biostage Inc.
Headquartered in Holliston, Massachusetts, Biostage --
http://www.biostage.com/-- is a bio-engineering company that is
developing next-generation esophageal implants. The Company's
Cellspan technology combines a proprietary, biocompatible scaffold
with a patient's own cells to create an esophageal implant that
could potentially be used to treat pediatric esophageal atresia and
other conditions that affect the esophagus. The Company's
esophageal implant leverages the body's inherent capacity to heal
itself as it is a "living tube" that facilitates regeneration of
esophageal tissue and triggers a positive host response resulting
in a tissue-engineered neo-conduit that restores continuity of the
esophagus. These implants have the potential to dramatically
improve the quality of life for children and adults.
Biostage reported a net loss of $8.33 million for the year ended
Dec. 31, 2019, compared to a net loss of $7.53 million for the year
ended Dec. 31, 2018. As of June 30, 2020, the Company had $1.38
million in total assets, $1.15 million in total liabilities, and
$230,000 in total stockholders' equity.
RSM US LLP, in Boston, Massachusetts, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
March 27, 2020 citing that the Company has suffered recurring
losses from operations, has an accumulated deficit, uses cash flows
in operations, and will require additional financing to continue to
fund operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
BLACK DOG CHICAGO: Parent Petroleum Objects to Amended Disclosure
-----------------------------------------------------------------
Parent Petroleum, Inc., objects to the approval of the Third
Amended Disclosure Statement in conjunction with the Third Amended
Chapter 11 Plan of Reorganization of debtor Black Dog Chicago,
LLC.
Parent Petroleum claims that the Disclosure Statement fails to
contain current financial statements. A reasonable investor cannot
meaningfully vote on the Plan Because the Disclosure Statement
lacks current financial information.
Parent Petroleum states that the Disclosure Statement does not
attach a separate liquidation analysis itemizing its assets,
liquidation value and costs of liquidation as required by Local
Rule 3016-2.
Parent Petroleum points out that the Debtor fails to provide
historical performance figures to compare with its projected
profits to fund plan payments. Without historical performance, a
reasonable investor cannot determine whether the plan projections
are based on reality or hopeful thinking.
Parent Petroleum asserts that the Debtor fails to disclose the
potential risks to the feasibility of the plan associated with the
World Fuel bid protest and whether Subsidiary profits will be
diverted to defend this litigation or advance funds awarded by
judgment or through settlement. These costs are not built-in to the
projected profits, and Debtor also fails to discuss how this
affects its ability to obtain future government contracts.
Parent Petroleum further asserts that the Debtor fails to mention
that the Subsidiaries as wholly owned subsidiaries have fiduciary
duties flowing to their sole owner, the Debtor, and to the Debtor's
creditors upon Debtor's insolvency. Debtor fails to discuss how it
plans on enforcing the fiduciary duties owed by the Subsidiaries
management to the Debtor's creditors following confirmation of any
Plan.
A full-text copy of Parent Petroleum's objection to Disclosure
Statement dated Sept. 18, 2020, is available at
https://tinyurl.com/y9ob53e6 from PacerMonitor at no charge.
Parent Petroleum is represented by:
Michael R. Levinson
James B. Sowka
Jordan P. Vick
Devvrat Sinha
SEYFARTH SHAW LLP
233 South Wacker Drive
Suite 8000
Chicago, Illinois 60606-6448
Telephone: (312) 460-5000
Facsimile: (312) 460-7000
E-mail: mlevinson@seyfarth.com
jsowka@seyfarth.com
jvick@seyfarth.com
dsinha@seyfarth.com
About Black Dog Chicago
Based in Lyons, Ill., Black Dog Chicago, LLC --
http://www.blackdogcorp.com/-- is a petroleum distribution firm
offering gasoline, diesel, oils, lubricants, alternative fuels,
hauling and asphalt concrete. It is a successor by merger to Black
Dog Chicago Corp.
Black Dog Chicago filed a voluntary Chapter 11 petition (Bankr.
N.D. Ill. Case No. 19-28245) on Oct. 28, 2019. In its petition,
the Debtor estimated $1 million to $10 million in both assets and
liabilities. The petition was signed by Amit Gauri, sole manager
and majority membership holder. Judge Janet S. Baer presides over
the case. Crane, Simon, Clar and Dan is the Debtor's legal
counsel.
BLACK DOG CHICAGO: U.S. Trustee Objects to Third Amended Plan
-------------------------------------------------------------
Patrick S. Layng, the United States Trustee for the Northern
District of Illinois, objects to the confirmation of Third Amended
Plan of Reorganization of Debtor Black Dog Chicago, LLC.
The U.S. Trustee points out that the Plan proposes an inappropriate
injunction which will bar creditors from pursuing Mr. Amit Gauri,
which in effect, is in an improper non-debtor discharge. The Plan
violates various provisions of Section 1129 consistent with the
Debtor's conduct since the Petition Date.
The U.S. Trustee claims that Mr. Gauri, as the Debtor's
representative and majority owner, has failed to provide accurate
and honest disclosures in the Debtor's bankruptcy documents. The
Debtor omitted from the February 2020 Operating Report, a document
that Mr. Gauri signed under penalty of perjury, the $24,000 that
Mr. Gauri directed the Subsidiaries to disburse to his personal
bank account.
The U.S. Trustee states that the Court should deny confirmation due
to the Debtor's failure to demonstrate that the Plan is in the best
interest of creditors. The Debtor touts that the Plan is a 100%
plan but does nothing to substantiate that claim.
The U.S. Trustee asserts that post-petition loans from an insider
to the Debtor should receive extra scrutiny and are subject to the
standards set forth in Section 364. Not only is the loan not new
value, but the Plan is devoid of crucial terms relevant to the
loan.
The U.S. Trustee further asserts that to satisfy the implicit
fairness test, the Debtor must provide for interest to Class 4 and
Class 5 to adequately preserve the present value of their money and
account for the risk of a 60-month plan.
A full-text copy of the U.S. Trustee's objection to plan
confirmation dated September 18, 2020, is available at
https://tinyurl.com/y2aqc3d6 from PacerMonitor at no charge.
About Black Dog Chicago
Based in Lyons, Ill., Black Dog Chicago, LLC --
http://www.blackdogcorp.com/-- is a petroleum distribution firm
offering gasoline, diesel, oils, lubricants, alternative fuels,
hauling and asphalt concrete. It is a successor by merger to Black
Dog Chicago Corp.
Black Dog Chicago filed a voluntary Chapter 11 petition (Bankr.
N.D. Ill. Case No. 19-28245) on Oct. 28, 2019. In its petition,
the Debtor estimated $1 million to $10 million in both assets and
liabilities. The petition was signed by Amit Gauri, sole manager
and majority membership holder. Judge Janet S. Baer presides over
the case. Crane, Simon, Clar and Dan is the Debtor's legal
counsel.
BLACKJEWEL LLC: 0% to 15% for Unsecureds in Committee-Backed Plan
-----------------------------------------------------------------
Blackjewel L.L.C. and its Debtor Affiliates, which have sold off
most of their assets, filed with the U.S. Bankruptcy Court for the
Southern District of West Virginia a First Amended Disclosure
Statement for their Joint Chapter 11 Plan of Liquidation.
The Debtors and the Official Committee of Unsecured Creditors
support confirmation of the Plan and urge all Holders of Claims
entitled to vote, vote to accept the Plan.
Class 2 Other Secured Claims in the amount of $11 million to 21
million and will recover 13% to 100%. Each holder of an Allowed
Secured Claim shall receive one of the following treatments,
determined at the option of the Debtors or the Liquidation Trustee,
as applicable: (i) the Collateral securing such Allowed Secured
Claim to the holder of such Claim; (ii) retention of any valid
Liens on Collateral, to the extent of the value of the Claim
holder's interest in such Collateral as of the Confirmation Date;
or (iii) such other treatment as may be agreed to by the holder of
such Claim and the Debtors or the Liquidation Trustee, as
applicable.
Class 3 General Unsecured Claims totaling $$292 million to $364
million will recover 0% to 15%. Each holder of an Allowed General
Unsecured Claim shall receive its pro rata share of any remaining
Distributable Cash.
The Plan Distributions to be made in Cash under the terms of the
Plan shall be funded from the Distributable Cash on hand and the
proceeds of Liquidation Trust Assets.
A full-text copy of the Disclosure Statement dated September 25,
2020, is available at https://tinyurl.com/y3ezyspf from
PacerMonitor at no charge.
A full-text copy of the First Amended Disclosure Statement dated
October 21, 2020, is available at https://tinyurl.com/y697p9vh from
PacerMonitor.com at no charge.
Counsel for the Debtors:
Stephen D. Lerner
Nava Hazan
Travis A. McRoberts
SQUIRE PATTON BOGGS
201 E. Fourth Street, Suite 1900
Cincinnati, Ohio 45202
Telephone: 513.361.1200
Facsimile: 513.361.1201
Joe M. Supple
SUPPLE LAW OFFICE, PLLC
801 Viand Street
Point Pleasant, West Virginia 25550
Telephone: 304.675.6249
Facsimile: 304.675.4372
About Blackjewel L.L.C.
Blackjewel LLC.'s core business is mining and processing
metallurgical, thermal and other specialty and industrial coals.
Blackjewel operates 32 properties, including surface and
underground coal mines, preparation or wash plants, and loadouts or
tipples. Combined, Blackjewel and its affiliates hold more than 500
mining permits. Operations are located in the Central Appalachian
Basin in Virginia, Kentucky and West Virginia and the Powder River
Basin in Wyoming.
Blackjewel L.L.C. and four affiliates filed voluntary petitions
seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel was
estimated to have $100 million to $500 million in asset and $500
million to $1 billion in liabilities as of the bankruptcy filing.
The Hon. Frank W. Volk is the case judge.
The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy
counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI
Consulting Inc. as financial advisor; Jefferies LLC as investment
banker; and Prime Clerk LLC as the claims agent.
The Office of the U.S. Trustee on July 3, 2019, appointed five
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 case of Blackjewel LLC. Whiteford Taylor &
Preston LLP is the Committee's counsel.
* * *
Following auctions in August 2019, the Bankruptcy Court entered an
order approving the sale of assets associated with the mines
commonly known as the Pax mine (Pax Assets) to Contura Energy,
Inc. The Bankruptcy Court also entered orders independently
approving the sale of certain of the Debtors' assets to Mark
Energy, LLC, John Deere Construction and Forestry Company, Rhino
Energy LLC, Sulzer Electro Mechanical Services (US), Inc.; Tye Fork
Coal Company, Inc., Coking Coal, LLC; Kopper Glo Mining LLC and
Dean-McAfee Lenders.
In October 2019, the Court approved the sale of six mines in Leslie
County, Kentucky within the Bell, Harlan and Leslie division, and
the related preparation plants, assets and coal permits for
fourteen permit locations to Black Mountain Resources, L.L.C. The
Court also approved the sale of the Debtors' assets in the Western
Division to Eagle Specialty Materials, LLC.
BLUE DOLPHIN: Incurs $4.6 Million Net Loss in Third Quarter
-----------------------------------------------------------
Blue Dolphin Energy Company filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $4.65 million on $42.93 million of total revenue from operations
for the three months ended Sept. 30, 2020, compared to net income
of $8.17 million on $78.63 million of total revenue from operations
for the three months ended Sept. 30, 2019. The increase in net
loss was the result of less favorable margins per bbl and lower
sales volume in the three-month period ended Sept. 30, 2020
compared to the three-month period ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $12.23 million on $123.40 million of total revenue from
operations compared to net income of $5.61 million on $225.90
million of total revenue from operations for the same period during
the prior year. The significant increase in net loss was the
result of less favorable margins per bbl and lower sales volume in
the nine-month period ended September 30, 2020 compared to the same
period a year earlier. Both the three- and nine-month periods
ended Sept. 30, 2019 included a gain on the extinguishment of debt
of $9.1 million.
As of Sept. 30, 2020, the Company had $67.65 million in total
assets, $76.21 million in total liabilities, and a total
stockholders' deficit of $8.56 million.
The Company had a working capital deficit of $70.6 million and
$59.4 million at Sept. 30, 2020 and Dec. 31, 2019, respectively.
Excluding the current portion of long-term debt, the Company had a
working capital deficit of $24.8 million and $19.6 million at
Sept. 30, 2020 and Dec. 31, 2019, respectively. The Company had
cash and cash equivalents and restricted cash (current portion) of
$0.3 million and $0.05 million, respectively, at Sept. 30, 2020.
Comparatively, the Company had cash and cash equivalents and
restricted cash (current portion) of $0.07 million and $0.05
million, respectively, at Dec. 31, 2019.
Management has determined that certain factors raise substantial
doubt about the Company's ability to continue as a going concern.
These factors include the following: (a) defaults under secured
loan agreements with third parties, (b) margin deterioration and
volatility, and (c) net losses and working capital deficits.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/793306/000165495420012518/bdco_10q.htm
About Blue Dolphin
Headquartered in Houston, Texas, Blue Dolphin --
http://www.blue-dolphin-energy.com/-- is an independent downstream
energy company operating in the Gulf Coast region of the United
States. The Company's subsidiaries operate a light sweet-crude,
15,000-bpd crude distillation tower with approximately 1.2 million
bbls of petroleum storage tank capacity in Nixon, Texas. Blue
Dolphin was formed in 1986 as a Delaware corporation and is traded
on the OTCQX under the ticker symbol "BDCO".
UHY LLP, in Sterling Heights, Michigan, the Company's auditor since
2002, issued a "going concern" qualification in its report dated
March 30, 2020, citing that the Company is in default under secured
and related party loan agreements and has a net working capital
deficiency. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
BOY SCOUTS OF AMERICA: Wants to Settle Abuse Claims
---------------------------------------------------
9Josh Saul of Bloomberg News reports that the Boy Scouts of America
intends to settle the 95,000 sexual abuse claims before a cash
crunch. More than 95,000 victims have filed sexual-abuse claims
against the Boy Scouts of America, and the organization risks
running out of cash if it can't settle the claims and exit
bankruptcy by summer 2021, the group said in court Wednesday,
November 18, 2020. The Scouts need to come up with a settlement
plan and emerge from court protection to preserve cash, Jessica
Boelter of law firm Sidley Austin said on behalf of the group. The
Scouts filed for bankruptcy in February 2020 to cope with a rising
number of abuse lawsuits.
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets at least $500 million in liabilities as of the
bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
CAH ACQUISITION 1: Court Confirms Liquidating Plan
--------------------------------------------------
CAH Acquisition Company #1, LLC, has won confirmation of its
Chapter 11 Plan of Orderly Liquidation.
Among other things, the Plan provides for the distribution of funds
received through the Sale of certain of the Debtor’s Assets to
Affinity Health Partners LLC, which closed on April 20, 2020. The
Plan further provides for the establishment of the Litigation Trust
and appointment of the Litigation Trustee on or before the
Effective Date.
Following a hearing on Sept. 22, 2020, Judge Joseph N. Callaway
entered an order confirming the Debtor's Plan.
On the Effective Date, the Estate's right, title and interest in
and to all of the remaining Assets, including but not limited to
Chapter 5 causes of action and litigation regarding the prepetition
laboratory billing scheme described in the Disclosure Statement to
the Plan (the "Litigation Trust Claims"), will automatically pass
to the Litigation Trust, free and clear of all claims and equity
interests in accordance with Section 1141 of the Bankruptcy Code.
The only member of Class 2 that submitted a ballot voted to reject
the Plan. However, the Holder of that Claim was paid in full upon
such Claim through the Sale of certain Assets of the Debtor, which
closed on April 20, 2020. As such, that creditor is unimpaired and
unaffected by the Plan.
Class 4 voted to accept the Plan pursuant to Section 1126(c) of the
Bankruptcy Code. With respect to Class 5, 83.33% of the Class 4
members voting and 98.72% of the Class 4 dollar amount voting cast
votes to accept the Plan.
Class 2 consists of the First Capital Secured Claim while Class 4
consists of all General Unsecured Claims.
A copy of the Plan Confirmation Order is available at:
https://www.pacermonitor.com/view/P74K7TA/CAH_Acquisition_Company_1_LLC__ncebke-19-00730__1006.0.pdf
About CAH Acquisition Company #1
CAH Acquisition Company #1, LLC, which conducts business under the
name Washington County Hospital, is a Delaware limited liability
company that owns a for-profit 25-bed hospital and Rural Health
Clinic on a 20-acre campus in Plymouth, N.C. It purchased the
hospital from Washington County, N.C., on June 1, 2007.
On February 19, 2019, three creditors of CAH Acquisition Company #1
-- Medline Industries, Inc., Robert Venable, M.D., and Washington
County -- filed an involuntary petition for relief under Chapter 7
of the Bankruptcy Code in the United States Bankruptcy Court for
the Eastern District of North Carolina. On March 15, 2019, the
court entered an order converting the Debtor's case to one under
Chapter 11 (Bankr. E.D.N.C. Case No. 19-00730).
The case is jointly administered with six other critical access
hospitals under the Debtor's Chapter 11 case. On Feb. 22. 2019,
during the pendency of the Chapter 7 portion of the Debtor's case,
Thomas W. Waldrep Jr. was appointed as interim trustee for the
Debtor.
On March 15, 2019, upon conversion of the case, Mr. Waldrep was
appointed as Chapter 11 trustee for the Debtor. The trustee's own
firm, Waldrep LLP, serves as counsel in the Chapter 11 case.
Sherwood Partners, Inc., was appointed as sales agent to the
trustee on Oct. 23, 2019.
No official committee of unsecured creditors has been appointed in
the Debtor's case.
CAPITAL TRUCK: Wins March 12 Plan Exclusivity Extension
-------------------------------------------------------
At the behest of Capital Truck, Inc. d/b/a Mack Sales of
Tallahassee, Judge Karen K. Specie extended the period within which
the Debtor has the exclusive rights to file a plan of
reorganization to March 12, 2021, and to solicit acceptances to a
plan through and including May 11, 2021.
On September 29, 2020, the Debtor conducted a Court-approved
Auction of the majority of its assets. On October 14, 2020, the
Debtor filed a motion to approve the sale to Nextran Corporation,
the Prevailing Bidder at the Auction. Once the sale is consummated,
the Debtor intends to formulate a plan of liquidation as
expeditiously as possible and file objections to claims.
The Debtor said cause exists to grant the extension request. More
specifically:
a. The Debtor's case involves complex legal issues;
b. The Debtor is generally paying its post-petition debts as
they come due, but it will be ceasing operations upon consummation
of the sale;
c. The Debtor believes it is in compliance with all of the
operating guidelines of the United States Trustee;
d. The Debtor believes that a viable plan will be filed;
e. The Debtor seeks this extension of exclusivity in good
faith, and not for the purpose of pressuring or otherwise
attempting to prejudice the rights of any creditors; and
f. The Debtor is unsure of the exact net proceeds to be paid
into the estate via the sale due to the language of the Asset
Purchase Agreement between it and Nextran and the contingencies
that exist. Once the sale proceeds are realized, and the business
ceases to operate, the Debtor will know what monies actually exist
to fund the plan and can effectively negotiate with the creditors,
in this case, to attempt to resolve any disputes.
Capital Truck said the extension will provide the Debtor additional
time to formulate a plan of liquidation and to object to claims as
appropriate in an effort to distribute proceeds from the sale of
substantially all of its assets.
About Capital Truck
Capital Truck, Inc. d/b/a Mack Sales of Tallahassee, based in
Tallahassee, Fla., filed a Chapter 11 petition (Bankr. N.D. Fla.
Case No. 20-40287) on July 14, 2020. In the petition signed by
Mark Thomas, president, the Debtor was estimated to have $1 million
to $10 million in both assets and liabilities.
Judge Karen K. Specie is the case judge. Bruner Wright, P.A.,
serves as bankruptcy counsel to the Debtor.
CASA SYSTEMS: Moody's Affirms B3 CFR; Alters Outlook to Stable
--------------------------------------------------------------
Moody's Investors Service affirmed Casa Systems, Inc.'s Corporate
Family Rating of B3, Probability of Default Rating of B3-PD, and
senior secured credit facility rating of B3. The rating outlook was
changed to stable from negative. The Speculative Grade Liquidity
Rating (SGL) was upgraded to SGL-2 from SGL-3. The action follows
improvements in Casa's EBITDA and free cash flow generation in
recent periods and Moody's expectation for improving profitability
in 2021.
The following rating actions were taken:
Affirmations:
Issuer: Casa Systems, Inc.
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
Senior Secured Bank Credit Facility, Affirmed B3 (LGD3)
Upgrades:
Issuer: Casa Systems, Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
Outlook Actions:
Issuer: Casa Systems, Inc.
Outlook, Changed to Stable from Negative
RATINGS RATIONALE
Casa's credit profile reflects high leverage caused by revenue
pressures in 2019 and 2018 due to delays in its cable customers'
spending on network infrastructure upgrades. In 2019, EBITDA
generation was limited and free cash flow was modestly negative.
However, revenues have returned to growth in 2020 driven by
wireless and fixed telecom markets, with cable revenues remaining
relatively stable. As revenues recover, positive operating leverage
has supported an improvement in EBITDA margins. As of September
2020, Moody's adjusted total leverage was 7.6x (adding back
stock-based compensation, about 6x) and available cash balances
were $156 million or 54% of funded debt.
Casa's business risk profile is relatively high due to the inherent
uncertainty of technology evolutions, volatility and cyclicality of
capital spending by large customers, and intense competition.
However, over the coming years demand is likely to be supported by
the increased bandwidth requirement caused by the coronavirus
pandemic (COVID), the ongoing evolution of fixed telecom network
infrastructures, deployment of 5G wireless networks, and the
eventual upgrades of cable networks. Moody's regards the
coronavirus outbreak as a social risk under the ESG framework. In
2021, Moody's expects continued revenue growth and profitability
improvement to result in deleveraging. The company benefits from a
good liquidity position with cash balances of $156 million and
projected free cash flow in 2021 in excess of $25 million. As it
continues to generate positive free cash flow over time, Casa may
elect to utilize a portion of available cash balances to reduce
debt or acquire EBITDA-producing assets, which would reduce total
leverage. Moody's does not expect Casa to return material amounts
of capital to shareholders over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation of EBITDA growth
and positive free cash flow over the next 12-18 months. The ratings
could be upgraded if Casa demonstrates consistent revenue growth,
strengthening free cash flow, Moody's adjusted total leverage is
sustained below 6.0x, and good liquidity is maintained. The ratings
could be downgraded if Casa experiences sustained revenue or margin
decline, sustained negative free cash flow, or weakened liquidity
position.
The principal methodology used in these ratings was Diversified
Technology published in August 2018.
CATHEDRAL PLACE: Creditors to Be Paid in Full After Refinancing
---------------------------------------------------------------
Cathedral Place LLC filed a Plan and a Disclosure Statement.
The Debtor owns one property, comprising three parcels, a multi
unit residence, a small commercial building and a parking lot
located at the intersection of 15 Washington Avenue and Cumberland
Avenue in Portland, Maine, minimal cash reserves, and household
goods associated with the residential units.
The Debtor's assets are comprised of: the three parcels, with a
retail value of approximately $1,800,000, and a liquidation value
of less than $1,250,000, the Debtor holds approximately $5,000 in
cash reserves from rent payments, with a further $1,000 in
household goods associated with the residential rental spaces.
The payments required under the Plan shall be made primarily from
the refinance of the Debtor's primary mortgage loan within 90
days.
Under the Plan, Class One will consist of the allowed secured claim
of Hunter-Kelsey of Texas LLC, repaid $1,250,000 plus $15,000 held
by the creditor upon refinance within 90 days. Class Two will
consist of the allowed secured claim of the F.O. Bailey Real
Estate, if a claim is filed, repaid $2,500.00 in satisfaction of
its lien within seven days of closing the refinance. Class Three
will consist of allowed unsecured claims, repaid in full within
seven days of closing on the refinance without interest. Class
Four will consist of the equity interests of Ed Walsh, which will
pass through the case.
A full-text copy of the Disclosure Statement dated September 23,
2020, is available at https://tinyurl.com/y4qs2go4 from
PacerMonitor.com at no charge.
The Debtor's attorney:
J. Scott Logan, Esq.
Law Office of J. Scott Logan, LLC
75 Pearl Street, Ste. 211
Portland, Maine 04101
Tel: 207-699-1314
E-mail: scott@southernmainebankruptcy.com
About Cathedral Place
Cathedral Place LLC is a single asset real estate (as defined in 11
U.S.C. Section 101(51B)). It is the owner of fee simple title to a
property located at 15 Washington Ave., Portland, Maine, having a
comparable sale value of $1.8 million.
Cathedral Place sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Maine. Case No. 20-20243) on June 26,
2020. The petition was signed by Edward F. Walsh, Debtor's senior
manager. At the time of the filing, the Debtor disclosed
$1,802,000 in total assets and $1,524,600 in total liabilities.
Judge Michael A. Fagone presides over the case.
J. Scott Logan, Esq., at the Law Offices of J. Scott Logan, LLC, is
the Debtor's bankruptcy counsel.
CCM MERGER: S&P Affirms 'B+' Issuer Credit Rating; Outlook Negative
-------------------------------------------------------------------
S&P Global Ratings revised its liquidity assessment on Detroit
gaming operator CCM Merger Inc. to adequate from less than
adequate. At the same time, S&P affirmed its 'B+' rating on CCM
Merger.
CCM Merger's refinancing eliminates near-term maturity risk and
ensures the company has adequate liquidity. S&P revised its
liquidity assessment on CCM Merger to adequate from less than
adequate after the company successfullly refinanced its entire
capital structure. The company refinanced its term loan and
revolver due in 2021 and its senior notes due 2022 by raising a
$275 million term loan B due 2025 and $275 million senior secured
notes due 2026, eliminating near-term maturity risk and extending
its maturity profile.
The refinancing also increases CCM Merger's revolver capacity by
$30 million, which provides 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.
Pro forma for the transaction and based on preliminary financial
information as of Sept. 30, 2020, the company had approximately $44
million of cash on hand and full availability under its new $45
million revolver.
S&P said, "We estimate the company would have over two years of
liquidity in a zero revenue scenario. Additionally, we expect
sources of liquidity will exceed uses by at least 1.2x and net
sources to remain positive even if forecast EBITDA over the next 12
months unexpectedly declines 15%. In our view, the company's
successful refinancing demonstrates its sound relationships with
banks and generally satisfactory standing in credit markets." The
elimination of sizable near-term debt maturities also improves CCM
Merger's ability to absorb high-impact, low-probability events with
limited need for refinancing."
S&P believes there remains a high degree of uncertainty about the
evolution of the coronavirus pandemic. Reports that at least one
experimental vaccine is highly effective and might gain initial
approval by the end of the year are promising, but this is merely
the first step toward a return to social and economic normality;
equally critical is the widespread availability of effective
immunization, which could come by the middle of next year.
S&P said, "We use this assumption in assessing the economic and
credit implications associated with the pandemic. As the situation
evolves, we will update our assumptions and estimates
accordingly."
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 (despite reports that at
least one experimental vaccine is highly effective) and the
continued implementation of social distancing measures and their
impact on consumer discretionary spending. The negative outlook
also reflects the risk of additional operating restrictions in
response to increasing infections.
S&P said, "We could lower our ratings on CCM Merger if we no longer
believe leverage will recover and improve below 5x in 2021. This
could occur if its recovery is 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."
"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 5x downgrade
threshold into 2021. That said, we could revise our outlook to
stable if we believe its operating performance is stabilizing and
anticipate its leverage will improve comfortably below our 5x
downgrade threshold in 2021."
CHARTER DAY SCHOOL: Moody's Rates 2020A/B Revenue Bonds 'Ba1'
-------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 rating to the Public
Finance Authority's Educational Facilities Revenue Bonds (Charter
Day School, Inc. Project) Series 2020A and Taxable Educational
Facilities Revenue Bonds (Charter Day School, Inc. Project) Series
2020B. The Series 2020A bonds have an expected par value of $38.3
million. The Series B bonds have an expected par value of $285,000.
A stable outlook has been assigned.
RATINGS RATIONALE
The Ba1 rating reflects the school's satisfactory competitive
profile and enrollment as evidenced by steady year to year demand
and consistent retention of students and faculty. The rating also
reflects the moderate liquidity position and adequate debt service
coverage. The schools have produced solid overall academic
performance though academic scores at one of three school in the
obligated group has been closer to the state average. The rating
also captures the established charter renewal history with sound
prospects for renewal. The rating further incorporates adequate
legal covenants and the current financial projections that reflect
continued maintenance of adequate debt service coverage and
projected improvement in liquidity. The rating also reflects
environmental risks, which include a high exposure to hurricanes.
The schools also benefit from effective governance and management
and is in good standing with its authorizer.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Moody's has incorporated its current understanding of
these risks into its credit analysis for the school, including
stress scenarios that considered reductions in revenue and cash.
The situation surrounding coronavirus is rapidly evolving and any
longer-term impact on the school will depend on both the severity
and duration of the crisis. If its view of the credit quality of
the school changes, Moody's will update the rating and/or outlook
at that time.
RATING OUTLOOK
The stable outlook reflects its expectation that the obligated
group of schools will continue to maintain consistent overall
performance with moderate enrollment growth.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Material and sustained growth in debt service coverage and
liquidity
- Consistent improvement in academic outcomes
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- Operating deficits that drive declines to debt service coverage
and liquidity
- Deterioration of academic performance
- Enrollment declines
LEGAL SECURITY
The Series 2020 Bonds are special limited obligations of the
Authority payable by payments derived from a gross revenue pledge
of the obligated group. The bonds will be further secured by a
mortgage interest on all of the obligated group's facilities, and
all right, title and interest of the obligated group in all leases,
land, and improvements.
USE OF PROCEEDS
Bond proceeds will be used to Purchase property for Charter Day
School and Columbus Charter School campuses from CHC and refinance
the loan that was used to acquire and construct South Brunswick
Charter School. Proceeds will also be used to make capital
improvements including new buildings, and a parking lot.
PROFILE
The Public Finance Authority was established by local governments,
primarily for local governments, for the public purpose of
providing local governments a means to efficiently and reliably
finance projects that benefit local governments, nonprofit
organizations and other eligible private borrowers in Wisconsin and
throughout the country.
Charter Day School, Inc. is a North Carolina nonprofit corporation
that operates four public charter schools: Charter Day School,
Columbus Charter School, South Brunswick, and Douglass Academy. The
schools operate under a management agreement with the Roger Bacon
Academy. All but the Douglass Academy constitute the obligated
group whose gross revenues provide debt service for the bonds. The
schools are located in Leland, Whiteville, Southport and
Wilmington. The obligated group of schools have a combined
enrollment of 2,383 students in kindergarten through eighth grade.
METHODOLOGY
The principal methodology used in these ratings was US Charter
Schools published in September 2016.
CLAROS MORTGAGE: S&P Rates New $250MM Secured Term Loan Add-On 'B+'
-------------------------------------------------------------------
S&P Global Ratings said it assigned its 'B+' issue rating to Claros
Mortgage Trust Inc.'s (B+/Negative/--) (CMTG) new $250 million
add-on to its existing senior secured term loan.
The company intends to use the proceeds to boost liquidity, for
general corporate purposes, and to a lesser extent select repayment
of it repurchase agreement borrowings. The additional debt does not
affect S&P's ratings on CMTG because pro forma leverage, as
measured by debt to total adjusted equity, remains modest at only
1.41x, and S&P views positively the incremental liquidity.
S&P said, "The outlook remains negative, to reflect our view that
CMTG is likely to face further credit deterioration and margin
calls as the economic slowdown related to COVID-19 continues, which
could strain liquidity. That said, at this time we believe CMTG's
low leverage, credit terms, and efforts to bolster liquidity should
allow it to absorb potential margin calls under expected economic
conditions. We do not expect debt to adjusted total equity leverage
to increase materially above the fairly low 1.4x seen at year-end
2019."
Over the next 12 months, S&P could lower its ratings if it
expects:
-- Liquidity to be strained;
-- Covenants to be breached; or
-- CMTG to take material losses on its loan portfolio due to a
more-severe or prolonged COVID-19-related economic slowdown.
Over the same time horizon, S&P could revise the outlook to stable
if it expects the economic impact of COVID-19 to be less severe,
asset quality is relatively stable, and liquidity remains, in its
view, adequate.
COMCAR INDUSTRIES: Bulk Buying Low Value Assets for $61.5K
----------------------------------------------------------
Comcar Industries, Inc. and its affiliated debtors filed with the
U.S. Bankruptcy Court for the District of Delaware a notice of
their proposed sale of the low value assets set forth in the Bill
of Sale (Exhibit A) to Bulk Transport, Inc. for $61,500, free and
clear of all Liens.
On Sept. 2, 2020, the Court entered the Order, which, among other
things, established the De Minimis Asset Sale Procedures.
Pursuant to the De Minimis Asset Sale Procedures, the Debtors
submit the De Minimis Sale Notice in connection with their sale of
the low value assets to the Purchaser.
The total selling price for the Sale to the Purchaser is $61,500,
which is under the limit set forth in the De Minimis Asset Sale
Procedures. The Sale does not include payments to be made by the
Debtors on account of commission fees to agents, brokers or
auctioneers. The Debtors intend to use the proceeds from the Sale
to fund the administration of these chapter 11 cases and, if
applicable, to distribute funds in accordance with the priority
scheme set forth in orders of the Court, their financing documents
and/or the Bankruptcy Code. The Purchaser is not an insider of the
Debtors.
The Objection Deadline is Nov. 6, 2020 at 4:00 p.m. (ET).
If no objection to the De Minimis Sale Notice is timely filed and
served in accordance with it and the De Minimis Asset Sale
procedures, the Debtors may consummate the sale without further
notice.
Copies of all filings in the Debtors' chapter 11 cases are
available for free on the website of the Court-appointed claims and
noticing agent in these chapter 11 cases, Donlin Recano & Company,
Inc., at https://www.donlinrecano.com/Comcar.
A copy of the Exhibit A is available at
https://tinyurl.com/y4yldore from PacerMonitor.com free of charge.
About Comcar Industries
Comcar Industries is a transportation and logistics company
headquartered in Auburndale, Fla., with over 40
strategically-located terminal and satellite locations across the
United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In
the petitions signed by CRO Andrew Hinkelman, Comcar Industries was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting,
Inc., as financial advisor; and Bluejay Advisors, LLC as investment
banker. Donlin Recano & Company, Inc., is the claims agent.
COMCAR INDUSTRIES: C&D Logistics Buying Low Value Assets for $5.3K
------------------------------------------------------------------
Comcar Industries, Inc. and its affiliated debtors filed with the
U.S. Bankruptcy Court for the District of Delaware a notice of
their proposed sale of the low value assets set forth in the Bill
of Sale (Exhibit A) to C&D Logistics for $5,300, free and clear of
all Liens.
On Sept. 2, 2020, the Court entered the Order, which, among other
things, established the De Minimis Asset Sale Procedures.
Pursuant to the De Minimis Asset Sale Procedures, the Debtors
submit the De Minimis Sale Notice in connection with their sale of
the low value assets to the Purchaser.
The total selling price for the Sale to the Purchaser is $5,300,
which is under the limit set forth in the De Minimis Asset Sale
Procedures. The Sale does not include payments to be made by the
Debtors on account of commission fees to agents, brokers or
auctioneers. The Debtors intend to use the proceeds from the Sale
to fund the administration of these chapter 11 cases and, if
applicable, to distribute funds in accordance with the priority
scheme set forth in orders of the Court, their financing documents
and/or the Bankruptcy Code. The Purchaser is not an insider of the
Debtors.
The Objection Deadline is Nov. 6, 2020 at 4:00 p.m. (ET).
If no objection to the De Minimis Sale Notice is timely filed and
served in accordance with it and the De Minimis Asset Sale
procedures, the Debtors may consummate the sale without further
notice.
Copies of all filings in the Debtors' chapter 11 cases are
available for free on the website of the Court-appointed claims and
noticing agent in these chapter 11 cases, Donlin Recano & Company,
Inc., at https://www.donlinrecano.com/Comcar.
A copy of the Exhibit A is available at
https://tinyurl.com/y4wqxqoo from PacerMonitor.com free of charge.
About Comcar Industries
Comcar Industries is a transportation and logistics company
headquartered in Auburndale, Fla., with over 40
strategically-located terminal and satellite locations across the
United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In
the petitions signed by CRO Andrew Hinkelman, Comcar Industries was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting,
Inc., as financial advisor; and Bluejay Advisors, LLC as investment
banker. Donlin Recano & Company, Inc., is the claims agent.
COMCAR INDUSTRIES: Global Exports Buying Low Value Assets for $1K
-----------------------------------------------------------------
Comcar Industries, Inc. and its affiliated debtors filed with the
U.S. Bankruptcy Court for the District of Delaware a notice of
their proposed sale of the low value assets set forth in the Bill
of Sale (Exhibit A), to Global Exports for $1,000, free and clear
of all Liens.
On Sept. 2, 2020, the Court entered the Order, which, among other
things, established the De Minimis Asset Sale Procedures.
Pursuant to the De Minimis Asset Sale Procedures, the Debtors
submit the De Minimis Sale Notice in connection with their sale of
the low value assets to the Purchaser.
The total selling price for the Sale to the Purchaser is $1,000,
which is under the limit set forth in the De Minimis Asset Sale
Procedures. The Sale does not include payments to be made by the
Debtors on account of commission fees to agents, brokers or
auctioneers. The Debtors intend to use the proceeds from the Sale
to fund the administration of these chapter 11 cases and, if
applicable, to distribute funds in accordance with the priority
scheme set forth in orders of the Court, their financing documents
and/or the Bankruptcy Code. The Purchaser is not an insider of the
Debtors.
The Objection Deadline is Nov. 25, 2020 at 4:00 p.m. (ET).
If no objection to the De Minimis Sale Notice is timely filed and
served in accordance with it and the De Minimis Asset Sale
procedures, the Debtors may consummate the sale without further
notice.
Copies of all filings in the Debtors' chapter 11 cases are
available for free on the website of the Court-appointed claims and
noticing agent in these chapter 11 cases, Donlin Recano & Company,
Inc., at https://www.donlinrecano.com/Comcar.
A copy of the Exhibit A is available at
https://tinyurl.com/y4mdgy7p from PacerMonitor.com free of charge.
About Comcar Industries
Comcar Industries is a transportation and logistics company
headquartered in Auburndale, Fla., with over 40
strategically-located terminal and satellite locations across the
United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In
the petitions signed by CRO Andrew Hinkelman, Comcar Industries was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting,
Inc. as financial advisor; and Bluejay Advisors, LLC as investment
banker. Donlin Recano & Company, Inc. is the claims agent.
COMCAR INDUSTRIES: Howell Buying Low Value Assets for $1.6K
-----------------------------------------------------------
Comcar Industries, Inc. and its affiliated debtors filed with the
U.S. Bankruptcy Court for the District of Delaware a notice of
their proposed sale of the low value assets set forth in the Bill
of Sale (Exhibit A) to Cody Howell for $1,600, free and clear of
all Liens.
On Sept. 2, 2020, the Court entered the Order, which, among other
things, established the De Minimis Asset Sale Procedures.
Pursuant to the De Minimis Asset Sale Procedures, the Debtors
submit the De Minimis Sale Notice in connection with their sale of
the low value assets to the Purchaser.
The total selling price for the Sale to the Purchaser is $1,600,
which is under the limit set forth in the De Minimis Asset Sale
Procedures. The Sale does not include payments to be made by the
Debtors on account of commission fees to agents, brokers or
auctioneers. The Debtors intend to use the proceeds from the Sale
to fund the administration of these chapter 11 cases and, if
applicable, to distribute funds in accordance with the priority
scheme set forth in orders of the Court, their financing documents
and/or the Bankruptcy Code. The Purchaser is not an insider of the
Debtors.
The Objection Deadline is Nov. 6, 2020 at 4:00 p.m. (ET).
If no objection to the De Minimis Sale Notice is timely filed and
served in accordance with it and the De Minimis Asset Sale
procedures, the Debtors may consummate the sale without further
notice.
Copies of all filings in the Debtors' chapter 11 cases are
available for free on the website of the Court-appointed claims and
noticing agent in these chapter 11 cases, Donlin Recano & Company,
Inc., at https://www.donlinrecano.com/Comcar.
A copy of the Exhibit A is available at
https://tinyurl.com/y3hq7dfn from PacerMonitor.com free of charge.
About Comcar Industries
Comcar Industries is a transportation and logistics company
headquartered in Auburndale, Fla., with over 40
strategically-located terminal and satellite locations across the
United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In
the petitions signed by CRO Andrew Hinkelman, Comcar Industries was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting,
Inc., as financial advisor; and Bluejay Advisors, LLC as investment
banker. Donlin Recano & Company, Inc., is the claims agent.
COMCAR INDUSTRIES: TAC Auction Buying Low Value Assets for $7.3K
----------------------------------------------------------------
Comcar Industries, Inc. and its affiliated debtors filed with the
U.S. Bankruptcy Court for the District of Delaware a notice of
their proposed sale of the low value assets set forth in the Bill
of Sale (Exhibit A) to TAC Auction Services for $7,300, free and
clear of all Liens.
On Sept. 2, 2020, the Court entered the Order, which, among other
things, established the De Minimis Asset Sale Procedures.
Pursuant to the De Minimis Asset Sale Procedures, the Debtors
submit the De Minimis Sale Notice in connection with their sale of
the low value assets to the Purchaser.
The total selling price for the Sale to the Purchaser is $7,300,
which is under the limit set forth in the De Minimis Asset Sale
Procedures. The Sale does not include payments to be made by the
Debtors on account of commission fees to agents, brokers or
auctioneers. The Debtors intend to use the proceeds from the Sale
to fund the administration of these chapter 11 cases and, if
applicable, to distribute funds in accordance with the priority
scheme set forth in orders of the Court, their financing documents
and/or the Bankruptcy Code. The Purchaser is not an insider of the
Debtors.
The Objection Deadline is Nov. 6, 2020 at 4:00 p.m. (ET).
If no objection to the De Minimis Sale Notice is timely filed and
served in accordance with it and the De Minimis Asset Sale
procedures, the Debtors may consummate the sale without further
notice.
Copies of all filings in the Debtors' chapter 11 cases are
available for free on the website of the Court-appointed claims and
noticing agent in these chapter 11 cases, Donlin Recano & Company,
Inc., at https://www.donlinrecano.com/Comcar.
A copy of the Exhibit A is available at
https://tinyurl.com/y5nsxqnv from PacerMonitor.com free of charge.
About Comcar Industries
Comcar Industries is a transportation and logistics company
headquartered in Auburndale, Fla., with over 40
strategically-located terminal and satellite locations across the
United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In
the petitions signed by CRO Andrew Hinkelman, Comcar Industries was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting,
Inc., as financial advisor; and Bluejay Advisors, LLC as investment
banker. Donlin Recano & Company, Inc., is the claims agent.
CORNERSTONE PAVERS: West Bend Mutual Objects to Disclosure
----------------------------------------------------------
West Bend Mutual Insurance Company (WBMI) objects to the Disclosure
Statement of debtors Cornerstone Pavers, LLC, and Burlington Pavers
Leasing, LLC.
WBMI claims that the Disclosure Statement does not show the source
of funding for these expenses to obtain the recoveries. If there is
a funding source or party to advance these expenses, the Statement
should describe that arrangement.
WBMI is the holder of most of the claim against the CS Bank
identified in the Disclosure Statement, as the subrogee of the
trust claimants. The Disclosure Statement identifies assets as
Debtor assets when they are subject to claims of trust claimants or
WBMI. Funds or claims related to trust funds do not belong to the
Debtors
WBMI points out that the liquidation analysis does not address the
impact on the creditor distribution using different assumption
regarding the disposition of the assets of the Debtors. The
liquidation analysis should describe the yield to unsecured
creditors based on various assumption regarding the distribution of
assets.
WBMI asserts that the Disclosure Statement should state how the
Plan expenses are to be paid. WBMI asserts it is appropriate for a
court to deny approval of a disclosure statement where the plan is
unconformable.
A full-text copy of WBMI's objection dated September 24, 2020, is
available at https://tinyurl.com/y6drjr48 from PacerMonitor.com at
no charge.
WBMI is represented by:
T. Scott Leo
William S. Piper
The Law Offices of T. Scott Leo
100 North LaSalle Street, Suite 514
Chicago, IL 60602
Tel: (312) 857-0910
Fax: (312) 857-1240
E-mail: sleo@leolawpc.com
wpiper@leolawpc.com
About Cornerstone Pavers
Cornerstone Pavers, LLC --https://www.cornerstonepaversusa.com/
--is a heavy and highway concrete paving company that has performed
a wide variety of concrete paving, patching, grading, sidewalk and
curb & gutter work as a prime contractor and as a subcontractor
since its incorporation in 2005.
Cornerstone Pavers filed a Chapter 11 petition (Bankr. E.D. Wis.
Case No. 20-20882) on Feb, 4, 2020. On the Petition Date, the
Debtor was estimated to have between $1 million and $10 million in
both assets and liabilities. The petition was signed by
Christopher C. Cape, manager. Judge Katherine M. Perhach oversees
the case. Kerkman & Dunn is the Debtor's counsel.
CUENTAS INC: Posts $1.7 Million Net Loss in Third Quarter
---------------------------------------------------------
Cuentas, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss attributable to
the company of $1.75 million on $134,000 of revenue for the three
months ended Sept. 30, 2020, compared to a net loss attributable to
the company of $692,000 on $247,000 of revenue for the three months
ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss attributable to the company of $5.15 million on $385,000
of revenue compared to net income attributable to the company of
$853,000 on $811,000 of revenue for the same period during the
prior year.
As of Sept. 30, 2020, the Company had $8.06 million in total
assets, $4.34 million in total liabilities, and $3.72 million in
total stockholders' equity.
As of Sept. 30, 2020, the Company had approximately $343,000 in
cash and cash equivalents, approximately $3,846,000 in negative
working capital and an accumulated deficit of approximately
$24,543,000. The Company said these conditions raise substantial
doubt about its ability to continue as a going concern. The
Company's ability to continue as a going concern is dependent upon
raising capital from financing transactions and revenue from
operations. Management anticipates their business will require
substantial additional investments that have not yet been secured.
Management is continuing in the process of fund raising in the
private equity and capital markets as the Company will need to
finance future activities. These financial statements do not
include any adjustments that may be necessary should the Company be
unable to continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1424657/000121390020036909/f10q0920_cuentasinc.htm
About Cuentas
Headquartered in Miami, Florida, Cuentas, Inc. --
http://www.cuentas.com/-- is focused on financial technology
services, delivering mobile banking, online banking, prepaid debit
and digital content services to unbanked, underbanked and
underserved communities. The Company derives its revenue from the
sales of prepaid and wholesale calling minutes.
Cuentas reported a net loss attributable to the company of $1.32
million for the year ended Dec. 31, 2019, compared to a net loss
attributable to the company of $3.56 million for the year ended
Dec. 31, 2018. As of June 30, 2020, the Company had $8.19 million
in total assets, $3.68 million in total liabilities, and $4.51
million in total stockholders' equity.
Halperin Ilanit, in Tel Aviv, Israel, the Company's auditor since
2018, issued a "going concern" qualification in its report on the
consolidated financial statements for the year ended March 30, 2020
citing that as of Dec. 31, 2019, the Company has incurred
accumulated deficit of $19,390,000 and negative operating cash
flows. These factor, among others, raise substantial doubt about
the Company's ability to continue as a going concern.
CURE TOPCO: S&P Affirms 'B' ICR on New Term Loan Issuance
---------------------------------------------------------
S&P Global Ratings affirmed its existing 'B' issuer credit rating
on Dallas-based health care platform service provider Cure TopCo
LLC (doing business as Signify Health) after the company issued a
new non-fungible first-lien term loan ($150 million) to pay off the
existing revolving credit facility balance, for general corporate
purposes and to increase liquidity on the balance sheet. The
outlook is stable.
The rating agency assigned its 'B' issue-level rating and '3'
recovery rating (50%-70%, rounded estimate: 55%) to the new term
loan.
S&P said, "The stable outlook on the company reflects our
expectation for double-digit revenue growth in 2021, driven by both
organic and inorganic growth; discretionary cash flow generation of
$20 million-$25 million after dividend distribution; and leverage
to stay at about 3.5x."
The rating reflects limited scale and a narrow operating focus,
with significant customer concentration. The late 2019 merger of
legacy Signify Health LLC and Remedy Partners to form Cure TopCo
LLC (doing business as Signify Health) improved business scale,
with revenue estimated to exceed $560 million for 2020, but the
company remains smaller compared with other larger players and its
health plan customers. While S&P expects margins to continue to
improve as the company gains economies of scale, it expects
leverage to remain in the 3x-4x range because S&P expects the
financial sponsor to remain focused on its acquisition-driven
growth strategy.
Signify Health (formerly Chloe Ox Parent LLC) traditionally
provides health risk assessments (HRA) and chronic care management
services to primarily Medicare Advantage plans, which tends to
provide high recurring revenue. The addition of Remedy Partners
diversified the company into an entirely new business. Remedy is a
large provider in the Bundled Payments for Care Improvement
program, where it collaborates with health systems to manage
Medicare fee-for-service patients' 90-day episodes of care. Its
role focuses on episodic care coordination services, including
post-acute care utilization management. S&P views the business
combination favorably because it sees an accelerated shift in the
market from fee-for-service toward value-based payments and
arrangements based on quality of services and total care for
patients. Signify Health and Remedy Partners have different
operating business models, and thus there will be limited overlap
in the combined entity. However, with this combination, there is an
opportunity to bring together technology, data, and other tools to
enhance the company's position as a value-based data and solutions
provider.
S&P expects more enrollees to convert to Medicare Advantage plans
from traditional Medicare. The company has stable relationships
with seven of the top 10 Medicare Advantage plans and serves about
half of the bundled payments market (via Episodes of Care
Services). Moreover, the company is not subject to traditional
reimbursement risks since revenue is derived from insurance
companies, which primarily pay them on a fee-for-service basis.
However, the company has significant customer concentration, with
the top three and top 10 customers representing about 50% and 70%
revenue, respectively. Legacy Signify deals with much larger health
care plan clients (such as Humana, Aetna, and Wellcare) that manage
beneficiaries under Medicare Advantage plans. These health plans
operate on a significantly larger scale, and S&P believes they will
try to push HRA rates down, because they have high bargaining power
against smaller service providers. Moreover, there is always a risk
that these large health plans can insource some of the health
assessment services. Remedy Partners, on the other hand, generates
most of its revenue from the Centers for Medicare and Medicaid
Services (CMS).
S&P said, "While participation in the bundled payments model is not
inevitable, we see a significant trend of health care participants
moving toward bundled payments and episode care, especially with
the recent push for CMS making bundled payments mandatory by 2023.
While we see little probability of CMS changing policies (including
risk adjustment methodology) and a strong trend of outsourcing HRA
services, any potential changes in policies or insourcing of HRA
services will significantly disrupt the company's business."
Cure TopCo's adjusted leverage will be in the 3x-4x range, and free
cash flow will be positive.
S&P said, "We expect the company will continue to grow via large
debt-financed acquisitions, which we do not consider in our base
case scenario. Given financial sponsor ownership and current
business scale, we expect leverage to remain in the 3x-4x range,
supported by low double-digit organic growth. We expect cash flow
will improve in 2021 to over $20 million from about $10 million in
2020, but large working capital swings will cause cash flow to be
relatively volatile during any year. Cash flow was adversely
affected in 2020 by the pandemic."
"We expect the EBITDA margin to improve to about 20%. We expect
EBITDA margin will improve as it gains scale, increases
cross-selling, and expands into new areas (including commercial
bundled payments). Due to the limited overlap between the two
businesses, we do not expect further margin improvement from
synergies."
"The stable rating outlook on Signify reflects our view that it
will successfully manage recent acquisitions, generating $20
million-$25 million of discretionary cash flow after member tax
distribution and leverage of about 3.5x in 2021. It also reflects
our expectation that CMS will continue to use data generated from
in-home health assessments to calculate risk adjustment. However,
this does not rule out the fact that regulatory changes could
affect Signify's business model."
"We could lower the rating if operational challenges resulted in
customer losses or significant margin declines. We could also lower
the rating amid a significant drop in demand for Signify's
services, which could result from regulation changes or increased
competitive pressures that result in pricing pressure, customer
losses, or sharp declines in revenue per assessment. This might
result in free cash flow falling below $10 million."
"We would consider raising the rating if Signify successfully
expanded its scale while maintaining leverage below 4x and
generating discretionary cash flows (after member tax distribution)
of more than $40 million. This would likely require 21% revenue
growth, as well as margin improvement of more than 400 basis points
(bps) from our base case forecast."
CURVATURE INC: S&P Withdraws 'CCC' Issuer Credit Rating
-------------------------------------------------------
S&P Global Ratings withdrew its 'CCC' issuer credit rating on
U.S.-based IT maintenance service provider Curvature Inc. at the
issuer's request. On Oct. 21, 2020, S&P placed the rating on
CreditWatch with positive implications.
S&P withdrew its ratings on Curvature following the close of its
acquisition by Park Place Technologies LLC (PPT) and the repayment
of all of Curvature's outstanding debt.
The rating agency also withdrew its issue-level and recovery
ratings on Curvature's debt, which was repaid upon close of the
transaction.
DAH-ON INC: Unsecured Creditors to Split $105K Over 5 Years
-----------------------------------------------------------
Dah-On, Inc. d/b/a S&K Beverages filed the First Amended Disclosure
Statement describing First Amended Plan which provides for the
payment in full of all Allowed Priority Claims and Allowed Secured
Claims.
Class 5 Allowed General Unsecured Claims will receive $105,000
under the Plan. This class will receive a pro-rata share of
$75,000 with interest at a rate of 4% per annum, which will be paid
through 20 quarterly payments made over the course of five years.
The funds to be used for the payment of claims or other
distributions to be made under the Plan will be from the projected
disposable income from the continued operation of Dah-On's
business, proceeds from the SBA Economic Injury Disaster Loan, and
any available funds or property which the Reorganized Debtor may
otherwise possess on or after the Effective Date.
The perfected liens and security interests held by any Allowed
Secured Creditor will be continued, preserved and retained to
secure the unpaid balance of such Secured Creditor's Allowed
Secured Claim.
Current Equity Holders will retain their equity interests in the
Reorganized Debtor based on a New Equity Infusion.
A full-text copy of the Disclosure Statement dated Sept. 23, 2020,
is available at https://tinyurl.com/yyak2hou from PacerMonitor.com
at no charge.
A full-text copy of the First Amended Disclosure Statement and Plan
dated Nov. 3, 2020, is available at https://tinyurl.com/y5j4q2wx
from PacerMonitor at no charge.
Counsel for the Debtor:
Melissa S. Hayward
Jamie Kirk
Hayward & Associates PLLC
10501 North Central Expy., Suite 106
Dallas, Texas 75231
Tel: (972) 755-7100
Fax: (972) 755-7110
E-mail: MHayward@HaywardFirm.com
JKirk@HaywardFirm.com
About Dah-On Inc.
Dah-On, Inc. operates S&K Beverages, a liquor store in Plano,
Texas.
On Jan. 10, 2020, Dah-On filed a voluntary petition under Chapter
11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 20-40116). At
the time of the filing, Debtor was estimated to have $100,000 to
$500,000 in assets and $1 million to $10 million in liabilities.
Judge Brenda T. Rhoades oversees the case. Debtor has tapped
Hayward & Associates PLLC as its legal counsel, and Kevin Lim CPA
P.C. as its accountant.
DATA STORAGE: Posts $42K Net Income in Third Quarter
----------------------------------------------------
Data Storage Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $41,935 on $2.72 million of sales for the three months ended
Sept. 30, 2020, compared to a net loss of $133,288 on $2.01 million
of sales for the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported net
income of $184,721 on $6.83 million of sales compared to a net loss
of $43,707 on $6.05 million of sales for the nine months ended
Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $8.09 million in total
assets, $6.16 million in total liabilities, and $1.93 million in
total stockholders' equity.
As of Sept. 30, 2020, DSC had cash of $604,763 and a working
capital deficiency of $2,553,236. As a result, these conditions
raised substantial doubt regarding the Company's ability to
continue as a going concern.
During the nine months ended Sept. 30, 2020, the Company provided
cash from operations of $696,087 with continued revenue growth of
subscription solutions. Further, the Company has no capital
expenditure commitments and the Company's offices have been
consolidated and fully staffed and with sufficient room for
growth.
"If necessary, management also determined that it is probable that
related party sources of debt financing and capitalized leases can
be renegotiated based on management's history of being able to
raise and refinance debt through related parties.
"As a result of the current favorable trends of improving cash
flow, the Company concluded that the initial conditions which
raised substantial doubt regarding the ability to continue as a
going concern has been mitigated."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1419951/000173112220001195/e2225_10q.htm
About Data Storage
Data Storage Corporation provides disaster recovery, business
continuity, cloud storage, and compliance solutions primarily in
the United States. The company's solutions assist organizations in
protecting their data, minimize downtime, and ensure regulatory
compliance. Its solutions include infrastructure-as-a-service,
data backup, recovery and restore, and data replication services;
email archival and compliance; eDiscovery; continuous data
protection; data de-duplication; and virtualized system recovery,
as well as hybrid cloud services. The company offers its solutions
and services to businesses in healthcare, banking and finance,
distribution services, manufacturing, construction, education, and
government sectors. Data Storage Corporation is headquartered in
Melville, New York.
DIOCESE OF CAMDEN: Selling Two New Jersey Properties for $4M
------------------------------------------------------------
The Diocese of Camden, New Jersey asks the U.S. Bankruptcy Court
for the District of New Jersey to authorize the sale of the
following two real properties: (i) located at 276 White Horse Pike,
Galloway Township, New Jersey to Ark Innovations, L.L.C. for $3.9
million; and (ii) located at 1597 Almonesson Road, Deptford, New
Jersey to Raphael Braschoss and Melissa Fleming for $75,000.
The Diocese is the owner of two lots that make up part of a tract
referred to as the Galloway Property and identified on the Tax Map
of Galloway Township as Block 527, Lots 1 & 7. Our Lady Of
Perpetual Help Parish, Galloway, N.J. ("OLPH"), a separate
religious corporation of the State of New Jersey, owns contiguous
property that is also part of the sale (Block 527, Lot 11 and Block
528, Lots 3-9 on the Tax Map of Galloway Township).
The complete Galloway Property is approximately 19.5 acres. OLPH
owns the majority of the Galloway Property. The Diocese owns two
residential properties, which are required for access to Pomona
Road as opposed to White Horse Pike. The Diocese paid $275,000 for
Block 527, Lot 1 of the Galloway Property and $300,000 for Block
527, Lot 7 of the Galloway Property.
The Diocese loaned approximately $6.47 million to OLPH for its move
and construction of a new parish complex at 146 South Pitney Road,
Galloway, New Jersey, the bulk of which was spent on the new parish
school at that site. In partial satisfaction of the OLPH debt due
to the Diocese, the Diocese will receive the full proceeds of the
sale.
In November 2017, the Diocese, OLPH and Ark entered into an
Agreement of Sale for the purchase of the Galloway Property.
Pursuant to the Galloway Agreement, Ark has agreed to pay $3.9
million for the Galloway Property. The Diocese is holding a
deposit of $50,000 pursuant to the Galloway Agreement. The
remaining $3.85 million is due upon closing.
The sale excludes any altars, religious items/artifacts, and
certain windows of the Diocese's choosing. Ark is taking the
property subject to a Land Lease Agreement dated Oct. 17, 2016
between OLPH as lessor and Cellco Partnership, a Delaware general
partnership, d/b/a Verizon Wireless as lessee. Ark has requested
that the lease be terminated.
The final remaining contingency in the Galloway Agreement is the
removal of an occupant located on Block 527, Lot 7. On Sept. 18,
2020, the Diocese filed a Verified Complaint and Order to Show
Cause for removal of the occupant in an action captioned The
Diocese of Camden, New Jersey v. Wright, et al. in the Superior
Court of New Jersey, Atlantic Vicinage at Docket No.
ATL-DC-004405-20.
On Sept. 24, 2020, Judge James P. McClain, J.S.C. entered an Order
to Show Cause in the matter. The hearing on the Order to Show
Cause is scheduled for Oct. 21, 2020 at 10:00 a.m. 15. Prior to
entering into the Galloway Agreement, the Galloway Property was
subject to extensive marketing by the Diocese's real estate agent,
Budd Realty (Kenneth McIlvaine).
The Diocese is the owner of the Deptford Property and identified as
Block 226, Lot 3 of the Official Tax Maps of the Township of
Deptford, County of Gloucester. The Deptford Property is
approximately 4.3 acres.
On Feb. 14, 2020, the Diocese and the Deptford Buyers entered into
an Agreement of Sale for the purchase of the Deptford Property.
Pursuant to the Deptford Agreement, the Deptford Buyers have agreed
to pay $75,000 for the Deptford Property. The Diocese is holding a
deposit of $10,000 pursuant to the Deptford Agreement. The
remaining $65,000 is due upon closing.
The closing on the sale of the Deptford Property has been delayed
as a result of the Diocese's need to remove the current occupant(s)
on the Deptford Property. The removal has been delayed as a result
of Covid-19 and the stay on evictions imposed in New Jersey. Upon
removal of the current occupant, all other contingencies have been
satisfied. Prior to entering into the Deptford Agreement, the
Deptford Property was subject to extensive marketing by the
Diocese's real estate agent, Budd Realty (Kenneth McIlvaine).
By the Motion, the Diocese asks entry of the Sale Order, following
a hearing to be scheduled by the Court, authorizing and approving
the sale of the Diocese Properties, free and clear of
Encumbrances.
Finally, the Diocese asks to waive the stay requirements under Rule
6004(h) in connection with the sale of the Property to enable it to
minimize any costs associated with the proposed Sale by allowing
the parties to close the transaction as soon as possible after
entry of the proposed Order. Also, waiver of the stay will ensure
the smooth facilitation of the Sale.
A copy of the Agreements is available at
https://tinyurl.com/y5j666wu from PacerMonitor.com free of charge.
About The Diocese of Camden, NJ
The Diocese of Camden, New Jersey is a nonprofit religious
corporation organized pursuant to Title 16 of the Revised Statutes
of New Jersey. The Diocese is the secular legal embodiment of the
Roman Catholic Diocese of Camden, a juridic person recognized under
Canon Law.
The Diocese of Camden sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 20-21257) on Oct. 1, 2020.
The petition was signed by Reverend Robert E. Hughes, vicar
general/vice president. At the time of the filing, Debtor had
total assets of $53,575,365 and liabilities of $25,727,209. Judge
Jerrold N. Poslusny Jr. oversees the case. McMANIMON, SCOTLAND &
BAUMANN, LLC is the Debtor's legal counsel.
DOUBLE EAGLE III: S&P Assigns 'B-' ICR; Outlook Stable
------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
Private U.S.-based crude oil and natural gas exploration and
production company Double Eagle III Midco 1 LLC.
At the same time, S&P assigned its 'B' rating to the company's
proposed senior unsecured notes. The '2' recovery rating indicates
S&P's expectation for substantial (70%-90%; rounded estimate: 85%)
recovery of principal in the event of a default.
S&P said, "The stable outlook reflects our view that Double Eagle
will maintain modest leverage metrics over the next 12-24 months,
while growing its production and proved developed reserves. We
project average debt to EBITDA of 1.8x and funds from operations to
debt of about 50% in 2020 and 2021."
The rating on Double Eagle reflects its relatively small proved
reserves base and production level, its high percentage of proved
undeveloped reserves (69% of proved as of June 30, 2020), its lack
of geographic diversification, and large cash flow outspend. S&P's
rating also considers the company's weighting to oil, access to
takeaway infrastructure for oil, gas, and water, its moderate
leverage metrics, and strong hedging program.
Double Eagle holds a 96,500 net acre position in the Midland Basin,
with proved reserves of 317 million barrels of oil equivalent
(mmboe) as of June 30, 2020 (59% crude oil). In addition, the
company holds 38,200 net royalty acres across its position that
increases its net revenue interest and enhances overall
profitability, which S&P considers to be above average compared
with peers as the company also has competitively low cash operating
costs. Double Eagle's cost structure benefits from its access to
infrastructure, with 100% of its oil, gas, and water from its
horizontal operations connected to pipelines.
S&P said, "The company plans to run a six-rig drilling program for
the remainder of 2020 that we expect to drive material production
growth. Double Eagle averaged 43,000 boe per day in second-quarter
2020, compared with about 14,200 boe/d in second-quarter 2019.
Assuming a six-rig program throughout 2021, the company projects
surpassing 100,000 boe/d in fourth-quarter 2021. However, with this
aggressive growth target across a large acreage package put
together over the past three years comes execution risk, which we
factored into S&P's rating. Also, while the majority of the acreage
has been drilled and held by production from vertical wells, the
company will focus exclusively on horizontal wells. Double Eagle
has drilled 168 horizontal wells across its acreage, and plans to
drill around 150 wells in 2021."
Double Eagle has a robust hedging program, covering more than 80%
of remaining 2020 oil production at an average price of about $53
per barrel (bbl), and 70% of 2021 production at about $47/bbl.
Although this will provide an uplift to S&P's base-case price
assumptions and provide downside protection, the company is still
expected to materially outspend cash flow by about $300 million in
both 2020 and 2021, before becoming free operating cash flow (FOCF)
positive in 2022. Nonetheless, S&P expects Double Eagle's cash flow
leverage metrics to remain strong for the rating, with average debt
to EBITDA of 1.8x in 2020 and 2021, and funds from operations (FFO)
to debt of about 50%.
The company's financial risk profile is constrained by its
financial sponsor ownership. The largest holders are Apollo Global
Management Inc. (44%), Quantum Energy Partners (30%), Magnetar
Capital (7%), and GSO Capital Partners (4%). Combined, the
financial sponsors hold seven of 10 board seats, with the remaining
three seats held by company management, which in S&P's view gives
the financial sponsors significant influence on the company's
strategic direction and the ability to influence financial policy,
including debt leverage.
S&P said, "While we expect the company to continue to aggressively
grow production and convert reserves to the proved developed
category, we believe development and growth of its assets remain
subject to execution risk. Double Eagle has grown its proved
reserves and production rapidly since 2018, but overall remains
smaller than 'B' rated peers. As a result, we have applied a
negative one-notch comparable ratings analysis adjustment to the
anchor to arrive at our rating."
"The stable outlook reflects our view that the company's leverage
metrics will remain strong as it continues to rapidly grow
production volumes while running a six-rig program over the next
12-24 months. Although we anticipate a material cash flow deficit
over the next 12 months, production growth should drive higher
EBITDA to support leverage metrics. We expect 2020 and 2021 average
debt to EBITDA of 1.8x and average FFO to debt of about 50%."
"We could lower our rating on Double Eagle if its cash flow
outspend remained high beyond our current expectations, resulting
in a larger draw on the reserve-based lending (RBL) credit facility
and less than adequate liquidity. This would most likely result
from commodity prices well below our current assumptions of $45/bbl
in 2021 and 2022, and a higher-than-anticipated level of capital
expenditures to develop the company's assets."
"We could upgrade Double Eagle if it increases its proved developed
reserves and production to a level more consistent with higher
rated peers, while maintaining adequate liquidity and aligning
capital expenditures with cash flows. This would most likely occur
if Double Eagle successfully executes on its current development
spending and growth plans."
ELITE PHARMACEUTICALS: Posts $2.5 Million Net Income in 2nd Quarter
-------------------------------------------------------------------
Elite Pharmaceuticals, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $2.48 million on $7.40 million of total revenue for the three
months ended Sept. 30, 2020, compared to a net loss of $1.59
million on $4.63 million of total revenue for the three months
ended Sept. 30, 2019. The increase in revenues was largely
attributed to generic extended extended-release Adderall which was
launched earlier in this fiscal year and increased sales of generic
immediate-release Adderall during the Second Quarter.
For the six months ended Sept. 30, 2020, the Company reported net
income of $3.56 million on $14.94 million of total revenue compared
to a net loss of $1.32 million on $7.99 million of total revenue
for the same period during the prior year.
As of Sept. 30, 2020, the Company had $27.60 million in total
assets, $12.99 million in total liabilities, and $14.62 million in
total shareholders' equity.
Cash provided by operations during the six months ended Sept. 30,
2020 was $2.7 million, an increase of approximately $3.0 million
from the net cash used in operations of $0.3 million during the
comparable period of the prior fiscal year. Elite has now achieved
operating profits and positive operating cash flows for two
consecutive quarters for the first time.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1053369/000121390020037339/f10q0920_elitepharma.htm
About Elite Pharmaceuticals
Elite Pharmaceuticals, Inc. -- http://www.elitepharma.com/-- is a
specialty pharmaceutical company which is developing a pipeline of
niche generic products. Elite specializes in oral sustained and
controlled release drug products which have high barriers to entry.
Elite owns multiple generic products which have been licensed to
Lannett Company, Glenmark Pharmaceuticals, Inc. and TAGI Pharma.
Elite operates a cGMP and DEA registered facility for research,
development, and manufacturing located in Northvale, NJ.
Elite reported a net loss attributable to common shareholders of
$2.24 million for the year ended March 31, 2020, compared to a net
loss attributable to common shareholders of $9.28 million for the
year ended March 31, 2019. As of June 30, 2020, the Company had
$27.82 million in total assets, $16.03 million in total
liabilities, and $11.79 million in total shareholders' equity.
EVOQUA WATER: S&P Upgrades ICR to 'B+' on Lower Financial Leverage
------------------------------------------------------------------
S&P Global Ratings raised all ratings, including its issuer credit
rating on Evoqua Water Technologies Corp., to 'B+' from 'B'.
The stable outlook reflects S&P's expectation for steady volumes
and profitability over the next 12 months driven by stable end
market demand across end markets, long-term contracts, and
aftermarket sales, which keep leverage at about 4x.
S&P believes demand will remain resilient over the next year,
allowing the company to sustain improved credit metrics.
Water is an essential aspect of many industrial processes,
including microelectronics, pharmaceutical, and biotechnology,
which will likely continue to grow in 2021. The take-or-pay
component of Evoqua's long-term contracts will partially mitigate
lower activity in more pressured industries such as oil refining
and aquatics. Pandemic-related restrictions on U.S. industrial and
construction activity had a limited effect on demand during 2020,
and S&P's forecast does not incorporate any significant
disruptions. Overall, S&P expects low sales growth in 2021.
Credit metrics will likely also benefit from increased customer
acceptance of Evoqua's more differentiated and profitable
outsourced water model.
S&P believes that the COVID-19 pandemic is accelerating the trend
toward an outsourced model of water treatment and purification.
Customers increasingly prefer remote 24/7 monitoring and
preventative maintenance of the water system because this solution
offers higher up-time with fewer visits from external parties.
Evoqua's increased ability to efficiently schedule preventative
maintenance decreases its labor cost and benefits margins, while
long-term contracts aid demand visibility.
Applied Product Technologies (APT) may weigh on 2021 performance
after a strong 2020.
The market for water products remains fragmented and competitive,
restricting the margins Evoqua's APT segment can realize.
S&P said, "We view sales of less than $500 million as representing
well under a 10% share of the market APT serves. Although we expect
limited construction restrictions on existing projects, we believe
increased uncertainty will delay bidding and start dates on future
projects. A decrease in the number of new aquatics capital projects
and marine activity will likely also weigh on product sales for the
segment. However, we expect municipal demand to remain steady,
given the importance of safe water to communities."
S&P believes Evoqua will maintain the improved balance sheet it has
achieved over the past year.
Following a $100 million debt repayment during the second quarter
of the company's fiscal 2020, adjusted leverage will be about 4x at
Sept. 30, 2020.
S&P said, "We believe Evoqua's inorganic growth strategy could
elevate leverage slightly in fiscal 2021. However, we view the
company as having moderate cash flow generation, which provides
some cushion in its leverage metrics to digest tack-on acquisitions
totaling less than $100 million annually. We also expect AEA
Investors L.P.'s trend of divesting its holding of Evoqua to
continue, further reducing its ability to agitate for higher
shareholder rewards. AEA currently controls less than 20% of
Evoqua."
The stable outlook on Evoqua reflects S&P's expectation that it
will maintain S&P Global Ratings-adjusted leverage of about 4x over
the next 12 months as demand remains resilient and profitability
benefits from increasing customer acceptance of its outsourced
water model.
S&P could raise its rating on Evoqua if
-- The company maintains strong business performance as
demonstrated by continued solid earnings and margins; and
-- S&P forecasts S&P Global Ratings-adjusted leverage will decline
and remain below 4x with free operating cash flow to debt
increasing to about 10% or higher, and S&P expects the company's
financial policy supports maintaining these credit measures.
S&P could downgrade Evoqua if it expects its S&P Global
Ratings-adjusted debt to EBITDA will rise above 5x for an extended
period. This could occur if:
-- Acquisitions or shareholder rewards are significantly higher
than S&P expects; or
-- The company encounters unexpected challenges such as stronger
competition in its product technologies business or if customers do
not renew outsourced water contracts.
FIRST BRANDS: S&P Affirms B' ICR on Proposed Acquisition
--------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on First
Brands Group LLC. The outlook is negative.
S&P said, "We are affirming the 'B' issue-level rating and '3'
recovery rating on the company's upsized $1.798 billion term loan
B-3. We are maintaining our negative outlook due to continued
uncertainties around the impact of the coronavirus on the company's
credit metrics, as well as potential integration risks."
First Brands is planning to acquire an aftermarket brake and
chassis parts supplier. The transaction will be financed with an
incremental first-lien B-3 term loan of $220 million (increasing
the facility size to $1.798 billion) and $13 million of cash on
hand.
S&P said, "We expect debt to EBITDA of 5.0x-5.5x in 2020, improving
to 3.5x-4.0x in 2021 as transaction-related expenses and
coronavirus-related effects potentially decline. We anticipate cash
costs to achieve synergies over the next 18 months will limit any
material improvement in cash flow metrics in 2021."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
The negative outlook reflects the risk that credit metrics could be
worse than S&P expects over the next 12 months, due to
coronavirus-related impacts or potential integration costs that
delay synergy realization and reduction of debt leverage to below
5x in 2021 and beyond.
Upside scenario
S&P could revise the outlook to stable during the next 12 months if
the impact of the coronavirus were not as large as it expected and
the integrations and achievement of synergies have gone as
expected. S&P would also expect to debt to EBITDA to remain below
5x and FOCF to debt of above 5%.
Downside scenario
S&P sid, "We could lower the ratings during the next 12 months if
coronavirus effects were larger than we expected or if there were
integration issues, leading to debt to EBITDA above 6x and free
operating cash flow (FOCF) to debt toward breakeven. We could also
lower the ratings if liquidity erosion occurred and there were
concerns regarding the company's ability to meet its covenant or
mandatory debt and interest payments."
FITNESS INTERNATIONAL: S&P Cuts Senior Secured Debt Rating to CCC+
------------------------------------------------------------------
S&P Global Ratings lowered its issue-level ratings on Fitness
International LLC's (LA Fitness) senior secured revolving credit
facility, term loan A, and term loan B to 'CCC+' from 'B-' and
revised its recovery ratings on the facilities to '3' from '2' due
to reduced recovery prospects for existing lenders following the
issuance of a $300 million Main Street loan, which is pari passu to
existing facilities. The '3' recovery rating indicates S&P's
expectation for meaningful (50%-70%; rounded estimate: 65%)
recovery for lenders in the event of a payment default. The
company's $300 million Main Street Loan follows standard terms for
the U.S. Federal Reserve's Main Street lending program, including
amortization of 15% in years three and four of the loan and a final
bullet payment of 70% at maturity in year five. Concurrent with the
company's issuance of the Main Street loan, the company raised $30
million of equity from its ownership.
S&P said, "While we view the incremental liquidity provided by
these transactions as a credit positive, our 'CCC+' issuer credit
rating on LA Fitness is unchanged because we believe that leverage
is likely to remain elevated at potentially unsustainable levels
through 2021 even under a scenario for dissemination of a COVID-19
vaccine by mid-2021 because the company will need time to start to
rebuild its reduced membership base, revenue, and EBITDA in a
manner that can enable it to possibly begin to reduce leverage. Our
outlook remains negative since rising COVID-19 cases in the U.S.
could result in further mandatory or voluntary fitness club
closures, further attrition in the company's members, and further
stress on the company's liquidity and leverage position."
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P's recovery rating on the company's senior secured credit
facilities is '3', indicating the rating agency's expectation for
meaningful (50%-70%; rounded estimate: 65%) recovery for lenders in
the event of a payment default.
-- S&P's simulated default scenario contemplates a default
occurring in 2022, since the company's revenue, EBITDA, and cash
flow remain impaired following the COVID-19 pandemic.
-- If the company were to default, it would continue to have a
viable business model because of the company's geographical
diversification and large network of clubs. As a result, S&P
believes lenders would achieve greater recovery through
reorganization rather than a liquidation of the business. To value
the enterprise, S&P applied a 5.5x multiple.
-- S&P assumes the $400 million revolver is 85% drawn at default.
Simulated default assumptions
-- Year of default: 2022
-- EBITDA at emergence: $240 million
-- EBITDA multiple: 5.5x
-- Revolving credit facility: 85% drawn at default
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $1.25
billion
-- Obligor/non-obligor split: 100%/0%
-- Estimated secured debt: $1.871 billion
-- Value available for first-lien claim: $1.25 billion
-- Recovery expectation: 50%-70% (rounded estimate: 65%)
All debt amounts include six months of prepetition interest.
FLOOR AND DECOR: Moody's Affirms Ba3 CFR; Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service affirmed Floor and Decor Outlets of
America, Inc.'s Ba3 Corporate Family Rating (CFR), Ba3-PD
Probability of Default Rating (PDR), and Ba2 senior secured bank
facility rating. In addition, the Speculative Grade Liquidity
rating was upgraded to SGL-2 from SGL-3. The outlook was changed to
stable from negative.
"The change in outlook to stable from negative reflects Floor &
Decor's solid execution coupled with the outsized demand for hard
surface flooring as home remodeling trends have had significant
tailwinds from a shift in consumer spending in response to the
coronavirus pandemic", said Senior Vice President Christina Boni.
"The company's liquidity profile has also improved through its
accelerated sales and earnings growth while at the same time
capital spending for new store builds has reduced in the face of
the pandemic", Boni added.
Upgrades:
Issuer: Floor and Decor Outlets of America, Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
Affirmations:
Issuer: Floor and Decor Outlets of America, Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Senior Secured Bank Credit Facility, Affirmed Ba2 (LGD3)
Outlook Actions:
Issuer: Floor and Decor Outlets of America, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Its analysis has considered the effect on the performance of Floor
& Decor from the dramatic shift in consumer spending away from
travel and leisure towards the home as well as the current weak US
economic activity and a gradual recovery for the coming months.
Although an economic recovery is underway, it is tenuous and its
continuation will be closely tied to containment of the virus. As a
result, the degree of uncertainty around its forecasts is unusually
high. Moody's regards the coronavirus outbreak as a social risk
under its ESG framework, given the substantial implications for
public health and safety.
Floor & Decor's Ba3 corporate family rating reflects its solid
market position in the fragmented hard surface flooring and
accessories segment which services both do-it-yourself (DIY) and
professional (Pro) customers. The company's direct sourcing model,
extensive product offering and everyday low-price value positioning
have supported its consistent growth historically. Floor & Decor
weathered the temporary closure of its stores to meet the
challenges of the pandemic in the spring of 2020, as it relied on
curbside pickup and online sales. The company has experienced
outsized growth as stores reopened and tailwinds from an increased
focus on home maintenance and remodeling as well as low interest
rates and a healthy housing market.
Floor & Decor's financial strategy is balanced with moderate levels
of funded debt and no current dividend or share repurchase program.
The company remains focused on store growth of approximately 20%
per year, which was slowed in 2020 to approximately 11% as a result
of the pandemic. Floor & Decor also benefits from good liquidity as
the company has $271 million of cash, relative to $219 million of
funded debt at September 24, 2020. Nonetheless, Floor & Decor's
rating is constrained by its modest scale, aggressive growth
strategy, limited geographic diversity and cyclical nature of home
remodeling.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could result in an upgrade include the continued
success of profitably growing its store base, a meaningful increase
in Floor & Decor's scale and geographic diversification while
maintaining positive operating trends. Quantitatively, ratings
could be upgraded if debt to EBITDA remained around 3.0 times and
EBIT to interest coverage was above 4.0 times on a sustained basis.
An upgrade would also require good liquidity as well as a balanced
and clearly articulated financial strategy.
Ratings could be downgraded if new stores did not achieve targeted
returns or its operating performance came under sustained pressure.
Ratings could also be downgraded if financial strategy were to
become more aggressive resulting in debt to EBITDA sustained above
4.0 times or EBIT to interest below 3.0 times. Ratings could also
be downgraded if liquidity were to deteriorate.
Floor & Decor is a leading retailer of hard surface flooring in the
United States with 128 stores and LTM revenues as of September 24,
2020 of approximately $2.2 billion.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
FOUNDATION BUILDING: S&P Places 'B+' ICR on Watch Negative
----------------------------------------------------------
S&P Global Ratings placed all of its ratings on U.S.-based
distributor Foundation Building Materials Holding Co. LLC,
including its 'B+' issuer credit rating, on CreditWatch with
negative implications.
Foundation Building Materials Holding Co. LLC announced that it has
agreed to be acquired by affiliates of private-equity firm American
Securities LLC. The acquisition price of nearly $1.4 billion
includes about $445 million of the company's debt with the
likelihood for additional debt at closing.
S&P said, "The CreditWatch negative placement reflects our view
that American Securities will likely fund its $1.4 billion
acquisition of Foundation with incremental debt, which is common
when financial sponsors acquire building materials firms. That
said, our current rating assumes the company's adjusted leverage
will rise by about a turn from approximately 3x as of Sept. 30,
2020, because it is controlled by a financial sponsor."
Santa Ana, Calif.-based Foundation distributes wallboard, suspended
ceilings, and other building materials. The company is publicly
traded (NYSE: FBM), though it is majority held and controlled by an
affiliate of private-equity firm Lone Star Funds. Foundation will
be privately held when the proposed transaction closes.
S&P said, "We expect to resolve our CreditWatch when the
transaction closes, which is currently scheduled to occur in the
first quarter of 2021, or before. We would likely lower our ratings
on Foundation or its successor by at least one notch to reflect the
aggressive financial policies typically associated with private
firms owned by financial sponsors. We could lower our rating by two
notches if we determine it is likely that the company's leverage is
closer to 7x at closing."
FRONTIER COMMUNICATIONS: Fitch Affirms BB-(EXP) LT IDR
------------------------------------------------------
Fitch Ratings has affirmed the 'BB-(EXP)' Long-Term Issuer Default
Rating (IDR) of Frontier Communications Corp. and its subsidiaries
with a Stable Outlook.
Fitch has also affirmed Frontier's $625 million first lien secured
exit revolver due 2024 at 'BB+ (EXP)'/'RR1', the $1.7 billion
pre-petition first lien secured term loan due 2024 at
'BB+(EXP)'/'RR1', the $1.15 billion first lien exit notes due 2027
at 'BB+(EXP)'/'RR1' and the $1.6 billion pre-petition second lien
secured notes due 2026 at 'BB+(EXP)'/'RR1'.
In addition, Fitch has affirmed the first lien secured term loan
exit facility due 2027 at 'BB+(EXP)'/'RR1'; Frontier plans to
increase the size of this exit facility from its existing $500
million to $1 billion, with proceeds expected to be used to repay a
portion of the $1.7 billion prepetition first lien term loan due
2024. In addition, Fitch expects the remainder of the $1.7 billion
first lien term loan and the entire $1.6 billion pre-petition
second lien notes to be refinanced with other secured debt.
Frontier's and Frontier Southwest Inc.'s senior secured debt is
affirmed at 'BB+(EXP)'/'RR1'. The senior unsecured debt of Frontier
North Inc., Frontier California Inc. and Frontier West Virginia
Inc. is affirmed at 'BB(EXP)'/'RR2'. The senior unsecured debt of
Frontier Florida LLC is affirmed at 'B+(EXP)'/'RR5'.
Fitch expects to assign the ratings following Frontier's emergence
in early 2021. The expected ratings will be reviewed for material
changes prior to Fitch assigning final ratings. Material changes
may include changes in the company's capital structure at
emergence, any material deviations from current assumptions, and
Fitch's issuance of updated criteria or criteria exposure drafts.
Expected ratings, similar to any other rating, can be raised,
lowered, placed on Rating Watch or withdrawn.
KEY RATING DRIVERS
Low Leverage Upon Emergence: Frontier's 'BB-(EXP)' and Stable
Outlook is supported by relatively low leverage for the rating and
relatively low leverage compared with other telecom operators in
Fitch's U.S. telecom universe. Fitch expects gross leverage of 2.8x
at YE 2021 and net leverage of 2.4x. Absent additional rural
broadband support, leverage, both gross and net, could rise to 0.4x
to 0.5x.
A much improved FCF position will result from a reduction in
interest expense of more than $1 billion annually. Fitch believes
the company will have the opportunity to increase investments in
key strategic areas including fiber to the home and greater fiber
investment to support enterprise and wholesale services, including
fiber to the tower. The rating is constrained by the near-term
expected decline in legacy revenues and the need to continue to
take costs out of the business.
Managing Coronavirus Effects: Fitch believes the risk of the
coronavirus pandemic on the operational performance of the telecom
sector is low relative to other sectors. Enterprise revenues have
some pressure with businesses temporarily closed with the effect on
small businesses more pronounced.
This was mitigated by increased use in communication services to
conduct business as travel is down materially and remote working
continues. Stability in consumer revenues is supported by demand
for broadband, not only for work-at-home, but remote learning and
increased consumption of entertainment services, such as video and
gaming.
Capital Allocation: Frontier is expected to emerge from bankruptcy
in early 2021. The current holders of the senior unsecured debt
will become the new owners of the company as a result of the
restructuring support agreement (RSA). The capital allocation
policy remains uncertain, while the company is in bankruptcy with
respect to more aggressive investment plans and an articulated
capital structure. Fitch believes the company and parties to the
RSA are targeting a net leverage ratio of less than 3.0x based upon
the anticipated level of debt at emergence.
Challenging Operating Environment: The rating incorporates a
challenging operating environment for wireline operators. Fitch
expects Frontier's revenue trends to continue to be negative in the
next couple of years on an organic basis. The expiration of CAF II
funding in 2022 will affect the company.
Fitch expects this latter effect to be mitigated by the next
generation of broadband support through the Rural Digital
Opportunity Fund, although its assumptions exclude potential
funding from this program. The de-emphasis of products, such as
video, will affect revenues but will have a far lower effect on
EBITDA margins, given programming cost offsets.
FCF and Debt: Fitch is estimating FCF will be around $500 million
in 2021, when the company is expected to emerge from bankruptcy.
FCF could decline to around $250 million to $300 million in 2022
upon the expiration of CAF II funding. The effect on FCF due to the
expiration of CAF II funding could be mitigated by additional
broadband funding support. Following the emergence from bankruptcy,
Frontier will have a much more tenable capital structure.
Asset Sales: Frontier sold operations in Washington, Oregon, Idaho
and Montana, the Northwest operations, to WaveDivision Capital, LLC
for $1.35 billion in cash, subject to closing adjustments. This
cash, combined with existing cash, will be used to settle claims in
bankruptcy. Fitch estimated the transaction multiple was
approximately 5.3x based on 2019 estimated EBITDA. Fitch-calculated
EBITDA is before restructuring, other charges and a goodwill
impairment for operations.
Secured Debt Notching: Frontier parent secured debt is notched up
two levels from the IDR. The secured debt benefits from certain
guarantees and equity pledges. The first mortgage bonds of Frontier
Southwest are also notched up two levels from the IDR, given the
security provided by a first lien on substantially all of its
assets. For rated entities with IDRs of 'BB-' or above, Fitch does
not perform a bespoke analysis of recovery upon default for each
issuance. Instead, Fitch uses notching guidance whereby an issuer's
secured debt can be notched upward zero to two rating levels.
Unsecured Debt Notching: For corporate entities rated 'BB-' and
above, the rating assigned to an issuer's senior unsecured debt
instrument assumes an average recovery available to these creditors
in the event of bankruptcy. When average recovery prospects are
present, IDRs and unsecured debt instrument ratings are equal, with
no notching.
For subsidiary unsecured debt, Fitch notes the structural seniority
to Frontier parent debt and the rating is notched up one level to
'BB(EXP)'/'RR2'. At any rating level where the bespoke approach is
not used, analysts can denote contractual or structural
subordination that is detrimental to the unsecured debt by rating
it lower than the IDR. A bespoke style analysis determining
below-average recoveries could lead to a rating lower than the IDR.
The 'B+(EXP)'/'RR5' assigned to Frontier Florida's unsecured debt
reflects Frontier Florida as a guarantor of Frontier's secured
credit facility.
Parent-Subsidiary Relationship: Fitch linked the IDRs of Frontier
and its operating subsidiaries based on strong operational ties.
DERIVATION SUMMARY
Frontier has higher exposure to the more volatile residential
market compared with CenturyLink, Inc. (BB/Stable), a wireline
peer, and to some extent, Windstream Services, LLC. Incumbent
wireline operators within the residential market face wireless
substitution and competition from cable operators, such as Comcast
Corp. (A-/Stable) and Charter Communications Inc. Fitch rates
Charter's indirect subsidiary, CCO Holdings, LLC (BB+/Stable).
Cheaper alternative offerings, such as voice over internet protocol
and over-the-top video services provide additional challenges.
Incumbent wireline operators had modest success with bundling
broadband and satellite video service offerings in response to
these threats. Fitch expects Frontier to emerge from bankruptcy
with lower leverage than higher-rated peers CenturyLink and
Charter.
Frontier needs to improve its competitive position in the
enterprise market. In this market, Frontier is smaller than AT&T
Inc. (A-/Stable), Verizon Communications Inc. (A-/Stable) and
CenturyLink.
All three companies have an advantage with national or
multinational companies, given extensive footprints in the U.S. and
abroad. Frontier has a slightly smaller enterprise business than
wireline peer Windstream. Compared with Frontier, AT&T and Verizon,
have wireless offerings providing more service diversification.
Frontier's gross leverage is expected to be slightly higher than
AT&T and Verizon following emergence from bankruptcy.
KEY ASSUMPTIONS
- Revenues decline just above 10% in 2020, largely reflecting the
sale of the Pacific Northwest properties on May 1, 2020.
- Revenue declines at a slightly lower rate in 2021 and 2022, due
to the partial year of the Northwest assets in 2020, and the loss
of CAF II revenues, respectively.
- EBITDA margin is expected to decline to the high 30% range in
2020 and 2021 from the low 40% range in 2019. The loss of CAF II
funding further lowers EBTIDA margins in 2022. Pressure in 2022
could be partly offset by future rural broadband subsidies.
- Capital spending reflects company plans of approximately $1.3
billion in 2020. Thereafter, capital intensity ranges from 16% to
18%.
- Cash taxes are nominal in 2020-2023.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross leverage, defined as total debt with equity
credit/operating EBITDA, expected to be sustained at or below 3.0x,
with FFO leverage of 3.0x, while consistently generating positive
FCF margins in the mid-single-digits.
-- Greater certainty around capital allocation, given the new
shareholder base upon emergence.
-- Successful execution on cost reduction plans.
-- Consistent gains in revenues from anticipated investments in
fiber/broadband product areas.
-- Demonstrating stable EBITDA and FCF growth
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A weakening of operating results, including deteriorating
EBITDA margins and an inability to stabilize revenue erosion in key
product areas or offset EBITDA pressure through cost reductions.
-- Discretionary management decisions, including but not limited
to, execution of M&A activity that increases gross leverage beyond
4.5x, with FFO leverage of 4.5x, in the absence of a credible
deleveraging plan.
LIQUIDITY AND DEBT STRUCTURE
Frontier has a substantial amount of liquidity at this current
point-in-time with more than $1.7 billion of unrestricted cash. At
emergence, the company expects to have $150 million of unrestricted
cash and an undrawn $625 million credit facility. First-lien debt
is expected to be $3.96 billion, second-lien debt is expected to
total $1 billion, and subsidiary debt is expected to total $856
million. Parent takeback debt is expected to be $750 million, and
whether or not it is secured or unsecured will be determined at
emergence. Fitch expects to provide a final rating on the takeback
debt at that time.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Frontier has an ESG Relevance Score of 4 for Management Strategy
due operational challenges following the close of the Verizon
transaction that resulted in elevated subscriber churn and weaker
than expected revenue, which had a negative impact on the credit
profile, and is relevant to the rating in conjunction with other
factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
FTS INTERNATIONAL: Successfully Completes Restructuring
-------------------------------------------------------
FTS International, Inc. (NYSE American: FTSI) on Nov. 19, 2020,
announced that it has successfully completed its fully consensual
financial restructuring and has emerged from Chapter 11.
Michael Doss, Chief Executive Officer, commented, "Today is an
important day for FTSI. We have quickly and efficiently completed
our financial restructuring and emerge with sufficient cash and
revolving credit capacity to deploy stacked fleets, invest in new
technology, rebuild working capital and create long-term value for
our stakeholders."
"FTSI is a leader in the pressure pumping space and with the entire
organization focused on enhancing the value proposition to our
customers, we will continue to set records in operational
performance and attract new customer relationships. Our team and
our pressure pumping fleet are well-positioned to quickly take
advantage of increased customer demand as the world returns to a
more normalized environment. I would like to express my gratitude
to all of our employees for their dedication during this process,
and thank our customers, vendors, and service providers for their
continued cooperation and support."
"The new owners, which include Amundi Pioneer Asset Management,
Glendon Capital Management, Wexford Capital, and the Wilks
Brothers, have deep industry experience, and understand the value
of FTSI and the proposition to our customers and the industry,"
continued Mr. Doss. "We expect them to be active partners, who are
strongly committed to supporting our company. The proactive
transaction agreed to by our equity and debt holders enhances value
for all stakeholders and solidifies the company’s prospects for
the future—I am proud that FTSI now has one of the cleanest
balance sheets of any public, pure-play pressure pumping company."
As previously announced, the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division confirmed FTSI’s prepackaged
plan of reorganization (the "Confirmed Plan") on November 4, 2020.
Pursuant to the Confirmed Plan, FTSI deleveraged its balance sheet
by equitizing all prepetition funded debt, resulting in holders of
FTSI's legacy senior notes and term loan collectively holding over
90% of FTSI's new common stock. Holders of FTSI's legacy equity
interests received approximately 9.4% of FTSI's new common stock
under the Confirmed Plan.
Upon emergence, FTSI expects to have approximately $90 million cash
on hand and has entered into a new $40 million asset-based
revolving credit facility with Wells Fargo Bank, N.A., as
administrative agent and lender, to support working capital needs.
Issuance of Equity and Listing on the NYSE American
In connection with emergence from Chapter 11, all of the Company's
existing equity interests will be cancelled and will cease to
exist, effective before the market opens on November 20, 2020. At
emergence, approximately 13,687,620 shares of new Class A common
stock are outstanding, with 49 million shares authorized at
emergence. Shares of the Company's new Class A common stock will
commence trading on the NYSE American under the ticker symbol
"FTSI" on November 20, 2020. Additionally, at emergence,
approximately 312,306 shares of the Company's new Class B common
stock are outstanding, with 1 million shares of Class B common
stock authorized at emergence. Shares of the Company's new Class B
common stock are identical to the shares of the Company's new Class
A common stock, except that such shares will not be listed on any
stock exchange.
In addition, 1,555,521 Tranche 1 Warrants exercisable for one share
of Class A common stock per Tranche 1 Warrant were issued at
emergence at an initial exercise price of $33.04, expiring on
November 19, 2023 and 3,888,849 Tranche 2 Warrants exercisable for
one share of Class A common stock per Tranche 2 Warrant were issued
at emergence at an initial exercise price of $37.14, expiring on
November 19, 2023.
Details of the restructuring, the securities issued pursuant to the
Confirmed Plan and the debt and other agreements entered into as
part of the Plan will be provided in a Form 8-K which can be viewed
on the Company's website or the Securities and Exchange
Commission's ("SEC") website at http://www.sec.gov/
Adoption of Rights Agreement
FTSI's Board of Directors has also approved the adoption of a
stockholder rights agreement (the "Rights Agreement") and declared
a dividend distribution of one right ("Right") for each outstanding
share of common stock (both Class A common stock and Class B common
stock) outstanding as of the record date. The record date for such
dividend distribution is November 30, 2020. The Rights expire,
without any further action being required to be taken by FTSI’s
Board of Directors, on November 18, 2021.
The adoption of the Rights Agreement is intended to enable all FTSI
stockholders to realize the full potential value of their
investment in the company and to protect the interests of the
Company and its stockholders by reducing the likelihood that any
person or group gains control of FTSI through acquisitions from
other stockholders, open market accumulation or other tactics
(especially in current volatile markets) without paying an
appropriate control premium. In addition, the Rights Agreement
provides the FTSI Board of Directors with time to make informed
decisions that are in the best long-term interests of FTSI and its
stockholders and does not deter the FTSI Board of Directors from
considering any offer that is fair and otherwise in the best
interest of FTSI stockholders. Under the Rights Agreement, the
rights generally would become exercisable only if a person or group
acquires beneficial ownership of 20% or more of FTSI common stock
in a transaction not approved by the FTSI Board of Directors.
Further details of the Rights Agreement will be contained in a
Current Report on Form 8-K and in a Registration Statement on Form
8-A that FTSI will be filing with the SEC. These filings will be
available on the SEC’s web site at www.sec.gov.
Kirkland & Ellis LLP and Winston & Strawn LLP acted as legal
advisors, Lazard Frères & Co, acted as financial advisor, and
Alvarez & Marsal North America, LLC acted as restructuring advisor
to the Company. Davis Polk & Wardwell LLP acted as legal advisor,
and Ducera Partners, LLC and Silver Foundry, LP acted as financial
advisor for the ad hoc group of secured noteholders. Stroock &
Stroock & Lavan LLP acted as legal counsel to the ad hoc group of
term loan lenders.
Court filings and other documents related to the restructuring are
available on a separate website administered by the Company’s
claims agent, Epiq, at https://dm.epiq11.com/FTSI. For inquiries
regarding the Company’s emergence, please call the hotline
established by Epiq at (888) 490-0882 (toll-free in the United
States and Canada) or (503) 597-5602 (outside the United States).
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.
GATES GLOBAL: S&P Alters Outlook to Stable, Affirms 'B+' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlook on Denver-based power
transmission belts and fluid power products manufacturer Gates
Global LLC to stable from negative and affirmed its 'B+' issuer
credit rating.
S&P said, "Our stable outlook reflects our expectation that a
rebound in Gates' end markets and cost savings from its
restructuring program will increase earnings and improve its credit
measures."
"We expect secular tailwinds in the global automotive aftermarket
industry to offset a slower recovery in European and North American
industrial end markets. In the third quarter, core sales from the
Automotive Replacement channel returned to growth, up 3.6% from the
prior-year quarter, driven primarily by Europe and North America.
We expect favorable demand trends in the light-vehicle aftermarket
to support revenue growth exiting the downturn. In response to the
COVID pandemic, public transportation ridership and the use of
ride-sharing services has declined, increasing demand for personal
vehicles and miles driven as quarantine restrictions ease. Further,
recessionary pressures often cause consumers to postpone or forgo
purchasing new cars, instead purchasing less-expensive used cars or
prolonging usage of their current vehicle. We believe an increase
in both miles driven and average vehicle age will lead to greater
need for vehicle maintenance and repair, therefore increasing
demand for aftermarket parts."
"We believe Gates' diversified geographic operations provides
resiliency given diverging recoveries. Following sharp revenue
declines in March and April, we expect demand recoveries will be
uneven across different geographies and end markets. Gates' revenue
in China was first to recover, returning to core revenue growth in
the second quarter led by strong performance in heavy-duty
vehicles, construction, and general industrial end markets. China's
industrial sectors are experiencing a strong recovery, driven by
the government's accelerated infrastructure spending. In the third
quarter, revenue in Europe followed, reporting the greatest
sequential increase and returning to core revenue growth. Revenue
in North America continues to improve month over month also,
although at a slower rate. Over the next 12 months we expect growth
in China, Europe, and North America will mitigate protracted
weakness in India and other emerging markets."
"Gross debt leverage remains high, but we believe the company is
committed to deleveraging over the next 12 months through a
combination of EBITDA growth and debt repayment. We estimate S&P
Global Ratings-adjusted gross debt leverage will rise above 6.5x in
2020, before improving toward 4.5x over the next 12 months. We
believe Gates is well positioned exiting the current downturn
because of its various restructuring actions and investments in
product innovation and organic growth initiatives. We forecast
EBITDA margins will improve to 20%-21% as market conditions
recover. Despite weaker earnings in the first nine months of the
year, Gates generated positive free cash flow and maintained its
strong balance sheet. As of Sept. 26, 2020, Gates had $1.1 billion
of available liquidity, which includes $672 million of cash and
cash equivalents and about $432 million available under its
revolving credit facilities. We assume the company will use its
steady cash generation and sizeable cash on hand to repay
outstanding debt and reduce its gross debt leverage."
"Our stable outlook reflects our expectation that over the next 12
months a rebound in Gates' end markets and cost savings from its
restructuring program will increase earnings and improve its credit
measures."
S&P could lower its rating on Gates if:
-- The company cannot generate sufficient positive free cash flow
and maintain free operating cash flow (FOCF) to debt above 5.0%;
or
-- EBITDA growth is below S&P's current forecast and leverage
remains above 6.5x. This could occur if protracted end market
weakness leads to lower volumes and if the company cannot recognize
expected cost savings from its restructuring program.
Although unlikely over the next 12 months, S&P could raise its
rating on Gates if:
-- Consistent positive cash flow generation results in FOCF to
debt sustained near 10%; and
-- EBITDA growth, along with significant debt repayment, leads to
debt to EBITDA sustained near 4x; and
-- The company commits to a financial policy commensurate with
this level of debt leverage even as it pursues debt-funded
acquisitions and shareholder distributions; or
-- Financial sponsor, Blackstone, reduces its ownership causing
S&P to reassess the company's financial policy. If following a
change in ownership, S&P views its financial policy as more
conservative, S&P could consider a higher rating.
GATOR HOLDCO: S&P Affirms B- ICR on Debt Issuance, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
enterprise resource planning (ERP) solutions provider Gator Holdco
(UK) Ltd. (dba Aptean) following the company's announcement that it
will be funding the acquisition of two companies focused on ERP
solutions using a portion of a $130 million incremental delayed
draw first-lien term loan and $75 million incremental second-lien
term loan.
At the same time, S&P affirmed the 'B-' issue-level rating on
Aptean's revolving credit facility and first-lien term loan,
inclusive of the new $130 million incremental first-lien delayed
draw term loan. The recovery rating remains '3'.
S&P lowered the issue-level rating to 'CCC' from 'CCC+' and
recovery rating to '6' from '5' on Aptean's second-lien term loan,
inclusive of the new $75 million incremental second-lien term
loan.
S&P said, "Aptean's leverage will be higher than 14x following
these debt-funded transaction, but we expect it will be able to
expand EBITDA such that leverage decreases below 11x in 2021.
Aptean's financial sponsor owners have been aggressive with its
capital structure as it continues to do debt-funded acquisitions.
After the close of these 2 ERP companies, Aptean will have closed
11 acquisitions since 2019. While most of these acquisitions have
been small to mid-size, Aptean has funded most of them with debt,
more than doubling the amount of debt on its capital structure
since 2019. Aptean also issued $140 million in preferred equity in
June 2020 for an equity recapitalization, which we treat as debt
for analytical purposes because it is callable and the
payment-in-kind margin is high and creates an incentive for
redemption in our view, potentially with proceeds from new debt. We
note the company has significant EBITDA add backs, most of which we
do not include in our EBITDA calculation, which results in very
high leverage. Nevertheless, the company's track record of
integrating acquisitions and executing cost reduction plans support
our rating. Aptean's S&P Global Ratings'-adjusted starting
leverage, inclusive of the $140 million preferred equity we treat
as debt, from the transaction will be above 14x, because of the
currently low EBITDA generation from the targeted acquisitions."
"We do expect Aptean will be able to deleverage in 2021. Aptean has
shown a good ability to continuously acquire companies and
implement cost savings plans without disrupting the acquired or
Aptean's business. Given the currently low EBITDA generation for
the three acquisitions, we believe there is room for EBITDA
expansion as Aptean implements its cost savings plan, mostly
related to headcount, and realizes synergies. We also believe
Aptean has one-time fees related to acquisitions, equity
recapitalization, and restructuring that should roll off in 2021.
Aptean also was able to have stable operating performance through
the macroeconomic impact of COVID, even though its solutions are
geared more toward small and medium sizes businesses (SMBs), which
could have been more at risk for revenue or free cash flow issues
during the COVID-19 pandemic."
"Aptean should be able to achieve synergies, roll off one-time
fees, and generate modest organic growth such that it drives S&P
Global Ratings' adjusted leverage to the high-10x area in 2021. We
believe Aptean may continue exploring acquisition opportunities,
but it has little room within the limits of the rating for
additional debt-funded acquisitions that increase leverage."
"Aptean's EBITDA margin expansion should help generate positive
unadjusted free operating cash flow in 2021. Due to the aggressive
nature of Aptean's financial sponsor ownership, it has generated
negative unadjusted FOCF in 2019 and 2020. Aptean has incurred
large acquisition, restructuring, and equity recap fees that have
depressed FOCF. Aptean also has been transitioning from a perpetual
license revenue model to a subscription revenue model, which has
decreased organic revenue and hurt free cash flow generation. We
expect Aptean FOCF will be around negative $15 million in 2020
because of the acquisition, equity recapitalization, and
restructuring fees it has incurred. While we expect negative FOCF
generation in 2020, we believe Aptean can generate positive FOCF in
2021 as it realizes the benefits of cost reductions."
"Aptean has historically had low capital expenditure (capex) which
should help drive free cash flow generation. We expect Aptean will
have around $11 million in capex which, along with its ability to
achieve synergies from its acquisition and one-time costs that roll
off, will allow it to generate more than $45 million in FOCF in
2021."
"Although 2020 organic revenue was hurt by Aptean's transition to
subscription revenue, we believe Aptean can bounce back with modest
organic growth in 2021 because of the mission-critical nature of
its solutions. Aptean has been transitioning from a perpetual
license revenue model to a subscription revenue model over the past
year. While we expect this to be beneficial in the long run as
recurring revenue increases close to 70%, the transition will
depress revenue growth in the short term. We believe Aptean's
organic revenue will decline in 2020 as it works through the
transition. However, due to the mission-critical nature of its
solutions, we expect Aptean will improve in 2021. Aptean's ERP and
supply chain solutions are geared toward niche SMBs. We believe
that if the customers were to not use Aptean's solutions, it would
be very hard for these SMB customers to operate given how integral
Aptean's solutions were for them to scale up and the lack of
competitive options in this more niche operating space. Due to
these factors, Aptean should be able continue growing its
subscription revenue more than 20% to help drive modest organic
revenue growth in 2021."
"The stable outlook reflects our expectation that Aptean will be
able to achieve the acquisitions' cost savings plan without
disrupting business operations, roll off one-time restructuring and
acquisition costs, and grow organic revenue modestly, such that it
can generate sufficient unadjusted FOCF to satisfy its debt
requirements."
"We could downgrade Aptean over the next 12 months if the company
underperforms its cost savings plan, one-time cost roll offs or
revenue targets due to the macroeconomic impact of COVID-19,
problems related to acquisitions or integrations, or weak customer
demand on the transition to subscription revenue, such that FOCF
after debt service is around breakeven. We could also downgrade
Aptean if it engages in debt-funded acquisitions or shareholder
returns that increase leverage."
"While unlikely over the next 12 months, we could raise the rating
if Aptean maintains leverage below 7x through debt-funded
acquisitions or shareholder returns and Aptean keeps FOCF to debt
above 5%. Aptean could achieve this if it can increase demand for
its subscription revenue and achieves its cost structure
optimization."
GB SCIENCES: Incurs $805K Net Loss in Second Quarter
----------------------------------------------------
GB Sciences, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $805,458
on $0 of sales revenue for the three months ended Sept. 30, 2020,
compared to a net loss of $2.93 million on $0 of sales revenue for
the three months ended Sept. 30, 2019.
For the six months ended Sept. 30, 2020, the Company reported a net
loss of $2.65 million on $0 of sales revenue compared to a net loss
of $5.47 million on $0 of sales revenue for the same period during
the prior year.
As of Sept. 30, 2020, the Company had $14.25 million in total
assets, $16.60 million in total liabilities, and a total
stockholders' deficit of $2.35 million.
The Company has sustained net losses since inception, which have
caused an accumulated deficit of $(100,056,626) at Sept. 30, 2020.
The Company had a working capital deficit of $(6,227,642) at
Sept. 30, 2020, net of working capital of $648,926 classified as
discontinued operations, compared to $(3,884,877) at March 31,
2020, net of working capital of $349,195 classified as discontinued
operations. In addition, the Company has consumed cash in its
operating activities of $(212,854) for the six months ended
Sept. 30, 2020, including $(10,602) used in discontinued
operations, compared to $(3,546,457) including $(1,758,120) used in
discontinued operations for the six months ended Sept. 30, 2019.
The Company said these factors, among others, raise substantial
doubt about its ability to continue as a going concern.
"Management has been able, thus far, to finance the losses through
a public offering, private placements and obtaining operating funds
from stockholders. The Company is continuing to seek sources of
financing. There are no assurances that the Company will be
successful in achieving its goals.
"In view of these conditions, the Company's ability to continue as
a going concern is dependent upon its ability to obtain additional
financing or capital sources, to meet its financing requirements,
and ultimately to achieve profitable operations. Management
believes that its current and future plans provide an opportunity
to continue as a going concern. The accompanying financial
statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the
amounts and classification of liabilities that may be necessary in
the event the Company is unable to continue as a going concern,"
the company stated.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1165320/000143774920023849/gblx20200930_10q.htm
About GB Sciences
GB Sciences, Inc., seeks to be a biopharmaceutical research and
cannabinoid-based drug development company whose goal is to create
patented formulations for safe, standardized, cannabinoid therapies
that target a variety of medical conditions in both the
pharmaceutical and wellness markets. The Company is engaged in the
research and development of cannabinoid medicines and plans to
produce cannabinoid therapies for the wellness markets based on its
portfolio of intellectual property.
GB Sciences reported a net loss of $13.11 million for the year
ended March 31, 2020, compared to a net loss of $24.68 million for
the year ended ended March 31, 2019. As of June 30, 2020, the
Company had $14.37 million in total assets, $16.02 million in total
liabilities, and a total deficit of $1.65 million.
Assurance Dimensions, in Margate, Florida, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated Aug. 27, 2020, citing that the Company has suffered recurring
losses. For the year ended March 31, 2020 the Company had a net
loss, had net cash used in operating activities of $4,479,713, and
had negative working capital of $3,884,877. These factors raise
substantial doubt about its ability to continue as a going concern.
GFL ENVIRONMENTAL: Moody's Rates New $500MM Unsec. Notes B3
-----------------------------------------------------------
Moody's Investors Service assigned a B3 rating to GFL Environmental
Inc.'s proposed new $500 million senior unsecured notes due in
2028. The B1 corporate family rating, B1-PD probability of default
rating, Ba3 ratings on GFL's existing senior secured bank credit
facility and senior secured notes and B3 ratings to its existing
senior unsecured notes remain unchanged. The Speculative-Grade
Liquidity Rating also remains unchanged at SGL-2. The outlook
remains stable.
The proceeds from the unsecured notes issuance will be used to
prepay the existing senior unsecured notes due June 2026 and pay
down a portion of the outstanding revolving credit facility. This
is a debt-for-debt transaction and will not materially affect GFL's
leverage.
Assignments:
Issuer: GFL Environmental Inc.
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5)
RATINGS RATIONALE
GFL's B1 CFR is constrained by: 1) its history of aggressive
debt-financed acquisition growth strategy; 2) Moody's expectation
that leverage will remain above 4x in the next 12 to 18 months
(about 4.8x pro forma for recent acquisitions and the proposed
notes issuance); 3) the short time frame between acquisitions which
increases the potential for integration risks and creates opacity
of organic growth; and 4) GFL's majority ownership by private
equity firms, which may continue to hinder deleveraging. However,
GFL benefits from: 1) the company's diversified business model; 2)
high recurring revenue supported by long term contracts; 3) its
good market position in the stable Canadian and US non-hazardous
waste industry; 4) EBITDA margins that compare favorably with those
of its investment grade rated industry peers; and 5) good
liquidity.
The stable outlook reflects Moody's view that GFL will sustain a
leverage that will remain below 5x and maintain its stable margins
and good liquidity in the next 12 to 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if GFL demonstrates consistent and
visible organic revenue growth, maintains good liquidity and
sustains adjusted debt/EBITDA below 4.0x (4.8x pro forma 2021E) and
EBIT/Interest above 2.0x (1.6x pro forma 2021E). The ratings could
be downgraded if liquidity weakens, possibly caused by negative
free cash flow, if there is a material and sustained decline in
margins due to challenges integrating acquisitions or if adjusted
Debt/EBITDA is sustained above 5.0x (4.8x pro forma 2021E) and
EBIT/Interest falls below 1.5x (1.6x pro forma 2021E).
GFL has good liquidity (SGL-2). Sources are approximately C$900
million with no mandatory debt repayments over the next 12 months.
After the closing of the acquisitions of WCA Waste Corporation and
the Waste Management assets in October, GFL is projected to have
limited cash on its balance sheet. As at September 30, 2020, GFL
had over C$600 million of availability under its C$628 million and
$40 million revolving credit facilities, both due August 2023, and
Moody's expected free cash flow of about C$300 million over the
next 12 months to September 2021. GFL's revolver is subject to a
net leverage covenant, which Moody's expects will have at least a
40% cushion over the next four quarters. GFL has limited
flexibility to generate liquidity from asset sales as its assets
are encumbered.
Environmental risks considered material are the various regulations
and requirements that GFL is subjected to for the collection,
treatment and disposal of waste. GFL has a long track record of
adhering to the requirements for the proper handling of the waste
materials encountered.
The governance considerations Moody's makes in GFL's credit profile
include the majority ownership by private equity firms as well as
its history of debt-financed acquisitions and aggressive financial
policies, which may be reversed after the completion of the IPO
earlier this year. Moody's also considered GFL's track record of
successfully integrating its acquisitions for the expansion of its
business as well as the management team's experience in the
amalgamation of the businesses.
The Ba3 ratings on the senior secured notes and term loan are one
notch above the CFR due to the senior debt's first priority access
to substantially all of the company's assets as well as loss
absorption cushion provided by the senior unsecured notes. The B3
rating on the senior unsecured notes is two notches below the CFR
due to the senior unsecured notes' junior position in the debt
capital structure.
The principal methodology used in this rating was Environmental
Services and Waste Management Companies published in April 2018.
GFL Environmental Inc., headquartered in Toronto, provides solid
waste and liquid waste collection, treatment and disposal solutions
and soil remediation services to municipal, industrial and
commercial customers in Canada and the US. Pro forma for
acquisitions, annual revenue is approximately C$5.0 billion. GFL is
publicly traded on the Toronto Stock Exchange and New York Stock
Exchange.
GFL ENVIRONMENTAL: S&P Rates New Senior Secured Notes 'B-'
----------------------------------------------------------
S&P Global Ratings said it assigned its 'B-' issue-level rating and
'6' recovery rating to GFL Environmental Inc.'s proposed senior
secured notes due 2028. GFL plans to raise US$400 million in this
private offering, but it believed the amount could be upsized to as
high as US$500 million if market conditions are favorable. The '6'
recovery rating on the notes indicated its expectation for
negligible (0%-10%; rounded estimate: 0%) recovery in the event of
default, stemming from the contractual subordination of the notes.
S&P said, "We believe GFL intends to use the net proceeds primarily
to redeem all of its 2026 unsecured notes, of which about US$405
million is outstanding. We consider the proposed refinancing to be
credit neutral to slightly negative from a leverage perspective (if
upsized), and that the fees or premiums associated with the
refinancing should be largely offset by the interest-cost savings
we anticipate. The 2026 unsecured notes GFL is repaying have a 7%
coupon and we believe the new unsecured notes could be priced at a
lower rate."
"We continue to forecast an adjusted debt-to-EBITDA ratio of
6.0x-6.5x and adjusted EBITDA interest coverage of about 3.0x in
2021, with further improvement in 2022. These forecast credit
measures are commensurate with our issuer credit rating (ICR) on
GFL. Our 'B+' ICR and stable outlook on GFL reflect the company's
position as the fourth-largest waste management company in North
America, with pro forma annual revenue of more than C$5 billion
(about two-thirds generated in the U.S., with the remainder in
Canada). In our view, the environmental services industry has low
risk characteristics stemming from the essential nature of its
solid waste services that are less exposed to cyclical downturns
than many other industries. GFL also benefits from high revenue
visibility due to multiyear service contracts and high renewal
rates across a diversified customer base, which should contribute
to low-single-digit annual organic revenue growth with stable
earnings and operating cash flow generation."
"These positive characteristics are partially offset by our view
that GFL is exposed to cyclical demand in certain segments such as
infrastructure and soil remediation (about 16% of 2019 revenue),
and liquid waste (about 10% of 2019 revenue). We also believe there
remains some integration risk in the near term from the significant
number of acquisitions the company completed over the past couple
of years, which have more than tripled GFL's size (based on
revenue)."
"We could lower our ratings on the company within the next 12
months if adjusted debt-to-EBITDA increases above 6.5x on a pro
forma basis, with poor prospects of deleveraging within the
subsequent 12 months, or we expect EBITDA interest coverage to be
below 2.0x. In our view, this could result from a higher level of
acquisitions than we forecast, poor execution of integrating
acquisitions, volume and pricing pressure from tough market
conditions, or operating inefficiencies that contribute to
weaker-than-expected earnings and cash flow."
ISSUE RATINGS--RECOVERY ANALYSIS
-- The '2' recovery rating on GFL's senior secured debt indicates
S&P's expectation for substantial (70%-90%; rounded estimate: 70%)
recovery in the event of default.
-- The '6' recovery rating on the company's senior unsecured debt
indicates S&P's expectation for negligible (0%-10%; rounded
estimate: 0%) recovery in default.
-- S&P's simulated default scenario contemplates a default in
2024, stemming from a loss of customer contracts, heightened
competition, and margin erosion caused by an unexpected increase in
costs related to acquisition integration issues.
-- In this scenario, GFL is unable to service its financial
obligations, prompting the need for its restructuring as a going
concern.
-- S&P's recovery analysis assumes a reorganization value for the
company of about C$4.4 billion, reflecting emergence EBITDA of
about C$740 million and a 6x multiple.
-- S&P assumes there is no debt outstanding at GFL's subsidiaries,
resulting in all the value of the company's U.S. operations flowing
up to GFL creditors.
-- The company's C$628 million revolving credit facility is 85%
drawn at the time of default.
-- The company issues up to US$500 million of unsecured notes to
repay its unsecured notes due 2028.
Simulated default assumptions
-- Simulated year of default: 2024
-- Revolver to be 85% drawn at default
-- LIBOR at 2.5% in S&P's assumed default year
-- Emergence EBITDA: C$755 million
-- Multiple: 6x
-- Gross recovery value: C$4.53 billion
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): C$4.3
billion
-- Total value available to secured first-lien debt claims: C$4.3
billion
-- Secured first-lien debt claims: C$5.92 billion
-- Recovery expectations: 70%-90% (rounded estimate: 70%)
-- Total value available to unsecured claims: 0
-- Senior unsecured debt and pari passu claims: C$2.94 billion
-- Recovery expectations: 0%-10% (rounded estimate: 0%)
All debt amounts include six months of prepetition interest.
GORHAM PAPER: Hires Donlin Recano as Claims and Noticing Agent
--------------------------------------------------------------
Gorham Paper and Tissue, LLC, and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ Donlin Recano & Company, Inc., as claims and
noticing agent to the Debtors.
Gorham Paper requires Donlin Recano to:
(a) assist the Debtor with the preparation and distribution of
all required notices and documents in accordance with the
Bankruptcy Code and the Bankruptcy Rules in the form and
manner directed by the Debtor and/or the Court, including:
(i) notice of any claims bar date, (ii) notice of any
proposed sale of the Debtor's assets, (iii) notices of
objections to claims and objections to transfers of
claims, (iv) notices of any hearings on a disclosure
statement and confirmation of any plan of reorganization,
including under Bankruptcy Rule 3017(d), (v) notice of the
effective date of any plan, and (vi) all other notices,
orders, pleadings, publications and other documents as the
Debtor, Court, or Clerk may deem necessary or appropriate
for an orderly administration of this chapter 11 case;
(b) maintain an official copy of the Debtor's schedules of
assets and liabilities and statements of financial affairs
(collectively, the "Schedules"), listing the Debtor's
known creditors and the amounts owed thereto;
(c) maintain (i) a list of all potential creditors, equity
holders and other parties-in-interest and (ii) a "core"
mailing list consisting of all parties described in
Bankruptcy Rule 2002(i), (j) and (k) and those parties
that have filed a notice of appearance pursuant to
Bankruptcy Rule 9010; update and make said lists available
upon request by a party-in-interest or the Clerk;
(d) furnish a notice to all potential creditors of the last
date for filing proofs of claim and a form for filing a
proof of claim, after such notice and form are approved by
the Court, and notify said potential creditors of the
existence, amount and classification of their respective
claims as set forth in the Schedules, which may be
effected by inclusion of such information (or the lack
thereof, in cases where the Schedules indicate no debt due
to the subject party) on a customized proof of claim form
provided to potential creditors;
(e) maintain a post office box or address for receiving claims
and returned mail, and process all mail received;
(f) for all notices, motions, orders or other pleadings or
documents served, prepare and file or cause to be filed
with the Clerk an affidavit or certificate of service
within seven (7) days of service which includes (i) either
a copy of the notice served or the docket number(s) and
title(s) of the pleading(s) served, (ii) a list of persons
to whom it was mailed (in alphabetical order) with their
addresses, (iii) the manner of service, and (iv) the date
served;
(g) process all proofs of claim or proofs of interest
received,including those received by the Clerk's Office,
and check said processing for accuracy, and maintain the
original proofs of claim or proofs of interest in a secure
area;
(h) provide an electronic interface by filing proofs of claim;
(i) maintain the official claims register (the "Claims
Register") on behalf of the Clerk; upon the Clerk's
request, provide the Clerk with a certified, duplicate
unofficial Claims Register; and specify in the Claims
Register the following information for each claim
docketed: (i) the claim number assigned, (ii) the date
received, (iii) the name and address of the claimant and
agent, if applicable, who filed the claim, (iv) the
address for payment, if different from the notice address;
(v) the amount asserted, (vi) the asserted
classification(s) of the claim (e.g., secured, unsecured,
priority, etc.), and (vii) any disposition of the claim;
(j) provide public access to the Claims Registers, including
complete proofs of claim with attachments, if any, without
charge;
(k) implement necessary security measures to ensure the
completeness and integrity of the Claims Register and the
safekeeping of the original claims;
(l) record all transfers of claims and provide any notices of
such transfers as required by Bankruptcy Rule 3001(e);
(m) relocate, by messenger or overnight delivery, all of the
court-filed proofs of claim to the offices of Donlin,
not less than weekly;
(n) upon completion of the docketing process for all claims
received to date for each case, turn over to the Clerk
copies of the claims register for the Clerk's review, upon
the Clerk's request;
(o) monitor the Court's docket for all notices of appearance,
address changes, and claims-related pleadings and orders
filed and make necessary notations on and/or changes to
the claims register;
(p) identify and correct any incomplete or incorrect addresses
in any mailing or service lists;
(q) assist in the dissemination of information to the public
and respond to requests for administrative information
regarding this chapter 11 case as directed by the
Debtor or the Court, including through the use of a case
website and/or call center;
(r) if this chapter 11 case is converted to a case under
chapter 7 of the Bankruptcy Code, contact the Clerk's
office within three (3) days of notice to Donlin of
entry of the order converting the case;
(s) thirty (30) days prior to the close of this chapter 11
case, to the extent practicable, request that the Debtor
submit to the Court a proposed order dismissing Donlin as
claims, noticing, and solicitation agent and terminating
its services in such capacity upon completion
of its duties and responsibilities and upon the
closing of this chapter 11 case;
(t) within seven (7) days of notice to Donlin of entry of
an order closing this chapter 11 case, provide to the
Court the final version of the Claims Register as of
the date immediately before the close of the case;
(u) at the close of the Chapter 11 Case, (i) box and transport
all original documents, in proper format, as provided by
the Clerk's Office, to (A) the Philadelphia Federal
Records Center, 14470 Townsend Road, Philadelphia, PA
19154 or (B) any other location requested by the Clerk,
and (ii) docket a completed SF-135 Form indicating the
accession and location numbers of the archived claims.
Donlin will be paid at these hourly rates:
Executive Management No charge
Senior Bankruptcy Consultant $126 to $153
Case Manager $72 to $135
Consultant/Analyst $63 to $126
Technology/Programming Consultant $63 to $81
Clerical $25 to $40
Prior to the Petition Date, on October 28, 2020, the Debtors
provided Donlin Recano a retainer in the amount of $25,000.
Donlin will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Nellwyn Voorhies, executive director of Donlin Recano & Company,
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.
Donlin can be reached at:
Nellwyn Voorhies
DONLIN RECANO & COMPANY, INC.
6201 15th Avenue
Brooklyn, NY 11219
Toll Free Tel: (800) 591-8236
About Gorham Paper and Tissue
Founded in 2011, Gorham Paper and Tissue LLC --
http://www.gorhampt.com/-- operates a paper mill and manufactures
customized tissues, towels and specialty packagings.
Gorham Paper and Tissue and affiliate White Mountain Tissue, LLC,
sought Chapter 11 protection (Bankr. D.N.H. Lead Case No. 20-12814
and 20-12815) on Nov. 4, 2020. Gorham Paper was estimated to have
assets of $1 million to $10 million and liabilities of $50 million
to $100 million.
The Hon. Karen B. Owens is the case judge.
The Debtors have tapped Bernstein, Shur, Sawyer & Nelson, P.A. as
their bankruptcy counsel, Polsinelli PC as local counsel, and B.
Riley Securities as investment banker. Donlin Recano & Company,
Inc., as claims and noticing agent.
GORHAM PAPER: Hires Financial Advisor and Investment Banker
-----------------------------------------------------------
Gorham Paper and Tissue, LLC, and its debtor-affiliates, seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to employ B. Riley Securities, as financial advisor and
investment banker to the Debtors.
Gorham Paper requires B. Riley Securities to:
(a) analyze and evaluate the business, operations, and
financial condition of the Debtors and preparing
appropriate materials for distribution to potential
purchasers, subject to a confidentiality agreement;
(b) identify potential purchasers (the "Purchaser Entities");
(c) solicit proposals from the Purchaser Entities with respect
to the sale of all or a significant portion of the assets
or capital stock of the Debtors;
(d) engage in discussions and negotiations with the Purchaser
Entities;
(e) evaluate proposals from the Purchaser Entities; and
(f) provide other such financial advisory and investment
banking services as are customary in engagements of the
type contemplated hereby and as may be reasonably agreed
upon by the Debtors and B. Riley Securities.
B. Riley Securities will be paid as follows:
(a) In the event that: (i) a Sale Transaction is consummated
prior to the termination of B. Riley's engagement
hereunder; or (ii) the Debtors, prior to the termination
of B. Riley Securities's engagement hereunder or within 12
months following the termination of B. Riley's engagement
hereunder, sends or receives a proposal or enters into an
agreement with respect to a potential Sale Transaction and
such Sale Transaction is subsequently consummated, a fee
in cash (the "Transaction Fee"), equal to the greater of
$1 million or 2% of the Aggregate Transaction Value paid
in cash concurrently with the closing of the Sale
Transaction; and
(b) In the event that a Sale Transaction is not consummated
and the Debtors receive a reverse termination, breakup,
topping, other similar fee or any other form of
compensation or expense reimbursement, whether payable in
cash, property or securities (a "Company Reverse Breakup
Fee"), the Debtors shall pay B. Riley an amount, in cash
(the "Reverse Breakup Fee") mutually agreed by the Debtors
and B. Riley Securities.
The Debtors paid B. Riley Securities a retainer in the amount of
$50,000.
B. Riley Securities will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Matthew Spain, senior managing director of B. Riley Securities,
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.
B. Riley Securities can be reached at:
Matthew Spain
B. Riley Securities
11100 Santa Monica Blvd., Ste. 800
Los Angeles, CA 90025
Tel: (310) 966-1444
Fax: (310) 966-1448
About Gorham Paper and Tissue
Founded in 2011, Gorham Paper and Tissue LLC --
http://www.gorhampt.com/-- operates a paper mill and manufactures
customized tissues, towels and specialty packagings.
Gorham Paper and Tissue and affiliate White Mountain Tissue, LLC,
sought Chapter 11 protection (Bankr. D.N.H. Lead Case No. 20-12814
and 20-12815) on Nov. 4, 2020. Gorham Paper was estimated to have
assets of $1 million to $10 million and liabilities of $50 million
to $100 million.
The Hon. Karen B. Owens is the case judge.
The Debtors have tapped Bernstein, Shur, Sawyer & Nelson, P.A. as
their bankruptcy counsel, Polsinelli PC as local counsel, and B.
Riley Securities as investment banker. Donlin Recano & Company,
Inc., as claims and noticing agent.
GROWLIFE INC: Incurs $1.06 Million Net Loss in Third Quarter
------------------------------------------------------------
GrowLife, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $1.06
million on $1.42 million of net revenue for the three months ended
Sept. 30, 2020, compared to a net loss of $2.08 million on $2.30
million of net revenue for the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $2.96 million on $4.92 million of net revenue compared
to a net loss of $6.11 million on $6.74 million of net revenue for
the same period during the prior year.
As of Sept. 30, 2020, the Company had $4.29 million in total
assets, $7.65 million in total current liabilities, $2.19 million
in total long term liabilities, and a total stockholders' deficit
of $5.54 million.
The Company anticipates that it will record losses from operations
for the foreseeable future. As of Sept. 30, 2020, the Company's
accumulated deficit was $151,322,125. 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 Dec. 31, 2019 includes an
explanatory paragraph expressing the substantial doubt about the
Company's ability to continue as a going concern.
"The Company believes that its cash on hand will be sufficient to
fund our operations only until December 31, 2020. The Company
needs additional financing to implement our business plan and to
service our ongoing operations and pay our current debts. There
can be no assurance that we will be able to secure any needed
funding, or that if such funding is available, the terms or
conditions would be acceptable to us. If we are unable to obtain
additional financing when it is needed, we will need to restructure
our operations, and divest all or a portion of our business. We
may seek additional capital through a combination of private and
public equity offerings, debt financings and strategic
collaborations. Debt financing, if obtained, may involve agreements
that include covenants limiting or restricting our ability to take
specific actions, such as incurring additional debt, and could
increase our expenses and require that our assets secure such debt.
Equity financing, if obtained, could result in dilution to the
Company's then-existing stockholders and/or require such
stockholders to waive certain rights and preferences. If such
financing is not available on satisfactory terms, or is not
available at all, the Company may be required to delay, scale back,
eliminate the development of business opportunities and our
operations and financial condition may be materially adversely
affected."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1161582/000165495420012358/phot_10q.htm
About GrowLife
GrowLife, Inc. (PHOT)-- http://www.shopgrowlife.com/-- aims to
become the nation's largest cultivation service provider for
cultivating organics, herbs and greens and plant-based medicines.
Through a network of local representatives covering the United
States and Canada, regional centers and its e-Commerce team,
GrowLife provides essential goods and services including media,
industry-leading hydroponics and soil, plant nutrients, and
thousands of more products to specialty grow operations. GrowLife
is headquartered in Kirkland, Washington and was founded in 2012.
GrowLife reported a net loss of $7.37 million for the year ended
Dec. 31, 2019, compared to a net loss of $11.47 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$4.35 million in total assets, $7.77 million in total current
liabilities, $2.05 million in total long term liabilities, and a
total stockholders' deficit of $5.47 million.
BPM LLP, in Walnut Creek, California, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
April 1, 2020 citing that the Company has sustained a net loss from
operations and has an accumulated deficit since inception. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
GUITAR CENTER: Reaches RSA With Key Stakeholders
------------------------------------------------
Guitar Center, Inc., the world's leading musical instrument
retailer, announced Nov. 13 that it has entered into a
comprehensive Restructuring Support Agreement (the "RSA") with its
key stakeholders, including its equity sponsor, a fund managed by
the Private Equity Group of Ares Management Corporation, new equity
investors Brigade Capital Management and a fund managed by The
Carlyle Group, as well as supermajorities of its noteholder groups.
The RSA provides for a comprehensive transaction that will
deleverage the Company's balance sheet, enhance financial
flexibility and provide additional liquidity to continue to support
its vendors, suppliers and employees. The RSA positions the Company
to return to the growth trajectory it had been on prior to the
COVID pandemic.
Ron Japinga, CEO of Guitar Center, said: "Today we announced a very
important and positive step forward to ensure the long-term
financial strength of Guitar Center. This agreement will allow us
to significantly reduce our debt and reinvest in our business in
order to better serve our customers and deliver on our mission of
putting more music in the world. With ten consecutive quarters of
growth prior to the impact from COVID-19, we have been pleased with
our resilient financial performance during these challenging times
created by the pandemic. As a result of this financial
restructuring process, we will be better equipped to execute on and
invest in our strategic growth initiatives and we will continue
delivering through the strength of our brands, availability of our
stores, customer-focused associate relationships, innovative music
education programs and our expanding digital solutions."
The RSA is intended to allow Guitar Center and its related brands
(including Music & Arts, Musician's Friend, Woodwind Brasswind and
AVDG) to continue to operate in the normal course while the
transaction is implemented. As a result of the RSA, Guitar Center
will continue to meet its financial obligations to vendors,
suppliers, and employees, and intends to make payments in full to
these parties without interruption in the ordinary course of
business. Guitar Center will continue to provide uninterrupted
service to its customers through its existing channels, including
its stores, websites, call centers and social media pages and will
continue to receive goods and ship customer orders as usual. All
merchandise credits, prepaid lessons, rentals, gift cards,
deposits, orders, financing and warranties will be honored.
While Guitar Center is pleased with its overall store footprint,
the Company has engaged A&G to explore opportunities to optimize
its real estate portfolio and other agreements to focus on
investments that best position the Company to return to its growth
trajectory prior to COVID-
Reorganization Proceedings
To implement the financial restructuring plan contemplated by the
RSA, Guitar Center expects to file voluntary petitions for
reorganization pursuant to Chapter 11 in the United States
Bankruptcy Court. Currently, supermajorities of the Company's
noteholder groups have signed up to the RSA and committed to vote
in favor of the Plan, above the required support thresholds in the
respective agreements to approve the Plan. Guitar Center expects
the process to be completed before the end of 2020.
The contemplated transaction will be supported by up to $165
million in new equity investments from a fund managed by the
Private Equity Group of Ares Management Corporation, a fund managed
by the Carlyle Group and Brigade Capital Management.Guitar Center
has negotiated to have a total of $375 million in
Debtor-In-Possession ("DIP") financing provided by certain of its
existing noteholders and ABL lenders.
In connection with the RSA, the Company currently intends to raise
$335 million in new senior secured notes. UBS Investment Bank will
serve as the lead placement agent in connection with this effort.
The new senior secured notes have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") or the
securities laws of any state and may not be offered or sold in the
United States absent registration or an exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
Advisors
Milbank LLP is serving as legal counsel to the Company and BRG is
serving as restructuring advisor. Houlihan Lokey is serving as the
Company's financial advisor.
Stroock & Stroock & Lavan LLP is serving as legal counsel to an ad
hoc group of Secured Noteholders and Province is serving as
financial advisor.
Kirkland & Ellis LLP is serving as legal counsel to Ares Management
Corporation.
Debevoise & Plimpton LLP is serving as legal counsel to Brigade
Capital Management and GLC Advisors & Co. is serving as financial
advisor.
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal
counsel to The Carlyle Group.
About Guitar Center Inc.
Guitar Center is a leading retailer of musical instruments,
lessons, repairs and rentals in the U.S. With nearly 300 stores
across the U.S. and one of the top direct sales websites in the
industry, Guitar Center has helped people make music for more than
50 years. Guitar Center also provides customers with various
musician-based services, including Guitar Center Lessons, where
musicians of all ages and skill levels can learn to play a variety
of instruments in many music genres; GC Repairs, an on-site
maintenance and repairs service; and GC Rentals, a program offering
easy rentals of instruments and other sound reinforcement gear.
Additionally, Guitar Center’s sister brands include Music & Arts,
which operates more than 200 stores specializing in band &
orchestral instruments for sale and rental, serving teachers, band
directors, college professors and students, and Musician’s
Friend, a leading direct marketer of musical instruments in the
United States.
Guitar Center closed its retail locations in late March amid the
Coronavirus pandemic and started reopening at the end of May.
In October 2020, Guitar Center missed a $45 million interest
payment on its debt.
In mid-November 2020, Guitar Center said it has agreed to a
restructuring support agreement (RSA) with certain creditors ahead
of a planned Chapter 11 filing.
GULFPORT ENERGY: Gets Court Approval for $90 Million DIP Financing
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Gulfport Energy Corporation announced that the United States
Bankruptcy Court for the Southern District of Texas (the "Court")
granted approval of all Gulfport's "first day" motions,
authorizing, among other things, Gulfport to continue paying
royalties, employee wages and benefits, and certain vendors and
suppliers in the ordinary course of business for goods and services
provided, and to enter into new hedging arrangements in accordance
with an agreement with certain prepetition lenders.
The Court also authorized Gulfport to borrow up to $90 million in
debtor-in-possession ("DIP”) financing. The DIP, combined with
cash generated by Gulfport, will support ongoing operations in the
ordinary course of business during the restructuring.
Gulfport intends to use the bankruptcy proceedings to strengthen
its balance sheet, restructure certain debt obligations,
significantly reduce its midstream cost structure, and achieve a
more sustainable capital structure. Gulfport intends to continue to
operate in the ordinary course of business during the restructuring
process.
As previously announced, on November 14, 2020, Gulfport and all of
its wholly-owned subsidiaries filed petitions for voluntary relief
under chapter 11 of the United States Bankruptcy Code. In
connection with the filing, Gulfport also entered into a
Restructuring Support Agreement ("RSA") with over 95% of its
revolving credit facility lenders and certain noteholders holding
over two-thirds of the outstanding aggregate principal amount of
its senior unsecured notes. Attached to the RSA is a
“pre-negotiated” restructuring plan, pursuant to which Gulfport
will eliminate approximately $1.25 billion in funded debt and
significantly reduce its annual cash interest going forward.
Gulfport will also issue $550 million of new senior unsecured notes
under the plan to existing unsecured creditors of certain Gulfport
subsidiaries. Certain senior secured noteholders have committed to
backstop a minimum new money investment of $50 million in the form
of convertible preferred stock.
Gulfport expects to exit the chapter 11 process with leverage below
two times and rapidly deliver thereafter due to a much-improved
cost structure driven by reduced legacy firm transport commitments
and costs. Gulfport has also received a commitment from its
existing lenders to provide $580 million in exit financing upon
emergence from chapter 11.
About Gulfport Energy Corp.
Gulfport Energy Corporation (NASDAQ: GPOR) --
http://www.gulfportenergy.com/-- is an independent natural gas and
oil company focused on the exploration and development of natural
gas and oil properties in North America and a producer of natural
gas in the contiguous United States. Headquartered in Oklahoma
City, Gulfport holds significant acreage positions in the Utica
Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer
plays in Oklahoma. In addition, Gulfport holds non-core assets that
include an approximately 22% equity interest in Mammoth Energy
Services, Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil
Sands in Canada through its 25% interest in Grizzly Oil Sands ULC.
Gulfport Energy reported net loss of $2.0 billion for the year
ended Dec. 31, 2019 as compared to net income of $430.6 million for
the year ended Dec. 31, 2018. As of June 30, 2020, Gulfport had
$2.58 billion in total assets, $2.35 billion in total liabilities,
and $231.34 million in total stockholders' equity.
As of Sept. 30, 2020, Gulfport had $2,375,559,000 in assets and
$2,520,336,000 in liabilities.
Gulfport Energy Corporation and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-35562) on Nov. 13,
2020.
The Hon. David R. Jones is the case judge.
The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy
counsel; JACKSON WALKER L.L.P. as local bankruptcy counsel; ALVAREZ
& MARSAL NORTH AMERICA, LLC as restructuring advisor; and PERELLA
WEINBERG PARTNERS L.P. and TUDOR, PICKERING, HOLT & CO. as
financial advisor. PRICEWATERHOUSECOOPERS LLP is the tax services
provider. EPIQ CORPORATE RESTRUCTURING, LLC, is the claims agent.
WACHTELL, LIPTON, ROSEN & KATZ is counsel for the Special Committee
of Gulfport Energy's Board of Directors of Gulfport Energy
Corporation and CHILMARK PARTNERS is the financial advisor.
KATTEN MUCHIN ROSENMAN LLP is counsel for the Special Committee of
the Governing Body of each Debtor other than Gulfport Energy
Corporation, and M-III PARTNERS, LP, is the financial advisor.
H-CYTE INC: Posts $3.9 Million Net Income in Third Quarter
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H-Cyte, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing net income of $3.95
million on $649,892 of revenues for the three months ended Sept.
30, 2020, compared to a net loss of $2.62 million on $2.74 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 $4.90 million on $1.68 million of revenues compared to
a net loss of $11.62 million on $6.50 million of revenues for the
same period during the prior year.
As of Sept. 30, 2020, the Company had $4.11 million in total
assets, $3.62 million in total liabilities, and $485,711 in ttoal
stockholders' equity.
The corona virus outbreak (COVID-19) has adversely affected the
Company's financial condition and results of operations. In the
first quarter of 2020, the Company took steps to protect its
vulnerable patient base (elderly patients suffering from chronic
lung disease) by cancelling all treatments effective March 23, 2020
through mid-July 2020. The Company also made the decision in late
March, to layoff approximately 40% of its employee base, including
corporate and clinical employees, and to cease operations at the
LHI clinics located in Tampa, Scottsdale, Pittsburgh, Nashville,
and Dallas. The Company resumed operations in July at the Tampa
and Nashville clinics, in August at the Scottsdale clinic, and in
September at the Pittsburgh clinic. The Pittsburgh clinic
re-opening was temporary in September as it ceased operations
permanently at the end of October 2020. The Dallas clinic did not
re-open and will be closed permanently.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1591165/000149315220021297/form10-q.htm
About H-CYTE, Inc.
Headquartered in Tampa, Florida, H-CYTE -- http://www.HCYTE.com/--
was formed to build and develop a diversified portfolio of
innovative medical technology products and services to improve
quality of life for patients. The DenerveX System is H-CYTE's
first product and is intended to provide long-lasting relief from
pain associated with facet joint syndrome. For biomedical
services,
H-CYTE manages Lung Health Institute. Lung Health Institute is in
regenerative medicine that specializes in cellular therapies to
treat chronic obstructive pulmonary disease (COPD) and other
chronic lung diseases. In late 2019, H-CYTE's biologics division,
LungCYTE, plans to submit an IND to the FDA to study novel and
proprietary biologics for treatment of COPD.
H-Cyte reported a net loss of $29.81 million for the year ended
Dec. 31, 2019, compared to a net loss of $4.39 million for the year
ended Dec. 31, 2018. As of March 31, 2020, the Company had $1.20
million in total assets, $6.89 million in total liabilities, $6.28
million in total mezzanine equity, and a total stockholders'
deficit of $11.97 million.
Frazier & Deeter, LLC, in Tampa, Florida, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated April 22, 2020 citing that the Company has negative working
capital, has an accumulated deficit, has a history of significant
operating losses and has a history of negative operating cash flow.
Additionally, the Company has closed clinic operations and
experienced significant losses related to COVID-19 in 2020. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
HD SUPPLY: S&P Puts 'BB+' ICR on Watch Positive on Home Depot Deal
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S&P Global Ratings placed all of its ratings on HD Supply Inc.,
including its 'BB+' long-term issuer credit rating, on CreditWatch
with positive implications following the company's announcement
that it will be acquired by Home Depot Inc. for $56 per share of
its outstanding shares.
The CreditWatch placement reflected S&P's view that the transaction
may enhance HD Supply's credit position given its acquisition by a
higher-rated entity.
S&P said, "The CreditWatch placement reflects our view that HD
Supply's credit quality will likely benefit from its acquisition by
Home Depot, which is a significantly larger and higher-rated
entity. Per the agreement, Home Depot will acquire HD Supply in an
all-cash transaction for $56 per share. The parties agreed to the
deal on Nov. 16, 2020. Subject to closing, we may discontinue the
rating if all of HD Supply's debt is retired, or if under our
criteria we believe the debt should be rated under Home Depot, in
which Home Depot would have to be the guarantor of the debt."
"We expect to resolve the CreditWatch placement on HD Supply when
Home Depot closes the transaction in early 2021. At that time, we
anticipate discontinuing our ratings on HD Supply. Alternatively,
we would reassess our ratings if the transaction is called off or
if HD Supply's debt remains outstanding."
HENRY FORD: Seeks to Tap RBC Capital Markets as Investment Banker
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Henry Ford Village, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Michigan to employ RBC Capital
Markets, LLC as investment banker.
RBC Capital Markets will render these professional services:
(a) assist in the preparation of offering, marketing or other
transaction materials concerning the Debtor and a transaction for
distribution to creditors, acquirors and investors;
(b) implement the marketing plan with respect to a
transaction;
(c) identify, solicit and review proposals received from the
investors and other third parties;
(d) negotiate any transaction with the investors and other
third parties as necessary;
(e) provide advice and assistance to the Debtor in developing
and seeking approval of any such transaction;
(f) participate in the negotiation with the creditors,
investors and other parties-in-interest with respect to a
transaction;
(g) participate in depositions and hearings before the
bankruptcy court; and
(h) render such other assistance as the Debtor's management or
counsel may deem necessary consistent with the role of an
investment banker.
RBC Capital Markets will receive a $25,000 monthly retainer and
will be paid a success fee calculated as a fixed percentage of (i)
1.50 percent of the par amount of performing current-pay
restructured bonds; or (ii) 2.25 percent of the gross sale proceeds
in a sale transaction. Fifty percent of the accrued monthly
retainer amounts paid by the Debtor will be applied to the success
fee.
RBC Capital Markets will be compensated on an hourly basis at $800
per hour if its professionals are required to provide testimony,
prepare for or appear at a contested hearing relating to any
services provided by the firm.
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
David Fields, a managing director in the Conshohocken Municipal
Finance office of RBC Capital Markets, 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:
David B. Fields
RBC Capital Markets, LLC
300 Four Falls Corporate Center, Suite 760
300 Conshohocken State Road
W. Conshohocken, PA 19428
Telephone: (610) 729-3658
Facsimile: (610) 729-3708
E-mail: david.fields@rbccm.com
About Henry Ford Village
Henry Ford Village, Inc. is a non-profit, non-stock corporation
established to operate a continuing care retirement community
located at 15101 Ford Road, Dearborn, Mich. It provides senior
living services comprised of 853 independent living units, 96
assisted living unites and 89 skilled nursing beds.
Henry Ford Village sought Chapter 11 protection (Bankr. E.D. Mich.
Case No. 20-51066) on Oct. 28, 2020. In the petition signed by CRO
Chad Shandler, Henry Ford Village was estimated to have $50 million
to $100 million in assets and $100 million to $500 million in
liabilities.
The Hon. Mark A. Randon is the case judge.
The Debtor tapped Dykema Gossett PLLC as its legal counsel, FTI
Consulting, Inc., as financial advisor, and RBC Capital Markets,
LLC as investment banker. Kurzman Carson Consultants, LLC is the
claims agent.
HERITAGE RAIL: Committee Gets Approval to Hire Legal Counsel
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The official committee of unsecured creditors of Heritage Rail
Leasing, LLC received approval from the U.S. Bankruptcy Court for
the District of Colorado to retain Goldstein & McClintock LLLP and
the Law Offices of Douglas T. Tabachnik, P.C. as its legal
counsel.
The firms will provide these services:
(a) advise the committee on all legal issues as they arise;
(b) represent and advise the committee regarding the terms of
any sales of assets or Chapter 11 plans, and assist the committee
in negotiations with the Debtor and other parties;
(c) investigate the Debtor's assets and pre-bankruptcy
conduct;
(d) investigate the validity, priority and extent of the
claims, liens and security interests of any secured creditors of
the Debtor;
(e) investigate, and where appropriate prosecute or assist in
the prosecution of, estate claims and causes of action against the
Debtor, its officers, directors and shareholders and other
parties-in-interest;
(f) prepare legal papers;
(g) advise and represent the committee in all proceedings in
the Debtor's Chapter 11 case; and
(h) provide other legal services.
Goldstein & McClintock's 2020 hourly rates are:
Associates $295
Senior Partners $810
Paraprofessionals $170 - $235
The billing rates for Douglas T. Tabachnik Law are:
Douglas T. Tabachnik (partner) $650
Juliet Wyne (counsel) $550
Renee' D'Alba (paralegal) $250
Neither Goldstein & McClintock nor Douglas T. Tabachnik Law holds
or represents any interest adverse to the Debtor's estate,
according to court filings.
The firm can be reached through:
Harley J. Goldstein, Esq.
Daniel C. Curth, Esq.
Goldstein & McClintock LLLP
111 W. Washington St., Ste. 1221
Chicago, IL 60602
Phone: (773) 337-7700
Email: harleyg@restructuringshop.com
danc@goldmclaw.com
Douglas T. Tabachnik, Esq.
Law Offices of Douglas T. Tabachnik
63 West Main Street, Suite C
Freehold, NJ 07728
Phone: (732) 780-2760
Email: dtabachnik@dttlaw.com
About Heritage Rail Leasing
Heritage Rail Leasing, LLC leases rail rolling stocks, locomotives
and track equipment.
On Aug. 21, 2020, Portland Vancouver Junction & Railroad Inc.,
Vizion Marketing LLC and D.L. Paradeau Marketing LLC filed a
Chapter 11 involuntary petition against Heritage Rail Leasing. The
creditors are represented by Michael J. Pankow, Esq., at Brownstein
Hyatt Farber Schreck, LLP.
Judge Thomas B. McNamara oversees the case.
L&G Law Group LLP and Moglia Advisors serve as the Debtor's legal
counsel and restructuring advisor. Alex Moglia of Moglia Advisors
is the Debtor's chief restructuring officer.
On Oct. 19, 2020, the Office of the U.S. Trustee appointed a
committee to represent unsecured creditors in the Debtor's Chapter
11 case. The committee is represented by Goldstein & McClintock
LLLP and the Law Offices of Douglas T. Tabachnik, P.C.
HILTON DOMESTIC: Moody's Gives Ba2 Rating to New $1B Unsec. Notes
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Moody's Investors Service assigned a Ba2 rating to Hilton Domestic
Operating Company Inc.'s planned $1.0 billion senior unsecured note
issuances. All of Hilton's other ratings, including its Ba1
Corporate Family Rating, Ba1-PD Probability of Default rating,
existing Ba2 senior unsecured rating, and Baa3 senior secured bank
facility rating remain unchanged. Hilton's outlook is negative.
The proceeds of the planned note issuances due 2029 and 2031 will
be used to redeem the company's 4.25% senior unsecured notes due
2024. This transaction will benefit Hilton's liquidity as it pushes
out the maturity of the 2024 notes by five and seven years.
Assignments:
Issuer: Hilton Domestic Operating Company Inc.
Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (LGD4)
RATINGS RATIONALE
Hilton's credit profile derives support from its large scale with
about 998,000 rooms. Hilton is the second largest rated hotel
company after Marriott International, Inc. (Baa3 negative).
Hilton's credit profile is also supported by its well-recognized
brands and good diversification by geography and industry segment.
Hilton's hotels are located in 118 countries and territories across
the world. Hilton's credit profile also benefits from its very good
liquidity with $3.4 billion of cash at September 30, 2020. This
cash balance includes proceeds from the drawdown of its revolver in
full to have additional cash on hand.
In the short run, Hilton's credit profile will be dominated by the
length of time that the lodging industry continues to be highly
disrupted and the resulting impacts on the company's cash
consumption and its liquidity profile. The normal ongoing credit
risks include its historically high leverage relative to other Ba1
rated companies and its expectation that its debt/EBITDA will
remain above its 4.5x downgrade factor through 2022.
The negative outlook reflects its expectation that the impact of
global travel restrictions related to the spread of the coronavirus
will continue to put significant pressure on Hilton's earnings over
the next year. Its base case assumes modest improvement each
quarter resulting in leverage of about 6.0x to 6.5x at the end of
2021 with additional improvement to less than 5.0x by the end of
2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The outlook could be revised to stable if there are signs of
improving travel trends, including business travel, into 2021
leading to an expectation that the company's finances will
stabilize in the near term and that debt/EBITDA will improve to
below 4.5x over the medium term. An upgrade could come if travel
demand returns to near prior levels and debt/EBITDA improved to a
level approaching 3.5x. Factors that could lead to a downgrade
include the continuation of depressed occupancy and RevPAR through
the second half of 2020 beyond its base case assumption or updated
expectations for a weaker recovery, resulting in debt/EBITDA
remaining above 6.25x at the end of 2021 or an expectation that
debt/EBITDA will remain above 4.5x or EBITA/interest expense below
3.5x over the longer term.
Hilton Worldwide Holdings Inc. is a leading hospitality company
with 6,333 managed, franchised, owned and leased hotels, resorts
and timeshare properties comprising about 998,000 rooms in 118
countries and territories around the world. 2019 net revenues were
$3.7 billion.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
HILTON DOMESTIC: S&P Rates New Senior Unsecured Notes 'BB'
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S&P Global Ratings assigned its 'BB' issue-level and '4' recovery
ratings to the proposed senior unsecured notes to be issued by
Hilton Domestic Operating Co. Inc., a wholly-owned subsidiary of
Hilton Worldwide Holdings Inc. The issuance amount has not yet been
determined, and S&P expected the maturities to be 2029 and 2031.
S&P's analysis assumes the issuance amount is $1 billion.
Hilton plans to use the debt issuance proceeds to refinance
existing debt, including the 4.25% senior notes due 2024, and for
general corporate purposes. Because this is largely a refinancing
transaction, it is approximately leverage-neutral, and it does not
impair recovery prospects for unsecured noteholders. Therefore,
S&P's ratings on the proposed unsecured notes are the same as its
ratings on Hilton's existing unsecured debt. The '4' recovery
rating reflects S&P's expectation for average (30%-50%; rounded
estimate: 30%) recovery for unsecured lenders in the event of a
payment default.
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P's issue-level rating is 'BBB-' and its recovery rating is
'1' on the company's senior secured debt, which consists of the
revolving credit facility and term loan B.
-- S&P's issue-level rating on the company's senior unsecured
notes is 'BB', and its recovery rating is '4'. This incorporates
the proposed unsecured notes issuance that the rating agency
assumes will be $1 billion.
Simulated default assumptions
-- S&P's simulated default scenario contemplates a payment default
by 2025 as a result of prolonged economic weakness and
significantly reduced travel by corporate and leisure customers.
-- S&P assumes a reorganization following the default and value
the company using an emergence EBITDA multiple of 7.5x. This
multiple, which is at the high end of its recovery multiple range
for the leisure sector, and a relatively large operational
adjustment reflect the quality and scale of Hilton's portfolio of
brands.
-- Revolving credit facility: 100% assumed drawn at default after
excluding the unused portion of letters of credit. S&P bases this
on Hilton's near-full draw on its revolver since the beginning of
the COVID-19 pandemic.
Simplified waterfall
-- Year of default: 2025
-- Emergence EBITDA: $854 million
-- Multiple: 7.5x
-- Net enterprise value after 5% administrative expenses: $6.09
billion
-- Obligor/nonobligor split: 70%/30%
-- Estimated priority debt claims (mortgages and other debt): $18
million
-- Estimated secured debt claims: $4.1 billion
-- Recovery expectation: 90%-100% (rounded estimate: 95%)
-- Estimated unsecured debt claims: $6.14 billion
-- Value available for unsecured debt claims: $1.97 billion
-- Recovery expectation: 30%-50% (rounded estimate: 30%)
All debt amounts include six months of prepetition interest.
HILTON GRAND: S&P Affirms 'BB' ICR; Ratings Off Watch Negative
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S&P Global Ratings affirmed all ratings on Hilton Grand Vacations
Inc. (HGV), including the 'BB' issuer credit rating. S&P removed
all the ratings from credit watch where they were placed with
negative implications on March 20, 2020.
S&P said, "The negative outlook reflects the significant stress we
expect on revenue and cash flow and the possibility that we could
lower the rating on HGV in the coming quarters if we don't believe
a medical solution to COVID-19 will emerge by mid-2021 so that
vacation ownership interest sales can begin to recover."
"The 'BB' affirmation reflects our belief that HGV's EBITDA could
recover quickly once destination travel gains momentum, despite
anticipated high leverage in 2021 and significant uncertainty on
the path to recovery. HGV's path to recovery will likely be
slower than we anticipated several months ago, and our updated base
case reflects a spike in leverage in 2020 and 2021. We believe
captive-adjusted debt to EBITDA could continue to be high in 2021,
perhaps in the 5x-6x range, which is above our 4.5x downgrade
threshold for the current 'BB' rating. The high leverage in 2021
incorporates HGV's sizable exposure to destination markets, which
will experience a steeper decline in vacation ownership interest
(VOI) sales than drive-to markets. HGV's destination markets
include Hawaii, Las Vegas, and Orlando, which accounted for about
62% of its VOI sales in 2019. In addition, urban markets including
New York, Chicago, and Washington, D.C. accounted for 11% of 2019
VOI sales, and visitation in these markets remains low. Until Oct.
15, Hawaii (the largest of HGV's market exposures) had a
restrictive requirement that mandated a two-week quarantine for
out-of-state travelers upon arrival, and this depressed visitation.
Hawaii visitation will probably remain weak until a vaccine is
widely available. Markets such as Las Vegas, Orlando, and large
cities could also remain weak due to their reliance on air traffic,
corporate conventions activity, or capacity restrictions at local
attractions."
"Nevertheless, we affirmed the 'BB' rating because we believe HGV's
resorts could eventually attract significant visitation when a
travel recovery is underway. Preliminary data released by Hawaii's
Department of Transportation show that the state's daily visitation
increased from about 5% to 20%-25% of prior-year levels between the
periods before and after Oct. 15, which suggests there was some
pent-up demand. On Nov. 6, Hawaii also reopened to Japanese
travelers, who could support visitation and are a significant
source of HGV sales. The development of a medical solution,
including the recent announcement by Pfizer that its experimental
vaccine reported 90% effectiveness, could further restore
visitation if a vaccine can achieve wide dissemination in 2021.
Pfizer's news is broadly in line with our macro assumption that a
medical solution could emerge and be distributed by mid-2021, which
could bode well for the pace of recovery in the second half of
2021. While the news does not affect our assumptions at this time,
it supports higher confidence in our base-case forecast."
"Under our recovery assumptions, HGV could continue to upsell its
existing owners by upgrading them to higher-priced VOI inventory
during an extended period of low tour flow over the next several
quarters, typically resulting in higher closing rates and a
temporary spike in volume per guest (VPG). We also have assumed
that tour flow and VOI sales to new owners could eventually recover
based on HGV's pipeline of prepaid vacation packages, if travel
safety concerns begin to moderate in the second half of 2021. Our
understanding is that HGV currently has about 400,000 prepaid
vacation packages in the pipeline, which have been paid for by
customers, are not at risk of needing to be refunded, and a
fraction of which typically convert into VOI sales based on
historical experience. Because HGV ended 2019 with about 2.9x
captive-adjusted debt to EBITDA, which compared favorably to its
timeshare peers, a recovery in EBITDA and VOI sales could enable
HGV to improve leverage to below our 4.5x downgrade threshold on a
run rate basis by late 2021 and on a trailing 12-month basis by
early 2022."
Key offsetting risk factors include significant uncertainty during
the interim period until a vaccine emerges, upticks in COVID-19
infections that could detract from visitation, and logistical
challenges related to distribution even after a vaccine is
authorized. These factors contribute to S&P's negative outlook.
HGV reported its liquidity as of September 2020 would be adequate
for 31 months based on run-rate revenue in September. HGV stated
that as of September 2020, it had sufficient liquidity for about 31
months based on the level of VOI sales and rental revenue in
September. Liquidity sources include recurring revenue streams such
as financing and resort and club management revenue, as well as a
modest level of cash VOI sales and rentals. Club and resort
management revenues include member fees, almost all of which have
been collected for 2020 and is expected to fully fund the operating
costs of HGV's resorts. HGV's estimated total liquidity as of
September 2020 is $764 million, consisting of $625 million of
unrestricted cash, $39 million of availability on the revolver, and
unencumbered receivables that could generate about $100 million of
cash using the warehouse facility, if needed. The warehouse
facility capacity of $450 million was fully available as of
September 2020 to the extent receivables are available. The
warehouse facility is typically an interim liquidity source to make
new consumer loans, and its usage for operating expenses could
reduce availability for future consumer loans.
Liquidity uses include cash operating expenses, inventory
purchases, capital expenditures, debt amortization, and interest
expense.
S&P said, "We estimate HGV's current average monthly cash usage is
about $25 million based on the September 2020 level of total
revenue. Subsequent to third-quarter, HGV further cut cash expenses
by reducing its workforce, which is expected to yield cost savings.
We have also assumed no share repurchases for the remainder of 2020
and 2021."
While financial risk at the captive finance subsidiary will likely
increase through 2021, it had good leverage cushion entering the
COVID-19 crisis. HGV experienced annual default rates on
timeshare receivables of 5.14% and 4.71% in 2019 and 2018,
respectively, and the annualized default rate as of September 2020
was 5.96%, which increased due to write-offs on vacation ownership
loans that could result in a spike in the captive's financial risk.
If annual default rates remain moderately above 5%, the captive's
leverage as measured by adjusted debt to equity could rise to the
2x-3x range but remain well below S&P's 5x downgrade threshold.
Higher default rates at the captive could motivate HGV to
substitute healthy unpledged receivables for defaulting securitized
loans, which might slightly reduce cash flow to the company. HGV
could also opportunistically buy defaulting inventory if the prices
are favorable, which could temporarily reduce liquidity.
Partly offsetting these risk factors was modest captive leverage
before the crisis, as measured by adjusted debt to equity of 1.2x
at the end of 2019. Over the past few years, the captive's adjusted
debt to equity was in the 1x-1.5x range, which represented
significant cushion compared with S&P's 5x downgrade threshold on
the company. Over the forecast period, the captive could likely
absorb some deterioration in loan losses without impairing HGV's
overall financial risk. Furthermore, while annualized loan losses
are spiking above 5% because of the pandemic, these losses
represent cyclical performance rather than a fundamental shift in
HGV's underwriting standards and therefore may not trigger us to
lower the rating solely based on this risk factor, as long as S&P
believes the company can eventually reduce the loss percentages.
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
The negative outlook reflects significant anticipated stress on
revenue and cash flow, and the possibility that S&P could lower the
rating on HGV in the coming quarters if it loses confidence a
medical solution to COVID-19 will emerge by mid-2021 such that VOI
sales can begin to recover. The outlook is also negative because
there is significant uncertainty during the interim period until a
vaccine emerges and gains wide distribution.
S&P could lower the rating if:
-- VPG, tour flow, resort occupancy, or EBITDA margin are weaker
than S&P previously assumed and cause it to revise its base case
for captive-adjusted leverage to remain above 4.5x.
-- Risk in captive finance operations rises enough to impair the
parent's financial risk, which could occur if the captive's
adjusted debt to equity remains above 5x or if annual loan losses
in the captive's portfolio increase and stay materially above 5%.
-- S&P could revise the outlook to stable if it believes COVID-19
containment and economic recovery are robust enough to enable HGV
to maintain captive-adjusted debt to EBITDA below 4.5x.
-- S&P could raise the rating if captive-adjusted leverage returns
to and remains lower than 3x.
HOBERT K. SANDERSON: Son Buying Equipment for $10K
--------------------------------------------------
Hobert Kennedy Sanderson, Jr. and Denise C. Sanderson ask the U.S.
Bankruptcy Court for the Eastern District of North Carolina to
authorize their private sale of the following personal property
farm equipment and non-personal motor vehicles: (i) 2007 GMC Sierra
1500 Pickup Truck, VIN 2GTEK18Z971112276; (ii) 1978 Muvall Trailer,
SN 4138; (iii) 2012 Gooseneck 30' Utility Trailer, SN 21324380; and
(iv) 1986 Newhoff 48' Drop Deck Utility Trailer, VIN
1UYFS2487GA459001, Andrew Sanderson for a total purchase price of
$10,050, on the terms of the Offers to Purchase.
The Debtors are the owners of the Equipment. Upon information and
belief, the Equipment is not subject to liens or encumbrances
except for a potential claim of Jones County Tax Department by
virtue of its statutory tax lien, if any.
The Plan provides as that within 30 days of entry of the order, the
Debtors will either submit a motion to approve private sales or
schedule a public auction (without the necessity of further Court
approval) for the liquidation of the Equipment. The proceeds of
the liquidation of these assets (net of actual, reasonable and
necessary costs of sale but free of other administrative expenses
and exemptions) will be applied first in satisfaction of
outstanding interest and then to the principal balance of the Class
10B Notes.
Provided, however, that such proceeds will be applied to the
payments due under the Class 10B Notes in the inverse order of
maturity (i.e., applied to the balloon payments first), such that
such proceeds likely will have no effect on the Debtors' obligation
to make, with separate funds, the full payments under the Class 10B
Notes becoming due on March 1, 2021.
The Debtors ask authority to sell the Equipment to the Buyer for a
total purchase price of $10,050 allocated as follows: (i) $2,000
for the 2007 GMC Sierra, $2,250 for the 1978 Muvall Trailer, $1,800
for the 2012 Gooseneck 30' Utility Trailer, and $4,000 for the 1986
Newhoff 48' Drop Deck Utility Trailer.
The Buyer is the son of the male Debtor and as such is an "insider"
as defined by the Bankruptcy Code. Nevertheless, the proposed sale
was negotiated in good faith and at arms'-length, and the Purchase
Price represents a fair and reasonable price for the Equipment.
The best interests of the Debtors, their creditors, and the estate
will be served by the allowance of the Motion. The Debtor has
simultaneously given notice to all parties in interest of their
intent to sell the Equipment. If any person or entity claiming a
lien on the Equipment does not object within the time allowed, they
should be deemed to have consented to the sale of the Equipment
free and clear of their interests. If any questions arise as to
the validity or priority of liens against the Equipment, those
questions should be later determined by the Court.
The sale will be free and clear of any and all liens, claims,
encumbrances, rights, interests and claims of record, with said
liens, claims, encumbrances, rights, interests, and claims
attaching to the Net Proceeds of the sale. The Net Proceeds
should be disbursed to the holders of the lienholders as their
interests appear of record, if any, and as provided by the Plan.
Finally, the Debtors ask the Court that the 14-day stay applicable
to orders authorizing the sale of property pursuant to Rule 6004(h)
be waived.
A copy of the Contract is available at https://tinyurl.com/y2x87689
from PacerMonitor.com free of charge.
Hobert Kennedy Sanderson, Jr. and Denise C. Sanderson sought
Chapter 11 protection (Bankr. E.D.N.C. Case No. 17-05040) on Oct.
13, 2017. The Debtors taaped David F. Mills, Esq., as counsel. On
March 21, 2019, the Court confirmed the Debtor's Chapter 11 Plan.
On Sept. 3, 2020, the Court confirmed a Modified Chapter 11 Plan.
HOSPITALITY INVESTORS: Has $20.6M Net Loss for Sept. 30 Quarter
---------------------------------------------------------------
Hospitality Investors Trust, Inc., filed its quarterly report on
Form 10-Q, disclosing a net loss and comprehensive loss of
$20,560,000 on $54,228,000 of total revenue for the three months
ended Sept. 30, 2020, compared to a net loss and comprehensive loss
of $17,494,000 on $158,686,000 of total revenue for the same period
in 2019.
At Sept. 30, 2020, the Company had total assets of $1,814,486,000,
total liabilities of $1,396,326,000, and $354,000 in total
deficit.
The Company said, "Under United States Generally Accepted
Accounting Principles ("GAAP"), when preparing financial statements
for each annual and interim reporting period, the Company has the
responsibility to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about its
ability to meet its obligations arising within one year after the
date that the financial statements are issued. Due to the impact
of the coronavirus pandemic, the Company is unable to conclude with
certainty that it is probable that it will be able to meet its
obligations arising within twelve months of the date of issuance of
these financial statements under the parameters set forth in the
accounting guidance and the Company has determined in accordance
with the accounting guidance that there is substantial doubt about
its ability to continue as a going concern for one year after the
date the financial statements are issued. The consolidated
financial statements have been prepared assuming that the Company
will continue as a going concern and do not include any adjustments
that might result from the outcome of this uncertainty."
A copy of the Form 10-Q is available at:
https://bit.ly/32Z3Y3o
Hospitality Investors Trust, Inc., incorporated on July 25, 2013,
is a self-managed real estate investment trust ("REIT") that
invests primarily in premium-branded select-service lodging
properties in the United States. As of September 30, 2020, the
Company owns or has an interest in a total of 101 hotels with a
total of 12,673 guest rooms located in 29 states. As of September
30, 2020, all but one of these hotels operated under a franchise or
license agreement with a national brand owned by one of Hilton
Worldwide, Inc., Marriott International, Inc., and Hyatt Hotels
Corporation or one of their respective subsidiaries or affiliates.
The Company's one unbranded hotel has a direct affiliation with a
leading university in Atlanta.
HYCROFT MINING: Has Substantial Doubt on Staying as Going Concern
-----------------------------------------------------------------
Hycroft Mining Holding Corporation filed its quarterly report on
Form 10-Q, disclosing a net loss of $29,114,000 on $12,291,000 of
revenues for the three months ended Sept. 30, 2020, compared to a
net loss of $32,092,000 on $2,707,000 of revenues for the same
period in 2019.
At Sept. 30, 2020, the Company had total assets of $173,186,000,
total liabilities of $205,967,000, and $32,781,000 in total
stockholders' deficit.
The Company said, "As of September 30, 2020, substantial doubt
existed about our ability to continue as a going concern as we may
need additional capital, which is contemplated based on, among
other things, our current estimates of production, costs, metal
prices, capital expenditures, and debt service obligations over the
next twelve months."
A copy of the Form 10-Q is available at:
https://bit.ly/35K0T9b
Based in Denver, Colorado, Hycroft Mining Holding Corporation
operates as a blank check company. The Company aims to acquire one
and more businesses and assets, via a merger, capital stock
exchange, asset acquisition, stock purchase, and reorganization.
IBH MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: IBH Management PS, LLC
dba Infusion Beach Club
1900 N. Palm Canyon Drive
Palm Springs, CA 92262
Business Description: IBH Management PS, LLC, doing business as
Infusion Beach Club, operates a hotel
& restaurant business.
Chapter 11 Petition Date: November 18, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-17537
Judge: Hon. Scott H. Yun
Debtor's Counsel: Michael J. Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
Fax: (310) 271-9605
E-mail: michael.berger@bankruptcypower.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Christopher M. Rosas, managing member
and chief executive officer.
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/XJTO5OI/IBH_Management_PS_LLC_dba_Infusion__cacbke-20-17537__0001.0.pdf?mcid=tGE4TAMA
ICONIC BRANDS: Has $1.2M Net Loss for Quarter Ended Sept. 30
------------------------------------------------------------
Iconic Brands, Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $1,195,208 on $712,198 of sales for the
three months ended Sept. 30, 2020, compared to a net loss of
$1,004,169 on $267,619 of sales for the same period in 2019.
At Sept. 30, 2020, the Company had total assets of $1,665,243,
total liabilities of $2,383,210, and $717,967 in total
stockholders' deficit.
The Company has sustained significant net losses which have
resulted in an accumulated deficit as of September 30, 2020 of
$25,534,477 and has experienced periodic cash flow difficulties,
all of that 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://bit.ly/3kGCNAf
Iconic Brands, Inc. develops, markets, and distributes alcoholic
beverages in the United States. It offers vodka, wine, and spirits,
as well as liquor based products infused with hemp and CBD. The
company markets its products under the Bivi and Bellissima brand
names. Iconic Brands, Inc. was founded in 2005 and is headquartered
in Amityville, New York.
ICONIX BRAND: Reports $46.7M Net Income for Sept. 30 Quarter
------------------------------------------------------------
Iconix Brand Group, Inc. filed its quarterly report on Form 10-Q,
disclosing a net income of $46,702,000 on $24,462,000 of licensing
revenue for the three months ended Sept. 30, 2020, compared to a
net loss of $34,226,000 on $35,471,000 of licensing revenue for the
same period in 2019.
At Sept. 30, 2020, the Company had total assets of $445,590,000,
total liabilities of $662,369,000, and $242,276,000 in total
stockholders' deficit.
The Company has experienced substantial and recurring losses from
operations, which losses have caused an accumulated deficit of
$422.3 million as of September 30, 2020. Net losses incurred for
the years ended December 31, 2019 and 2018 amounted to
approximately $101.9 million and $89.7 million, respectively.
While the Company had positive cash flows from operations in recent
periods, the potential adverse impact of the COVID-19 pandemic on
its operating results, liquidity and financial condition raises
substantial doubt the Company can continue as an ongoing business
for the next twelve months.
A copy of the Form 10-Q is available at:
https://bit.ly/3pEgW00
Iconix Brand Group, Inc., a brand management company, owns,
licenses, and markets a portfolio of consumer brands across the
women's, men's, and home industries in the United States and
internationally. Iconix Brand Group, Inc. was founded in 1978 and
is based in New York.
ICORECONNECT INC: Posts $774,000 Net Loss for Sept. 30 Quarter
--------------------------------------------------------------
iCoreConnect Inc. filed its quarterly report on Form 10-Q,
disclosing a net loss of $774,000 on $530,000 of revenue for the
three months ended Sept. 30, 2020, compared to a net loss of
$744,000 on $225,000 of revenue for the same period in 2019.
At Sept. 30, 2020, the Company had total assets of $2,590,000,
total liabilities of $2,609,000, and $19,000 in total stockholders'
deficit.
The Company said, "For the nine month period ended September 30,
2020 the Company generated an operating loss of US$2,297,000. In
addition, the Company has an accumulated deficit, total
stockholders' deficit and net working capital deficit of
US$76,751,000, US$19,000 and US$2,101,000, respectively, at
September 30, 2020. The Company's activities have been primarily
financed through private placements of equity securities,
convertible debt financing, and PPP Loan proceeds. The Company
intends to raise additional capital through the issuance of debt
and/or equity securities to fund its operations. The Company is
reliant on future fundraising to finance operations in the near
future. The financing may not be available on terms satisfactory
to the Company, if at all. In light of these matters, there is
substantial doubt that the Company will be able to continue as a
going concern.
"Management intends to continue developing and marketing its
healthcare software products to generate increasing revenues.
While management believes in the viability of its strategy to
increase revenues and in its ability to raise additional funds,
there can be no assurances to that effect. Management's ability to
continue as a going concern is ultimately dependent upon its
ability to continually increase the Company's customer base and
realize increased revenues from signed contracts. The 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 is available at:
https://bit.ly/3lJPOKO
iCoreConnect Inc., a Nevada Corporation, builds secure cloud-based
HIPAA compliant communications systems, productivity and technology
framework software focused on healthcare, although the core
technology can be adopted to other vertical markets that require a
high degree of secure data communication, such as the legal,
financial and education fields.
IFRESH INC: Reports $3.6-Mil. Net Income for Quarter Ended June 30
------------------------------------------------------------------
iFresh Inc. filed its quarterly report on Form 10-Q, disclosing a
net income of $3,597,470 on $21,533,915 of total net sales for the
three months ended June 30, 2020, compared to a net loss of
$3,368,126 on $23,827,782 of total net sales for the same period in
2019.
At June 30, 2020, the Company had total assets of $121,348,826,
total liabilities of $106,236,893, and $15,111,933 in total
equity.
iFresh said, "The Company's principal liquidity needs are to meet
its working capital requirements, operating expenses and capital
expenditure obligations. The Company's ability to fund these needs
will depend on its future performance, which will be subject in
part to general economic, competitive and other factors beyond its
control. These conditions raise substantial doubt as to the
Company's ability to remain a going concern."
A copy of the Form 10-Q is available at:
https://bit.ly/38VqiOU
iFresh Inc. through its wholly owned subsidiary, NYM, is a fast
growing Asian/Chinese grocery supermarket chain in the North
Eastern U.S. providing food and other merchandise hard to find in
mainstream grocery stores. Since NYM was formed in 1995, it has
targeted the Chinese and other Asian populations (collectively, the
"Asian Americans") in the U.S. with a deep cultural understanding
of its consumers' unique consumption habits. iFresh currently has
nine (9) retail supermarkets across New York, Massachusetts and
Florida, with over 6,920,500 sales transactions in the fiscal year
ended March 31, 2018.
IMAGEWARE SYSTEMS: Says Substantial Going Concern Doubt Exists
--------------------------------------------------------------
ImageWare Systems, Inc., filed its quarterly report on Form 10-Q,
disclosing a net loss of $2,902,000 on $733,000 of revenue for the
three months ended June 30, 2020, compared to a net loss of
$2,548,000 on $812,000 of revenue for the same period in 2019.
At June 30, 2020, the Company had total assets of $7,813,000, total
liabilities of $13,800,000, and $15,218,000 in total shareholders'
deficit.
The Company said, "Considering the financings consummated in 2020,
as well as our projected cash requirements, and assuming we are
unable to generate incremental revenue, our available cash will be
insufficient to satisfy our cash requirements for the next twelve
months from the date of this filing. At August 17, 2020, cash on
hand approximated $351,000.Based on the Company's rate of cash
consumption in the first six months of 2020, the Company will need
additional capital in the third quarter of 2020 and its prospects
for obtaining that capital are uncertain. As a result of the
Company's historical losses and financial condition, 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://bit.ly/36QjnEf
Based in San Diego, California, ImageWare Systems, Inc. operates as
a biometrics first identity company. The Company offers a critical
identity infrastructure and biometrically validated
identity-secured access to transform enterprise security. ImageWare
Systems serves government and public sectors in the United States.
IMERYS TALC: Morris, Brown Represent Litigation Claimants
---------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Morris James LLP and Brown Rudnick LLP that they
are representing the Ad Hoc Committee of Talc Litigation Claimants
in the Chapter 11 cases of Imerys Talc America, Inc., et. al.
On June 8, 2020, the Morelli Law Firm and the Segal Law Firm
retained the law firms of Brown Rudnick LLP and Morris James LLP to
represent their clients' collective claims and interests with
respect to the Debtors and these Bankruptcy Cases. Certain of the
Plaintiff's Law Firms' clients comprise the members of the Ad Hoc
Committee. See FED. R. BANK. P. 2019(c)(1)(A)
At this time, the Members of the Ad Hoc Committee are primarily
clients of the Plaintiffs' Law Firms that have litigation pending
against the Debtors and/or related parties or have otherwise filed
proofs of claim in these Bankruptcy Cases. The Plaintiffs' Law
Firms continue to work with their other clients to determine
whether, and to what extent, they may choose to participate in the
Bankruptcy Cases. As a result, additional clients of the
Plaintiffs' Law Firms may become Members of the Ad Hoc Committee at
a later time.
Each Ad Hoc Member is a Talc Personal Injury Claimant as defined in
the Debtors' Further Revised TDP [D.I. 2370, Exhibit 1]
As of Nov. 16, 2020, the Ad Hoc Members and their disclosable
economic interests are:
A., Paula
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: No
* Claim Deceased: Yes
A., Erica
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: No
* Claim Deceased: No
A., Ruth
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: No
* Claim Deceased: Yes
A., Wanda
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: No
* Claim Deceased: Yes
A., Mary
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: No
* Claim Deceased: No
A., Deborah
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: No
* Claim Deceased: No
Alequin, Connie
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: Yes
* Claim Deceased: No
A., Dora
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: No
* Claim Deceased: No
Allen, Sallie
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: Yes
* Claim Deceased: No
A., Faye
c/o The Segal Law Firm
Attn: Edward Amos
810 Kanawha Bouldevard, East
Charleston, WV 25301
* In MDL: No
* Claim Deceased: Yes
Each Member, as a Talc Personal Injury Claimant, is a
party-in-interest and holds an unliquidated tort claim against the
Debtors. Additional claims against the Debtors may include, but
are not necessarily limited to, unsecured claims and administrative
claims. See FED. R. BANK. P. 2019(c)(2)(B); See FED. R. BANK. P.
2019(c)(3)(B).
Each Ad Hoc Member has signed an engagement letter with one of the
Plaintiffs' Law Firms. Exemplars of the Ad Hoc Retention Agreements
are attached at Exhibit A-2 and verified as true and accurate
copies of the engagement letters signed by the respective Ad Hoc
Members. The contingency fee percentages for each law firm is
redacted to protect commercially sensitive information. However,
Bankruptcy Counsel will provide such fee information to the Court
and the United States Trustee, and, upon request, to counsel to the
Debtors, counsel to the Official Committee of Tort Claimants and
counsel to the Future Claims Representative subject to
confidentiality protections.
On June 8, 2020, the Plaintiffs' Law Firms retained Bankruptcy
Counsel through a signed engagement letter. The Bankruptcy Counsel
Engagement Letters are attached hereto as Exhibit A-3 and verified
as true and accurate copies of the engagement letters signed by the
Plaintiffs' Law Firms. See FED. R. BANK. P. 2019(c)(1)(A); see also
FED. R. BANK. P. 2019(c)(4).
Pursuant to the authority given to them by their clients in their
written Ad Hoc Retention Agreements, the Plaintiffs' Law Firms
engaged Bankruptcy Counsel. The Bankruptcy Counsel Engagement
Letters provide that the "Morelli Law and Segal Law represent and
warrant that they have the authority to sign this Engagement Letter
on behalf of their respective Law Firm Clients and bind the Law
Firm Clients to the terms thereof." See Exhibit A-3.
Nothing contained in this Verified Statement is intended or should
be construed as (i) a waiver or release of any claims filed or to
be filed against, or interests in, the Debtors held by any Ad Hoc
Member; (ii) a limitation upon, or waiver of, any Ad Hoc Member's
rights to assert, file and/or amend its claim in accordance with
applicable law and any orders entered in these cases establishing
procedures for filing proofs of claim; (iii) consent to the
jurisdiction of the Court over any matter; (iv) an election of
remedy; and (v) a waiver of release of any rights of any of the Ad
Hoc Members may have to a jury trial, whether in state or federal
court.
Other than disclosed herein, Bankruptcy Counsel does not represent
or purport to represent any other entities with respect to the
Bankruptcy Cases. In addition, the Ad Hoc Members do not purport to
act, represent, or speak on behalf of any other entities in
connection with the Bankruptcy Cases.
From time to time, additional Talc Personal Injury Claimants may
become Ad Hoc Members and certain Ad Hoc Members may cease to be
members in the future. Bankruptcy Counsel reserves the right to
amend or supplement this Verified Statement as necessary for that,
or any other, reason in accordance with Rule 2019.
The information contained herein is intended only to comply with
Rule 2019 and is not intended for any other use or purpose.
Co-Counsel to the Ad Hoc Committee of Imerys Talc Litigation
Plaintiffs can be reached at:
MORRIS JAMES LLP
Jeffrey R. Waxman, Esq.
Eric J. Monzo, Esq.
Brya M. Keilson, Esq.
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801
Telephone: (302) 888-6800
E-mail: jwaxman@morrisjames.com
emonzo@morrisjames.com
bkeilson@morrisjames.com
David J. Molton, Esquire, Esq.
Bennett S. Silverberg, Esq.
BROWN RUDNICK LLP
Seven Times Square
New York, NY 10036
Telephone: (212) 209-4800
E-mail: DMolton@brownrudnick.com
BSilverberg@brownrudnick.com
- and -
Sunni P. Beville, Esq.
BROWN RUDNICK LLP
One Financial Center
Boston, MA 02111
Telephone: (617) 856-8200
E-mail: sbeville@brownrudnick.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3nGTspm
About Imerys Talc America
Imerys Talc and its subsidiaries --
https://www.imerys-performance-additives.com/ -- are
in the business of mining, processing, selling, and distributing
talc. Talc is a hydrated magnesium silicate that is used in the
manufacturing of dozens of products in a variety of sectors,
including coatings, rubber, paper, polymers, cosmetics, food, and
pharmaceuticals. Its talc operations include talc mines, plants,
and distribution facilities located in: Montana (Yellowstone,
Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas
(Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet).
It also utilizes offices located in San Jose, California and
Roswell, Georgia.
Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc
Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13,
2019.
The Debtors were estimated to have $100 million to $500 million in
assets and $50 million to $100 million in liabilities as of the
bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped Richards, Layton & Finger, P.A., and Latham &
Watkins LLP as counsel; Alvarez & Marsal North America, LLC as
financial advisor; and Prime Clerk LLC as claims agent.
IMPRIVATA INC: Moody's Assigns B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service assigned a first-time B2 corporate family
rating to Imprivata, Inc. following the announcement that it
intends to raise a $755 million senior secured first lien bank
credit facility, consisting of a $715 million term loan B and $40
million revolving credit facility. Proceeds from the issuance will
go towards funding a pending acquisition, a $420 million
distribution to equity holders, with the remaining proceeds going
towards repaying existing debt and paying fees and expenses
associated with the transactions. In addition to the B2 CFR,
Moody's assigned a B2 rating to the company's proposed senior
secured first lien credit facility and a B2-PD probability of
default rating (PDR). The outlook is stable.
A summary of the action follows:
Assignments:
Issuer: Imprivata, Inc.
Probability of Default Rating, Assigned B2-PD
Corporate Family Rating, Assigned B2
Senior Secured 1st Lien Term Loan B, Assigned B2 (LGD4)
Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
(LGD4)
Outlook Actions:
Issuer: Imprivata, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
Imprivata's B2 CFR reflects the company's high financial leverage,
which Moody's estimates to be around 6x pro forma for the debt
issuance for the last twelve months ended September 30, 2020, as
well as the company's small scale and limited end-market
diversification. The B2 CFR is supported by the company's leading
position in identification (ID) management software within the
healthcare industry, as well as the company's strong free cash
generation (about 9% FCF to total debt pro forma for the
transaction). The company has excellent gross retention rates (on
the high 90%) over the last several years, while also increasing
revenue through new business wins in the healthcare industry.
Imprivata has good liquidity, as evidenced by the company's solid
free cash flow generation. Even after accounting for the increased
interest expense related to a higher debt burden, Moody's expects
Imprivata to generate at least $60 million of free cash flow over
the next 12 months. In addition, the company will have an undrawn
$40 million revolving credit facility and roughly $70 million of
cash on the balance sheet to provide additional sources of
liquidity. There is expected to be no financial covenants on the
company's term loan B and a springing net leverage ratio covenant
on the company's revolving credit facility at 35% utilization.
The stable outlook reflects Moody's expectation that Imprivata will
achieve mid-single-digit percent revenue growth over the next 12-18
months despite the current economic recession. The stable outlook
accommodates a moderate level of acquisitions including
debt-financed acquisitions.
Preliminary terms of the first lien credit agreement (and subject
to change in the final documentation) contain provisions for
incremental debt capacity, with allowable maturities prior to the
contemplated facilities, up to the greater of $145 million and 100%
of consolidated EBITDA for the trailing four fiscal quarters
(reduced by incremental equivalent debt and ratio debt amounts
incurred in reliance on this basket). The company can also incur
unlimited incremental first lien facilities if (i) pro forma first
lien net leverage ratio is less than 5.0x or (ii) if incurred for
permitted acquisitions or investments, first lien net leverage does
not increase on a pro forma basis. The company can incur unlimited
junior lien incremental facilities if (i) pro forma senior secured
net leverage is 7.0x or less, or (ii) if incurred for permitted
acquisitions or investments the pro forma senior secured leverage
ratio does not increase. The company can incur unsecured, or
secured by a lien on non-collateral, incremental facilities if (i)
pro forma total net leverage is 7.25x or less (or does not
increase, if used to finance a permitted acquisition or
investment), or (ii) pro forma interest coverage ratio is at least
2.0x (or if incurred for permitted acquisitions or investments, the
pro forma interest coverage does not decrease). The "blocker"
provisions providing additional restrictions on top of the covenant
carve-outs to limit collateral leakage are still being negotiated.
Only wholly-owned subsidiaries must provide guarantees, raising the
risk of potential guarantee release; dividends of partial ownership
interests could jeopardize guarantees. The company's obligation to
prepay loans with net proceeds of asset sales steps down to 50% and
0%, subject to pro forma first lien net leverage at 4.25x and 3.75,
respectively, weakening control over collateral.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would consider an upgrade if the company significantly
increases its scale, while maintaining conservative financial
policies, such that leverage is sustained below 5.0x and free cash
flow is sustained above 10%. Moody's would consider a downgrade if
market share is materially weakened as a result of increased
competition, leading to revenue declines or financial leverage to
be sustained over 7.0x. A deterioration of liquidity could also
lead to a downgrade.
ESG CONSIDERATIONS
Overall, environmental and social risks are considered low for
Imprivata as a software company. Although limited, the credit risks
stemming from social issues are linked to data security, diversity
in the workplace and access to highly skilled workers.
Imprivata's governance is a risk to the credit rating. Private
equity-owned software companies typically have much more tolerance
for higher leverage than comparable publicly traded software
peers.
Imprivata is an identification (ID) management software platform
focused on providing solutions to the healthcare industry.
Imprivata is majority-owned by private equity firm Thoma Bravo. Pro
forma for the pending acquisition, revenue for the last twelve
months ended Sept. 30, 2020 was about $300 million.
The principal methodology used in these ratings was Software
Industry published in August 2018.
JAB OF ROCKLAND: Gets OK to Hire BC Commercial as Broker
--------------------------------------------------------
JAB of Rockland, Inc. received approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ BC Commercial
Broker, Inc. as its commercial business broker.
BC Commercial will sell the Debtor's business, David's Bagels, in
New York.
The brokerage commission of BC Commercial is 6 percent of the
selling price.
John Chang, member of BC Commercial, disclosed in court filings
that the firm does not nor represent an adverse interest to the
Debtor and it estate, and is disinterested under Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
John Chang
BC Commercial Broker, Inc.
About JAB of Rockland Inc.
JAB of Rockland, Inc., which conducts business under the name
David's Bagels, filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y. Case No. 19-23153) on June 11, 2019, disclosing under $1
million in both assets and liabilities.
Judge Robert D. Drain oversees the case.
The Debtor is represented by Elizabeth A. Haas, Esq., PLLC.
JAGUAR HEALTH: Incurs $7.9 Million Net Loss in Third Quarter
------------------------------------------------------------
Jaguar Health, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
attributable to common shareholders of $8.27 million on $2.77
million of total revenue for the three months ended Sept. 30, 2020,
compared to a net loss and comprehensive loss of $7.56 million on
$973,000 of total revenue for the three months ended Sept. 30,
2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss and comprehensive loss of $25.04 million on $6.81 million
of total revenue compared to a net loss and comprehensive loss of
$32.58 million on $4.27 million of total revenue for the nine
months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $36.23 million in total
assets, $28.43 million in total liabilities, and $7.81 million in
total stockholders' equity.
Jaguar said, "The Company, since its inception, has incurred
recurring operating losses and negative cash flows from operations
and has an accumulated deficit of $158.1 million as of Sept. 30,
2020. The Company expects to incur substantial losses and negative
cash flows in future periods. Further, the Company's future
operations are dependent on the success of the Company's ongoing
development and commercialization efforts, as well as securing of
additional financing and generating positive cash flows from
operations. There is no assurance that the Company will have
adequate cash balances to maintain its operations. In addition, as
a result of the recent outbreak of novel COVID-19, the Company may
experience disruptions in fiscal year 2020 until November 2021 that
could severely impact its supply chain, ongoing and future clinical
trials and commercialization of Mytesi.
"Although the Company plans to finance its operations and cash flow
needs through equity and/or debt financing, collaboration
arrangements with other entities, license royalty agreements, as
well as revenue from future product sales, the Company does not
believe its current cash balances are sufficient to fund its
operating plan through one year from the issuance of these
unaudited condensed consolidated financial statements. The Company
has an immediate need to raise cash. There can be no assurance
that additional funding will be available to the Company on
acceptable terms, or on a timely basis, if at all, or that the
Company will generate sufficient cash from operations to adequately
fund operating needs. If the Company is unable to obtain an
adequate level of financing needed for short-term operations and
the long-term development and commercialization of its products,
the Company will need to curtail planned activities and reduce
costs. Doing so will likely have an adverse effect on the
Company's ability to execute on its business plan; accordingly,
there is substantial doubt about the ability of the Company to
continue in existence as a going concern. The accompanying
unaudited condensed consolidated financial statements do not
include any adjustments that might result from the outcome of these
uncertainties."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1585608/000155837020013865/jagx-20200930x10q.htm
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar reported a net loss of $38.54 million for the year ended
Dec. 31, 2019, compared to a net loss of $32.15 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$37.58 million in total assets, $25.16 million in total
liabilities, $10.88 million in Series A redeemable convertible
preferred stock, and $1.54 million in total stockholders' equity.
Mayer Hoffman McCann P.C., in San Francisco, California, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated April 2, 2020 citing that the
Company has experienced losses since inception, significant cash
used in operations, and is dependent on future financing to meet
its obligations and fund its planned operations. These conditions
raise substantial doubt about its ability to continue as a going
concern.
JCK LEGACY: Amended Joint Plan Confirmed by Judge
-------------------------------------------------
Judge Michael E. Wiles has entered findings of fact, conclusions of
law and order approving the Disclosure Statement and confirming the
First Amended Joint Plan of JCK Legacy Company (f/k/a The McClatchy
Company) and its debtor affiliates.
The Debtors have proposed the Plan in good faith with the
legitimate and honest purpose of maximizing the value of the
Debtors' Estates, and not by any means forbidden by law. In
determining that the Plan has been proposed in good faith, the
Court has examined the totality of the circumstances surrounding
the filing of the Chapter 11 Cases and the formulation of the Plan.
The Plan was the product of extensive negotiations conducted at
arm's length among the Debtors, the Chatham Parties, the Brigade
Parties, and the Committee. Accordingly, the requirements of
section 1129(a)(3) of the Bankruptcy Code are satisfied.
The treatment of Administrative Claims, Deferred Amounts Claims,
Professional Claims, Priority Tax Claims, Other Priority Claims,
and Other Secured Claims pursuant to Articles II and III of the
Plan satisfy the requirements of, and comply in all respects with,
section 1129(a)(9) of the Bankruptcy Code.
A full-text copy of the order dated September 25, 2020, is
available at https://tinyurl.com/yxhe7gzw from PacerMonitor.com at
no charge.
About McClatchy Co.
The McClatchy Co. (OTC-MNIQQ) -- https://www.mcclatchy.com/ --
operates 30 media companies in 14 states, providing each of its
communities local journalism in the public interest and advertising
services in a wide array of digital and print formats. McClatchy
publishes iconic local brands including the Miami Herald, The
Kansas City Star, The Sacramento Bee, The Charlotte Observer, The
(Raleigh) News & Observer, and the Fort Worth Star-Telegram.
McClatchy is headquartered in Sacramento, Calif., and was listed on
the New York Stock Exchange American under the symbol MNI.
On Feb. 13, 2020, The McClatchy Company and 53 affiliates sought
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10418) with
a Plan of Reorganization that will cut $700 million of funded debt
in half.
McClatchy was estimated to have $500 million to $1 billion in
assets and debt of at least $1 billion as of the bankruptcy
filing.
The cases are pending before the Honorable Michael E. Wiles.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as
general bankruptcy counsel; Togut, Segal & Segal LLP as
co-bankruptcy counsel with Skadden; Groom Law Group as special
counsel; FTI Consulting, Inc. as financial advisor; and Evercore
Inc. as investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
* * *
At an auction in July 2020, the Debtors identified the bid
submitted by SIJ Holdings, LLC, an affiliate of Chatham Asset
Management, LLC, as the highest or otherwise best bid for the
Debtors' assets. The Debtors changed their names to JCK Legacy
Company, et al., following completion of the sale.
JONAH ENERGY: S&P Lowers ICR to 'D' on Missed Deficiency Payment
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
exploration and production company Jonah LLC to 'D' from CCC-' and
its issue-level rating on the company's senior unsecured notes to
'D' from 'CCC-'.
The downgrade reflects Jonah's decision to not make the full
September 30th deficiency payment on its reserve-based lending
facility due July 2022. S&P does not expect the company to make
additional payments and believe it will seek a broader financial
restructuring.
LAS LOMAS: Acknowledges Feasilibility Issue; No Plan So Far Filed
-----------------------------------------------------------------
Las Lomas Construction Se on Oct. 26, 2020 filed another motion for
a short extension of its deadline to file a plan and a disclosure
statement. It told a court that after the meeting with Debtor's
president, the Debtor's counsel explained the need for third party
funding. In seeking a 10-day extension, the Debtor's counsel said
that the draft of the Disclosure Statement and Plan is ready but
there is a feasibility issue that need to be resolved. The motion
was granted Oct. 27 and the 10-day period expired Nov. 7. However,
as of Nov. 18, 2020, no file has been filed in the case.
About Las Lomas Construction
Las Lomas Construction, S.E., a general contractor based in Lajas,
P.R., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D.P.R. Case No. 20-00007) on Jan. 2, 2020. It previously
sought bankruptcy protection (Bankr. D.P.R. Case No. 11-04774) on
May 26, 2011.
At the time of the filing, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range.
The Debtor tapped Maria Soledad Lozada, Esq., at Lozada Law
Offices, as its legal counsel.
LATEX FOAM: Unsecured Creditors to Have 0% to 8% Recovery in Plan
-----------------------------------------------------------------
The Latex Trust and the Creditors' Committee filed the final
version of the disclosure statement explaining their proposed
Chapter 11 Plan for Latex Foam International, LLC, and its
debtor-affiliates on Sept. 30, 2020.
According to th eSecond Amended Disclosure Statement, the Plan
Participants estimate that the Debtors' Unsecured Creditors are
owed approximately $2.8 million in the aggregate pursuant to the
Debtor's Schedules. Other creditors have filed claims, including
substantial claim filed by the Latex Trust. As such, total general
unsecured claim may range between $2.8 million $12 million. This
amount may decrease based on payments made by the purchaser of the
Debtors' assets on account of assumed contracts, and may increase
or decrease in the event that contracts are rejected and/or the
Court overrules or sustains objections to Claims that have been or
will be made. The Debtors and Liquidating Debtors reserves all of
their rights and objections to any non-priority Unsecured Claim.
The Plan Participants estimate 0% to 8% recovery for this Class
depending on net proceeds from litigation claims.
It is not clear as of the date of this Disclosure Statement whether
there will be a distribution to unsecured creditors under the Plan,
according to the Second Amended Disclosure Statement.
A full-text copy of the Latex Trust and the Creditors' Committee's
Disclosure Statement dated Aug/ 14, 2020, is available at
https://tinyurl.com/yyorznd6 from PacerMonitor.com at no charge.
A full-text copy of the Latex Trust and the Creditors' Committee's
Amended Disclosure Statement dated Sept. 25, 2020, is available at
https://tinyurl.com/y6osnozd from PacerMonitor.com at no charge.
A full-text copy of the Second Amended Joint Disclosure Statement
dated September 30, 2020, is available at
https://tinyurl.com/y3gkw9xo from PacerMonitor.com at no charge.
About Latex Foam International
Latex Foam International, LLC, which conducts business under the
name Talalay Global, provides textile furnishing products. It
offers house furnishings such as blankets, bedspreads, sheets,
table clothes, towels, and shower curtains.
Latex Foam International and four affiliates filed voluntary
petitions seeking relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Conn. Lead Case No. 19-51064) on Aug. 8, 2019. The
petitions were signed by Marc Navarre, chief executive officer. At
the time of the filing, the Debtors were estimated to have assets
between $10 million and $50 million and liabilities of the same
range. Judge Julie A. Manning oversees the case. James Berman,
Esq., at Zeisler & Zeisler, P.C., is the Debtors' counsel.
LIBERTY COMMUNICATIONS: S&P Raises ICR to 'B+'; Outlook Stable
--------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on connectivity
provider Liberty Communications of Puerto Rico LLC (LCPR) to 'B+'
from 'B' and removed the rating from CreditWatch, where the rating
agency placed it with positive implications on Oct. 10, 2019. The
outlook is stable.
LCPR completed its transformative acquisition of AT&T's wireless
and wireline operations in Puerto and the U.S. Virgin Islands for
$1.95 billion. S&P assigned its 'B+' issue-level ratings to debt
previously issued to fund this acquisition.
The rating agency viewed LCPR's entrance into the more competitive,
lower margin wireless business unfavorably when assessing its
business risk profile, which is incorporated in the rating agency's
4x upgrade trigger to 'BB-'.
S&P said, "The stable outlook reflects our view that there is
downside cushion in the rating given the demonstrated resiliency of
the cable and wireless businesses, but that upside is also limited
over the next year due to uncertainty around the integration and
longer-term financial policy."
"The upgrade primarily reflects improved credit metrics enabled by
a significant equity contribution, combined with robust growth in
LCPR's cable business. We estimate that the acquired business has
a modestly deleveraging effect given that it was funded at a
roughly 4x debt-to-EBITDA multiple, thanks to a roughly $650
million equity contribution. However, over the past year, we
believe that the deleveraging impact of the acquisition has
narrowed mainly because of 7% EBITDA growth year to date in LCPR's
cable business, which has pushed pre-acquisition leverage below 5x.
On a pro forma basis, we project leverage of about 4.3x in 2020,
approaching 4x by the end of 2021."
"We believe LCPR's business will not be materially affected by
COVID-19 and the associated global recession over the next year.
In fact, we believe its cable business will continue to benefit
from a full-forward in demand for high-speed internet. We have
witnessed very healthy subscriber growth of 15% year over year
through the third quarter of 2020 because the company has been able
to increase penetration to about 36% from about 32% just nine
months ago. We expect this trend to continue as consumers
increasingly opt for faster speeds offered by LCPR's cable
infrastructure compared with copper-based competition."
On the wireless side, S&P believes mobile devices have become a
necessity for most people and consumers are unlikely to rid
themselves of wireless service, even in an economic downturn.
However, S&P believes there is potential for modest EBITDA
compression because of the following:
-- Postpaid subscriber growth could decline as companies reduce
headcount or go out of business. A large portion of industry
postpaid growth has come from the proliferation of second handsets
for employees.
-- Consumers could aim to save money by moving to lower-margin
prepaid plans or less-expensive postpaid plans
-- S&P projects 1%-3% total EBITDA growth in 2021 but there is
ample cushion in the rating for underperformance since most
reasonable stress scenarios still result in leverage comfortably
below 5x.
S&P said, "The acquired mobile assets now account for about 55%-60%
of LCPR's total EBITDA, which is a modest drag on our overall view
of the business risk. We believe the wireless business is more
competitive than the legacy cable business. The company has a
roughly equal market share with T-Mobile in Puerto Rico (about 37%
each), with Claro also offering a wireless product. However,
T-Mobile now has a spectrum advantage with the acquisition of
Sprint, which provides more flexibility for aggressive service
offerings in the future. Still, we recognize it will take time for
T-Mobile to integrate Sprint and deploy spectrum. Therefore, we
believe we could see a more benign near-term competitive
environment."
"In contrast, LCPR's largest competitor in the cable business is
Claro, which offers mostly slower DSL. We believe consumer trends
toward increasing data consumption will continue to favor LCPR and
its competitive advantage will strengthen. Barriers to entry are
high for new high-speed internet competitors given substantial
capital requirements to install fiber that can offer comparable
speeds to LCPR."
Still, S&P recognizes potential synergies between the two
businesses. S&P expects that most synergies will come from cost
savings including the following:
-- Systems and information technology: Roll off the transition
service agreement with AT&T;
-- Overhead - combining sales, accounting, legal, and other
back-office functions; and
-- Subsea savings based on moving the packet core onto the island
for increased caching.
S&P said, "However, we also believe there could be revenue
synergies from cross-selling opportunities because LCPR will be the
dominant quad-play provider on the island."
"We have not factored material savings into our base-case forecast
over the next year because we believe the costs to achieve will
exceed savings in 2021. For example, the migration of the billing
platform to Puerto Rico will cost millions of dollars to implement.
Longer term, we believe net savings could exceed $35 million."
There will be execution risk associated with implementing new
marketing strategies and migrating systems from AT&T to LCPR.
However, S&P believes there is much less risk than a horizontal
merger (i.e. T-Mobile buying Sprint) would present, given LCPR does
not have to manage the complexity associated with a network and
customer integration.
S&P said, "Longer-term, we continue to factor geographic
concentration and exposure to ongoing weak macroeconomic conditions
in Puerto Rico into our ratings. We continue to believe that
operations in a hurricane-prone region present unique environmental
risks. For starters, insurance coverage is now more expensive and
not as comprehensive. While we recognize that the company was able
to recover financially and operationally from Hurricane Maria in
2017 (with high-speed data subscribers now well above pre-hurricane
levels), it is unclear how another natural disaster of this
magnitude could affect LCPR's financial health."
"Secondly, we believe it's possible that a challenging
macroeconomic environment in Puerto Rico could impair subscriber
trends over time, particularly if residents choose to permanently
leave the island."
"Our issuer credit rating represents the stand-alone credit profile
of LCPR. LCPR is 100% owned by Liberty Latin America Ltd. (LLA),
which also owns Cable & Wireless Communications PLC and VTR Finance
BV. While LLA has a group credit profile assessment of 'bb-', we do
not equalize the ratings because LCPR only accounts for about 25%
of total earnings and there are no contractual obligations to
incentive support, such as cross-default provisions among the
different credit pools. Furthermore, there is minimal operational
overlap between the group members. Still, we do believe LLA would
support LCPR in periods of temporary stress and consider it
moderately strategic to the group."
"The stable outlook reflects our belief that debt to EBITDA will
approach 4x by the end of 2021, but that there is uncertainty
around the owner's long-term financial policy, as well as a modest
amount of execution risk associated with acquired properties."
"Although unlikely over the next year, we could lower the rating if
leverage rose above 5x. We believe this is unlikely to occur from
COVID-19-related operational stress given that even a 6%-8% decline
in revenue and a 100-200 basis point contraction in EBITDA margins
is unlikely to cause leverage to rise above 5x by itself.
Therefore, we believe it would likely take a confluence of events,
such as debt-financed shareholder returns and execution missteps,
to cause a downgrade."
"Although unlikely over the next year, we could raise the rating if
leverage were to fall below 4x on a sustained basis. An upgrade
would need to be accompanied by demonstration of successful
integration of acquired wireless operations, including steady churn
and EBITDA margins, along with a more clearly defined financial
policy with a commitment to maintaining leverage below 4x
longer-term."
LINDEN PONDS: Moody's Affirms BB Rating on $117MM Revenue Bonds
---------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on approximately $117
million revenue bonds series 2018 that were issued by Massachusetts
Development Finance Agency on behalf of Linden Ponds, Inc. (LP).
The Rating Outlook is Stable.
SECURITY
The bonds are secured by a pledge of gross revenues, a first
mortgage on the property and a DSRF. Debt service payments on the
bonds are senior to any subordinate debt obligations and annual
management fees, which enhances senior bondholder security.
KEY RATING DRIVERS
CONSTRAINED LONG-TERM LIABILITY PROFILE: The 'BB' rating primarily
reflects LP's constrained long-term liability profile, which is
characterized by a manageable debt burden and hindering subordinate
debt structure. LP's maximum annual debt service (MADS) equates to
12.4% of fiscal 2019 revenues and its debt to net available
measured a solid 5x in fiscal 2019, which both compare favorably to
Fitch's below-investment-grade (BIG) medians. However, LP has
approximately $20 million outstanding in subordinate zero-coupon
bonds, which are payable annually from available excess cash flow
and will limit LP's ability to materially improve its liquidity
position until the bonds are paid off.
ADEQUATE LIQUIDITY POSITION: Following completion of its most
recent independent living unit (ILU) expansion project and receipt
of its remaining initial entrance fees, LP improved its
unrestricted cash and investments to $32.7 million at the six-month
interim period (ending June 30, 2020), which translates into 210
days cash on hand (DCOH), 29% cash to debt, and 4.1x cushion ratio.
All three metrics remain on par with or below Fitch's BIG category
medians. Fitch believes LP's liquidity position remains adequate
for its current rating level given its strong operations, low debt
burden, and consistently solid demand.
SOLID DEMAND: LP's attractive pricing and favorable reputation has
translated into solid demand in recent years. Over the last three
fiscal years, LP has averaged occupancy of 94% in its ILUs, 97% in
its memory-care units (MCUs), 96% in its assisted living units
(ALUs), and 97% in its skilled-nursing facility (SNF) beds. While
census levels are expected to soften over the short-term due to
disruptions from the coronavirus pandemic, Fitch believes LP's
demand indicators are strong and should support solid census levels
over the longer term.
STRONG OPERATIONS: LP's solid census, effective expense controls,
and recent completion of its ILU expansion project has produced
strong historical operations and coverage levels. Over the last
three fiscal years, LP has averaged 94.4% operating ratio, 15.2%
net operating margin (NOM), and 25.8% NOM-adjusted (NOMA), which
all compare favorably to Fitch's BIG category medians. LP's solid
operations and consistent cash flow levels have produced a strong
average 2.3x MADS coverage and 1.2x revenue-only coverage over the
last three fiscal years.
ASYMMETRIC RISK FACTORS: There are no asymmetric risk factors
affecting this rating determination.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Although outside of the outlook period, successful paydown of
its subordinate debt and further improvement in its unrestricted
cash reserves.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Any unexpected operational pressures that deteriorate coverage
levels or LP's unrestricted reserves.
- Fitch believes LP has minimal debt capacity at its current
rating level; therefore, any additional debt without a commensurate
increase in liquidity would pressure the rating.
- Should economic conditions decline further than expected from
Fitch's current expectations or should a second wave of infections
occur, Fitch would expect further pressures on LP's revenue base.
If there are significant additional pressures on LP's revenue base,
which materially impacts its operations, cash flow levels, or
unrestricted reserves, there could be rating pressure.
CREDIT PROFILE
LP is a not-for-profit corporation established in 2002 for the
purpose of operating a life plan community (LPC). LP operates a
Type-C CCRC, which is located on a 108-acre campus in Hingham, MA,
approximately 17 miles southeast of Boston, MA. The campus, which
opened in 2004, consists of: 1,086 ILUs, 22 ALUs, 44 MCUs, and 66
SNF beds. LP's ILUs include its recently completed Willard Square
building, which was completed in June 2018 and added 104 new ILUs
to its campus. Currently, LP only offers 90% refundable
fee-for-service (Type-C) contracts to its residents.
LP's sole member is National Senior Campuses, Inc. (NSC), a
not-for-profit organization that is committed to providing housing,
healthcare, and other related services to seniors. NSC provides
governance oversight and strategic planning for 16 CCRCs throughout
the U.S., including LP. Additionally, LP contracted Erickson Living
Management (ELM) to provide management services. As part of this
agreement, LP pays ELM annual base and incentive fees, which
totaled $2.4 million in fiscal 2019. ELM's management fees are
subordinate to debt service. In fiscal 2019, LP reported total
operating revenues of approximately $64 million.
CONSTRAINED LONG-TERM LIABILITY PROFILE
LP's long-term debt outstanding consists of $117 million in series
2018 bonds and approximately $20 million in subordinate series
2011B bonds. The senior 2018 bonds are fixed-rate and have a MADS
of approximately $7.9 million. Overall, LP's debt burden remains
low as evidenced by MADs equating to 12.4% of fiscal 2019 revenues,
which compares favorably to Fitch's BIG median of 16.4%.
Additionally, LP's debt to net available measured a solid 5x in
fiscal 2019, which also compares favorably to Fitch's BIG median of
11.8x.
However, despite LP's low debt burden, the affirmation of the 'BB'
rating largely reflects its constrained long-term liability profile
due to its subordinate debt structure. LP's subordinate series
2011B bonds are zero-coupon obligations that mature in 2056. Per
LP's audited financial statements, the bonds carry a 6.13% net
discount rate, which equated to a discount of approximately $22
million in fiscal 2019. Beginning Dec. 31, 2018, the series 2011B
bonds are payable annually from any available excess cash flow,
which is defined as net income available for debt service, less
routine capital needs and debt service on all senior debt.
Depending on its annual DCOH at the time, LP will use anywhere from
30%- 50% of its net cash flow to support debt payments of its
subordinate debt. This will hinder its ability to meaningfully
improve its liquidity position until the bonds are paid down. The
presence of the subordinate debt that seizes excess cash flow is a
credit negative and reflected in the 'BB' rating.
SOLID DEMAND
Despite historical census pressures and the presence of
competitors, LP has demonstrated strong demand across all levels of
care in recent years. Over the last three fiscal years, LP averaged
a strong 94% in its ILUs, 97% in its MCUs, 96% in its ALUs, and 97%
in its SNF beds. Fitch attributes LP's strong census to its solid
market reputation, attractive service offerings, and its favorable
residency contracts. However, like most senior living providers,
Fitch expects LP's census levels to soften over the short-term due
to disruptions from the coronavirus pandemic, which can be somewhat
evidenced by its six-month interim census levels of 93% in its
ILUs, 97% in its ALUs, 99% in its MCUs, and 67% in its SNF beds.
However, despite the softening, Fitch believes LP's demand
indicators are strong and expects census levels to remain solid
over the longer term.
ADEQUATE LIQUIDITY
At the six-month interim period, LP had approximately $32.7 million
in unrestricted cash and investments, which translates into 210
DCOH, 29% cash to debt, and 4.1x cushion ratio. All three metrics
remain on par or below Fitch's BIG medians of 307 DCOH, 30% cash to
debt, and 4.2x cushion ratio. Fitch attributes LP's recent
liquidity growth to the completion of its ILU expansion project and
the receipt of initial entrance fees which flowed directly to its
balance sheet. Additionally, Fitch notes that LP's cash to debt is
somewhat overstated due to the accounting treatment for its
zero-coupon subordinate bonds. However, Fitch believes LP's
liquidity position is sufficient for its rating level given its
solid historical demand, consistent operations, and strong coverage
levels.
STRONG OPERATIONAL PERFORMANCE
LP's solid census, strong expense management practices, and
consistent cash flow levels have produced strong operations and
coverage levels in recent years. In fiscal 2019, LP had a 92.4%
operating ratio, 16.3% NOM, and 30.2% NOMA which all compare
favorably to Fitch's BIG medians of 101.2%, 4.8%, and 17.7%,
respectively. Additionally, in fiscal 2019, LP produced a 2.9x MADS
coverage and 1.3x revenue only coverage, which are both higher than
Fitch's BIG medians of 1.2x and 0.6x, respectively. Despite
pressures from the pandemic, LP has maintained its strong
operational performance as evidenced by its 88.6% operating ratio,
20.3% NOM, and 19.4% NOMA at the six-month interim period. Fitch
attributes the maintenance of LP's strong performance to its solid
expense management practices, maintenance of its solid ILU census
levels, and receipt of stimulus funding. LP has received
approximately $1.5 million in stimulus funding to help offset
revenues and expense pressures from the pandemic.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
LIVE NATION: S&P Lowers ICR to 'B'; Outlook Negative
----------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
Live Nation Entertainment Inc. to 'B' from 'B+'. The outlook is
negative.
At the same time, S&P lowered its issue-level ratings on Live
Nation's secured debt to 'B+' from 'BB-' and on the company's
unsecured debt to 'B-' from 'B'.
The downgrade and negative outlook reflect the prolonged nature of
the coronavirus pandemic and S&P's revised expectation that a
substantial return to live music events will not occur until
mid-2021, when a vaccine is presumed to be widely available. S&P
believes there is substantial risk that ongoing delays in
controlling the pandemic could hurt live event scheduling and
attendance such that Live Nation's liquidity is diminished toward
the $500 million minimum liquidity covenant and it is not able to
reduce leverage below 7.5x by 2022.
The ongoing coronavirus pandemic will cause Live Nation to generate
minimal revenue until the expected return of live events in
mid-2021.
Global social distancing efforts and government policies aimed at
controlling the coronavirus pandemic have caused a cessation in
live music events for Live Nation since March, which has greatly
reduced revenue in the company's busiest concert period, May
through October. Specifically, the company's revenue was down
roughly 95% for the second and third quarters of 2020, and by the
end of September, Live Nation's concert business had cancelled over
5,000 concerts and postponed nearly 6,000 events due to the
pandemic.
S&P said, "While the timing and pace of a pandemic recovery are
uncertain, we believe a return to large-scale live music events is
likely by mid-2021, by which time we assume a safe and effective
coronavirus vaccine would be available and widely distributed in
Live Nation's key markets. However, we expect a resumption of live
music events will vary broadly by geography, local social
distancing regulations, event type, and audience demographics. We
expect outdoor venues like festivals and amphitheaters to return
before indoor venues such as arena tours and concert halls. In
addition, while we expect shows to return at half-capacity or
greater, we anticipate that social distancing measures will likely
restrict capacity as audiences return to live events."
"As a result, we expect most revenue in 2021 will be generated in
the second half of the year and that total revenue will be between
55% and 65% of 2019 levels. In 2022, we expect improving consumer
confidence and a substantial resumption in live event scheduling
will cause revenue to improve in line with 2019 levels."
"We expect EBITDA and cash flow will remain negative into mid-2021,
causing net debt and leverage to remain elevated longer term."
"The company has taken substantial actions to realign its cost
structure in the face of dramatically lower revenue during this
period of diminished concert activity. These actions include rent
re-negotiations, cuts to executive compensation, staff furloughs,
and layoffs. The company is also proactively managing its working
capital and capital expenditures to preserve cash. While we believe
these efforts have partially stemmed the company's cash burn, we
still expect the company's EBITDA and free cash flow generation
will be substantially negative in the fourth quarter of 2020 and
the first half of 2021 until concerts and ticketing revenue return
at scale. Specifically, we expect adjusted FOCF to debt to be
negligible in 2021 before improving to the 5%-7% range in 2022.
Similarly, we believe the company's S&P Global Ratings-adjusted net
leverage will remain elevated above the 10x area in 2021 and the 6x
area in 2022 as these operating costs partially deplete available
cash, thereby increasing net debt longer term."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
S&P said, "The negative outlook reflects Live Nation's exposure to
postponed and canceled events during the COVID-19 pandemic and
uncertainty surrounding the ensuing economic recovery and timing of
the resumption of events in 2021. We believe there is substantial
risk that social distancing could persist for an extended period or
that the company will be unable to successfully manage its cost
structure such that liquidity is substantially diminished, leverage
remains above 7.5x, and FOCF to debt remains below 5% in 2022."
"We could lower the rating if we believed that live music event
postponements and cancelations would increase due to a prolonged
coronavirus pandemic causing revenue to remain minimal in 2021. We
could also lower the rating if the company were unable to
successfully manage its costs and cash flows, including an
unfavorable acceleration of cash refunds for postponed live events
and corresponding reductions in cash balances. Under these
scenarios, we believe the company could diminish its liquidity
reserves, increasing the risk of a covenant violation. We expect
these scenarios would equate to leverage remaining above 7.5x and
FOCF to debt remaining negligible in 2022."
"We could revise the outlook to stable if we expected live music
events to resume close to 2019 levels in the summer of 2021 and the
company to contain its variable cost structure while restoring cash
flows despite the disruption caused by the coronavirus. Under this
scenario, we would expect the company to maintain leverage well
below 7.5x in 2021 and beyond."
LRGHEALTHCARE: Other Possible Bidders Emerge to Buy Assets
----------------------------------------------------------
Bob Sanders of NH Business Review reports that there's a good
chance that the owner of Concord Hospital may face some competition
in its $30 million bid to acquire LRGHealthcare, which could drive
up the price but also could result in costly and cumbersome
litigation that would draw out the process.
The amount of interest in the bankrupt owner of Lakes Region
General Hospital in Laconia and Franklin General Hospital in
Franklin and other affiliates, "has been striking," said LRGH
attorney Victor Milione, at the Tuesday, November17, 2020,
bankruptcy hearing
Some 47 potential bidders have expressed interest in buying the
assets of LRGH, and at least 10 have gone to the "reading room" to
conduct due diligence, indicating that they may be serious in
making an offer, Milione told the court.
With so many potential bidders, the situation represents quite a
change for cash-strapped LRGH, which had been trying for several
years to find a buyer. After Covid-19 hit, Capital Region Health
Care – the organization that owns Concord Hospital as well as a
number of other healthcare providers – seemed to be the only one
interested in acquiring LRGH, and then and only if the LRGH filed
for Chapter 11 bankruptcy protection to lessen the burden of its
$111 million in debt.
Capital Region became the "stalking horse" in the bankruptcy
auction, willing to commit to buying LRGH. In exchange, the
bankruptcy handicapped all other bidders by requiring them to pay
the hospital a fee if it's outbid at auction. But with so little
interest shown in the past, most observers expected that Capital
Region would be the only one to actually make a competing bid,
resulting in a relatively quick process, signed sealed and
delivered shortly after the Dec. 16, 2020 auction.
Issues raised
Indeed, many of the decisions made during Tuesday's hearing, held
by telephone because of the pandemic, seemed based on the idea that
this would be a non-contentious proceeding.
One issue was the amount of money to be used to pay off Key Bank,
LRGH's main creditor, before the sale.
Andrew Helman, representing the state of New Hampshire, objected to
the amount, saying that LRGH would be left with three days worth of
cash if approved.
But Bankruptcy Judge Michael A. Fagone overruled the objection,
arguing that there appeared to be enough cash on hand, given that
LRGH would soon be sold quickly and besides, all the parties
depended on this arrangement, so that the sale would happen
smoothly.
"It's more than a payment," said Fagone. "The whole thing must be
taken holistically."
Another major issue was whether to waive the requirement that LGRH
appoint a third-party independent patient ombudsman. The bankruptcy
trustee objected to the request, arguing that Congress put this in
the bankruptcy code to protect vulnerable patients during a cash
crunch.
But Christopher M. Desiderio, another attorney for LRGH, argued
that it would be costly and "distracting" to meet the requirement.
Fagone overruled this objection as well, though he said that he did
so with some trepidation. He noted that the law also gave
bankruptcy judges the power to waive the requirement based on
particular conditions, and given what was thought to be the
relatively quick nature of the sale, an ombudsman was "not
warranted at this time."
But in the end, he pointed out, a bidding war could result in
litigation, adding that he didn't feel comfortable conducting a
trial telephonically if that occurs. He asked all of the attorneys
to prepare for the possibility of a zoom trial, and even scheduled
a date for a pre-trial hearing to go over procedures to schedule
time to test the technology.
About LRGHealthcare
LRGHealthcare -- http://www.lrgh.org/-- is a not-for-profit
healthcare charitable trust operating Lakes Region General
Hospital, Franklin Regional Hospital, and numerous other affiliated
medical practices and service programs.
LRGH is a community based acute care facility with a licensed bed
capacity of 137 beds, and FRH is a 25-bed critical access hospital
with an additional 10-bed inpatient psychiatric unit. In 2002,
Lakes Region Hospital Association and Franklin Regional Hospital
Association merged, with the merged entity renamed LRGHealthcare.
LRGHealthcare offers a wide range of medical, surgical, specialty,
diagnostic, and therapeutic services, wellness education, support
groups, and other community outreach services.
LRGHealthcare filed a Chapter 11 petition (Bankr. D.N.H. Case No.
20-10892) on October 19, 2020. The petition was signed by Kevin W.
Donovan, president and chief executive officer. At the time of the
filing, the Debtor estimated to have $100 million to $500 million
in both assets and liabilities.
Judge Bruce A. Harwood oversees the case.
The Debtor tapped Nixon Peabody LLP as counsel; Deloitte
Transactions and Business Analytics LLP and Kaufman, Hall &
Associates, LLC as financial advisors; and Epiq Corporate
Restructuring, LLC as claims, noticing, solicitation, and
administrative agent.
LRGHEALTHCARE: Sets Bidding Procedures for Substantially All Assets
-------------------------------------------------------------------
LRGHealthcare asks the U.S. Bankruptcy Court for the District of
New Hampshire to authorize the bidding procedures in connection
with the sale of substantially all assets to Concord Hospital, Inc.
for $30 million, subject to overbid.
The Debtor has been in a precarious financial state for the past
several years. Despite significant cost-cutting and
revenue-improvement measures, it has been unable to overcome its
operating deficit. In 2018, LRGH hired Kaufman Hall & Associates,
LLC to assist in marketing its businesses. Ultimately, with the
assistance of Kaufman Hall, LRGH identified the Stalking Horse as a
potential acquirer of its assets. Over the past four months, LRGH
and the Stalking Horse have engaged in significant arms'-length
negotiations for the sale of LRGH's assets and post-petition
financing to ensure that the Debtor can further market its assets
and hope to obtain a higher or otherwise better bid at a public
auction through a section 363 sale process. In light of the
Debtor's financial position, the only other alternative for the
Debtor is to close its doors, which would result in the elimination
of emergency services to an underserved community, the termination
of hundreds of employees, and virtually no recovery for any
creditor constituency.
In light of these circumstances, the Debtor believes the Bidding
Procedures are an appropriate mechanism to maximize the value of
the its assets and to provide continuity of patient care and
employment in the communities that it serves. Additionally, it
believes the Stalking Horse is a financially sound buyer who will
be able to obtain, in short order, the necessary non-bankruptcy
regulatory approvals to permit a sale without interruption in
service.
Notwithstanding its dire financial position, the Debtor's agreement
with the Stalking Horse subjects its offer for substantially all of
the Debtor's assets to a competitive, but quick, auction process.
The Stalking Horse has spent considerable time, effort, and
expense, and as a result the Stalking Horse has asked for bidder
protection. The Debtor also believes the timeline for the auction
is appropriate on the facts and circumstances of this case,
especially because of the limited funding available.
The salient terms of the Stalking Horse APA are:
a. Purchase Price: $30 million
b. Acquired Assets: Substantially all assets
c. Assumed Liabilities: Effective upon Closing, (a)
obligations of the Debtor arising on or after the Closing Date
under the Assumed Contracts will be assumed by the Buyer that is
the assignee of such Assumed Contract (and no other Buyer); (b) the
Assumed Employee Benefit Plans will be assumed by the Stalking
Horse (and no other Buyer); (c) vacation, holiday, and sick leave
accumulations of the Hired Employees, but only to the extent listed
in Schedule 5.5(a), of the Stalking Horse Agreement, and related
Taxes thereon, will be assumed by the Buyer who becomes the
employer of such Hired Employee (and no other Buyer); and (d) the
Debtor's obligations, if any, described in Schedule 2.3 of the
Stalking Horse Agreement will be assumed by the Stalking Horse (and
no other Buyer).
d. Closing: March 31, 2021
e. All of the Debtor's rights, title, and interest in the
Acquired Assets will be sold free and clear of any liens, security
interests, claims, charges, or encumbrances. Any such liens,
security interests, claims, charges, or encumbrances will attach to
the amounts payable to the Debtor's estate resulting from the
Sale.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Nov. 30, 2020 at 4:00 p.m. (EST)
b. Initial Bid: The bid has value to the Debtor that is
greater than or equal to (i) the Total Transaction Value, plus (ii)
$1.35 million ("Break up fee") plus (iii) $1 million ("Initial
Overbid").
c. Deposit: 10% of the Proposed Purchase Price
d. Auction: If one or more timely Qualified Bids is received,
the Debtor will conduct the Auction on Dec. 8, 2020, at 10:00 a.m.
at the offices of Nixon Peabody LLP, 900 Elm Street, Manchester,
NH 03101-2031, or such other place and time as the Debtor will
notify all Qualified Bidders, including the Stalking Horse, counsel
for the Stalking Horse Bidder, any official committee, and other
parties invited to attend by the Debtor. The Debtor may conduct
the Auction remotely to the extent necessary to comply with
applicable COVID-19 health guidelines.
e. Bid Increments: $250,000
f. Sale Hearing: Dec. 17, 2020 at 10:00 a.m. (EST)
g. Sale Objection Deadline: Dec. 4, 2020 at 4:00 p.m. (EST)
h. By the Bid Deadline, parties holding a valid lien on some
or all of the Acquired Assets that secures an allowed secured claim
may submit a credit bid for some or all of such Acquired Assets
subject to such valid lien to the fullest extent permitted under
section 363(k) of the Bankruptcy Code.
The Debtor proposes to serve the Procedures Notice within five
business days after entry of the Sale-Procedures Order on the
Procedures Notice Parties. Moreover, it also proposes on or before
five business days after entry of the Sale-Procedures Order, to
cause the Sale Notice, modified in a manner appropriate for
publication and approved by the Stalking Horse, to be published in
the Boston Herald and the New Hampshire Union Leader.
The Debtor asks approval of the procedures notifying counterparties
to Contracts of potential Cure Amounts with respect to those
Contracts that it may ask to assume and assign on the Closing Date.
Within five business days of the entry of the Sale-Procedures
Order, the Debtor will file the Notice of Assumption and
Assignment, and will serve such notice on the Contract Notice
Parties. The Contract Objection Deadline is 4:00 p.m. (EST) on
Dec. 15, 2020.
In light of the deadlines set forth in the Stalking Horse
Agreement, the Debtor asks that the Court waives the 14-day stay
period under Bankruptcy Rules 6004(h) and 6006(d) or, in the
alternative, if an objection to the Sale is filed, reduce the stay
period to the minimum amount of time needed by the objecting party
to file its appeal.
A copy of the Bidding Procedures and Stalking Horse APA is
available at https://tinyurl.com/y3o283kc from PacerMonitor.com
free of charge.
About LRGHealthcare
LRGHealthcare -- http://www.lrgh.org/-- is a not-for-profit
healthcare charitable trust operating Lakes Region General
Hospital, Franklin Regional Hospital, and numerous other affiliated
medical practices and service programs.
LRGH is a community based acute care facility with a licensed bed
capacity of 137 beds, and FRH is a 25-bed critical access hospital
with an additional 10-bed inpatient psychiatric unit. In 2002,
Lakes Region Hospital Association and Franklin Regional Hospital
Association merged, with the merged entity renamed LRGHealthcare.
LRGHealthcare offers a wide range of medical, surgical, specialty,
diagnostic, and therapeutic services, wellness education, support
groups, and other community outreach services.
LRGHealthcare filed a Chapter 11 petition (Bankr. D.N.H. Case No.
20-10892) on Oct. 19, 2020. The petition was signed by Kevin W.
Donovan, president and CEO. At the time of the filing, the Debtor
was estimated to have $100 million to $500 million in both assets
and liabilities.
Judge Bruce A. Harwood oversees the case.
The Debtor tapped Nixon Peabody LLP as counsel; Deloitte
Transactions and Business Analytics LLP and Kaufman, Hall &
Associates, LLC as financial advisors; and Epiq Corporate
Restructuring, LLC as claims, noticing, solicitation, and
administrative agent.
MALLINCKRODT PLC: Can't Stop Antitrust Claims, Says Illinois City
-----------------------------------------------------------------
Law360 reports that the city of Rockford, Illinois, told a federal
court Tuesday, November 17, 2020, that Mallinckrodt's bankruptcy
should have no impact on the prosecution of claims against Express
Scripts for allegedly working with the troubled drug company to
inflate prices of the hormone treatment Acthar.
The city filed a response Tuesday, November 17, 2020, opposing a
bid from pharmacy benefits manager Express Scripts and several of
its subsidiaries to pause all proceedings in the antitrust case
until key issues in Mallinckrodt's bankruptcy can be resolved. The
bankruptcy has automatically stayed the claims against
Mallinckrodt, and the drugmaker has asked the bankruptcy court to
extend that stay.
About Mallinckdrodt
Mallinckrodt -- http://www.mallinckrodt.com/-- is a global
business consisting of multiple wholly owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
As of March 27, 2020, the Company had $10.17 billion in total
assets, $8.27 billion in total liabilities, and $1.89 billion in
total shareholders' equity.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware in the U.S. (Bankr. D.
Del. Lead Case No. 20-12522) to seek approval of a restructuring
that would reduce total debt by $1.3 billion and resolve
opioid-related claims against the Company.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Latham & Watkins LLP, Ropes & Gray LLP and Wachtell, Lipton, Rosen
& Katz are serving as counsel to the Company, Guggenheim
Securities, LLC is serving as investment banker and AlixPartners
LLP is serving as restructuring advisor to Mallinckrodt. Hogan
Lovells is serving as counsel with respect to the Acthar Gel
matter. Prime Clerk LLC is the claims agent.
MATCHBOX FOOD: Has New Owner, To Open New Locations
---------------------------------------------------
Jeff Clabaugh of WTOP News reports that Matchbox Food Group, which
filed for Chapter 11 bankruptcy in August 2020, has emerged from
reorganization under new ownership and with plans to open new
locations.
The Matchbox chain is now owned by Reston, Virginia-based Thompson
Hospitality, which has been managing Matchbox restaurants for the
past two years.
As part of the reorganization, Matchbox restaurants on 14th Street,
NW in D.C. and at Potomac Mills in Virginia's Prince William County
are permanently closed, as are Matchbox outposts in Texas’
Preston Hollow and Dallas.
Matchbox was forced into bankruptcy reorganization largely due to
the negative impact the coronavirus pandemic has had on the
restaurant industry. Thompson Hospitality said the reorganization
has enabled it to deleverage its balance sheet, and rationalize its
store footprint.
"Never before have we experienced such trying times in the
restaurant industry and the fact that this brand will continue to
live on is one bright spot during these unprecedented times," said
Warren Thompson, president of Thompson Hospitality.
Matchbox will open several new locations — though the new
restaurants will be smaller, averaging less than 4,000 square feet,
and will increase focus on delivery and takeout.
New locations include Reston Metro Plaza at the Wiehe-Reston East
Metro station, at Northwest D.C.'s Cathedral Commons replacing the
former Grilled Oyster Co. restaurant and in Fort Lauderdale,
Florida. It will seek franchise partners for additional new
locations.
Matchbox opened its first restaurant in D.C.'s Chinatown in 2003.
It has restaurants in Capitol Hill and Penn Quarter in D.C.,
Merrifield, One Loudoun, Pentagon City and Charlottesville in
Virginia and Bethesda, Rockville and Silver Spring in Maryland, as
well as one location in Sawgrass Mills, Florida.
Thomson Hospitality's other restaurants include Hen Quarter in
Alexandria, The Delegate in D.C., American Tap Room in Reston and
Austin Grill in Springfield.
About Matchbox Food Group LLC
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.
MERITOR INC: Fitch Assigns BB- Rating to New $275MM Unsec. Notes
----------------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB-'/'RR4' to Meritor,
Inc.'s (MTOR) proposed issuance of $275 million in senior unsecured
notes due 2028. Proceeds from the proposed notes will be used to
refinance a portion of the company's $450 million in 6.25% senior
unsecured notes due 2024.
MTOR's Long-Term Issuer Default Rating (IDR) is 'BB-'. The Rating
Outlook is Stable.
KEY RATING DRIVERS
Ratings Overview: Fitch expects the fundamental improvements MTOR
has made to its operating performance and credit profile over the
past five years will help it to continue managing the uncertainties
of the current macro environment. Fitch expects improved global
market conditions in fiscal 2021 will allow the company's credit
protection metrics to return to levels more commensurate with its
current ratings by the end of the year, and a return to more
typical market conditions in fiscal 2022 could lead to further
improvement in the company's credit profile.
Rating Concerns: Aside from the effects of the coronavirus
pandemic, Fitch's primary rating concern remains the extreme
cyclicality of the global commercial truck and off-highway vehicle
markets. Heavy shifts in market demand over relatively short time
periods increase the importance of MTOR maintaining relatively
conservative mid-cycle credit metrics. Prior to the current
downturn, MTOR had grown margins and generated positive FCF through
the peaks and troughs of the Class 8 cycle, representing a marked
improvement from previous cycles, when margins and FCF were heavily
pressured at both the top and the bottom of the typical cycle.
Other rating concerns include heavy competition in the commercial
truck driveline sector, particularly in North America, as well as
volatile raw material costs, which can pressure margins despite
pass-through mechanisms in many customer contracts. MTOR's
heightened interest in acquisition opportunities over the past
several years and an increased emphasis on share repurchases are
also concerns, although Fitch expects most future acquisitions will
be smaller bolt-on transactions, as opposed to larger
transformative acquisitions. The company has also pulled back on
share repurchases during the pandemic, and Fitch expects share
repurchase activity will remain limited over the next year as the
company focuses leverage reduction.
Resilient Profitability: Fitch expects MTOR's EBITDA margin will be
below 10% in fiscal 2021, as the global commercial vehicle industry
continues to recover. Beyond fiscal 2021, Fitch expects MTOR's
margins to rise back into Fitch's previously expected range.
Margins will be supported, in part, by a combination of pricing and
new product introductions, as well as cost flexibility achieved
through MTOR's M2022 strategic plan.
Moderate Leverage: Fitch expects MTOR's gross EBITDA leverage
(gross debt/EBITDA as calculated by Fitch) to run roughly in the
3x-4x range over the intermediate term beginning in fiscal 2021.
Fitch also expects FFO leverage to run roughly in the 3.5x-5.0x
range over that same timeframe, with both leverage metrics running
closer to the high end of the expected ranges fiscal 2021 and
declining toward the lower end over subsequent years.
Solid FCF: Fitch expects MTOR's FCF margin to run at about 2.5% in
fiscal 2021 and to rise back toward 4.0% in fiscal 2022, similar to
the company's actual FCF margin in fiscal 2019. Fitch expects capex
as a percentage of revenue to run in the 2.5% to 3.0% range over
the intermediate term.
DERIVATION SUMMARY
MTOR is a capital goods supplier with product lines focused
primarily on driveline components and brakes for commercial
vehicles, off-highway equipment and trailers. Compared with its
primary competitor, Dana Incorporated (BB+/Negative), MTOR is
smaller and fully focused on the capital goods industry, without
any meaningful light vehicle exposure. That said, MTOR generally
retains a top-three market position in most of the product segments
where it competes.
Compared with other capital goods and automotive suppliers rated in
the 'BB' category, including Dana, Allison Transmission Holdings,
Inc. (BB/Stable) and The Goodyear Tire and Rubber Company
(BB-/Negative), MTOR's margins, FCF generation and leverage have
trended toward levels more commensurate with issuers in the middle
of the category, while a couple years ago, its metrics were more in
line with issuers at the lower end of the category. Prior to the
coronavirus outbreak, MTOR's EBITDA leverage had trended down
toward the mid-2x range from the high-3x range several years ago,
while EBITDA margins had risen above 10%. FCF margins had improved,
and the company generated consistently positive annual FCF through
the last commercial vehicle cycle.
No country-ceiling, parent/subsidiary or operating environment
aspects impact the rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Global commercial truck production partially recovers in
fiscal 2021 but does not reach the fiscal 2019 level for several
years;
-- Revenue rises in fiscal 2021 and fiscal 2022 on improving
demand conditions, new business wins and some pricing improvement;
-- Capex runs at about 2.5%-3.0% revenue in fiscal 2021 and the
following years;
-- The FCF margin in FY2021 runs close to 2.5% and rises toward
4.0% in fiscal 2022;
-- The company curtails share repurchase activity until market
conditions are more stable;
-- The company maintains a solid liquidity position, including
cash and revolver capacity, over the next several years.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Maintaining mid-cycle debt/EBITDA leverage below 3.0x;
-- Maintaining mid-cycle FFO leverage below 4.5x;
-- Maintaining a mid-cycle FCF margin of 2.0% or higher;
-- Maintaining a mid-cycle EBITDA margin above 10%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A material deterioration in the global commercial truck or
industrial equipment markets for a prolonged period;
-- An increase in mid-cycle debt/EBITDA leverage to above 4.0x
for an extended period;
-- An increase in mid-cycle FFO leverage to above 5.0x for an
extended period;
-- A decline in the mid-cycle FCF margin to below 1.0% for an
extended period;
-- A decline in the mid-cycle EBITDA margin to below 8.5% for an
extended period.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch expects MTOR's liquidity will remain
adequate over the intermediate term. The company had $315 million
in cash and cash equivalents at Sept. 30, 2020 and full
availability on its $625 million secured ABL revolving credit
facility that matures in 2024 (although it will mature on Nov. 15,
2023 if $75 million of its 6.25% notes remains outstanding). In
November 2020, the revolver was upsized to $685 million, following
the addition of an incremental lender to the facility.
Based on its criteria, Fitch has estimated the amount of cash that
it believes MTOR needs to keep on hand to cover seasonal changes in
cash flows without any incremental borrowing, and it treats this
cash as not readily available for purposes of calculating net
metrics. Based on the company's recent performance, Fitch has
treated $10 million of MTOR's cash as not readily available.
Debt Structure: As of Sept. 30, 2020, the principal value of MTOR's
long-term debt, including off-balance sheet factoring, was $1.4
billion. MTOR's debt consists of $750 million in senior unsecured
notes, $348 million in convertible notes, $166 million in secured
term loan borrowings and $154 million in off-balance sheet
factoring that Fitch treats as debt. Fitch does not include finance
leases in its debt calculations.
MTOR's convertible notes contain put and call features that allow
for earlier redemption. The company has called its remaining $23
million in 7.875% convertible notes due 2026 for redemption in
December 2020. The $325 million in 3.25% convertible notes due 2037
may be redeemed in fiscal 2025.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has adjusted MTOR's debt to include off-balance sheet
factored receivables. Also, for purposes of calculating
EBITDA-based metrics, Fitch has included dividends received from
equity method investments in its calculation of EBITDA. However,
Fitch has not included these dividends in its standalone
calculations of EBITDA or the EBITDA margin.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
MERITOR INC: Moody's Assigns B1 Rating to New $275MM Unsec. Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Meritor, Inc.'s
proposed $275 million senior unsecured notes. Meritor's existing
ratings, including the Ba3 Corporate Family Rating, the Ba3-PD
Probability of Default rating and the B1 senior unsecured debt
rating are all unaffected. The Speculative Grade Liquidity rating
of SGL-2 is also unaffected with this rating action. The outlook is
negative.
The proceeds from these notes will be used to redeem a portion of
the 6.25% senior unsecured notes due 2024.
RATINGS RATIONALE
Meritor's ratings reflect a strong competitive position as a major
supplier of commercial vehicle drivetrains, brakes, and aftermarket
products to the commercial vehicle, transportation, and industrial
sectors. Meritor's debt-to-EBITDA as of June 30, 2020 was high at
7x, reflecting already weak North American Class 8 build rates
heading into 2020 that were further depressed by the impact of the
coronavirus pandemic. Production levels are steadily improving with
expectations for fiscal 2021 North American Class 8 output to
eclipse the fiscal 2020 level. Prior to the shutdowns in March and
April of this year, EBITA margins had demonstrated solid growth,
reaching 9% for fiscal 2019 (including Moody's adjustments). After
the setback in fiscal 2020, Moody's expects margins to resume
growth in fiscal year 2021 as volumes improve and cost actions
taken in fiscal 2020 enhance operating leverage.
The negative outlook reflects the uncertain pace of recovery in
commercial vehicle production for Meritor's customers, lingering
manufacturing inefficiencies and the potential impacts from a
second wave of increasing coronavirus infection rates in the US and
Europe.
The Speculative Grade Liquidity rating of SGL-2 reflects
expectations for good liquidity through fiscal 2021 as Class 8
production levels steadily improve. The liquidity position is
supported by $315 million of cash on hand at September 30, 2020
along with full availability under the $625 million revolving
credit facility. The company generated $180 million of reported
free cash flow during fiscal year 2020, boosted by proceeds from
the termination of a distribution agreement with WABCO Holdings,
Inc. in March 2020. As a result, fiscal 2021 free cash flow is
expected to be meaningfully lower, but comfortably positive, as
working capital and incentive compensation return to more
normalized levels.
At September 30, 2020, the company had utilized $157 million of
receivables factoring and securitization facility arrangements
which has been an ongoing practice, but also represents a potential
funding risk if these programs are discontinued. Most of these
arrangements are under long-term committed facilities.
Meritor's role in the commercial vehicle industry creates exposure
to material environmental risks arising from increasing regulations
on carbon emissions. Favorably, as commercial vehicle manufacturers
introduce more electrified powertrains, Meritor is developing
products to meet this need in each of its customer end-markets and
regions.
Rating Assigned:
Issuer: Meritor, Inc.
New Senior Unsecured Notes at B1 (LGD5)
Ratings Unaffected:
Issuer: Meritor, Inc.
Corporate Family Rating, at Ba3
Probability of Default Rating, at Ba3-PD
Senior Unsecured Notes, at B1 (LGD5)
Outlook:
Issuer: Meritor, Inc.
Outlook, Negative
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded with evidence of greater than expected
financial flexibility including cost controls to produce an EBITA
margin in the mid-teens, EBITA-to-interest exceeding 5x, and
debt-to-EBITDA around the mid-2x level. The ratings could be
downgraded with expectations of an EBITA margin below 7%,
EBITA-to-interest approaching 2.5x or debt-to-EBITDA above 4x
through the second half of 2021. Other potential events that could
result in a downgrade include meaningful loss of market position, a
weakening of the liquidity profile or more aggressive financial
policies such as increased target leverage or return of capital to
shareholders.
The principal methodology used in these ratings was Automotive
Supplier Methodology published in January 2020.
Meritor, Inc. is a leading global supplier of drivetrain, mobility,
braking and aftermarket solutions for commercial truck, trailer,
off-highway, defense, specialty and aftermarket customers. Revenues
for the fiscal year ended Sept. 30, 2020 were approximately $3
billion.
MERITOR INC: S&P Rates New $275MM Senior Unsecured Notes 'BB-'
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '5'
recovery rating to Meritor Inc.'s proposed $275 million senior
unsecured notes due 2028. The '5' recovery rating indicated its
expectation that lenders would receive modest (10%-30%; rounded
estimate: 10%) recovery of their principal in the event of a
payment default. The company intends to use the net proceeds from
the notes to repay a portion of the outstanding 6.25% notes due
2024.
"The 'BB-' issue-level rating on Meritor's existing unsecured debt
and our '5' recovery rating remain unchanged, indicating our
expectation that lenders would receive modest (10%-30%; rounded
estimate: 10%) recovery of their principal in the event of a
payment default. The 'BB' issuer credit rating and negative outlook
also remain unchanged," S&P said.
MLK ALBERTA: Court Confirms Reorganization Plan
-----------------------------------------------
Judge Trish M. Brown has confirmed the First Amended Plan of
Reorganization filed by MLK Alberta LLC.
The Court in September approved the explanatory Disclosure
Statement and set an Oct. 29 hearing to consider confirmation of
the Plan.
Following the hearing, Judge Brown confirmed the Plan. A copy of
the order is available at:
https://www.pacermonitor.com/view/CCPTC6A/MLK_Alberta_LLC__orbke-20-31032__0116.0.pdf?mcid=tGE4TAMA
The Debtor's main asset is the real property described as one
commercial building complex. The tenants within the building pay
monthly rents.
Under the Plan, Class 1 Parkview Financial Fund 2015, LP, is
impaired. Any amounts in arrears as of the Effective Date, will be
added to the prepetition Allowed Claim. The resulting amount shall
be conclusively determined to be $5,541,625 referred to as the "New
Principal Balance" or "NPB." The Debtor shall repay the NPB in
monthly installments of $35,000 to be applied to interest accruing
on the NPB with the first monthly payment due on Oct. 20, 2020, and
continuing on the 20th day of each successive month.
Class 4 General Unsecured Claims are impaired. Each holder of an
Allowed Claim in this Class shall be paid the full amount of such
Claim, together with simple interest at the rate provided under 28
U.S.C. Sec. 1961 then in effect on the Confirmation Date (as of
July 10, 2020 - 0.65%) in a single installment of principal and
interest, payable on or before October 31, 2025. Each member of
this Class will, within 30 days after the Effective Date of the
Plan. Debtor estimates that the total amount of Allowed Claim(s)
within this class will be approximately $250,000.
The payments due under the Plan will be funded by the proceeds of
Debtor's continued operation of its business, equity infusions from
Alemseghed, plus the proceeds from the sale or refinance of the MLK
Property.
A full-text copy of the First Amended Plan of Reorganization dated
November 2, 2020, is available at https://tinyurl.com/yy6hstgn from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Douglas R. Ricks
VANDEN BOS & CHAPMAN, LLP
319 SW Washington St., Ste. 520
Portland, OR 97204
Tel: 503-241-4869
Fax: 503-241-3731
About MLK Alberta
MLK Alberta, LLC, based in Portland, OR, filed a Chapter 11
petition (Bankr. D. Ore. Case No. 20-31032) on March 18, 2020. In
the petition signed by Meron Alemseghed, sole member, the Debtor
was estimated to have $10 million to $50 million in assets and $1
million to $10 million in liabilities. The Hon. Trish M. Brown
oversees the case. Douglas R. Ricks, Esq., at Vanden Bos &
Chapman, LLP, serves as bankruptcy counsel to the Debtor.
MONTAGE RESOURCES: S&P Raises ICR to 'BB-' on Southwestern Deal
---------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Montage
Resources Corp. to 'BB-' (the same level as its issuer credit
rating on Southwestern Energy Co.) from 'B-' and removed it from
CreditWatch, where the rating agency placed it with positive
implications on Aug. 13, 2020. The outlook is stable.
The rating actions follow the completion of Southwestern's
acquisition of Montage. As part of the transaction, Southwestern
redeemed all of Montage's senior unsecured debt and placed any
borrowings outstanding under the company's credit facility on its
own $2.0 billion revolving credit facility.
Subsequently, S&P withdrew all of its ratings on Montage because
the company's debt has been repaid.
MONUMENT BREWING: Plan Confirmation Hearing Continued to Dec. 7
---------------------------------------------------------------
Judge Caryl E. Delano on Oct. 5, 2020 convened a hearing to
consider approval of Monument Brewing LLC's disclosure statement.
Following the hearing, the judge ruled that the Third Amended
Disclosure Statement contains adequate information and set a
hearing for Nov. 16, 2020 to consider confirmation of the Plan.
According to the hearing proceeding memo for the Nov. 16 hearing,
the confirmation hearing has been continued to Dec. 7, 2020 at 1:30
pm.
About Monument Brewing
Monument Brewing LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-10832) on Nov. 14,
2019. At the time of the filing, the Debtor had estimated assets
of between $50,001 and $100,000 and liabilities of between $100,001
and $500,000. The case is assigned to Judge Caryl E. Delano. The
Debtor tapped Samantha L. Dammer, Esq., at Tampa Law Advocates,
P.A., as its legal counsel.
MONUMENT BREWING: Unsecured Creditors to Recover 30% in Plan
------------------------------------------------------------
Monument Brewing, LLC filed the Third Amended Disclosure Statement
for Plan of Reorganization on October 8, 2020.
General unsecured creditors in Class 4 will receive an approximate
distribution of 30% of their allowed claims. The Debtor will pay
$40,000 to a Plan Pool. Creditors in this class will receive a pro
rata distribution in 120 monthly payments of $333.33 commencing on
the first month following Confirmation of the Plan.
In the prior iteration of the Disclosure Statement and Plan,
general unsecured creditors were projected to receive 28% of their
allowed claims.
A full-text copy of the second amended disclosure statement dated
October 1, 2020, is available at https://tinyurl.com/y6naxmcv from
PacerMonitor.com at no charge.
A full-text copy of the third amended disclosure statement dated
October 8, 2020, is available at https://tinyurl.com/yxaj563t from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Samantha L. Dammer
Tampa Law Advocates, P.A.
620 E. Twiggs Street, Suite 110
Tampa, FL 33602
Tel: (813) 288-0303
E-mail: sdammer@attysam.com
About Monument Brewing
Monument Brewing LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-10832) on Nov. 14,
2019. At the time of the filing, the Debtor had estimated assets of
between $50,001 and $100,000 and liabilities of between $100,001
and $500,000. The case is assigned to Judge Caryl E. Delano. The
Debtor tapped Samantha L. Dammer, Esq., at Tampa Law Advocates,
P.A., as its legal counsel.
NOBLE ACADEMY: S&P Cuts 2014A-B Lease-Revenue Bond Rating to 'BB'
-----------------------------------------------------------------
S&P Global Ratings lowered its rating to 'BB' from 'BB+' on Hugo,
Minn.'s series 2014A and 2014B lease-revenue bonds, supported by CS
Property Noble LLC and issued for Noble Academy. The outlook is
negative.
"The downgrade and negative outlook reflect the school's recent
expansion to two facilities, which resulted in enrollment falling
significantly short of projections in fall 2019 and weakening
maximum annual debt service coverage," said S&P credit analyst
Jessica Wood. This led to a covenant breach in fiscal 2019.
The rating and outlook reflect S&P's view of Noble's:
-- Recent expansion to a second site, which included additional
debt and capital spending, and reorganization of students across
the two campuses according to grade level, leading to some
transition risk and enrollment declines;
-- Weakened operations and maximum annual debt service (MADS)
coverage in recent years, which resulted in a covenant breach in
fiscal 2019;
-- High MADS burden and debt per student relative to that of its
peers; and
-- The structural risk associated with the bonds' maturity date
extending well beyond the term of the school's charter, as with
most charter school debt.
The rating also recognizes the following credit strengths:
-- Healthy cash levels, with 121 days' cash on hand at fiscal
year-end 2020;
-- Historically strong demand and solid academics; and
-- Location in a state that supports charter schools and provides
lease aid of approximately 90% of debt.
S&P views the risks posed by the COVID-19 pandemic to public health
and safety as an elevated social risk for all charter schools under
the rating agency's environmental, social, and governance factors.
It believes this is a social risk for Noble due to potential
per-pupil funding reductions or an increase in state holdbacks that
might occur as a result of recessionary pressures. Despite the debt
service coverage covenant breach in fiscal 2019, S&P believes the
school's governance risk is in line with that of other charter
schools. S&P believes the school's environmental risk is in line
with the rating agency's view of the sector as a whole.
The negative outlook reflects S&P's view that during the outlook
period, the school could experience further enrollment declines or
budget pressures, causing MADS coverage to weaken further. S&P
expects liquidity will remain solid for the rating. It expects the
school to remain in compliance with bond covenants.
S&P could lower the rating if Noble fails to meet enrollment
projections in fall 2021, particularly given the relocation of
students again; if debt service coverage does not improve in fiscal
2021; or if liquidity were to weaken significantly.
Given the school's high leverage, weakened operations, and reduced
coverage levels, a higher rating is unlikely during the one-year
outlook period.
NOBLE CORPORATION: Seeks to Hire KPMG LLP as Tax Consultant
-----------------------------------------------------------
Noble Corporation PLC, and its affiliates seek authority from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
KPMG LLP to provide them with tax consulting services.
The services KPMG will provide are:
Tax Consulting Services
a. Provide general tax consulting services with respect to
matters which arise, including preliminary engagement planning
activities related to discrete tax consulting projects.
b. Perform the following services related specifically to
rationalization of ownership interest in Noble NBD LP Holding and
Noble NBD Cayman LP partnership:
i. Review of the different alternatives for purposes of
realigning the ownership interest in Noble NBD LP Holdings and NBD
Partnership;
ii. Assist the Debtors with review of tax cost benefit
analysis associated with the preferred option;
iii. Develop a macro step plan associated with the proposed
restructuring;
iv. Provide research and analysis on certain US tax and
reporting issues pertaining to the proposed restructuring;
v. Review of implementation documents from US federal
income tax incentive; and
vi. Prepare tax memorandum(s) addressing the US tax
consequences associated with proposed restructuring.
c. Provide tax consulting services in connection with the
restructuring:
i. Analysis of any Section 382 issues related to any
restructuring alternatives, including a sensitivity analysis to
reflect the Section 382 impact of the proposed or hypothetical
equity transactions;
ii. Analysis of "net unrealized built-in gains and losses"
and Notice 2003-65 as applied to the ownership change, if any,
resulting from or in connection with the restructuring;
iii. Review of the Debtors' tax attributes including net
operating losses, tax basis in assets, and tax basis in stock of
subsidiaries as relevant to the restructuring;
iv. Analysis of cancellation of debt ("COD") income,
including the application of Section 108 and consolidated tax
return regulations relating to the restructuring of
non-intercompany debt and the completed capitalization or
settlement of intercompany debt;
v. Analysis of the application of the attribute reduction
rules under Section 108(b) and Treasury Regulation Section
1.1502-28, including a benefit analysis of Section 108(b)(5) and
1017(b)(3)(D) elections as related to the restructuring;
vi. Analysis of the tax implications of any internal
reorganizations and proposal of restructuring alternatives;
vii. Cash tax modeling of the tax benefits or tax costs of
restructuring alternatives;
viii. Analysis of the tax implications of any dispositions of
assets or subsidiary stock pursuant to the restructuring;
ix. Analysis of potential bad debt, worthless stock, and
retirement tax losses associated with the restructuring; and
x. Analysis of the tax treatment of restructuring related
costs;
d. Provide advice with respect to the Debtors' global mobility
program.
Tax Compliance Services
a. Review the following tax returns for the year ended Dec.
31, 2019:
i. Noble SCS Cayman LP – 2019 Form 1065 and related Forms
8858 and 8865, including whitepaper detail and disclosures, as well
as corresponding workpapers and calculations;
ii. Noble NBD Cayman LP – 2019 Form 1065 and related Forms
8858 and 8865, including whitepaper detail and disclosures, as well
as corresponding workpapers and calculations;
iii. Noble Eagle Corporation – Consolidated 2019 Form 1120
and related Forms 1118, 5471, 5472, 8858, and 8865, including
whitepaper detail and disclosures, as well as corresponding
workpapers and calculations;
iv. Bully 1 (U.S.) Corporation – 2019 Form 1120, including
Forms 5472, and corresponding workpapers;
v. Frontier Driller, Inc. – 2019 Form 1120, including
Forms 5472, and corresponding workpapers; and
vi. 2019 Form 1120-F Protective Filings for the Debtors.
b. Review of tax impacts and reporting requirements as a
result of Tax Cuts and Jobs Act (TCJA) including:
i. Form 8992 and Global Intangible Low-Taxed Income
computation;
ii. Form 8991 and Base Erosion and Anti-Abuse Tax analysis
and calculation;
iii. Form 5471 Reporting; and
iv. Form 8990 and Section 163(j) applicability.
c. Review Form 1120X or Form 1139 for Noble Eagle Corporation
& Subsidiaries as a result of the Coronavirus Aid, Relief, and
Economic Security Act (CARES) for the following years ending:
i. Dec. 31, 2012
ii. Dec. 31, 2013
iii. Dec. 31, 2014
iv. Dec. 31, 2015
v. Dec. 31, 2018
d. With respect to property tax compliance services:
i. Prepare the state and local personal property tax
returns and supporting schedules for the Debtors' 2020 tax year and
resolve straightforward discrepancies; and
ii. Track valuation and tax bills received by the Debtors
and provide summary reports and check requests to the Debtors as
requested.
e. Prepare a Form 3115, Application for Change in Accounting
Method, for the 2020 tax year to change the method of accounting
for non-incidental materials and supplies for the Debtors.
Accounting Advisory Services
a. Assist Debtors' management with planning an approach,
consideration of alternatives, research, analysis, implementation,
and documentation related to accounting and reporting the emergence
from bankruptcy and fresh-start reporting supporting Debtors'
management in its consideration or evaluation of the following:
i. Fresh-Start Approach and Work Steps: Consideration of the
alternatives in approach, timing, order, and adoption dates for
fresh-start reporting, the alternatives for on-going efficient
processing of detailed accounting records, and the potential
approaches for updating detailed records to reflect changes in
values and the new accounting requirements following emergence;
ii. Change in ownership. Evaluation of whether the conditions
in ASC 852 are met to justify adoption of a new, fresh-start basis
by determining whether there is a change in ownership before
confirmation and after emergence;
iii. Issues & documentation. Researching and documenting
(memoranda, discussions with the independent auditors,
PricewaterhouseCoopers LLP, as required, etc.) to support the
accounting and reporting conclusions reached in accordance with ASC
852;
iv. Segregation liabilities. Identification and segregation
of liabilities that arose before and after filing to reflect the
liabilities subject to the bankruptcy process;
v. Claims. Monitoring the bankruptcy proceedings to (i)
compare the claims filed, allowed, and existing debtor balances
(particularly for trade vendors), (ii) adjust the existing
payables to the allowed claims, and (iii) estimate claims to be
settled upon emergence (failure to properly estimate the claims to
be settled at emergence will impact post-emergence earnings);
vi. Reporting classifications. Identification and segregation
of pre-emergence expenses, restructuring costs, and losses for
classification in a special category called "reorganization items"
to properly portray amounts from activities to restructure the
operations prior to emergence;
vii. Guarantees. Consideration of issues related to
recognizing the fair value of obligations from guarantees (which
may result from a sale of a business unit or division as a result
of the restructuring process or approved as part of the
restructuring process);
viii. Asset Retirement Obligations. Consideration of issues
related to the recognizing obligations from the retirement of
tangible long-lived assets;
ix. Top level reporting. Assessment of the degree to which
top side adjustments and disclosures are utilized to report on a
fresh-start basis from the date of emergence until such amounts are
recorded to your detailed accounting records; and
x. Detailed accounting records. Developing an approach to
repopulating your detailed records with new fair values and asset
lives providing electronic files and assistance with updating fixed
asset and other detailed accounting records with the concluded fair
values.
The fees to be charged for services reflect a reduction of
approximately 30 percent from KPMG's Washington National Tax
practice's normal and customary rates. These fees are.
Tax Consulting Services WNT Other Service
Discounted Lines
Rate
Partners, Principals and
Managing Directors $900 $680
Senior Managers $750 $630
Managers $650 $580
Senior Associates $550 $550
Associates N/A $400
Para-Professionals N/A $260
General Tax Consulting WNT Other Service
Services Discounted Lines
Partners $933-$1,049 $687-$864
Managing Directors $908-$933 $687-$790
Senior Managers and
Directors $834-$933 $586-$735
Managers $633-$834 $465-$647
Senior Tax Associates $442-$602 $323-$445
Tax Associates $335-$379 $257-$294
Tax Review Services WNT Other Service
Discounted Lines
Rate
Partners $933-$1,049 $687-$864
Managing Directors $908-$959 $687-$790
Senior Managers and
Directors $834-$933 $586-$735
Managers $633-$834 $465-$647
Senior Tax Associates $442-$602 $323-$445
Tax Associates $335-$379 $257-$294
Michael Harling, a partner at KPMG, 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 J. Harling, Esq.
KPMG LLP
560 Lexington Avenue
New York, NY 10022
Telephone: (212) 872-6562
Email: hbsteinberg@kpmg.com
About Noble Corporation
Noble Corporation plc -- http://www.noblecorp.com/-- is an
offshore drilling contractor for the oil and gas industry. It
provides contract drilling services to the international oil and
gas industry with its global fleet of mobile offshore drilling
units. Noble Corporation focuses on a balanced, high-specification
fleet of floating and jackup rigs and the deployment of its
drilling rigs in oil and gas basins around the world.
On July 31, 2020, Noble Corporation and its affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Tex. Lead Case No. 20-33826). Richard B. Barker,
chief financial officer, signed the petitions. Debtors disclosed
total assets of $7,261,099,000 and total liabilities of
$4,664,567,000 as of March 31, 2020.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP and
Porter Hedges LLP as legal counsel; Smyser Kaplan & Veselka,
L.L.P., McAughan Deaver PLLC, and Baker Botts L.L.P. as special
counsel; AlixPartners, LLP as financial advisor; and Evercore Group
LLC as investment banker. Epiq Corporate Restructuring, LLC is the
claims and noticing agent.
NORTHEAST GAS: Iroquois Gas Objects to Disclosure Statement
-----------------------------------------------------------
Iroquois Gas Transmission System, L.P., objects to the Disclosure
Statement for Joint Chapter 11 Plan of NorthEast Gas Generation,
LLC and Its Affiliated Debtors.
Iroquois claims that the Disclosure Statement fails to satisfy the
adequate information requirement of the Bankruptcy Code and should
not be approved.
Iroquois points out that the Debtors fail to discuss the
significant consequences that may occur if the Requisite Lenders
instruct the Debtors to reject the Iroquois Contracts, many of
which are required for the continued operation of the Athens
Facility.
Iroquois states that the Easement must be in place for Iroquois to
legally access, properly maintain, and potentially use, its
pipeline and infrastructure at the interconnection point with the
Athens Facility. Thus, an early breach and/or termination of the
Iroquois Contracts could prevent the Athens Facility from operating
as efficiently (or at all).
Iroquois asserts that the Disclosure Statement does not disclose
the material risks or any other risks associated with a rejection
of the Iroquois Contracts. As a result of the Debtors' failure to
divulge these possibilities, the Disclosure Statement lacks
adequate information.
A full-text copy of Iroquois' objection to the Disclosure Statement
dated October 15, 2020, is available at
https://tinyurl.com/y3h6gg59 from PacerMonitor at no charge.
Attorneys for Creditor Iroquois:
TROUTMAN PEPPER HAMILTON SANDERS LLP
David M. Fournier
Marcy J. McLaughlin Smith
Hercules Plaza
1313 N. Market Street, Suite 5100
P.O. Box 1709
Wilmington, DE 19899-1709
Telephone: 302.777.6500
Facsimile: 302.421.8390
E-mail: david.fournier@troutman.com
marcy.smith@troutman.com
- and -
Harris B. Winsberg
Matthew G. Roberts
Bank of America Plaza
600 Peachtree Street NE
Suite 3000
Atlanta, GA 30308-2216
Telephone: 404.885.3000
Facsimile: 404.885.3900
E-mail: harris.winsberg@troutman.com
matthew.roberts2@troutman.com
About Northeast Gas Generation
NorthEast Gas Generation, LLC -- https://www.talenenergy.com/ --
owns and manages a portfolio of two natural gas-fired electric
generating facilities located in the United States: (1) a 1,080 MW
facility located in Athens, New York that achieved commercial
operation on May 5, 2004; and (2) a 360 MW facility, located in
Charlton, Massachusetts, that achieved commercial operation on
April 12, 2001. The NorthEast Gas is part of a group of
privately-owned independent power generation infrastructure
companies indirectly owned by non-debtors Talen Energy Corporation
and Talen Energy Supply, LLC.
The company filed for Chapter 11 protection for the first time in
2014, through which NorthEast Gas reduced its outstanding debt
obligations by more than $600 million by exchanging its
then-second-lien debt for 93.5% of the equity in a reorganized
company while giving existing equity holders the remaining shares.
The second case commenced in 2018 and reduced the debt load of the
company by another $70 million and turned over the equity of an
operating affiliate to former senior lenders.
NorthEast Gas Generation LLC and its affiliates sought Chapter 11
protection (Bankr. Del. Case No. 20-11597) on June 18, 2020. In
the recent case, NorthEast Gas was estimated to have $100 million
to $500 million in assets and $500 million to $1 billion in
liabilities.
The current case has been assigned to U.S. Bankruptcy Judge Mary F.
Walrath, who presided over both previous cases.
The Debtors are represented by Mark D. Collins, Daniel J.
DeFranceschi, Jason M. Madron, Brendan J. Schlauch and David T.
Queroli of Richards Layton & Finger PA. ALVAREZ & MARSAL NORTH
AMERICA, LLC, is the restructuring advisor. HOULIHAN LOKEY
CAPITAL, INC., is the investment banker. PRIME CLERK LLC is the
claims agent.
NORTHEAST GAS: Unsecureds to Have 3% to 12% Recovery in Joint Plan
------------------------------------------------------------------
NorthEast Gas Generation, LLC (f/k/a New MACH Gen, LLC) and Its
Affiliated Debtors filed with the U.S. Bankruptcy Court for the
District of Delaware a Disclosure Statement for Joint Chapter 11
Plan on September 18, 2020.
The Plan provides for the restructuring of each of the Debtors,
including NorthEast Gen, New Athens, the current owner of a 1,080
MW facility located in Athens, New York, Millennium, the current
owner of a 360MW facility, located in Charlton, Massachusetts, and
NorthEast Gen GP, a wholly owned subsidiary of NorthEast Gen which
holds 99.5% of the equity interests in Millennium.
In connection with the treatment of Allowed Class 3 First Lien
Claims, the Plan also provides for the reinstatement of the First
Lien Claims in the principal amount equal to $200 million which
shall be reinstated in accordance with the Plan and subject to the
Reinstated First Lien Debt Modification Terms. The restructuring
will eliminate no less than $385.2 million in funded indebtedness,
with the Reorganized Debtors emerging with a stronger capital
structure that is better aligned with the Reorganized Debtors'
present and future operating prospects. The Debtors believe that
the Restructuring Transactions outlined in the Plan will enable the
Reorganized Debtors to emerge from the Chapter 11 Cases
competitively positioned within the wholesale power markets for the
New Athens Facility and the Millennium Facility.
On the Effective Date of the Plan, the Reorganized Debtors shall
establish and fund an interest-bearing account (the GUC Recovery
Account) in the amount of $2 million, which shall be used by the
Disbursing Agent solely to fund distributions to the holders of
Allowed General Unsecured Claims.
In connection with developing the Plan, the Debtors conducted a
careful review of their current business operations and compared
their projected value as an ongoing business enterprise with their
potential value in a liquidation scenario, as well as the estimated
recoveries to holders of Allowed Claims and Interests thereunder.
The Debtors concluded that the potential recoveries to holders of
Allowed Claims and Interests would be maximized by continuing to
operate the Debtors as a going concern.
Class 5 consists of all General Unsecured Claims against the
Debtors, separately classified by Debtor, namely NorthEast Gen
(Class 5(a)), NorthEast Gen GP (Class 5(b)), Millennium (Class
5(c)), and New Athens (Class 5(d)). Each holder of an Allowed Class
5 Claim shall receive, in full and final satisfaction, settlement,
release, and discharge of, and in exchange for, each such General
Unsecured Claim, its Pro Rata Share of the Distributable Proceeds
pursuant to the GUC Recovery. This Class has $16.95 million to
$58.7 million estimated allowed amount and 3% to 12% estimated
recovery.
Class 8 consists of all Interests in NorthEast Gen. Each holder of
an Allowed Interest in Class 8 shall have its Interest cancelled,
released, and extinguished without further action by the Debtors,
and shall receive no distribution on account thereof, and the
obligations of the Debtors thereunder shall be discharged.
A full-text copy of the Disclosure Statement dated September 18,
2020, is available at https://tinyurl.com/y5jt7q6c from
PacerMonitor at no charge.
The Debtors are represented by:
Mark D. Collins
Daniel J. DeFranceschi
Michael J. Merchant
Jason M. Madron
Brendan J. Schlauch
RICHARDS, LAYTON & FINGER, PA
One Rodney Square
920 North King Street
Wilmington, DE 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
About Northeast Gas Generation
NorthEast Gas Generation, LLC -- https://www.talenenergy.com/ --
owns and manages a portfolio of two natural gas-fired electric
generating facilities located in the United States: (1) a 1,080 MW
facility located in Athens, New York that achieved commercial
operation on May 5, 2004; and (2) a 360 MW facility, located in
Charlton, Massachusetts, that achieved commercial operation on
April 12, 2001. The NorthEast Gas is part of a group of
privately-owned independent power generation infrastructure
companies indirectly owned by non-debtors Talen Energy Corporation
and Talen Energy Supply, LLC.
The company filed for Chapter 11 protection for the first time in
2014, through which NorthEast Gas reduced its outstanding debt
obligations by more than $600 million by exchanging its
then-second-lien debt for 93.5% of the equity in a reorganized
company while giving existing equity holders the remaining shares.
The second case commenced in 2018 and reduced the debt load of the
company by another $70 million and turned over the equity of an
operating affiliate to former senior lenders.
NorthEast Gas Generation LLC and its affiliates again sought
Chapter 11 protection (Bankr. Del. Case No. 20-11597) on June 18,
2020. In the recent case, NorthEast Gas was estimated to have $100
million to $500 million in assets and $500 million to $1 billion in
liabilities.
The current case has been assigned to U.S. Bankruptcy Judge Mary F.
Walrath, who presided over both previous cases.
Mark D. Collins, Daniel J. DeFranceschi, Jason M. Madron, Brendan
J. Schlauch and David T. Queroli of Richards Layton & Finger PA are
serving as counsel to the Debtors. ALVAREZ & MARSAL NORTH AMERICA,
LLC, is the restructuring advisor. HOULIHAN LOKEY CAPITAL, INC.,
is the investment banker. PRIME CLERK LLC is the claims agent.
NPC INTERNATIONAL: Wendy's to Buy 400 Eateries Out of Bankruptcy
----------------------------------------------------------------
Josh Saul of Bloomberg News reports that Wendy's Co. submitted a
bid to buy around 400 of its restaurants from operator NPC
International Inc.'s bankruptcy sale, according to a regulatory
filing Thursday, November 19, 2020.
"The company submitted a consortium bid together with a group of
pre-qualified franchisees to acquire NPC’s Wendy's restaurants,"
the hamburger chain said in the filing, which doesn't reveal the
size of the bid.
If it's successful, Wendy's expects several existing and new
franchisees would ultimately purchase most of the NPC restaurants,
with the company acquiring eateries in one or two markets at most
to keep its ownership level at around 5%.
About NPC International Inc.
NPC International, Inc. -- https://www.npcinternational.com/ -- is
a franchisee company with over 1,600 franchised restaurants across
two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states
and the District of Columbia.
NPC International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-33353) on July 1, 2020. At the time of the filing, the Debtors
disclosed assets of between $1 billion and $10 billion and
liabilities of the same range.
Judge David R. Jones oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy
counsel; Alixpartners, LLP as financial advisor; Greenhill & Co.,
LLC as investment banker; and Epiq Corporate Restructuring, LLC as
claims, noticing and solicitation agent and administrative advisor.
NRG ENERGY: S&P Affirms 'BB+' Issuer Credit Rating
--------------------------------------------------
S&P Global Ratings affirmed its 'BB+' issuer credit rating on NRG
Energy Inc. and assigned its 'BBB-' and 'BB+' issue-level ratings
to NRG's $2.93 billion senior secured and senior unsecured debt,
respectively.
S&P's ratings analysis factors in NRG's commitment to use excess
cash flow for deleveraging. Specifically, it factors in a debt
reduction commitment of about $1.15 billion by year-end 2021.
The ratings on NRG reflect successful cost-cutting initiatives and
resiliency in performance under stressed market conditions in the
wake of the pandemic. S&P's upgrade in July this year factored
NRG's improving credit metrics, as reflected in its net
debt-to-EBITDA ratio and adjusted funds from operations
(FFO)-to-debt ratio of about 3.2x and about 25%, respectively (its
ratio projections were lower than the company's calculations due to
imputed debt adjustments, as well assumptions of lower power
prices). Through its business transformation plan, NRG has
successfully cut costs and improved its operational flexibility
while enhancing its resilience in the face of weaker wholesale
power pricing.
While S&P expects power demand, especially in the small commercial
and industrial (C&I) segment, to continue to face some pressure and
decline compared with last year, it has been more resilient than
sectors such as oil and gas, midstream, and refining.
Wholesale power market risks have intensified while retail power
continues to perform strongly. In most markets, the power demand
forecast continues to be revised lower (even before COVID-19
struck) and the markets remain well supplied as new renewables come
on line to offset retired facilities. As a result, market heat
rates have been under pressure. For instance, implied heat rates in
the Pennsylvania-Jersey-Maryland (PJM) Interconnection have
contracted by 10% over the forward curve. At a high level, S&P
thinks these declines reflect some combination of lower natural gas
prices and a mild start to recent summers that weighed on prompt
prices, which then cascaded out onto the forward curve. In
addition, prices fell because fewer generating assets than the
markets expected were retired. All of this has led to forward
curves in backwardation, exacerbated by a lack of liquidity in out
years.
Energy margins currently account for about 75% of NRG's wholesale
generation margins, but it still produces about 42% of its
wholesale energy margins from coal-fired assets (30 terawatt hours
[TWh]).
S&P said, "We expect weaker margins, plant closures, or asset sales
in the company's Midwest fleet. However, over the past two years,
NRG's retail power business has contributed to lower volatility and
higher cash flow conversion (about 65% in 2019) than we
anticipated. With the acquisition of power retailers like Xoom
Energy LLC and Stream Energy, NRG is continuing its strategy of
load matching, which aims to help stabilize cash flows even in
periods of lower power prices."
Due to the expansion of its retail power business, backwardated
wholesale margins, and S&P's expectations of additional plant
closures, the rating agency expects NRG's retail business to
account for about 75% of the stand-alone company's aggregate EBITDA
by 2023, up from 47% in 2019.
The Direct Energy acquisition affected NRG in various ways.
The key credit drivers include:
-- The acquisition is high-priced at more than 7.0x EBITDA but
transformational transactions of this size are few and far
between.
-- There are significant opportunities for operating synergies,
yet execution risks exist.
-- The transaction will re-leverage to the higher end of the
significant financial risk profile assessment range, but business
risk of the pro forma company will commensurately improve.
The company has increasing scale and geographic diversity. A
successful acquisition of Direct Energy would shift pro forma NRG's
aggregate EBITDA decisively to retail power (to 56% from 47%).
Growth of the capital-light retail segment has the potential of
increasing NRG's cash conversion further and improve its
profitability to above average compared with industry peers. The
transaction more than doubles retail mass platform to serve
approximately 7 million customers combined. S&P expects to raise
the business risk profile to satisfactory at transaction close.
With power prices in a secular decline from declining capital costs
of renewables, NRG's strategic decision of pivoting to retail has
benefited the company's profitability, and helped it stay ahead of
disruptive forces.
For now, the short generation position in retail-to-wholesale
matching benefits NRG. A growing retail business means the
load-to-generation match could become skewed. Compared with about
60 TWh of expected load in The Electric Reliability Council of
Texas (ERCOT), NRG has only about 40 TWh of economic generation
(i.e., generation that routinely supports retail load). Thus far,
NRG has been able to manage this risk buying cheaper power from the
market compared to its self-generation. In fact, with prompt power
prices declining even further this year compared to 2019, the
company has been able to buy a larger proportion of its generation
from the market. S&P expects it to self-generate only about 44 TWh
to 45 TWh in 2020 compared to 57 TWh in 2019.
To mitigate the risks of getting caught short generation (to serve
its retail load), the company also owns assets with the ability to
flex up typically with its out-of-market peaking gas-fired units.
While "right tail" market risk is part of any retail supply
management plan, S&P continues to monitor NRG's ability to rely on
its peakers, buying call options, and supplemental market
purchases, to cover demand during periods of strong weather
conditions.
NRG's performance in its ERCOT business is key after the Direct
Energy acquisition. Based on S&P's estimates, NRG's legacy business
is about 2 gigawatts (GW) short in ERCOT in the peak summer
periods. Recognizing that need, the company has already made one
request for offer (RFO) for renewable power purchase agreement
(PPAs) and has contracted 1.7 GW. The fallout from the COVID-19
pandemic has delayed much of this generation, currently under
construction. Given the competitive pricing of the PPA contracts,
NRG has had to re-hedge this power from the market (or
self-generate) at higher costs, resulting in lower expected margins
in 2021 than S&P's earlier estimates.
S&P said, "We estimate that Direct's load would add an additional 4
GW to NRG's retail position in ERCOT (although 2 GW of these
contracts are indexed). As a result, the pro forma company will
either seek more renewable PPAs, which would increase its operating
leverage, or enter tolls, heat rate call options structured
obligations to secure generation capacity--which we will consider
as nonexecutory contracts that will typically result in debt
imputation of the demand charges."
"We note that even if PPA contracts for solar generation are
structured as energy-only payments, given the predictable nature of
the resource, generation is also predictable, making a take-and-pay
contracts similar to take-or-pay contracts. NRG has announced a
second RFP and is reviewing bids."
"We consider NRG's liquidity a dominant credit risk. While the
merchant risks of being long wholesale power are apparent, being
short generation has its own unique risks. Being short generation,
and hedging retail requirements through purchases, will result in
margining calls should power prices drop. Limiting must-take supply
to minimum demand expectations mitigates hedge costs and liquidity
demands during "left tail" mild weather events."
The nature of gas supply business requires margining and collateral
requirements. Direct has historically provided that through a
parental guarantee, which will need to convert to letters of credit
(LOC). The company estimates this requirement at $2.1 billion
(about $1.7 billion of LOC's that will replace Centrica's parent
guarantees and $380 million in incremental margins because of NRG's
sub-investment grade ratings). The company proposes to fund these
immediate requirements at close through a combination of sources,
including funded LOC facilities.
While the company will likely renegotiate collateral posting
requirements as contracts come up for renewal the reduction is not
going to happen over a period of 12 or more months given 800
counterparties. S&P notes that realized reductions through tighter
management of LOC usage parameters, synergies with overlapping
counterparties, offsetting trades, and overlap of generation and
retail in the Northeast are likely.
Given a short position, a stress scenario for the pro forma company
is a significant decline in power prices. In order to evaluate
NRG's potential future exposure to its LOC reserve, S&P asked the
company to run a market stress as a roughly 30% decline in power
prices in 2021 and a 20% decline to 2022. Results were based on a
P95 case across 500 simulated market price paths, including adding
future trades for contracted retail load (a P95 case is a 95th
percentile confidence interval). The simulations show that NRG
legacy business's liquidity requirements would peak at $2.0 billion
in the summer of 2021 leaving about $1.1 billion as excess
liquidity for Direct's future exposure.
S&P said, "We factor about $1.15 billion of deleveraging in 2021.
Given that a retail business is asset-lite and typically generates
high cash flows, NRG has leveraged up for the acquisition, which
has slowed its credit momentum compared to its stand-alone credit
profile. We expect about $1.15 billion of deleveraging for the
company to get back on the path to potentially higher ratings. We
expect about $950 million of this debt reduction from cash flow and
about $200 million from asset sales, or equity issuance."
The company has an incentive to deleverage. A business that
requires high use of margining provisions is operated more
effectively and efficiently with an investment-grade balance sheet.
As a result, S&P believes the company has an incentive to
deleverage to improve credit quality and stride toward its
investment-grade aspirations.
S&P said, "The rating reflects our expectation of ongoing strength
in free cash flow generation, high cash flow conversion, and an
integrated business strategy that results in lower volatility in
cash flow even as the forward curve is in backwardation. Pro forma
for the transaction, NRG will have higher scale in the retail
business and improving profitability, countered by the substantial
debt-financed transaction that results in leverage to rise to an
estimated 3.8x adjusted debt to EBITDA at the close of the
acquisition (before deleveraging). Our stable outlook reflects
expectations that adjusted debt to EBITDA moderates to about 3.3x
on a run-rate basis. While the transaction increases overall
leverage, an improvement in the company's business risk profile
from higher scale, and expectations of deleveraging through 2021,
lessen the impact of the debt-financed transaction on credit
quality."
A positive outlook could follow if the company pays down its
roughly $1.0 billion debt-reduction target such that adjusted
debt-to-EBITDA ratios decline below 3.25x, and trend lower.
Furthermore, investment-grade ratings could follow if the company
is able to extract synergies as expected, or improve margins, such
that debt to EBITDA declines below 3.0x , or adjusted FFO to debt
increases to about 30% on a sustained basis.
S&P said, "We would revise the outlook to negative and lower
ratings could follow should net debt to EBITDA of the pro forma
company weaken below 4.0x and FFO to debt fall below 22.5%. We
expect that this could happen if demand falls and power prices
remain depressed such that liquidity demands increase sharply
thwarting growth, or volatility falls such that margins in the
retail business decline. We could consider a downgrade if the
payments for purchased power results in an increase in NRG's
operating leverage, or an increase in its financial leverage from
debt imputation because of predictable payments for the purchased
power. The inability of the company to extract synergies as
expected could also result in a revised outlook."
PANKEY'S TRANSPORTATION: Plan of Reorganization Confirmed by Judge
------------------------------------------------------------------
Judge Jerrold N. Poslusny, Jr. of the U.S. Bankruptcy Court for the
District of New Jersey has entered an order approving and
confirming Combined Plan and Disclosure Statement of debtor
Pankey's Transportation, Inc.
The Court has determined that the requirements for final approval
of the disclosure statement have been satisfied and that the
requirements for confirmation of the plan under 11 U.S.C. Sec. 1129
have been satisfied.
The Plan is Amended to provide that the Debtor shall pay the
unclassified claims of the taxing authorities in equal monthly
installments amortized over a 60 month period and paid within 60
months of the Petition Date. All other objections are withdrawn or
overruled.
A full-text copy of the order dated Oct. 30, 2020, is available at
https://tinyurl.com/y45b7ctk from PacerMonitor.com at no charge.
The Debtor is represented by:
Law Offices of Dimitri L. Karapelou, LLC
Two Penn Center, Suite 920
1500 John F. Kennedy Boulevard
Philadelphia, PA 19102
Tel: (215) 391-4312
Fax: (215) 701-8707
About Pankey's Transportation
Pankey's Transportation, Inc., a specialty transportation company
founded in 2016 by Georgette Miller, owns and operates tractors
which it uses to transport goods between various Federal Ground
Package System Inc. (FXG) terminals, as a sub-contractor for FXG.
The company filed a Chapter 11 petition (Bankr. D.N.J. Case No.
20-12184) on Feb. 10, 2020. The Law Offices of Dimitri L.
Karapelou, LLC represents the Debtor. Judge Jerrold N. Poslusny,
Jr., is assigned to the case.
PANKEY'S TRANSPORTATION: Unsecureds to Receive $3K Per Quarter
--------------------------------------------------------------
Pankey's Transportation, Inc., filed a Combined Amended Plan of
Reorganization and Disclosure Statement on September 24, 2020.
Class 11 consists of General Unsecured Claims as scheduled and
filed as unsecured claims and deficiency claims of secured claims
remaining after Section 506 bifurcation of secured claim into
secured and unsecured components based on value of collateral.
This class shall receive quarterly payments of $3,000 to be shared
pro rata by unsecured creditors.
Equity Interest Holders shall retain shares.
The Debtor's Plan will be funded through the Debtor's future
operations. The Debtor expects to have sufficient cash on hand to
make the payments required on the Effective Date.
All United States Trustee Fees accrued prior to the Effective Date
shall be paid in full, on or before the Effective Date, by the
Debtor or any successor to the Debtor. All United States Trustee
Fees which accrue post-Effective Date shall be paid in full on a
timely basis by the Debtor or any successor to the Debtor prior to
the Debtor's case being closed, converted or dismissed.
A full-text copy of the Combined Amended Plan and Disclosure dated
September 24, 2020, is available at https://tinyurl.com/y2we5n3p
from PacerMonitor at no charge.
About Pankey's Transportation
Pankey's Transportation, Inc., a specialty transportation company
founded in 2016 by Georgette Miller, owns and operates tractors
which it uses to transport goods between various Federal Ground
Package System Inc. (FXG) terminals, as a sub-contractor for FXG.
The company filed a Chapter 11 petition (Bankr. D.N.J. Case No.
20-12184) on Feb. 10, 2020. The Law Offices of Dimitri L.
Karapelou, LLC represents the Debtor. Judge Jerrold N. Poslusny,
Jr., is assigned to the case.
PENOBSCOT VALLEY: Dec. 17 Plan Confirmation Hearing Set
-------------------------------------------------------
Debtor Penobscot Valley Hospital filed with the U.S. Bankruptcy
Court for the District of Maine a Disclosure Statement with respect
to the First Amended Plan of Reorganization.
On Nov. 12, 2020, Judge Michael A. Fagone ordered that:
* Dec. 17, 2020, at 1:00 p.m. at the United States Bankruptcy
Court for the District of Maine, 202 Harlow Street, Bangor, Maine
is the hearing on confirmation of the Plan.
* Dec. 10, 2020 at 5:00 p.m. is the deadline for filing and
serving written objections to confirmation of the Plan.
* Dec. 10, 2020, at 5 p.m. is the deadline for filing and
serving any motion seeking temporary allowance of a claim for the
purpose of accepting or rejecting the Plan.
* Dec. 10, 2020 at 5:00 p.m. is the deadline to deliver ballots
for accepting or rejecting the Plan.
A full-text copy of the order dated Nov. 12, 2020, is available at
https://tinyurl.com/y4rxhpuh from PacerMonitor.com at no charge.
About Penobscot Valley Hospital
Penobscot Valley Hospital -- http://www.pvhme.org/-- operates a
general medical and surgical facility in Lincoln, Maine. It has
been serving the community for over 40 years with a wide variety of
services and treatment options.
Penobscot Valley Hospital sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Maine Case No. 19-10034) on Jan. 29,
2019. At the time of the filing, the Debtor estimated assets of $1
million to $10 million and liabilities of $1 million to $10
million. The case is assigned to Judge Michael A. Fagone. The
Debtor tapped Murray Plumb & Murray as its legal counsel.
PENOBSCOT VALLEY: Keybank Says Disclosure Is Inadequate
-------------------------------------------------------
Creditor, KeyBank, N.A., objects to Penobscot Valley Hospital's
First Amended Chapter 11 Plan of Reorganization, which appears at
DE 380, and Debtor's Disclosure Statement.
KeyBank objects to Debtor's Plan and Disclosure Statement to the
extent they fail to treat the Master Equipment Lease Agreement as
an unexpired lease/executory contract under 11 U.S.C. Sec. 365 and,
instead, requests disallowance of KeyBank's claim under the Master
Equipment Lease Agreement as late-filed
KeyBank objects to the Plan and Disclosure Statement to the extent
they fail to recognize KeyBank's claim under the Master Equipment
Lease Agreement as based on an unexpired lease/executory contract
governed by 11 U.S.C. Sec. 365.
KeyBank points out that adequate information is necessary to
approve a Plan and Debtor's Disclosure Statement fails to
adequately classify and address KeyBank's interest under the Master
Equipment Lease Agreement and Debtor's proposed treatment thereof
in the Disclosure and Plan.
KeyBank further points out that it is clear that the Disclosure
Statement does not provide adequate information, and the Plan does
not adequately address all claims, because of its attempt to
improperly disallow KeyBank's claim under the Master Equipment
Lease Agreement as late-filed.
Attorney for KeyBank N.A:
Andrew W. Sparks, Esq.
DRUMMOND & DRUMMOND, LLP
One Monument Way
Portland, Maine 04101
(207) 774-0317
asparks@ddlaw.com
About Penobscot Valley Hospital
Penobscot Valley Hospital -- http://www.pvhme.org/-- operates a
general medical and surgical facility in Lincoln, Maine. It has
been serving the community for over 40 years with a wide variety of
services and treatment options.
Penobscot Valley Hospital sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Maine Case No. 19-10034) on Jan. 29,
2019. At the time of the filing, the Debtor was estimated to have
assets of $1 million to $10 million and liabilities of $1 million
to $10 million. The case is assigned to Judge Michael A. Fagone.
The Debtor tapped Murray Plumb & Murray as its legal counsel.
PENOBSCOT VALLEY: United States Objects to Plan Disclosures
-----------------------------------------------------------
The United States, on behalf of the United States Department of
Agriculture ("USDA") and the United States Department of Health and
Human Services ("HHS"), Centers for Medicare and Medicaid Services
("CMS") and the Small Business Administration (SBA), objects to the
approval of the Disclosure Statement With Respect to the First Plan
of Reorganization filed by Debtor Penobscot Valley Hospital Dated
September 18, 2020.
The United States asserts that:
* The Disclosure Statement fails to supply adequate information
regarding PVH's relationship with its affiliates, including Alpine
Health Services, Inc.(Alpine). The Disclosure Statement fails to
fully document the relationship and the disposition of the debt
owed to USDA.
* The Plan and Disclosure Statement fail to adequately disclose
the status of the adversary and the likelihood of success of such
action.
* In the event the parties do not reach an agreement, the United
States is filing this limited objection to preserve its rights to
raise any remaining objections at the hearing scheduled on the
Disclosure Statement.
A full-text copy of the United States' objection to the disclosure
statement dated October 29, 2020, is available at
https://tinyurl.com/y3wc4nqk from PacerMonitor.com at no charge.
About Penobscot Valley Hospital
Penobscot Valley Hospital -- http://www.pvhme.org/-- operates a
general medical and surgical facility in Lincoln, Maine. It has
been serving the community for over 40 years with a wide variety of
services and treatment options.
Penobscot Valley Hospital sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Maine Case No. 19-10034) on Jan. 29,
2019. At the time of the filing, the Debtor estimated assets of $1
million to $10 million and liabilities of $1 million to $10
million. The case is assigned to Judge Michael A. Fagone. The
Debtor tapped Murray Plumb & Murray as its legal counsel.
PENOBSCOT VALLEY: Unsecureds Get Releases of Causes of Action
-------------------------------------------------------------
Penobscot Valley Hospital submitted a First Amended plan of
Reorganization and a Disclosure Statement.
The Plan confirmation hearing will be held on Dec. 17, 2020, at 1
p.m., before the Honorable Michael A. Fagone, United States
Bankruptcy Judge, at the Bankruptcy Court located at 202 Harlow
Street, Bangor, Maine. At the Confirmation Hearing, the Bankruptcy
Court will consider whether the Plan satisfies the various
requirements for Confirmation under the Bankruptcy Code.
Objections, if any, to Confirmation of the Plan must be filed and
served so that they are received on or before Dec. 10, 2020, at 5
p.m.
Pursuant to the Plan, the Debtor proposes to effectuate a
reorganization and to complete a balance sheet restructuring that
will aid in the company’s viability.
The Debtor's Schedules reflect Unsecured Claims in the amount of
$4,558,073, which includes approximately $1.66 million in unsecured
trade debt.
The Debtor received $4,184,997 in federal stimulus funds that are
only available to the Debtor for use to, among other things,
prepare for or respond to Covid-19 or to replace lost revenues
attributable to Covid-19. Without these funds, the Debtor likely
would have faced immediate closure and liquidation.
The creditors' claims shall be treated as follows:
* The USDA (Class 2) is impaired. Paid in full ($3,472,130,
plus interest during the repayment term). Prior to the Petition
Date, the Debtor executed and delivered the USDA Notes to USDA,
which together had an original principal amount of $4,363,300. By
agreement with USDA, on the Effective Date, USDA's Class 2 Claim
shall be Allowed as a Secured Claim in the amount $3,566,436
(referred to in the Plan as the "USDA Balance"). The Debtor will
repay the USDA Balance over 30 years at an interest rate of 2.25%
per annum or the interest rate available under the Community
Facility Direct and Guaranteed loan program, whichever interest
rate is lower, or, if the Effective Date occurs after December 31,
2020, the then-prevailing interest rate under the Community
Facilities Direct Loan & Grant Program.
* The Machias Secured Claim (Class 3) is impaired. Paid in
full (est. $178,192.90 as of Dec. 31, 2020). Prior to the Petition
Date, the Debtor executed and delivered to Machias certain the
Machias Loan Documents, memorializing a loan in the original
principal amount of $264,000.00. By agreement with Machias, on the
Effective Date, the Machias Class 3 Secured Claim shall be Allowed
in the amount of $178,192.90 (as of December 31, 2020). The Debtor
shall execute an allonge (referred to in the Plan as the “Machias
Allonge”) restating the principal balance with respect to the
Machias Note in an amount equal to the Allowed amount of the Class
3 Claim and providing for payment amortized over 120 months at an
interest rate of 5.125% per annum.
* The Machias Setoff Claim (Class 4) is impaired. Estimated
recovery is $200,000.00. Class 4 consists of a Claim of Machias in
the amount of $304,197.75. On the Effective Date, the Machias
Setoff Claim shall be Allowed in the amount of $200,000.00. In full
and final satisfaction of the Machias Setoff Claim, the Debtor
shall make a Distribution of $200,000.00 to Machias by December 31,
2020, or the Effective Date, whichever is earlier.
* DHHS Claims (Class 5) are impaired. Estimated recovery is
not less than $921,000.00 plus the 2018 Plan Settlement Payment, if
any. Class 5 consists of the Claims of Maine DHHS and MRS in Proof
of Claim 64-1 in the aggregate amount of $3,082,566. On the
Effective Date, Maine's Class 5 Claim shall be Allowed in the
amount of $3,082,566. Pursuant to the Plan, payment of the Allowed
Class 5 Claim shall be as follows: (1) Maine shall recoup, offset,
or otherwise retain the Medicaid Underpayment for 2016 and 2017;
(2) on the Effective Date, the Debtor shall distribute Cash in the
amount of $750,000 (the "State Effective Date Payment") to Maine;
and (3) with respect to a cost settlement for fiscal year 2018, the
Debtor shall make a payment to DHHS (the "2018 Plan Settlement
Payment").
* General Unsecured Claims (Class 9) are impaired. The Debtor
has Scheduled General Unsecured Claims in the amount of $4,558,073.
Under the Plan, in full and final satisfaction, settlement,
release, and discharge of any Allowed General Unsecured Claim, the
Debtor shall provide distributions of releases of any avoidance
cause of action that the Debtor may have against the Holder of any
Allowed General Unsecured Claim. The Debtor makes no assertions
regarding the extent of Creditors holding Class 9 Claims against
whom it may have such claims; it is possible that an analysis
would show a significant discrepancy in the value of such Avoidance
Causes of Action, including a possibility that the value would be
de minimis.
The source of funds for payments that the Debtor shall be required
to make (or reserve for) on the Effective Date, which does not
include deferred Cash payments, is the Debtor's Cash on hand as of
the Effective Date.
A full-text copy of the Disclosure Statement dated November 11,
2020, is available at
https://tinyurl.com/yy73jfvc from PacerMonitor.com at no charge.
Attorneys For Penobscot Valley Hospital:
Andrew C. Helman
Kelly W. McDonald
Katie Krakowka
Sage Friedman
MURRAY, PLUMB & MURRAY
75 Pearl Street, P.O. Box 9785
Portland, Maine 04104-5085
Tel: (207) 773-5651
About Penobscot Valley Hospital
Penobscot Valley Hospital -- http://www.pvhme.org/-- operates a
general medical and surgical facility in Lincoln, Maine. It has
been serving the community for over 40 years with a wide variety of
services and treatment options.
Penobscot Valley Hospital sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Maine Case No. 19-10034) on Jan. 29,
2019. At the time of the filing, the Debtor was estimated to have
assets of $1 million to $10 million and liabilities of $1 million
to $10 million. The case is assigned to Judge Michael A. Fagone.
The Debtor tapped Murray Plumb & Murray as its legal counsel.
PPV INC: David R. Burns Says Disclosure Too Vague & Speculative
---------------------------------------------------------------
Creditor David R. Burn objects to the Joint Disclosure Statement
filed by Debtors PPV, Inc. and Bravo Environmental NW, Inc.
Mr. Burns claims that the discussion of certain key issues in the
Disclosure Statement is too vague and speculative to provide
adequate information to creditors sufficient to satisfy the
requirements of 11 U.S.C. § 1125 although he appreciates the
Debtors' efforts to move the case forward.
Mr. Burns states that Section 16 of the Disclosure Statement
states, with little additional detail, that substantial delay,
insufficient purchase price, or failure of the contemplated sales
to close are all risks to plan performance. That section should be
updated to disclose whether the delay of the PPV sale to date has
or is likely to increase the risk of nonperformance under the
Plan.
Mr. Burns points out that the Disclosure Statement should not be
approved unless it is amended to provide more detailed and
up-to-date information regarding the potential impact of the
Debtors' disputes with Leonite and Bellridge on Plan feasibility
and distributions to creditor classes.
Mr. Burns respectfully requests that the Court deny approval of the
Disclosure Statement until a revised version with adequate
information has been proposed.
A full-text copy of David R. Burn's objection to joint disclosure
statement dated November 6, 2020, is available at
https://tinyurl.com/y3epkt8l from PacerMonitor at no charge.
Counsel for David R. Burns:
John H. Chambers
DUNN CARNEY LLP
851 SW 6th Ave., Ste. 1500
Portland, OR 97204
Direct: (503) 417-5360
E-mail: jchambers@dunncarney.com
- and -
Timothy A. Solomon
LEONARD LAW GROUP LLC
4110 SE Hawthorne Blvd PMB #506
Portland, OR 97214-5246
Direct: 971.634.0194
E-mail: tsolomon@LLG-LLC.com
About PPV, Inc.
PPV, Inc. -- https://www.ppvnw.com/ -- is a waste management
services provider in Portland, Oregon. The company offers
industrial cleaning, recycling, treatment, and technical waste
management services.
PPV, Inc. filed a petition under Chapter 11 of the Bankruptcy Code
(Bankr. D. Ore. Lead Case No. 19-34517) on Dec. 10, 2019. In the
petition signed by Joseph J. Thuney, president, the Debtor was
estimated to have between $1 million and $10 million in both assets
and liabilities. Douglas R. Ricks, Esq. at Vanden Bos & Chapman,
LLP is the Debtor's counsel.
Affiliate Bravo Environmental NW, Inc., also filed for Chapter 11
bankruptcy (Bankr. D. Ore. Case 19-34518) on Dec. 10, 2019.
The cases are jointly administered before the Honorable David W.
Hercher. No creditors' committee has been appointed in this case.
PPV INC: Leonite Capital Objects to Joint Disclosure Statement
--------------------------------------------------------------
Leonite Capital LLC objects to the Joint Disclosure Statement filed
by debtors PPV, Inc. and Bravo Environmental NW, Inc.
Leonite agrees with the U.S. Trustee's objection that the
Disclosure Statement fails to provide adequate information within
the meaning of 11 U.S.C. § 1125 by failing to include information
regarding the ESG Note and the events that gave rise to it.
Leonite points out that the Disclosure Statement fails to provide
adequate information within the meaning of 11 U.S.C. § 1125 by
failing to include information regarding the alleged cancellation
of the ESG Note and the events that gave rise to the alleged
cancellation of PPV's sale of its shares in Bravo to ESG.
Leonite has a security interest in the Bravo shares, and neither
PPV nor the shareholders of PPV, or the estate of PPV, is entitled
to receive any of the proceeds from the sale of the Bravo assets
until the debt secured by Leonite's interest in the Bravo shares is
paid in full And the Disclosure Statement does not disclose that
fact.
Leonite asserts that Article 4.1.3 (re: Leonite Capital, LLC) does
not disclose the correct amount of Leonite's claim. Its claim is
for approximately $950,000.00, which represents principle,
interest, and attorney fees.
Leonite further asserts that no money should be distributed to any
creditors from PPV until such allocation of assets and debt is
determined between the Bravo Estate and the PPV Estate.
Leonite claims that the Debtors have disclosed in Articles 8.3.2
and 8.3.4 that the creditors identified in those two Articles
alleged have a security interest in the Bravo shares, although it
is not entirely clear if those security interests are perfected
under applicable law.
A full-text copy of Leonite's objection to joint disclosure
statement dated November 6, 2020, is available at
https://tinyurl.com/y3epkt8l from PacerMonitor at no charge.
Attorneys for Leonite Capital:
Bruce H Orr, OSB No. 813297
Wyse Kadish LLP
900 SW Fifth Ave, Ste 2000
Portland, OR 97204
E-mail: bho@wysekadish.com
Phone: 503 228-8448
Harvey D. Mervis
Hinman, Howard & Kattell, LLP
P.O. Box 5250
Binghamton, NY 13902-5250
E-mail: hmervis@hhk.com
Phone: (607) 723-5341
About PPV, Inc.
PPV, Inc. -- https://www.ppvnw.com/ -- is a waste management
services provider in Portland, Oregon. The company offers
industrial cleaning, recycling, treatment, and technical waste
management services.
PPV, Inc., filed a petition under Chapter 11 of the Bankruptcy Code
(Bankr. D. Ore. Lead Case No. 19-34517) on Dec. 10, 2019. In the
petition signed by Joseph J. Thuney, president, the Debtor was
estimated to have between $1 million and $10 million in both assets
and liabilities. Douglas R. Ricks, Esq. at Vanden Bos & Chapman,
LLP is the Debtor's counsel.
Affiliate Bravo Environmental NW, Inc., also filed for Chapter 11
bankruptcy (Bankr. D. Ore. Case 19-34518) on Dec. 10, 2019.
The cases are jointly administered before the Honorable David W.
Hercher. No creditors' committee has been appointed in this case.
PRESSURE BIOSCIENCES: Incurs $3.67 Million Net Loss in 3rd Quarter
------------------------------------------------------------------
Pressure Biosciences, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
attributable to common stockholders of $3.67 million on $533,862 of
total revenue for the three months ended Sept. 30, 2020, compared
to a net loss attributable to common stockholders of $4.32 million
on $501,158 of total revenue for the three months ended Sept. 30,
2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss attributable to common stockholders of $12.92 million on
$1.05 million of total revenue compared to a net loss attributable
to common stockholders of $11.87 million on $1.53 million of total
revenue for the same period during the prior year.
As of Sept. 30, 2020, the Company had $2.96 million in total
assets, $17.49 million in total liabilities, and a total
stockholders' deficit of $14.54 million.
"The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern, which
contemplates the realization of assets and the liquidation of
liabilities in the normal course of business. However, we have
experienced negative cash flows from operations with respect to our
pressure cycling technology business since our inception. As of
September 30, 2020, we do not have adequate working capital
resources to satisfy our current liabilities and as a result, there
is substantial doubt regarding our ability to continue as a going
concern. We have been successful in raising debt and equity
capital in the past...In addition we raised debt and equity capital
after September 30, 2020...We have financing efforts in place to
continue to raise cash through debt and equity offerings. Although
we have successfully completed financings and reduced expenses in
the past, we cannot assure you that our plans to address these
matters in the future will be successful. These financial
statements do not include any adjustments that might result from
this uncertainty."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/830656/000149315220021691/form10-q.htm
About Pressure Biosciences
Headquartered in South Easton, Massachusetts, Pressure Biosciences,
Inc. -- http://www.pressurebiosciences.com-- develops and sells
innovative, broadly enabling, pressure-based platform solutions for
the worldwide life sciences industry. Its solutions are based on
the unique properties of both constant (i.e., static) and
alternating (i.e., pressure cycling technology, or "PCT")
hydrostatic pressure. PCT is a patented enabling technology
platform that uses alternating cycles of hydrostatic pressure
between ambient and ultra-high levels to safely and reproducibly
control bio-molecular interactions (e.g., cell lysis, biomolecule
extraction).
Pressure Biosciences recorded a net loss of $11.66 million for the
year ended Dec. 31, 2019, compared to a net loss of $9.70 million
for the year ended Dec. 31, 2018. As of June 30, 2020, the Company
had $2.46 million in total assets, $16.68 million in total
liabilities, and a total stockholders' deficit of $14.21 million.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
April 14, 2020 citing that the Company has a working capital
deficit, has incurred recurring net losses and negative cash flows
from operations. These conditions raise substantial doubt about
its ability to continue as a going concern.
PRESSURE BIOSCIENCES: Signs 3rd Amended Binding LOI with Cannaworx
------------------------------------------------------------------
As previously disclosed, on April 29, 2020, Pressure BioSciences,
Inc. entered into a binding letter of intent to merge with
Cannaworx Holdings, Inc. The Binding LOI, as later amended, had an
Oct. 31, 2020 deadline for the (i) negotiation of definitive
documentation regarding the merger transaction and (ii) exclusivity
period with regard to each of the Company and Cannaworx Holdings,
Inc. being prohibited from negotiating a controlling interest
transaction with any third party.
On November 6th, the Company and CWX entered into the Third
Amendment to the Binding LOI. Pursuant to the Third Amendment, the
parties extended the Oct. 31, 2020 deadline to Dec. 31, 2020.
About Pressure Biosciences
Headquartered in South Easton, Massachusetts, Pressure Biosciences,
Inc. -- http://www.pressurebiosciences.com-- develops and sells
innovative, broadly enabling, pressure-based platform solutions for
the worldwide life sciences industry. Its solutions are based on
the unique properties of both constant (i.e., static) and
alternating (i.e., pressure cycling technology, or "PCT")
hydrostatic pressure. PCT is a patented enabling technology
platform that uses alternating cycles of hydrostatic pressure
between ambient and ultra-high levels to safely and reproducibly
control bio-molecular interactions (e.g., cell lysis, biomolecule
extraction).
Pressure Biosciences recorded a net loss of $11.66 million for the
year ended Dec. 31, 2019, compared to a net loss of $9.70 million
for the year ended Dec. 31, 2018. As of Sept. 30, 2020, the
Company had $2.96 million in total assets, $17.49 million in total
liabilities, and a total stockholders' deficit of $14.54 million.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
April 14, 2020 citing that the Company has a working capital
deficit, has incurred recurring net losses and negative cash flows
from operations. These conditions raise substantial doubt about
its ability to continue as a going concern.
PROVIDENT FUNDING: Fitch Assigns B+ LT IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR)
of 'B+' to Provident Funding Associates, LP. The Rating Outlook is
Stable. Concurrently, Fitch has assigned a rating of 'B'/'RR5' to
Provident's $325 million, 6.375% senior unsecured debt due June
2025.
KEY RATING DRIVERS
IDRs AND SENIOR DEBT
Provident's rating reflects its long track record as an originator
and servicer within the U.S. residential mortgage market, supported
by an integrated, proprietary technology platform, its focus on
higher quality, agency-eligible originations, which has resulted in
solid asset quality in the servicing portfolio, improving
profitability, an unsecured funding component, which enhances
funding flexibility, adequate liquidity and an experienced
management team with deep industry background.
Rating constraints include the challenging economic backdrop, which
Fitch believes may pressure asset quality over the medium term, its
nominal market share within the wholesale and direct mortgage
origination space, which is dominated by large players, continued
reliance on secured, short-term, uncommitted wholesale funding
facilities with relatively limited duration, and elevated key
person risk related to the CEO, Craig Pica, who, together with the
Pica family, exercise significant control over the company as
majority shareholders.
Fitch believes the highly cyclical nature of the mortgage
origination business and the capital intensity and valuation
volatility of mortgage servicing rights (MSRs) within the servicing
business represent rating constraints for non-bank mortgage
companies more broadly, including Provident. Furthermore, the
mortgage business is subject to intense legislative and regulatory
scrutiny, which increases business risk, and the imperfect nature
of interest rate hedging that can introduce liquidity risks related
to margin calls and/or earnings volatility. These industry
constraints typically limit ratings assigned to non-bank mortgage
companies to below-investment-grade levels.
Fitch believes Provident's combined wholesale and direct mortgage
origination platform is well balanced and has allowed the company
to take advantage of increased mortgage demand and higher
prepayment recaptures, which has resulted in strong earnings in
2020. Provident has shifted to selling more of its originated loans
servicing released to shore up liquidity and reduce balance sheet
usage. Though the sales have reduced some of the future valuation
risk typically associated with retained MSRs, it has also led to an
increased reliance on gain on sale revenue, which can be more
volatile. Still, the company has a sufficiently large servicing
operation that generates consistent cashflows and can provide a
counter-cyclical offset through various rate and economic cycles.
Provident is not subject to material asset quality risks because
nearly all originated loans are conforming agency eligible and sold
to investors shortly after origination. However, the company has
exposure to potential losses due to repurchase or indemnification
claims from investors under certain warranty provisions. Fitch
expects Provident to continue to build reserves for new loan
production to account for this risk. The companies repurchase and
indemnification claims in recent years have been minimal and the
company has had sufficient reserves to cover these charges, which
Fitch expects to continue.
The asset-quality performance of Provident's servicing portfolio is
solid, as historically delinquencies have been low relative to
peers and the overall market. Additionally, the amount of
Provident's loans in coronavirus-related forbearance programs is
well-below the broader market, which is attributed to the company's
focus on higher credit quality and primarily conventional
conforming loans. Still, Fitch expects delinquencies to remain
above historic averages for some time as forbearance programs cease
and the macroeconomic effects of the pandemic continue.
The company's 2020 earnings have been strong through Sept. 30,
2020, driven by growing origination volume and an increase in gain
on sale margins. However, Provident's earnings were volatile from
2016-2019 primarily driven by lower originations and compressed
gain on sale margins and by certain one-off items like debt
extinguishment charges as well as MSR valuation charges.
Low-interest rates are expected to continue to drive higher
origination volume, which should benefit earnings, although this
will also yield higher amortization of MSRs. Fitch expects the
company's profitability metrics to moderate from current levels,
with the normalization of gain on sale margins, incremental
valuation hits on MSRs, partially offset by lower interest expenses
from reduced levels of debt.
Fitch evaluates Provident's leverage metrics primarily on the basis
of gross debt to tangible equity, which amounted to 4.9x as of
Sept. 30, 2020, down materially from 8.2x at Dec. 31, 2019 due to
significant debt paydowns as well as increased profitability and
growth in retained earnings, further supported by a $20 million
equity infusion from an affiliated entity in March 2020. Fitch
expects leverage to be maintained at or below 5.0x over the Outlook
horizon, as occasional shareholder distributions will be
sufficiently offset by the retention of stronger earnings.
Corporate tangible leverage, which excludes the balances under
warehouse facilities from gross debt, was 1.4x at Sept. 30, 2020.
Consistent with other mortgage companies, Provident remains reliant
on the wholesale debt market to fund operations. Secured debt,
which was 78% of total debt at Sept. 30, 2020, is comprised of
warehouse facilities and secured bank lines of credit. Provident's
warehouse lenders are comprised of six global and large national
banks and 36.6% of the facilities were committed as of Sept. 30,
2020, which is adequate relative to its size and to other mortgage
peers. However, Provident's funding tenor is short duration and all
but one of the facilities mature within one year, which exposes the
company to increased liquidity and refinancing risk, though Fitch
notes that Provident was able to renew all of the facilities since
the 1Q20 market volatility. Fitch would view an extension of the
firm's funding duration and an increase in the proportion of
committed funding favorably.
Provident's mix of unsecured debt to total debt was 22%, as of
Sept. 30, 2020, which is within Fitch's 'bb' category funding,
liquidity and coverage benchmark range of 10% to 40% for balance
sheet heavy finance and leasing companies with an 'a' category
operating environment score. Fitch views this as a rating strength
and would view any decreases in the unsecured funding component
unfavorably as it would increase encumbered assets and reduce the
firm's funding flexibility, particularly in times of stress.
On April 21, 2020, the Federal Housing Finance Agency (FHFA), which
is the regulator of Fannie Mae and Freddie Mac (Fannie and Freddie,
collectively the GSEs), announced that GSE mortgage servicers will
not have to advance principal and interest for more than four
months of missed payments for borrowers in forbearance. This
timeframe is consistent with the policy before the onset of the
coronavirus pandemic, when the GSEs generally purchased loans out
of mortgage-backed security pools after being delinquent for four
months. Fitch views this development positively as it limits the
potential liquidity strain on Provident from the Fannie and Freddie
portions of the MSR portfolio, which comprised approximately 99% of
the MSR portfolio at Sept. 30, 2020.
Fitch views Provident's liquidity profile as adequate for the
expected ratings given actions already taken to shore up liquidity
in response to the coronavirus pandemic. As of Sept. 30, 2020,
Provident had approximately $30 million of unrestricted cash, net
of $190 million in corporate-level debt paydowns YTD in 2020.
Balance sheet cash is expected to increase as it continues to sell
more of the loan production servicing released. On Sept. 30, 2020,
Provident also had available borrowing capacity of $79.6 million on
its committed MSR facilities, in addition to $1.95 billion on
warehouse facilities to fund originations.
The Stable Rating Outlook reflects Fitch's expectation that
Provident will maintain sufficient liquidity to address potential
increases in servicing advances due to consumer mortgage
forbearance programs in the event of a second wave of the pandemic
and that its higher loan quality focus will continue to act as a
mitigant to broader consumer stress. The Outlook also reflects
expectations for relatively stable leverage and consistent earnings
generation.
Fitch's rating on Provident's senior unsecured debt is one notch
below the Long-Term IDR, given a limited pool of unencumbered
assets and, therefore, weaker relative recovery prospects in a
stressed scenario.
RATING SENSITIVITIES
IDRs AND SENIOR DEBT
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
An improved market share within the originations market while
sustaining profitability levels, and an improvement in funding
flexibility including an extension of funding duration and
increases in the proportion of committed facilities. Demonstrated
effectiveness of corporate governance policies, enhanced liquidity,
and leverage maintained at or below 4.0x on a gross debt to
tangible equity basis could also contribute to positive rating
actions.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
An inability to maintain sufficient liquidity to effectively manage
elevated servicer advance levels stemming from an increase in
forbearance by borrowers and the potential for higher delinquencies
following the lapse of forbearance programs. Leverage sustained
above 6.0x over the Outlook horizon, increased utilization of
secured funding that constrains the company's funding flexibility,
a significant reduction in profitability from current levels,
regulatory scrutiny resulting in Provident incurring substantial
fines that negatively impact its franchise or operating
performance, or the departure of Craig Pica, who has led the growth
and direction of the company, could also drive negative rating
actions.
The unsecured debt rating would be sensitive to changes in the
Long-Term IDR and available collateral. A material increase in
unencumbered assets could result in a narrowing of the notching
between the Long-Term IDR and the unsecured notes.
ESG CONSIDERATIONS
Provident has an ESG Relevance Score of '4' for Governance
Structure due to elevated key person risk related to its Craig
Pica, who has led the growth and strategic direction of the
company, as well as the presence of significant levels of ongoing
transactions with affiliated parties. An ESG Relevance Score of '4'
means Governance Structure is relevant to Provident's rating but
not a key rating driver. However, it does have an impact to the
rating in combination with other factors.
Provident also has an ESG Relevance Score of 4 for Customer Welfare
- Fair Messaging, Privacy, and Data Security due to its exposure to
compliance risks including fair lending practices, debt collection
practices, and consumer data protection, which has a negative
impact on the credit profile, and is relevant to the rating in
conjunction with other factors.
Except for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the
entities, either due to their nature or to the way in which they
are being managed by the entities.
PWR INVEST: Dec. 8 Plan & Disclosure Hearing Set
------------------------------------------------
Michael McConnell, the Chapter 11 Trustee for the Debtors PWR
Invest, LP, PWR Oil & Gas General Partners, Inc., Oklahoma Merge,
LP, Oklahoma Merge Midstream, LP and River Basin, filed with the
U.S. Bankruptcy Court for the District of Delaware a motion for
entry of an order approving the Combined First Amended Joint
Disclosure Statement and Plan of Reorganization proposed by the
Trustee.
On November 6, 2020, Judge John T. Dorsey granted the motion and
ordered that:
* The Combined Disclosure Statement and Plan is approved on an
interim basis for solicitation purposes.
* Dec. 8, 2020 at 2:00 p.m. is the hearing to consider
confirmation of the Combined Disclosure Statement and Plan.
* Dec. 1, 2020 at 4:00 p.m. is fixed as the last day to file
objections to confirmation of the Combined Disclosure Statement and
Plan.
* Dec. 1, 2020 at 5:00 p.m. is fixed as the last day to file and
serve Ballots to the Trustee.
A full-text copy of the order dated November 6, 2020, is available
at https://tinyurl.com/y3g6aw3z from PacerMonitor.com at no
charge.
About PWR Invest LP
PWR Invest, LP, and debtor affiliates Oklahoma Merge, LP; Oklahoma
Merge Midstream, LP; Oklahoma River Basin, LP; and PWR Oil & Gas
General Partners, Inc., operate and develop oil and gas properties
predominantly in Oklahoma.
On May 22, 2019, PWR Oil & Gas General Partners, Inc., filed a
Chapter 11 petition (Bankr. D. Del.). On May 23, 2019, PWR Invest,
LP, also sought for Chapter 11 protection. On Aug. 12, 2019,
Oklahoma Merge, LP, Oklahoma River Basin, LP, and Oklahoma Merge
Midstream, LP, each filed Chapter 11 petitions. The Debtors'
Chapter 11 cases are jointly administered under Case No. 19-11164,
with that of PWR Invest, LP, as the lead case.
As of its Petition Date, PWR Invest was estimated to have assets at
$50 million to $100 million, and liabilities at $50 million to $100
million.
PRONSKE & KATHMAN, P.C., and BARNES & THORNBURG LLP served as the
Debtors' counsel. McCathern,
PLLC, was special litigation counsel. FTI Consulting, Inc., was
the Debtors' financial advisor.
Michael A. McConnell, Esq., was appointed as the chapter 11 trustee
in December 2019. Following his appointment, the Trustee assembled
his own team of advisors, including Kelly Hart & Hallman LLP, as
counsel, Morris,Nichols, Arsht & Tunnell LLP, as bankruptcy
co-counsel, and Lain Faulkner & Co., P.C., asaccountants
* * *
On May 16, 2020, the Trustee filed a motion seeking approval of a
sale process for the sale of the Subsidiary Debtors' assets to
Chambers Energy Management, LP, for a $30,000,000 credit bid,
subject to higher or better offers. On June 5,2020, the Court
approved the bid and sale process. Following an auction, the
Trustee selected Chambers' stalking horse bid as the successful
bid. The sale closed July 1, 2020.
PWR INVEST: Gaedeke Says Trustee's Plan Unconfirmable
-----------------------------------------------------
Gaedeke Oil & Gas Operating, LLC (Gogo) and Gaedeke Holdings II,
Ltd. object to the Motion of the Chapter 11 Trustee for Entry of an
Order Approving the Combined Disclosure Statement and Plan for PWR
Invest, LP, and its debtor-affiliates.
The Objecting Parties claim that the Plan classifies non-insider
general unsecured claims in Classes 3A-3C, while general unsecured
claims of the Objecting Parties are classified in Classes 4 and 5.
The only identifiable difference is that the Objecting Parties are
affiliated with the Debtors. The classification scheme under the
Plan violates the Bankruptcy Code, which renders the Plan patently
unconfirmable.
The Objecting Parties point out that there is very clearly a
presumption of unfair discrimination in the Plan's proposed
treatment of the Objecting Parties. Given the unfair discrimination
against the Objecting Parties, the Plan cannot be confirmed.
Because the Chapter 11 Trustee's Plan is patently unconfirmable,
the Court should deny the Motion.
The Objecting Parties state that the Plan's exculpation provision
impermissibly includes Chambers and any of its successors and
assigns. Chambers is a prepetition lender, not an estate fiduciary.
Chambers cannot be covered by the Plan's exculpation provision.
The Objecting Parties assert that the Chapter 11 Trustee
acknowledges in the Plan that there is a risk that general
unsecured creditors in Class 3 will receive less than a full
recovery under the Plan. Yet, under the Plan, the Chapter 11
Trustee is allowing a valuable asset to expire without monetizing
it for the benefit of creditors.
The Objecting Parties further assert that the Disclosure Statement
fails to identify the amount that is going to be used to fund those
reserves. Such information is necessary for creditors to assess
whether there will be sufficient funds to satisfy the various
claims and obligations being paid from the reserves.
A full-text copy of the Objecting Parties' objection to Trustee's
Disclosure Motion dated October 6, 2020, is available at
https://tinyurl.com/y345932e from PacerMonitor.com at no charge.
Attorneys for the Objecting Parties:
Stephen M. Miller
MORRIS JAMES LLP
500 Delaware Avenue, Suite 1500
P.O. Box 2306
Wilmington, DE 19899-2306
Telephone: (302) 888-6800
Facsimile: (302) 571-1750
E-mail: smiller@morrisjames.com
- and -
Clayton D. Ketter
PHILLIPS MURRAH P.C.
Corporate Tower – Thirteenth Floor
101 N. Robinson Avenue
Oklahoma City, OK 73102
Telephone: (405) 606-4792
Facsimile: (405) 235-4133
E-mail: cdketter@phillipsmurrah.com
About PWR Invest LP
PWR Invest, LP, and debtor affiliates Oklahoma Merge, LP; Oklahoma
Merge Midstream, LP; Oklahoma River Basin, LP; and PWR Oil & Gas
General Partners, Inc., operate and develop oil and gas properties
predominantly in Oklahoma.
On May 22, 2019, PWR Oil & Gas General Partners, Inc., filed a
Chapter 11 petition (Bankr. D. Del.). On May 23, 2019, PWR Invest,
LP, also sought for Chapter 11 protection. On Aug. 12, 2019,
Oklahoma Merge, LP, Oklahoma River Basin, LP, and Oklahoma Merge
Midstream, LP, each filed Chapter 11 petitions. The Debtors'
Chapter 11 cases are jointly administered under Case No. 19-11164,
with that of PWR Invest, LP, as the lead case.
As of its Petition Date, PWR Invest was estimated to have assets at
$50 million to $100 million, and liabilities at $50 million to $100
million.
PRONSKE & KATHMAN, P.C., and BARNES & THORNBURG LLP served as the
Debtors' counsel. McCathern,
PLLC, was special litigation counsel. FTI Consulting, Inc., was
the Debtors' financial advisor.
Michael A. McConnell, Esq., was appointed as the chapter 11 trustee
in December 2019. Following his appointment, the Trustee assembled
his own team of advisors, including Kelly Hart & Hallman LLP, as
counsel, Morris,Nichols, Arsht & Tunnell LLP, as bankruptcy
co-counsel, and Lain Faulkner & Co., P.C., asaccountants
* * *
On May 16, 2020, the Trustee filed a motion seeking approval of a
sale process for the sale of the Subsidiary Debtors' assets to
Chambers Energy Management, LP, for a $30,000,000 credit bid,
subject to higher or better offers. On June 5,2020, the Court
approved the bid and sale process. Following an auction, the
Trustee selected Chambers' stalking horse bid as the successful
bid. The sale closed July 1, 2020.
PWR INVEST: Unsecureds to Have 90% to 100% Recovery in Joint Plan
-----------------------------------------------------------------
Michael McConnell, the duly-appointed Chapter 11 Trustee for the
debtors PWR Invest, LP, PWR Oil & Gas General Partners, Inc.,
Oklahoma Merge, LP, Oklahoma Merge Midstream, LP and River Basin,
LP, filed a solicitation version of its Combined Joint Disclosure
Statement and Plan of Liquidation for Debtors on Nov. 9, 2020.
Class 3A consists of General Unsecured Claims Against Parent
Debtors (totaling $100,000). Each holder of an Allowed General
Unsecured Claim against a Parent Debtor shall receive in full and
final satisfaction, settlement, and release of and in exchange for
its Allowed General Unsecured Claim its pro rata share of the GUC
Fund. This Class has 90-100% estimated recovery.
Class 3B consists of General Unsecured Claims Against Oklahoma
Merge (totaling $1.252 million). Each holder of an Allowed General
Unsecured Claim against Oklahoma Merge shall receive in full and
final satisfaction, settlement, and release of and in exchange for
its Allowed General Unsecured Claim its pro rata share of the GUC
Fund. This Class has 90-100% estimated recovery.
Class 3C consists of General Unsecured Claims Against River Basin
(totaling $7,500). Each holder of an Allowed General Unsecured
Claim against River Basin shall receive in full and final
satisfaction, settlement, and release of and in exchange for its
Allowed General Unsecured Claim its pro rata share of the GUC Fund.
This Class has 90-100% estimated recovery.
All Interests in each of the Debtors shall be cancelled and
extinguished.
On May 16, 2020, the Trustee filed a motion seeking approval of a
sale process for the sale of the Subsidiary Debtors' assets to
Chambers for a $30,000,000 credit bid, subject to higher or better
offers. On June 5, 2020, the Court approved the bid and sale
process. On June 22, 2020, the Trustee conducted an auction and
selected Chambers' stalking horse bid as the successful bid. On
June 29, 2020, the Court entered the Sale Order, by which the
Court, among other things, approved the sale of substantially all
of the Subsidiary Debtors' Assets to OM Properties, LLC, as
Chambers' assignee, free and clear of liens, claims and
encumbrances, other than certain permitted encumbrances and assumed
liabilities pursuant to the Purchase Agreement.
Additionally, the majority of executory contracts of the Subsidiary
Debtors were assumed and assigned to the purchaser and no longer
represent obligations of the Debtors or the Estates, in accordance
with the Sale Order and Purchase Agreement. On July 1, 2020, the
Trustee and the purchaser closed the sale in accordance with the
terms of the Sale Order and the Purchase Agreement.
The Debtors' Assets currently consist of Cash and Causes of Action.
This Plan provides for the Debtors' Assets to be distributed to
holders of Allowed Claims in accordance with the terms of the Plan.
The Liquidating Trustee will effect such liquidation and
distribution.
A full-text copy of the combined plan and disclosure statement
dated September 18, 2020, is available at
https://tinyurl.com/y3getmjy from PacerMonitor.com at no charge.
A full-text copy of the Combined First Amended Joint Disclosure
Statement and Plan of Reorganization dated November 9, 2020, is
available at https://tinyurl.com/y2gtn3fw from PacerMonitor.com at
no charge.
Attorneys for the Chapter 11 Trustee:
Nancy L. Ribaudo
KELLY HART & HALLMAN LLP
201 Main Street, Suite 2500
Fort Worth, Texas 76102
Telephone: (817) 878-3574
Facsimile: (817) 878-9744
Derek C. Abbott (No. 3376)
Joseph C. Barsalona II (No. 6102)
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market Street, 16th Floor
P.O. Box 1347
Wilmington, Delaware 19899-1347
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
About PWR Invest LP
PWR Invest, LP, and debtor affiliates Oklahoma Merge, LP; Oklahoma
Merge Midstream, LP; Oklahoma River Basin, LP; and PWR Oil & Gas
General Partners, Inc., operate and develop oil and gas properties
predominantly in Oklahoma.
On May 22, 2019, PWR Oil & Gas General Partners, Inc., filed a
Chapter 11 petition (Bankr. D. Del.). On May 23, 2019, PWR Invest,
LP, also sought for Chapter 11 protection. On Aug. 12, 2019,
Oklahoma Merge, LP, Oklahoma River Basin, LP, and Oklahoma Merge
Midstream, LP, each filed Chapter 11 petitions. The Debtors'
Chapter 11 cases are jointly administered under Case No. 19-11164,
with that of PWR Invest, LP, as the lead case.
As of its Petition Date, PWR Invest was estimated to have assets at
$50 million to $100 million, and liabilities at $50 million to $100
million.
PRONSKE & KATHMAN, P.C., and BARNES & THORNBURG LLP served as the
Debtors' counsel. McCathern,
PLLC, was special litigation counsel. FTI Consulting, Inc., was
the Debtors' financial advisor.
Michael A. McConnell, Esq., was appointed as the chapter 11 trustee
in December 2019. Following his appointment, the Trustee assembled
his own team of advisors, including Kelly Hart & Hallman LLP, as
counsel, Morris,Nichols, Arsht & Tunnell LLP, as bankruptcy
co-counsel, and Lain Faulkner & Co., P.C., asaccountants
* * *
On May 16, 2020, the Trustee filed a motion seeking approval of a
sale process for the sale of the Subsidiary Debtors' assets to
Chambers Energy Management, LP, for a $30,000,000 credit bid,
subject to higher or better offers. On June 5,2020, the Court
approved the bid and sale process. Following an auction,the
Trustee selected Chambers' stalking horse bid as the successful
bid. The sale closed July 1, 2020.
QUARTER HOMES: $225K Sale of Spur House to Progress Approved
------------------------------------------------------------
Judge Daniel P. Collins of the U.S. Bankruptcy Court for the
District of Arizona authorized Quarter Homes, LLC's sale of the
house located at 28779 N. Spur Drive, San Tan Valley, Arizona to
Progress Residential Homes, LLC for $225,000, on the terms of their
Purchase Contract.
The Debtor is authorized and directed to pay (i) the Release Price
to Situs from the sale proceeds of the Spur House in accordance
with the terms set forth in the Sale Motion and the Order Allowing
Use of Cash Collateral; (ii) a 3% brokerage fee of $7,650 at
closing of the transaction to A&M Management; and (iii) the
applicable taxing authority and homeowners' association for their
claims secured or encumbered by the Property, and all other costs
incident to closing and typically borne by the seller in a
transaction.
The Debtor is directed to sequester the net sale proceeds for the
benefit of Toxic Stock, LLC in a segregated DIP bank account not to
be used or otherwise disbursed absent further court order.
It is directed to provide a copy of the closing statement to the
counsel for the Curry Parties and counsel for the United States
Trustee.
The 14-day stay provided under Fed. R. Bankr. P. 6004(h) is waived
with respect to the closing of such sales which sales may occur
immediately upon entry of the Order.
A copy of the Contract is available at https://tinyurl.com/y5xkj3dc
from PacerMonitor.com free of charge.
About Quarter Homes
Quarter Homes, LLC, located at 15446 N Greenway Hayden Loop Ste
1029, Scottsdale, Arizona, owns commercial real estate, undeveloped
land, and residential properties located in Arizona.
Quarter Homes sought Chapter 11 protection (Bankr. D. Ariz. Case
No. 20-07065) on June 11, 2020. In the petition signed by David
Turcotte, president, the Debtor was estimated to have assets and
liabilities in the range of $1 million to $10 million. The Debtor
tapped Warren J. Stapleton, Esq., at Osborn Maledon, P.A.
R & H MACHINERY: Seeks Court Approval to Hire Accountant
--------------------------------------------------------
R & H Machinery, Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Hawaii to employ Carl Yamamoto, founding
principal of Yamamoto & Ichishita, CPA's Inc., as accountant.
The accountant will provide bookkeeping services and will prepare
tax returns for the Debtor.
Mr. Yamamoto disclosed in court filings that he does not hold nor
represent an interest adverse to the estate and has no connection
with the Debtor, creditors or any other party-in-interest.
The accountant can be reached at:
Carl Yamamoto, CPA
Yamamoto & Ichishita, CPA's Inc.
169 South Kukui Street, 3rd Floor
Honolulu, HI 96813
Telephone: (808) 523-0471
Facsimile: (808) 531-8582
Email: carl@yi-cpa.com
About R & H Machinery
R & H Machinery, Inc. filed a voluntary petition for relief under
Chapter 11 of Bankruptcy Code (Bankr. D. Hawaii Case No. 20-01089)
on Sept. 17, 2020, listing under $1 million in both assets and
liabilities. Judge Robert J. Faris oversees the case. The Debtor
has tapped Mark S. Kawata, Esq., as its legal counsel and Carl
Yamamoto of Yamamoto & Ichishita, CPA's Inc. as its accountant.
RACKSPACE TECHNOLOGY: Moody's Affirms B2 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service affirmed Rackspace Technology Global,
Inc.'s B2 corporate family rating (CFR), B2-PD probability of
default rating, B1 rating on its senior secured term loan and
revolving credit facility and Caa1 rating on its existing senior
unsecured notes. Moody's has assigned a Caa1 rating to Rackspace's
proposed $550 million of senior unsecured notes due 2028 (Proposed
Notes), net proceeds of which will be used to repurchase or redeem
all of the company's remaining 8.625% senior unsecured notes due
2024. Moody's also assigned a speculative grade liquidity rating of
SGL-1, indicating very good liquidity. The rating outlook was
changed to stable from negative.
The change in ratings outlook to stable from negative is based on
the company's improved financial position following the successful
IPO of its ultimate parent, Rackspace Technology, Inc., in August
2020. The net IPO proceeds were about $667 million of which $515
million was used to repay a portion of Rackspace's 8.625% senior
unsecured notes due 2024, with the remaining proceeds boosting
balance sheet cash. Leverage has improved following the debt
repayment, and Moody's now expects leverage (Moody's adjusted) to
approach 5.4x by year-end 2020. Rackspace's financial policy
following its IPO now targets a long term, company-defined net debt
leverage range of 3.0x to 3.5x. While the potential for sustained
and growing free cash flow generation could accelerate the pathway
to this lower leverage target, the pace of continued deleveraging
will be dictated by the company's future financial policy decisions
regarding M&A, additional debt paydowns and shareholder-friendly
actions.
Assignments:
Issuer: Rackspace Technology Global, Inc.
Senior Unsecured Regular Bond/Debenture, Assigned Caa1 (LGD6)
Speculative Grade Liquidity Rating, Assigned SGL-1
Affirmations:
Issuer: Rackspace Technology Global, Inc.
Probability of Default Rating, Affirmed B2-PD
Corporate Family Rating, Affirmed B2
Senior Secured Bank Credit Facility, Affirmed B1 (LGD3)
Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD6) from
(LGD5)
Outlook Actions:
Issuer: Rackspace Technology Global, Inc.
Outlook, Changed to Stable from Negative
RATINGS RATIONALE
Rackspace's B2 CFR reflects its high but moderately decreasing
leverage, intensely competitive end markets which include large
multi-national providers and risks to sustainability of business
model evolution despite turnaround evidence and solid growth over
recent quarters. The rating is also constrained by the
technological and competitive threats inherent in the IT services
industry. The rating is supported by Rackspace's moderate scale and
strengthening free cash flow profile driven by recurring revenue
and recent double-digit bookings growth trends. Rackspace's
asset-light multicloud services focus has sustained lower capital
intensity. Moody's expects Rackspace's free cash flow to steadily
improve in 2021 and 2022, aided by expectations for mid-to-high
single-digit revenue growth and lower interest expense associated
with post-IPO debt reduction and refinancing activity. Rackspace's
debt leverage (Moody's adjusted) for the last 12 months ending
Sept. 30, 2020 was 5.6x.
The SGL-1 speculative grade liquidity rating is primarily supported
by Rackspace's cash balances and $375 million revolving credit
facility. Pro forma for the company's Proposed Notes issuance,
Rackspace will have about $158 million of cash on hand and full
availability under its revolver. Moody's anticipates the company
will rely on its cash balances and utilize its revolver to invest
in its business, including targeted M&A to enhance its service
offerings similar to the company's November 2019 acquisition of
Onica Holdings LLC (Onica). Onica is an Amazon Web Services
consulting partner and managed services provider providing
cloud-native consulting and managed services, including strategic
advisory, architecture and engineering and application development
services. Onica has increased Rackspace's service innovation and
facilitated expanded customer penetration, and likely serves as a
template for future M&A to better leverage global growth
opportunities in the multicloud space.
The debt instrument ratings of Rackspace reflect the probability of
default of the company, as reflected in the B2-PD probability of
default rating, an average expected family recovery rate of 50% at
default given the mix of secured and unsecured debt in the capital
structure, and the loss given default (LGD) assessment of the debt
instruments in the capital structure based on a priority of claims.
The senior secured term loan and revolving credit facility are
rated B1 (LGD3), one notch above the B2 CFR, given the loss
absorption provided by the unsecured notes. The unsecured notes are
rated Caa1 (LGD6), two notches below the B2 CFR due to their junior
position in the capital structure.
The stable outlook reflects Rackspace's reduced leverage following
its IPO and strong bookings trends and revenue growth. Moody's
expectations for continued increases in the scale and profitability
of the company's multicloud services segment will contribute to
continued reductions in leverage, further supporting the stable
outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Rackspace's ratings if leverage is sustained
below 4.5x and free cash flow/debt is greater than 5% (both on a
Moody's adjusted basis).
Moody's could downgrade Rackspace's ratings if leverage is
sustained above 5.5x (Moody's adjusted) or if free cash flow
deteriorates or if liquidity deteriorates. In addition, the rating
could be downgraded if the company returns cash to shareholders or
if there is deterioration of Rackspace's market position
irrespective of its credit metrics.
The principal methodology used in these ratings was Communications
Infrastructure Industry published in September 2017.
Based in San Antonio, Texas, Rackspace combines its broad IT
industry expertise with leading technologies across applications,
data and security to deliver end-to-end multicloud solutions. The
company's 120,000-plus customer base is accessed through a network
presence in more than 60 markets around the world.
RACKSPACE TECHNOLOGY: S&P Rates New $550MM Senior Notes 'B-'
------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating and '5'
recovery rating to information technology services provider
Rackspace Technology Global Inc.'s proposed $550 million unsecured
senior notes due in 2028. The '5' recovery rating indicated its
expectation for modest (10%-30%; rounded estimate: 20%) recovery
for lenders in the event of payment default.
S&P said, "We expect the proceeds will be used to refinance
Rackspace Technology's 8.625% senior notes due 2024 (principal
amount of $519 million and tender premium of $26 million), and we
expect the terms of the new notes to be substantially the same as
its existing notes except for maturity (eight years) and coupon
terms. The transaction is leverage neutral."
"We continue to expect Rackspace to continue de-leveraging over the
next year through earnings growth. We revised our outlook on our on
Rackspace Technology to positive in September 2020 and affirmed our
'B' issuer credit rating and note that the company's recent
bookings traction and stated financial policy are conducive to
credit metric improvement."
"The company's positive momentum continued in the third quarter of
2020, with revenues increasing 13% and bookings increasing 39%
year-over-year when normalizing for the Onica acquisition. We have
updated our forecast for 2020, which is consistent with
management's revised growth expectations, and we now expect
revenues to increase about 10% in 2020 (versus high-single-digit
percentage growth expected previously). We note that S&P Global
Ratings-adjusted EBITDA growth may be more muted in 2020 due to
growth in lower-margin solutions, high investment spending, and
incurrence of one-time restructuring and transaction costs. We
expect leverage to be in the mid-5x range by the end of the year,
an improvement from 6x in 2019 driven by debt reduction from IPO
proceeds."
"Our positive outlook reflects Rackspace's improved leverage
profile that could potentially approach our 5x upside leverage
trigger by the end of 2021 as transaction costs decline and with
margin improvements as customers increase their service offerings
with Rackspace. We note that our cash flow trigger for an upgrade
(free operating cash flow [FOCF] to debt maintained above 6%) can
also be achieved in 2021 as the company's capital intensity
continues to decline."
"We could revise the outlook to stable over the next year if we do
not expect leverage to trend below 5x or if we expected FOCF to
debt to remain under 5%. This could be the result of revenue growth
slowing down to the low-single-digit percentage area or with
elevated customer churn. We could also revise the outlook to stable
if the company issues additional debt to fund significant
acquisitions or shareholder returns."
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P's '2' recovery rating on the company's revolving credit
facility and senior secured first-lien debt reflects its
expectation for substantial (70%-90%; rounded estimate: 80%)
recovery and its '5' recovery rating on the unsecured debt reflects
its expectation for modest (10%-30%; rounded estimate: 20%)
recovery.
-- S&P's simulated default scenario contemplates heightened
competitive pressures from IT service providers and third-party
cloud providers, leading to increased churn and pricing pressure
that erodes profitability. This would reduce cash flow to the point
that Rackspace Technology cannot cover its fixed charges (interest
expense, required amortization, and minimum maintenance capex) and
eventually lead to a default in 2023.
Simulated default assumptions
-- Simulated year of default: 2023
-- EBITDA at emergence: $495 million
-- EBITDA multiple: 6x
Simplified waterfall
-- Gross recovery value: $2.97 billion
-- Net recovery value for waterfall after administrative expenses
(5%): $2.82 billion
-- Obligor/nonobligor valuation split: 72%/28%
-- Estimated senior secured debt: $3.2 billion
-- Value available for senior secured debt: $2.5 billion
-- Recovery range: 70%-90%; rounded estimate: 80%
-- Estimated senior unsecured debt and pari passu claims: $1.3
billion
-- Value available for senior unsecured debt and pari passu
claims: $276 million
-- Recovery range: 10%-30%; rounded estimate: 20%
RAYSHAWN L. ROBINSON: Glenn Dale Property Sale to Eccles Approved
-----------------------------------------------------------------
Judge Lori S. Simpson of the U.S. Bankruptcy Court for the District
of Maryland authorized Rayshawn Latrease Robinson's short sale of
the real property located at 5806 Gabriel Duvall Court, Glenn Dale,
Maryland to Joseph Eccles or any substitute buyer(s) whether
insiders or not, on the same terms and conditions required of the
Buyer under the Contract and imposed by the Order.
The sale is free and clear of liens, claims, encumbrances, and
interests.
The closing on the Contract will occur no later than and including
Nov. 30, 2020, and if such closing does not timely occur, on Dec.
1, 2020, the Lender is authorized to enroll a deed in lieu of
foreclosure on the Property without further action or Court
approval, and the Debtor will vacate the Property by Dec. 15, 2020
(provided however the Debtor and the Lender may enter into
documented consent extensions between them without further Order of
the Court on such dates).
No filing evincing closing difficulties having been made by
Passport Title as settlement agent within 14 days from Oct. 29,
2020, Passport Title is directed to close the transaction as
settlement agent, and will deliver to The Burns Law Firm, LLC with
a copy to the Lender's counsel a set of proposed final closing
disclosures (HUD-1) no later than 10 days prior to any proposed
closing, which will reflect the disbursements identified in the
Order to be made by the settlement agent.
After payment of allowed Broker commission; identified further
reasonable closing costs from the CD referenced; the sum of $7,500
to the Debtor's counsel in escrow payable by the Buyer on account
of accrued legal fees to the estate, subject to fee application;
the lien of record of Wilmington Trust, NA ("Lender") payable in
the amount of $501,315 as relayed in the Motion and the exhibit
HUD-1 annexed to the Motion by the settlement agent, the remaining
proceeds of sale, if any, will be paid by check to the Debtor's
counsel in escrow for distribution pursuant to further Court Order
accompanied by a report of sale to be provided to the Debtor's
counsel by Passport Title within two business days of the closing.
Following closing by consent of the parties wherein the Lender is
paid as referenced, or following a failure of timely closing where
a deed in lieu of foreclosure is enrolled by the Lender and the
Debtor has vacated and surrendered the Property to the Lender, it
is required that following full administration of a Chapter 11 Plan
confirmed and upon discharge, the Lender will strike and withdraw
its Claim Dkt. 11 with prejudice waiving thereby any deficiency
claim above what it has been paid above in full and final
satisfaction of its loan documents and Claim.
Notwithstanding the internal loan loss provision taken by the
Lender for the purpose of its accounting and books/records therein
respective to any deficiency claim otherwise existing to the
benefit of the Lender, for good faith and to avoid a sub rosa
discharge
the Debtor will not receive a discharge of any deficiency claim
arising from the short sale of the Property in the Chapter 11 case
until full administration of a Chapter 11 plan which treats other
obligations (i.e.; Allowed Administrative Expense Claims; Priority
Claims; other Allowed Unsecured Claims), and any capital
gains/losses arising for year 2020 as required by applicable law
under a confirmed Chapter 11 Plan by the Debtor.
Any cancellation of debt claims arising from the sale of the
Property may only be excluded from recognition by discharge of the
Debtor in the case, and/or recognition of insolvency by the
Internal Revenue Service by timely filing of Form 982 which is the
Debtor's responsibility herein to file and pursue.
Promptly following closing by consent of the parties wherein the
Lender is paid as referenced, or following a failure of timely
closing where a deed in lieu of foreclosure is enrolled by the
Lender and the Debtor has vacated and surrendered the Property to
Lender, it is required that the Lender will strike and withdraw its
Motion for Relief From Stay and Reply docketed in the case with
prejudice and the Debtor will strike and withdraw its Answer
containing counterclaims against the Lender and Motion to Strike
Reply with prejudice.
No other disbursements will be made at closing other than those
identified in the Order by the settlement agent before all net
funds are delivered to the Debtor's counsel within 2 business days
following the sale closing.
The settlement agent having failed to provide in 14 days following
Oct. 29, 2020 as required by the Motion any clouds or impediments
to closing on the Contract such as open liens or encumbrances of
record which required action or payment as a precondition to
closing, the settlement agent is directed to proceed to closing
expediently as required by the Debtor and the Lender.
The stay provided for by Fed. R. Bankr. P. 6004(h) is waived.
The Debtor will by the counsel upload a Report of Sale attaching
the HUD-1 (final closing disclosures) within 10 days from the date
of the sale closing.
If the Debtor's counsel does not receive the required proceeds and
settlement sheet or closing disclosure (ie; HUD-1) within 90 days
of the date of entry of the Order, the authority to sell granted by
the Order will automatically terminate.
Notwithstanding anything to the contrary in the Order, should the
Lender in its own unfettered and unilateral discretion choose to
permit any extension of time on closing on the Contract or
alteration of a term of the Contract, it may do so with the Debtor
without seeking further relief of the Court, but the Lender will
have no obligation to alter any term of the Contract or any closing
date identified.
Rayshawn Latrease Robinson sought Chapter 11 protection (Bankr. D.
Md. Case No. 19-24523) on Oct. 30, 2019. The Debtor tapped John
Douglas Burns, Esq., at The Burns Law Firm, LLC as counsel.
RED ROSE: Sets Bidding Procedures for Substantially All Assets
--------------------------------------------------------------
Red Rose, Inc. and affiliates ask the U.S. Bankruptcy Court for the
District of Nevada to authorize the bidding procedures in
connection with the sale of ACF Finco I LP or its assignee, subject
to overbid.
In exchange for the Assets, ACF's offer provides for (a) a credit
bid in the amount of $10 million, plus (b) the assumption of (i)
the DIP Factoring (of up to $15 million) on terms acceptable to the
DIP Factor, the Secured Obligations which include the Roll-Up
Amount and DIP Liens, and (ii) 50% of the allowed legal fees and
expenses of the Debtors' counsel, Fox Rothschild LLP, subject to
the agreed upon total cap for such legal fees and expenses of $1.4
million, of which the Purchaser, subject to the closing of the
Sale, will assume $700,000, to be paid within one year of Closing.
In the fourth quarter of 2019, the Debtors began to seek
refinancing of the ACF debt, including searching for take-out
financing new equity infusions and strategic partnerships. To that
end, Conway MacKenzie commenced its review and analysis of the
Debtors' financial position. Subsequently, in early February of
2020, the Debtors retained Imperial Capital, an investment banking
firm that assists middle market companies in completing challenging
financial transactions. In this pre-petition period, the Debtors
solicited expressions of interest from traditional banks, private
equity firms, debt equity firms and investors.
On Oct. 7, 2020, the Purchaser submitted a non-binding Letter of
Intent for the purchase of substantially all of the Debtors'
assets, and thereafter continued to negotiate in good faith and at
arms'-length with the Debtors concerning the terms and conditions
upon which the Purchaser would be willing to consummate the
purchase. The Purchaser's obligation to purchase the Assets is
subject to a 30-day due diligence period commencing from execution
of the Stalking Horse Agreement, which period may be extended for
an additional 10 days upon agreement between the Purchaser and the
Debtors, without further Court approval.
The Stalking Horse Agreement provides for the purchase of
substantially all of the Debtors' assets except those agreed to be
excluded. All claims for relief and causes of action, including
commercial tort claims, that constitute property of the Debtors'
bankruptcy estates under Section 541 and/or any other applicable
federal or state law of the Bankruptcy Code are included as well as
claims and causes of action under or incorporated through Chapter 5
of the Bankruptcy Code (e.g., preference actions and fraudulent
conveyance actions), and all proceeds and rights to proceeds
therefrom, will be included assets in the Stalking Horse Agreement.
The material assets not being purchased by the Purchaser are the
Debtors' consumer solar divisions.
In exchange for the Assets, the Stalking Horse Agreement provides
for (a) a credit bid in the amount of $10 million, plus (b) the
assumption of (i) the DIP Factoring (of up to $15 million) on terms
acceptable to the DIP Factor, the Secured Obligations which include
the Roll-Up Amount and DIP Liens, and (ii) 50% of the allowed legal
fees and expenses of the Debtors' counsel, Fox Rothschild LLP,
subject to the agreed upon total cap for such legal fees and
expenses of $1.4 million, of which the Purchaser, subject to the
closing of the Sale, will assume $700,000, to be paid within one
year of Closing. Additionally, the Purchaser will be responsible
for the payment for the proposed cure amounts for Assigned
Contracts.
Notably, the DIP Factor has consented to Purchaser assuming the DIP
Factoring in connection with the Sale if the conditions set forth
in section 4 to the Letter of Intent are met, and has agreed to
continue the DIP Factoring to Purchaser for a period of one year
after the Closing. Accordingly, the transfer of the Assets to the
Purchaser under the Stalking Horse Agreement will not constitute an
event of default under the DIP Factoring, and will not accelerate
the obligation to pay all outstanding amounts upon transfer. There
can be no assurances that the DIP Factor will agree to the
assumption of the DIP Factoring by any other Bidder.
The Stalking Horse Agreement has no financing contingency and the
Stalking Horse Bidder has demonstrated an ability to consummate the
transaction.
For a period of 12 months from the date of Closing, the Debtors
will be permitted to review the books and records for their
business operations solely up through the date of Closing, to the
extent necessary for their financial reporting purposes, upon
reasonable advance written notice to the Stalking Horse Bidder.
The Stalking Horse Agreement allows the Stalking Horse Bidder to
terminate the Stalking Horse Agreement if, among other things: (i)
the Bid Protection Order is not entered by the Bankruptcy Court by
Oct. 29, 2020, (ii) does not become a final order within 14 days
thereafter; (b) the 363 Sale Order is not entered within 47 days
following entry of the Bid Protection Order; or (iv) does not
become a final order within 14 days thereafter.
The DIP Factor has a perfected senior secured interest in all of
the Debtors' assets, excluding only TD Venture Fund, LLC's and
PetersenDean Hawaii, LLC's assets, and the Debtors' Section 541
claims and causes of action, including commercial tort claims and
chapter 5 avoidance actions ("Causes of Action"), pursuant to the
DIP Factoring Order. ACF has a perfected secured interest in all
of the Debtors' assets, including Causes of Action, junior only to
the DIP Factor on all assets other than Causes of Action.
The Debtors propose to follow and, once approved by the Court, be
bound by the Bidding Procedures. They believe that the adoption of
the Bidding Procedures will provide interested parties with the
opportunity to formulate bids for the Assets and will facilitate
the solicitation, submission and evaluation of significant bids for
the Assets in a manner that will maximize the value of the Assets
for their estates.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Dec. 4, 2020 at 4:00 p.m. (PST)
b. Initial Bid: At least $100,000 greater than the Purchase
Price
c. Deposit: 10% of the purchase price
d. Auction: The Debtors request that the Court establish the
date and time of the Auction, if one is needed, to be held via Zoom
at the offices of the counsel to the Debtors (Fox Rothschild LLP,
1980 Festival Plaza Drive, Suite 700, Las Vegas, Nevada 89135), as
Dec. 7, 2020 at 9:00 a.m. (PT).
e. Bid Increments: $50,000
f. Sale Hearing: Dec. 15, 2020 at 9:30 p.m. (PT)
g. Sale Objection Deadline: Dec. 11, 2020 at 5:00 p.m. (PT)
h. The Assets that are the subject of the Successful Bid will
be sold by the Debtors subject to the DIP Factoring and DIP Liens,
but otherwise free and clear of all Claims.
Wthin two business days of the entry of the Bidding Procedures
Order, the Debtors will cause the Sale Notice to be served upon the
Sale Notice Parties.
In connection with the Sale, the Debtors will sell, assume and
assign certain executory and unexpired leases. Each Bidder at any
time no later than 4:00 p.m. (PT) on Dec. 4, 2020 will identify the
Contracts and Leases to be Assigned Contracts and Assigned Leases.
The Contract Objection Deadline is Nov. 23, 2020 at 5:00 p.m.
(PT).
Finally, the Debtors respectfully ask waiver of the stays under
Bankruptcy Rules 6004(h) and 6006(d).
A hearing on the Motion is set for Oct. 29, 2020 at 9:30 a.m.
A copy of the Bididng Procedures and the Stalking Horse APA is
available at https://tinyurl.com/y3fo9k3u from PacerMonitor.com
free of charge.
About Red Rose Inc.
Red Rose, Inc., its affiliates and its parent company Petersen-Dean
Inc., a full-service, privately-held roofing and solar company,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Nev. Lead Case No. 20-12814) on June 11, 2020. At the time of
the filing, Red Rose and Petersen-Dean each disclosed assets of
between $10 million and $50 million and liabilities of the same
range.
Judge Mike K. Nakagawa oversees the cases.
The Debtors have tapped Fox Rothschild, LLP to serve as their
bankruptcy counsel and JHS CPAs, LLP to provide tax-related
services.
The U.S. Trustee for Region 17 appointed a committee of unsecured
creditors on June 27, 2020. Brown Rudnick LLP and Schwartz Law,
PLLC serve as the committee's bankruptcy counsel and local counsel,
respectively.
RGN-GROUP: Regus Units Seek $47 Million More to Finance Chapter 11
------------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that the subsidiaries of Regus
Corp. are seeking $47 million in additional loans to finance their
bankruptcy cases and negotiate new leases for their co-working
spaces in the U.S.
RGN-Group Holdings LLC and its affiliated debtors need to increase
a $50 million Chapter 11 loan they already received from Regus in
order to fund operations and potential costs arising from
restructured lease agreements, RGN told the U.S. Bankruptcy Court
for the District of Delaware in a filing Tuesday, November 17,
2020.
The renegotiated lease arrangements "will form a crucial aspect of
the debtors' go-forward business plan" and frame the contours of a
reorganization plan.
About RGN-Group
Headquartered in Chertsey, UK, Regus Group Plc was founded by the
current CEO Mark Dixon in 1989 and is the world's largest provider
of serviced offices and videoconferencing facilities. Following
the acquisition of HQ Global Workplaces in 2004, it runs a network
of approximately 80,000 workstations in 55 countries around the
world.
RGN-Group Holdings, LLC and its affiliates are primarily engaged in
renting and leasing real estate properties in the U.S.
On Aug. 17, 2020, RGN-Group Holdings and and other U.S. affiliates
of Regus Group 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.
The 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.
RICHARD MARVIN CRONK: $510K Sale of Vegas Property to Jalaf Okayed
------------------------------------------------------------------
Judge Mike K. Nakagawa of the U.S. Bankruptcy Court for the
District of Nevada authorized Richard Marvin Cronk's sale of the
real property located at 10713 Royal Pine Avenue, Las Vegas,
Nevada, APN 137-25-316-055, including all fixtures and personal
property, as agreed upon in the Residential Purchase Agreement, to
Gaby Jalaf for $510,000.
The sale is free and clear of any and all security interests,
liens, encumbrances, claims or interests.
The proceeds of the sale will be used to pay off the Nationstar
Mortgage. Nationstar will be timely paid in full. Nationstar
Mortgage will then execute a release of the lien on the Property.
The Realtors will not be paid out of the proceeds of the sale. They
will be required to file an application to be employed and file an
application with the Court to ask payment of their commission on
the sale. There is a Buyer and a Seller's agent in the sale. The
total commission that they will be asking is 6%. Once they get
Court approval, then and only then, can they get paid out of
escrow. The escrow fees that are customary and ordinary will be
paid out of escrow.
Any remaining proceeds will be paid held by escrow until further
order of the Court.
A hearing on the Motion was held on Nov. 10, 2020 at 9:30 a.m.
Richard Marvin Cronk sought Chapter 11 protection (Bankr. D. Nev.
Case No. 20-12313) on May 13, 2020. The Debtor tapped David
Winterton, Esq., as counsel.
ROBERT D. SPARKS: $625K Sale of Lubbock Property to CH Withdrawn
----------------------------------------------------------------
Judge Robert L. Jones of the U.S. Bankruptcy Court for the Northern
District of Texas withdrew Robert Dial Sparks's proposed sale of
the real property located at 6807 79th Street, Lubbock, Texas to CH
Global, LLC for $625,000, free and clear of liens.
Mr. Sparks lives at the 79th Street Property. The 79th Street
Property owned and claimed by Mr. Sparks as his homestead is more
particularly described as follows, to wit: Lot 104, Papalote South,
an Addition to the City of Lubbock, Lubbock County, Texas.
In his Schedules, Mr. Sparks has valued the 79th Street Property as
being worth $625,000. Wells Fargo Bank, N.A. is believed to hold
(by assignment) a valid and perfected Deed of Trust lien on the
79th Street Property securing its claim in the amount of $235,139
(Claim #3).
A hearing on the Motion was set for Nov. 18, 2020 at 1:30 p.m.
Robert Dial Sparks sought Chapter 11 protection (Bankr. N.D. Tex.
Case No. 20-50079) on May 1, 2020. The Debtor tapped Byrn R. Bass,
Jr., Esq., as counsel.
ROSEGARDEN HEALTH: Trustee Seeks to Hire 401(k) Plan Administrator
------------------------------------------------------------------
Jon Newton, the trustee appointed in the Chapter 11 cases of The
Rosegarden Health and Rehabilitation Center LLC and Bridgeport
Health Care Center Inc., seeks approval from the U.S. Bankruptcy
Court for the District of Connecticut to employ Northeast
Retirement Services, LLC as administrator of Bridgeport Health's
401(k) plan.
The trustee contacted NRS in connection with the proposed
termination of the plan.
NRS will be paid at these rates:
Christopher Hulse, Chief Executive Officer $250 per hour
Diane Murphy Senior, Vice President $125 per hour
The firm estimates that its total fees will amount to $20,000 to
$25,000, plus costs.
NRS is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code and does not represent interests
adverse to the trustee, the Debtors or their estates.
The firm can be reached at:
Northeast Retirement Services, LLC
12 Gill Street, Suite 2600
Woburn, MA 01801
Telephone: (781) 938-9595
Email: marketinginfo@nrstpa.com
About The Rosegarden Health and
Rehabilitation Center
Located in Waterbury, Conn., The Rosegarden Health and
Rehabilitation Center LLC and Bridgeport Health Care Center provide
nursing care and rehabilitation services. Visit
http://www.bridgeporthealthcarecenter.comfor more information.
Rosegarden and Bridgeport Health Care sought Chapter 11 protection
(Bankr. D. Conn. Case Nos. 18-30623 and 18-50488) on April 18,
2018. In the petitions signed by their chief financial officer,
Chaim Stern, Rosegarden Health estimated assets and liabilities of
less than $10 million while Bridgeport estimated assets and
liabilities of less than $50 million.
The Hon. Julie A. Manning is the case judge.
The Debtors tapped White and Williams LLP as their bankruptcy
counsel, Green & Sklarz LLC as local counsel, and Long Term Care
Management LLC as restructuring advisor. Barry Braunstein of Long
Term Care Management was appointed as the Debtors' chief
restructuring officer.
William K. Harrington, the United States Trustee for Region 2,
appointed Joseph J. Tomaino as patient care ombudsman in the cases.
The PCO hired Barbara H. Katz, as counsel.
Jon Newton was appointed Chapter 11 trustee for the Debtors. The
trustee is represented by Reid and Riege, P.C. He tapped Northeast
Retirement Services, LLC as third party administrator of Bridgeport
Health's 401(k) plan.
ROYALE ENERGY: Incurs $612K Net Loss in Third Quarter
-----------------------------------------------------
Royale Energy, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $612,229 on $562,155 of total revenues for the three months
ended Sept. 30, 2020, compared to net income of $2.30 million on
$635,388 of total revenues for the three months ended Sept. 30,
2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $540,251 on $1.17 million of total revenues compared to
a net loss of $800,566 on $2.03 million of total revenues for the
nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $18.16 million in total
assets, $16.74 million in total liabilities, $22.02 million in
convertible preferred stock, and a total stockholders' deficit of
$20.61 million.
The Company has had recurring operating and net losses and cash
used in operations and the financial statements reflect a working
capital deficiency of $4,475,962 and an accumulated deficit of
$74,496,606. The Company said these factors raise substantial doubt
about its ability to continue as a going concern.
Royale said, "We anticipate that our primary sources of liquidity
will be from the sale of oil and gas in the course of normal
operations, the sale of oil and gas property, sales of
participation interest and possible issuance of debt and/or equity.
If the Company is unable to generate sufficient cash from
operations or financing sources, it may become necessary to
curtail, suspend or cease operations, sell property, or enter into
financing transaction(s) on less favorable terms; any such outcomes
could have a material adverse effect on the Company's business,
results of operations, financial position and liquidity.
Additionally, management has, and plans to continue, to increase
revenue and reduce overhead and Lease Operating Expense (LOE)
costs."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1694617/000118518520001582/royaleinc20200930_10q.htm
About Royale Energy
Headquartered in El Cajon, CA, Royale Energy --
http://www.royl.com/-- is an independent exploration and
production company focused on the acquisition, development, and
marketing of oil and natural gas. The Company has its primary
operations in California's Los Angeles and Sacramento Basins.
Royale Energy reported a net loss of $348,383 for the year ended
Dec. 31, 2019, compared to a net loss of $23.50 million on $3.28
million of total revenues for the year ended Dec. 31, 2018. As of
June 30, 2020, the Company had $17.64 million in total assets,
$15.73 million in total liabilities, $21.83 million in convertible
preferred stock, and a total stockholders' deficit of $19.92
million.
Moss Adams LLP, in San Diego, California, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 30, 2020 citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
SINTX TECHNOLOGIES: Posts $2.51 Million Net Loss in Third Quarter
-----------------------------------------------------------------
SINTX Technologies, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
attributable to common stockholders of $2.51 million on $66,000 of
product revenue for the three months ended Sept. 30, 2020, compared
to a net loss attributable to common stockholders of $1.79 million
on $173,000 of product revenue for the three months ended Sept. 30,
2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss attributable to common stockholders of $14.86 million on
$478,000 of product revenue compared to a net loss attributable to
common stockholders of $6.51 million on $437,000 of product revenue
for the same period during the prior year.
As of Sept. 30, 2020, the Company had $32.63 million in total
assets, $5.10 million in total liabilities, and $27.54 million in
total stockholders' equity.
Management has concluded that together with its existing capital
resources and payments on the note receivable from the sale of the
Spine business will be sufficient to fund operations for at least
the next 12 months, or through November 2021. In the financial
statements for the year ended Dec. 31, 2019, the Company concluded
substantial doubt existed for the Company to continue as a going
concern. Beginning with the period ended March 31, 2020, the
Company's position changed as a result of the capital raises.
For the nine months ended Sept. 30, 2020 and 2019, the Company
incurred a net loss of $5.3 million and $3.8 million, respectively,
and used cash in operations of $7.1 million and $4.9 million,
respectively. The Company had an accumulated deficit of $239
million and $234 million as of Sept. 30, 2020 and Dec. 31, 2019,
respectively. To date, the Company's operations have been
principally financed from proceeds from the issuance of preferred
and common stock and, to a lesser extent, cash generated from
product sales. It is anticipated that the Company will continue to
generate operating losses and use cash in operations. The
Company's continuation as a going concern is dependent upon its
ability to increase sales, and/or raise additional funds through
the capital markets. Whether and when the Company can attain
profitability and positive cash flows from operations or obtain
additional financing is uncertain.
"The Company is actively generating additional scientific and
clinical data to have it published in leading industry
publications. The unique features of our silicon nitride material
are not well known, and we believe the publication of such data
would help sales efforts as the Company approaches new prospects.
The Company is also making additional changes to the sales
strategy, including a focus on revenue growth by expanding the use
of silicon nitride in other areas outside of spinal fusion
applications. For instance, we recently received positive testing
results from an independent study that demonstrate the potential
anti-viral properties of our silicon nitride. We believe that we
may be able to apply our silicon nitride powder to personal
protection products, such as face masks, gowns and gloves,
resulting in inactivation of viruses that come into contact with
the items."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1269026/000149315220021529/form10-q.htm
About SINTX Technologies
Headquartered in Salt Lake City, Utah, SINTX Technologies --
https://ir.sintx.com/ -- is an OEM ceramics company that develops
and commercializes silicon nitride for medical and non-medical
applications. The core strength of SINTX Technologies is the
manufacturing, research, and development of silicon nitride
ceramics for external partners. The Company manufactures silicon
nitride material and components in its FDA registered and ISO 13485
certified facility.
SINTX reported a net loss attributable to common stockholders of
$7.50 million for the year ended Dec. 31, 2019, compared to a net
loss attributable to common stockholders of $22.55 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$24.58 million in total assets, $5.39 million in total liabilities,
and $19.19 million in total stockholders' equity.
SOUTHERN FOODS: Court Extends Plan Exclusivity Thru November 26
---------------------------------------------------------------
At the behest of Southern Foods Group d/b/a Dean Foods and its
affiliates, Judge David R. Jones of the U.S. Bankruptcy Court for
the Southern District of Texas, Houston Division, extended the
period in which the Debtors may file a chapter 11 plan through and
including November 26, 2020, and to solicit acceptances for a plan
through January 25, 2021.
Upon the written consent of the Official Committee of Unsecured
Creditors to extend the Exclusive Filing Period and Exclusive
Solicitation Period (which consent shall not be unreasonably
withheld):
(a) the Exclusive Filing Period will automatically extend
through and including December 21, 2020;
(b) the Exclusive Solicitation Period will automatically
extend through and including February 19, 2021; and
(c) the Debtors must file a notice with the Court detailing
the extensions.
Southern Foods said the Debtors and their advisors have worked
diligently to progress the Chapter 11 Cases, and have achieved a
great deal since the Petition Date, including, among other things:
(a) obtaining critical operational relief;
(b) obtaining DIP financing;
(c) engaging with the Committee and assisting with due
diligence efforts, regarding (i) the Debtor' businesses and sale
efforts, (ii) the wind-down of the Debtors' estates, and (iii) the
Committee's investigation of potential causes of action against the
Debtors' current and former management team and board members;
(d) engaging with the Ad Hoc Group of Noteholders and
assisting with due diligence efforts;
(e) engaging with the Debtors' labor unions;
(f) establishing claims bar date;
(g) filing Schedules of Assets and Liabilities and Statements
of Financial Affairs;
(h) consummating the sale of substantially all of the Debtors'
assets;
(i) obtaining authority to permanently close certain operating
facilities;
(j) obtaining the approval of administrative expense claim
protocols; and
(k) pursuing avoidance claims.
According to Southern Foods, the complexity of winding down the
estates in an orderly fashion following the sale of substantially
all of the Debtors' assets and the continued process of reconciling
administrative expense claims asserted against the Debtors' estates
have required an enormous amount of time and energy from the
Debtors, the Committee, and their respective advisors.
Southern Foods said the Debtors and the Committee will continue to
work together constructively to formulate a confirmable chapter 11
plan that would maximize distributable value to the Debtors'
creditors.
About Southern Foods Group dba Dean Foods
Southern Foods Group, LLC, which conducts business under the name
Dean Foods, is a Food and Beverage Company and a processor and
direct-to-store distributor of fresh fluid milk and other dairy and
dairy case products in the United States.
Southern Foods and its affiliates filed for bankruptcy protection
on November 12, 2019 (Bankr. S.D. Texas, Lead Case No. 19-36313).
The petitions were signed by Gary Rahlfs, senior vice president and
chief financial officer. The Debtors posted estimated assets and
liabilities of $1 billion to $10 billion.
Judge David R. Jones presides over the cases. The Debtors have
tapped David Polk & Wardell LLP as general bankruptcy counsel,
Norton Rose Fulbright US LLP as local counsel, Alvarez Marsal as
financial advisor, Evercore Group LLC as investment banker, Epiq
Corporate Restructuring LLC as notice and claims agent, and ASK LLP
as their special counsel.
The Office of the U.S. Trustee appointed creditors to serve on the
official committee of unsecured creditors on November 22, 2019. The
committee is represented by Philip C. Dublin, Esq., at Akin Gump
Strauss Hauer & Feld LLP.
SPRINGFIELD HOSPITAL: Dec. 9 Plan Confirmation Hearing Set
----------------------------------------------------------
On November 2, 2020, Debtor Springfield Hospital, Inc., filed with
the U.S. Bankruptcy Court for the District of Vermont the Second
Amended Disclosure Statement relating to the proposed Second
Amended Plan of Reorganization.
On November 3, 2020, Judge Colleen A. Brown approved the Disclosure
Statement and established the following dates and deadlines:
* Nov. 30, 2020, by 4:00 p.m. is fixed as the last day to return
completed ballots to counsel for the Plan Proponent.
* Dec. 4, 2020 is fixed as the last day for the Plan proponent
to file a certification summarizing all returned ballots.
* Dec. 9, 2020, at 9:30 a.m. before the United States Bankruptcy
Court for the District of Vermont, via ZOOM is the hearing on
confirmation of the Plan.
* Nov. 30, 2020 is fixed as the last day to file any objections
to the Plan.
A full-text copy of the order dated November 3, 2020, is available
at https://tinyurl.com/y4u74hn3 from PacerMonitor.com at no
charge.
About Springfield Hospital
Springfield Hospital, Inc. is a not-for-profit, critical access
hospital located in Springfield, Vermont. As part of Springfield
Medical Care Systems' integrated system of care, including a
network of ten federally qualified community health center sites,
Springfield Hospital serves communities in southeastern Vermont and
southwestern New Hampshire.
Springfield Hospital, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Vermont Case No. 19-10283) on June
26, 2019. At the time of the filing, Debtor had estimated $10
million to $50 million in assets and liabilities.
The Hon. Colleen A. Brown oversees the case.
Murray, Plumb & Murray is the Debtor's bankruptcy counsel.
SPRINGFIELD HOSPITAL: Unsecureds Payouts Rely on Avoidance Suits
----------------------------------------------------------------
Springfield Hospital, Inc., submitted a Second Amended Plan of
Reorganization and and a corresponding Second Amended Disclosure
Statement on Nov. 2, 2020.
In order to maintain continuity of health care services in the
Springfield region and to facilitate the timely and successful
reorganization of the Debtor, Vermont has agreed to provide the
Debtor a grant in the amount of $4,000,000, which is defined in the
Plan as the "Exit Funding." The Exit Funding shall be used by the
Debtor to fund a settlement and payoff of Berkshire's Allowed
Claim, which is Classified in Class 1 of the Plan.
Berkshire Claims (Class 1) are impaired. Berkshire's Class 1 Claim
shall be an Allowed Secured Claim in the amount of $2,000,000, with
payment, in full, to be made on the Effective Date or as soon as is
reasonably practicable thereafter from the Exit Funds. Berkshire
shall also receive an additional $2,000,000.00 on the Effective
Date or as soon as is reasonably practicable thereafter from a
non-Debtor source.
The State of Vermont (Class 2) is impaired. Class 2 consists of
the Claims of Vermont in the aggregate amount not less than
$9,092,281. The proposed treatment of the Vermont Claims
represents (i) a settlement of Vermont's administrative, priority,
and superpriority Claims that would otherwise be required to be
paid in full on the Effective Date and (ii) consideration for a
$4,000,000 grant that Vermont is contributing to the Debtor upon
the Effective Date and referred to herein as the Exit Funding,
subject to and conditioned upon the terms of this Plan. This grant
is in addition to a $2,000,000 grant Vermont is providing SMCS for
payment to Berkshire Bank.
Vermont Claims - Class 2-A will be Allowed in the amount of
$5,000,000. In full and final satisfaction, settlement, release,
and discharge of Vermont's Allowed Class 2-A Claim, on the
Effective Date or such other date as the Debtor and Vermont shall
agree, the Debtor shall execute and deliver to Vermont two
promissory notes. Pursuant to the A Note, the Debtor shall pay
$2,000,000 amortized over 20 years at an interest rate of 2% per
annum payable in 120 equal monthly payments of $10,118 with a
balloon payment on the Maturity Date (as defined in this
paragraph). The first monthly payment under the A Note shall be due
on or before the twenty-first (21st) calendar day of the thirteenth
(13th) month after the Effective Date, with the monthly payment to
be made on or before the same day of each subsequent month.
Vermont Claims - Class 2-B will be Allowed as a General Unsecured
Claim in the amount of $4,092,281 subject to the treatment provided
for in Class 8.
The CMS Claim (Class 3) is impaired. Upon the occurrence of the
Effective Date, the Class 3 Claims shall be Allowed in the amount
of $4,000,000 subject to the terms of Sec. IV(D) of the Plan. The
Debtor will pay CMS $4,000,000 amortized over 5 years (60 months)
(the "CMS Repayment Term") in equal monthly payments at a fixed
rate of 2% interest per annum, with the first monthly payment to be
delivered on or before the later of (A) the first calendar day of
the first month after the Effective Date or (B) January 1, 2021, or
such other date as the Debtor and CMS agree in the ERS. The final
monthly payment shall be due on the five year anniversary of the
date the first monthly payment was due (the "CMS Maturity Date"),
or such other date as the Debtor and CMS agree.
The 457 Plan Claims (Class 4) are impaired. Class 4 consists of
the Claims of current or former employees of the Debtor who are
participants in a 457(b) retirement plan sponsored by SMCS (the
"457 Plan"). As of the Effective Date, the Class 4 Claims shall be
allowed as General Unsecured Claims.
Patient Refund Claims (Class 7) are impaired. In order to maintain
its reputation and to adhere to best business practices, the Debtor
shall pay refund claims in full no later than the 180th day after
the Effective Date.
General Unsecured Claims (Class 8) are impaired. Under the Plan, in
full and final satisfaction, settlement, release, and discharge of
any Allowed General Unsecured Claim, each Holder of an Allowed
General Unsecured Claim shall receive Cash Distributions equal to a
pro rata share of all GUC Avoidance Recoveries, as provided for in
Sec. VII(C) of the Plan. Class 8 Claims shall not accrue interest.
The source of funds for payments that the Debtor shall be required
to make (or reserve for) on the Effective Date, which does not
include deferred Cash payments, is the Debtor's Cash on hand as of
the Effective Date and the Exit Funding.
A full-text copy of the Disclosure Statement dated November 2,
2020, is available at https://tinyurl.com/yyw7rt9f from
PacerMonitor.com at no charge.
Attorneys For Springfield Hospital:
Andrew C. Helman, Esq.
Kelly McDonald, Esq.
Katie M. Krakowka, Esq.
Sage M. Friedman, Esq.
MURRAY, PLUMB & MURRAY
75 Pearl Street
Portland, Maine 04101
(207) 773-5651
ahelman@mpmlaw.com
About Springfield Hospital
Springfield Hospital, Inc. is a not-for-profit, critical access
hospital located in Springfield, Vermont. As part of Springfield
Medical Care Systems' integrated system of care, including a
network of ten federally qualified community health center sites,
Springfield Hospital serves communities in southeastern Vermont and
southwestern New Hampshire.
Springfield Hospital, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Vermont Case No. 19-10283) on June
26, 2019. At the time of the filing, Debtor had estimated $10
million to $50 million in assets and liabilities. The Hon. Colleen
A. Brown oversees the case. Murray, Plumb & Murray is the Debtor's
legal counsel.
STOHNE RENTALS: Seeks to Hire KC Cohen as Counsel
-------------------------------------------------
Stohne Rentals, LLC, seeks authority from the U.S. Bankruptcy Court
for the Southern District of Indiana to employ KC Cohen, Lawyer,
PC, as counsel to the Debtor.
Stohne Rentals requires KC Cohen to:
a) give the Debtor legal advice with respect to its duties,
powers and responsibilities in this case;
b) investigate and pursue any actions on behalf of the estate
in order to recover assets for or best enable this estate
to reorganize fairly;
c) represent the Debtor in these proceedings in an effort to
maximize the value of the assets available herein, and to
pursue confirmation of a successful Plan of Reorganization;
and
d) perform such other legal services as may be required and in
the interest of the estate herein.
KC Cohen will be paid at the hourly rate of $350. KC Cohen received
from the Debtor a retainer of $3,000.
KC Cohen will also be reimbursed for reasonable out-of-pocket
expenses incurred.
KC Cohen, partner of KC Cohen, Lawyer, PC, 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.
KC Cohen can be reached at:
KC Cohen, Esq.
KC COHEN, LAWYER, PC
151 N. Delaware St., Ste. 1106
Indianapolis, IN 46204-2573
Tel: (317) 715-1845
E-mail: kc@smallbusiness11.com
About Stohne Rentals
Stohne Rentals LLC filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Ind. Case No. 20-05830) on Oct. 20, 2020, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by KC COHEN, LAWYER, PC.
TATUNG COMPANY: Dec. 8 Hearing on Disclosures and Plan
------------------------------------------------------
Judge Neil W. Bason will hold a combined hearing to confirm the
Plan and to approve the Disclosure Statement of Tatung Company of
America, Inc. on December 8, 2020, at 1:00 p.m. in Courtroom "1545"
255 East Temple Street Los Angeles, CA 90012.
Dec. 1, 2020 is the deadline for the Debtor to serve and file
responses to any objections.
Nov. 24, 2020 is the deadline (a) for ballots to be received by
counsel for the Debtor and (b) for any objections to confirmation
of the Plan and final approval of the Disclosure Statement.
Attorneys for Chapter 11 Debtor:
Ron Bender
Juliet Y. Oh
Lindsey L. Smith
LEVENE, NEALE, BENDER, YOO & BRILL L.L.P.
10250 Constellation Boulevard, Suite 1700
Los Angeles, California 90067
Telephone: (310) 229-1234; Facsimile: (310) 229-1244
E-mail: RB@LNBYB.com
JYO@LNBYB.com
LLS@LNBYB.com
About Tatung Company of America
Founded in 1972, Tatung Company of America, Inc., is a privately
held California corporation headquartered in Long Beach,
California, that specializes in the manufacturing and distribution
of technology products for computers and electronics original
equipment manufacturers like personal computer monitors, home
appliances, point-of-sale equipment, air conditioners, coolers, and
purifiers.
The company also provides tech-solutions for some of the leading PC
system manufacturers and original equipment manufacturers (OEM)
around the world, including offerings like third-party logistics
and procurement services to individuals and corporate customers
globally.
The company expanded its market scope to provide world-class
products and services to the industrial and educational sectors.
Predominantly a business-to-business enterprise, it also
manufactures and distributes a variety of display products to the
gaming, educational, and security industries.
Tatung Company of America sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-21521) on Sept. 30,
2019. In the petition signed by CRO Jason Chen, the Debtor was
estimated to have $10 million to $50 million in both assets and
liabilities.
Judge Neil W. Bason oversees the case.
The Debtor has tapped Levene, Neale, Bender, Yoo & Brill, LLP as
its legal counsel and E&W Consulting, LLC as its financial advisor.
Jason Chen of E&W Consulting is Debtor's acting chief
restructuring officer.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Oct. 22, 2019. Goldstein & McClintock, LLP and RSR
Consulting, LLC serve as the committee's legal counsel and
financial advisor, respectively.
TATUNG COMPANY: Unsecured Creditors to Have 20% Recovery in Plan
----------------------------------------------------------------
Tatung Company of America, Inc. filed with the U.S. Bankruptcy
Court for the Central District of California, Los Angeles Division,
a Disclosure Statement describing Plan of Reorganization dated
September 22, 2020.
Class 3 consists of non-priority general unsecured claims other
than the class 4 claim or the class 5 claim. Each holder of a class
3 allowed claim will, in full settlement and satisfaction of their
class 3 allowed claim, be paid a payment out of the Estate Funds
equal to 20% of the amount of their class 3 allowed claim, with
each such payment to be made on the later of the Effective Date and
the date that any such class 3 claim becomes a class 3 allowed
claim.
Class 4 consists of Sterling's portion of the Hemlock Claim which
comprises 46.43% of the Hemlock Claim equating to a general
unsecured claim in the amount of approximately $231,400,900.
Sterling's class 4 claim shall be in full settlement and
satisfaction.
Class 5 consists of Christina's portion of the Hemlock Claim which
comprises 53.57% of the Hemlock Claim equating to a general
unsecured claim in the amount of approximately $266,993,919.
Christina shall receive 100% of the stock in the Reorganized Debtor
in exchange for a cancellation of a portion of her class 5 claim
equal to the value of such stock. Christina shall retain the
balance all of her unsecured debt against the Debtor which shall
become unsecured debt of the Reorganized Debtor. Any Remaining
Christina Debt shall be unsecured and shall be completely
subordinated to all claims of EWB and Sterling's class 4 claim.
Class 6 consists of all equity interests in the Debtor. All class 6
interests shall be deemed cancelled and extinguished on the
Effective Date. Class 6 interest holders will not receive any
distribution under the Plan or any equity in the Reorganized Debtor
on account of their class 6 interests.
All payments required to be made on or near the Effective Date will
be paid from the Debtor's cash existing on the Effective Date. The
balance of payments required to be made under the Plan, consisting
of payment of the outstanding class 1 secured debt of EWB, and the
remaining secured debt of Sterling, shall be paid by the
Reorganized Debtor out of the Reorganized Debtor's remaining cash,
revenue from the Reorganized Debtor's business operations, a sale
of some or all of the Reorganized Debtor's assets, or new debt or
investment capital obtained by the Reorganized Debtor.
A full-text copy of the Disclosure Statement dated September 22,
2020, is available at https://tinyurl.com/y65z3l5e from
PacerMonitor at no charge.
About Tatung Company of America
Founded in 1972, Tatung Company of America, Inc., is a privately
held California corporation headquartered in Long Beach,
California, that specializes in the manufacturing and distribution
of technology products for computers and electronics original
equipment manufacturers like personal computer monitors, home
appliances, point-of-sale equipment, air conditioners, coolers, and
purifiers.
The company also provides tech-solutions for some of the leading PC
system manufacturers and original equipment manufacturers (OEM)
around the world, including offerings like third-party logistics
and procurement services to individuals and corporate customers
globally.
The company expanded its market scope to provide world-class
products and services to the industrial and educational sectors.
Predominantly a business-to-business enterprise, it also
manufactures and distributes a variety of display products to the
gaming, educational, and security industries.
Tatung Company of America sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-21521) on Sept. 30,
2019. In the petition signed by CRO Jason Chen, the Debtor was
estimated to have $10 million to $50 million in both assets and
liabilities.
Judge Neil W. Bason oversees the case.
The Debtor has tapped Levene, Neale, Bender, Yoo & Brill, LLP as
its legal counsel and E&W Consulting, LLC as its financial advisor.
Jason Chen of E&W Consulting is Debtor's acting chief
restructuring officer.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Oct. 22, 2019. Goldstein & McClintock, LLP and RSR
Consulting, LLC serve as the committee's legal counsel and
financial advisor, respectively.
TD HOLDINGS: Posts $1.2 Million Net Income in Third Quarter
-----------------------------------------------------------
TD Holdings, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing net income of $1.18
million on $7.21 million of total revenue for the three months
ended Sept. 30, 2020, compared to a net loss of $392,843 on $0 of
total revenue for the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $3.32 million on $12.39 million of total revenue
compared to a net loss of $3.26 million on $0 of total revenue for
the same period during the prior year.
As of Sept. 30, 2020, the Company had $100.36 million in total
assets, $6.46 million in total liabilities, and $93.91 million in
total equity.
Going forward, the Company plans to fund its operations through
revenue generated from its commodity trading business, funds from
its private placements as well as financial support commitments
from the Company's chief executive officer and major shareholders.
Based on above operating plan, the management believes that the
Company will continue as a going concern in the following 12
months.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1556266/000121390020036771/f10q0920_tdholdings.htm
About TD Holdings
Headquartered in Beijing, People's Republic of China, TD Holdings,
Inc., (formerly known as Bat Group, Inc.) operates a luxurious car
leasing business as well as a commodities trading business
operating in China.
For the year ended Dec. 31, 2019, the Company incurred net loss
from continuing operations of approximately $6.94 million, and
reported cash outflows of approximately $2.17 million from
operating activities. These factors caused concern as to the
Company's liquidity as of Dec. 31, 2019.
TRANSOCEAN LTD: S&P Downgrades ICR to 'SD' on Distressed Exchanges
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Transocean
Ltd. to 'SD' (selective default) from 'CC' and its issue-level
ratings on the five debt securities involved in the transaction to
'D' from 'CC'.
S&P's issue-level and recovery ratings on Transocean's unaffected
secured, unsecured and guaranteed debt remain unchanged.
The downgrade follows Transocean's completion of below-par debt
repurchases through a tender offer. Transocean Ltd.'s previously
announced below-par tender offer expired on Nov. 9, 2020, and S&P
understands that it completed the repurchases three days later.
Based on the results of the early tender, which expired on Oct. 26,
2020, the following securities were validly tendered:
-- $36.299 million of 6.5% senior unsecured notes due 2020 (total
consideration of $970 per $1,000);
-- $75.757 million of 6.375% senior unsecured notes due 2021
(consideration of $700);
-- $9.168 million of 3.8% senior unsecured notes due 2022
(consideration of $550);
-- $102.897 million of 5.375% senior secured notes due 2023
(consideration of $650); and
-- $123.517 million of 7.25% senior unsecured notes due 2025
(consideration of $430).
S&P said, "We view the repurchases as tantamount to a default. In
our view, Transocean's below-par debt repurchases are tantamount to
a default because the noteholders will receive less than they were
originally promised under the securities. In addition, we consider
the company to be distressed given its unsustainable capital
structure, heavy debt burden, and weak industry fundamentals."
"We intend to review our ratings on Transocean over the next few
days. We intend to review our ratings on the company over the next
few days to incorporate the debt exchange and our forward-looking
opinion of its creditworthiness."
TUESDAY MORNING: Faegre Drinker Represents Trade Claimants
----------------------------------------------------------
In the Chapter 11 cases of Tuesday Morning Corporation., the law
firm of Faegre Drinker Biddle & Reath LLP submitted a verified
statement under Rule 2019 of the Federal Rules of Bankruptcy
Procedure, to disclose that it is representing the Trade Claimants
Committee.
The Counsel represents a group of trade claimants comprised of the
following undersigned holders, or investment managers or funds or
accounts holding an interest in claims against Debtors: (a)
Invictus Global Management, LLC; (b) Bradford Capital Management,
LLC; (c) Contrarian Capital Management; and (d) Hain Capital Group,
LLC.
The Trade Claimants Committee retained Faegre Drinker in November
2020 to represent it in connection with Debtors' chapter 11 cases.
As of the date of this Verified Statement, Faegre Drinker continues
to represent the Trade Claimants Committee in connection with
Debtors' chapter 11 cases. As of the date of this Verified
Statement, Faegre Drinker also represents Liberty Property Limited
Partnership in connection with Debtors' chapter 11 cases. Faegre
Drinker does not represent the Trade Claimants Committee as a
"committee". Except as expressly set forth in this Verified
Statement, Faegre Drinker does not represent the interest of, nor
are they fiduciaries for, any creditor, party in interest, or other
entity. In addition, the Trade Claimants Committee does not
represent or purport to represent any other entities in connection
with the Debtors' chapter 11 cases or otherwise. Each member of the
Trade Claimants Committee does not assume any fiduciary or other
duties to any other creditor or person.
As of Nov. 15, 2020, members of the Trade Claimants Committee and
their disclosable economic interests are:
Trade Claims
------------
Bradford Capital Management, LLC $1,916,438
1051 Bloomfield Avenue, Suite 10
Clifton, New Jersey 07012
Contrarian Capital Management, L.L.P. $4,400,448
411 West Putnam Avenue, Suite 425
Greenwich, Connecticut 06830
Hain Capital Group, LLC $6,160,813.04
301 Route 17 North
Rutherford, New Jersey 07010
Invictus Global Management, LLC $6,300,000
310 Comal Building A, Suite 220
Austin, Texas 78702
Nothing contained in this Verified Statement should be construed as
a limitation upon, or waiver of, any rights of any member of the
Trade Claimants Committee, its respective affiliates, or any other
entity, or an admission with respect to any fact or legal theory.
Nothing herein should be construed as a limitation upon, or waiver
of, any rights of the Trade Claimants Committee to assert, file,
and/or amend any claim or proof of claim in accordance with
applicable law and any orders entered in these cases.
Additional holders of Trade Claims may become members of the Trade
Claimants Committee, and certain of the current members may cease
to be members of the Trade Claimants Committee in the future.
Faegre Drinker reserves the right to amend this Verified Statement
as necessary in accordance with the requirements set forth in
Bankruptcy Rule 2019.
Counsel for Trade Claimants Committee can be reached at:
FAEGRE DRINKER BIDDLE & REATH LLP
Vincent P. Slusher, Esq.
Kristen L. Perry, Esq.
1717 Main Street, Suite 5400
Dallas, TX 75201-7367
Telephone: (469) 357-2500
Facsimile: (469) 327-0860
Email: vince.slusher@faegredrinker.com
kristen.perry@faegredrinker.com
- and -
James H. Millar, Esq.
Faegre Drinker Biddle & Reath LLP
1177 Avenue of the Americas, 41st Floor
New York, NY 10036-2714
Telephone: (212) 248-3140
Facismile: (212) 248-3141
Email: james.millar@faegredrinker.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/36KrguJ
About Tuesday Morning Corp.
Tuesday Morning Corporation, together with its subsidiaries, is a
closeout retailer of upscale home furnishings, housewares, gifts,
and related items. It operates under the trade name "Tuesday
Morning" and is one of the original "off-price" retailers
specializing in providing unique home and lifestyle goods at
bargain values. Based in Dallas, Tuesday Morning operated 705
stores in 40 states as of Jan. 1, 2020. For more information,
visit http://www.tuesdaymorning.com/
On May 27, 2020, Tuesday Morning and six affiliates sought Chapter
11 protection (Bankr. N.D. Tex. Lead Case No. 20-31476). Tuesday
Morning disclosed total assets of $92 million and total liabilities
of $88.35 million as of April 30, 2020.
The Hon. Harlin Dewayne Hale is the case judge. The Debtors tapped
Haynes and Boone, LLP as general bankruptcy counsel; Alixpartners
LLP as financial advisor; Stifel, Nicolaus & Co., Inc. as
investment banker; A&G Realty Partners, LLC as real estate
consultant; and Great American Group, LLC as liquidation
consultant. Epiq Corporate Restructuring, LLC, is the claims and
noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on June 9, 2020. The committee is represented by Munsch
Hardt Kopf & Harr, P.C.
USA GYMNASTICS: Taps Krieg DeVault as 'Ordinary Course' Counsel
---------------------------------------------------------------
USA Gymnastics received approval from the U.S. Bankruptcy Court for
the Southern District of Indiana to employ Krieg DeVault LLP as
"ordinary course" counsel.
The Debtor needs the firm's assistance to audit its implementation
of a report issued by Deborah Daniels, a partner at the firm,
entitled "Report to USA Gymnastics on Proposed Policy and
Procedural Changes for the Protection of Young Athletes." The
report contained a number of recommendations designed to enhance
the safety and well-being of the Debtor's athletes, which the
Debtor's then board of directors unanimously agreed to implement.
The 2020 hourly billing rates for Krieg's attorneys and paralegals
are:
Partners/Of Counsel/Senior Attorneys $630 - $350 per hour
Associates $390 - $220 per hour
Paralegals $305 - $230 per hour
The billing rates for the attorneys who may have a material role in
conducting the audit are:
Deborah Daniels, Partner $625 per hour
C. Daniel Motsinger, Partner $620 per hour
Hilary Leighty, Associate $225 per hour
Kate Trinkle, Associate $225 per hour
Charles Richert, Associate $245 per hour
Krieg has agreed to a 5 percent discount on its fees and an overall
fee cap of $50,000 for the audit.
Ms. Daniels disclosed in court filings that she and other Krieg
attorneys do not own nor represent any interests materially adverse
to the Debtor.
The firm can be reached through:
Deborah Daniels, Esq.
Krieg DeVault LLP
One Indiana Square, Suite 2800
Indianapolis, IN 46204-2017
Telephone: (317) 636-4341
Facsimile: (317) 636-1507
Email: ddaniels@kdlegal.com
About USA Gymnastics
USA Gymnastics -- https://www.usagym.org/ -- is a not-for-profit
organization incorporated in Texas. Based in Indianapolis, Ind.,
USAG's organization encompasses six disciplines: women's
gymnastics, men's gymnastics, trampoline and tumbling, rhythmic
gymnastics, acrobatic gymnastics, and group gymnastics.
USAG provides educational opportunities for coaches and judges as
well as gymnastics club owners and administrators, and sanctions
approximately 4,000 competitions and events throughout the United
States annually. More than 200,000 athletes, professionals and
clubs are members of USAG. USAG sets the rules and policies that
govern the sport of gymnastics in the United States, including
selecting and training gymnastics teams for the Olympics and World
Championships. As of the petition date, USAG employs 53
individuals, nearly all of whom work for USAG full-time.
USAG sought Chapter 11 protection (Bankr. S.D. Ind. Case No.
18-09108) on Dec. 5, 2018. It was estimated to have $50 million to
$100 million in assets and liabilities as of the bankruptcy filing.
The petition was signed by James Scott Shollenbarger, chief
financial officer.
The Hon. Robyn L. Moberly is the case judge.
USAG tapped Jenner & Block LLP as counsel; Hilder & Associates,
P.C. and Krieg DeVault LLP as ordinary course counsel; Alfers GC
Consulting, LLC and Scramble Systems, LLC as business consulting
services providers; and OMNI Management Group, Inc. as claims
agent.
VECTOR LAUNCH: Court Clears Liquidation Plan for Creditor Voting
----------------------------------------------------------------
Daniel Gill of Bloomberg Law reports that bankrupt space technology
startup Vector Launch Inc. received court permission to solicit
votes for its liquidation plan that's expected to pay unsecured
creditors up to 19% of their claims.
The combined plan and disclosure statement, approved Wednesday,
Nov. 18, 2020, by Judge John T. Dorsey of the U.S. Bankruptcy Court
for the District of Delaware for the limited purpose of sending it
to a vote by eligible creditors, calls for the creation of a trust
to liquidate claims remaining after most of the company's assets
were sold earlier in 2020.
About Vector Launch Inc.
Vector Launch Inc., -- https://www.vector-launch.com/ -- is a space
technology that develops rockets and satellite computing
technology. Vector maintains engineering and software development
facilities in California and fabrication and research facilities in
Arizona. Vector is the parent of Garvey and owns 100% of Garvey's
equity interests. Vector, which was formed as a Delaware
corporation in 2016, is the primary operating entity and since 2016
has been the only Debtor entity with significant operations or
assets.
Vector sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
19-12670) concurrently with Garvey Spacecraft Corporation (Bankr.
D. Del. Case No. 19-12671) on December 13, 2019.
In the petitions signed by CRO Shaun Martin, Vector Launch was
estimated to have between $10 million and $50 million in assets and
between $1 million and $10 million in liabilities. Garvey
Spacecraft was estimated to have assets of up to $50,000 and
between $1 million and $10 million in liabilities.
Judge John T. Dorsey oversees the case.
Sullivan Hazeltine Allinson LLC and Pillsbury Winthrop Shaw Pittman
LLP are the Debtors' counsel. Epiq Corporate Restructuring, LLC,
serves as the Debtors' claims, notice agent and administrative
advisor.
VECTOR LAUNCH: Unsecureds to Recover 2% to 7% in Liquidating Plan
-----------------------------------------------------------------
Debtors VL Wind Down Inc., f/k/a Vector Launch Inc. and GSC Wind
Down Inc. f/k/a Garvey Spacecraft Corporation filed with the U.S.
Bankruptcy Court for the District of Delaware a Combined Disclosure
Statement and Joint Chapter 11 Plan of Liquidation on October 16,
2020.
This Combined Plan and Disclosure Statement is the culmination of
extensive negotiations between the Debtors and the Creditors'
Committee for the Debtors' estates resulting in this consensual
liquidating Chapter 11 plan for the Debtors and the remaining
assets of their estates. Under the Combined Plan, the Debtors are
contributing all of the remaining value of their estates to the
Liquidating Trust to be used to satisfy the claims of the Debtors'
unsecured creditors. The Creditors Committee and the Debtors
support this Combined Plan and Disclosure Statement and encourage
the Holders of Impaired Claims to vote in in favor of this Combined
Plan and Disclosure Statement.
Pursuant to the Combined Plan and Disclosure Statement, a trust
will be established for the purposes of effectuating the
liquidation of the Assets of the Debtors and distributing the
proceeds of the Liquidating Trust to the Beneficiaries of the
Trust, which shall include Holders of Allowed Claims against the
Debtors. The Liquidating Trust will be managed by a Liquidating
Trustee in accordance with the Liquidating Trust Agreement, which
shall be filed with the Plan Supplement. The Creditors' Committee
has selected Peter Hurwitz of Dundon Advisors LLC to serve as
Liquidating Trustee.
The Holder of Class 5 General Unsecured Claims will receive their
Pro Rata Share of Liquidating Trust Interests. The Debtors
estimate that it will result in a distribution between 2% to 7% to
Allowed Holders of General Unsecured Claims.
Interest Holders are not entitled to a Distribution under the
Combined Plan and Disclosure Statement. On the Effective Date, all
the Interests in the Debtors shall be canceled and extinguished.
On and after the Effective Date, the Liquidating Trust and the
Liquidating Trustee will cause each of the Liquidating Debtors to
sell or otherwise dispose of their Assets and properties, to
discharge its obligations and liabilities and to wind up its
business operations, all on such terms as the Liquidating Trustee
determines to be necessary or appropriate to implement this
Combined Plan and Disclosure Statement and the Liquidating Trust
Agreement and all without further order of the Bankruptcy Court.
A full-text copy of the Combined Plan and Disclosure Statement
dated October 16, 2020, is available at
https://tinyurl.com/y2nz6z5x from PacerMonitor.com at no charge.
Counsel to the Debtors:
SULLIVAN • HAZELTINE • ALLINSON LLC
William D. Sullivan
William A. Hazeltine
Elihu E. Allinson, III
919 North Market Street, Suite 420
Wilmington, DE 19801
- and -
PILLSBURY WINTHROP SHAW PITTMAN LLP
Hugh M. Ray, III
Jason S. Sharp
2 Houston Center
909 Fannin Street, Suite 2000
Houston, Texas 77010-1028
Counsel for the Official Committee of Unsecureds:
POTTER ANDERSON & CORROON LLP
Christopher M. Samis
L. Katherine Good
D. Ryan Slaugh
1313 N. Market Street, 6th Floor
Wilmington, Delaware 19801-3700
- and -
BROWN RUDNICK LLP
Bennett S. Silverberg
Kenneth J. Aulet
7 Times Square
New York, New York 10036
About Vector Launch Inc.
Vector Launch Inc. -- https://www.vector-launch.com/ -- is a space
technology that develops rockets and satellite computing
technology. Vector maintains engineering and software development
facilities in California and fabrication and research facilities in
Arizona. Vector is the parent of Garvey and owns 100% of Garvey's
equity interests. Vector, which was formed as a Delaware
corporation in 2016, is the primary operating entity and since 2016
has been the only Debtor entity with significant operations or
assets.
Vector sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
19-12670) concurrently with Garvey Spacecraft Corporation (Bankr.
D. Del. Case No. 19-12671) on Dec. 13, 2019.
In the petitions signed by CRO Shaun Martin, Vector Launch was
estimated to have between $10 million and $50 million in assets and
between $1 million and $10 million in liabilities. Garvey
Spacecraft was estimated to have assets of up to $50,000 and
between $1 million and $10 million in liabilities.
Judge John T. Dorsey oversees the case.
Sullivan Hazeltine Allinson LLC and Pillsbury Winthrop Shaw Pittman
LLP are the Debtors' counsel. Epiq Corporate Restructuring, LLC,
serves as the Debtors' claims, notice agent and administrative
advisor.
VIZIV TECHNOLOGIES: Hires Beckham Group as Litigation Counsel
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Viziv Technologies, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to employ The Beckham
Group as special litigation counsel.
The firm will render these professional services to the Debtor:
(a) give legal advice regarding possible causes of action and
defenses of the Debtor;
(b) appear for, prosecute, defend and represent the Debtor's
interest in suits arising in or related to its Chapter 11 case;
and
(c) advise the Debtor on judgments, settlements or other
resolutions to controversies that are assigned to and handled by
special counsel.
The firm's normal hourly billing rates are:
Counsel $550 - $650
Paraprofessionals $165 - $185
The firm has estimated its fees to be in the range of $25,000 per
month, depending upon the assigned litigation matters.
Blake Beckham, Esq., the founding partner of The Beckham Group,
disclosed in court filings that the firm neither holds nor
represents an interest adverse to the estate and is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Blake L. Beckham, Esq.
The Beckham Group
3400 Carlisle Street, Suite 550
Dallas, TX 75204
Telephone: (214) 965-9300
Facsimile: (214) 965-9301
About Viziv Technologies
Viziv Technologies, LLC is an electronics company that specialized
in the field of electromagnetic surface waves.
On Oct 7, 2020, creditors Surface Energy Partners LP, Kendol C.
Everroad and Jamison Partners, LP filed an involuntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex.
Case No. 20-32554) against Viziv Technologies. The creditors are
represented by Kenneth Stohner Jr., Esq., at Jackson Walker, LLP.
Judge Stacey G. Jernigan oversees the case.
The Debtor tapped Cavazos Hendricks Poirot, PC as bankruptcy
counsel, Allred & Wilcox, PLLC as special corporate counsel, and
The Beckham Group as special litigation counsel.
VYCOR MEDICAL: Posts $360K Net Loss in Third Quarter
----------------------------------------------------
Vycor Medical, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
available to common stockholders of $360,472 on $275,925 of revenue
for the three months ended Sept. 30, 2020, compared to a net loss
available to common stockholders of $371,794 on $322,884 of revenue
for the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss available to common stockholders of $946,492 on $850,430
of revenue compared to a net loss available to common stockholders
of $899,581 on $1.06 million of revenue for the same period during
the prior year.
As of Sept. 30, 2020, the Company had $1.03 million in total
assets, $2.85 million in total current liabilities, $88,097 in
operating lease liability, and a total stockholders' deficiency of
$1.91 million.
The Company has incurred losses since its inception, including a
net loss of $946,492 for the nine months ended Sept. 30, 2020 and
has not generated sufficient positive cash flows from operations.
As of Sept. 30, 2020 the Company had a working capital deficiency
of $688,725, excluding related party liabilities of $1,675,120.
The Company said these conditions, among others, raise substantial
doubt regarding its ability to continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1424768/000149315220021209/form10-q.htm
About Vycor Medical
Vycor Medical (OTCQB: VYCO) -- http://www.vycormedical.com-- is
dedicated to providing the medical community with innovative and
superior surgical and therapeutic solutions. The company has a
portfolio of FDA cleared medical solutions that are changing and
improving lives every day. The company operates two business
units: Vycor Medical and NovaVision, both of which adopt a
minimally or non-invasive approach.
Vycor Medical reported a net loss available to common shareholders
of $1.12 million for the year ended Dec. 31, 2019, compared to a
net loss attributable to common shareholders of $1.70 million for
the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$1.09 million in total assets, $2.45 million in total current
liabilities, and a total stockholders' deficiency of $1.35
million.
Prager Metis CPAs, LLC, in Hackensack, New Jersey, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated March 27, 2020 citing that the Company has incurred
net losses since inception, including a net loss of $796,202 and
$1,379,356 for the years ended Dec. 31, 2019 and 2018 respectively,
and has not generated cash flows from its operations. As of Dec.
31, 2019, the Company had working capital deficiency of $541,070,
excluding related party liabilities of $1,248,904. These factors,
among others, raise substantial doubt regarding the Company's
ability to continue as a going concern.
WALDEN PALMS: Granted Cash Collateral Access Thru Dec. 3
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The U.S. Bankruptcy Court for the Middle District of Florida has
authorized Walden Palms Condominium Association, Inc. to use cash
collateral on an interim basis through December 3, 2020 in
accordance with a budget.
To adequately protect the City of Orlando and/or any other
potentially secured creditors in connection with the use by the
Debtor of any Cash Collateral and other property upon which
security interests and liens may have been previously granted by
the Debtor to the City of Orlando and/or any other putative secured
creditors, the Court confirms the grant, assignment and pledge by
the Debtor to such secured creditors a post-petition security
interest and replacement lien (only to the same validity, extent,
and priority of such pre-petition security interests, if any exist)
in the secured creditor's Pre-Petition Collateral, any of its
goods, property, assets and interests in property in which the
secured creditors may have held a lien or security interest prior
to the Petition Date, and the proceeds from the disposition of any
of such Prepetition Collateral.
The replacement lien will also apply to any funds recovered by the
bankruptcy estate pursuant to avoidance actions arising under
Sections 542 through 550 of the Bankruptcy Code to the extent such
secured creditor had a lien on such fund(s) prior to the Petition
Date.
At the end of each month, the Debtor will also prepare reports
reflecting its actual cash expenditures per line-item during the
previous month (and/or stub period, if any), with such monthly
budget-to-actual reports to be served upon counsel for the City of
Orlando no later than the tenth day of the month following the
relevant reporting period.
The next Interim Hearing on the matter is continued until December
3, 2020, at 2:00 p.m.
A copy of the order and the Budget Worksheet for October 1, 2020 to
December 31, 2020, is available at https://bit.ly/2TF0eif from
PacerMonitor.com.
About Walden Palms Condominium
Walden Palms Condominium Association, Inc., is a nonprofit property
management company in Orlando, Florida. Walden Palms Condominium
Association sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 18-07945) on Dec. 24, 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 is assigned to Judge Cynthia C. Jackson.
The Debtor tapped Shapiro, Blasi, Wasserman & Hermann, P.A., as its
bankruptcy counsel; Arias Bosinger PLLC as general association
counsel; JD Law Firm; as collections & foreclosure counsel; and
Winderweedle, Haines, Ward & Woodman, P.A., as land use counsel.
WAYNE P. BURICK: $500K Sale of New Wilmington Property Confirmed
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Judge Carlota M. Bohm of the U.S. Bankruptcy Court for the Western
District of Pennsylvania confirmed the sale by Wayne P. Burick and
Virginia Sue Burick of the real property located at 4547 State
Route 158, New Wilmington, Pennsylvania to Michael E. Nagel, Jr.
and Monique R. Nagel for $500,000.
The sale is free and divested of liens and claims. The Debtors are
authorized to make, execute and deliver to the Purchasers the
necessary deed and/or other documents required to transfer title to
the property purchased upon compliance with the terms of sale. The
liens and claims are transferred to the proceeds of sale.
The following expenses/costs will immediately be paid at the time
of closing. Failure of the Closing Agent to timely make and
forward the disbursements required by the Order will subject the
closing agent to monetary sanctions, including among other things,
a fine or the imposition of damages, after notice and hearing, for
failure to comply with the above terms of the Order. Except as to
the distribution specifically authorized in the Order, all
remaining funds will be held by the Counsel for the Debtors pending
further Order of the Court after notice and hearing:
a. Lawrence County Tax Claim Bureau - approx. $8,932;
b. Current real estate taxes, pro-rated to the date of
closing; Richard Rapone, Lawrence County Treasurer, approx. $4,256;
Wilmington Twp, c/o Jodie Elder, T.C., approx. $7,723; Wilmington
Area School District c/o Portnoff Law Associates, Ltd., approx.
$18,141;
c. The costs of local newspaper advertising in the amount of
approximately $341. The amount will be paid to Santillan Law PC as
reimbursement.
d. Court approved attorney fees in the amount of $2,000 to
Edgardo D. Santillan, Esq.;
e. Payment of Priority Taxes to: Pa. Department of Revenue,
approximately $15,000 or to be determined by PA Department of
Revenue prior to closing. The Debtors agree to file all unfiled
returns & transmittals within seven days of the Order and pay any
amounts due at time of closing; Internal Revenue Service, $27,668;
f. Court approved Realtor fees in the amount of $30,000 to
Renee Statler of Berkshire Hathaway HomeServices;
g. Ordinary closing costs under Pennsylvania Law;
h. Sale is "as is, where is";
i. The Huntington National Bank (POC#4-1) - $545; Comcast
(POC#10-1) - $291; Directv, LLC (POC#13-1) - $225; Quatum3 Group
LLC as agent for Comenity Bank (POC# 14-1) - $76; Quatum3 Group LLC
as agent for Comenity Bank (POC# 15-1) - $535; Synchrony Bank
(POC#16-1) - $4,260; and Regional Acceptance (POC#11-2) - $16,461.
j. Payment of the Debtors' counsel fees pursuant to the
Court's prior Order dated May 29, 2019, to: Edgardo D. Santillan,
Esq. in the amount of $694; and,
k. Payment of the Debtors' counsel fees granted to: Edgardo D.
Santillan, Esq. in the amount of $11,172 per Order dated Nov. 4,
2020;
l. The "net proceeds' from the closing as identified on the
HUD-1 to the Debtors.
The Closing will occur within 30 days of the Order and, within five
days following closing, the Debtors/Plaintiffs will file a report
of sale which will include a copy of the HUD-1 or other Settlement
Statement.
Within five days of the date of the Order, the Debtors will serve a
copy of the Order on each Respondent/Defendant (i.e., each party
against whom relief is sought) and its attorney of record, if any,
upon any attorney or party who answered the motion or appeared at
the hearing, the attorney for the debtor, the Closing Agent, the
Purchasers, and the attorney for the Purchasers, if any, and file a
certificate of service.
Wayne P. Burick and Virginia Sue Burick sought Chapter 11
protection (Bankr. W.D. Pa. Case No. 18-24608) on Nov. 29, 2018.
The Debtor tapped Edgardo D. Santillan, Esq., at Santillan Law,
P.C. as counsel.
WEISS BUSH: Seeks Approval to Hire Pittman & Pittman as Counsel
---------------------------------------------------------------
Weiss Bush Collision Center seeks approval from the U.S. Bankruptcy
Court for the Western District of Wisconsin to employ Pittman &
Pittman Law Offices, LLC as its legal counsel.
The firm will provide legal services in connection with Debtor's
Chapter 11 case, including representation relating to the
preparation of bankruptcy schedules and statements of financial
affairs, actions by creditors, and the preparation of liquidation
analysis.
The firm's hourly billing rates are:
Galen W. Pittman $300
Greg P. Pittman $250
Wade M. Pittman $250
Paralegal $75
Greg Pittman, Esq., the firm's attorney who will be handling the
case, disclosed in court filings that he and his firm neither hold
nor represent any interest adverse to the Debtor and that he is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Greg P. Pittman, Esq.
Pittman & Pittman Law Offices, LLC
712 Main Street
La Crosse, WI 54601
Telephone: (608) 784-0841
Facsimile: (608) 784-2206
About Weiss Bush Collision Center
Weiss Bush Collision Center filed a Chapter 11 petition (Bankr.
W.D. Wis. Case No. 20-12710) on Oct. 29, 2020. The petition was
signed by William Bush, owner. At the time of the filing, the
Debtor had estimated assets of less than $50,000 and liabilities of
less than $50,000.
Judge Catherine J. Furay oversees the case.
Greg P. Pittman, Esq., at Pittman & Pittman Law Offices, LLC,
serves as the Debtor's legal counsel.
WELLFLEX ENERGY: Sale of All Assets to PetroSmith Approved
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The U.S. Bankruptcy Court for the Northern District of Texas
authorized Wellflex Energy Partners Fort Worth, LLC's sale of
substantially all assets to PetroSmith Equipment, L.P. on the terms
of their Asset Purchase Agreement.
The purchase price for the Acquired Assets, to be paid in cash at
Closing, will be:
(a) So long as the QEP Purchase Order is not cancelled,
impaired, or materially altered in any way after the Effective Date
without the Purchaser's express written consent (at the Purchaser's
sole option), $2.2 million, minus the amount of any casualty losses
experienced by Company with respect to any Acquired Assets between
the Effective Date and Closing; or
(b) If a QEP Impairment Event will have occurred, and the
Purchaser will have declined to terminate this Agreement as a
result of the QEP Impairment Event and elected to proceed with
closing, $1.5 million, minus the amount of any casualty losses
experienced by the Company with respect to any Acquired Assets
between the Effective Date and Closing.
The sale is free and clear of any and all 363 Interests and other
adverse claims. Any and all such 363 Interests will automatically
attach to (and be deemed perfected as to) the net proceeds of the
Sale Transaction.
Within two business days after the Closing of the Sale Transaction
to the Purchaser, the cash proceeds of the sale of the Acquired
Assets will be paid to (a) Simmons Bank for all amounts of the FPL
Obligations and (b) the appropriate governmental taxing authorities
for any unpaid ad valorem taxes. For the avoidance of doubt, the
liens of Simmons Bank and the taxing authorities automatically
attach to the proceeds of the Sale Transaction.
The Debtor is authorized to assume and assign the Assumed Contracts
designated for assignment to the Purchaser pursuant to the APA.
Notwithstanding Bankruptcy Rules 6004(h), 6006(d) and 7062, the
Sale Order will be effective and enforceable immediately upon its
entry, and the sale approved by the Sale Order may close
immediately upon entry of the Sale Order, notwithstanding any
otherwise applicable waiting periods.
A copy of the APA is available at https://tinyurl.com/y6jl48mo from
PacerMonitor.com free of charge.
The Purchaser:
PETROSMITH EQUIPMENT LP
c/o Chris Thomas
Blue Wolf Capital Partners
One Liberty Plaza, 52nd Floor
New York, NY 10006
The Purchaser is represented by:
Brent McIlwain, Esq.
Fred Stovall, Esq.
HPLLAND & KNIGHT LLP
200 Crescent Court, Suite 1600
Dallas, TX 75201
About Wellflex Energy Partners
Founded in 2006, Wellflex Energy Partners Fort Worth, LLC
manufactures oil & gas field equipment. The Company utilizes the
latest in design technology to assist in detailed engineering,
fabrication, and project management to provide its customers with
most efficient, fit for purpose equipment. Visit
https://www.wellflex.com/ for more information.
Wellflex Energy Partners Fort Worth sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-43267) on
October 22, 2020. The petition was signed by Nick Klaus,
president.
At the time of the filing, the Debtor had estimated assets of
between $1 million and $10 million and liabilities of between $10
million and $50 million.
Judge Edward L. Morris oversees the case.
Foley & Lardner LLP and Grey Light Advisory, LLC serve as the
Debtor's legal counsel and financial advisor, respectively.
WESTERN URANIUM: CEO Gets $150K Annual Salary Under New Contract
----------------------------------------------------------------
Western Uranium & Vanadium Corp. entered into a new employment
agreement with its Chief Financial Officer, Robert Klein. The
Agreement is effective as of Oct. 1, 2020 and has an initial term
that ends on Sept. 30, 2021. The Agreement will automatically
renew for successive annual terms unless either party provides a
90-day advance written notice of their intention not to renew. The
Agreement provides for a base salary of $150,000 per year, the
amount of which is subject to review at least annually on or about
December 15th of each year during the term of the Agreement. Under
the Agreement, Mr. Klein will be eligible to receive a bonus after
the end of each calendar year or such earlier date as the Board of
Directors may determine, in an amount to be determined and approved
by the Board. A bonus will also be considered upon the closing of
a strategic transaction by the Company. The Agreement provides
that Mr. Klein will continue to be eligible to participate
generally in any employee benefit plan of the Company or its
affiliates and to receive annual stock option grants under the
Company's incentive stock option plan in amounts to be determined
and approved by the Board. The Agreement also provides Mr. Klein
with certain rights of indemnification and advancement of expenses
in his capacity as an officer or employee of the Company and for
having served any other entity as an officer, director or employee
at the Company's request.
About Western Uranium
Western Uranium & Vanadium Corp. is a Colorado based uranium and
vanadium conventional mining company focused on low cost near-term
production of uranium and vanadium in the western United States,
and development and application of kinetic separation.
Western Uranium reported a net loss of $2.11 million for the year
ended Dec. 31, 2019, compared to a net loss of $2.04 million for
the year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company
had $23.15 million in total assets, $4.15 million in total
liabilities, and $19 million in total stockholders' equity.
MNP LLP, in Mississauga, Ontario, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated April
14, 2020, citing that the Company has incurred continuing losses
and negative cash flows from operations and is dependent upon
future sources of equity or debt financing in order to fund its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
WESTERN URANIUM: Incurs $366K Net Loss in Third Quarter
-------------------------------------------------------
Western Uranium & Vanadium Corp. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $366,433 on $11,155 of lease revenue for the three
months ended Sept. 30, 2020, compared to a net loss of $717,401 on
$11,155 of lease revenue for the three months ended Sept. 30,
2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $2.17 million on $33,465 of lease revenue compared to
a net loss of $1.68 million on $33,465 of lease revenue for the
nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $23.15 million in total
assets, $4.15 million in total liabilities, and $19 million in
total stockholders' equity.
The Company has incurred continuing losses from its operations and
negative operating cash flows from operations and as of Sept. 30,
2020, the Company had an accumulated deficit of $10,867,655 and
working capital of $373,382.
Since inception, the Company has met its liquidity requirements
principally through the issuance of notes and the sale of its
common shares. On May 6, 2020, the Company obtained a Paycheck
Protection Program loan of $73,116. The loan has a fixed interest
rate of 1%, requires the Company to make 17 monthly payments, after
a deferral period, and has a maturity date of May 6, 2022.
Western Uranium stated, "The Company's ability to continue its
operations and to pay its obligations when they become due is
contingent upon the Company obtaining additional financing.
Management's plans include seeking to procure additional funds
through debt and equity financings, to secure regulatory approval
to fully utilize its kinetic separation technology and to initiate
the processing of ore to generate operating cash flows.
"There are no assurances that the Company will be able to raise
capital on terms acceptable to the Company or at all, or that cash
flows generated from its operations will be sufficient to meet its
current operating costs. If the Company is unable to obtain
sufficient amounts of additional capital, it may be required to
reduce the scope of its planned product development, which could
harm its financial condition and operating results, or it may not
be able to continue to fund its ongoing operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern to sustain operations for at least one
year from the issuance of these condensed consolidated financial
statements. The accompanying condensed consolidated financial
statements do not include any adjustments that might result from
the outcome of these uncertainties."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1621906/000121390020037422/f10q0920_westernuranium.htm
About Western Uranium
Western Uranium & Vanadium Corp. is a Colorado based uranium and
vanadium conventional mining company focused on low cost near-term
production of uranium and vanadium in the western United States,
and development and application of kinetic separation.
Western Uranium reported a net loss of $2.11 million for the year
ended Dec. 31, 2019, compared to a net loss of $2.04 million for
the year ended Dec. 31, 2018. As of March 31, 2020, the Company
had $23.69 million in total assets, $3.90 million in total
liabilities, and $19.79 million in total shareholders' equity.
MNP LLP, in Mississauga, Ontario, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated April
14, 2020, citing that the Company has incurred continuing losses
and negative cash flows from operations and is dependent upon
future sources of equity or debt financing in order to fund its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
WILSON SALON: Seeks Approval to Tap Julianne Frank as Legal Counsel
-------------------------------------------------------------------
Wilson Salon and Spa, Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Julianne
Frank, P.A. to handle its Chapter 11 case.
The firm received a retainer in the amount of $8,965 from the
Debtor. The retainer will be held in trust and applied upon court
approval toward legal fees and expenses incurred in representing
the Debtor.
The firm also received pre-bankruptcy accrued fees in the sum of
$2,535 for preliminary analytical work provided prior to the
Debtor's Chapter 11 filing.
Julianne Frank can be reached at:
Julianne Frank, Esq.
Julianne Frank, P.A.
4495 Military Trail Suite 107
Jupiter, FL 33458
Telephone: (561) 320-7971
About Wilson Salon and Spa
Wilson Salon and Spa, Inc. filed a voluntary petition for relief
under Chapter 11 of Bankruptcy Code (Bankr. S.D. Fla. Case No.
20-21138) on Oct. 13, 2020. At the time of the filing, the Debtor
had estimated assets of less than $50,000 and liabilities of
between $100,001 and $500,000.
Judge Mindy A. Mora oversees the case.
Julianne Frank, Esq., at Julianne Frank, P.A., serves as the
Debtor's legal counsel.
YOGAWORKS INC: Committee Seeks to Hire Morris James as Counsel
--------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of YogaWorks, Inc. and Yoga Works, Inc. seeks
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Morris James, LLP as legal counsel.
Morris James will render these legal services to the committee:
(a) provide legal advice and assistance to the committee in
its consultations with the Debtors relative to the Debtors'
administration of the reorganization;
(b) prepare legal papers;
(c) review and analyze all applications, motions, orders,
statements of operations and schedules filed with the court by the
Debtors or third parties, advise the committee as to their
propriety, and, after consultation with the committee, take
appropriate action;
(d) represent the committee at hearings held before the court
and communicate with the committee regarding the issues raised as
well as the decisions of the court; and
(e) perform other legal services for the committee which may
be reasonably required in Debtors' Chapter 11 proceedings.
The hourly rates of Morris James' principal attorneys and
paralegals who are likely to represent the committee in this case
are:
Jeffrey R. Waxman, Partner $595
Eric J. Monzo, Partner $565
Brya M. Keilson, Senior Counsel $505
Sarah M. Ennis, Associate $375
Jason S. Levin, Associate $350
Douglas J. Depta, Paralegal $225
In addition, Morris James will charge for normal and customary
expenses incurred.
Jeffrey Waxman, Esq., a partner at Morris James, 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:
Jeffrey R. Waxman, Esq.
Morris James, LLP
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801
Telephone: (302) 888-5842
Facsimile: (302) 504-3942
Email: jwaxman@morrisjames.com
About YogaWorks Inc.
YogaWorks, Inc. is a provider of progressive and quality yoga that
promotes total physical and emotional well-being. It caters to
students of all levels and ages with both traditional and
innovative programming. YogaWorks is also an international teaching
school, cultivating the richest yoga talent from around the globe
and setting the gold standard for teaching. For more information on
YogaWorks, visit http://www.yogaworks.com/
YogaWorks and Yoga Works, Inc. sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-12599) on Oct. 14, 2020.
In the petition signed by CEO Brian Cooper, YogaWorks was estimated
to have $1 million to $10 million in assets and $10 million to $50
million in liabilities.
The Debtors tapped Shulman Bastian Friedman & Bui LLP as
restructuring counsel, Cozen O'Connor as Delaware restructuring
counsel, and Force Ten Partners, LLC as financial advisor. BMC
Group, Inc., is the claims agent.
On Oct. 27, 2020, the U.S. Trustee for the District of Delaware
appointed an official committee of unsecured creditors in these
chapter 11 cases. The committee tapped Kilpatrick Townsend &
Stockton LLP and Morris James LLP as its legal counsel and Dundon
Advisers LLC as its financial advisor.
YOGAWORKS INC: Committee Taps Kilpatrick Townsend as Counsel
------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of YogaWorks, Inc. and Yoga Works, Inc. seeks
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Kilpatrick Townsend & Stockton LLP as its legal
counsel.
Kilpatrick Townsend will render these legal services:
(a) render legal advice regarding the committee's
organization, duties, and powers in the Debtors' Chapter 11 cases;
(b) evaluate and participate in the Debtors' restructuring
process to ensure it proceeds in the most efficient manner to
maximize recoveries to unsecured creditors;
(c) assist the committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors and participate in and review any proposed asset sales or
dispositions, and any other matters relevant to the cases;
(d) attend meetings of the committee and meetings with the
Debtors and secured creditors, and participate in negotiations as
requested by the committee;
(e) take all necessary actions to protect and preserve the
interests of the committee;
(f) assist the committee in the review, analysis and
negotiation of any financing or proposed use of cash collateral;
(g) assist the committee with respect to communications with
the general unsecured creditor body about significant matters in
these cases;
(h) review and analyze claims filed against the Debtors'
estates;
(i) represent the committee in hearings before the bankruptcy
court, appellate courts, and other courts in which matters may be
heard, and represent the interests of the committee before those
courts and before the U.S. Trustee;
(j) assist the committee in preparing legal papers;
(k) assist the committee in the review, formulation, analysis
and negotiation of any plan of reorganization and accompany
disclosure statement that have been or may be filed; and
(l) provide such other legal assistance as the committee may
deem necessary and appropriate.
Kilpatrick Townsend's hourly rates for the professionals expected
to be primarily involved in the Debtors' cases are:
Partners $690 - $1,160
Associates $515 - $550
Paralegals $315
The hourly rates of Kilpatrick Townsend attorneys who will be
primarily responsible for representing the committee in this matter
are:
David M. Posner $1,160
Gianfranco Finizio $730
Blaine E. Adams $550
Kelly E. Moynihan $515
In addition, Kilpatrick Townsend will seek reimbursement for
work-related expenses incurred.
Gianfranco Finizio, Esq., a partner at Kilpatrick Townsend,
disclosed in court filings that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
Mr. Finizio also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the Revised 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. However, as an accommodation to the committee,
Kilpatrick Townsend has agreed in its billing discretion to reduce
the total fees on each monthly invoice by 20% during the pendency
of these chapter 11 cases.
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: Not applicable.
Question: Has your client approved your prospective budget and
staffing plans, and, if so for what budget period?
Response: The committee and its counsel are currently in the
process of formulating a budget and staffing plan, recognizing that
in the course of large cases like the Debtors' Chapter 11 cases, it
is highly likely that there may be a number of unforeseen
circumstances that will need to be addressed by the committee and
its counsel giving rise to additional fees and expenses.
The firm can be reached through:
Gianfranco Finizio, Esq.
Kilpatrick Townsend & Stockton LLP
The Grace Building 1114 Avenue of the Americas
New York, NY 10036
Telephone: (212) 775-8840
Facsimile: (646) 786-4442
Email: gfinizio@kilpatricktownsend.com
About YogaWorks Inc.
YogaWorks, Inc. is a provider of progressive and quality yoga that
promotes total physical and emotional well-being. It caters to
students of all levels and ages with both traditional and
innovative programming. YogaWorks is also an international teaching
school, cultivating the richest yoga talent from around the globe
and setting the gold standard for teaching. For more information on
YogaWorks, visit http://www.yogaworks.com/
YogaWorks and Yoga Works, Inc. sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-12599) on Oct. 14, 2020.
In the petition signed by CEO Brian Cooper, YogaWorks was estimated
to have $1 million to $10 million in assets and $10 million to $50
million in liabilities.
The Debtors tapped Shulman Bastian Friedman & Bui LLP as
restructuring counsel, Cozen O'Connor as Delaware restructuring
counsel, and Force Ten Partners, LLC as financial advisor. BMC
Group, Inc., is the claims agent.
On Oct. 27, 2020, the U.S. Trustee for the District of Delaware
appointed an official committee of unsecured creditors in these
chapter 11 cases. The committee tapped Kilpatrick Townsend &
Stockton LLP and Morris James LLP as its legal counsel and Dundon
Advisers LLC as its financial advisor.
YOGAWORKS INC: Hires Cozen O'Connor as Delaware Counsel
-------------------------------------------------------
Yogaworks, Inc., and its debtor-affiliates, seek authority from the
U.S. Bankruptcy Court for the District of Delaware to employ
Whiteford Taylor & Preston LLC, as conflicts and special counsel to
the Debtors.
Yogaworks, Inc. requires Cozen O'Connor to:
(a) assist in matters that the Debtors may encounter in which
Lead Counsel and/or Delaware Counsel has, or believes it
may have, an actual or potential conflict;
(b) render such other tasks and matters as they arise and as
specifically requested or assigned by the Debtors which,
in their business judgment, would best serve the needs of
the Chapter 11 Cases; and
(c) assist, as needed and as requested, in any hearing in the
Chapter 11 Cases related to the foregoing.
Cozen O'Connor will be paid at these hourly rates:
Partners $635 to $675
Associates $425
Paralegals $335
Cozen O'Connor will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Richard W. Riley, partner of Whiteford Taylor & Preston 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.
Cozen O'Connor can be reached at:
Richard W. Riley, Esq.
WHITEFORD TAYLOR & PRESTON LLC
401 North King Street, Suite 1600
Wilmington, DE 19801
Tel: (302) 353-4144
About Yogaworks, Inc.
YogaWorks is a leading provider of progressive and quality yoga
that promotes total physical and emotional well-being. YogaWorks
caters to students of all levels and ages with both traditional and
innovative programming. It is also an international teaching
school, cultivating the richest yoga talent from around the globe
and setting the gold standard for teaching. For more information on
YogaWorks, visit yogaworks.com.
YogaWorks, Inc., and Yoga Works, Inc., sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 20-12599) on Oct. 14, 2020.
In the petition signed by CEO Brian Cooper, YogaWorks was estimated
to have $1 million to $10 million in assets and $10 million to $50
million in liabilities.
The Debtors tapped SHULMAN BASTIAN FRIEDMAN & BUI LLP as
restructuring counsel; COZEN O'CONNOR as Delaware restructuring
counsel; and FORCE TEN PARTNERS, LLC as financial advisor. BMC
GROUP, INC., is the claims agent.
YOGAWORKS INC: Seeks to Tap Dundon Advisers as Financial Advisor
----------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of YogaWorks, Inc. and Yoga Works, Inc. seeks
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Dundon Advisers LLC as financial advisor.
Dundon Advisers will render these professional services:
(a) Assist in the analysis, review, and monitoring of the
restructuring process;
(b) Develop a complete understanding of the Debtors'
businesses and their valuations;
(c) Determine whether there are viable alternative paths for
the disposition of the Debtors' assets from those being currently
proposed by the Debtors;
(d) Monitor, and to the extent appropriate, assist the Debtors
in efforts to develop and solicit transactions which would support
unsecured creditor recovery;
(e) Assist the committee in identifying, valuing, and pursuing
estate causes of action;
(f) Assist the committee to address claims against the Debtors
and to identify, preserve, value, and monetize tax assets of the
Debtors;
(g) Advise the committee in negotiations with the Debtors and
third parties;
(h) Assist the committee in reviewing the Debtors' financial
reports;
(i) Review and provide analysis of any proposed disclosure
statement and Chapter 11 plan and if appropriate, assist the
committee in developing an alternative Chapter 11 plan;
(j) Attend meetings and assist in discussions with the
committee, the Debtors, the secured lenders, the U.S. Trustee, and
other parties-in-interest and professionals;
(k) Present at meetings of the committee as well as meetings
with other key stakeholders and parties;
(l) Perform such other advisory services for the committee as
may be necessary or proper in these proceedings, subject to the
aforementioned scope; and
(m) Provide testimony as and when may be deemed appropriate.
The firm's customary hourly rates are:
Alex Mazier $700
Ammar Alyemany $400
April Kimm $525
Colin Breeze $630
Demetri Xistris $550
Eric Reubel $600
Harry Tucker $475
HeJing Cui $400
Laurence Pelosi $700
Lee Rooney $400
Matthew Dundon $750
Michael Garbe $600
Peter Hurwitz $700
Phillip Preis $650
Tabish Rizvi $550
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
Matthew Dundon, a principal at Dundon Advisers, 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:
Matthew Dundon
Dundon Advisers LLC
440 Mamaroneck Avenue, Fifth Floor
Harrison, NY 10528
Telephone: (914) 341-1188
Facsimile: (212) 202-4437
Email: md@dundon.com
About YogaWorks Inc.
YogaWorks, Inc. is a provider of progressive and quality yoga that
promotes total physical and emotional well-being. It caters to
students of all levels and ages with both traditional and
innovative programming. YogaWorks is also an international teaching
school, cultivating the richest yoga talent from around the globe
and setting the gold standard for teaching. For more information on
YogaWorks, visit http://www.yogaworks.com/
YogaWorks and Yoga Works, Inc. sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-12599) on Oct. 14, 2020.
In the petition signed by CEO Brian Cooper, YogaWorks was estimated
to have $1 million to $10 million in assets and $10 million to $50
million in liabilities.
The Debtors tapped Shulman Bastian Friedman & Bui LLP as
restructuring counsel, Cozen O'Connor as Delaware restructuring
counsel, and Force Ten Partners, LLC as financial advisor. BMC
Group, Inc., is the claims agent.
On Oct. 27, 2020, the U.S. Trustee for the District of Delaware
appointed an official committee of unsecured creditors in these
chapter 11 cases. The committee tapped Kilpatrick Townsend &
Stockton LLP and Morris James LLP as its legal counsel and Dundon
Advisers LLC as its financial advisor.
[*] Colorado Has Early Lead in Commercial Bankruptcies in Region
----------------------------------------------------------------
Aldo Svaldi of Denver Post reports that Colorado is taking
unfortunate early lead for commercial bankruptcy filings in the
region.
Bankruptcies among medium-sized companies are ramping up much
faster in Colorado than in other states in the Mountain West, with
the real estate and rental sector taking the hardest hit so far,
according to a report from Resolute Commercial Services.
The pandemic has pushed several large firms in retail, hospitality
and oil and gas over the edge and into bankruptcy protection,
including household names like The Hertz Corp., J.C. Penney, and
Neiman Marcus Group. Closer to home, Denver's own Whiting Petroleum
and Extraction Oil and Gas have sought to restructure billions of
dollars in debt, ranking them among the largest filers this year
2020.
Medium-sized firms have mostly averted a reckoning, thanks to the
help of the Paycheck Protection Program and other government
assistance, said Jerry Foster, founder of Resolute Commercial
Services. That will change, however, as a resurgence in COVID-19
cases brings down tighter restrictions and fiscal support from the
federal government dries up.
During the third quarter, Resolute counted 60 business bankruptcies
by firms with $1 million or more in liabilities across a nine-state
region stretching from Washington and Oregon and down to Arizona,
excluding California and New Mexico.
Of that total, 28% came in Colorado, surpassing Arizona at 22% and
Washington at 12%, even though those two states have larger
populations and larger economies.
"It feels like you are in the lead," Foster, who is based in
Scottsdale, said of Colorado. "Largely, many of these trends will
play themselves out after the first of the year. We are not even in
the first inning yet."
He suspects real estate firms are taking the hardest hit in
Colorado because many didn’t have access to PPP funds, and they
are under pressure from tenants who aren't paying their leases.
Once borrowers submit their 2020 financial statements early next
year 2021, the expectation is that lenders and unpaid creditors
will demand a reckoning. A bankruptcy filing may be the only hope
some businesses may have to survive long enough for a vaccine to
take hold and activity to return to normal.
In a coincidence of timing, the Chapter 11 Bankruptcy Code added
changes known as Subchapter V on Feb. 19 that are designed to
streamline the process and reduce costs for bankruptcy filings for
businesses with under $2.72 million in liabilities. The Cares Act
boosted that temporarily to $7.5 million in liabilities, opening it
up to more medium-sized enterprises.
Subchapter V allows existing owners to retain equity as long as
they can pay unsecured creditors from disposable income over a
three- to five-year period. Filers aren't required to provide a
cumbersome disclosure statement, and they can create the sole
restructuring plan. They can also delay paying administrative
expenses and avoid the quarterly fee paid to the U.S. Trustee.
Although new, about 55% of the filings in the region that Resolute
tracked sought the more favorable terms of Subchapter V in the
third quarter.
"It makes it a quicker process," Foster said. "It has become quite
popular." For many struggling companies, it could prove the
difference between survival and failure in the months ahead.
[^] 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.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***