/raid1/www/Hosts/bankrupt/TCR_Public/211104.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, November 4, 2021, Vol. 25, No. 307
Headlines
27646 TG: Seeks to Employ Bonnie Bell Bond as Legal Counsel
58 YORK PARTNERS: Taps Ciardi Ciardi & Astin as Bankruptcy Counsel
AAG FH: S&P Alters Outlook to Negative, Affirms 'B-' ICR
ACRISURE LLC: Moody's Rates New $600MM Sr. Secured Term Loan 'B2'
ACRISURE LLC: S&P Assigns 'B' Rating on First-Lien Term Loan
AINSWORTH TRUCK: Seeks to Hire Terra Point as Auctioneer
AKOUSTIS TECHNOLOGIES: Incurs $12.85-Mil. Net Loss in First Quarter
ALAMO CITY MOTORPLEX: Property Sale Proceeds to Fund Plan
ALCO CONSTRUCTION: Taps Land & Ranch Realty as Real Estate Broker
ALL WHEEL DRIVE: Wins Cash Collateral Access Thru Dec 31
ALS LIQUIDATION: Unsecureds Get 3% to 9%; Plan Hearing on Dec. 17
ANTHONY VULPIS: Taps Van Horn Law Group as Bankruptcy Counsel
APOLLO ENDOSURGERY: Incurs $6.7 Million Net Loss in Third Quarter
APPLIED ENERGETICS: Stockholders Elect Five Directors
ARCHDIOCESE OF NEW ORLEANS: Gainsburgh Represents B.L., 2 Others
ARIZONA AGRIBUSINESS: S&P Affirms 'BB+' Rating on Revenue Bonds
AROUND THE SOUND: Taps Neeleman Law Group as Bankruptcy Counsel
ASBURY AUTOMOTIVE: Fitch Assigns FirstTime 'BB' IDR
ASBURY AUTOMOTIVE: Moody's Rates New $1.5BB Unsecured Notes 'B1'
ASBURY AUTOMOTIVE: S&P Affirms 'BB+' ICR, Outlook Stable
AVERY COMMERCIAL: Dec. 16 Plan & Disclosure Hearing Set
AVIANCA HOLDINGS: Wins U.S. Court Approval of Bankruptcy Plan
AZ HEALTH: Unsecured Creditors Will Get 3% of Claims in Plan
B.R.H. CONSULTANTS: Case Summary & Unsecured Creditors
BABCOCK & WILCOX: B. Riley Financial Reports 30.4% Equity Stake
BLACK DIRT: Unsecured Creditors to be Paid in Full over 60 Months
BLUEBERRY COMMONS: Seeks to Hire Tang & Associates as Legal Counsel
BON-TON STORES: Former Carson's Property Listed for Sale
BOY SCOUTS: Teams Up With Survivors to Hike Child Protection Effort
CALPLANT I: Seeks to Hire Paladin Management as Financial Advisor
CAPITOL CLOSET: Taps John Forest II as Bankruptcy Attorney
CHESAPEAKE ENERGY: S&P Upgrades ICR to 'BB-' on Vine Acquisition
CHICAGOAN LOGISTIC: Unsecureds Will Get 10% Dividend in 60 Months
CLEARDAY INC: To Sell 67.36% Interests in Naples Property for $5.4M
CP HOLDINGS: Chapter 11 Sale to Tor Asia Credit Okayed by Court
CRC BROADCASTING: Seeks Cash Collateral Access for Nov. Expenses
DLVAM1302 NORTH: Seeks to Hire Buddy D. Ford as Bankruptcy Counsel
DONUT HOUSE: Dieyleh Unsecureds Will Get 5% of Claims in Plan
DOUBLE D GROUP: Seeks to Hire JW Michaels as Real Estate Broker
DURABILIS ROOFING: Unsecureds Will Get 100% of Claims in Plan
EAGLE HOSPITALITY: Court Okayed $9 Mil. In Deals With Marriott, IHG
ENCORE AUDIO: Gets OK to Hire Jerry Synder as Special Counsel
EVERGREEN GARDENS: Taps Weil, Gotshal & Manges as Legal Counsel
EXELA TECHNOLOGIES: S&P Downgrades ICR to 'SD' on Debt Repurchases
FENDER MUSICAL: S&P Affirms 'B' ICR on PreSonus Audio Acquisition
FITLETIC SPORTS: Seeks to Employ Morty Etgar as Accountant
FREDDIE MAC: Reports Third Quarter Net Income of $2.9 Billion
GIRARDI & KEESE: Erika Asks Court to Dismiss $25M Bankruptcy Suit
GOLDEN FLEECE: Seeks to Hire Sugar Felsenthal as Legal Counsel
GTT COMMUNICATIONS: S&P Downgrades ICR to 'D' on Chapter 11 Filing
GULF COAST HEALTH: Unsecureds to Get Share of GUC Trust Interests
HANKS TOWING: $258K Unsecured Claims to be Paid in Full w/ Interest
HBL SNF: Seeks Cash Collateral Access, $4MM DIP Loan
J&J ROBINSON: Seeks to Hire Hayward PLLC as Bankruptcy Counsel
KUMTOR GOLD: State-Managed Mine Underperformed by 24%
LESLIE'S POOLMART: Moody's Ups CFR & Sr. Secured Term Loan to Ba3
LRGHEALTHCARE: Court Approves Bankruptcy Wind-Down Plan
LRGHEALTHCARE: Seeks to Expand Scope of Baker Newman's Services
LSF9 ATLANTIS: Moody's Affirms 'B2' CFR, Outlook Remains Stable
MAGELLAN HOME-GOODS: Taps Whatcom Law Group as Special Counsel
MALLINCKRODT PLC: Plan Lacks Enough Votes, Says Antitrust Group
MANNINGTON MILLS: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
MATTAMY GROUP: Moody's Hikes CFR to Ba2, Outlook Stable
MDEV12 LLC: U.S. Trustee Unable to Appoint Committee
MERITAGE HOMES: Fitch Affirms 'BB+' LT IDR, Outlook Stable
NAHAUL INC: Unsecureds Will Get 10% Dividend over 60 Months
NATIONAL RIFLE: Sued by Giffords for Campaign Finance Law Violation
NATURE COAST: Seeks to Hire BerganKDV as Accountant
NEP/NCP HOLDCO: S&P Alters Outlook to Stable, Affirms 'B-' ICR
NEUTRAL POSTURE: Files Emergency Bid to Use Cash Collateral
NEXEL SERVICES: Taps The Lane Law Firm as Bankruptcy Counsel
NORTONLIFELOCK INC: S&P Affirms 'BB' ICR on Pending Avast Deal
OFS INTERNATIONAL: Dec. 9 Plan & Disclosure Hearing Set
PBF HOLDING: Fitch Affirms 'B+' LT IDR, Outlook Remains Negative
PBF LOGISTICS: Fitch Affirms 'B+' LT IDR, Outlook Remains Neg.
PCT INTERNATIONAL: Wins OK of Chapter 11 Plan, Exits Chapter 11
PLAMEX INVESTMENT: Seeks to Hire Jones Lang as Real Estate Broker
POLK AZ: U.S. Trustee Unable to Appoint Committee
PRECIPIO INC: Q3-2021 Shareholder Update Call Set for Nov. 15
PWM PROPERTY: MLB Manager Drops Fight With NYC Office Tower
QUANTUM CORP: B. Riley Reports 9.2% Equity Stake
RTECH FABRICATIONS: First Amended Plan Confirmed by Judge
RYBEK DEVELOPMENTS: U.S. Trustee Unable to Appoint Committee
SCP COLDWORKS: Seeks to Hire Helmsing Leach as Legal Counsel
SEANERGY MARITIME: Secures Commitment for $16.85M Loan Facility
SM ENERGY: Posts $85.6 Million Net Income in Third Quarter
SN TEAM: Seeks to Hire Reza Athari & Associates as Special Counsel
SOTO'S AUTO: Gets OK to Employ Moecker Auctions as Appraiser
SPRING VALLEY: Seeks to Hire Tirelli Law Group as Legal Counsel
TARGA RESOURCES: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
TELIGENT INC: Creditors Objected to Proposed Bankruptcy Financing
TELKONET INC: All Proposals Approved at Special Meeting
TIANJIN JAHO: Unsecured Creditors Will Get 100% of Claims in Plan
TIANJIN JAHO: Wins Cash Collateral Access Thru Dec 31
VERITY HEALTH: Sues MultiPlan, Other Insurers for Price-Fixing
VICTORY BUYER: Moody's Assigns 'B3' CFR & Rates New Term Loan 'B2'
VICTORY BUYER: S&P Assigns 'B-' ICR, Outlook Stable
VINE ENERGY: S&P Raises ICR to 'BB-' on Acquisition by Chesapeake
VOYAGER AVIATION: DBRS Hikes Long-Term Issuer Rating to B(low)
YELLOW POPLAR: 1928 Case Set to Close as $325K Sale Okayed
ZAREPHATH ACADEMY: Continued Operations to Fund Plan
[*] Fairness Advocates Target Pre-Bankruptcy Executive Pay
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
27646 TG: Seeks to Employ Bonnie Bell Bond as Legal Counsel
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27646 T. G., LLC seeks approval from the U.S. Bankruptcy Court for
the District of Colorado to hire the Law Office of Bonnie
Bell Bond, LLC to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) providing the Debtor with legal advice with respect to its
rights and duties under Chapter 11;
(b) assisting the Debtor in the development of a plan of
reorganization or sale of its property;
(c) preparing and filing pleadings, reports and actions, which
may be become necessary in the case;
(d) representing the Debtor in any litigation which it
determines is in the best interest of the estate; and
(e) performing all other necessary legal services.
The firm's hourly rates are as follows:
Attorney $350 per hour
Paralegal $125 per hour
The Debtor paid $6,738 to the firm as a retainer fee.
Bonnie Bell Bond, Esq., the firm's attorney who will be providing
the services, disclosed in a court filing that he is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Bonnie Bell Bond, Esq.
Law Office of Bonnie Bell Bond, LLC
8400 E. Prentice Avenue, Suite 1040
Greenwood Village, CO 80111
Phone: 303-770-0926
Fax: 303-770-0965
Email: bonnie@bellbondlaw.com
About 27646 T. G.
27646 T. G., LLC filed a petition for Chapter 11 protection (Bankr.
D. Colo. Case No. 21-15421) on Oct. 27, 2021, listing as much as
$500,000 in both assets and liabilities. Judge Joseph G. Rosania
Jr. oversees the case. The Debtor tapped the Law Office of Bonnie
Bell Bond, LLC as legal counsel.
58 YORK PARTNERS: Taps Ciardi Ciardi & Astin as Bankruptcy Counsel
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58 York Partners, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Pennsylvania to hire Ciardi Ciardi &
Astin to serve as legal counsel in its Chapter 11 case.
The firm's hourly rates are as follows:
Albert A. Ciardi, III, Esq. $575 per hour
Daniel S. Siedman, Esq. $375 per hour
Dorene Torres $160 per hour
Albert Ciardi, Esq., a partner at Ciardi Ciardi & Astin, disclosed
in a court filing that he is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Albert A. Ciardi, III, Esq.
Ciardi Ciardi & Astin
1905 Spruce Street
Philadelphia, PA 19103
Tel: 215-557-3550
Fax: 215-557-3551
Email: aciardi@ciardilaw.com
About 58 York Partners
Philadelphia-based 58 York Partners, LLC filed a petition for
Chapter 11 protection (Bankr. E.D. Pa. Case No. 21-12907) on
Oct. 27, 2021, listing as much as $10 million in both assets and
liabilities. Judge Ashely M. Chan oversees the case. The Debtor
tapped Ciardi Ciardi & Astin as legal counsel.
AAG FH: S&P Alters Outlook to Negative, Affirms 'B-' ICR
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S&P Global Ratings revised its outlook on Toronto-based auto
retailer AAG FH L.P. to stable from negative. At the same time, S&P
Global Ratings affirmed all of its ratings, including its 'B-'
issuer credit rating, on the company.
The stable outlook reflects S&P's expectation that AAG will sustain
its improved credit measures over the next couple of years while
generating meaningful positive free cash flows.
The stabilization of the rating follows AAG's improvement in recent
and estimated operating results and credit measures. S&P said,
"AAG's earnings and cash flow generation have outperformed our
expectations for the past 12 months, following a period of
government-mandated restrictions in the initial phase of the
COVID-19 pandemic that materially reduced store traffic and the
company's revenues. The improvement was led by sharply higher
vehicle sales volumes, which resulted in credit measures that
exceeded our previous expectations. We expect same-store unit sales
to increase further through next year, benefitting from increased
store traffic and pent-up consumer demand. New vehicle inventory
shortages because of global semiconductor supply challenges are
also propping up used vehicle sales volumes and prices of new and
used cars." In addition, the company's focus on expanding its
finance and insurance business, and higher maintenance activity
(from increased kilometers driven) in its parts and services
business should further contribute to earnings and cash flow.
S&P said, "As a result, we now expect the company will generate
improved leverage and coverage measures and continued positive free
cash flows. Specifically, we estimate adjusted EBITDA interest
coverage will strengthen to about 2.0x through 2022 (compared with
1.2x in 2020), which is aligned with our previous requirement to
stabilize the rating. We also expect adjusted debt to EBITDA will
decline to mid-6x area (compared with about 12x in 2020) and FOCF
to debt of about 10% over the same period. Based on the recent and
expected improvement in AAG's credit ratios, we view the company's
financial risk profile at the stronger end of our highly leveraged
assessment.
"We expect limited downside risk to the rating over the near-term,
but incorporate the potential for future earnings and cash flow
volatility. The improvement in the company's prospective cash flow
and liquidity has tempered downside rating risk, but our rating
incorporates the potential for high volatility in AAG's operating
results. AAG is highly sensitive to shortfalls in sales and
earnings mainly due to its modest scale and diversification. The
impact of the pandemic was significant, following sales disruptions
in second quarter of 2020 that led to a decline in earnings and a
spike in leverage. While future pandemic-related disruptions appear
unlikely, weaker-than-expected earnings and cash flow due to
periods of weaker auto demand can have an outsized effect on AAG's
credit ratios.
"The company currently operates 12 dealerships following the
disposition of 10 underperforming locations last year. These
dealerships were located in rural/noncore markets and did not have
a material impact on AAG's operating results but reduce the
company's scale of operations. Of the remaining 12, nine are
located in Ontario, which results in limited geographic
diversification. Therefore, we believe the company is highly
exposed to cyclical changes in demand in the province, which is
highly fragmented and competitive. In addition, increasing
competition from online market participants and growing penetration
of electric cars (through a direct-to-consumer sales channel) could
pose a longer-term headwind for auto retailers such as AAG.
AAG's margins are a key source of rating support, with future
upside potential. The company has historically operated with a lean
management structure and employed aggressive cost controls, which
has enabled its EBITDA margins to outperform peers. In addition,
AAG significantly reduced its headcount at the beginning of the
pandemic in anticipation of a decline in business activity, which
helped preserve its profitability. Sales have rebounded over the
past 12 months, but the company continues to operate with similar
staffing levels, resulting in EBITDA margins that are meaningfully
higher than in the recent past. The company's 2020 margins were
7.2% (compared with 5.3% in 2019), and S&P expects continued
strength through the rest of this year and 2022, before gradually
declining to a more sustainable levels in mid-6% area as hiring
picks up to address increased business needs.
AAG's relatively lower portion of fixed operating costs and
low-cost capital expenditure (capex) model adds resilience to the
company's cash flow profile. S&P said, "We estimate the company
will generate annual FOCF of about C$40 million, representing a
high conversion of EBITDA (about 70%). We believe the FOCF
generated will primarily be deployed to fund acquisitions beyond
2021. In our view, AAG's acquisition strategy could improve the
diversification of the company's earnings and cash flow by
geography and brands over time. However, we also acknowledge the
risks associated with this strategy, notably the potential increase
in leverage from debt financing or integration risks."
The stable outlook reflects S&P Global Ratings' expectation that
AAG will sustain its adjusted EBITDA interest coverage at about 2x
and adjusted FOCF to debt of about 10% over the next couple of
years. S&P's estimates are supported by the expectation of strong
organic vehicle sales growth and continued robust margins through
2022.
S&P said, "We could lower our ratings on AAG within the next 12
months if we expect the company will sustain adjusted EBITDA
interest coverage below 1.5x with negative FOCF. In our view, this
could result from a significant decline in vehicle sales,
potentially due to weaker-than-expected macroeconomic conditions,
or large debt-financed acquisitions. In either of scenario, we
would expect the company's ability to meet and service financial
commitments for an extended period will be severely constrained,
with a capital structure we view as unsustainable in the long
term.
"We could raise our ratings on AAG within the next 12 months if
adjusted debt to EBITDA approaches 6.0x and adjusted EBITDA
interest coverage is at or above 2.5x while generating
high-single-digit FOCF to debt. This could occur if earnings growth
exceeds our expectations, potentially from stronger-than-expected
demand for new vehicles, and the company maintains its robust
margins. In this scenario, we would also need to believe there is a
lower likelihood that macroeconomic headwinds or material
acquisitions could bring leverage back above 7x."
ACRISURE LLC: Moody's Rates New $600MM Sr. Secured Term Loan 'B2'
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Moody's Investors Service has assigned a B2 rating to a new $600
million senior secured term loan being issued by Acrisure, LLC
(Acrisure, corporate family rating B3). The company plans to use
net proceeds to fund future acquisitions, add cash to the balance
sheet and pay related fees and expenses. The rating outlook for
Acrisure is unchanged at stable.
RATINGS RATIONALE
Acrisure's rating reflects its growing market presence in US
insurance brokerage and select international markets, its good mix
of business across property & casualty insurance and employee
benefits, and its healthy EBITDA margins. Acrisure maintains the
existing brands of its many acquired entities and allows them to
operate fairly autonomously, while centralizing critical financial
reporting and compliance functions. Acrisure aligns the interests
of its existing and acquired businesses by including significant
common equity in its purchase consideration. While BDT Capital
holds a majority of Acrisure's preferred equity, Acrisure
Management and Agency Partners own around 77% of the firm's common
equity on a fully diluted basis.
These strengths are offset by Acrisure's large number and dollar
volume of acquisitions and its rising debt burden. The acquisition
strategy heightens the firm's integration risk and its exposure to
errors and omissions in the delivery of professional services. The
acquisitions also give rise to contingent earnout liabilities that
consume a substantial portion of Acrisure's free cash flow.
For the 12 months ended June 2021, Acrisure reported total revenues
of $2.2 billion with positive organic growth driven by rate
increases in commercial and specialty lines along with new
business. The company's EBITDA margin for the same period was a
healthy 32% driven by good organic growth and expense controls.
After giving effect to the proposed incremental borrowings, Moody's
estimates that Acrisure's pro forma debt-to-EBITDA ratio will
increase to around 7.5x, with (EBITDA - capex) interest coverage in
the range of 1.5x-2.5x. The company is improving its cash flow
generation, producing positive free cash flow after contingent
earnout payments and scheduled debt amortization during the 12
months ended June 2021. These metrics incorporate the rating
agency's adjustments for operating leases, contingent earnout
liabilities, changes in a warrant liability, and run-rate earnings
from recent and pending acquisitions. Moody's expects Acrisure to
reduce its financial leverage over the next couple of years in line
with provisions it has agreed to with its preferred equity holders,
and to continue growing its free cash flow.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to a rating upgrade include: (i)
debt-to-EBITDA ratio below 6x; (ii) (EBITDA - capex) coverage of
interest exceeding 2x; (iii) free-cash-flow-to-debt ratio exceeding
5%; and (iv) declining proportion of revenue and earnings from
newly acquired versus existing business.
Factors that could lead to a rating downgrade include: (i)
debt-to-EBITDA ratio above 7.5x; (ii) (EBITDA - capex) coverage of
interest below 1.2x; (iii) free-cash-flow-to-debt ratio below 2%,
or negative free cash flow after contingent earnout payments and
scheduled debt amortization; or (iv) disruptions to existing or
newly acquired operations.
Moody's has assigned the following rating:
$600 million senior secured term loan maturing in February 2027 at
B2 (LGD3).
The rating outlook for Acrisure is unchanged at stable.
The principal methodology used in this rating was Insurance Brokers
and Service Companies published in June 2018.
Based in Grand Rapids, Michigan, Acrisure distributes a range of
property & casualty insurance, employee benefits and related
products to small and midsize businesses through offices in a
majority of US states and through operations in the UK, Switzerland
and Bermuda. The company generated revenue of $2.2 billion for the
12 months through June 2021.
ACRISURE LLC: S&P Assigns 'B' Rating on First-Lien Term Loan
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S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating (50%-70%; rounded estimate: 50%) to Acrisure LLC's
$600 million incremental first-lien term loan. The proposed
offering will be nonfungible with the company's existing first-lien
term loans but will have the same Feb. 1, 2027, maturity date. S&P
expects the company to use the proceeds to fund acquisitions.
S&P said, "The ratings on Acrisure and its core
subsidiaries--including our 'B' issuer credit ratings, 'B'
first-lien credit facility debt ratings, and 'CCC+' unsecured debt
rating--are unaffected the proposed financing. Our 'B' issuer
credit ratings on Acrisure continue to reflect its fair business
risk profile and highly leveraged financial risk profile.
"For the 12 months ended June 30, 2021, Acrisure reported total
revenues of $2.2 billion and pro forma adjusted EBITDA of $790
million (about 33% adjusted margin) per our calculations, which
exclude certain add-back items. We expect reported revenue to
exceed $2.7 billion for full-year 2021.
"Our financial risk profile assessment assumes a debt-intensive
capital structure comprising debt and debt-like instruments.
Including this transaction, we expect adjusted leverage of 7.0x and
coverage of 2.2x (pro forma per our adjusted levels for both
figures, excluding preferred shares that we treat as debt) for the
12 months ended June 30, 2021.
"We expect key credit measures to stay in line with our existing
expectations for financial leverage (10x-11x; 7x-8x excluding
payment-in-kind [PIK] preferred treated as debt) and EBITDA cash
interest above 2x for the 12-month outlook period."
AINSWORTH TRUCK: Seeks to Hire Terra Point as Auctioneer
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Ainsworth Truck Leasing, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire Terra
Point, LLC to sell its equipment at public auction.
Tim Watters, chief executive officer of Terra Point, will be
primarily responsible for services rendered to the Debtor.
The firm will receive as compensation a commission equal to 8
percent of the property value.
As disclosed in court filings, Terra Point does not hold interests
adverse to the Debtor's estate.
The firm can be reached through:
Tim Watters
Terra Point, LLC
2802 Flintrock Trace, Suite 284
Austin, TX 78738
Tel: 877-772-5998
About Ainsworth Truck Leasing
Robstown, Texas-based Ainsworth Truck Leasing, LLC sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Texas Case No. 21-21142) on May 19, 2021. In the petition signed by
David Ainsworth, Sr., sole member, the Debtor disclosed up to $10
million in both assets and liabilities.
Judge David R. Jones oversees the case.
Okin Adams, LLP and The Claro Group, LLC serve as the Debtor's
bankruptcy counsel and financial advisor, respectively.
AKOUSTIS TECHNOLOGIES: Incurs $12.85-Mil. Net Loss in First Quarter
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Akoustis Technologies, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $12.85 million on $1.87 million of revenue for the three months
ended Sept. 30, 2021, compared to a net loss of $11.95 million on
$636,000 of revenue for the three months ended Sept. 30, 2020.
As of Sept. 30, 2021, the Company had $120.52 million in total
assets, $8.13 million in total liabilities, and $112.40 million of
total stockholders' equity.
The Company had cash and cash equivalents of $75.7 million and
working capital of $74.7 million as of Sept. 30, 2021. It has
historically incurred recurring operating losses and experienced
net cash used in operating activities.
As of Oct. 20, 2021, the Company had $66.0 million of cash and cash
equivalents, which the Company expects to be sufficient to fund its
operations beyond the next twelve months from the date of filing of
this Form 10-Q. These funds will be used to fund the Company's
operations, including capital expenditures, R&D, commercialization
of our technology, development of the Company's patent strategy and
expansion of its patent portfolio, as well as to provide working
capital and funds for other general corporate purposes. Except
pursuant to its ATM Equity OfferingSM Sales Agreement with BofA
Securities, Inc. and Piper Sandler & Co., the Company said it has
no commitments or arrangements to obtain any additional funds, and
there can be no assurance such funds will be available on
acceptable terms or at all. If the Company is unable to obtain
additional financing in a timely fashion and on acceptable terms,
its financial condition and results of operations may be materially
adversely affected and it may not be able to continue operations or
execute its stated commercialization plan.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001584754/000121390021055621/f10q0921_akoustis.htm
About Akoustis Technologies
Headquartered in Huntersville, NC, Akoustis is focused on
developing, designing, and manufacturing innovative RF filter
products for the mobile wireless device industry, including for
products such as smartphones and tablets, cellular infrastructure
equipment, and WiFi premise equipment.
Akoustis reported a net loss of $44.16 million for the year ended
June 30, 2021, compared to a net loss of $36.14 million for the
year ended June 30, 2020. As of June 30, 2021, the Company had
$124.99 million in total assets, $7.58 million in total
liabilities, and $117.41 million in total stockholders' equity.
ALAMO CITY MOTORPLEX: Property Sale Proceeds to Fund Plan
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Alamo City Motorplex, LLC, filed with the U.S. Bankruptcy Court for
the Western District of Texas a Disclosure Statement describing
Chapter 11 Plan dated October 28, 2021.
The Debtor is principally engaged in the business of leasing real
property. After the filing of the Voluntary Petition, the Debtor
have continued to operate the Debtor's business. The Debtor have
continued to pay all obligations on post-petition debts while under
protection of the Bankruptcy Code and have paid all normal
operating business expenses.
The Debtor owns real property described as 1.247538 Acre track of
land situated in Guadalupe County, Texas. Its value is $4,275,000
and has a claim against it in the approximate amount of $3,100,000
plus accrued interest.
The Debtor has continued to remain current on its postpetition tax
liability and make agreed upon cash collateral payments, if any.
Future income and expenses under the Plan are irrelevant.
Currently, the Debtor has received permission from this Court to
sell the real property free and clear of all liens, claims and
encumbrances. Currently, that matter is before the title company,
but as of this date, the closing has not occurred.
It is not anticipated that the Debtor will not have a future
inasmuch as when the matter is closed and the property is sold, the
Debtor will seek a dismissal of this bankruptcy case.
Class 1 consists of the secured claim of Shirazi, LLC, in the total
amount of $3,100,000.00. The Class 1 Creditors, to the extent that
their claims are allowed, shall be paid in full at closing
regarding the sell of this real estate.
Class 2 consists of the Secured Claim of the Guadalupe County Tax
Assessor/Collector in the total amount of $38,838.50. The Class 2
Creditors, to the extent that their claims are allowed, shall be
paid 100% of their claim at closing on the sell of this real
estate.
The Debtor shall retain its ownership interest under this Plan.
If this case were converted to a Chapter 7 proceeding and all of
the operations were ceased, under a Chapter 7 liquidation, the
creditors would only receive the liquidation value of Debtor's
assets. The Debtor's liquidation analysis is not attached hereto
inasmuch as this is a single asset case and the value of $4,275,000
far exceeds the debt plus interest of $3,100,000.
A full-text copy of the Disclosure Statement dated October 28,
2021, is available at https://bit.ly/3GTyMF4 from PacerMonitor.com
at no charge.
Attorney for Debtor:
James S. Wilkins, Esq.
James S. Wilkins, P.C.
1100 NW Loop 410, Suite 700
San Antonio, TX 78213
Tel.: 210-271-9212
Email: jwilkins@stic.net
About Alamo City Motorplex
Marion, Texas-based Alamo City Motorplex, LLC, filed a petition for
Chapter 11 protection (Bankr. W.D. Texas Case No. 21-50946) on July
30, 2021, listing up to $50,000 in assets and up to $10 million in
liabilities. Poria Mianabi, manager, signed the petition. James
S. Wilkins, P.C. serves as the Debtor's legal counsel.
ALCO CONSTRUCTION: Taps Land & Ranch Realty as Real Estate Broker
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ALCO Construction Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of Texas to hire Land & Ranch
Realty, LLC, a real estate broker, to sell four parcels of land
located in Edwards County, Texas.
The firm will be paid a brokerage commission of 6 percent of the
total sale price.
Joseph Lewis, partner at Land & Ranch Realty, disclosed in a court
filing that he is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Joseph L. Lewis
Land & Ranch Realty LLC
314 Hwy 83 South
Leakey, TX 78873
Phone: (830) 232-5499;
Email: lem@landandranchrealty.com
About ALCO Construction Inc.
ALCO Construction Inc., a San Antonio Texas-based company, filed a
petition for Chapter 11 protection (Bankr. W.D. Texas Case No.
21-50953) on Aug. 1, 2021, disclosing up to $1 million in assets
and up to $10 million in liabilities. Judge Michael M. Parker
oversees the case. Villa & White, LLP is the Debtor's legal
counsel.
ALL WHEEL DRIVE: Wins Cash Collateral Access Thru Dec 31
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
Santa Rosa Division, has authorized West C Builders, Inc. to use
cash collateral in accordance with the budget through December 31,
2021.
The Debtor is in immediate need to use the Cash Collateral in the
ordinary course of its business, to operate its business, to
complete the work-in-process and service obligations currently in
progress, and to service additional clients going forward, which is
the source of the Debtor's revenue.
Through continued operations, the Debtor anticipates paying its
necessary operating expenses and generating new revenue. Without
the use of the Cash Collateral, the Debtor would be unable to
remain open and would not be able to reorganize.
The Debtor is indebted to Frost, with an outstanding balance of
approximately $80,000. The Frost Claim may be collateralized by,
among other things, the Debtor's personal property some of which
may constitute cash collateral, including but not limited to its
accounts, work in process, inventory, as well as other assets,
which are estimated to be not more than $50,000. There are other
creditors who assert security interests in the Debtor's collateral,
but such claims are junior to the Frost Claim and, as such, have no
interest in the Debtor's purported cash collateral, as of the
Petition Date.
The Court finds that Frost is adequately protected during the term
of the Interim Order and that use of cash collateral is necessary
to realize the value of the collateral, future revenue and to avoid
irreparable harm.
As adequate protection for the Debtor's use of cash collateral,
Frost is granted a valid and automatically perfected continuing
replacement lien on all post-petition collateral, including Cash
Collateral, to the same extent, nature, validity and priority it
possessed prior to the petition date. The Replacement Lien will be
in addition to the liens that Frost Bank had in the assets of
Debtor as of the petition date.
A continued and final hearing on the Debtor's Motion to consider
the entry of a proposed final order will be set for telephonic
hearing on December 21 at 9:30 a.m.
A copy of the order and the Debtor's 60-Day budget from November 1
to December 31, 2021 is available at https://bit.ly/2Y9JNjT from
PacerMonitor.com.
The Debtor projects $238,750 in total income and $234,950 in total
expenses for the period.
About West C Builders, Inc.
West C Builders, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 21-10263) on May
26, 2021. In the petition signed by Anton D. Council, president,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Roger L. Efremsky oversees the case.
Gina R. Klump, Esq., at the Law Office of Gina R. Klump is the
Debtor's counsel.
ALS LIQUIDATION: Unsecureds Get 3% to 9%; Plan Hearing on Dec. 17
-----------------------------------------------------------------
ALS Liquidation LLC and its affiliated debtors and the official
committee of unsecured creditors appointed in the Debtors' Chapter
11 Cases (the "Creditors' Committee," and together with the
Debtors, the "Plan Proponents"), filed a Combined Disclosure
Statement and Chapter 11 Plan of Liquidation dated Oct. 28, 2021.
This Combined Disclosure Statement and Plan is the product of the
Debtors' and the Creditors' Committee's efforts to create an
efficient process for the wind down of the Debtors' Estates and
their exit from chapter 11 in a manner that maximizes value under
the circumstances.
This Combined Disclosure Statement and Plan contemplates the
establishment of certain liquidating trusts by and through which
the Liquidating Trustee(s) will: (i) marshal the remaining assets
of the Debtors' estates, including the proceeds from the sale of
substantially all of the Debtors' assets and certain retained
causes of action; (ii) implement the terms of the Bankruptcy Court
approved Sale by segregating and distributing certain cash held for
the benefit of non-insider general unsecured creditors; (iii)
review, reconcile, and resolve claims; and (iv) make distributions
to holders of allowed claims.
Sale of the Debtors' Assets
Despite a marketing process run by the Debtors' investment banker,
JD Merit, the Debtors did not receive any competing bids for the
Debtors' Assets by the bid deadline set forth in the Bidding
Procedures Order. Accordingly, on October 20, 2020, the Bankruptcy
Court entered the Sale Order, approving the Sale to the Purchaser
pursuant to the terms of the Asset Purchase Agreement. The Sale
subsequently closed on October 26, 2020. The Debtors ceased
operations upon the closing of the Sale.
The purchase price for the Assets sold under the Asset Purchase
Agreement, consisted of a combination of (i) a credit bid and
assumption of the Prepetition Obligations and the DIP Financing
Obligations, (ii) the Estate Cash of $650,000, (iii) the Unsecured
Cash Amount of $500,000, and (iv) the assumption of certain other
obligations (including the payment of cure amounts associated with
assigned contracts). By virtue of the purchase, all of the Debtors'
liabilities related to the Prepetition Obligations and the DIP
Financing Obligations have been satisfied in full and the Excluded
Assets (including the Retained Causes of Action), the Estate Cash,
and the Unsecured Cash Amount are all free and clear of the
Prepetition Liens and the DIP Liens.
Upon the closing of the Sale, the Purchaser transferred the Estate
Cash to the Debtors and, consistent with the Asset Purchase
Agreement, transferred the Unsecured Cash Amount into a segregated
bank account not controlled by the Debtors. As set forth in the
Asset Purchase Agreement, the Unsecured Cash Amount (i) was
contributed by the Purchaser for the sole benefit of non Insider
Holders of Allowed General Unsecured Claims (ii) is not property of
the Debtors' Estates and (iii) neither the Debtors nor the
Purchaser have any interest in the Unsecured Cash Amount. Moreover,
the Asset Purchase Agreement provides that the Unsecured Cash
Amount shall be used only through a separate liquidating trust to
be established for the sole benefit of Holders of Allowed General
Unsecured Claims.
The Plan implements the terms of the Bankruptcy Court approved
Asset Purchase Agreement by (i) establishing the GUC Sub-trust for
the sole benefit of Holders of Allowed General Unsecured Claims and
(ii) transferring and vesting the Unsecured Cash Amount in the GUC
Sub-trust.
The Plan will treat claims as follows:
* Class 1 consists of Secured Claims. Each Holder of an
Allowed Secured Claim, at the option of the Plan Proponents or the
Liquidating Trustee, as applicable, shall receive on or as soon as
reasonably practicable after the Effective Date in full and final
satisfaction, settlement, and release of and in exchange for such
Allowed Secured Claim: (A) return of the collateral securing such
Allowed Secured Claim; or (B) a Distribution of Cash from the
Estate Cash equal to the amount of such Allowed Secured Claim; or
(C) such other treatment which the Plan Proponents or the
Liquidating Trustee, as applicable, and the Holder of such Allowed
Secured Claim have agreed upon in writing. This Class has $0 -
$17,562.60 total amount of claims and will receive a distribution
of 100%.
* Class 2 consists of Priority Non-Tax Claims. Each holder of
an Allowed Priority Unsecured Non-Tax Claim against the Debtors
shall receive on or as soon as reasonably practicable after the
Effective Date, on account of and in full and complete settlement,
release and discharge of, and in exchange for, such Allowed
Priority Unsecured Non-Tax Claim, either a Distribution of Cash
from the Estate Cash equal to the full unpaid amount of such
Allowed Priority Unsecured Non-Tax Claim, or such other treatment
as the Plan Proponents or the Liquidating Trustee, as applicable,
and the holder of such Allowed Priority Unsecured Non-Tax Claim
shall have agreed. This Class has $0 - $18,226.66 total amount of
claims and will receive a distribution of 100%.
* Class 3 consists of General Unsecured Claims. Each Holder of
an Allowed General Unsecured Claim against the Debtors shall
receive on account of and in full and complete settlement, release
and discharge of, and in exchange for, such Allowed General
Unsecured Claim its Pro Rata share of: (i) the Unsecured Cash
Amount; (iii) the Beneficial Interest in the GUC Sub-trust in
accordance with the Liquidating Trust Agreement; (iii) any
remaining Estate Cash after all Allowed Administrative Claims,
Allowed Priority Tax Claims, Allowed Secured Claims, and Allowed
Priority Non-Tax Claims have been paid, resolved, or reserved for,
as applicable; and (iv) the Beneficial Interest in the Apex
Liquidating Trust in accordance with the Liquidating Trust
Agreement. This Class has $6 million - $9 million total amount of
claims and receive a distribution of 3% - 9% of their allowed
claims.
* Class 4 consists of Insider Claims. Each Holder of an
Allowed Insider Claim against the Debtors shall receive on account
of and in full and complete settlement, release and discharge of,
and in exchange for, such Allowed Insider Claim its Pro Rata share
of: (i) any remaining Estate Cash after all Allowed Administrative
Claims, Allowed Priority Tax Claims, Allowed Secured Claims, and
Allowed Priority Non-Tax Claims have been paid, resolved, or
reserved for, as applicable; and (ii) the Beneficial Interest in
the Apex Liquidating Trust in accordance with the Liquidating Trust
Agreement. This Class will receive a distribution of 0% - 1% of
their allowed claims.
* Class 6 consists of Equity Interests. On the Effective Date,
all Interests shall be deemed canceled, extinguished and of no
further force or effect, and the Holders of Interests shall not be
entitled to receive or retain any property on account of such
Interest.
On and after the Effective Date, all Assets and liabilities of the
Debtors shall be treated as though they were merged into the Estate
of ALS Liquidation LLC for all purposes associated with
Confirmation and Consummation, and all guarantees by any Debtor of
the obligations of any other Debtor shall be eliminated so that any
Claim and any guarantee thereof by any other Debtor, as well as any
joint and several liability of any Debtor with respect to any other
Debtor shall be treated as one collective obligation of the
Debtors, subject to all rights, claims, defenses, and arguments
available to the Debtors or the Liquidating Trustee.
The Confirmation Hearing has been scheduled for December 17, 2021
at 10:00 a.m. to consider (a) final approval of the Disclosure
Statement as providing adequate information and (b) Confirmation of
the Plan.
Any objection to final approval of the Disclosure Statement must be
filed and served so as to be actually received on or before
December 8, 2021 at 4:00 p.m.
A full-text copy of the Combined Disclosure Statement dated October
28, 2021, is available at https://bit.ly/3GJgh63 from
PacerMonitor.com at no charge.
Counsel to the Debtors:
Goldstein & McClintock, LLLP
Maria Aprile Sawczuk, Esq.
501 Silverside Road, Suite 65
Wilmington, DE 19809
E-mail: marias@goldmclaw.com
-- and --
Harley J. Goldstein, Esq.
Jeffrey C. Dan, Esq.
111 W. Washington Street, Suite 1221
Chicago, IL 60602
harleyg@goldmclaw.com
jeffd@goldmclaw.com
Counsel to the Creditors' Committee:
Archer & Greiner PC
David W. Carickhoff, Esq.
Alan M. Root, Esq.
300 Delaware Ave, Suite 1100
Wilmington, DE 19801
dcarickhoff@archerlaw.com
aroot@archerlaw.com
About ALS Liquidation
ALS Liquidation LLC, formerly known as Apex Linen Service LLC, and
its affiliates sought Chapter 11 protection (Bankr. D. Del. Case
No. 20-11774) on July 6, 2020. Chris Bryan, president and
authorized representative, signed the petitions. At the time of
the filing, ALS Liquidation was estimated to have $10 million to
$50 million in both assets and liabilities.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Goldstein & McCintock LLLP as their bankruptcy
counsel, GlassRatner Advisory & Capital Group LLC as chief
restructuring officer, JD Merit & Co. as investment banker and
Lauterbach & Amen LLP as accountant. Stretto is the claims and
noticing agent.
On July 23, 2020, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in the Debtors' cases.
The committee is represented by Archer & Greiner, P.C.
ANTHONY VULPIS: Taps Van Horn Law Group as Bankruptcy Counsel
-------------------------------------------------------------
Anthony Vulpis Contract Carrier Corp. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Van Horn Law Group, P.A. to serve as legal counsel in its Chapter
11 case.
The firm's services include:
(a) advising the Debtor regarding its powers and duties and
the continued management of its business operations;
(b) advising the Debtor regarding its responsibilities in
complying with the U.S. trustee's operating guidelines and
reporting requirements and with the rules of the court;
(c) preparing legal documents;
(d) protecting the Debtor's interest in all matters pending
before the bankruptcy court; and
(e) representing the Debtor in negotiation with its creditors
in the preparation of a Chapter 11 plan.
The firm's hourly rates range from $150 to $450 for law clerks,
paralegals and attorneys. The normal rate charged by Chad Van Horn,
Esq., a partner at Van Horn Law Group, is $450 per hour but the
attorney has agreed to lower it to $350 per hour.
Van Horn Law Group received a retainer in the amount of $5,000,
plus $1,738 for the filing fee cost.
In addition, the firm will seek reimbursement for expenses
incurred.
Mr. Van Horn disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Chad T. Van Horn, Esq.
Van Horn Law Group, PA
330 N. Andrews Ave., Suite 450
Fort Lauderdale, FL 33301
Telephone: (954) 765-3166
Email: Chad@cvhlwgroup.com
About Anthony Vulpis Contract Carrier
Anthony Vulpis Contract Carrier Corp. filed its voluntary petition
for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-20090) on
Oct. 21, 2021, listing up to $50,000 in assets and up to $100,000
in liabilities. Judge Peter D. Russin oversees the case.
Chad T. Van Horn, Esq., at Van Horn Law Group, P.A. represents the
Debtor as legal counsel.
APOLLO ENDOSURGERY: Incurs $6.7 Million Net Loss in Third Quarter
-----------------------------------------------------------------
Apollo Endosurgery, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $6.66 million on $16.35 million of revenues for the three months
ended Sept. 30, 2021, compared to a net loss of $2.60 million on
$12.83 million of revenues for the three months ended Sept. 30,
2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $14.28 million on $46.82 million of revenues compared
to a net loss of $19.11 million on $29.19 million of revenues for
the same period during the prior year.
As of Sept. 30, 2021, the Company had $71.08 million in total
assets, $71.17 million in total liabilities, and a total
stockholders' deficit of $92,000.
"In the third quarter, we continued to build momentum and energize
our business in the U.S. and overseas, delivering strong financial
performance for both revenue and gross margin," said Chas McKhann,
Apollo's president and CEO. "Our recently completed follow-on
financing enables us to thoughtfully invest in advancing
large-scale opportunities to expand our addressable markets. For
example, our recent De Novo 510(k) classification request for
Apollo ESG and Apollo REVISE is based on well documented
therapeutic solutions in categories where patients are increasingly
seeking effective but less invasive alternatives. We are building
a foundation for long-term value creation here at Apollo."
Cash, cash equivalents and restricted cash were $28.5 million as of
Sept. 30, 2021, representing a net cash burn of $2.8 million for
the third quarter.
In October, the Company completed a follow-on equity offering of
9,660,000 shares for gross proceeds of $75 million.
Apollo expects full year 2021 revenue between $63-$64 million. The
Company continues to monitor the potential and uncertain impact of
the ongoing COVID-19 pandemic. Should hospitals or outpatient
centers where the company's procedures are performed experience
continued or additional surges in cases and need to defer elective
procedures to preserve capacity for COVID-19 patients, the
company's ability to achieve these financial projections could be
adversely affected.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1251769/000125176921000120/apen-20210930.htm
About Apollo Endosurgery
Apollo Endosurgery, Inc. -- http://www.apolloendo.com-- is a
medical technology company focused on less invasive therapies to
treat various gastrointestinal conditions, ranging from
gastrointestinal complications to the treatment of obesity.
Apollo's device-based therapies are an alternative to invasive
surgical procedures, thus lowering complication rates and reducing
total healthcare costs. Apollo's products are offered in over 75
countries and include the OverStitch Endoscopic Suturing System,
the OverStitch Sx Endoscopic Suturing System, and the ORBERA
Intragastric Balloon.
Apollo Endosurgery reported a net loss of $22.61 million for the
year ended Dec. 31, 2020, compared to a net loss of $27.43 million
for the year ended Dec. 31, 2019. As of June 30, 2021, the Company
had $74.42 million in total assets, $71.71 million in total
liabilities, and $2.71 million in total stockholders' equity.
APPLIED ENERGETICS: Stockholders Elect Five Directors
-----------------------------------------------------
The 2021 Annual Meeting of Stockholders of Applied Energetics, Inc.
was held at which the stockholders elected the following nominees
to the Board of Directors:
(1) Gregory J. Quarles (3 years)
(2) Bradford T. Adamczyk (3 years)
(3) Mary P. O'Hara (3 years)
(4) Jonathan R. Barcklow (2 years)
(5) John Schultz (1 year)
The stockholders also ratified the appointment of RBSM LLP as the
company's independent registered public accounting firm for the
fiscal year ending Dec. 31, 2021.
About Applied Energetics
Headquartered in Tucson, Arizona, Applied Energetics, Inc. --
www.aergs.com -- specializes in the development and manufacture of
advanced high-performance lasers, high voltage electronics,
advanced optical systems, and integrated guided energy systems for
prospective defense, aerospace, industrial, and scientific
customers worldwide.
Applied Energetics reported a net loss of $3.23 million for the
year ended Dec. 31, 2020, compared to a net loss of $5.56 million
for the year ended Dec. 31, 2019. As of June 30, 2021, the Company
had $4.83 million in total assets, $2.57 million in total
liabilities, and $2.26 million in total stockholders' equity.
Henderson, Nevada-based RBSM LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated
April 12, 2021, citing that the company has suffered recurring
losses from operations, will require additional capital to fund its
current operating plan, and has stated that substantial doubt
exists about the company's ability to continue as a going concern.
ARCHDIOCESE OF NEW ORLEANS: Gainsburgh Represents B.L., 2 Others
----------------------------------------------------------------
In the Chapter 11 cases of The Roman Catholic Church of the
Archdiocese of New Orleans, the law firm of Gainsburgh, Benjamin,
David, Meunier & Warshauer, L.L.C. submitted a verified statement
under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to
disclose that it is representing CDC #19-11521 Plaintiffs, B.L.,
R.M. and E.C.
Gainsburgh Benjamin only represents creditors in the Archdiocese's
bankruptcy case.
The CDC #19-11521 Plaintiffs, B.L., R.M. and E.C. are the only
creditors or other parties in interest in the Archdiocese's
bankruptcy for which Gainsburgh Benjamin is required to file a
Verified Statement pursuant to Federal Rule of Bankruptcy Procedure
2019.
CDC #19-11521 Plaintiffs' counsel name and address:
Gerald E. Meunier
Brittany R. Wolf-Freedman
Gainsburgh, Benjamin, David Meunier, &
Warshauer, L.L.C. 2800 Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163-2800
B.L.'s counsel name and address:
Gerald E. Meunier
Brittany R. Wolf-Freedman
Gainsburgh, Benjamin, David Meunier, &
Warshauer, L.L.C. 2800 Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163-2800
R.M.'s counsel name and address:
Gerald E. Meunier
Brittany R. Wolf-Freedman
Gainsburgh, Benjamin, David Meunier, &
Warshauer, L.L.C. 2800 Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163-2800
E.C.'s counsel name and address:
Gerald E. Meunier
Brittany R. Wolf-Freedman
Gainsburgh, Benjamin, David Meunier, &
Warshauer, L.L.C. 2800 Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163-2800
The nature of the CDC #19-11521 Plaintiffs', B.L.'s, R.M.'s and
E.C.'s economic interests held in relation to the Archdiocese are
as creditors, with the amount of each entities' claim to be
determined.
Nothing contained in this Verified Statement is intended or shall
be construed to constitute (i) a waiver or release of the rights of
the CDC #19-11521 Plaintiffs, B.L., R.M. and E.C. to have any final
order entered by, or other exercise of the judicial power of the
United States performed by, an Article III court; (ii) a waiver or
release of the rights of the CDC #19-11521 Plaintiffs, B.L., R.M.
and E.C. to have any and all final orders in any and all non-core
matters entered only after de novo review by a United States
District Judge; (iii) consent to the jurisdiction of the Court over
any matter; (iv) an election of remedy; (v) a waiver or release of
any rights the CDC #19-11521 Plaintiffs, B.L., R.M. and E.C. may
have to a jury trial; (vi) a waiver or release of the right to move
to withdraw the reference with respect to any matter or proceeding
that may be commenced in the bankruptcy case against or otherwise
involving the CDC #19-11521 Plaintiffs, B.L., R.M. and E.C.; or
(vii) a waiver or release of any other rights, claims, actions,
defenses, setoffs or recoupments to which the CDC #19-11521
Plaintiffs, B.L., R.M. and E.C. may be entitled, in law or in
equity, under any agreement or otherwise, with all of which rights,
claims, actions, defenses, setoffs or recoupments being expressly
reserved.
Counsel For CDC #19-11521 Plaintiffs, B.L., R.M. and E.C. can be
reached at:
GAINSBURGH, BENJAMIN, DAVID MEUNIER, & WARSHAUER, L.L.C.
Brittany R. Wolf-Freedman, Esq.
Gerald E. Meunier, Esq.
2800 Energy Centre
1100 Poydras Street
New Orleans, LA 70163-2800
Telephone: (504) 522-2304
E-mail: gmuenier@gainsben.com
bwolf@gainsben.com
A copy of the Rule 2019 filing is available at
https://bit.ly/3w74UA0 at no extra charge.
About The Roman Catholic Church
of the Archdiocese of New Orleans
The Roman Catholic Church of the Archdiocese of New Orleans is a
non-profit religious corporation incorporated under the laws of the
State of Louisiana. For more information, visit
https://www.nolacatholic.org/
Created as a diocese in 1793, and established as an archdiocese in
1850, the Archdiocese of New Orleans has educated hundreds of
thousands in its schools, provided religious services to its
churches and provided charitable assistance to individuals in need,
including those affected by hurricanes, floods, natural disasters,
war, civil unrest, plagues, epidemics, and illness. Currently, the
archdiocese's geographic footprint occupies over 4,200 square Miles
in southeast Louisiana and includes eight civil parishes --
Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John
the Baptist, St. Tammany, and Washington.
The Roman Catholic Church for the Archdiocese of New Orleans sought
Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1,
2020. The archdiocese was estimated to have $100 million to $500
million in assets and liabilities as of the bankruptcy filing.
Judge Meredith S. Grabill oversees the case.
Jones Walker, LLP and Blank Rome, LLP serve as the archdiocese's
bankruptcy counsel and special counsel, respectively. Donlin,
Recano & Company, Inc., is the claims agent.
The U.S. Trustee for Region 5 appointed an official committee of
unsecured creditors on May 20, 2020. The committee is represented
by the law firms of Pachulski Stang Ziehl & Jones, LLP and Locke
Lord, LLP. Berkeley Research Group, LLC, is the committee's
financial advisor.
ARIZONA AGRIBUSINESS: S&P Affirms 'BB+' Rating on Revenue Bonds
---------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed its 'BB+' rating on the Yavapai County Industrial
Development Authority, Ariz.'s series 2012, 2015A, and 2015B
education revenue bonds, and the Arizona Industrial Development
Authority's series 2017A and 2017B education revenue and refunding
bonds, issued for the Arizona Agribusiness & Equine Center Inc.
(AAEC).
"The outlook revision and rating affirmation are based on the
strength of the enterprise profile across the five campuses, and
improved financial operations since fiscal 2019 with expectations
for similar positive results in fiscal 2022, maximum annual debt
service (MADS) coverage of 1.18x, and days' cash on hand that
remains solid at just under 90 days," said S&P Global Ratings
credit analyst Jessica Wood.
Total debt outstanding is about $41.7 million and there are no
leases. AAEC's pledge of net revenue from its charter school
operations, primarily derived from per-pupil funding received from
the state, secures all bonds outstanding. A first-lien deed of
trust and security interest in all financed facilities further
secure the bonds. The school's additional bonds test requires that
debt service associated with maximum combined pre-existing and
proposed additional debt service coverage (DSC) must equal at least
1.2x MADS. AAEC also has to maintain at least 1.0x annual DSC at
every fiscal year-end, and violation could be an event of default.
The school must maintain a working capital reserve equal to a
certain percentage of expenditures, depending on MADS compared with
gross revenue. The bonds also have a reserve requirement of the
lowest of 10% of the original principal, MADS, or 125% of average
annual debt service.
"We assess AAEC's enterprise profile as adequate, reflecting our
view of the school's historical enrollment growth; modest
waitlists; six separately chartered campuses in different
neighborhoods, which mitigates risk; solid charter standings; and
reputation for academic quality," said Ms. Wood. S&P said, "The
center's financial profile is vulnerable, in our opinion,
reflecting AAEC's volatile operating results in recent years,
combined with an extremely leveraged debt profile, especially per
student. We view positively that AAEC has generated healthy
liquidity for the past few years, with expectations to maintain
unrestricted days' cash during fiscal 2021. We believe that these
combined credit factors lead to an anchor of 'bb'."
"The stable outlook reflects our opinion that AAEC's enrollment
will remain relatively stable despite a small dip in fall 2021,
supporting steady financial performance and lease-adjusted MADS
coverage and liquidity levels in line with the current rating,"
added Ms. Wood.
S&P said, "We view the risks posed by COVID-19 to public health and
safety as an elevated social risk for the charter sector under our
environmental, social, and governance (ESG) factors. We believe
this is a social risk for the school, should local demand
preferences shift toward home-school options amid the spread of the
delta variant, potentially affecting enrollment trends, which could
affect state funding as a major revenue source for the school.
Despite the elevated social risks, we consider the school's
environmental and governance risks to be in line with our view of
the sector as a whole."
AROUND THE SOUND: Taps Neeleman Law Group as Bankruptcy Counsel
---------------------------------------------------------------
Around The Sound Roofing, LLC received approval from the U.S.
Bankruptcy Court for the Western District of Washington to hire
Neeleman Law Group to serve as legal counsel in its Chapter 11
case.
The firm's services include:
(a) assisting the Debtor in investigating the financial
affairs of the bankruptcy estate;
(b) providing legal assistance to the Debtor with respect to
matters relating to the case and creditor distribution;
(c) preparing all pleadings necessary for proceedings arising
under the case; and
(d) performing all other necessary legal services.
The firm's hourly rates are as follows:
Principals $450 per hour
Associate $275 per hour
Paralegal $125 per hour
Jennifer Neeleman, Esq., a principal at Neeleman Law Group,
disclosed in a court filing that he is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jennifer L. Neeleman, Esq.
Neeleman Law Group
1403 8th Street
Marysville, WA 98270
Phone: 425.212.4800
Fax: 425.212.4802
Email: courtmail@expresslaw.com
About Around The Sound
Around The Sound Roofing, LLC filed a petition for Chapter 11
protection (Bankr. W.D. Wash. Case No. 21-11721) on Sept. 13, 2021,
listing up to $50,000 in assets and up to $500,000 in liabilities.
Judge Timothy W. Dore oversees the case. The Debtor tapped
Neeleman Law Group, P.C. as legal counsel.
ASBURY AUTOMOTIVE: Fitch Assigns FirstTime 'BB' IDR
---------------------------------------------------
Fitch Ratings has assigned a 'BB' First-Time Issuer Default Rating
(IDR) to Asbury Automotive Group, Inc. (Asbury). Fitch has also
assigned a 'BBB-'/'RR1' rating to the company's proposed $450
million revolving credit facility and a 'BB'/'RR4' rating to its
existing $850 million unsecured notes maturing 2028 and 2030 and
proposed $1.5 billion unsecured notes maturing 2029 and 2032, which
will be used to finance the acquisition of Larry H. Miller
Dealerships (LHM), Total Care Auto (TCA) and for additional
acquisitions under contract.
Asbury's 'BB' rating reflects its top five position in the new and
used auto dealership industry following the proposed acquisitions.
The rating is supported by balanced gross profit mix across
segments that limits financial sensitivity to the cyclical new and
used vehicle market and by strong liquidity. The ratings consider a
projected reversal of recently strong gross margin and demand
trends. Fitch's leverage expectation assumes close to $700 million
in debt repayment over the next two years. The Negative Outlook
contemplates a period of heightened uncertainty related to
increased consumer demand and margins that could reverse beyond
Fitch's expectations and limit the company's deleveraging
capacity.
KEY RATING DRIVERS
Proposed Acquisitions:
On Sept. 29, 2021, Asbury announced the proposed acquisitions of
LHM and TCA, adding around 60 new and used franchise dealerships
and a suite of financial and service related products. Management
expects the transaction to add $5.7 billion in annualized revenue.
The purchase price of roughly $3.2 billion represents an
approximately 7x multiple based on $470 million in LTM September
2021 adjusted EBITDA. The company is proposing $234 million in
revolver borrowings, $712 million in real estate term loans, $1.5
billion in unsecured notes and around $600 million of equity to
fund the transaction. Giving effect to additional acquisitions
under contract, pro forma adjusted leverage is around 3.2x on
September 2021 LTM EBITDA of around $1.2 billion. The acquisition
is expected to close in Q4 2021.
The transaction could modestly shift the gross profit mix towards
the higher margin parts & service (P&S) and finance & insurance
(F&I) business segments, which could support higher margins
relative to pre-pandemic levels. The transaction expands the
company's geographic scale and diversification into the Southwest
U.S. It could produce modest synergies across the fleet through
shared costs, new capabilities of the company's omnichannel
platform Clicklane, and additional F&I product sales as a result of
the acquired TCA portfolio.
Strategic Plan:
Asbury updated its five-year plan in September 2021, including a
sales target of $20 billion by 2025, and expects to update this
plan in Q1 2022. From a sales base of $8 billion in 2020, the
company expects to grow organic sales by $7 billion by 2025, with
the vast majority related to increased sales opportunities
generated from Clicklane. Recent acquisitions exceed management's
$5 billion target in additional revenue from acquisitions by $1.6
billion.
Absent material growth in the company's omnichannel platform or
additional transformative M&A, Fitch believes sales could trend in
the low to mid $16 billion range by 2024. Fitch considers Asbury's
forecast for Clicklane somewhat aspirational but views the
company's willingness and ability to invest in new capabilities as
a competitive advantage relative to smaller independent peers.
Strong Industry Demand & Profitability; Some Reversal Expected:
Asbury's vehicle unit volume was challenged in 2020, down around
10%, due to the coronavirus pandemic. However, it was able to grow
EBITDA to around $440 million in 2020 from $340 million in 2019 on
a lower sales base due to higher vehicle margins and expense
control measures. 2021 performance benefitted from even stronger
vehicle margins due to vehicle supply shortages related to
microchips and strong vehicle demand, resulting in EBITDA trending
in the mid $700 million range for the LTM period September 2021.
Fitch expects demand to somewhat reverse in 2022 such that, pro
forma for acquisitions, revenue could decline to around $15.4
billion in 2022 from $15.5 billion for the LTM period September
2021. Pro forma, Fitch's 2022 sales forecast represents mid-single
digit growth in pre-pandemic sales of around $14.7 billion in 2019.
Fitch expects total revenue to then grow toward $16.4 billion by
2024, reflecting low single-digit growth in comparable sales and
low single-digit growth from additional dealership acquisitions.
Fitch expects gross margin rates to remain largely similar in 2022
due to a likely tight vehicle supply environment. Given revenue and
gross margin assumptions, Fitch expects pro forma EBITDA to decline
towards $1.05 billion in 2022 from around $1.2 billion LTM
September 2021 due to top-line reversal.
In 2023 EBITDA could be in the mid-$800 million range given Fitch's
topline projections and assuming some vehicle margin normalization.
EBITDA margins could trend in the low-5% range, higher than pro
forma 2019 margins in the mid-4% range.
Strong FCF; Reasonable Leverage:
FCF was approximately $600 million in 2020, in part due to a $300
million working capital benefit. Fitch expects it to average around
$400 million annually beginning in 2022 despite higher EBITDA
following the acquisition assuming higher capex, interest expense
and neutral working capital. FCF could be used for debt repayment
and additional M&A opportunities. Fitch expects adjusted
debt/EBITDAR, which has averaged around 3.1x over the last several
years, to increase close to 4.0x in 2022. Fitch also expects Asbury
to prioritize debt repayment as it targets net leverage of 3x, or
around 3.5x on an adjusted leverage basis. If Asbury does not use
FCF to reduce debt, adjusted leverage could be mid-4x in 2023 given
Fitch's EBITDA assumptions.
Industry Position:
Asbury benefits from good scale and reputation. The company has
extensive experience in running dealerships and maintains good
relationships with automotive OEMs. Pro forma for LHM and TCA, the
company will operate over 150 franchise locations across the U.S.,
predominantly in Florida, Utah, Georgia, Colorado, and Texas.
Asbury has established alternative sources of revenue and profit
associated with vehicle purchases, including P&S and F&I business
segments. As of 2020, around 30% of total consolidated gross profit
was derived from vehicle sales. Fitch believes scale in this
industry allows for the leveraging of fixed investments across a
wider scope of business compared to independent dealers. While
ancillary gross profit may be correlated to vehicle unit volume,
the balanced approach across business segments somewhat limits
sensitivity to economic fluctuations in the highly cyclical vehicle
market.
Industry incumbents such as Asbury benefit from structurally high
barriers to entry, which are high because of protected franchise
agreements regulated on both state and federal levels. Dealerships
require significant upfront capital investment for initial
construction and working capital. Asbury's scale and cash
generation enable it to invest in omnichannel and automation
capabilities, which are difficult to replicate for lower
capitalized independent peers.
DERIVATION SUMMARY
Asbury's 'BB' rating reflects its top five position in the new and
used auto dealership industry. The ratings consider a projected
reversal of recently strong gross margin and demand trends which is
expected to produce sales and EBITDA trending around $16 billion
and the mid $800 million range beginning 2023. Fitch expects
adjusted leverage (capitalizing rent expense at 8x) to trend close
to 4.0x over the next 18 to 24 months. Consistent with expected
financial policy actions the company would take to maintain their
public net leverage target of 3.0x, which equates to adjusted
leverage of around 3.5x, assuming around $100 million to $200
million in cash, Fitch's leverage expectation assumes close to $700
million in debt repayment over the next two years.
Fitch's Negative Outlook for Asbury contemplates a period of
heightened uncertainty related to increased consumer demand and
margins, which could reverse beyond Fitch's expectations and limit
the company's deleveraging capacity. Auto and auto parts retail
peers in Fitch's coverage include Sonic Automotive Inc.
(BB/Stable), AutoNation, Inc. (BBB-/Positive) and AutoZone, Inc.
(BBB/Stable), while similarly rated retail peers include Signet
Jewelers Limited (BB/Stable).
Sonic's 'BB' rating reflects its top five position in the new and
used auto dealership industry with expected 2022 revenue and EBITDA
of around $15 billion and around $600 million, respectively,
following the proposed acquisition of RFJ. The rating is supported
by balanced gross profit mix across segments, which helps limit
financial sensitivity to the cyclical new and used vehicle market,
strong liquidity position supported by expected positive FCF, and
Fitch's expectation for adjusted leverage to trend around 4x, in
line with the company's historical adjusted leverage range.
Additionally, the rating considers potential EBITDA upside and
related risks associated with the company's pre-owned superstore
growth strategy, EchoPark, which is expected to contribute around
$5 billion and $50 million to $60 million in sales and EBITDA,
respectively, by 2024.
AutoNation, whose business model is similar to that of Asbury,
holds a leading position in the auto retail segment and has a
history of good cash flows, which allows it to invest in growth
initiatives while effectively managing through an inherently
cyclical automotive industry. The Positive Outlook reflects
AutoNation's good operating momentum in 2019/2020 and proactive
debt reduction of over $500 million during 2019/2020 which led to
adjusted leverage of 2.3x in 2020, below AutoNation's upgrade
sensitivity of 2.75x. An upgrade could therefore result from
increased confidence in AutoNation's ability to grow EBITDA over
time, recognizing 2022 EBITDA could decline as revenue and gross
margin upside unwinds from 2020/2021 levels, in combination with
financial policy actions that would yield adjusted leverage
sustained below 2.75x.
Unlike Asbury, AutoZone competes in the retail auto parts and
accessories aftermarket. Ratings reflect leading market share,
steady operating results including sales and EBITDA growth at a
five-year CAGR of 4%, high profitability margins with EBITDA
margins around 23%, and steady credit metrics with adjusted
debt/EBITDAR at 2.3x in fiscal 2021 (ended August 2021).
Signet's 'BB'/Stable rating reflects the company's improving
operating trajectory through topline and expense management
initiatives. Fitch expects stable revenue and EBITDA beginning 2022
around mid-$6 billion and mid-$500 million, respectively, relative
to pre-pandemic levels of $6.1 billion and $504 million. These
expectations, alongside management's evolving financial policy
favoring debt reduction, have improved Fitch's confidence in the
company's ability to sustain adjusted leverage below 4.5x. Signet's
ratings continue to reflect its leading market position as a U.S.
specialty jeweler with approximately 6% share of a highly
fragmented industry.
KEY ASSUMPTIONS
-- Revenue in 2021 is expected to grow over 35% to $9.7 billion
from $7.1 billion in 2020 on a rebound in vehicle units
following around 10% unit declines in 2020, in combination
with full year sales contribution from 12 franchise
dealerships acquired in August 2020. This assumes around 13%
sales growth in 4Q21 following nearly 47% growth in YTD
September sales. EBITDA in 2021 is projected to expand to $790
million from approximately $440 million in 2020 on topline
growth and gross margin expansion due to a strong vehicle
pricing environment.
-- Topline in 2022 could be approximately $15.4 billion, assuming
around 5% growth over 2019 total pro forma sales of around
$14.7 billion, inclusive of 2020/2021 acquisitions. Assuming a
still-tight vehicle supply environment, pro forma EBITDA
margins in 2022 could be similar to 2021, yielding EBITDA of
around $1.05 billion.
-- Beginning 2023, Asbury's organic topline could expand around
1% to 2% annually, with consolidated revenue up closer to 3%
to 4% assuming some ongoing franchise acquisitions. EBITDA
could trend at the mid $800 million level beginning 2023,
below the $1.05 billion level expected in 2022 as sales growth
is mitigated by gross margin declines as the pricing
environment for vehicles is expected to normalize somewhat,
albeit still above pre-pandemic levels.
-- FCF, which was approximately $600 million in 2020, in part due
to a $300 million working capital benefit, is expected to
average around $400 million annually beginning 2022 despite
higher EBITDA due to higher capex and interest expense.
Working capital is assumed to be neutral.
-- Adjusted debt/EBITDAR, which averaged around 3.1x over the
last several years, is projected to be similar in 2021, pro
forma for acquisitions. Adjusted leverage could trend toward
4x in 2023 based on industry margin normalization. This
projection assumes Asbury uses a significant portion of FCF
for debt reduction, in line with its public net leverage
target of 3x, which would equate to around 3.5x on a lease
adjusted basis. Should Asbury not deploy FCF toward debt
reduction, adjusted leverage could be in the mid-4x beginning
2023, given Fitch's EBITDA assumptions.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- An upgrade would result from adjusted debt/EBITDAR
(capitalizing lease expense at 8x) sustained below 3.75x,
through better than expected operating performance and/or
financial policy actions.
-- Stabilization of Asbury's Outlook could result from increased
confidence in Asbury meeting Fitch's operating expectations,
along with demonstrated debt repayment leading to adjusted
debt /EBITDAR sustained under 4.25x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A downgrade would result from financial policy decisions,
including debt financed M&A or share repurchase, which results
in adjusted debt/EBITDAR (capitalizing lease expense at 8x)
sustained above 4.25x.
-- Weaker than expected operating results or lower than expected
debt repayment which results in adjusted debt/EBITDAR
sustained above 4.25x beyond 2023 could also yield a
downgrade.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Good Liquidity:
Total liquidity, excluding floorplan related liquidity resources,
as of Sept. 30, 2021 was $380 million supported by cash balances of
$331 million and $49 million in available commitments under the
company's credit facility. The company also has additional
liquidity resources through its used floorplan facility which may
be used for non-vehicle financing. Fitch does not contemplate
floorplan availability into total liquidity resources due to
exclusion of floorplan related payables from debt calculations. As
part of the announced financing, the company is also proposing an
increase to its credit facility to $450 million from $250 million.
Pro forma for the transaction, Fitch expects the company to
maintain strong liquidity supported by FCF of around $400 million
annually and available liquidity under the company's new $450
million credit facility.
Total debt as of Sept. 30, 2021 was $1.36 billion consisting of
$505 million in real estate and mortgage debt and $850 million in
unsecured notes due 2028 and 2030. Post the acquisitions, total
debt is expected to increase by $2.4 billion to $3.8 billion ($3.6
billion giving effect of planned dispositions) inclusive of $234
million in revolver borrowings, $712 million in new secured real
estate term loans, and $1.5 billion in new unsecured notes. Pro
forma adjusted leverage (capitalizing leases at 8x) is expected to
be similar to 2020 at around 3.1x on LTM EBITDA as of September
2021.
Based on the company's public net leverage target of 3x, which
equates to adjusted leverage of about 3.5x, Fitch expects the
company to prioritize debt repayment with internally generated FCF
which Fitch expects could average around $400 million annually.
Floorplan Facilities:
Automotive retailers, including Asbury, finance their inventories
with floorplan facilities, which have characteristics of both
payables and debt. Companies primarily use the facilities for new
car inventory and the source of these facilities is typically from
either financing arms of various automotive manufacturers or
lending institutions. The accounting treatment of these payables is
similar to that of accounts payables. These facilities lack a fixed
maturity date (loans due on demand) and a duration that is
generally paid within days after a car is sold. These loans are
often tied to manufacturer subsidies, which offset a portion, if
not all, of the borrowing costs. These facilities are provided on a
vehicle-by-vehicle basis.
Floorplan financing also incurs an interest expense (distinct from
debt interest) and in a liquidation scenario, floorplan payables
are secured by the collateral of the vehicle, gaining priority over
unsecured debt. Including floorplan payable as debt, adjusted
leverage would be 4.6x for the year ended Dec. 31, 2020. However,
Fitch excludes floorplan financing from its primary leverage ratio
calculation in deriving its rating for Asbury. Fitch also adjusts
EBITDA by moving floorplan-related interest expense to COGS. In
2020, this adjustment increased COGS and reduced EBITDA by $18
million. Fitch also recognizes that these floorplan facilities are
secured and would receive priority over unsecured claims in a
bankruptcy.
Recovery Considerations:
Fitch does not employ a waterfall recovery analysis for issuers'
assigned ratings in the 'BB' category. The further up the
speculative-grade continuum a rating moves, the more compressed the
notching between the specific classes of issuances becomes. Fitch
has assigned Asbury's secured ABL Facility a 'BBB-'/'RR1' rating
indicating outstanding recovery prospects (91% to 100%). Asbury's
proposed $1.5 billion unsecured notes issuance and their existing
unsecured notes have been rated 'BB'/'RR4', indicating average
recovery prospects (31% to 50%).
ISSUER PROFILE
Asbury Automotive Group, Inc. is a new and used automotive retailer
that also provides parts & repair services and finance & insurance
products through lending institutions. Pro forma for acquisitions,
the company generated around $1.2 billion of EBITDA for the LTM
period September 2021.
SUMMARY OF FINANCIAL ADJUSTMENTS
In addition to treating floor plan interest expense as an operating
cost within cost of goods sold, Fitch adjusts for stock-based
compensation expense, acquisition related costs, legal settlements,
franchise impairment, and gains on the sale of real estate. Fitch
also treats interest on lease liabilities as an operating cost in
accordance with Fitch's corporate criteria at the time of the
rating committee.
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.
ASBURY AUTOMOTIVE: Moody's Rates New $1.5BB Unsecured Notes 'B1'
----------------------------------------------------------------
Moody's Investors Service a B1 rating to Asbury Automotive Group,
Inc.'s proposed $1.5 billion senior unsecured notes. Asbury's other
ratings remain unchanged including its Ba2 corporate family rating,
Ba2-PD probability of default rating and B1 senior unsecured
rating. The speculative grade liquidity rating is SGL-2 and the
outlook is stable.
Asbury signed a definitive agreement to acquire all the assets and
operations of Larry H. Miller (LHM) and Total Care Auto (TCA) for
approximately $3.2 billion. Asbury will finance the acquisitions
with a combination of common equity, the proceeds from the $1.5
billion of proposed senior unsecured notes, other debt and cash on
hand. The acquisition is also contingent upon Asbury receiving the
necessary regulatory and OEM approvals.
Assignments:
Issuer: Asbury Automotive Group, Inc.
Senior Unsecured Notes, Assigned B1 (LGD5)
RATINGS RATIONALE
Asbury's Ba2 corporate family rating recognizes its material scale
post its acquisition of LHM and TCA which will place it as the
fourth largest auto retailer in the US. Asbury will also benefit
from greater geographic reach and an expanded portfolio of brands
while extending its reach into repair and maintenance protection
through TCA. The company's flexible operating model and ability to
share initiatives such as Clicklane to LHM and TCA's capabilities
over time are also important synergies. Moody's also view Asbury's
pro forma brand mix as favorable, with around 70% of new vehicle
sales coming from luxury and import brands, and its reduced
reliance on earnings from the sale of new vehicles as its used
business continues to improve. However, Asbury is constrained by
the significant integration challenges with regards to the scale of
the acquisition, that could result in added costs or staffing
challenges or extend the time needed to strengthen credit metrics.
The stable outlook reflects Moody's expectation that Asbury
successfully integrates the LHM, TCA and other acquisitions with
leverage migrating to 3.0 times by the end of 2023. The outlook
also assumes the company continues to manage itself with sufficient
discipline around operating costs such that its proposed
quantitative credit profile with a 3.0 times net leverage target
continues regardless of the competitive or macro environment.
and social risks are key credit considerations for Asbury. The
company is subject to extensive governmental laws and regulations
and could be impacted if they are found to be in purported
violation of or subject to liabilities under any of these laws or
regulations, or if new laws or regulations are enacted that
adversely affect the operations, business, reputation, financial
condition, or results of operations. Asbury's overall corporate
governance is also a consideration given its acquisition focused
growth strategy but does recognize its balanced financial policy,
board structure and that it is a publicly traded company.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could result in an upgrade include the successful
integration of the proposed acquisitions along with continued solid
operating performance and good liquidity. Quantitatively, ratings
could be upgraded should debt to EBITDA be sustained under 3.5
times and EBIT to interest is sustained above 5.0 times.
A downgrade could result should operating results or financial
policy change such that debt to EBITDA approached 4.5 times on a
sustained basis or if EBIT to interest fell below 3.0 times.
Headquartered in Duluth, GA, Asbury Automotive Group, Inc. is a
leading auto retailer with 117 franchises and 25 collision repair
centers. LHM is headquartered Utah, and has 61 dealerships and 11
collision centers while TCA offers various vehicle protection
programs and contracts. Pro forma annual revenues are about $16
billion.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
ASBURY AUTOMOTIVE: S&P Affirms 'BB+' ICR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' issuer credit rating on
Asbury Automotive Group Inc. and its existing 'BB' issue-level
ratings. In addition, S&P assigned its 'BB' issue-level on its
proposed $1.5 billion of senior unsecured notes. The '5' recovery
rating remains unchanged, indicating its expectation for modest
recovery (10%-30%; rounded estimate: 15%) in the event of a
default. The company will use the proceeds from these notes to
partly fund its recently announced acquisitions.
The stable outlook on Asbury reflects its solid operating results,
which S&P believes will offset the effects of the additional debt
it is taking on to fund its acquisitions such that its debt to
EBITDA remains in the 3.5x-4.0x range over the next 12 months.
Despite the anticipated increase in its debt following its planned
acquisitions, Asbury's earnings and cash flow metrics will remain
in line with S&P's current expectations. The major factors behind
the company's higher-than-expected earnings were the significant
improvements in its new and used vehicle margins and the
substantial cost reductions it achieved, especially in its sales
and service processes, in the past year. Some of the recent
reductions in Asbury's selling, general, and administrative (SG&A)
expenses seem sustainable and we expect its level of overall SG&A
expenses relative to its gross profit to decline somewhat in 2022
and flatten out in 2023. S&P also expects the company's gross
margins in its new and used vehicle business to decline gradually
over the next few quarters as its inventory levels increase and
used car prices normalize. Based on these expectations, it assumes
its debt to EBITDA will remain in the 3.5x-4.0x range while its
free operating cash flow (FOCF) to debt stays near 10% until 2023,
with further improvements thereafter. While the increase in
Asbury's debt will somewhat reduce its cushion for an
underperformance at the current rating, there could be some upside
if management allocates a higher amount of its cash flow toward
debt reduction than S&P assumes in its base case.
Management will follow a disciplined financial policy focused on
debt reduction while undertaking acquisitions that support its
stated leverage target. Similar to many of its peers, Asbury has
embarked on an aggressive acquisition-driven growth strategy and is
on track to potentially exceed its $20 billion revenue target by
2025. So far in 2021, the company has acquired $6.6 billion of
revenue (including the proposed acquisitions) and will have total
revenue of over $16 billion by 2022. Pro forma for the announced
acquisitions, Asbury's consolidated brand mix will remain balanced
with an approximately 40% exposure to non-luxury imports, 32% to
luxury, and 28% to non-luxury domestic. The transaction will also
expand the company's footprint in the U.S., especially in the
Midwest where it previously lacked a presence. S&P expects Asbury
to continue to use most of its internal cash flow for dealership
upgrades linked to its planned acquisitions, to expand its online
businesses, and for debt reduction. The company has historically
operated with leverage of less than 3x, per its calculations, and
management has announced it will suspend some liquidity uses--such
as its share repurchases--to focus on integrating its acquisitions,
realizing its expected synergies, and reducing its debt. The
company's stated leverage target of 3.0x by 2023 is approximately
equivalent to S&P Global Ratings-adjusted leverage of 3.3x-3.5x. As
Asbury makes progress toward achieving its target leverage it will
improve its cushion at the current rating, which will offset its
downside risks in 2022, especially if its earnings are weaker than
S&P expects.
The company's resilient business model and adequate liquidity will
protect it against potential downside risks if the economic
recovery is slower than S&P anticipates in 2022. Pro forma for the
transaction--including the $1.1 billion upsizing of its credit
facility and the new real estate facility--the company has ample
liquidity to cover its uses over the next 12 months. Asbury's
downside risks are limited because its parts and services (P&S)
business is its most-profitable segment, given that it contributes
over 40% of its gross profit. Under this business model, the
company benefits from recurring revenue that acts as a stabilizing
force, which is especially helpful during a typical downturn.
The stable outlook on Asbury reflects its solid operating results,
which S&P believes will offset the effects of the additional debt
from its acquisitions such that its debt to EBITDA remains in the
3.5x-4.0x range over the next 12 months.
S&P said, "We could lower our rating on Asbury in the next 12
months if its leverage exceeds 4x and its FOCF to debt remains
below 10% for an extended period. This could occur if its earnings
are weaker than we expect or it does not allocate sufficient cash
flow for debt reduction to support a sustained recovery in its
credit metrics over the next few quarters. It could also occur if
the company pursues another large debt-financed acquisition prior
to demonstrating an extended track record of accretive performance
following its recent deals.
"Though unlikely for the foreseeable future, we could raise our
rating on Asbury if it maintains debt to EBITDA of well below 3x
and increase its FOCF to debt above 15% on a sustained basis. At
the same time, we would expect consistency in its business strategy
and management expertise and a financial policy committed to
maintaining an investment-grade rating."
AVERY COMMERCIAL: Dec. 16 Plan & Disclosure Hearing Set
-------------------------------------------------------
Avery Commercial Small C, LLC, filed with the U.S. Bankruptcy Court
for the Southern District of Texas a First Amended Disclosure
Statement and Plan of Reorganization.
On Oct. 28, 2021, Judge David R. Jones conditionally approved the
Disclosure Statement and ordered that:
* Dec. 10, 2021, at 12:00 noon is the deadline for filing
ballots accepting or rejecting the Plan.
* Dec. 10, 2021, at 12:00 noon is the deadline for filing and
serving written objections to confirmation of the Plan or final
approval of the Disclosure Statement.
* Dec. 16, 2021, at 12:30 p.m. in the Bankruptcy Courtroom,
United States Courthouse, 1300 Victoria Street, Laredo, Texas 78040
is the evidentiary hearing to consider final approval of the
Disclosure Statement and confirmation of the Plan.
A full-text copy of the order dated Oct. 28, 2021, is available at
https://bit.ly/2ZMAN5h from PacerMonitor.com at no charge.
Proposed counsel for the Debtor:
Carl Michael Barto
817 Guadalupe
Laredo, Texas 78040
Tel: (956) 725-7500
Fax: (956) 722-6739
E-mail: cmblaw@netscorp.net
About Avery Commercial
Avery Commercial Small C, LLC, sought protection under Chapter 11
of the Bankruptcy Code on Feb. 22, 2021 (Bankr. S.D. Tex. Case No.
21-50020). Brian T. Moreno, the Debtor's vice president and chief
operating officer, signed the petition. In the petition, the
Debtor disclosed total assets of $4,985,519 and total liabilities
of $3,398,302.
The Debtor is represented by Carl M. Barto, Esq., at the Law
Offices of Carl M. Barto.
Great Western Bank, a secured creditor, is represented by:
Diann M. Bartek, Esq.
Jeana Long, Esq.
Dykema Gossett PLLC
1400 N. McColl Road, Suite 204
McAllen, TX 78501
Telephone: (956) 984-7400
Facsimile: (956) 984-7499
Email: dbartek@dykema.com
jlong@dykema.com
Wells Fargo Bank, also as a secured creditor, is represented by:
Robert L. Barrows, Esq.
Warren, Drugan & Barrows, P.C.
800 Broadway, Suite 200
San Antonio, TX 78215
Telephone: (210) 226-4131
Facsimile: (210) 224-6488
Email: rbarrows@wdblaw.com
AVIANCA HOLDINGS: Wins U.S. Court Approval of Bankruptcy Plan
-------------------------------------------------------------
Reuters reports that the Southern District of New York has approved
Colombian airliner Avianca's (AVT_p.CN) reorganization plan,
Avianca said on Tuesday, November 2, 2021, which will allow the
company to complete its Chapter 11 bankruptcy process before the
end of the year.
Avianca, along with rival Chile's LATAM Airlines, were the two
largest carriers in the region before the coronavirus pandemic, but
both were sent into bankruptcy restructuring when the virus upended
air travel, amid especially strict restrictions in Latin America.
Avianca had already posted several years of losses before the
pandemic began, and went through a boardroom coup in 2019 led by
United Airlines.
"Avianca announces that today, after presenting certain additional
documentation that had been required by the court, the tribunal of
the Southern District of New York confirmed the company's
reorganization plan," the company said in a statement from Bogota.
"The airline expects to successfully complete that process and
emerge from Chapter 11 before the end of the year as a financially
stronger and more efficient airline."
Avianca will have significantly less debt and more than $1 billion
in liquidity when it finishes the bankruptcy process, the statement
said.
The company plans to have 130 airplanes servicing 200 routes by
2025, it added.
During the bankruptcy process, Avianca received around $2 billion
in new financing.
About Avianca Holdings SA
Avianca -- https://aviancaholdings.com/ -- is the commercial brand
for the collection of passenger airlines and cargo airlines under
the umbrella company Avianca Holdings S.A. Bogota, Colombia-based
Avianca has been flying uninterrupted for 100 years. With a fleet
of 158 aircraft, Avianca serves 76 destinations in 27 countries
within the Americas and Europe.
Avianca Holdings S.A. and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
20-11133) on May 10, 2020. At the time of the filing, the Debtors
disclosed $7,273,900,000 in assets and $7,268,700,000 in
liabilities.
Judge Martin Glenn oversees the cases.
The Debtors tapped Milbank LLP as general bankruptcy counsel;
Urdaneta, Velez, Pearl & Abdallah Abogados and Gomez-Pinzon
Abogados S.A.S. as restructuring counsel; Smith Gambrell and
Russell, LLP as aviation counsel; Seabury Securities LLC as
financial restructuring advisor and investment banker; FTI
Consulting, Inc. as financial restructuring advisor; and Kurtzman
Carson Consultants LLC as claims and noticing agent.
The U.S. Trustee for Region 2 appointed a committee of unsecured
creditors in Debtors' bankruptcy cases on May 22, 2020. The
committee is represented by Willkie Farr & Gallagher, LLP.
AZ HEALTH: Unsecured Creditors Will Get 3% of Claims in Plan
------------------------------------------------------------
AZ Health Partners, PLLC, filed with the U.S. Bankruptcy Court for
the District of Arizona a Plan of Reorganization for Small
Business.
The Debtor is a professional limited liability company. Since
February, 2019, the Debtor has been in the business of Chiropractic
Care.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $6200.00 per month to
increase to annual for and average over 60 months to $9,967.00 per
month by month 60. The final Plan payment is expected to be paid on
August 1, 2026.
This Plan of Reorganization proposes to pay creditors of AZ Health
Partners, PLLC from cash flow from operations, and future income.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately Three cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
The Plan will treat claims as follows:
* Class 1 consists of Priority claims. Each holder of a Class
1 Priority Claim will be paid in full, in cash, upon the later of
the effective date of this Plan, or the date on which such claim is
allowed by a final non-appealable order.
* Class 2 consists of the Secured claim of Citizens Bank.
Citizens Bank, will be paid $296, 422.00 which includes interest at
3.35 percent. Of this $15000.00 has been paid in adequate
protection payments. The reduced claim will be paid in monthly plan
payments of $5389.49 for 55 months.
* Class 3 consists of All non-priority unsecured claims. The
unsecured claim of Foothills Properties L.P. for pre-petition
arrears in the amount of $25,548.17. The Debtor also has
Post-Petition arrears due this Creditor in the amount of $47,077.93
The Debtor will pay this claim in full through its monthly Plan
payments over 55 months at $464,51 per month to prepetition arrears
and $855.96 to cure post-petition arrears. The remaining unsecured
claims of Citizens Bank, US Small Business Administration, Republic
Media and JP Morgan Chase to be discharged upon completion of the
Plan.
On confirmation of the Plan, all property of the Debtor, tangible
and intangible, including without limitation, licenses, furniture,
fixtures and equipment will revert free and clear of all Claims and
Equitable Interest except as provided in the Plan, to the Debtor.
The Debtor expects to have sufficient cash on hand to make the
payments required on the Effective Date.
The Debtor is a single member profession limited liability company
and is member managed. The member manager will serve in accordance
with the operating agreement and in accordance with the applicable
non- bankruptcy laws and the articles of organization and the
operating agreement as each of the same may be amended from time to
time. At the time of the filing of this plan the single member
manager if Eric Breure.
A full-text copy of the Plan of Reorganization dated October 28,
2021, is available at https://bit.ly/3CGiahz from PacerMonitor.com
at no charge.
About AZ Health Partners
AZ Health Partners, PLLC, d/b/a Arizona Spine Disc and Sport, is in
the business of chiropractic care. The company filed a Chapter 11
petition (Bankr. D. Ariz. Case No. 21-05142) on July 1, 2021.
On the Petition Date, the Debtor estimated $1,000,000 to
$10,000,000 in assets and $500,000 to $1,000,000 in liabilities.
The petition was signed by Eric Breure, manager.
Judge Daniel P. Collins is assigned to the case. Brown &
Associates PLLC serves as the Debtor's counsel.
Citizens Bank, as lender, is represented by:
Christopher R. Kaup, Esq.
Seventh Floor, Camelback Esplanade II
2525 East Camelback Road
Phoenix, AZ 85016
E-Mail: crk@tblaw.com
B.R.H. CONSULTANTS: Case Summary & Unsecured Creditors
------------------------------------------------------
Debtor: B.R.H. Consultants, Inc.
7272 Burbank Dr., #20
Baton Rouge, LA 70820
Chapter 11 Petition Date: November 2, 2021
Court: United States Bankruptcy Court
Middle District of Louisiana
Case No.: 21-10515
Debtor's Counsel: Patrick S. Garrity, Esq.
THE DERBES LAW FIRM, LLC
3027 Ridgelake Drive
Metairie, LA 70002
Tel: (504) 837-1230
Fax: (504) 837-2214
E-mail: pgarrity@derbeslaw
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Brent S. Honore as president.
The Debtor listed Taylor, Wellons, Politz & Duhe as its sole
unsecured creditor holding a claim of $30,000 for legal fees.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HHYJM6A/BRH_Consultants_Inc__lambke-21-10515__0001.0.pdf?mcid=tGE4TAMA
BABCOCK & WILCOX: B. Riley Financial Reports 30.4% Equity Stake
---------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, these entities reported beneficial ownership of shares
of common stock of Babcock & Wilcox Enterprises, Inc. as of Sept.
30, 2021:
Shares Percent
Beneficially of
Reporting Person Owned Class
---------------- ------------ --------
B. Riley Financial, Inc. 26,587,340 30.4%
B. Riley Securities, Inc. 11,331,099 13.0%
BRF Investments, LLC 15,256,241 17.5%
Bryant R. Riley 26,983,739 30.9%
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/0001630805/000121390021055606/ea149529-13da13briley_bab.htm
About Babcock & Wilcox
Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises is a
growing, globally-focused renewable, environmental and thermal
technologies provider with decades of experience providing
diversified energy and emissions control solutions to a broad range
of industrial, electrical utility, municipal and other customers.
B&W's innovative products and services are organized into three
market-facing segments which changed in the third quarter of 2020
as part of the Company's strategic, market-focused organizational
and re-branding initiative to accelerate growth and provide
stakeholders improved visibility into its renewable and
environmental growth platforms.
Babcock & Wilcox reported net losses of $10.30 million in 2020,
$129.04 million in 2019, $724.86 million in 2018, $379.01 million
in 2017, and $115.08 million in 2016. As of June 30, 2021, the
Company had $665.14 million in total assets, $680.86 million in
total liabilities, and a total stockholders' deficit of $15.72
million.
BLACK DIRT: Unsecured Creditors to be Paid in Full over 60 Months
-----------------------------------------------------------------
Black Dirt Farm, LLC filed with the U.S. Bankruptcy Court for the
Southern District of West Virginia an Amended Plan of
Reorganization under Subchapter V dated October 28, 2021.
This Plan provides for one class of secured claims, one class of
priority unsecured claims and one class of general unsecured
claims. Unsecured creditors holding allowed claims will be paid in
full throughout the course of this Plan.
This Plan also provides for the payment of administrative and
priority claims to the extent permitted by the Code in 60
installments.
The Debtor has a plan to handle its finances going forward. The
Debtor has multiple sources of income to operate its business, as
follows: (1) heavy haul trucking, (2) pilot car services, and (3)
site management services for windmill tower projects.
Class 3 consists of Unsecured Priority Creditors:
* Debtor will pay the West Virginia State Tax Department claim
of $1,050.00 in full In the first month following confirmation.
* Debtor will pay the Internal Revenue Service claim of
$1,268.84 in full in the first month following confirmation.
* Debtor will pay Derik Livingston $41.67 per month over 60
months in accordance with the priority claim for wages in the
amount of $2,500.00.
* Debtor will pay Jonathan Austin $40.00 per month over 60
months in accordance with the priority claim for wages in the
amount of $2,400.00.
Class 4 Unsecured Creditors will be paid in full over 60 months
without interest payable in equal monthly payments.
The Debtor will fund the plan payments from the income made in the
ordinary course of its business. In this regard, the Debtor was
able to begin hauling for another entity which promises work for
the next 18-24 months that will keep the Debtor engaged at full
capacity.
A full-text copy of the Amended Plan of Reorganization dated
October 28, 2021, is available at https://bit.ly/2ZNGb7x from
PacerMonitor.com at no charge.
Counsel for Debtor:
Paul W. Roop, II, Esq.
Roop Law Office LC
P.O. Box 1145
Beckley, WV 25802-1145
Telephone: (304) 255-7667
Facsimile: (304) 256-2295
Email: bankruptcy@rooplawoffice.com
About Black Dirt Farm
Black Dirt Farm, LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No.
21-50028) on April 11, 2021. At the time of the filing, the Debtor
disclosed assets of up to $10 million and liabilities of up to $1
million.
Judge B. Mckay Mignault oversees the case.
The Debtor tapped Paul W. Roop, II, Esq., at Roop Law Office LC as
legal counsel, Jonathan Bolen as manager, Kimberly Bolen as chief
operating officer, and Paul M. Khoury as bookkeeper.
BLUEBERRY COMMONS: Seeks to Hire Tang & Associates as Legal Counsel
-------------------------------------------------------------------
Blueberry Commons Sunnyvalle, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
Tang & Associates to serve as legal counsel in its Chapter 11
case.
The firm's services include:
(a) advising Debtor on matters relating to administration of
the estate, and on its rights and remedies about the estate's
assets and claims of creditors;
(b) representing the Debtor's interest in suits arising in or
related to the case, including adversary proceedings against the
Debtor;
(c) assisting in the preparation of legal documents; and
(d) representing the Debtor in adversary proceedings to
recover assets of the bankruptcy estate.
The firm charges $400 per hour for attorney's services and $200 per
hour for paralegal and law clerk services. The retainer fee is
$12,000.
Kevin Tang, Esq., at Tang & Associates, disclosed in a court filing
that his firm is a "disinterested person" as that term is defined
in the Bankruptcy Code.
The firm can be reached through:
Kevin Tang, Esq.
Tang & Associates
17011 Beach Blvd, Suite 900
Huntington Beach, CA 92647
Tel: (714) 594-7022
Fax: (714) 594-7024
Email: kevin@tang-associates.com
About Blueberry Commons Sunnyvalle
Santa Cruz, Calif.-based Blueberry Commons Sunnyvalle, LLC is a
single asset real estate debtor (as defined in 11 U.S.C. Section
101(51B)). It is the fee simple owner of a land subdivided into
six parcels in Sunnyvale, Calif., valued at $3.5 million.
Blueberry Commons Sunnyvalle filed its voluntary petition for
Chapter 11 protection (Bankr. N.D. Calif. Case No.) on Oct. 5,
2021, listing $3.5 million in assets and $3.1 million in
liabilities. Hui Jiang, managing member, signed the petition.
Kevin Tang, Esq., at Tang & Associates represents the Debtor as
legal counsel.
BON-TON STORES: Former Carson's Property Listed for Sale
--------------------------------------------------------
Bob Uphues of Riverside-Brookfield Landmark reports that an
11.5-acre property at the North Riverside Park Mall, 7501 Cermak
Road, which includes the retail anchor store that once housed
Carson Pirie Scott, has been listed for sale.
John Suzuki, the court-appointed receiver of the property, told the
Landmark in an email that while the foreclosure case initiated in
September 2018, shortly after Carson's closed its doors, has not
yet been resolved, he has hired the firm CBRE as the listing broker
for the property.
In addition to the 181,000-square-foot retail building, the
property also includes the southern half of the parking lot on the
west side of the mall. All three of the mall's anchor properties
– J.C. Penney and the former Sears location – are owned
independently of the main shopping center and include about three
quarters of the parking lot that surrounds the mall.
Carson Pirie Scott was one of the three original anchors when North
Riverside Park Mall opened in 1975. The store closed for good on
Aug. 29, 2018 about six months after Carson's parent company, Bon
Ton Stores Inc., filed for Chapter 11 bankruptcy protection.
The marketing brochure for the property states that the site's
"ideal for retail anchor, light industrial, fulfillment center,
senior living and multifamily."
There's no listing price for the property, but the last time it
changed hands was in 1998, when it sold for a little more than $14
million.
Because the shopping center's owner, The Feil Organization, does
not own the anchor properties, they are not privy to any
negotiations for the property, but officials there have been made
aware of various possibilities since Carson’s closed.
Prior to the pandemic, mall management had been made aware of three
potential options, two of which would have resulted in the
demolition of the Carson's store and the construction of a new
structure. A third proposed redeveloping the existing Carson's box
and leasing it to multiple tenants.
But the ongoing foreclosure suit, combined with the Carson's
bankruptcy and its impact on ownership as well as the COVID-19
pandemic apparently have scuttled any of those possibilities.
The COVID-19 pandemic also doomed a proposal pitched to the village
of North Riverside just as shutdowns went into effect in spring
2020 for the construction of two buildings in the east parking lot
area owned by The Feil Organization.
According to Brian Lade, regional asset manager for the company,
Feil was finalizing a lease deal to bring 24 Hour Fitness to one of
the buildings. The other building would have been leased to general
retail tenants.
"That [project] was a victim of the pandemic,” Lade said.
Pandora, JD Sports opening soon
Lade said two new retail tenants would be opening soon inside the
North Riverside Park Mall. Pandora, the Danish jewelry retailer
specializing in charm bracelets, is under construction in a space
on the upper level in one of the center court corner storefronts.
"Pandora has been on our wish list for a long time," said Lade, who
added he expects the store to open sometime in November before the
holidays.
Also slated to open later this 2021, prior to Christmas, is the
Manchester, England-based sports fashion retailer JD Sports. The
store will be located on the upper level of the mall, across the
concourse from Foot Locker, in the space formerly occupied by
Rainbow, which is moving to a larger retail space on the lower
level near J.C. Penney.
There are also a couple of changes on the way with respect to the
mall's food/drink businesses. The kiosk in the center court of the
lower level that housed Starbucks until it closed earlier this year
will become a new Gloria Jean's coffee location.
In the food court, Sarku Japan, a made-to-order teriyaki and sushi
business, will occupy one of the walk-up spaces in the food court
proper. It's possible that business could open by the end of 2021,
said Lade.
EM Buffet, a sit-down Chinese buffet restaurant just north of the
food court entrance doors, will be rebranded as EM Chinese and
continue as a sit-down Chinese restaurant. It should open in early
2022.
About The Bon-Ton Stores
The Bon-Ton Stores, Inc. (OTCQX: BONT) -- http://www.bonton.com/--
with corporate headquarters in York, Pennsylvania and Milwaukee,
Wisconsin, operates 250 stores, which includes nine furniture
galleries, in 23 states in the Northeast, Midwest and upper Great
Plains under the Bon-Ton, Bergner's, Boston Store, Carson's,
Elder-Beerman, Herberger's and Younkers nameplates. The stores
offer a broad assortment of national and private brand fashion
apparel and accessories for women, men and children, as well as
cosmetics and home furnishings.
The Bon-Ton Stores, Inc., and nine affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 18-10248) on Feb. 4,
2018.
In the petitions signed by Executive Vice President and CFO
MichaelCulhane, Bon-Ton Stores disclosed total assets at $1.58
billion and total debt at $1.74 billion.
The Bon-Ton Stores tapped Paul, Weiss, Rifkind, Wharton & Garrison
LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel;
Joseph A. Malfitano, PLLC, as special counsel; PJT Partners LP as
investment banker; AlixPartners LLP as restructuring advisor and AP
Services, LLC as financial advisor; and A&G Realty Partners LLC, as
real estate advisor; and Prime Clerk LLC, as administrative
advisor.
Andrew R. Vara, Acting U.S. Trustee for Region 3, on Feb. 15, 2018,
appointed seven creditors to serve on the official committee of
unsecured creditors in the Chapter 11 case. Counsel for the
creditors' committee are Jeffrey N. Pomerantz, Esq., Robert J.
Feinstein, Esq., and Bradford J. Sandler, Esq., at Pachulski Stang
Ziehl & Jones LLP.
An investor group comprised of DW Partners, LP, Namdar Realty Group
and Washington Prime Group, Inc., primarily as secured mortgage
lender; and AM Retail Group, Inc., who submitted a going concern
bid for the Debtors' assets, are represented by John Lyons, Esq.,
at DLA Piper LLP (US).
Co-Counsel to the Ad Hoc Second Lien Noteholder Group are Norman L.
Pernick, Esq., J. Kate Stickles, Esq., and Katherine M. Devanney,
Esq., at Cole Schotz, P.C.; and Sidney P. Levinson, Esq., Genna L.
Ghaul, Esq., Charles S. Wittmann-Todd, Esq., Bruce Bennett, Esq.,
and Joshua M. Mester, Esq., at Jones Day.
Co-Counsel to the DIP Tranche A-1 Documentation Agent, Crystal
Financial LLC, are Mark D. Collins, Esq., and Joseph Charles
Barsalona II, Esq., at Richards, Layton & Finger, P.A.; and Matthew
P. Ward, Esq., at Womble Bond Dickinson (US) LLP; and Jonathan D.
Marwill, Esq., and John Ventola, Esq., at Choate Hall & Stewart
LLP.
Co-Counsel to the Administrative Agent, Bank of America, N.A., are
Julia Frost-Davies, Esq., Robert A.J. Barry, Esq., and Amelia C.
Joyner, Esq., at Morgan, Lewis & Bockius LLP.
Co-Counsel to the Second Lien Trustee, Wells Fargo Bank, N.A. As
indenture trustee and collateral agent for the Debtor's 8.00%
Second Lien Senior Secured Notes Due 2021, are Emily Kathryn Devan,
Esq., and Luke A. Sizemore, Esq., at Reed Smith LLP.
BOY SCOUTS: Teams Up With Survivors to Hike Child Protection Effort
-------------------------------------------------------------------
Maria Chutchian of Reuters reports that the Boy Scouts of America
and a group representing thousands of men who say they were
sexually abused by troop leaders as children said on Tuesday,
November 2, 2021, that they are forming a working group to advise
the youth organization on efforts to protect current and future
Scouts.
The Survivor Advisory Working Group will be comprised of 15 to 20
people, including eight to 12 sex abuse survivors, according to a
statement from the BSA and Coalition of Abused Scouts for Justice,
a group that says it represents 60,000 abuse survivors. The working
group will focus on the organization’s current and future child
protection policies and protocols.
The creation of the working group comes amid BSA's bankruptcy,
which began in February 2020 to resolve hundreds of sex abuse
lawsuits. The organization is awaiting votes for its proposed
reorganization plan, which rests on a proposed settlement that sets
up a trust to compensate former Scouts who have filed abuse claims.
Votes are due on Dec. 14.
The BSA, local councils, insurers and others have committed
approximately $1.887 billion to compensate abuse survivors.
Proponents of the plan, including the Coalition, say that amount is
expected to increase.
The plan includes non-monetary components aimed at ensuring safety
for Scouts in the future, including the creation of a child
protection committee. The working group's activities will be
shifted to that committee once BSA emerges from bankruptcy.
At least six BSA representatives, including the organization's
chief executive officer and chair of the organization's existing
committee on safe scouting, will also sit on the working group.
BSA’s plan is supported by the Coalition, and one of its major
insurers, Hartford Financial Services Group, among others.
However, it faces opposition from another insurer, Century
Indemnity Company, and the committee representing survivors as a
whole in the bankruptcy.
For the Boy Scouts: Jessica Lauria, Michael Andolina, Matthew
Linder and Laura Baccash of White & Case; and Derek Abbott and
Andrew Remming of Morris, Nichols, Arsht & Tunnell
For the Coalition of Abused Scouts for Justice: David Molton, Sunni
Beville and Eric Goodman of Brown Rudnick; Lawrence Robbins, Ariel
Lavinbuk, William Trunk and Joshua Bolian of Robbins, Russell,
Englert, Orseck & Untereiner; and Rachel Mersky of Monzack Mersky
and Browder
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 and 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.
CALPLANT I: Seeks to Hire Paladin Management as Financial Advisor
-----------------------------------------------------------------
CalPlant I Holdco, LLC and CalPlant I, LLC seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Paladin
Management Group, LLC as their financial and transaction advisor.
Paladin's services will include:
(a) Financial Advisory Services
(i) Assist the Debtors in preparing and maintaining
liquidity and cash projections;
(ii) Assist the Debtors in developing and implementing cash
management and cash flow forecasting processes;
(iii) Assist the Debtors in the preparation of financial
forecasts and reports that may be required by the Debtors' board,
lenders and stakeholders;
(iv) Assist the Debtors in negotiations with their lenders,
significant vendors, and other stakeholders;
(v) Assist the Debtors in strategic communication
services;
(vi) Assist the Debtors in administering their cases; and
(vii) Advise the Debtors and provide recommendations with
respect to other related matters as the Debtors or their
professionals may request from time to time, as agreed to by
Paladin.
(b) Transaction Advisory Services
(i) Assist the Debtors in marketing the Debtors or their
assets for sale to third parties.
(ii) Assist the Debtors in securing financing to support
their operations, Chapter 11 cases or emergence from their cases.
(iii) Assist in soliciting interest and securing options for
third party investment in the Debtors or their assets.
Paladin's hourly rates range from $425 to $775, depending on the
personnel performing the work. The hourly rate for Scott Avila is
$775 while the hourly rate for Lance Miller is $675.
Mr. Miller, a partner at Paladin, disclosed in a court filing that
his firm is a "disinterested person" within the meaning of section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Lance Miller
Paladin Management Group, LLC
633 West Fifth Street, 28th Floor
Los Angeles, CA 90071
About CalPlant
CalPlant I, LLC -- http://www.eurekamdf.com/-- is a Northern
California-based company focused on manufacturing
sustainably-sourced building products, including the creation of
the world's first no-added-formaldehyde, rice straw-based medium
density fiberboard, Eureka MDF. CalPlant and its predecessor
company, CalAg, LLC, have spent many years researching, developing,
and patenting a process to make high-quality MDF using annually
renewable rice straw as the feedstock, the disposal of which has
posed environmental issues in California for decades.
CalPlant I and CalPlant I Holdco, LLC sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-11302) on Oct. 5, 2021. The cases
are handled by Honorable Judge John T. Dorsey.
CalPlant I Holdco listed up to $100 million in assets and up to
$50,000 in liabilities as of the bankruptcy filing while CalPlant I
listed as much as $500 million in both assets and liabilities.
The Debtors tapped Morrison & Foerster, LLP as bankruptcy counsel;
Morris James, LLP as local bankruptcy counsel; and Paladin
Management Group as financial advisor. Prime Clerk, LLC is the
claims and noticing agent and administrative advisor.
CAPITOL CLOSET: Taps John Forest II as Bankruptcy Attorney
----------------------------------------------------------
Capitol Closet Design, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Virginia to hire John Forest, II,
Esq., an attorney practicing in Fairfax, Va., to handle its Chapter
11 case.
Mr. Forest will be paid at an hourly rate of $350.
In a court filing, Mr. Forest disclosed that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
Mr. Forest can be reached at:
John P. Forest, II
Law Office of John P. Forest, II
11350 Random Hills Rd., Suite 700
Fairfax, VA 22030
Telephone: (703) 691-4940
Email: john@forestlawfirm.com
About Capitol Closet Design
Capitol Closet Design, Inc., a Vienna, Va.-based company in the
custom closet construction business, filed a petition for Chapter
11 protection (Bankr. E.D. Va. Case No. 21-11781) on Oct. 25, 2021,
listing $311,442 in total assets and $1,415,004 in total
liabilities. Larry Nordseth, president of Capitol Closet Design,
signed the petition.
Judge Brian F. Kenney oversees the case.
The Debtor tapped the Law Office of John P. Forest, II as legal
counsel.
CHESAPEAKE ENERGY: S&P Upgrades ICR to 'BB-' on Vine Acquisition
----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Oklahoma
City-based oil and gas exploration and production company
Chesapeake Energy Corp. to 'BB-' from 'B+', and removed it from
CreditWatch, where S&P placed it with positive implications on Aug.
12, 2021.
At the same time, S&P affirmed its 'BB-' issue-level rating on
Chesapeake's unsecured notes (recovery rating: '3').
The upgrade reflects Chesapeake's increased scale and improved
profitability.
The acquisition of publicly traded Vine Energy makes Chesapeake
Energy the largest natural gas producer in the Haynesville shale,
with nearly 1.6 billion cubic feet per day (bcf/d) of net
production (over 2.0 bcf/d gross) in the basin. The added scale
will help the company optimize gathering, transport, and sales
agreements. S&P said, "We expect Chesapeake's total equivalent
production to average close to 3.5 bcfe/d in 2022 (nearly 85%
natural gas), with total proved reserves of around 9 trillion cubic
feet equivalent (tcfe). We expect pro forma operating costs to be
about 15% lower in 2022 than for Chesapeake stand-alone, which will
boost profitability and cash flows, and thereby strengthen the
company's business risk profile."
Chesapeake's credit measures remain very strong.
Vine shareholders received 0.2486 shares of Chesapeake common stock
plus $1.20 in cash for each share of Vine stock. Chesapeake also
repaid Vine's $150 million second lien term loan due 2025 and
assumed Vine's $950 million unsecured notes due 2029. Following the
acquisition, Chesapeake's credit measures remain very strong--with
expected FFO to debt above 100% and debt to EBITDA below 1x next
year. S&P expects the company to generate significant free
operating cash flows over the next two years, as it plans to keep
capital spending close to maintenance levels.
S&P expects dividends to remain within cash flows.
Chesapeake expects to increase its base dividend by 27% to
$1.75/share post close, and will also pay out a variable dividend
of up to 50% of free cash flow. Although S&P expects dividends to
significantly increase next year, we estimate they will remain well
within cash flows.
A new CEO has been named, but the company still has some key
management positions to fill.
The company has named its former CFO, Domenic Dell'Osso, as
permanent CEO; however, it now needs to find a new chief financial
officer (CFO). It is also looking for a chief operating officer
(COO), after the previous COO left earlier this year.
S&P said, "The stable outlook on Chesapeake reflects our view that
it intends to maintain healthy financial measures and adequate
liquidity over the next two years while keeping its production
declines modest and generating positive free cash flow. We estimate
the company's FFO to debt will be well above 60% and anticipate it
will sustain debt to EBITDA of less than 1x in 2022 and 2023. Our
outlook assumes Chesapeake's management will maintain its newfound
conservative financial policy, enable the company to generate
excess cash flow by keeping its capital spending low, and deploy
any excess cash in a manner that does not weaken credit quality.
"We could lower our rating on Chesapeake if we expect its FFO to
debt to fall below 30% or its debt to EBITDA to exceed 3x for a
sustained period. This would most likely occur if natural gas
prices decline and the company fails to rein in its spending levels
accordingly or its production declines given its limited drilling
plans. We could also lower our rating if Chesapeake pursues a
debt-funded acquisition that does not add to near-term cash flows.
"We could raise our rating on Chesapeake if it improves its
profitability and proved reserve life index, and continues to
generate positive free cash flow for the next several quarters
while maintaining FFO to debt of more than 45%. This would most
likely occur if the company can maintain modest production declines
by operating with capital expenditures (capex) close to maintenance
levels while limiting its shareholder distributions and debt-funded
acquisitions. For an upgrade, we would also like to see a broader
management team and more established track record of operating
within cash flows."
CHICAGOAN LOGISTIC: Unsecureds Will Get 10% Dividend in 60 Months
-----------------------------------------------------------------
Chicagoan Logistic Company filed with the U.S. Bankruptcy Court for
the Northern District of Illinois a Plan of Reorganization for
Small Business dated October 28, 2021.
The Debtor is an Illinois corporation which was formed in 2014 and
is engaged in trucking and logistic operations. The Debtor's
President and its sole shareholder is Serkan Kaputluoglu. CLC is
affiliated with 2 other companies owned and operated by Mr.
Kaputluoglu, namely NaHaul Inc. ("NaHaul") which also is currently
under Chapter 11 protection (Case No. 21-bk-7152) and AJT Services
Inc.( "AJT"), which has not filed for bankruptcy protection.
In order to maintain a continuous cash flow and consistent with the
general business practice in the trucking industry, the Debtor both
prepetition and postpetition has entered into a Factoring Agreement
with Partners Funding, Inc. ("Partners Funding") wherein the Debtor
sells its accounts receivable to Partners Funding for an immediate
cash payment. Partners Funding does retain a contingent security
interest against the Debtor's assets, other than vehicles, in the
event the factoring company is unable to collect a receivable.
However, the historical experience that a receivable is
uncollectible is negligible.
The Debtor has 3 secured creditor, BMO Harris Bank, N.A.., The
Huntington Bank, and Volvo Financial Services, with respect to many
of its trucks and trailers. The Debtor's remaining vehicles and
trailers are leased. Because of the slowdown in the trucking
industry, the Debtor has still not returned to its pre pandemic
profitability. As a result, one of its related companies, AJT, has
continued to provide funds to the Debtor to meet any operating
shortfall.
However, the Debtor believes that its monthly income and cash flow
will continue to grow post-pandemic and the Debtor will be able,
without assistance from AJT, to fund its monthly payments to its
secured creditors, to the extent of their allowed secured claims in
the collateral,; payment of the rental fees to each of the vehicle
and trailer lessors, and an estimated 10% dividend to general
unsecured non-priority creditors through this Plan of
Reorganization over a term of 60 months.
This Plan of Reorganization proposes to pay creditors of the Debtor
from its monthly business income and cash flow.
The Plan provides for payment of one class of secured creditors,
one class of priority claims, and one class of general unsecured
non-priority claims. Non-priority unsecured creditors holding
allowed claims will receive payment, through periodic cash
distributions from the Subchapter V Trustee, Matthew Brash. This
Plan also provides for the payment of administrative and priority
claims including priority tax claims. The Plan does not provide
for any payments or distributions to the holder of the equity
interest.
The Plan will treat claims as follows:
* Class 1A consists of the Motor Vehicle Claim of BMO Harris
Bank which is secured by the vehicles. To the extent that the
claim is secured, BMO Harris Bank shall receive equal monthly
installment payments, together with interest at 5% per annum,
commencing on the 15th day of the month following the Effective
Date and the 15th of the month thereafter until paid in full. The
balance of BMO Harris' Claim shall be treated as a Class 3
Unsecured Non-Priority Claim. Claim 1A is impaired under the
Plan.
* Class 1B consists of the Motor Vehicle Claim of The
Huntington Bank which is secured by the vehicles. To the extent
that the claim is secured, the Huntington Bank shall receive equal
monthly installment payments, together with interest at 5% per
annum, commencing on the 15th day of the month following the
Effective Date and the 15th of the month thereafter until paid in
full. The balance of The Huntington Banks' Claim shall be treated
as a Class 3 Unsecured Non-Priority Claim. Claim 1B is impaired
under the Plan.
* Class 1C consists of the Motor Vehicle Claim of Volvo
Financial Services which is secured by the vehicles. To the extent
that the claim is secured, Volvo Financial Services Inc., shall
receive equal monthly installment payments, together with interest
at 5% per annum, commencing on the 15th day of the month following
the Effective Date and the 15th of the month thereafter until paid
in full. The balance of Volvo Financial Services' Claim shall be
treated as a Class 3 Unsecured NonPriority Claim. Claim 1C is
impaired under the Plan.
* Class 3 consists of General Unsecured Non-Priority Claims.
General Unsecured Non-Priority Claims aggregate approximately
$1,367,532. Allowed Class 3 claims shall be paid approximately
$136,753.22 through pro rata distributions of deferred cash
payments to holders of allowed Class 3 Claims in five (20 annual
installments of $6,837.66, commencing on March 1, 2022, and each
quarter thereafter through and including February 28, 2027. The
quarterly installments shall be distributed to allowed Class 3
Claims, pro rata, by the Subchapter V Trustee. Class 3 claimants
may be prepaid without penalty or discount. Class 3 claims are
impaired under the Plan.
* Class 4 consists of Equity Interest. No property or other
consideration will be paid or distributed to the holder, Serkan
Kaputluoglu, who will retain his 100% stock ownership of the
Debtor.
The Plan shall be funded by proceeds from the Estate's available
cash, cash equivalents, and proceeds generated from Debtor's
business income and cash flow. The Debtor projects that his cash
flow will be sufficient to make the Plan payments.
A full-text copy of the Plan of Reorganization dated October 28,
2021, is available at https://bit.ly/2ZLlUzM from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Laxmi P Sarathy
3553 W. Peterson Ave., Suite 102
Chicago, Illinois 60659
Tel: (312) 674-7965
E-mail: L.sarathylaw@gmail.com
David R Herzog
53 West Jackson Blvd., Suite 1442
Chicago, Illinois 60604
Tel: (312) 427-1558
E-mail: drh@dherzoglaw.com
About Chicagoan Logistic Company
Chicagoan Logistic Company, an affiliate of NAHAUL, Inc., is a
Chicago-based company in the general freight trucking industry.
Chicagoan Logistic Company and NAHAUL filed Chapter 11 petitions
(Bankr. N.D. Ill. Case Nos. 21-07154 and 21-07152) on June 5, 2021.
The two cases are not jointly administered.
In the petition signed by Serkan B. Kaputluoglu, president,
Chicagoan Logistic Company disclosed total assets of up to $1
million and total liabilities of up to $10 million.
Judge Carol A. Doyle oversees Chicagoan Logistic Company's Chapter
11 case.
Chicagoan Logistic Company tapped David Herzog, Esq., at Herzog &
Schwartz, P.C. and Laxmi P. Sarathy, Esq., as bankruptcy counsel;
Romano Law, PLLC as special counsel; and Daniel Greenman & Co. as
accountant.
Buchalter, A Professional Corporation represents creditor, Partners
Funding. Vadim Serebro, Esq., serves as counsel to creditor, World
Global Capital LLC, doing business as Funderslink. ATX MCA Fund I,
LLC, also a creditor, is represented by The Magnozzi Law Firm, P.C.
Creditor BMO Harris is represented by Howard & Howard.
CLEARDAY INC: To Sell 67.36% Interests in Naples Property for $5.4M
-------------------------------------------------------------------
Clearday, Inc., through its subsidiary MCA Naples, LLC, on Oct. 25,
2021 entered into a purchase agreement to sell undivided interests
in the land and improvements that are used for its Memory Care of
Naples care facility that is located in Naples, Florida.
The Purchase Agreement provides that an aggregate amount of
$5,350,000 was received by Clearday for the sale of undivided
interests equal to 67.36% of the aggregate interests in the Naples
property. The remaining 32.64% of the undivided interests in the
Naples property will be retained by MCA Naples, LLC. The closing
of the purchase and sale of the undivided interests in the Naples
property under the Purchase Agreement will occur upon the
satisfaction of customary conditions precedent and deliveries
including the consent to purchase and sale by the existing mortgage
lender or refinancing of the mortgage debt. The Purchase Agreement
provides for customary indemnification by the parties, which is
subject to certain limitations including that the aggregate amount
of losses, other than for fraud or third party claims, are
recoverable after the amount of losses exceeds 1% of the aggregate
purchase price, the aggregate amount recoverable is limited to 5%
of the aggregate purchase price and that claims need to be asserted
within one year after the closing. Any disputes among the parties
under the Purchase Agreement will be determined by arbitration.
The sale of the undivided interests in the Naples property is
intended to permit the purchasers to have the benefit of a
so-called like-kind exchange pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended, and the parties agreed
to reasonably cooperate with each other with respect to an
exchange. The Purchase Agreement provided for a non-refundable
advance of the purchase price. Accordingly, the aggregate purchase
price amount has been received by Clearday.
At the closing of this Purchase Agreement each of the purchasers of
the undivided interest in the Naples property and MCA Naples LLC
will hold all of the undivided interests in the Naples property as
tenants in common and will be party to a Tenant in Common
Agreement. The TIC Agreement provides customary terms and
provisions for such agreements, including that the purchasers of
the undivided interests in the Naples property as well as MCA
Naples, LLC will hold their respective undivided tenancy in common
interests in the Naples property as tenants-in-common and not as
partners or joint venturers and that each such tenant in common
will elect to be excluded from the provisions of Subchapter K of
Chapter 1 of the Code, with respect to the tenancy in common
ownership of the Naples property. The Naples property will be
managed by Clearday Management Ltd., a subsidiary of Clearday, in
its capacity as the property manager, in accordance with the terms
of a Management and Leasing Agreement that will be mutually
acceptable to the tenants in common and the property manager and
entered into concurrently with the TIC Agreement. It is expected
that the Property Management Agreement will limit the property
manager's services to customary services typically performed to
manage the property on behalf of the tenants in common, such as
collecting rents, paying property taxes and insurance premiums,
arranging for repair and maintenance of the Naples property,
utilities, heat, air conditioning, trash removal, parking for the
Naples property and paying such expenses, and providing other
customary services. The amount of rent paid by a lessee shall not
be based on a percentage of net income, cash flow, increases in
equity, or otherwise depend in whole or in part on the income or
profits derived by the lessee. The property manager, on behalf of
the tenants in common, shall open and maintain all accounts
necessary or desirable in connection with ownership of the Naples
property, shall maintain adequate books and records of the Naples
property operations, and shall provide monthly reports to the
tenants in common on the operations of the Naples property. The
Naples property is subject to a lease to MCA Naples Operating
Company, LLC, a subsidiary of Clearday, and such lease will not be
effected or modified by the sale of the undivided interests in the
Naples property or the TIC Agreement. The Company expects to
continue to operate the Naples Facility and pay the holders of the
tenant in common interests a return based on the payments under
such lease.
Under the TIC Agreement, the unanimous approval of all of the
tenants in common shall be required for any of the following: (i)
decisions of the property manager regarding leases or subleases,
deed restrictions, or grants of easement of or on all or any
portion of the property, provided that the conveyance of leases or
subleases or portions of the property pursuant to contracts with
third parties that have been previously approved by the Tenants in
Common shall not require the further approval of the Tenants in
Common, (ii) any sale or exchange of the property, (iii) any
indebtedness or loan, and any negotiation or refinancing thereof,
secured by a lien on the property, (iv) any successor or
replacement property manager, (v) annual budgets for development
and operations of the property, (vi) any contracts, renewals and
amendments thereof, and any transactions with parties affiliated
with any tenant in common or the property manager including the
Property Management Agreement, and (vii) any successor or
replacement property manager. Whenever this Agreement provides
that the Tenants in Common shall be entitled to vote upon a matter,
each tenant in common shall be entitled to vote in proportion to
its TIC Percentage.
Clearday entered into the Purchase Agreement after the expiration
or termination of the Contract for Sale and Purchase of the MCA
Naples Facility by and among MCA Naples LLC and Naples property
Ventures, LLC dated as of Sept. 9, 2021 in accordance with its
terms, which agreement was reported by Clearday in its Current
Report on Form 8K that was filed on Sept. 15, 2021.
About Clearday
Clearday (fka Superconductor Technologies, Inc.) is an innovative
non-acute longevity health care services company with a modern,
hopeful vision for making high quality care options more
accessible, affordable, and empowering for older Americans and
those who love and care for them. Clearday has decade-long
experience in non-acute longevity care through its subsidiary
Memory Care America, which operates highly rated residential memory
care communities in four U.S. states. Clearday at Home -- its
digital service -- brings Clearday to the intersection of
telehealth, Software-as-a-Service (SaaS), and subscription-based
content.
Superconductor reported a net loss of $2.96 million in 2020
following a net loss of $9.23 million in 2019. As of July 3, 2021,
the Company had $2.36 million in total assets, $668,000 in total
liabilities, and $1.69 million in total stockholders' equity.
Los Angeles, CA-based Marcum LLP, the Company's auditor since 2009,
issued a "going concern" qualification in its report dated March
31, 2021, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain is operations.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
CP HOLDINGS: Chapter 11 Sale to Tor Asia Credit Okayed by Court
---------------------------------------------------------------
Leslie Pappas, writing for Law360, reports that a Delaware
bankruptcy judge on Tuesday, November 2, 2021, allowed the owner of
an assisted living facilities chain to hand over the business "free
and clear" to a prepetition lender, but refused to settle a side
dispute between the buyer and a Hong Kong businessman who had
guaranteed the debt.
U.S. Bankruptcy Judge Laurie Selber Silverstein said debtor CP
Holdings LLC could sell its 50 sites in Alabama and Texas to its
lender, Tor Asia Credit Master Fund LP, in exchange for $14.9
million in debt forgiveness. But she declined Tor Asia's requests
to rule on its ongoing legal disputes with Guy Kwok-Hung Lam.
About CP Holdings LLC
CP Holdings LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 21-10950) on June 20,
2021. In the petition signed by Marc Weinsweig, independent
manager, the Debtor disclosed up to $50 million in assets and up to
$100 million in liabilities.
Laurie Selber Silverstein oversees the case.
Patrick J. Reilley, Esq. at Cole Schotz P.C. is the Debtor's
counsel.
CRC BROADCASTING: Seeks Cash Collateral Access for Nov. Expenses
----------------------------------------------------------------
CRC Broadcasting Company and CRC Media West, LLC ask the U.S.
Bankruptcy Court for the District of Arizona for authority to use
certain cash and cash equivalents in which Desert Financial Federal
Credit Union claims an interest in, to pay essential post-petition
operating expenses on an emergency basis.
The Debtors seek to access cash collateral to pay vendors, lessors,
salaries, wages, and all other expenses necessary to the operations
of its businesses for the month of November 2021. The relief sought
is essential to facilitate the ongoing operations of the Debtors
as, after 20 Interim Cash Collateral Orders, Desert Financial has
denied the use of cash collateral in retaliation for the Debtors'
earlier request to use $25,000 of currently sequestered Cash to
deposit a retainer into the Trust Account of Michael W. Carmel of
Michael W. Carmel, Ltd. The Debtors are seeking to hire Mr. Carmel
to represent them in the contested confirmation hearing of the
Debtors' Amended Chapter 11 Plans. The Court has scheduled an
evidentiary Plan confirmation hearing for February 17 and 18, 2022.
The Debtors also have refused to agree to certain offending
language not included in any of the Court's prior Interim Orders.
Since denial of such relief could essentially force the Debtors
into proceedings under Chapter 7, extraordinary circumstances exist
that justify the relief sought.
Since the inception of the Case, Desert Financial has required the
Debtors to stipulate to the use of Cash Collateral each and every
month. As a result, the Court has entered no less than 20 Interim
Orders. Despite such being extraordinary in the eyes of the
Debtors, each was willing to continue down this monthly path
pending the evidentiary hearing relating to Confirmation of the
Amended Chapter 11 Plans.
Desert Financial has refused to consent to the use of cash
collateral for the entire month of November 2021 despite the fact
that the Debtors have jumped through every hoop and roadblock the
Creditor has thrown in its path, including but not limited to
supplying bi-monthly financials not typically required of such
Debtors. This most recent hoop -- a stranglehold on both Debtors,
is clearly done out of spite and retaliation for the Debtors not
kowtowing to the creditor's demands. Waiting until November 10,
2021 to see if the creditor will "agree" to further use of cash
collateral is simply going to cause additional problems for the
Debtors and is not acceptable.
Despite the potential equity in the Debtors' assets, the Debtors
have granted Desert Financial post-petition replacement liens, in
the same order of priority, in such cash collateral as additional
adequate protection. During the course of these proceedings Desert
Financial's collateral position has only improved.
Desert Financial is further adequately protected by the Debtors'
continuation and preservation of the continually increasing going
concern value of the business and the non-cash collateral as may be
reflected in the bankruptcy schedules when filed. The Debtors have
met each budget previously approved by the Court. Furthermore, the
Debtors have paid Desert Financial every month an amount no less
than what was proposed in the Debtors' Amended Plans of
Reorganization filed in December 2020.
Although Desert Financial may object to the Debtors' use of the
Cash, the Debtors contend the lender's interest is significantly
protected by allowing the Debtors to continue to operate the
business and to protect and preserve the value of its assets.
A copy of the order and the Debtors' respective November 2021
budgets is available at https://bit.ly/3EJiGfn from
PacerMonitor.com.
CRC Broadcasting Company's budget provided for $90,000 in total
expenses while CRC Media West's provided for $25,000 in total
expenses.
About CRC Broadcasting Co.
CRC Broadcasting Company, Inc., a broadcast media company based in
Scottsdale, Ariz., filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-02349) on March 6,
2020, listing under $1 million in both assets and liabilities.
Affiliate CRC Media West, LLC also filed for Chapter 11 petition
(Bankr. D. Ariz. Case No. 20-02352) on March 6, 2020, listing under
$1 million in both assets and liabilities.
The cases are jointly administered.
Judge Paul Sala oversees both cases.
Allan D. NewDelman, Esq., at Allan D. NewDelman, P.C., is the
Debtors' legal counsel.
Squire Patton Boggs (US)LLP represents Desert Financial Federal
Credit Union, secured creditor.
Desert Financial Federal Credit Union, as secured creditor, is
represented by Squire Patton Boggs (US) LLP.
DLVAM1302 NORTH: Seeks to Hire Buddy D. Ford as Bankruptcy Counsel
------------------------------------------------------------------
DLVAM1302 North Shore, LLC seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Buddy D. Ford,
P.A. to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) analyzing the financial situation of the Debtor;
(b) advising the Debtor regarding its powers and duties in the
continued operation of the business and management of the property
of the estate;
(c) preparing and filing schedules of assets and liabilities,
statement of affairs and other documents required by the court.
(d) representing the Debtor at the Section 341 creditors'
meeting;
(e) advising the Debtor with respect to its responsibilities
in complying with the United States Trustee's Operating Guidelines
and Reporting Requirements and with the rules of the court;
(f) preparing legal papers and appearing at court hearings;
(g) protecting the interest of the Debtor in all matters
pending before the court;
(h) representing the Debtor in negotiation with its creditors
in the preparation of a Chapter 11 plan; and
(j) performing all other necessary legal services.
The firm's hourly rates are as follows:
Buddy D. Ford, Esq. $450 per hour
Senior associate attorney $400 per hour
Junior associate attorneys $350 per hour
Senior paralegal services $150 per hour
Junior paralegal services $100 per hour
The Debtor paid $16,738 to the firm as retainer fee.
Buddy Ford, Esq., the firm's attorney who will be providing the
services, disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Buddy D. Ford, Esq.
Buddy D. Ford, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel.: (813) 877-4669
Fax: (813) 877-5543
Email: Buddy@tampaesq.com
About DLVAM1302 North Shore
Anna Maria, Fla.-based DLVAM1302 North Shore, LLC filed a petition
for Chapter 11 protection (Bankr. M.D. Fla. Case No. 21-05371) on
Oct. 20, 2021, disclosing $1,988,681 in total assets and $1,585,279
in total liabilities. Floyd Calhoun, manager, signed the petition.
The Debtor tapped Buddy D. Ford, P.A. as legal counsel.
DONUT HOUSE: Dieyleh Unsecureds Will Get 5% of Claims in Plan
-------------------------------------------------------------
Debtors The Donut House, Inc. ("DH") and Omar Dieyleh submitted a
Second Amended Joint Plan of Reorganization.
DH is a Colorado corporation that owns and operates several Donut
House restaurant locations in the Denver Metro area. DH is wholly
owned and operated by Dieyleh, who opened the business with a
location off of Colorado Boulevard in 2009.
DH and Dieyleh's other businesses experienced significant financial
difficulties resulting from the COVID-19 pandemic. These financial
difficulties were further compounded by the arbitration award
entered against the Debtors. As a result of its financial
difficulties, the Debtors filed their voluntary petitions for
relief under Chapter 11, Subchapter V on March 22, 2021 in order to
propose a Plan of Reorganization that allows DH to continue as a
going concern.
Class 3 consists of those unsecured creditors of DH who hold
Allowed Claims that were either scheduled by the Debtor as
undisputed, or subject to timely filed proofs of claim to which the
Debtor does not successfully object. Class 3 Claimants total
$1,015,342.39 in unsecured claims, of which approximately
$69,192.66 may be forgiven through the Payroll Protection Program.
Class 3 claimants shall receive payment of their Allowed Claims as
follows:
* Class 3 shall receive a pro rata distribution equal a
percentage of the Debtor's Gross Revenue generated over a five year
period commencing the first full month following the Effective Date
of the Plan ("Repayment Term");
* The variable percentage of Gross Revenue paid to Class 3
creditors shall be equal to: 3% of the Gross Revenue during the
first and second year of the Repayment Term; 4.0% of the Gross
Revenue during the third and fourth year of the Repayment Term; and
5% of the Gross Revenue during the fifth year of the Repayment
Term;
* Commencing on the first month during the Repayment Term, DH
shall, at the conclusion of each month, set aside in a segregated
account an amount equal to the requisite percentage of the
preceding month's Gross Revenue ("Distribution Amount") which shall
be distributed to Class 3 creditors on a pro rata basis every three
months thereafter during the Repayment Term. No interest will be
paid on account of Class 3 claims.
* In addition, Class 3 shall receive a pro rata distribution
of all of the net proceeds of any Avoidance Action brought by the
Debtor, less reasonable costs and attorneys' fees incurred by the
Debtor to pursue the claim through litigation, settlement, and/or
collection. The Debtor does not believe any such claims exist.
* Based on the estimated distributions, Class 3 Claimants are
anticipated to receive approximately 24% of their allowed claims,
or 25.75% of their allowed claims if DH's PPP loans are forgiven in
their entirety. Upon request by any party in interest, DH shall
provide a quarterly financial statement, including amounts
disbursed to creditors in accordance with the Plan.
Class E consists of those unsecured creditors of Dieyleh who hold
Allowed Claims that were either scheduled by the Dieyleh as
undisputed, or subject to timely filed proofs of claim to which the
Debtor does not successfully object. Class E Claimants total
$952,507.26, of which $69,192.66 is subject to forgiveness under
the Payroll Protection Program or disallowance as being filed in
the incorrect case. Class E claimants shall receive payment of
their Allowed Claims as follows:
* Class E shall receive a pro rata distribution equal to
Dieyleh's disposable monthly income after payment of priority
claims, including administrative expense claims and priority tax
claims generated in the five-year period following the Effective
Date of the Plan ("Repayment Term"). Based on Dieyleh's
projections, the Repayment Term shall begin in approximately May
2025, or sooner if administrative expense claimants and Tax Claims
are paid sooner;
* Commencing on the first month during the Repayment Term,
Dieyleh shall set aside in a segregated account an amount equal to
the preceding month's disposable monthly income ("Distribution
Amount") which shall be distributed to Class E creditors on a pro
rata basis every 3 months thereafter during the Repayment Term. To
the extent the distributions to Class E Creditors during the
Repayment Term are less than 5% of the allowed Class E Claims, on
the 5 year anniversary of the Effective Date of the Plan Dieyleh
shall make a single balloon payment to Class E creditors in an
amount sufficient to ensure that Class E Creditors receive 5% of
their allowed general unsecured claims.
* Based on the estimated distributions, Class E Claimants are
anticipated to receive approximately 5.5% of their allowed claims
from distributions during the Repayment Term if the PPP loans are
not forgiven, and approximately 5.9% of their allowed claims if the
PPP loans are forgiven.
Class 4 includes Interests in the Dieyleh held by the pre
confirmation shareholders. Class 4 is unimpaired by this Plan. On
the Effective Date of the Plan, Class 4 Interest Holders shall
retain their Interests in DH which they owned prior to the
Confirmation Date, subject to the terms of the Plan.
Class F includes Interests in the Dieyleh estate held by Dieyleh.
Class F is unimpaired by this Plan. On the Effective Date of the
Plan, Class F shall retain his Interests in the properties which he
owned prior to the Confirmation Date, subject to the terms of the
Plan.
The Debtors' Plan is feasible based upon the Debtors' prepared
projections which reflect a conservative prediction of DH's
operations during the term of the Plan and Dieyleh's income from
providing services to DH and his other companies. As evidenced by
the projections, DH anticipates that its income will be positive
each year of the Plan, and will generate sufficient revenue to meet
its obligations under the Plan. The Debtors have used their best
efforts to prepare accurate projections. DH's actual income will
fluctuate based on seasonal business, actual sales, and changes in
the market. DH is basing its projections on performance over the
past few years. Dieyleh is basing his projections on his actual
salary.
DH has based payments to Class 3 Unsecured Creditors on Gross
Revenue to further support the feasibility of the Plan. As the
Debtor's revenue fluctuates, the amount set aside for creditors
will fluctuate as well, but the Debtor will not be overburdened
with fixed debt payments.
As set forth on the Liquidation Analysis, if the Debtors' cases
were converted to a case under Chapter 7, the sale of the assets
would result in significantly lower distributions to unsecured
creditors. As a result, unsecured creditors of DH would likely only
receive 13.5% on account of their claims, whereas DH anticipates
that unsecured creditors will receive at least 21.81% of their
allowed claims over the Repayment Term.
Similarly, Dieyleh's assets are primarily exempt, and any
unencumbered, non-exempt value would be used to pay priority
claims, resulting in little to no distributions to unsecured
creditors in a Chapter 7. As a result, after payment of anticipated
administrative expense claims, no funds would be available for
distributions to unsecured creditors, and unsecured creditors would
receive nothing on account of their claims. In contrast, unsecured
will receive at least 5% on account of their allowed claims from
distributions under the Plan.
A full-text copy of the Second Amended Joint Plan dated October 28,
2021, is available at https://bit.ly/3nVhWNc from PacerMonitor.com
at no charge.
Attorneys for the Donut House:
Keri L. Riley, #47605
Kutner Brinen Dickey Riley, P.C.
1660 Lincoln St., Suite 1720
Denver, CO 80264
Telephone: 303- 832-2400
Email: klr@kutnerlaw.com
Co-counsel to Omar Dieyleh:
Stuart J. Carr, #19708
2851 S. Parker Rd., Suite 710
Aurora, CO 80014
Tel: (303) 369-1915
Fax: (303) 369-0277
E-Mail: stuartjcarr@hotmail.com
- and -
Jan L. Hammerman
P.O. Box 3446
Englewood, CO 80155
Tel: (720) 261-8013
E-mail: Jlhammerman111@msn.com
About Donut House
The Donut House, Inc., a Colorado corporation that owns and
operates several Donut House restaurant locations in the Denver
Metro area, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Colo. Case No. 21-11349) on March 22, 2021, listing
under $1 million in both assets and liabilities. Kutner Brinen
Dickey Riley, PC serves as the Debtor's counsel.
DOUBLE D GROUP: Seeks to Hire JW Michaels as Real Estate Broker
---------------------------------------------------------------
The Double D Group, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to hire JW Michaels Realty
Services to sell its real property located at 627 South 10th St.,
Las Vegas.
JW Michaels will receive a 6 percent commission on the sale price.
As disclosed in court filings, JW Michaels is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
John Weisler
JW Michaels Realty Services
1771 E. Flamingo Rd.., Suite 104-A
Henderson, NV 89012
Phone: 702 595-4295
About The Double D Group
The Double D Group, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Case No. 21-10343) on Jan. 26,
2021, listing as much as $10 million in both assets and
liabilities. Jose Pihardo, the managing member, signed the
petition. Judge Natalie M. Cox oversees the case. Fennemore
Craig, P.C., is the Debtor's legal counsel.
DURABILIS ROOFING: Unsecureds Will Get 100% of Claims in Plan
-------------------------------------------------------------
Durabilis Roofing, LLC, filed with the U.S. Bankruptcy Court for
the Middle District of Florida a Plan of Reorganization for Small
Business dated Oct. 28, 2021.
The Debtor is a Florida Limited Liability Company. Since 2018, the
Debtor has been in the business of installation and repair of
primarily residential roofing.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $315,731.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
The Plan will treat claims as follows:
* Class 2 - Secured claim of Citizens Bank N.A. The secured
claim of Citizens Bank, N.A will be paid per the terms of the note
and the security agreement.
* Class 2 - Secured claim of US Small Business Administration.
The secured claim of US Small Business Administration will be paid
per the terms of the note and security agreement.
* Class 2 - Secured claim of JPMorgan Chase, N.A. The secured
claim of JP Morgan Chase N.A. will be paid per the terms of the
note and security agreement.
* Class 3 - Non-priority unsecured creditors. The allowed
unsecured claims of Class 3 shall receive a distribution from an
expected pool of $251,361.84 with distribution to commence after
claims entitled to be paid prior to Class 3 claims have been paid
in full. On a monthly basis payments with be distributed on pro
rata basis from a monthly amount of $5,000 until claim is paid.
* Class 4 - Equity Interests of the Debtor. The equity
interests in the Debtor shall be modified so as to deprive the
holders from retaining any distribution upon liquidation of the
Debtor's assets or upon the sale off of the Debtor's assets. Such
modification shall remain effective until such time as all the
payments contemplated to be made by the terms of the plan have been
made. Upon completion of payments under the plan such modifications
or limitations shall be removed and equity holders shall retain in
full their interests without limitation or restriction.
The Debtor shall retain all property of the estate and the funds
necessary to fund the plan shall be generated from the future
income of the Debtor. The Debtor does not anticipate the sale of
any property of the Estate.
A full-text copy of the Plan of Reorganization dated October 28,
2021, is available at https://bit.ly/3q361zt from PacerMonitor.com
at no charge.
Attorney for the Plan Proponent:
David Lampley, Esq.
THE DELLUTRI LAW GROUP, P.A.
E-mail: dlampley@dellutrilawgroup.com
About Durabilis Roofing
Durabilis Roofing, LLC is a Florida Limited Liability Company. The
Debtor filed Chapter 11 Petition (Bankr. M.D. Fla. Case No. 21
01003) on July 30, 2021. The Debtor is represented by David
Lampley, Esq. of THE DELLUTRI LAW GROUP, P.A.
EAGLE HOSPITALITY: Court Okayed $9 Mil. In Deals With Marriott, IHG
-------------------------------------------------------------------
Rick Archer, writing for Law360, reports that a Delaware bankruptcy
judge has given hotel operator Eagle Hospitality Group the go-ahead
to pay $9 million to Marriott International and the owner of the
Holiday Inn hotel chain to settle more than $46 million in claims
for licensing and franchise fees.
Under the pair of settlements approved by U.S. Bankruptcy Judge
Christopher Sontchi on Monday, Nov. 1, 2021, EHT US1 will pay
Marriott $6.5 million and Holiday Inn parent company IHG Hotels and
Resorts $2.5 million to settle the companies' claims in EHT's
Chapter 11 case. According to the settlement papers, EHT was a
party to six franchise agreements with Marriott.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust ("Eagle H-REIT") and Eagle Hospitality Business Trust. Based
in Singapore, Eagle H-REIT is established with the principal
investment strategy of investing on a long-term basis, in a
diversified portfolio of income-producing real estate which is used
primarily for hospitality and/or hospitality-related purposes, as
well as real estate-related assets in connection with the
foregoing, with an initial focus on the United States.
EHT US1, Inc., and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021.
EHT US1, Inc., estimated $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped PAUL HASTINGS LLP as bankruptcy counsel; FTI
CONSULTING, INC., as restructuring advisor; and MOELIS & COMPANY
LLC, as investment banker. COLE SCHOTZ P.C. is the Delaware
counsel. RAJAH & TANN SINGAPORE LLP is Singapore Law counsel, and
WALKERS is Cayman Law counsel. DONLIN, RECANO & COMPANY, INC., is
the claims agent.
ENCORE AUDIO: Gets OK to Hire Jerry Synder as Special Counsel
-------------------------------------------------------------
Encore Audio Visual Design, LLC received approval from the U.S.
Bankruptcy Court for the District of Nevada to hire Jerry Synder,
Esq., an attorney practicing in Reno, Nev.
Encore requires an attorney to represent it in a settlement
conference set by the Supreme Court of Nevada to resolve issues
raised in its appeal of a judgment entered by default against the
company.
The company is currently a defendant in a case (Case No.
CV19-00856) pending in the Second Judicial District Court for the
State of Nevada. On Feb. 23, a judgment by default was entered
against the company after its principal, Brad Bolotin, failed to
appear at a deposition. The amount of the judgment has not been
determined by the state court.
Mr. Synder has agreed to serve as special counsel for an hourly fee
of $325.
In court papers, Mr. Synder disclosed that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
Mr. Synder can be reached at:
Jerry M. Synder, Esq.
429 West Plumb
Reno, NV 89509
Tel: 775.499.5647
Fax: 775.499.5648
Email: jerry@jerrysnyderlaw.com
About Encore Audio Visual Design
Encore Audio Visual Design, LLC filed a petition for Chapter 11
protection (Bankr. D. Nev. Case No. 21-50431) on June 8, 2021,
disclosing total assets of up to $50,000 and total liabilities of
up to $500,000. Judge Bruce T. Beesley oversees the case.
Kevin A. Darby, Esq., at Darby Law Practice, Ltd., represents the
Debtor as bankruptcy counsel while Jerry M. Synder, Esq., serves as
special counsel.
EVERGREEN GARDENS: Taps Weil, Gotshal & Manges as Legal Counsel
---------------------------------------------------------------
Evergreen Gardens Mezz, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ Weil, Gotshal
& Manges, LLP to serve as legal counsel in its Chapter 11 case.
Weil will perform these legal services:
(a) take all necessary action to protect and preserve the
Debtor's estate;
(b) prepare legal papers;
(c) take all necessary actions in connection with the
administration of the Debtor's estate including the preparation of
a Chapter 11 plan and related documents;
(d) take all necessary actions in connection with the sale of
the Debtor's assets pursuant to Section 363 of the Bankruptcy Code;
and
(e) perform other legal services necessary to prosecute the
Debtor's Chapter 11 case.
The firm's customary hourly rates are as follows:
Partners and Counsel $1,150 - $1,795 per hour
Associates $630 - $1,100 per hour
Paraprofessionals $260 - $460 per hour
In addition, Weil will seek reimbursement for out-of-pocket
expenses incurred.
Matthew Goren, Esq., a member of Weil, disclosed in court filings
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
Mr. Goren 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:
-- Weil has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of Weil's professionals included in the engagement
vary their rate based on the geographic location of the bankruptcy
case;
-- Weil was formally engaged by the Debtor on Dec. 29, 2020.
In December 2020, Weil's hourly rates were $1,100 to $1,695 for
members and counsel, $595 to $1,050 for associates, and $250 to
$435 for paraprofessionals. In January 2021, Weil adjusted its
standard billing rates for its professionals in the normal course
to $1,150 to $1,795 for members and counsel, $630 to $1,100 for
associates, and $260 to $460 for paraprofessionals. However, Weil's
billing rates and material financial terms with respect to this
matter have not changed post-petition.
-- Weil, in conjunction with the subsidiary debtors, will
develop a prospective budget and staffing plan for the period
beginning February 2021 and ending June 2021.
The firm can be reached through:
Matthew P. Goren, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153-0119
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Email: matthew.goren@weil.com
About Evergreen Gardens
Evergreen Gardens Mezz LLC focuses on the development,
construction, acquisition, leasing and management of residential
and commercial income-producing properties in Brooklyn, N.Y. It
owns part of the 900-unit Denizen apartment complex, a millennial
haven in Bushwick, Brooklyn, developed on the former site of the
Rheingold Brewery.
Evergreen Gardens is part of All Year Management, a New York-based
real estate development firm, which has owned, managed and
developed dozens in real estate since its founding.
Evergreen Gardens sought Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 21-10335) on Feb. 22, 2021, listing up to $100 million in
both assets and liabilities. The Hon. Martin Glenn is the case
judge. Weil, Gotshal & Manges LLP, led by Gary T. Holtzer, Esq.,
and Matthew P. Goren, Esq., is the Debtor's legal counsel.
EXELA TECHNOLOGIES: S&P Downgrades ICR to 'SD' on Debt Repurchases
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Exela
Technologies Inc. to 'SD' (selective default) from 'CCC-'. S&P also
lowered its ratings on Exela's senior secured notes and term loan
to 'D' from 'CCC-'.
Exela has announced an exchange offer for its senior secured term
loans and secured notes. The company has repurchased about $95
million of debt in the open market so far this year.
The downgrade reflects Exela's announcement that it will offer $900
in cash per $1,000 principal amount of term loans or notes, with an
early tender date of Nov. 9, 2021, and an expiration date of Nov.
24, 2021. The maximum cash to be paid is $225 million, with the
balance of any tendered loans and notes not accepted for cash being
exchanged into new 11.5% notes due July 15, 2026. The company has
been conducting at-the-market equity offerings to raise cash for
debt exchanges, with a $250 million offering on Sept. 30, 2021.
Additionally, the company has been conducting open-market debt
repurchases, having repurchased about $95 million of debt as of
Sept. 30, 2021.
FENDER MUSICAL: S&P Affirms 'B' ICR on PreSonus Audio Acquisition
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on Fender
Musical Instruments Corp. and assigned its 'B+' issue-level rating
to the proposed $375 million term loan. The recovery rating is '2',
reflecting its expectation of substantial (70%-90% rounded
estimate: 70%) recovery in the event of payment default. S&P will
withdraw the issue-level ratings on the existing term loan when it
is repaid. S&P based all ratings on preliminary terms and they are
subject to review of final documentation.
S&P said, "The stable outlook on Fender reflects our expectation
that it will successfully integrate PreSonus and maintain leverage
below 4x over the next 12 months and free cash flow generation of
at least $50 million in fiscal 2022, driven by continued healthy
demand for its guitars and amplifiers given consumers are
increasingly seeking in-home entertainment options amid the
pandemic.
"The rating affirmation reflects our expectations of leverage
sustained in the 3x-4x range over the next 12 months and for free
operating cash flow (FOCF) to be negative in 2021 due to increased
investments. Pro forma leverage will increase to 3.5x at
transaction close from 2.7x for the 12 months ended Oct. 3, 2021.
We forecast a modest decline in pro forma leverage to low-3x area
by the end of fiscal 2022 as the company continues to benefit from
higher sales volumes. Our measure of Fender's leverage includes a
put option held by its majority owner, Servco Pacific, which we
treat as a debt-like obligation because it represents a potential
future call on cash. Excluding the put option, we forecast leverage
will be in the mid- to high-2x area in 2021 and 2022. We forecast
Fender's FOCF to turn negative in 2021 as it makes significant
capital investments to increase production capacity and working
capital investments to build inventory in order to satisfy the
higher levels of demand. We forecast FOCF generation of more than
$50 million in 2022 as working capital usage normalizes and the
company benefits from the incremental contribution to profitability
from the acquisition of PreSonus.
"We forecast strong revenue growth over the next 12 months driven
by resilient industry demand and contribution from acquisition of
PreSonus." Fender posted a 42% revenue growth and S&P Global
Ratings-adjusted EBITDA margin increased to 18.9% in the first
three quarters of fiscal 2021 compared to 13.2% for the same period
in fiscal 2020 when the company faced a steep drop in demand at the
start of the pandemic. This improvement was the result of strong
Squier electric guitars, Fender/Squier acoustic guitars, and Fender
electric guitars volume growth driven by consumers' interest in
learning to play instruments during the early pandemic and the
reopening of its major retailers' stores.
Sales at Fender Digital increased by 26% in the second quarter of
fiscal 2021 with the active paying users' base increasing to about
243,000 from 224,000. The company offered a three-month free
membership of its Fender Play digital app, which helps users learn
to play their instrument, in fiscal 2020 driving nearly 800,000 new
users. Fender has revamped its marketing strategies to increase
focus on social-media marketing and expand its online presence by
creating a dedicated space where new players can complement their
learning when they are not using the subscription Fender Play app.
S&P said, "We project the company will continue to increase its
marketing spending to continue to support this growth. We expect
advertising and promotion spend to increase to about 10% of sales
from about 8% currently. We forecast that the company's revenues
will continue to grow over the next few quarters, given the strong
order book and visibility of revenues from the large wholesale
channel over the next 12 months and contribution from the
acquisition of PreSonus."
S&P said, "We continue to believe the company is susceptible to
high profit volatility during economic downturns. Our rating on
Fender incorporates the risk of a 1x or more increase in leverage
during an economic downturn due to the discretionary nature of the
company's products. While the company's products are sold at
multiple price points, its sales tend to be cyclical and vulnerable
to economic downturns as customers generally put off purchases or
trade down to lower-priced offerings, resulting in negative product
mix shifts during periods of economic stress. Therefore, we believe
Fender could experience relatively high profit volatility in a
recession resulting in EBITDA declines equal to or more than 30%
from current levels."
Fender maintains a strong portfolio of brands and the acquisition
of PreSonus will enhance its scale and create cross selling
opportunities. Fender has a strong competitive position in the
highly fragmented electric guitars and basses industry given its
solid market shares and recognition as one of the world's leading
manufacturers of high-quality guitars and basses for many decades.
The company's premium manufacturing with high-quality craftsmanship
and vast distribution network should allow it to maintain its brand
equity and global leadership positions. PreSonus is a designer and
manufacturer of audio-recording and live-sound software, hardware,
and related accessories used for recording, sound reinforcement,
broadcast, sound design and internet audio. The acquisition will
reduce product concentration in guitars and increase its exposure
to pro audio and sizeable home recording market, which is expected
to benefit from broad proliferation of content such as podcasting,
at-home music creation and the resurgence of live music/concerts.
It will also provide cross-selling opportunities and create a
one-stop shopping experience for customers with the integration of
Fender's intellectual property with software and technology. The
company continues to innovate with its suite of digital apps with
new forms of content and with the acquisition of PreSonus it will
expand its software and hardware portfolio to create easy-to-use
end-to-end platforms for learning, practice, recording, sharing,
and performing that will allow artists to get a deeper insight into
the creation of music. S&P said, "We project that the company will
continue to invest in the Fender Play app to stimulate demand for
new guitars and spur growth. We believe Fender will continue to add
brands and manufacturing capabilities via bolt-on acquisitions
close to its core, including guitar instruments and parts and
accessories."
S&P said, "The stable outlook on Fender reflects our expectation
that the company will successfully integrate PreSonus and maintain
leverage below 4x over the next 12 months and free cash flow
generation of at least $50 million in fiscal 2022, driven by
ongoing healthy demand for its guitars and amplifiers given
consumers are increasingly seeking in-home entertainment options
amid the pandemic."
S&P could lower the ratings on Fender if the company sustains
adjusted debt to EBITDA above 6x due to:
-- A deterioration in the macroeconomic environment that causes a
decline in consumer spending on discretionary items like guitars;
or
-- The company's inability to meet demand due to supply chain
constraints.
S&P could consider raising its rating on Fender if:
-- S&P believes the company and its owners are committed to a more
conservative financial policy such that the company sustains
adjusted debt to EBITDA below 5x with a sustained 1x cushion during
times of economic and consumer spending growth to absorb volatility
and acquisition activity; and
-- S&P is more certain Fender will maintain its good operating
performance even amid inflationary pressures, supply chain
constraints, ongoing capacity expansion that pressures cash flow
generation, and a potentially prolonged period of economic
uncertainty that causes a decline in discretionary spending on
items like guitars.
FITLETIC SPORTS: Seeks to Employ Morty Etgar as Accountant
----------------------------------------------------------
Fitletic Sports, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to hire Morty Etgar, a
certified public accountant practicing in North Miami Beach, Fla.
The Debtor requires an accountant to prepare its 2020 federal
income tax returns and assist in preparing the financial
projections in support of its plan of reorganization.
Mr. Etgar disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
Mr. Etgar holds office at:
Morty Etgar, CPA
Morty Etgar, P.A./C.P.A.
3363 NE 163rd Street
North Miami Beach, FL 33160
Phone: (305) 577-0454
Fax: (305) 577-0455
Email: mortyetgar@etagrcpa.com
About Fitletic Sports
Fitletic Sports, LLC sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-18642) on
Sept. 3, 2021, listing up to $500,000 in assets and up to $1
million in liabilities. Judge Laurel M. Isicoff presides over the
case.
Gary M. Murphree, Esq., at AM Law, LLC represents the Debtor as
legal counsel, while Morty Etgar, CPA serves as the Debtor's
accountant.
FREDDIE MAC: Reports Third Quarter Net Income of $2.9 Billion
-------------------------------------------------------------
Federal Home Loan Mortgage Corporation filed with the Securities
and Exchange Commission its Quarterly Report on Form 10-Q
disclosing net income of $2.92 billion on $5.25 billion of net
revenues for the three months ended Sept. 30, 2021, compared to net
income of $2.46 billion on $5.07 billion of net revenues for the
three months ended Sept. 30, 2020.
For the nine months ended Sept. 30, 2021, the Company reported net
income of $9.37 billion on $16.39 billion of net revenues compared
to net income of $4.41 billion on $11.64 billion of net revenues
for the nine months ended Sept. 30, 2020.
As of Sept. 30, 2021, the Company had $2.94 trillion in total
assets, $2.91 trillion in total liabilities, and $25.31 billion in
total equity.
"We are pleased that Freddie Mac's third quarter results showed 19
percent year-over-year growth in net income and comprehensive
income, which enabled us to add $2.9 billion to our net worth.
These strong results allow the company to serve its mission of
providing liquidity, stability and affordability to the housing
market – and to do so expansively by making home possible for
owners and renters across the country and in all economic
environments," said Michael J. DeVito, chief executive officer.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1026214/000102621421000110/fmcc-20210930.htm
About Freddie Mac
Federal National Mortgage Association (Freddie Mac) is a GSE
chartered by Congress in 1970. The Company's public mission is to
provide liquidity, stability, and affordability to the U.S. housing
market. Freddie Mac does this primarily by purchasing residential
mortgage loans originated by lenders. In most instances, it
packages these loans into guaranteed mortgage-related securities,
which are sold in the global capital markets and transfer
interest-rate and liquidity risks to third-party investors. In
addition, the Company transfers mortgage credit risk exposure to
third-party investors through its credit risk transfer programs,
which include securities- and insurance-based offerings. The
Company also invests in mortgage loans and mortgage-related
securities. The Company does not originate loans or lend money
directly to mortgage borrowers.
Since September 2008, Freddie Mac has been operating under
conservatorship with FHFA as Conservator. The support provided by
Treasury pursuant to the Purchase Agreement enables the company to
maintain access to the debt markets and have adequate liquidity to
conduct its normal business operations. The amount of funding
available to Freddie Mac under the Purchase Agreement was $140.2
billion at Sept. 30, 2021.
Pursuant to the January 2021 Letter Agreement, the company will not
be required to pay a dividend to Treasury until it has built
sufficient capital to meet the capital requirements and buffers set
forth in the Enterprise Regulatory Capital Framework. As a result,
the company was not required to pay a dividend to Treasury on the
senior preferred stock in September 2021. As the company builds
capital during this period, the quarterly increases in its Net
Worth Amount have been, or will be, added to the aggregate
liquidation preference of the senior preferred stock. The
liquidation preference of the senior preferred stock increased to
$95.0 billion on Sept. 30, 2021 based on the $3.6 billion increase
in the Net Worth Amount during the second quarter of 2021, and will
increase to $98.0 billion on Dec. 31, 2021 based on the $2.9
billion increase in the Net Worth Amount during the third quarter
of 2021.
GIRARDI & KEESE: Erika Asks Court to Dismiss $25M Bankruptcy Suit
-----------------------------------------------------------------
OK Magazine reports that Erika Jayne has finally responded to the
$25 million federal bankruptcy lawsuit lodged against her by
estranged husband Tom Girardi's former clients.
In legal documents obtained by Radar, The Real Housewives of
Beverly Hills cast member requested that the suit be tossed out and
stated that she should not have to pay back any of the money. The
former Chicago actress claims the debt is owed to her LLC, EJ
Global, but not her personally.
The Pretty Mess founder stated in the documents that the Girardi
and Keese law firm "was run by attorneys who understood the
significance of claiming that an alleged receivable was owed solely
by EJ Global LLC, which is that GK's claim, if it is valid, is
limited to the assets of EJ Global LLC."
Jayne also argues that she has no responsibility, financially as
Girardi's firm handled all of EJ Global's finances. She also claims
that the 82-year-old handled all of their personal tax returns.
"Ms. Girardi at all times was and is an entertainer with a 12th
grade education," her attorney explains in the papers. "Ms. Girardi
was never and is not an attorney, and she trusted that GK, Mr.
Girardi, and the outside accountants, given their superior
knowledge and expertise, prepared proper, lawful, and legitimate
tax returns."
According to the documents, the singer alleged that when Girardi
was spending money on her, he was financially sound -- therefore
arguing that it was not a fraudulent transfer of funds and she
should have no responsibility to pay it.
In the original lawsuit, the former clients alleged that Jayne
closing EJ Global and launching Pretty Mess LLC was a ploy in order
to hide funds.Yet the entertainer's attorney stated "She formed
Pretty Mess, Inc. for lawful and legitimate reasons, to have an
entity through which she could conduct her business as an
entertainer as her separate property following her divorce filing
against Mr. Girardi in early November 2020."
Earlier this year, Jayne's former spouse filed for Chapter 7
bankruptcy at his credior's request. The former attorney is
accused of winning large settlements for his clients and never
paying them their settlement money, instead funneling the money
into Jayne's career and lavish lifestyle.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case NO. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
Facsimile: (310) 640-0200
GOLDEN FLEECE: Seeks to Hire Sugar Felsenthal as Legal Counsel
--------------------------------------------------------------
Golden Fleece Beverages, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to employ
Sugar Felsenthal Grais & Helsinger, LLP to serve as legal counsel
in its Chapter 11 case.
The firm's services include:
(a) advising the Debtor with respect to its powers and duties
in the continued management and operation of its business and
property;
(b) attending meetings and negotiating with creditor
representatives and other parties in interest, and advising and
consulting on the conduct of the case, including all of the legal
and administrative requirements of operating in Chapter 11 under
Subchapter V;
(c) working with the Subchapter V trustee to successfully
reorganize the Debtor’s estate;
(d) taking appropriate action to protect and preserve the
Debtor's assets, including prosecuting actions on behalf of the
Debtor's estate, defending actions commenced against the estate,
negotiating any litigation in which the Debtor may be involved, and
objections to claims filed against the estate;
(e) preparing legal papers;
(f) advising the Debtor with respect to its executory
contracts and unexpired leases, and seeking court approval to
assume or reject each, as appropriate;
(g) appearing before the bankruptcy court or other courts;
and
(h) performing other necessary legal services.
The firm's hourly rates are as follows:
Attorneys $350 - $600 per hour
Law Clerks $50 - $300 per hour
The Debtor received from the Debtor a retainer of $100,000.
Jonathan Friedland, Esq., a partner at Sugar Felsenthal, disclosed
in a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jonathan P. Friedland, Esq.
Jack O'Connor, Esq.
Mark Melickian, Esq.
Sugar Felsenthal Grais & Helsinger LLP
30 N. LaSalle St., Ste. 3000
Chicago, IL 60602
Tel: 312.704.9400
Fax: 312.704.9400
Email: jfriedland@sfgh.com
joconnor@sfgh.com
mmelickian@sfgh.com
About Golden Fleece Beverages
Golden Fleece Beverages, Inc. a Chicago-based company engaged in
the beverage manufacturing business, filed its voluntary petition
for Chapter 11 protection (Bankr. N.D. Ill. Case No. 21-12228) on
Oct. 27, 2021. The petition was signed by Candace MacLeod as
president. At the time of filing, the Debtor listed $2,489,378 in
assets and $1,658,654 in liabilities.
Judge David D. Cleary oversees the case.
Jonathan P. Friedland, Esq., at Sugar Felsenthal Grais & Helsinger
LLP represents the Debtor as legal counsel.
GTT COMMUNICATIONS: S&P Downgrades ICR to 'D' on Chapter 11 Filing
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
internet protocol network operator GTT Communications Inc. to 'D'
from 'SD'.
At the same time, S&P lowered its issue-level ratings on the
company's remain in secured debt to 'D'.
The downgrade follows GTT's announcement that it has entered into a
restructuring support agreement with holders of more than 84% in
amount of 2018 credit facility claims and more than 76% in amount
of senior notes claims and certain equity holders.
Since the filings indicate this is a "prepackaged" plan, the
company will continue to operate through the bankruptcy process and
has $105 million in cash as of the petition date to support GTT
through the bankruptcy process. Under the filed plan, if approved,
GTT would emerge with around $854 million of debt, down from about
$2 billion, the remaining balance following the debt repayment from
the proceeds of sale of the company's infrastructure division.
GULF COAST HEALTH: Unsecureds to Get Share of GUC Trust Interests
-----------------------------------------------------------------
Gulf Coast Health Care, LLC and 61 of its affiliates (collectively,
the "Debtors") filed with the U.S. Bankruptcy Court for the
District of Delaware a Joint Plan of Liquidation and a Disclosure
Statement on Oct. 28, 2021.
The Debtors engaged in extensive negotiations with the Omega
Landlords and New Ark, as proposed lenders, regarding not only the
proposed financing structures, but also a global settlement among
the parties to provide a pathway to a prompt and efficient transfer
of the Omega Facilities and wind-down of the Debtors through a plan
process. Given the complexity of the financing structures, numerous
competing interests, and dwindling liquidity, all in the face of
the stark reality that the health and well being of the Debtors'
residents was at stake, these negotiations proved lengthy, intense,
delicate, and complex.
These negotiations -- which were completed immediately before the
commencement of the Chapter 11 Cases -- culminated in the
agreements memorialized in the Restructuring Support Agreement
among the Debtors, the Omega Landlords, New Ark, the Service
Providers, and the Debtors' equity sponsors, which provides for a
comprehensive process to fund, implement, and consummate the
transition of the Debtors' Facilities through MOTAs and the
Debtors' chapter 11 plan process.
The Debtors have determined, after extensive diligence and in
consultation with their advisors and key stakeholders, that the
transactions contemplated by the Restructuring Support Agreement
are in the best interests of the Debtors and their creditors. In
the Debtors' view, the transactions memorialized in the
Restructuring Support Agreement, including the DIP Facility, the
transfer of the Debtors' Facilities through MOTAs, and the proposed
Plan, represent the only option available to transition the
Facilities in a manner that safeguards the health and safety of the
Debtors' residents.
This global resolution among the Debtors, the Omega Landlords, the
DIP Lender, New Ark, the Service Providers, and the Debtors' equity
sponsors represents the best, value-maximizing alternative
available for the Debtors and their creditors and, most
significantly, will enable the Debtors to continue to provide
quality care for the Debtors' residents through the transition of
operations. The various transactions outlined in the Restructuring
Support Agreement are inextricably interwoven, and reflect months
of extensive, arm's-length, and good faith negotiations among the
parties, recognizing the substantial stakes for all of the Debtors'
stakeholders. Accordingly, the Debtors believe that the
effectuation of transactions as memorialized in the Restructuring
Support Agreement represents the best option for the Debtors to
maximize the value of their Estates and ensure the safety and
continued care of the Debtors' residents.
Class 4 consists of the Omega Unsecured Claim. Holders of the Omega
Unsecured Claim will receive Pro Rata Distribution with Class 5,
Class 6, and Class 7 of the GUC Trust Interests; provided, however,
that notwithstanding the foregoing, pursuant to the Omega/Delta
Subordination Agreement, any Cash Distribution received by the
Holders of Subordinated Seller Note Claims on account of their GUC
Trust Interests will be paid to the Holders of the Omega Unsecured
Claim until the Omega Unsecured Claim is paid in full; provided
further, however, that if Class 7 votes to accept the Plan, then
the Holders of the Omega Unsecured Claim will contribute to the
Holders of Class 7 General Unsecured Claims (i) their Pro Rata
Distribution of the GUC Trust Interests and (ii) any Cash
Distribution received from the Holders of Subordinated Seller Note
Claims pursuant to the Omega/Delta Subordination Agreement, to be
shared by the Holders of Class 7 General Unsecured Claims on a Pro
Rata basis.
Class 7 consists of General Unsecured Claims. Each Holder of a
General Unsecured Claim will receive a Pro Rata Distribution with
Class 4, Class 5, and Class 6 of the GUC Trust Interests; provided,
however, that if Class 7 votes to accept the Plan, then (a) the
Holders of the Omega Unsecured Claim will contribute (i) their Pro
Rata Distribution of the GUC Trust Interests and (ii) any Cash
Distribution received from the Holders of Subordinated Seller Note
Claims pursuant to the Omega/Delta Subordination Agreement to the
Holders of Class 7 General Unsecured Claims, and (b) the Holders of
the Service Provider Claims will contribute their Pro Rata
Distribution of the GUC Trust Interests to the Holders of Class 7
General Unsecured Claims, and each Holder of a Class 7 General
Unsecured Claim will receive their respective Pro Rata Distribution
of all such contributed GUC Trust Interests and amounts.
Class 9 consists of Existing Equity Interests. On the Effective
Date, all Existing Equity Interests in the Top Level Debtors will
be cancelled, released, and extinguished, and each such Holder of
an Existing Equity Interest will not be entitled to, and will not
receive or retain, any property or interest in property on account
of such Existing Equity Interest. On the Effective Date, all
Existing Equity Interests in the Debtors other than the Top Level
Debtors will be (a) reinstated solely to the extent necessary to
maintain the Debtors' corporate structure post-Effective Date or
(b) cancelled, released, or extinguished, as determined by the
Debtors in their business judgment.
The Plan contemplates and is predicated upon entry of an order
substantively consolidating the Debtors' Estates and Chapter 11
Cases for all purposes, including voting, Distribution, and
Confirmation.
The Liquidating Trust will make Distributions under the Plan from
(a) the Liquidating Trust Assets; (b) the Prepetition A/R Reserve;
and (c) the New Ark Funding. The Liquidating Trust Assets will be
used to pay the costs of administration of the Liquidating Trust
(including the compensation of the Liquidating Trustee and any
professionals retained by the Liquidating Trust), and to satisfy
DIP Facility Claims, Allowed Administrative Claims, Allowed
Priority Tax Claims, Allowed Other Priority Claims, and Allowed
Other Secured Claims as set forth in the Plan. The GUC Trust will
make Distributions under the Plan with the Unsecured Claims Cash
Amount.
The GUC Trust Assets will be used to pay the costs of
administration of the GUC Trust (including the compensation of the
GUC Trustee and any professionals retained by the GUC Trust), and
to satisfy Allowed General Unsecured Claims and Allowed
Subordinated Seller Note Claims and, in the event Class 7 votes to
reject the Plan, the Allowed Omega Unsecured Claim and the Allowed
Service Provider Claims. The New Ark Funding will be used to fund
the New Ark Reserve Account to reserve for Professional Fee Claims
and other expenses set forth in the New Ark Budget.
Proposed Counsel for Debtors:
Daniel M. Simon
Emily C. Keil
McDERMOTT WILL & EMERY LLP
444 West Lake Street, Suite 4000
Chicago, IL 60606
Telephone: (312) 372-2000
Facsimile: (312) 984-7700
E-mail: dmsimon@mwe.com
ekeil@mwe.com
- and -
David R. Hurst
McDERMOTT WILL & EMERY LLP
1007 North Orange Street, 10th Floor
Wilmington, DE 19801
Telephone: (302) 485-3900
Facsimile: (302) 351-8711
E-mail: dhurst@mwe.com
About Gulf Coast Health Care
Gulf Coast Health Care is a licensed operator of 28 skilled nursing
facilities comprising nearly 3,350 licensed beds across Florida,
Georgia, and Mississippi. It provides short-term rehabilitation,
comprehensive post-acute skilled care, long-term care, assisted
living, and therapy services in each of their Facilities.
Gulf Coast Health Care, LLC, and 61 affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 21-11336) on Oct. 14,
2021. In the petition signed by Benjamin M. Jones as chief
restructuring officer, Gulf Coast Health Care estimated assets of
between $10 million and $50 million and estimated liabilities of
between $100 million to $500 million.
The cases are handled by Honorable Judge Karen B. Owens.
McDermott Will & Emery LLP is the Debtors' counsel, and Ankura
Consulting Group LLC is the financial advisor. Epiq is the claims
agent.
HANKS TOWING: $258K Unsecured Claims to be Paid in Full w/ Interest
-------------------------------------------------------------------
Hanks Towing Inc. submitted a First Amended Disclosure Statement
describing Chapter 11 Plan dated October 28, 2021.
The Debtor was created in 2010 by Daniel Ward Eanes. The company
was not profitable until around 2014. The company was able to pay
its debt at that time but then Mr. Eanes started having to spend
more and more time away from the business until his wife died in
January 2019 and his daughter in law in April 2020.
Mr. Eanes did not refocus on the business until late 2020. Since
that time he has become more involved in the business and addressed
waste and worked on increasing income.
The company continues to improve and the debtor believes that the
income will continue to grow to be able to fund the Debtor's Plan.
During the pendency of this case the Debtor has paid all
post-petition taxes as they come due. The Debtor has filed its Plan
of Reorganization to provide an orderly repayment of its debts.
The Debtor estimates that the unsecured claims total $258,237.54
including the unsecured portions of the Internal Revenue Service
Proof of Claim 4-2, TCF National Bank Proof of Claim 5-1 and
Eastern Funding Proof of Claim 11-1.
Each allowed claim shall be paid in full with 5.25% per annum
interests by issuance of a note in the amount of the allowed claim
providing for monthly payments in an amount equal to its pro rata
share of 120 monthly installments totaling $2,770.67.
A full-text copy of the First Amended Disclosure Statement dated
October 28, 2021, is available at https://bit.ly/3ECzBjt from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Harry P. Long, Esq.
Law Offices of Harry P. Long, LLC
P.O. Box 1468
Anniston, AL 36202
Telephone: (256) 237-3266
Email: Hlonglegal8@gmail.com
About Hanks Towing
Hanks Towing Inc. filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No.
21-40072) on Jan. 25, 2021. Daniel Eanes, president, signed the
petition. Harry P. Long, Esq., at the Law Offices of Harry P.
Long, LLC serves as the Debtor's legal counsel.
HBL SNF: Seeks Cash Collateral Access, $4MM DIP Loan
----------------------------------------------------
HBL SNF, LLC, d/b/a Epic Rehabilitation and Nursing at White Plains
asks the U.S. Bankruptcy Court for the Southern District of New
York for authority to:
1. use the cash collateral of White Plains Healthcare
Properties I, LLC, Security Benefit Life Insurance Company and
Security Benefit Corporation; and
2. obtain a post-petition senior secured revolving credit
facility in an aggregate amount of up to $4 million from CNH
Finance Fund I, L.P. on the terms set forth in the Term Sheet, and
the definitive documentation therefor to be filed with the Court,
for use in accordance with the approved budget and to borrow up to
$750,000 under the DIP Facility on an interim basis.
Although the Debtor is generally financially and operationally
sound, the timing of collections of the Debtor's accounts
receivable has resulted in a need for immediately available cash as
of the Petition Date to allow the Debtor to continue to meet its
obligations, including funding payroll within the first few days of
the Case. Without immediate financing, the Debtor will likely be
unable to pay its vendors and employees, ultimately resulting in
potential loss of jobs and cessation of services to its patients.
After diligent efforts to obtain financing, the proposed DIP
Facility on the terms described in the DIP Term Sheet was the most
cost-effective and otherwise favorable facility available to the
Debtor.
Although the Debtor believes it does not have secured debt
outstanding as of the Petition Date, it is requesting authority to
obtain the DIP Facility on a senior secured priming basis and
authority to use cash collateral as a result of the potential
arguments by WPHPC and WPHPC's lender, Security Benefit, that they
hold a lien on substantially all of the Debtor's assets. Although
the Debtor granted security interests to each of WPHPC and Security
Benefit, WPHPC's security interest is unperfected and avoidable,
and the Debtor is not a party to WPHPC's loan agreement with, and
has no obligations thereunder to, Security Benefit.
Further, in light of the appraised value of the Real Property and
related business assets, WPHPC and Security Benefit are more than
adequately protected by equity in the property securing their
interests. As additional adequate protection, the Debtor intends to
pay post-petition rent and other charges in the ordinary course of
business, in accordance with the terms of the Lease while the Case
is pending, as set forth in the Budget. As such, the Debtor will
remain current on all of its obligations under the Lease.
As of the Petition Date, there is no enforceable UCC-1 Financing
Statement of record filed against the Debtor by or on behalf of
WPHCP. As a result, WPHCP's liens on the Debtor's assets are
unperfected and avoidable. Further, the Debtor has made all rent
payments of over $506,000, commencing on October 30, 2019 (even
before the opening of the facility and commencement of the Lease),
totaling over $10.5 million, such that no amounts are due and owing
to WPHCP, and the Debtor intends to continue to remain current on
its obligations under the Lease after the Petition Date.
To the best of the Debtor's knowledge, the balance owed by WPHCP to
Security Benefit under the Loan Agreement was $41.7 million as of
May 1, 2021. According to an appraisal provided by JLL dated as of
April 24, 2020, the value of the Real Property and related assets
is estimated to be between $56.8 million and $74.9 million.
Despite the fact the Debtor did not default under the Lease, WPHCP
defaulted under its Loan Agreement with Security Benefit. Indeed,
Security Benefit issued multiple notices of default to WPHCP,
commencing on October 16, 2019, and commenced litigation against
WPHCP attempting to foreclose against the Real Property. These
actions were discontinued as a result of a New York State
moratoriums on such actions.
On January 7, 2020, attorneys for WPHCP sent the Debtor a letter
purporting to terminate the Lease effective January 13, 2020, and
on September 18, 2020, WPHCP filed a complaint against the Debtor
and certain of its officers in the Supreme Court of the State of
New York, County of Westchester, captioned as White Plains
Healthcare Properties I, LLC v. HBL SNF, LLC, et al., Index No.
60278-20 (N.Y. Sup. Ct. 2020), containing various frivolous
allegations regarding purported defaults by the Debtor under the
Lease, seeking termination of the Lease and seeking recovery of
over $84 million in alleged damages.
The Debtor and co-defendants filed an answer to the Complaint and
asserted counterclaims and third-party claims against WPHCP, among
others, as discussed in the First Day Declaration.
The Debtor submits that the value of WPHCP's and Security Benefit's
property interests is and will remain adequately protected against
the Debtor's use thereof upon the terms proposed in the motion:
1. Given that the appraisal received by the Debtor estimates
the value of the Real Property and related assets at between $56.8
million and $74.9 million, there is substantial equity in the Real
Property over and above the amounts owed to Security Benefit by
WPHCP, which totaled less than $42 million six months before the
Petition Date. Putting aside the infirmities in WPHCP's liens,
there is also substantial equity above any amounts owed to WPHCP as
of the Petition Date.
2. The Debtor's proposed use of cash collateral will only
enable the Debtor to preserve and enhance the value of any such
party's property interests by enabling the Debtor to continue to
generate and collect accounts receivable, obtain the proposed
debtor-in-possession financing, and continue its contracts and
relationships.
3. Even if adequate protection were required, the Debtor
submits that its intent and commitment in the Budget to continue to
remain current on its obligations under its Lease after the
Petition Date will adequately protect any interest that WPHCP and
Security Benefit may have in the Debtor's property.
A copy of the motion and the Debtor's budget for November 1, 2021
to February 21, 2022 is available at https://bit.ly/3mAIBPU from
PacerMonitor.com.
The budget provided for total expenses, on a weekly basis, as
follows:
$1,188,597 for the week beginning November 1, 2021;
$75,000 for the week beginning November 8, 2021;
$500,000 for the week beginning November 15, 2021;
$254,187 for the week beginning November 22, 2021;
$1,163,597 for the week beginning November 29, 2021;
$125,000 for the week beginning December 6, 2021;
$552,500 for the week beginning December 13, 2021;
$259,006 for the week beginning December 20, 2021;
$1,163,597 for the week beginning December 27, 2021;
$125,000 for the week beginning January 3, 2022;
$556,000 for the week beginning January 10, 2022;
$262,245 for the week beginning January 17, 2022;
$1,142,097 for the week beginning January 24, 2022;
$125,000 for the week beginning January 31, 2022;
$556,000 for the week beginning February 7, 2022; and
$266,098 for the week beginning February 14, 2022;
About HBL SNF, LLC
HBL SNF, LLC d/b/a Epic Rehabilitation and Nursing at White Plains
is a 160-bedroom skilled nursing and rehabilitation facility
located at 120 Church Street, White Plains, New York, which opened
in late 2019. The Debtor provides an array of healthcare services,
including neurological, respiratory, orthopedic, occupational,
psychiatric, and many other medical and rehabilitative services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. S.D. N.Y. Case No. 21-22623) on November
1, 2021. In the petition signed by Lizer Jozefovic as chief
executive officer, the Debtor disclosed $$9,131,311 in total assets
and $20,128,876 in total liabilities.
Judge Sean H. Lane oversees the case.
Klestadt Winters Jureller Southard and Stevens, LLP is the Debtor's
counsel.
J&J ROBINSON: Seeks to Hire Hayward PLLC as Bankruptcy Counsel
--------------------------------------------------------------
J&J Robinson Ventures LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to employ Hayward, PLLC to
serve as legal counsel in its Chapter 11 case.
The firm's hourly rates are as follows:
Melissa Hayward $450 per hour
Associates $250 - $300 per hour
Paralegal $175 per hour
As disclosed in court filings, Hayward does not represent interests
adverse to the Debtor's estate or creditors.
The firm can be reached through:
Melissa S. Hayward, Esq.
Hayward PLLC
10501 N. Central Expressway, Suite 106
Dallas, TX 75231
Tel: 972-755-7100
Email: mhayward@haywardfirm.com
About J&J Robinson Ventures
J&J Robinson Ventures is a Corsicana, Texas-based company primarily
engaged in renting and leasing real estate properties.
J&J Robinson Ventures filed its voluntary petition for Chapter 11
protection (Bankr. N.D. Texas Case No. 21-31826) on Oct. 5, 2021,
listing as much as $10 million in both assets and liabilities.
Judge Stacey G. Jernigan oversees the case. Melissa S. Hayward,
Esq. at Hayward PLLC represents the Debtor as legal counsel.
KUMTOR GOLD: State-Managed Mine Underperformed by 24%
-----------------------------------------------------
bne IntelIiNews and , Mining.com reported that Centerra Gold has
said that the flagship Kumtor gold mine -- seized from the company
by the Kyrgyz government in May -- underperformed the 2021 mine
plan for June through September by 24%.
According to a Centerra statement sent to the media outlet, Kyrgyz
authorities and the state-imposed "external management" continue to
claim the mine is operating normally, but a very different story is
seen based on production numbers.
"In particular, gold output plunged more than 24% below Centerra's
approved 2021 mine plan over the period between June and
September," Centerra said in the statement. "That means the
external management poured about KGS 6.2 billion ($73.5 million)
less gold, based on the average gold price for the period."
Toronto-based Centerra also took issue with the current
management's refusal to publish any output data or other indicators
of Kumtor's performance since the last public update in late June
2021.
"When Centerra was in control of the mine, the Kumtor Gold Company
(KGC) released timely, accurate and detailed information about its
operations -- including how much gold was produced and sold.
Despite calls for transparency from members of parliament, the
'external management' has refused to publish any production data or
other indicators of the mine's output," Centerra said.
Centerra said it wants to know where Kumtor's missing gold is; why
KGC has failed to publish any operating results since the
expropriation of the mine; how the state intends to make up for
falling gold output; who is purchasing the gold and where the
proceeds are; how much the current mine manager Tengiz Bolturuk is
being paid and why the state is not allowing an independent
assessment of the mine's condition.
'Critical to economy'
"Kumtor plays a critical part in the Kyrgyz economy, and we again
urge the government to allow Kyrgyz and international journalists
to visit the mine and get answers to these and other questions,"
Centerra said.
KGC, as a subsidiary of Centerra, filed for bankruptcy in June 2021
after the central Asian country brought in a law to enhance state
power, enabling the government to grab control of the mine.
Kyrgyzstan is challenging Kumtor's right to Chapter 11 bankruptcy
protection in the US.
In late August 2021, Centerra said it had obtained photographic
evidence showing at least 40 metres of water at the bottom of the
Kumtor gold mine and "abnormally" large amounts running down the
pit walls. It claimed the situation could lead to catastrophic
events.
Kyrgyzstan's Japarov administration, which came to power following
political upheaval in the country seen late last 2020, is facing
international arbitration hearings pursued by Centerra over
ownership of the mine, the second highest gold mining operation in
the world and the largest taxpayer in the country. The authorities
resurrected several previously settled alleged tax and
environmental complaints in relation to the gold mine prior to the
seizure.
The tactics deployed by nationalist strongman President Sadyr
Japarov to wrestle the mine from Centerra's hands have been
especially aggressive and have shocked foreign investors. So much
so that the British government, recognising that UK-based BlackRock
Investment Management holds a 10.6% stake in Centerra, in late May
2021 lined up with the Canadians in warning Kyrgyzstan that
measures that "negatively impact trade and foreign direct
investment will further undermine already fragile economic
livelihoods of the Kyrgyz people."
The International Monetary Fund (IMF) in June 2021 called for a
"speedy and transparent" resolution to the dispute between
Kyrgyzstan and Centerra over the mine.
About Kumtor Gold Inc.
Centerra Gold Inc. is a Canadian mining company that owns and
operates the Kumtor Gold Mine in the Kyrgyz Republic.
Centerra placed subsidiaries, Kumtor Gold Co and Kumtor Operating
Co., into Chapter 11 bankruptcy in the U.S. following
nationalization of the miner's Kumtor gold mine by the Kyrgyz
Republic, a former Soviet republic.
Kumtor Gold Company CSJC and Kumtor Operating Company CSJC sought
Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos.
21-11051 to 21-11052) on May 31, 2021. Kumtor Gold was estimated to
have $1 billion to $10 billion in assets and $100 million to $500
million in liabilities as of the bankruptcy filing. The Hon. Lisa
G. Beckerman is the case judge. Sullivan & Cromwell LLP, led by
James L. Bromley, is the Debtor's counsel. Stikeman Elliot LLP is
the co-counsel.
LESLIE'S POOLMART: Moody's Ups CFR & Sr. Secured Term Loan to Ba3
-----------------------------------------------------------------
Moody's Investors Service upgraded Leslie's Poolmart, Inc.'s
corporate family rating to Ba3 from B1 and probability of default
rating to Ba3-PD from B1-PD. Leslie's senior secured term loan was
also upgraded to Ba3 from B1. The speculative grade liquidity
rating was upgraded to SGL-1 from SGL-2. The outlook remains
stable.
The upgrade of the CFR reflects Leslie's better than expected
operating performance as well as Moody's expectation that these
improvements are sustainable. Leslie's is benefiting from robust
consumer demand for its products as a result of an increase in pool
installations and pool usage promoted by the outbreak of COVID-19.
The large installed base of US residential pools is expected to
continue to grow and the need for water maintenance when pools are
open for use generates a steady source of demand for Leslie's.
The upgrade of Leslie's speculative grade liquidity rating to SGL-1
reflects the company's very good liquidity position, supported by
its positive free cash flow generation, sizable excess cash
balances with $309 million of cash on balance sheet as of July 3,
2021 and the expectation that its $200 million revolving credit
facility due 2025 will remain undrawn over the next 12 to 18
months.
Upgrades:
Issuer: Leslie's Poolmart, Inc.
Corporate Family Rating, Upgraded to Ba3 from B1
Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Secured Term Loan, Upgraded to Ba3 (LGD4) from B1 (LGD4)
Outlook Actions:
Issuer: Leslie's Poolmart, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Leslie's Poolmart, Inc.'s Ba3 CFR reflects its moderate leverage
with debt/EBITDA of 3.1x as of July 3, 2021 as well as its very
good liquidity. It also reflects that the company now has a
majority independent board as its private equity owners have
reduced their equity stake to around 27%. The company benefits from
relatively stable demand of pool and spa maintenance products from
a large installed base that diminishes its economic sensitivity,
despite its weather dependence. Leslie's has also experienced
significant tail winds from the pandemic as consumers remain
focused on their homes and sanitation increased in importance. The
increase in pool installations will help support demand for its
products in future years. Leslie's has a leading market share in
the US pool and spa care market which serves residential,
professional, and commercial consumers. Despite its strength in the
category, its limited absolute scale and geographic concentration
constrains the credit profile.
The stable outlook reflects Moody's expectations for very good
liquidity, a conservative financial strategy, and stable to
increasing revenue and earnings on a weather-adjusted basis as a
result of the execution of the company's strategic initiatives.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely over the near-to-intermediate term given
Leslie's small scale. Factors that could lead to an upgrade include
a significant increase in scale while maintaining sustained
earnings growth, conservative financial policies as evidenced by a
clearly articulated public capital allocation policy, and
maintenance of very good liquidity. Quantitatively, the ratings
could be upgraded if debt/EBITDA sustained below 3.0x and
EBIT/interest expense sustained above 4.0x.
The ratings could be downgraded if revenue or earnings
deteriorated, or if liquidity materially weakened or financial
policies that turned more aggressive, such as through shareholder
returns or debt-financed acquisitions, that led to sustainably
higher leverage. Quantitatively, the ratings could be downgraded if
debt/EBITDA is sustained above 4.0x or EBIT/interest expense
sustained below 3.0x.
Headquartered in Phoenix, AZ, Leslie's Poolmart, Inc. is a public
specialty pool supplies retailer that operated 946 stores and
commercial centers as of July 3, 2021. Leslie's is approximately
27% owned by the investment funds affiliated with L Catterton and
GIC who purchased the company in a leveraged buyout in February
2017. Net sales for the last twelve months ended July 3, 2021 are
approximately $1.3 billion.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
LRGHEALTHCARE: Court Approves Bankruptcy Wind-Down Plan
-------------------------------------------------------
Alex Wolf of Bloomberg Law reports that a bankrupt New Hampshire
hospital group won approval to wind down and partially pay back
unsecured creditors and the federal government.
LRGHealthcare's bankruptcy estate, winding down under the name
HGRL, will create a liquidating trust and distribute proceeds from
a $30 million sale of its hospital and medical care businesses,
according to its Chapter 11 plan.
The U.S. Housing and Urban Development Department, which is the
largest creditor in the case, will receive 88.5% of a roughly $7
million pool of proceeds, according to the Plan.
About LRGHealthcare
LRGHealthcare -- http://www.lrgh.org/-- was a not-for-profit
healthcare charitable trust operating Lakes Region General Hospital
(LRGH), Franklin Regional Hospital, and numerous other affiliated
medical practices and service programs.
LRGH was 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 offered 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
estimated to have $100 million to $500 million in both assets and
liabilities.
Judge Bruce A. Harwood was assigned to the case before Judge
Michael A. Fagone took over.
The Debtor tapped Nixon Peabody LLP as legal counsel; Baker Newman
Noyes as accountant; and Deloitte Transactions and Business
Analytics, LLP and Kaufman, Hall & Associates, LLC as financial
advisors. Epiq Corporate Restructuring, LLC is the claims,
noticing, solicitation, and administrative agent.
The U.S. Trustee for Region 1 appointed a committee of unsecured
creditors on Oct. 23, 2020. The committee is represented by the law
firms of Sills Cummis & Gross P.C. and Drummond Woodsum. CBIZ
Accounting, Tax and Advisory of New York, LLC, serves as the
committee's financial advisor.
In December 2020, the U.S. Bankruptcy Court, District of New
Hampshire issued a final order approving Concord Hospital's
acquisition of Lakes Region General Hospital, Franklin Hospital and
their ambulatory sites from LRGHealthcare. The healthcare system
and its two hospitals were sold to Concord Hospital for $30
million.
On May 5, 2021, the Debtor filed its change of name from
LRGHealthcare to HGRL with the Secretary of State for the State of
New Hampshire and the Laconia Town Clerk.
LRGHEALTHCARE: Seeks to Expand Scope of Baker Newman's Services
---------------------------------------------------------------
LRGHealthcare filed an amended application with the U.S. Bankruptcy
Court for the District of New Hampshire to expand the scope of
services of its accountant, Baker Newman Noyes.
The firm has agreed to provide additional services as follows:
(a) auditing of the consolidated financial statements of the
Debtor;
(b) preparing the report on Federal Housing Administration
Insured Mortgage for the year ended Sept. 30, 2021;
(c) preparing Uniform Guidance audit and related reports; and
(d) preparing Federal and State Tax returns for the Debtor.
The firm will be paid between $235 and $300 per hour for tax return
preparation; a flat fee of $9,000 for the Uniform Guidance audit
services; and a flat fee of $107,000 for the other audit services.
Darren Hurlburt, chief financial officer of Baker Newman Noyes,
disclosed in a court filing that he is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Darren Hurlburt
Baker Newman Noyes
280 Fore Street
Portland, ME 04101
Tel: 207-879-2100/207-791-7158
About LRGHealthcare
LRGHealthcare -- http://www.lrgh.org/-- was a not-for-profit
healthcare charitable trust operating Lakes Region General Hospital
(LRGH), Franklin Regional Hospital, and numerous other affiliated
medical practices and service programs.
LRGH was 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 offered 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
estimated to have $100 million to $500 million in both assets and
liabilities.
Judge Bruce A. Harwood was assigned to the case before Judge
Michael A. Fagone took over.
The Debtor tapped Nixon Peabody LLP as legal counsel; Baker Newman
Noyes as accountant; and Deloitte Transactions and Business
Analytics, LLP and Kaufman, Hall & Associates, LLC as financial
advisors. Epiq Corporate Restructuring, LLC is the claims,
noticing, solicitation, and administrative agent.
The U.S. Trustee for Region 1 appointed a committee of unsecured
creditors on Oct. 23, 2020. The committee is represented by the law
firms of Sills Cummis & Gross P.C. and Drummond Woodsum. CBIZ
Accounting, Tax and Advisory of New York, LLC, serves as the
committee's financial advisor.
In December 2020, the U.S. Bankruptcy Court, District of New
Hampshire issued a final order approving Concord Hospital's
acquisition of Lakes Region General Hospital, Franklin Hospital and
their ambulatory sites from LRGHealthcare. The healthcare system
and its two hospitals were sold to Concord Hospital for $30
million.
On May 5, 2021, the Debtor filed its change of name from
LRGHealthcare to HGRL with the Secretary of State for the State of
New Hampshire and the Laconia Town Clerk.
LSF9 ATLANTIS: Moody's Affirms 'B2' CFR, Outlook Remains Stable
---------------------------------------------------------------
Moody's Investors Service affirmed LSF9 Atlantis Holdings, LLC's
(dba "Victra") B2 corporate family rating, B2-PD probability of
default rating and B2 senior secured notes rating. The outlook
remains stable.
The affirmations incorporate governance considerations including
the ownership change as Victra will be purchased by a consortium of
investors including the company founder and current CEO, Rich
Balot, and an affiliate of the Dhanani Group. As part of the
transaction, Victra will issue a new $70 million secured loan
facility (unrated) that ranks pari-passu with the existing senior
secured notes. The existing asset-based lending (ABL) revolver due
2026 (unrated) and $735 million senior secured notes due 2026 will
remain in place as the change in control provision under the ABL
will be waived and under the secured notes terms the transaction is
viewed as permitted change of control. Moody's adjusted debt/EBITDA
pro forma for the transaction is approximately 4.7x.
Affirmations:
Issuer: LSF9 Atlantis Holdings, LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Notes, Affirmed B2 (LGD3)
Outlook Actions:
Issuer: LSF9 Atlantis Holdings, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Victra's B2 corporate family rating (CFR) reflects its reliance on
cellphone manufacturers for continued product innovation and the
risk of volatile customer demand related to new product
introductions. The rating is also constrained by the risk of
lengthening customer replacement/upgrade cycle and declines in
wireless activations. Victra benefits from its symbiotic
relationship with Verizon Communications Inc. (Baa1 stable) as its
largest independent retailer, the nondiscretionary nature of cell
phones, and beneficial relationships with the handset
manufacturers. The credit profile also considers Victra's good
liquidity.
The stable outlook reflects Victra's good liquidity and market
position as Verizon's largest independent retailer and the Moody's
expectation the company will utilize free cash flow for
reinvestment or debt repayment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Victra maintains a conservative
financial strategy towards shareholder returns and future
acquisitions, while improving operating performance.
Quantitatively, ratings could be upgraded if debt/EBITDA was
sustained around 4.5 times and EBIT/Interest was sustained around
2.0x.
Ratings could be downgraded if liquidity were to weaken, or if
either deteriorating operating performance and/or financial
strategy actions resulted in debt/EBITDA sustained above 5.5 times
or EBIT/Interest approaching 1.25 times.
LFS9 Atlantis Holdings, LLC and subsidiaries, operating under the
Victra brand name, is the largest Verizon independent retailer and
operates 909 stores in 43 states. The company is owned by a
consortium of investors including the company founder and current
CEO, Rich Balot, and an affiliate of the Dhanani Group. Revenue for
the last twelve-month period ended September 30, 2021 was
approximately $1.7 billion.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
MAGELLAN HOME-GOODS: Taps Whatcom Law Group as Special Counsel
--------------------------------------------------------------
Magellan Home-Goods, Ltd. received approval from the U.S.
Bankruptcy Court for the Western District of Washington to hire the
law firm of Whatcom Law Group to serve as special counsel.
The Debtor needs the firm's legal services related to corporate
governance, risk evaluations, litigation and transactional work.
The firm's hourly rates are as follows:
Roger Ellingson, Esq. $285 per hour
Rajeev Majumdar, Esq. $250 per hour
Casie Rodenberger, Esq. $200 per hour
Sierra Valadez $180 per hour
Jakki Amsberry. $100 per hour
Lisa McMaster $100 per hour
Rajeev Majumdar, Esq., a partner at Whatcom Law Group, disclosed in
a court filing that he is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Rajeev Majumdar, Esq.
Whatcom Law Group
289 H. Street, I-5 Exit 276
Blaine, WA 98230
Tel: (360) 332-7000
Email: info@whatcomlaw.com
About Magellan Home-Goods
Magellan Home-Goods Ltd, doing business as Magellan Home Goods,
sells patented home goods and small appliances manufactured
offshore to retail consumers in the United States. The company is
based in Blaine, Wash.
Magellan Home-Goods sought protection under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-11413) on
July 24, 2021, listing $2,324,758 in total assets and $2,063,752 in
total liabilities. Judge Marc Barreca oversees the case while
Geoffrey Groshong is the Subchapter V trustee appointed in the
case.
The Debtor tapped Neeleman Law Group PC as bankruptcy counsel,
Whatcom Law Group as special counsel, and Northstar Tax &
Accounting as accountant.
MALLINCKRODT PLC: Plan Lacks Enough Votes, Says Antitrust Group
---------------------------------------------------------------
Rick Archer of Law360 reports that a group with antitrust claims
against drugmaker Mallinckrodt challenged the vote approving the
company's Chapter 11 plan on Tuesday, October 2, 2021, but lost a
bid to get counsel for the unsecured creditors on the stand to
address the vote solicitation process.
At a plan confirmation hearing held virtually, Delaware U.S.
Bankruptcy Judge Thomas Dorsey said he would not force attorneys
for the unsecured creditors committee to testify on the committee's
solicitation of creditor votes on the plan, saying since committees
are always involved in vote solicitation it would open a "Pandora's
box."
About Mallinckrodt PLC
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.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware (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 them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC, is the claims agent.
The official committee of unsecured creditors retained Cooley LLP
as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon
Advisers LLC as its financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid related claimants. The OCC tapped Akin
Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz as
Delaware co-counsel, Province Inc. as financial advisor, and
Jefferies LLC as investment banker.
A confirmation trial for the Debtors' First Amended Joint Plan of
Reorganization is set to begin Nov. 1, 2021. The Confirmation
Hearing will be bifurcated into two phases. Phase 1 will commence
the week of Nov. 1. The Confirmation Hearing will continue with
Phase 2 on or around the week of Nov. 15, when the Acthar
Administrative Claims Hearing proceedings concludes.
MANNINGTON MILLS: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Salem, N.J.-based
Mannington Mills Inc. to stable from negative and affirmed its
'BB-' issuer credit rating.
In addition, S&P also affirmed the 'BB-' issue-level rating on the
company's senior secured notes. The '3' recovery rating is
unchanged.
The stable outlook reflects S&P's view that over the next 12
months, the company will sustain debt to EBTIDA of about 4x and S&P
Global Ratings-adjusted EBITDA above $75 million.
Compared to previous assumptions, S&P now expects a near 50% jump
in 2021 adjusted EBITDA from year-end 2020 . The 50% year-over-year
climb stems from increased demand in the company's end markets,
pricing initiatives to mitigate cost inflations, and
stronger-than-anticipated orders. In addition to continued
tailwinds, the company's rolling-twelve-month debt to EBITDA on
June 30, 2021, was 4x, which provides some assurance that earnings
will keep the company well below its 5x downside trigger for the
next 12 months. Lastly, the company's margins have benefited from
its improved operating leverage due to expansion, which has been
supported by new product initiatives and infrastructure investments
that management has implemented over the past 24 months. This has
resulted in EBITDA margins of approximately 8%-9% forecast for
year-end 2021 from roughly 7% EBITDA margins at year-end 2020.
Mannington Mills operates in the highly competitive flooring
industry and has limited pricing power. Overall, the flooring
industry is very competitive and the demand for the company's
legacy products made with vinyl, laminate, and wood is declining.
This is partly due to greater demand for its highly engineered
rigid-core luxury vinyl tile (LVT) products. Mannington is a leader
in rigid-core LVT and has begun manufacturing these products at its
Calhoun, Ga. plant to better compete against imports from China.
S&P said, "We view this as credit positive because the demand for
LVT products is strong. However, our assessment of Mannington's
business is constrained by its sole focus on flooring products,
meaning it has relatively limited product diversity. The company is
relatively small, with reported 2020 revenue of $854.2 million
compared to its competitor Mohawk, with revenue of over $9 billion.
In addition, we believe Mannington has weaker profitability and
market strength than the larger players in its industry. The
company derives about 49% of its revenue from the U.S. residential
market, 36% from the U.S. commercial market, and roughly 15% from
the rest of the world. We assume Mannington will modestly increase
sales in the next 12 months as remodeling activity increases
steadily and strong conditions in the residential U.S. end markets
are somewhat offset by the slowdown in commercial activity and
delayed rebound in global activity. Currently, we anticipate U.S.
real GDP will expand 5.7% and eurozone GDP will increase 5.1% this
year. Furthermore, we forecast U.S. residential construction
activity will increase 10.3% while nonresidential construction
activity will be a flat 7.2% in 2021."
S&P said, "We expect Mannington's EBITDA interest coverage to
remain strong and anticipate it will generate positive free cash
flow. Due to the company's recent favorable credit repricing on its
term loan, we believe interest costs will decrease and working
capital investments will increase, generating positive free cash
flow of $25 million-$45 million over the next 12 months. We also
expect its earnings will continue to support EBITDA interest
coverage of at least 3x.
"The stable outlook reflects our expectation that Mannington will
generate moderate sales and implement pricing initiatives to
control costs such that adjusted leverage will be 3x-4x."
S&P could lower the rating over the next 12 months if:
-- Market recovery stalls and results in a significant decline in
residential or repair and remodeling (R&R) demand, causing EBITDA
to decline below $75 million; or
-- Debt to EBITDA approaches 5x with little prospect of recovery.
Although S&P would consider an upgrade unlikely, it could raise the
rating if:
-- Debt to EBITDA improves around 3-4x; and
-- The company continually generates significant positive
discretionary cash flow. This could occur if gross margins rise by
200 basis points and EBITDA exceeds $120 million over the next 12
months.
MATTAMY GROUP: Moody's Hikes CFR to Ba2, Outlook Stable
-------------------------------------------------------
Moody's Investors Service upgraded Mattamy Group Corporation's
corporate family rating to Ba2 from Ba3, probability of default
rating to Ba2-PD from Ba3-PD, and senior unsecured notes rating to
Ba3 from B1. The ratings outlook remains stable.
"The upgrade reflects Mattamy's improved liquidity and
profitability, and our expectation that debt/cap leverage will
remain below 45% through 2023, underpinned by a robust backlog and
supportive fundamentals in the Canadian and US housing sectors"
said Whitney Leavens, AVP-Analyst at Moody's.
Upgrades:
Issuer: Mattamy Group Corporation
Corporate Family Rating, Upgraded to Ba2 from Ba3
Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 (LGD5)
from B1 (LGD4)
Outlook Actions:
Issuer: Mattamy Group Corporation
Outlook, Remains Stable
RATINGS RATIONALE
Mattamy Group Corporation (Ba2 CFR) benefits from: (1) geographic
diversification across both Canada and the US with leading market
shares in key communities; (3) high gross margins (25% at LTM
Aug-21) compared to peers, supported by a large, low-cost land
position in the supply-constrained Greater Toronto Area (GTA); and
(3) strong revenue visibility underpinned by a build-to-order
strategy and structural advantages in Canada's housing market. The
company is constrained by: (1) elevated leverage remaining above
40% (43% LTM Aug-21); (2) long land supply and land development
strategy exposing company to risk of impairment and driving
negative free cash flow generation; and (3) lengthy entitlement
processes in Canada requiring the maintenance of a large land
bank.
The stable rating outlook reflects Moody's expectation that Mattamy
will continue to sustain adjusted debt to capitalization below 45%,
with gross margins remaining close to 25% while executing on its
strong backlog across both Canada and the US and maintaining good
liquidity.
Mattamy has good liquidity. Moody's estimates sources total about
C$1.5 billion compared to uses of around C$400 million. As of
August 2021, sources consist of about C$300 million in cash on
hand, and close to C$1.2 billion available under the company's
C$1.8 billion revolving credit facilities due August 2024 after
letters of credit totaling about C$560 million. Uses over the next
twelve months total close to C$400 million, comprised of Moody's
estimate of negative free cash flow of around C$300 million and
debt maturities of about C$100 million related to project specific
financings. Mattamy has ample headroom under financial covenants in
its credit agreements, which include debt to capitalization,
interest coverage and minimum net worth. The company has strong
sources of alternate liquidity to raise cash given its robust land
inventory position, with assets largely unencumbered.
Governance considerations for Mattamy include its ownership by a
single shareholder, the Gilgan family. The company has a dividend
policy that allows shareholder distributions of up to 50% of net
income. While the company has a six-member board of directors, four
of which are independent, Moody's consider the board to be more
advisory in nature given that all shareholder votes remain with the
family.
The Ba3 rating assigned to Mattamy's senior unsecured notes, one
notch below the Ba2 CFR, reflects the notes' junior position
relative to the secured debt in Mattamy's capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Mattamy's ratings could be upgraded if the company increases its
scale while sustaining adjusted homebuilding debt to book
capitalization at or below 35% (43% as of LTM Aug-21) throughout
the year and EBIT interest coverage above 6.0x (7x as of LTM
Aug-21). An upgrade would also require positive free cash flow
generation, maintenance of a very good liquidity profile and more
conservative financial policy.
The ratings could be downgraded if gross margins, compress well
below 20% (25% as of LTM Aug-21), if homebuilding leverage is
maintained at or above 45% (43% as of LTM Aug-21), or if EBIT
interest coverage remains below 5.0x (7x as of LTM Aug-21) Any
material weakening of liquidity could also result in a downgrade.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Established in 1978, headquartered in Toronto, Ontario, Canada, and
owned 100% by the Gilgan family, Mattamy Group Corporation
constructs single-family homes and high-rise buildings and has a
presence in two provinces in Canada and five states in the US. In
the last twelve months ended August 31 2021, the company generated
C$4.4 billion in revenue.
MDEV12 LLC: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of MDEV12, LLC, according to court dockets.
About MDVE12 LLC
Plantation, Fla.-based MDVE12, LLC filed its voluntary petition for
Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-18843) on Sept.
13, 2021, listing as much as $10 million in both assets and
liabilities. Judge Scott M Grossman oversees the case. Chad T.
Van Horn, Esq., at Van Horn Law Group, P.A. represents the Debtor
as legal counsel.
MERITAGE HOMES: Fitch Affirms 'BB+' LT IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed Meritage Homes Corporation's (Meritage,
NYSE: MTH) ratings, including the company's Long-Term Issuer
Default Rating (IDR) at 'BB+'. The Rating Outlook is Stable.
Meritage's ratings reflect the company's strong credit metrics,
moderate geographic and product diversity, healthy liquidity
position and strong execution of its business model in the current
housing environment. The ratings also consider the company's
speculative build strategy, which Fitch views as a riskier approach
to homebuilding, and Fitch's expectation for lower CFFO generation
than higher-rated peers during the intermediate term.
The Stable Outlook reflects Fitch's expectation that the company
will maintain credit metrics that are strong for the 'BB+'
Long-Term IDR in the near- to intermediate-term, but incorporates
the execution risk associated with the company's aggressive
community count expansion and spec build strategy.
KEY RATING DRIVERS
Strong Credit Metrics: Meritage has communicated a maximum net debt
to capitalization target in the high 20% range, and has maintained
that range since YE 2019 (according to Fitch calculations, which
considers $75 million of cash as not readily available for seasonal
working capital use). Fitch-measured net debt to capitalization was
19.4% and total debt to operating EBITDA was 1.2x as of Sept. 30,
2021, in line with or stronger than many investment-grade
homebuilding peers.
Fitch expects the company will comfortably manage its balance sheet
in line with its stated target during the intermediate-term,
despite its intention to aggressively rebuild and grow its
community count. Fitch believes the company's capitalization ratios
have sufficient cushion to support expansionary activity and absorb
modest impairment charges without negative rating action.
Speculative Building Activity: Meritage has significantly increased
its spec building activity in recent years in order to facilitate
the delivery of entry-level homes on an immediate need basis and
gain operational efficiencies. Homes started as spec inventory
accounted for 74% of closings in 3Q21. Fitch views high spec
activity as a credit negative, all else equal, as rapidly
deteriorating market conditions could result in standing inventory
and consequently sharply lower margins and impairment charges, both
of which could negatively impact credit metrics.
Fitch believes the company has managed its spec building activity
appropriately, as the company slowed housing starts in the early
stages of the pandemic, but the strategy remains untested during a
more prolonged housing downturn.
Aggressive Growth Strategy: The company has a stated goal to have
300 active communities open by mid-2022, up from 236 active
communities at end-3Q21. Fitch views the pace of growth as risky,
due to the significant land development and homebuilding investment
required in a short period of time, amid potentially softening
housing demand in the intermediate term.
Fitch expects absorption pace to normalize by 2023 as pent up
demand is satisfied. Meritage could record material inventory
impairment charges and a significant decline in operating margins
if the housing market were to experience a prolonged decline in
demand meaningfully worse than Fitch's current base case
expectations.
Land Position: As of Sept. 30, 2021, Meritage controlled 69,767
lots, representing a 46% yoy increase in lots controlled. About 64%
of lots under control as of Sept. 30, 2021 were owned, and the
remainder were controlled through options or bulk purchases. Based
on LTM closings, the company controlled 5.4 years of land and owned
roughly 3.5 years of land. Meritage typically aims to maintain four
to five years of land supply. The company's owned lot position is
approximately in line with the average homebuilder in Fitch's
coverage despite the sharp yoy increase in order to facilitate
community count growth.
Limited CFFO Generation Expected: Fitch expects the company will
generate neutral to negative CFFO in 2021 and 2022 despite strong
EBITDA generation, due to the significant inventory investment
required for planned community count expansion. CFFO generation may
trend positively beyond 2022 once active communities reach the
company's current target. The company generated more limited CFFO
than most investment-grade peers in the last few years mostly due
to the company's lower EBITDA margins. Meritage's expanding margins
due to strong execution on its entry-level spec strategy and
increasing scale could enable the company to generate similar CFFO
to peers over the long term.
Moderate Geographic Diversity: Meritage operates in 17 markets
across nine states as of YE 2020, with particularly heavy exposure
to Texas, Arizona, California and Florida. The company is less
geographically diversified than larger investment-grade peers such
as D.R. Horton (BBB+/Stable) and Lennar (BBB/Stable), which have
leading market shares in dozens of markets nationwide. However,
Meritage's multiregional exposure provides more diversity than
lower-rated or privately held peers. Fitch views geographic
diversity for homebuilders favorably since it may help insulate a
builder from a local or regional housing downturn.
High Entry-Level Exposure: Meritage sells homes targeting the entry
level and first-time move up segments. About 77% of active
communities were targeted toward entry-level buyers on average
during 3Q21. This strategy has resulted in strong operating
performance and order growth in recent years as home affordability
constraints have led to higher demand for more affordable
offerings. Fitch expects demographic trends to continue to support
long-term housing demand for entry-level homes. However, Fitch
believes demand at the lower price points can be more cyclical and
volatile as first-time buyers are less resilient to changes in
interest rates, home prices and economic conditions.
DERIVATION SUMMARY
Meritage's ratings reflect the company's strong credit metrics,
moderate geographic and product diversity, healthy liquidity
position and execution of its business model in the current housing
environment. The ratings also consider Meritage's aggressive shift
toward a more speculative homebuilding strategy in the past few
years driven by its emphasis on the entry-level/first-time buyer,
which Fitch views as a riskier approach to homebuilding.
Meritage's credit metrics are strong compared to M/I Homes, Inc.
(BB/Stable) and are roughly in line with some 'BBB-' rated peers,
such as Toll Brothers, Inc. (BBB-/Stable) and M.D.C. Holdings, Inc.
(MDC; BBB-/Stable). Fitch expects Meritage's net debt to
capitalization ratio and total debt to operating EBITDA to be
higher than 'BBB' rated peers such as PulteGroup, Inc. (BBB/Stable)
and Lennar Corporation (BBB/Stable) during the rating horizon.
Lennar and Pulte's breadth of leading positions in local markets,
strong profitability and Fitch's expectation for consistently
positive CFFO are credit positives relative to Meritage.
MDC has similar credit metrics, scale, profitability and cash flow
characteristics to Meritage, but MDC's historically short land
position, build-to-order strategy and conservatively managed
balance sheet through housing cycles are strengths relative to
Meritage.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- Meritage's home deliveries increase high-single digit % in
2021 and double-digit % in 2022;
-- EBITDA margins remain significantly above historical averages
in 2021 and 2022 due to strong demand and home price
appreciation;
-- Absorption pace slows considerably during 2022 and beyond,
leading to normalization in EBITDA margins towards the low- to
mid-teens % compared to Fitch's 2021 forecast of about 20%
adjusted EBITDA margins;
-- Fitch's rating case assumes some impairment charges to
inventory in 2022 and 2023 due to the forecasted moderation in
sales pace;
-- Meritage generates neutral to negative CFFO in 2021 and 2022
as the company continues to expand active community count
toward 300;
-- Net debt to capitalization situates in the high-teens to mid-
20% range during the intermediate-term.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The company consistently maintains conservative credit
metrics, such as net debt to capitalization below 35% or total
debt to operating EBITDA below 2.0x;
-- Fitch's expectation that Meritage can generate consistently
and meaningfully positive CFFO through expansionary and
recessionary housing environments, consistent with many
investment grade homebuilding peers, which could result from
more consistent land and development spending as the company
grows into a mature homebuilder;
-- The company further demonstrates strong execution of its spec
build strategy and community count expansion, as demonstrated
by limited land impairment charges and low volatility in
operating margins, with EBITDA margins maintaining in the low-
to mid-teens %;
-- Meritage improves geographic diversity through successful
entry into new markets;
-- Management commits to an investment grade rating.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- There is a sustained erosion of profits due to poor execution
of the company's strategy, leading to consistently lower
EBITDA margins and meaningful and continued loss of market
share, resulting in weakened credit metrics, such as net/debt
to capitalization sustaining above 40%;
-- The company maintains an aggressive land and development
spending program that leads to consistently negative CFFO,
higher debt levels and a diminished liquidity position.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: At Sept. 30, 2021, Meritage had $562 million of
cash and no outstanding borrowings under its $780 million revolver
that will mature in December 2025. Fitch believes the company has
ample liquidity to manage fixed charges and land acquisition and
development activity over the intermediate term. The company
redeemed its unsecured notes due 2022 in 2Q21 with proceeds from
its 2029 notes issuance. Following the note redemption, Meritage's
nearest maturity is in 2025, when a $400 million unsecured note
comes due.
ISSUER PROFILE
Meritage was the 6th largest U.S. homebuilder in 2020 based on home
deliveries. The company operates in 17 markets across nine states
and offers homes targeting the first-time and first move-up buyer.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical and projected EBITDA is adjusted to add back interest
expense included in cost of sales and also excludes impairment
charges and land option abandonment costs. Fitch also adds back
stock-based compensation expense to operating EBITDA.
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.
NAHAUL INC: Unsecureds Will Get 10% Dividend over 60 Months
-----------------------------------------------------------
NaHaul, Inc., filed with the U.S. Bankruptcy Court for the Northern
District of Illinois a Plan of Reorganization for Small Business
dated October 28, 2021.
The Debtor is an Illinois corporation which was formed in 2016 and
is engaged in trucking and logistic operations. The Debtor's
President and its sole shareholder is Serkan Kaputluoglu. NaHaul is
affiliated with 2 other companies owned and operated by Mr.
Kaputluoglu, namely Chicagoan Logistic Company ("CLC") which also
is currently under Chapter 11 protection (Case No. 21- bk 7154) and
AJT Services Inc. ("AJT"), which has not filed for bankruptcy
protection.
In order to maintain a continuous cash flow and consistent with the
general business practice in the trucking industry, the Debtor both
pre-petition and post-petition has entered into a Factoring
Agreement with Partners Funding, Inc. ("Partners Funding") wherein
the Debtor sells its accounts receivable to Partners Funding for an
immediate cash payment. The Debtor has secured creditor, Volvo
Financial Services, with respect to some of its trucks and
trailers. The Debtor's remaining vehicles are leased from AVT
Illinois, L.P.
Because of the slowdown in the trucking industry, the Debtor has
still not returned to its pre-pandemic profitability. As a result,
one of its related companies, AJT, has continued to provide funds
to the Debtor to meet any operating shortfall. However, the Debtor
believes that its monthly income and cash flow will continue to
grow post-pandemic and the Debtor will be able, without assistance
from AJT, to fund its monthly payments to the secured creditor to
the extent of Volvo's allowed secured claim in the collateral, pay,
in full, the monthly lease payments to the lessor of the leased
vehicles, and an estimated 10% dividend to general unsecured
non-priority creditors through this Plan of Reorganization over a
term of 60 months.
This Plan of Reorganization proposes to pay creditors of the Debtor
from its monthly business income and cash flow.
The Plan will treat claims as follows:
* Class 1 consists of the Motor Vehicle Claim of Volvo
Financial Services which is secured by the vehicles. To the extent
that the claim is secured, Volvo shall receive equal monthly
installment payments, together with interest at 5% per annum,
commencing on the 15th day of the month following the Effective
Date and the 15th of the month thereafter until paid in full. The
balance of Volvo Financial Services' Claim shall be treated as a
Class 3 Unsecured Non-Priority Claim. Claim 1 is impaired under the
Plan.
* Class 3 consists of General Unsecured Non-Priority Claims.
General Unsecured Non-Priority Claims aggregate approximately
$1,367,532.22. Allowed Class 3 claims shall be paid approximately
$136,753.22 through pro rata distributions of deferred cash
payments to holders of allowed Class 3 Claims in five (20 annual
installments of $6,837.66, commencing on March 1, 2022, and each
quarter thereafter through and including February 28, 2027. The
quarterly installments shall be distributed to allowed Class 3
Claims, pro rata, by the Subchapter V Trustee. Class 3 claims are
impaired under the Plan.
* Class 4 consists of Equity Interest. No property or other
consideration will be paid or distributed to the holder, Serkan
Kaputluoglu, who shall retain 100% stock ownership of the Debtor.
The Plan shall be funded by proceeds from the Estate's available
cash, cash equivalents, and proceeds generated from Debtor's
business income and cash flow. The Debtor projects that his cash
flow will be sufficient to make the Plan payments.
A full-text copy of the Plan of Reorganization dated October 28,
2021, is available at https://bit.ly/3GI9lpX from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Laxmi P Sarathy
3553 W. Peterson Ave., Suite 102
Chicago, Illinois 60659
(312) 674-7965
L.sarathylaw@gmail.com
David R Herzog
53 West Jackson Blvd., Suite 1442
Chicago, Illinois 60604
(312) 427-1558
drh@dherzoglaw.com
About NAHAUL Inc.
NAHAUL, Inc., an affiliate of Chicagoan Logistic Company, is a
privately held company in the general freight trucking industry.
The company is based in Columbus, Ohio.
NAHAUL and Chicagoan Logistic Company filed Chapter 11 petitions
(Bankr. N.D. Ill. Case Nos. 21-07152 and 21-07154) on June 5, 2021.
The two cases are not jointly administered.
In the petition signed by Serkan B. Kaputluoglu, president, NAHAUL
disclosed between $100,000 and $500,000 in assets and between $1
million and $10 million in liabilities.
Judge Carol A. Doyle oversees NAHAUL's Chapter 11 case.
David Herzog, Esq., of Herzog & Schwartz, P.C. and Laxmi P.
Sarathy, Esq., serve as NAHAUL's legal counsel, while Romano Law,
PLLC serves as special counsel. NAHAUL tapped Daniel Greenman &
Co. as its accountant.
NATIONAL RIFLE: Sued by Giffords for Campaign Finance Law Violation
-------------------------------------------------------------------
Reuters reports that gun control advocacy group Giffords sued the
National Rifle Association on Tuesday, November 2, 2021, for
allegedly violating campaign finance laws since 2014.
The powerful gun lobby made as much as $35 million in "unlawful"
and "unreported in-kind campaign contributions" to seven federal
candidates, including candidates for U.S. Senate in 2014, 2016, and
2018, and Donald Trump's 2016 presidential campaign, according to
the allegations.
The lawsuit seeks several forms of relief, including an order
preventing the NRA from violating the Federal Election Campaign Act
in future, and a penalty equal to the amount of money allegedly
spent unlawfully, which the NRA would pay to the U.S. treasury ==
potentially as much as $35 million.
The lawsuit was filed by campaign finance watchdog Campaign Legal
Center on behalf of Giffords in the United States District Court
for the District of Columbia.
The NRA said the lawsuit was "as misguided as it is transparent."
"Another premeditated abuse of the public by our adversaries —
who will stop at nothing in their pursuit of their anti-freedom
agenda," the NRA said in a statement.
"Suffice to say, the NRA has full confidence in its political
activities and remains eager to set the record straight."
New York's attorney general said in August 2021 that the NRA had
failed to root out rampant internal corruption.
The association had sought to use Chapter 11 bankruptcy protection
to reincorporate in Republican-dominated Texas and escape what it
called a corrupt political and regulatory environment in New York,
where it was founded in 1871.
About National Rifle Association
Founded in 1871 in New York, the National Rifle Association of
America is a gun rights advocacy group. The NRA claims to be the
longest-standing civil rights organization and has more than five
million members.
Seeking to move its domicile and principal place of business to
Texas amid lawsuits in New York, the National Rifle Association of
America sought Chapter 11 protection (Bankr. N.D. Tex. Case No.
21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously
sought Chapter 11 protection (Case No. 21-30080).
The NRA was estimated to have assets and liabilities of $100
million to $500 million as of the bankruptcy filing.
Judge Harlin Dewayne Hale oversees the cases.
The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as
their bankruptcy counsel, and Brewer, Attorneys & Counselors as
their special counsel.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on Feb. 4, 2021. Norton Rose Fulbright US, LLP
and AlixPartners, LLP serve as the committee's legal counsel and
financial advisor, respectively.
* * *
Following a 12-day trial, U.S. Bankruptcy Judge Harlin D. Hale
dismissed the National Rifle Association's Chapter 11 case Tuesday,
May 11, 2021, after finding the group filed its petition in bad
faith in order to gain advantage in litigation brought by New
York's attorney general. New York Attorney General Letitia James
sought the dismissal of the case. The judge condemned the NRA's
attempts to avoid accountability, making clear that the
organization's actions were "not an appropriate use of bankruptcy."
NATURE COAST: Seeks to Hire BerganKDV as Accountant
---------------------------------------------------
Nature Coast Emergency Medical Foundation, Inc. seeks approval from
the U.S. Bankruptcy Court for the Middle District of Florida to
employ BerganKDV, LLC as its accountant.
The firm will prepare and file an amended 09-30-2019 Forms 990 and
990T; work with the Internal Revenue Service in locating previously
submitted returns and submit any returns that may need to be filed;
and, to the extent necessary, assist with any bankruptcy filings
including monthly operating reports and plan attachments.
BerganKDV will be paid at the rate of $190 per hour and will be
reimbursed for out-of-pocket costs. The firm received a retainer
fee of $3,500.
Gary Hawkins, a certified public accountant at BerganKDV, disclosed
in a court filing that his firm neither holds nor represents an
interest adverse to the Debtor's estate.
The firm can be reached through:
Gary Hawkins, CPA
BerganKDV, LLC
3550 NE Ralph Powell Rd.
Lee's Summit, MO 64064
Phone: (816) 525-9699
Fax: (816) 525-2590
About Nature Coast Emergency
Medical Foundation
Nature Coast Emergency Medical Foundation, Inc. --
https://naturecoastems.org/ -- is Citrus County's exclusive,
not-for-profit (501(c)3), Advanced Life Support 9-1-1 emergency
responder and medical transportation provider. The organization
was established on Oct. 1, 2000.
Nature Coast filed a petition for Chapter 11 protection (Bankr.
M.D. Fla. Case No. 21-02357) on Oct. 2, 2021, listing $7,016,218 in
assets and $4,730,723 in liabilities. Judge Roberta A. Colton
oversees the case.
David S. Jennis, Esq., at David Jennis, PA, doing business as
Jennis Morse Etlinger, serves as the Debtor's bankruptcy counsel.
Fitch & Associates, LLC is the Debtor's financial and operational
consultant while The Hogan Law Firm is the general business
counsel.
NEP/NCP HOLDCO: S&P Alters Outlook to Stable, Affirms 'B-' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative on
NEP/NCP Holdco Inc. At the same time, S&P affirmed its 'B-' issuer
credit rating on the company.
S&P said, "The stable outlook reflects our view that adjusted
leverage will decline to the mid-6x area by the end of 2022, driven
by the recovery of live events globally and continued organic
growth. The stable outlook also reflects our expectations that NEP
will maintain adequate liquidity over the next 12 months while
making bolt-on acquisitions across its business segments.
"The rating action reflects our view that NEP will continue to
benefit from the return of live events after the pandemic, which we
expect will drive adjusted leverage below 7x over the next 12
months. NEP/NCP Holdco Inc. reported strong operating performance
in the first three quarters of 2021, mainly driven by the return of
live sports programming globally, partially offset by headwinds in
certain regions that are still affected by COVID-19 restrictions.
The company's Broadcast Services segment was the key driver of
growth over the past year as live sports programming returned
globally despite limitations on capacity and crowd sizes. We now
forecast adjusted leverage to decline below 7x over the next 12
months, which has the added benefit of even-year sporting events,
including the Winter Olympics, World Cup, and Commonwealth Games,
supported by the further recovery of the corporate live events
segment.
"We expect NEP will continue to maintain adequate liquidity over
the next 12 months as its business volumes return to normal,
pre-COVID-19 levels. We expect corporate live events to be the last
segment to recover completely and they likely will not reach
pre-COVID-19 levels until the second half of 2022.
"We continue to expect NEP to make bolt-on acquisitions going
forward using a combination of cash on the balance sheet and debt.
We also forecast capital expenditures to remain elevated to support
the company's growth initiatives. Both these factors could
potentially keep leverage above the mid-6x area over the next 12
months, which is our upside threshold for the current ratings."
NEP's recent acquisitions of Halon, Lux Machina, and Prysm now
represents a new 'Virtual Studios' business segment. While S&P
forecasts a return to live events over the next 12 months, virtual
events will likely be more prominent going forward and present a
new opportunity for NEP. The Virtual Studios segment also offer
virtual sound stages for content production companies, presenting
an opportunity for NEP to tap into the growing demand for content
across the media landscape while providing a differentiated service
offering for its broadcast and live event clients.
However, Hollywood production studios are notoriously slow in
adopting new technology and production methods. This could limit
the growth potential for this business segment in the short term.
This segment is still nascent, and we forecast it will represent
less than 5% of total 2022 EBITDA.
NEP's strong market position, large scale, and geographic reach are
distinct competitive advantages within a fragmented industry
landscape. The company has effectively used its scale to secure
high-profile global events, such as the Olympics, the World Cup,
and the Commonwealth Games. It also benefits from its established
long-term relationships with some of the media industry's largest
blue-chip companies, resulting in high renewal rates and long-term
contracts providing good revenue predictability and stability for
its broadcast services segment. As the effects of the pandemic
subside, S&P expects NEP will benefit from the weakened competitive
landscape, growing through a combination of new organic contract
wins and strategic bolt-on acquisitions to expand geographic reach
and capabilities.
S&P would expect to raise its ratings on NEP if all the following
occurred:
-- The company remained on track to achieve the revenue growth
trajectory it was on pre-pandemic;
-- Adjusted leverage declined and remained below the mid-6x area
on a sustained basis; and
-- Liquidity remained adequate, with the company being able to
maintain covenant cushions above 15% such that access to its
revolving facility were unhindered.
S&P could lower its ratings on NEP if S&P expected it would no
longer be able to sustain its capital structure. This could occur
if a new wave of COVID-19 infections resulted in another round of
shutdowns, affecting live sports programming and resulting in:
-- Insufficient cash flow being generated to service all debt
obligations, including interest and amortization payments; and
-- Access to additional liquidity being limited due to covenants
limiting a draw on the revolving credit facility or incurring
additional debt.
NEUTRAL POSTURE: Files Emergency Bid to Use Cash Collateral
-----------------------------------------------------------
Neutral Posture, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Texas, Victoria Division, for authority to use
cash collateral on an interim basis, to pay its operating expenses.
The Debtor currently has four outstanding loans with Chase Bank
with different sets of collateral: (a) a promissory note dated June
20, 2013 in the original principal amount of $1,280,000, with a
first priority lien deed of trust on real estate and a lien on
personal property; (b) a promissory note dated June 20, 2013 in the
original principal amount of $1,500,000, with a fifth priority
position lien deed of trust on the real estate and a lien on the
personal property of the Debtor; (c) a promissory note dated March
30, 2015 in the original principal amount of $1,000,000, with a
lien on personal property; and (d) a promissory note dated April 9,
2015 in the original principal amount of $500,000, with a lien on
personal property. Approximately two years ago, Chase Bank
requested that the Debtor move its accounts outside of Chase Bank.
As a result, all of the Debtor's cash as of the petition date is
deposited with Amarillo National Bank and Chase Bank does not have
a perfected lien or deposit account control agreement in place.
Chase Bank asserts a lien on all of the Debtor's property and the
rents derived therefrom pursuant to two deeds of trust and certain
security agreements executed in connection with the four
outstanding loans. However, Chase Bank does not have a perfected
security interest with regard to cash on hand as of the petition
date due to a lack of deposit account control agreement and the
cash collateral accounts are not residing at Chase Bank.
The Debtor also has three loans secured by a second, third and
fourth lien on the real estate with T2W, LLC in the original
principal amounts of $1,250,000.
The Debtor also has a loan outstanding in the principal amount of
$499,900 tied to the COVID-19 Economic Injury Disaster Loan program
implemented by the U.S. Small Business Administration.
In an effort to adequately protect the interests of Chase in its
prepetition collateral for the Debtor's use of cash collateral as
requested in the Motion, the Debtor are offering to provide Chase
replacement liens pursuant to and in accordance with 11 U.S.C.
section 363(2), in and to all property of the estate of the kind
presently securing the indebtedness owing to Chase purchased or
acquired with the cash collateral of Chase.
In filing the Motion, the Debtor does not admit that Chase holds
valid, perfected, or enforceable prepetition liens unsecured
interests in and to any of the prepetition collateral, and the
Debtor does not waive the right to contest the validity,
perfection, or enforceability of the rights of the alleged
prepetition liens and security interests in and to any such
property asserted by Chase.
The Debtor says the proposed adequate protection will be
subordinate only to (i) all accrued and unpaid fees and expenses
incurred by the Debtor's professionals and allowed by the Court in
an amount not to exceed the amounts set forth in the budget, (ii)
statutory U.S. Trustee or Court fees, and (iii) all reasonable fees
and expenses up to $10,000 incurred by the Subchapter V Trustee
appointed in the case.
A copy of the motion is available at https://bit.ly/2Y8Y1Sd from
PacerMonitor.com.
About Neutral Posture, Inc.
Neutral Posture, Inc. is involved in the business of manufacturing
of ergonomic chairs and related items for the office. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. Tex. Case No. 21-60086) on November 1, 2021. In the
petition signed by Rebecca E. Boenigk, president and chief
executive officer, the Debtor disclosed up to $10 million in both
assets and liabilities.
Tom A. Howley, Esq., at Howley Law, PLLC is the Debtor's counsel.
NEXEL SERVICES: Taps The Lane Law Firm as Bankruptcy Counsel
------------------------------------------------------------
Nexel Services, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Texas to hire The Lane Law Firm, PLLC
to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) advising the Debtor relative to the administration of its
bankruptcy case;
(b) assisting the Debtor in analyzing its assets and
liabilities, investigating the extent and validity of lien and
claims, and participating in and reviewing any proposed asset sales
or dispositions;
(c) attending meetings and negotiating with representatives of
secured creditors;
(d) assisting the Debtor in the preparation, analysis and
negotiation of any plan of reorganization and disclosure
statement;
(e) taking all necessary action to protect and preserve the
interests of the Debtor;
(f) appearing before the bankruptcy court, the appellate
courts and other courts; and
(g) performing all other necessary legal services.
The firm's hourly rates are as follows:
Robert C. Lane, Esq. $550 per hour
Supervising attorneys $475 per hour
Associate attorneys $350 - $400 per hour
Paraprofessionals $125 - $175 per hour
Robert Lane, Esq., the firm's attorney who will be providing the
services, disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Robert C. Lane, Esq.
The Lane Law Firm, PLLC
6200 Savoy, Suite 1150
Houston, TX 77036
Tel.: (713) 595-8200
Fax: (713) 595-8201
Email: notifications@lanelaw.com
About Nexel Services
Nexel Services, LLC filed a petition for Chapter 11 protection
(Bankr. S.D. Texas Case No. 21-33475) on Oct. 27, 2021, listing up
to $50,000 in assets and up to $1 million in liabilities. Kashif
Ijaz, chief executive officer, signed the petition. Judge Jeffrey
P. Norman oversees the case. The Debtor tapped Robert C. Lane as
legal counsel.
NORTONLIFELOCK INC: S&P Affirms 'BB' ICR on Pending Avast Deal
--------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' issuer credit rating on Tempe,
Ariz.-based consumer cyber security and identity protection
provider NortonLifeLock Inc.
S&P's senior secured debt ratings remain on CreditWatch with
negative implications pending more details about the instruments.
The stable outlook reflects S&P's view that cost savings, organic
growth, and debt repayment will likely drive leverage below its 4x
downgrade threshold 12-18 months after the acquisition closes.
On Aug. 10, 2021, NortonLifeLock announced a definitive agreement
to purchase European cyber security software company Avast PLC.
S&P said, "The combination will add scale and diversity, which we
view favorably. Combining Avast with NortonLifeLock will create a
platform with over 500 million users. We believe the company will
leverage its digital marketing prowess to cross-sell products.
Avast's strength in privacy will complement NortonLifeLock's
strength in identity protection, improving product diversity. We
believe that because of the close adjacency the NortonLifeLock
team, it has the knowledge and expertise to integrate Avast
successfully. Avast also adds more exposure to Europe, small
business segments, and "freemium"--basic or limited features at no
cost with additional premiums for supplemental or advanced
features--go-to-market capabilities. Finally, there is opportunity
for $280 million of gross cost synergies, which we view as
achievable. NortonLifeLock will reinvest some of this in innovation
and growth. It expects the transaction to close in mid-2022.
"Our senior secured debt ratings remain on CreditWatch with
negative implications pending more details about the instruments.
The increase in the mix of secured debt is likely to result in a
one-notch downgrade with unsecured debt ratings unaffected. We will
render a final decision when more details about the instruments are
made public, likely around the time NortonLifeLock begins marketing
them to investors.
"The stable outlook reflects our view that cost savings, organic
growth, and debt repayment will likely drive leverage below our 4x
downgrade threshold 12-18 months after the acquisition closes."
S&P could lower the rating if it believes leverage is likely to
remain above 4x. This could occur because of:
-- Integration missteps;
-- A reversion to pre-pandemic PC sales, which drags down consumer
cyber security demand; or
-- Another debt-funded acquisition.
S&P could raise the rating if:
-- S&P said, "We gain sufficient confidence that the company can
sustain at least mid-single-digit percent revenue growth long term.
Consumer security revenue declined for many years following the
trend in PC sales, which reversed to double-digit percent increases
during the pandemic. We want to see how the company's sales perform
in a normalized PC sales environment before revising our view of
the business;" and
-- NortonLifeLock successfully integrates Avast.
OFS INTERNATIONAL: Dec. 9 Plan & Disclosure Hearing Set
-------------------------------------------------------
OFS International LLC, and its Debtor Affiliates filed with the
U.S. Bankruptcy Court for the Southern District of Texas a motion
conditionally approving the Disclosure Statement.
On Oct. 28, 2021, Judge David R. Jones conditionally approved the
Disclosure Statement and ordered that:
* Dec. 3, 2021, at 5:00 p.m., is the Plan Voting Deadline and
Deadline to Object to Disclosure Statement and Confirmation.
* Dec. 9, 2021, at 3:00 p.m., is the Combined Hearing on Final
Approval of Disclosure Statement and Confirmation of Plan.
A full-text copy of the order dated October 28, 2021, is available
at https://bit.ly/3klRYBN from BMC Group, Inc., the claims agent.
Counsel to the Debtors:
PORTER HEDGES LLP
Joshua W. Wolfshohl
Aaron J. Power
Megan Young-John
1000 Main Street, 36th Floor
Houston, Texas 77002
Telephone: (713) 226-6600
Facsimile: (713) 226-6628
E-mail: jwolfshohl@porterhedges.com
apower@porterhedges.com
myoung-john@porterhedges.com
About OFS International
OFS International, LLC is a provider of oil and gas production and
processing equipment and services, with its headquarters in
Houston, Texas, and operations in the Permian, Barnett and
Marcellus regions. It provides field services, inspections,
couplings, threading and accessories to the oil and gas industry.
OFS International and affiliates, OFSI Holding LLC and Threading
and Precision Manufacturing LLC, sought Chapter 11 protection
(Bankr. S.D. Tex. Lead Case No. 21-31784) on May 31, 2021. In the
petition signed by chief financial officer Alexey Ratnikov, OFS
International disclosed assets of up to $50 million and liabilities
of up to $100 million.
The cases are handled by Judge David R. Jones.
The Debtors tapped Porter Hedges, LLP, as bankruptcy counsel, Ahmad
Zavitsanos Anaipakos Alavi & Mensing, P.C. as special counsel, and
Chiron Financial, LLC as investment banker and financial advisor.
BMC Group, Inc., is the Debtors' claims agent, while Gordon
Brothers Asset Advisors, LLC is the Debtor's machine and equipment
inventory appraiser.
Sandton Capital Solutions Master Fund V, LP, the Debtors' DIP
lender, is represented by McGuirewoods, LLP.
PBF HOLDING: Fitch Affirms 'B+' LT IDR, Outlook Remains Negative
----------------------------------------------------------------
Fitch Ratings has affirmed PBF Holding Company LLC's Long-Term
Issuer Default Rating (IDR) at 'B+'. Fitch also affirmed PBF
Holding's revolving credit facility at 'BB+'/'RR1' and senior
secured bonds at 'BB'/'RR2'. The senior unsecured notes were
downgraded to 'B-'/'RR6' from 'B+'/'RR4'. The Rating Outlook
remains Negative.
The rating reflects improved refining sector conditions, offset by
the impact of increased regulatory obligations and refinancing
concerns. The rating also reflects potential secular changes,
including the impact of renewables, excess refining capacity, and
declines in refined products demand.
The Negative Outlook reflects concerns regarding refinancing the
revolving credit facility and 2025 maturities, sustainability of
the refining sector recovery, regulatory obligations, and FCF
generation.
KEY RATING DRIVERS
Addressing Near-Term Maturities: PBF's revolving credit facility is
due in May 2023. A maturity extension could be dependent on how the
company addresses its approximately $2 billion of senior secured
and unsecured notes due in 2025. Current market bond yields of
these notes make a straight refinancing challenging. Fitch
acknowledges that improving refining conditions and FCF could allow
for a refinancing over time if yields move lower. There is limited
secured debt capacity to address the unsecured notes through a
refinancing or debt exchange, although cash on hand and FCF could
be available.
Notching for Secured Debt: The notching of the senior unsecured
debt was downgraded to 'B-'/'RR6' from 'B+'/'RR4'. The change in
the recovery rating reflects increased secured debt in the
waterfall from an incremental senior secured note issuance, a
larger borrowing base since the last review, and operational
changes that reduced throughput capacity.
Uncertain Impact of Regulatory Obligations: Fitch believes the RINs
(renewable identification numbers) and California "cap and trade"
obligations as manageable in the near term. RIN prices have come
off their highs although still remain at elevated levels. PBF is
still awaiting final regulatory ruling on the status of their
renewable volume obligations (RVO) for 2020 to 2022. Historically,
the majority of RIN prices could be passed on to the consumer, but
becomes more challenging when prices move sharply higher. Increases
in RIN prices are more difficult particularly when PBF must compete
with refiners with lower RIN exposure. Most of all California's
'cap and trade' obligations are passed on to the buyer. Elevated
RIN prices on their own are manageable, but when combined with
lower gross refining margins and a demand shock, liquidity
management becomes more challenging.
Current Liquidity Adequate: PBF has cash on hand of $1.4 billion
and availability under its revolver of $1.2 billion, which should
help the company fund near term FCF deficits, regulatory
obligations, and working capital needs. Fitch notes the borrowing
base calculation of the revolver is redetermined monthly and
dependent on cash, accounts receivable, and inventory balances. A
sharp decline in oil prices that occurred in early-2020, for
example, could result in sharply lower inventory balances, which
can reduce availability under revolver.
Improving Refining Margins: Stronger refined product demand has led
to higher crack margins, with most crack spreads currently near or
above their five-year averages. Realized refining margins for
refiners with significant RIN exposure, such as PBF, remain
compressed in some locations. Demand for gasoline and diesel fuel
are near pre-pandemic levels, although jet fuel demand still lags.
Fitch believes that refined product demand will continue to improve
throughout 2022, although risks remain from new COVID variants,
higher RIN prices, and reduced economic activity.
Chalmette Refinery Renewable Project: PBF is exploring a potential
renewable diesel project at its Chalmette refinery. The company is
having discussions with potential partners to develop a 20,000
barrels per day production facility. Once a final investment
decision is reached, management believes the project could be on
line within 12 months. The cost of the project is unknown. The
renewable project would generate RINs, which would reduce the
dependence of buying RINs in the open market.
PBF Logistics Relationship: PBFX is a fee-based master limited
partnership established by PBF in 2014 to acquire, own and operate
crude oil and refined products logistics assets. PBF Energy Company
LLC owned 47.9% of PBFX and 100% of PBF Holding as of September 30,
2021. PBF Holding and PBFX have entered into a series of
transactions in which PBF Holding contributed certain assets to PBF
Energy Company LLC, which in turn contributed those assets to PBFX.
PBF Energy Company LLC received cash considerations that were
eventually contributed to PBF Holding.
Although Fitch expects similar transactions may occur in the
future, PBFX's stated strategy is to expand through organic growth
and acquisition of third-party assets. Even though the operations
of PBF Holding and PBFX are intertwined, the companies have
separate boards of directors.
Relationship with PBF Energy: PBF Holding is an indirect subsidiary
of PBF Energy Inc., a holding company with primary subsidiaries of
PBF Holding and its 47.9% ownership in PBFX. PBF Holding typically
distributes cash to PBF Energy to fund tax payments and dividends.
PBFX also sends its 47.9% share of distributions to PBF Energy,
which can be used to cover a portion of the tax payments and
distributions. The parent has no debt.
DERIVATION SUMMARY
PBF Holding's ratings reflect its status as an independent refiner,
although it does not have non-refinery operations such as retail,
unlike Marathon Petroleum Corporation (BBB/Stable), which can
reduce cash flow volatility. PBF Holding's crude capacity of 973
million bpd is mid-range. It is significantly smaller than Marathon
(2.9 million bpd) and Valero Energy Corporation (BBB/Negative; 3.15
million bpd), but larger than HollyFrontier Corporation
(BBB-/Stable, 405,000 bpd) and CITGO Petroleum Corp. (B/Stable),
749,000 bpd). PBF Holding is believed to be the nation's most
complex independent refiner, with a weighted average Nelson
complexity index of 13.2. This compares with Valero at 11.4.
PBF Holding has solid geographic diversification, with a refinery
in every PADD other than PADD 4. PBF Holding's EBITDA margins are
well below those of Marathon, Valero and HollyFrontier, reflecting
the lack of non-refinery operations as well as the effect of its
exposure to different regional crack spreads. PBF also has
relatively larger exposure to RIN prices due to its lack of
renewables production.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- West Texas Intermediate (WTI) oil price of $52 in 2022 and $50
in the long term;
-- Gross refining margins at the 5-year average excluding 2020;
-- Long-term RIN expenses at $1.25 per gallon;
-- Throughput declining 8% in 2021 from East Coast
reconfiguration and flat over the remaining forecast period;
-- Operating expenses per throughput of approximately $6.00 over
the forecasted period;
-- Capex is expected to be $435 million in 2021, $520 million in
2022 and $620 million in 2023;
-- Dividends are suspended over the forecast period as well as no
acquisitions.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sufficient progress in extending the revolving credit facility
along with reduction in revolver borrowings without materially
affecting profitability or operations;
-- Exhibited progress in the ability to address the 2025 bond
maturities;
-- Demonstrated ability to generate positive FCF;
-- Through-the-cycle debt/EBITDA at or below 3.0x;
-- Through-the-cycle lease-adjusted FFO gross leverage at or
below 3.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Material reduction in liquidity to less than $500 million;
-- Inability to extend revolver maturity and refinance 2025 debt
maturities;
-- Regulatory actions that lead to a material increase in mid-
cycle RIN prices;
-- Through-the-cycle debt/EBITDA above 3.5x;
-- Through-the-cycle lease-adjusted FFO gross leverage at or
above 4.0x.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Near-Term Liquidity: PBF Holding had cash on hand of
$1,442 million and availability under its revolver of in excess of
$1.2 billion with $900 million borrowed on its revolver as of Sept.
30, 2021. The revolver matures in May 2023. The revolver borrowing
base is derived from a formula based on cash on hand, accounts
receivable and inventory. The borrowing base can fluctuate
materially due to changes in commodity prices, receivable payments,
inventory supplies, and cash on hand.
While the revolver should be adequate to meet cash needs during
working capital swings, Fitch notes that a rapid decline in
commodity prices could reduce the borrowing base at a time when
availability is needed most. Fitch's read of the borrowing base
calculation is that cash on hand is not double-counted when
determining overall liquidity.
PBF also has a $300 million uncommitted receivables purchase
facility in which it could sell certain eligible receivables
derived from the sale of refined product over truck racks.
RIN and other regulatory obligations and the timing of those
payments are expected to have an over-weighted impact on FCF in the
near term. Fitch expects the company to make $435 million of
regulatory payments in the second half of 2021. RIN obligations for
2021 and 2022 are not required until early-2023, although Fitch
expects PBF to make some payments in late-2022. Fitch believes
liquidity is sufficient to meet RIN obligations during the
forecasted period, although a spike in RIN prices combined with an
inability to pass-through RIN costs during an industry downturn
could result in materially weaker liquidity levels.
The revolver becomes current in May 2022 and Fitch believes a
maturity extension is likely due to the strong, liquid collateral
backing the facility. PBF has $1.25 billion of secured notes and
$704 million of unsecured notes due in 2025, which Fitch expects
the company to address before that time. The unsecured notes trade
at a substantial discount, and Fitch believes that PBF currently
does not have access to unsecured funding in the debt capital
markets, although this could change over the next two years
assuming industry conditions improve. There is insufficient lien
capacity to fully refinance those notes with secured funding.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that PBF Holding would be reorganized
as a going-concern in bankruptcy rather than liquidated.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
PBF's GC EBITDA assumption uses the 2024 projected EBITDA from the
stress case. This assumes a period of depressed results during
2021-2023, followed by an uptick in EBITDA in 2023 as the company
emerges from the downturn.
The GC EBITDA estimate of reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation.
The GC EBITDA of $775 million reflects a level that is below what
Fitch would consider a mid-cycle EBITDA as crack spreads are
assumed to be moving from the trough of the cycle level to
mid-cycle levels. In addition, Fitch assumes PBF has taken
additional cost reduction steps.
An EV multiple of 3.75x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The choice of
this multiple considered the following factors:
Publicly traded multiples for refiners (PBF Energy, Marathon
Petroleum, HollyFrontier, Valero Energy, CVR Energy) have primarily
been in the 5x-7x range. Certain of PBF peers have ancillary
businesses, like retail, chemicals or logistics, that can boost
multiples as those segments reduce the volatility of the refining
business.
There have been limited refinery asset sales over the past several
years. In addition, large, independent majors, such as Shell, are
selling their refinery assets or converting them into renewables or
chemical refineries.
Several of PBF's refineries, such as its East Coast and Toledo
refineries, are located in markets with heavy competition that are
unlikely to receive premium multiples. In addition, relatively high
operating costs versus peers would not warrant a higher multiple
given the more severe impact during a down-cycle period.
The GC EBITDA is lower than previous GC estimates to reflect higher
RIN prices, but the multiple is unchanged.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that could be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
The 50% inventory advance rate supported by ABL advance rates and
adjusted for the inherent price volatility from changes in oil
prices.
The 50% adjustment to property, plant and equipment reflects the
uncertainty from the lack of mergers and acquisitions in the
sector, and capacity rationalization.
The revolver is assumed to be 80% drawn upon default as Fitch
assumes the borrowing base will be reduced during a downturn. The
revolver is secured by current assets (cash, accounts receivable,
inventory) and is considered to have superior recovery in a
default. The senior secured notes are secured by property, plant
and equipment. Fitch assumes that these notes are almost fully
covered, but notches the notes from the revolver to reflect the
difference in certainty of recovery from the different collateral.
The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' for the first-lien revolver ($2.2
billion), 'RR2' for the senior secured notes ($1.25 billion), and
'RR6' for the senior unsecured notes ($1,725 million). The senior
unsecured notes RR declined to 'RR6' from 'RR4' to reflect a larger
revolver borrowing base and increased senior secured notes issuance
from the last recovery estimate.
ISSUER PROFILE
PBF Holding Company LLC (PBF Holding) is a large independent
refiner and supplier of unbranded transportation fuels, heating
oil, petrochemical feedstocks, lubricants and other petroleum
products in the United States. The company was formed in 2008 to
pursue acquisition of crude oil refineries and downstream assets in
North America.
ESG CONSIDERATIONS
PBF Holding has an ESG Relevance Score of '4' for Exposure to
Environmental Impacts due to the potential of operational
disruptions from extreme weather events, including PBF Holding's
exposure to hurricanes on the Gulf Coast through its Chalmette
refinery, which has a negative effect on the credit profile, and is
relevant to the rating in conjunction with other factors.
Except for the matters discussed above, 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 entity, either due to their nature or the way in which they are
being managed by the entity.
PBF LOGISTICS: Fitch Affirms 'B+' LT IDR, Outlook Remains Neg.
--------------------------------------------------------------
Fitch Ratings has affirmed PBF Logistics LP's (PBFX) Long-Term
Issuer Default Rating (IDR) at 'B+'. Fitch has also affirmed the
senior secured revolver at 'BB+'/'RR1' and the senior unsecured
notes at 'B+'/'RR4'. The notes are co-issued by PBF Logistics
Finance Corporation. The Rating Outlook remains Negative.
PBFX's ratings and Negative Outlook reflect its strong operational
ties with PBF Holding Company LLC (PBF Holding; B+/Negative), its
affiliate and primary counterparty. PBFX derives a substantial
portion of its from PBF Holding and is the primary driver behind
PBFX's ability to service its debt obligations.
The rating also takes into account the partnership's modest size,
low leverage and stable cash flows supported by fee-based contracts
that limit direct commodity price exposure. Counterparty
concentration is Fitch's key concern, which raises possibility of
an outsized event risk should there be any operating or financial
issue at PBF Holding.
KEY RATING DRIVERS
Counterparty Concentration Risk: PBFX derives approximately 85% of
its revenues from its affiliate, PBF Holding. PBF Holding is
expected to continue to be the partnership's largest customer in
the near to intermediate term, as PBFX provides PBF Holding with
critical logistics assets that support its refining operations. As
its primary counterparty, PBFX is subject to the operational,
business and financial risks of PBF Holding, whereby throughput
volumes at PBFX's facilities could be significantly reduced,
adversely impacting cash flows and distributions.
In the absence of expansion of the asset portfolio to service more
third-party customers, volume growth continues to be dependent on
PBF Holding, and could limit future growth of the partnership.
Near-Term Maturities: With its deleveraging strategy, PBFX has
continued to enhance financial flexibility, but is faced with the
issue of addressing its near-term debt maturities. PBFX's maturity
wall is concentrated, with both the $500 million revolving credit
facility and $525 million notes due in mid-2023. Fitch expects the
partnership may likely extend the revolver before it becomes
current in July 2023 supported by the strong security package.
Refinancing of the amount and tenor for the revolver and notes will
be dependent on directives from Washington D.C. on matters
including infrastructure bill and MLP tax plans.
Modest Size and Scale: The partnership is geographically
diversified, with presence in four Petroleum Administration for
Defense Districts' (PADD), although most of the assets and
operations are concentrated on the East Coast. Fitch views this
operational concentration and the partnership's EBITDA of
approximately $200 million makes PBFX vulnerable to weak East Coast
margins should there be an outsized event or slowdown in the
region's refining market.
Consistent Cash Flow: PBFX's operations demonstrate stable cash
flows underpinned by long-term, take-or-pay contracts with PBF
Holding, with an approximate seven-year weighted average contract
life. PBFX provides services at fixed fee (including inflation
escalators and certain increases in operating costs) with minimum
volume commitments (MVC), limiting PBFX's commodity price
sensitivity and providing some volumetric downside protection.
Low Leverage Provides Flexibility: PBFX has low leverage and strong
interest coverage relative to midstream peers. Leverage at YE 2021
is expected to be around 2.8x, lower than YE 2020 when leverage
3.1x, benefitting from MVC's despite lower refinery utilizations.
The partnership is expected to operate with modest leverage as it
continues to utilize FCF towards debt reduction. Although 2022
EBITDA is expected to decline as some of the East Coast MVC's roll
off, leverage is expected to continue trending lower over rating
horizon supported by partnership's deleveraging strategy.
Fitch estimates YE 2022 leverage between 2.6x-2.8x barring any
unforeseen increases in spending or acquisitions. Fitch believes
lower leverage is critical to PBFX's credit profile due to the
partnership's limited counterparty diversity.
Corporate Family Relations: PBFX is operationally and strategically
integral to PBF Holding as PBFX supports it with critical
infrastructure. PBF Holding is the fourth largest independent
refiner in the U.S. and its parent, PBF Energy Company LLC (PBF
Energy) holds 100% of the general partners and 47.9% of limited
partner interests in PBFX. Midstream growth has been a key
component of PBF's strategy.
As such, PBF has historically supported growth at PBFX with drop
down transactions, completing five drop-down transactions since
inception. PBFX also retains a 10-year right of first offer to
purchase certain logistics assets owned by PBF Holding in the event
PBF disposes, sells or transfers those assets. Given that PBF
directly benefits from the sustainable growth of PBFX through its
ownership, Fitch believes that PBFX will continue to benefit from
support from PBF Energy in the near term.
Parent Subsidiary Linkage: Overall, a weak parent-subsidiary
relationship exists between PBFX and PBF Energy Inc. and Fitch
rates PBFX on a stand-alone basis. The most important ties are
legal ties and those are deemed to be weak as there is no debt at
PBF Energy Inc and PBFX does not provide upstream guarantees. There
are also provisions in place that restrict payments to PBF Energy
Inc.
In addition, there are no cross defaults that could occur elsewhere
in the group that could impact PBFX. PBFX is operationally integral
to PBF Energy's core business, providing critical midstream
logistics infrastructure. There are operational and strategic ties
and share common management. In Fitch's view, there is legal
insulation explicitly designed to support PBFX's stand-alone credit
profile.
PBFX has a relevance score of '4' for Group Structure with
significant related party transactions. This has a negative impact
on the credit profile and is relevant to the rating in conjunction
with other factors.
DERIVATION SUMMARY
PBFX's leverage is strong for its rating category. Fitch expects
PBFX's leverage to be 2.8x for YE 2021 and between 2.5x-2.7x for YE
2022. PBFX's ratings reflect its strong strategic and operating
ties to PBF Holding. The heavy dependence on PBF Holding could
present an outsized event risk should there be an operating,
production or financial issue at PBF Holding. The partnership is
geographically well diversified with assets in four PADD's, but
approximately 48%-52% of EBITDA is generated from assets in the
East Coast (Delaware and Paulsboro, NJ). With the reconfiguration
and idling of some assets at the Paulsboro refinery in the East
Coast, this proportion is expected to reduce modestly but still
continue to remain a significant contributor of aggregate EBITDA.
PBFX is rated below Holly Energy Partners L.P (HEP; BB+/Stable).
Like PBFX, HEP's rating is supported by stable cash flows that are
largely minimum volume commitments from its investment grade
sponsor and largest counterparty, HollyFrontier Corporation (HFC;
BBB-/ Stable). Fitch expects HEP's leverage to be near 4.0x at YE
2021. With adjusted EBITDA roughly half of HEP, scale and the
significant exposure to PBF Holding are limiting factors to PBFX's
ratings.
Relative to a 'BB-' rated issuer like Delek Logistics Partners, LP
(DKL; BB-/ Negative), PBFX is geographically more diversified and
has better leverage. Fitch expects YE 2021 leverage for DKL in the
range of 3.4x-3.6x. Like PBFX, DKL has significant counterparty
exposure to its parent and sponsor, Delek US Holdings, Inc (Delek
Holdings; BB-/Negative). While leverage metrics at PBFX is expected
to be better than DKL, PBFX's lower rating is constrained by that
of its primary counterparty, PBF Holding.
KEY ASSUMPTIONS
-- Fitch price deck for West Texas Intermediate oil price of
$60/bbl in 2021, $52/bbl in 2022 and $50/bbl thereafter;
-- Revenues and EBITDA decline in 2022 as MVC's are reduced for
some rail assets;
-- Capex spending in 2021 in line with management estimate;
-- Distributions held at current levels through 2022;
-- Refinancing of debt due 2023 on similar terms;
-- No asset sale or equity issuance assumed.
In its recovery analysis, Fitch assumed that PBFX is reorganized as
a going-concern rather than liquidated. Fitch used a going-concern
EBITDA of $140 million for PBFX, which reflects lower volumes and a
repricing of its contracts. Fitch used a 6x EBITDA multiple to
arrive at PBFX's going-concern enterprise value. The multiple is in
line with reorganization multiples in the energy sector. There have
been a limited number of bankruptcies and reorganizations within
the midstream space, but bankruptcies at Azure Midstream and
Southcross Holdco had multiples between 5x and 7x by Fitch's best
estimates.
More recently, yet away from the midstream sub-sector of Energy, in
its recent bankruptcy case study report "Energy, Power and
Commodities Bankruptcies Enterprise Value and Creditor Recoveries,"
published in September 2021, the median enterprise valuation exit
multiplies for 51 energy cases for which this was available was
5.3x, with a wide range of multiples observed. Assuming a full draw
on the revolver, the recovery rating corresponds to 'RR1' for the
senior secured revolver and 'RR4' for the senior unsecured notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Favorable rating action at PBF Holding will lead to positive
rating action for PBFX, provided the factors driving a rating
change at PBF Holding have benefits that accrue to the credit
profile of PBFX;
-- Expected leverage (total debt with equity credit/ operating
EBITDA) at PBFX is at or below 3.5x on a sustained basis,
provided the rating of PBF Holding is no longer a constraint
on PBFX's rating;
-- As and when PBFX demonstrates a move towards further
insulation from its reliance on PBF Holding, such that third-
party revenues contribute at least 30% of total revenues with
credit metrics remaining within sensitivities, Fitch may
consider a separation between the IDR's of PBF Holding and
PBFX and/or revising the Outlook to Stable.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Expected leverage (total debt with equity credit/operating
EBITDA) above 4.5X and/or Distribution Coverage below 1.0x on
a sustained basis;
-- Negative rating action at PBF Holding will negatively impact
rating at PBFX;
-- Material change to contractual arrangement or operating
practices with PBF Holding that negatively impacts PBFX's cash
flow or earnings profile;
-- Impairments to liquidity and/ or inability to refinance the
secured revolver and unsecured notes due 2023 proactively.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity in Near Term: As of Sept. 30, 2021, PBFX had
approximately $399.6 million in available liquidity. Cash on the
balance sheet was $28.6 million, in addition to the $371 million
available under the $500 million senior secured revolver. The
revolver includes a $75 million sub-limit for standby letters of
credit and a $25 million sub-limit for swing-line loans. PBFX had
letters of credit of $4.0 million outstanding under the revolver.
The partnership's liquidity in the near term is considered to be
adequate. The revolver may be increased by an aggregate amount of
$250 million, subject to lender's consent. It is secured by a
first-priority lien on the asset of PBFX and its restricted
subsidiaries that are joint and several guarantors under the
facility.
The bank agreement for the revolver has three financial covenants:
minimum consolidated interest coverage ratio is at least 2.5x,
consolidated total leverage ratio which cannot exceed 4.5x and
consolidated senior secured leverage ratio cannot exceed 3.5x. As
of Sept. 30, 2021, PBFX was in compliance with its covenants and
Fitch expects PBFX to maintain compliance with its covenants in the
near term.
PBFX also has $525 million unsecured notes due 2023 which are
co-issued by PBF Logistics Finance Corp, a wholly owned subsidiary
of PBFX. The notes are guaranteed on a senior unsecured basis by
all the subsidiaries of PBFX. In addition, PBF LLC, the general
partner provides limited guarantee to the notes for the collection
of principal amount, but is not subject to the covenants governing
the notes.
Debt Maturity Profile: PBFX has a concentrated debt-maturity
profile. The revolver matures on July 30, 2023 and can be extended
for one year up to two occasions. The unsecured notes are due May
2023. As stated earlier, while the partnership has taken steps to
enhance its financial flexibility, PBFX is still faced with the
issue of debt refinancing over the next few quarters.
ISSUER PROFILE
PBFX is a master limited partnership (MLP) that owns, leases,
operates and develops crude oil and refined petroleum products
terminals, pipelines, storage facilities, and other logistics
assets that primarily support PBF Holding's refineries in the
Northeast, Midwest, Gulf Coast, and West Coast of the U.S.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
PBFX's default risk profile is influenced by PBFH, which is its
primary counterparty.
ESG CONSIDERATIONS
PBF Logistics LP has an ESG Relevance Score of '4' for Group
Structure due to material related party transactions with its
affiliate PBF Holding Company LLC, which has a negative impact on
the credit profile, and is relevant to the ratings 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.
PCT INTERNATIONAL: Wins OK of Chapter 11 Plan, Exits Chapter 11
---------------------------------------------------------------
On Nov. 2, 2021, with the full support of its customers, vendors,
and the Arizona Bankruptcy Court, PCT International has emerged
from Chapter 11 with a stronger organization. The robust balance
sheet with newly developed products and world-class support
continues to fuel global market growth with innovative broadband
connectivity solutions.
PCT has over 24 years of industry leadership and has continued to
show strong revenue and earnings momentum through the recent
turbulent times. "With the impact of COVID-19, tariffs, raw
material cost increases, and freight challenges, our team showed
perseverance and hard work," said Steve Youtsey, CEO and Founder.
"I couldn't be prouder of them with the support from our strategic
partners," Steve added. In parallel, PCT has also had to protect
their intellectual property that continues to enhance the broadband
network solutions their customers depend on.
"In my 35 years as a financial advisor and turnaround professional,
I have never been more confident in a company poised for a full
resurgence," said Chris Linscott, CPA. "What PCT has accomplished
through this reorganization has made it stronger and set it up for
successful growth."
U.S. Bankruptcy Judge Paul Sala said, "During the bankruptcy, PCT
continued to spend money on research and development and continued
to obtain patents for their products." He later added PCT "has a
seat at the table and an exclusive sales opportunity."
Working through the Chapter 11 period and maintaining focus
demonstrates the strength of PCT going forward. PCT fought through
unprecedented challenges and emerged as a stronger company with a
promising future.
About Andes Industries and PCT International
Creditors EZconn Corporation, Crestwood Capital Corporation, and
Devon Investment Inc. filed involuntary bankruptcy petitions
against Andes Industries, Inc. and PCT International, Inc. under
Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for
the District of Arizona.
On Dec. 4, 2019, the Chapter 7 cases were converted to cases under
Chapter 11 (Bankr. D. Ariz. Lead Case No. 19-14585). Judge Paul
Sala oversees the cases.
Sacks Tierney P.A. is the Debtors' legal counsel.
PLAMEX INVESTMENT: Seeks to Hire Jones Lang as Real Estate Broker
-----------------------------------------------------------------
Plamex Investment, LLC and 3100 E. Imperial Investment, LLC seek
approval from the U.S. Bankruptcy Court for the Central District of
California to hire Jones Lang LaSalle Americas, Inc. to conduct an
auction sale of their property in Lynwood, Calif.
The property is a 403,242 square-foot community shopping center
known as Plaza Mexico, which offers specialty retail and dining.
Plaza Mexico has been a community landmark in Southern California
for over 20 years.
Jones Lang's services as real estate broker will include:
(a) identifying qualified overbidders using the firm's
expertise and worldwide network;
(b) coordinating due diligence and other investigations by
qualified overbidders to ensure an active and robust auction sale
of the property;
(c) assisting the Debtors to evaluate proposals from potential
overbidders, and assisting in negotiations and closing of a sale or
investment; and
(d) participating in hearings before the bankruptcy court.
Jones Lang will receive a success fee, which will be all of the net
proceeds over $162.5 million with a maximum fee of $1.625 million
if the buyer is not included in the list of names of potential
buyers as attached in the firm's listing agreement.
Paul Brindley, senior managing director at Jones Lang, disclosed in
a court filing that he is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Paul Brindley
Jones Lang LaSalle Americas, Inc.
Los Angeles, CA
Phone: +1 310 407 2112
Email: paul.brindley@am.jll.com
About Plamex Investment
Buena Park, Calif.-based Plamex Investment, LLC and its affiliate,
3100 E. Imperial Investment, LLC, sought protection under Chapter
11 of the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No.
21-10958) on April 14, 2021. Donald Chae, designated officer,
signed the petitions. Judge Erithe A. Smith oversees the cases.
At the time of the filing, Plamex Investment disclosed assets of
between $100 million and $500 million and liabilities of the same
range. 3100 E. Imperial Investment had between $10 million and $50
million in both assets and liabilities.
Levene, Neale, Bender, Yoo & Brill LLP serves as the Debtors' legal
counsel.
POLK AZ: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------
The U.S. Trustee for Region 14 on Nov. 2 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Polk AZ, LLC.
About Polk AZ
Phoenix, Ariz.-based Polk AZ, LLC sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 21-07693) on
Oct. 13, 2021, listing as much as $10 million in both assets and
liabilities. Judge Eddward P. Ballinger, Jr. oversees the case.
Engelman Berger, PC, serves as the Debtor's legal counsel.
Haymarket Insurance Company, as lender, is represented by Patrick
F. Keery, Esq., at Kerry McCue.
The Debtor provided for $22,338 in total projected receipts and
$14,536 in total projected disbursements.
PRECIPIO INC: Q3-2021 Shareholder Update Call Set for Nov. 15
-------------------------------------------------------------
Precipio, Inc. will be hosting its Q3-2021 update call on Monday,
November 15th at 5:00 p.m. ET. The call will include updates on
the company's current core businesses.
The conference call may be accessed by calling 844-695-5519
(international callers dial 1-412-902-6760). All callers should
ask for the Precipio Inc. conference call. Participants may also
pre-register for the conference call at
https://dpregister.com/sreg/10161825/ef87a637d7 and will receive a
calendar invite and a direct dial-in number, bypassing the
operator.
Listeners interested in submitting questions in advance should
email their questions to investors@precipiodx.com and management
will do its best to address those questions during the call.
A replay of the call will be available approximately 24 hours after
the call and may be accessed via the Investors page on Precipio's
website, http://www.precipiodx.com/investors.html.
About Precipio
Omaha, Nebraska-based Precipio, formerly known as Transgenomic,
Inc. -- http://www.precipiodx.com-- is a cancer diagnostics
company providing diagnostic products and services to the oncology
market. The Company has developed a platform designed to eradicate
misdiagnoses by harnessing the intellect, expertise and technology
developed within academic institutions and delivering quality
diagnostic information to physicians and their patients worldwide.
Precipio operates a cancer diagnostic laboratory located in New
Haven, Connecticut and has partnered with the Yale School of
Medicine.
Precipio reported a net loss of $10.6 million for the year ended
Dec. 31, 2020, compared to a net loss of $13.24 million for the
year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$33.54 million in total assets, $6.28 million in total liabilities,
and $27.26 million in total stockholders' equity.
Hartford, CT-based Marcum LLP issued a "going concern"
qualification in its report dated March 29, 2021, citing that the
Company has a significant working capital deficiency, has incurred
significant losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
PWM PROPERTY: MLB Manager Drops Fight With NYC Office Tower
-----------------------------------------------------------
Vince Sullivan, writing for Law360, reports that the bankrupt owner
of a pair of urban officer towers said the manager of its midtown
Manhattan building has dropped the ball in filling the gap to be
made by the departure of tenant Major League Baseball, previewing a
battle between the parties during the first-day hearing of PWM
Property Management LLC on Tuesday, November 2, 2021, in Delaware
court.
Debtor attorney Thomas E. Lauria of White & Case LLP said property
manager S. L. Green Management Corp. has failed to find a tenant to
lease the space being vacated by Major League Baseball's
headquarters at 245 Park Avenue in New York City.
About PWM Property Management
PWM Property Management LLC, et al., are primarily engaged in
renting and leasing real estate properties. They own two premium
office buildings, namely 245 Park Avenue in New York City, a
prominent commercial real estate assets in Manhattan's prestigious
Park Avenue office corridor, and 181 West Madison Street in
Chicago, Illinois.
On Oct. 31, 2021, PWM Property Management LLC and its affiliates
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
21-11445). PWM estimated assets and liabilities of $1 billion to
$10 billion as of the bankruptcy filing.
The cases are pending before the Honorable Judge Mary F. Walrath
and are being jointly administered for procedural purposes under
Case No. 21-11445.
The Debtors tapped White & Case LLP as restructuring counsel; YOUNG
CONAWAY STARGATT & TAYLOR, LLP as local counsel; and M3 ADVISORY
PARTNERS, LP as restructuring advisor. OMNI AGENT SOLUTIONS is the
claims agent.
QUANTUM CORP: B. Riley Reports 9.2% Equity Stake
------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, these entities reported beneficial ownership of shares
of common stock of Quantum Corp. as of Sept. 30, 2021:
Shares Percent
Beneficially of
Reporting Person Owned Class
---------------- ------------ ---------
B. Riley Financial, Inc. 5,359,100 9.2%
B. Riley Securities, Inc. 5,359,100 9.2%
Bryant R. Riley 5,454,840 9.4%
The percentage of class is calculated based on 58,212,717 shares of
Common Stock outstanding.
BRF is the parent company of BRS. As a result, BRF may be deemed
to indirectly beneficially own the Shares held by BRS.
Mr. Riley, an individual, is the co-chief executive officer and
chairman of the Board of Directors of BRF.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/0000709283/000121390021055605/ea149531-13da4briley_quantum.htm
About Quantum Corp.
Based in San Jose, California, Quantum Corp. (NYSE:QTM) --
http://www.quantum.com-- provides technology and services that
stores and manages video and video-like data delivering the
industry's top streaming performance for video and rich media
applications, along with low cost, high density massive-scale data
protection and archive systems. The Company helps customers
capture, create and share digital data and preserve and protect it
for decades.
Quantum reported a net loss of $35.46 million for the year ended
March 31, 2021, compared to a net loss of $5.21 million for the
year ended March 31, 2020. As of June 30, 2021, the Company had
$178.18 million in total assets, $291.11 million in total
liabilities, and a total stockholders' deficit of $112.93 million.
RTECH FABRICATIONS: First Amended Plan Confirmed by Judge
---------------------------------------------------------
Judge Noah G. Hillen has entered findings of fact, conclusions of
law and order confirming the First Amended Plan of Reorganization
Subchapter V of Rtech Fabrications, LLC.
Specific Supplements and Modifications to Plan:
* Article 7, Paragraph 7.1 is supplemented as follows:
-- The sale of The Grey Matter, which should bring $250,000.00
to $350,000.00;
-- The sale of the Toterhome, which should bring $30,000.00 to
$40,000.00;
-- The sale of the car hauler, which should bring $15,000.00
to $20,000.00;
-- The sale of the dragster trailer, which should bring
$10,000.00;
-- The sale of the firetruck, which should bring $12,000.00;
-- The sale of the BMW, which should bring $7,000.00;
-- The sale of excess inventory and equipment, which should
bring between $20,000.00 to $30,000.00
-- Sale of the above described property shall occur within 180
days of final entry of the Plan confirmation Order, after further
notice and hearing, which may be on shortened notice if
circumstances warrant.
* Class 6 Equity Security Holders Randall and Dru-Ann Robertson
shall transfer title to "The Duke" to the Rtech Chapter 11
bankruptcy estate on or before the effective date of the Plan."
* As to Aramark claim in Class 3: Aramark's allowed claim to
cure the lease default is $531.05. Rtech shall pay the cure amount
on or before the Effective Date of the Plan.
* As to Aramark claim in Article 6, Paragraph 6.1: Aramark shall
assume the remaining lease for the uniforms.
A full-text copy of the Plan Confirmation Order dated October 28,
2021, is available at https://bit.ly/3CSutXS from PacerMonitor.com
at no charge.
Attorney for the Debtor:
Bruce A. Anderson, Esq.
Elsaesser Anderson, Chtd.
320 East Neider Avenue, Suite 102
Coer D Alene, ID 83815
Tel: (208) 667-2900
Fax: (208) 667-2150
Email: brucea@eaidaho.com
About Rtech Fabrications
Rtech Fabrications -- https://www.rtechfabrications.com/ -- is a
restoration shop specializing in 67-72 GM trucks.
Rtech Fabrications filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Court (Bankr. D. Idaho Case No.
21-20048) on Feb. 19, 2021. Randall T. Robertson, managing member,
signed the petition. In the petition, the Debtor had estimated
assets of between $1 million and $10 million and liabilities of
less than $1 million.
Judge Noah G. Hillen oversees the case.
The Debtor tapped Elsaesser Anderson, Chtd. as legal counsel and
CORE Accounting & Consulting as accountant.
RYBEK DEVELOPMENTS: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The U.S. Trustee for Region 14 on Nov. 2 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Rybek Developments, LLC.
About Rybek Developments
Rybek Developments, LLC filed a petition for Chapter 11 protection
(Bankr. D. Ariz. Case No. 21-07697) on Oct. 13, 2021, listing as
much as $1 million in both assets and liabilities. Judge Daniel P.
Collins oversees the case. Allan D. NewDelman, P.C. serves as the
Debtor's legal counsel.
SCP COLDWORKS: Seeks to Hire Helmsing Leach as Legal Counsel
------------------------------------------------------------
SCP Coldworks, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Alabama to employ Helmsing Leach, P.C.
to serve as legal counsel in its Chapter 11 case.
The firm's hourly rates are as follows:
Jeffery J. Hartley, Esq. $365 per hour
Associates $275 per hour
Paralegal(s) $120 per hour
Helmsing Leach received a retainer of $35,000.
As disclosed in court filings, Helmsing Leach neither holds nor
represents any interest adverse to the Debtor or its estate.
The firm can be reached through:
Jeffery J Hartley, Esq.
Helmsing Leach Herlong Newman & Rouse
150 Government Street, Suite 2000
Mobile, AL 36602
Phone: 251-432-5521
Email: jjh@helmsinglaw.com
About SCP Coldworks
Pelham, Ala.-based SCP Coldworks, LLC filed its voluntary petition
for Chapter 11 protection (Bankr. S.D. Ala. Case No. 21-02564) on
Oct. 29, 2021, listing as much as $10 million in both assets and
liabilities. Jeffery J. Hartley, Esq., at Helmsing Leach Herlong
Newman & Rouse represents the Debtor as legal counsel.
SEANERGY MARITIME: Secures Commitment for $16.85M Loan Facility
---------------------------------------------------------------
Seanergy Maritime Holdings Corp. has received a commitment letter
from a leading European bank for a sustainability-linked loan
facility to finance part of the acquisition cost of the M/V
Worldship.
Moreover, Seanergy became a signatory to the Call to Action for
Shipping Decarbonization, a global coalition of over 190 industry
leaders and organizations representing the entire maritime value
chain.
Financing of the M/V Worldship
Pursuant to the commitment letter, the sustainability-linked loan
will be for an amount of $16.85 million and will amortize over a
five-year term with a final balloon payment of $6.1 million at
maturity. The interest rate will be 3.05% plus LIBOR per annum,
which can be further improved based on certain emission reduction
thresholds. The approval is subject to definitive documentation,
which the Company expects to be completed within November 2021.
Call to Action for Shipping Decarbonization
The Call to Action was developed by a task force convened by the
Getting To Zero Coalition in September 2021 and will be delivered
to world Governments in November 2021, in advance of the UN Climate
Change Conference ("COP26") in Glasgow. The signatories to this
Call to Action firmly believe that an equitable decarbonization of
the maritime supply chain by 2050 is both possible and necessary.
Stamatis Tsantanis, the Company's chairman & chief executive
officer, stated:
"We are very pleased to announce another innovative financing for
Seanergy which is consistent both with our conservative leverage
approach, as well as our commitment to our sustainability
objectives. The proceeds of this new loan will further enhance our
strong liquidity position. At the same time, we are excited to
actively participate along with global industry leaders in the Call
to Action, a significant initiative aiming to contribute to our
industry's decarbonization targets. Seanergy has long ago
prioritized its ESG agenda and has implemented concrete actions and
collaborations upon this matter. In this context, we are
encouraging stakeholder engagement on all levels, including that of
our financiers and governmental organizations, as means to support
the common goal of a "greener" shipping."
About Seanergy Maritime
Greece-based Seanergy Maritime Holdings Corp. --
http://www.seanergymaritime.com-- is the only pure-play Capesize
ship-owner publicly listed in the US. Seanergy provides marine dry
bulk transportation services through a modern fleet of Capesize
vessels. On a 'fully-delivered' basis, the Company's fleet will
consist of 16 Capesize vessels with average age of 11.5 years and
aggregate cargo carrying capacity of above 2,829,630 dwt.
Seanergy Maritime reported a net loss of $18.35 million for the
year ended Dec. 31, 2020, compared to a net loss of $11.70 million
for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company
had $295.24 million in total assets, $199.55 million in total
liabilities, and $95.69 million in total stockholders' equity.
SM ENERGY: Posts $85.6 Million Net Income in Third Quarter
----------------------------------------------------------
SM Energy Company filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing net income of $85.59
million on $760.24 million of total operating revenues and other
income for the three months ended Sept. 30, 2021, compared to a net
loss of $98.29 million on $281.02 million of total operating
revenues and other income for the three months ended Sept. 30,
2020.
For the nine months ended Sept. 30, 2021, the Company reported a
net loss of $388.67 million on $1.77 billion of total operating
revenues and other income compared to a net loss of $599.44 million
on $806.38 million of total operating revenues and other income for
the same period a year ago.
As of Sept. 30, 2021, the Company had $5.06 billion in total
assets, $1.10 billion in total current liabilities, $2.32 billion
in total noncurrent liabilities, and $1.64 billion in total
stockholders' equity.
Chief Executive Officer Herb Vogel comments: "Outstanding
operational performance underscores a terrific quarter. The SM
Energy team successfully completed six Austin Chalk wells at
development spacing, delivered further improved well performance in
the Midland Basin employing significantly larger completions in the
majority of wells year-to-date, and solved a casing issue
experienced last fall enabling five Austin Chalk wells to
turn-in-line sooner than expected. This exceptional performance
combined with continued strength in commodity prices generated
strong free cash flow. We met our year-end 2022 leverage target
during the quarter and will enter 2022 with substantial momentum
toward generating a highly competitive free cash flow yield to
market capitalization and reducing leverage to less than 1.5 times.
On the ESG front, operations and IT have teamed up with a new
effort to focus on evaluating and implementing emerging field
technologies that will help the Company measure, monitor and
decrease emissions. The team has already initiated a pilot project
at Sweetie Peck with technology to provide continuous methane
emissions detection."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/893538/000089353821000121/sm-20210930.htm
About SM Energy
SM Energy Company is an independent energy company engaged in the
acquisition, exploration, development, and production of crude oil,
natural gas, and natural gas liquids in the state of Texas.
SM Energy reported a net loss of $764.61 million for the year ended
Dec. 31, 2020, compared to a net loss of $187 million for the year
ended Dec. 31, 2019.
SN TEAM: Seeks to Hire Reza Athari & Associates as Special Counsel
------------------------------------------------------------------
SN Team, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Nevada to hire Reza Athari & Associates as special
counsel.
The Debtor requires legal assistance to address the title dispute
issues concerning its purchase of the property located at 458
Winthrop Place, Henderson, Nev. The Debtor bought the property
through a homeowner's association auction sale.
Reza Athari & Associates will be paid an hourly fee of $300 and a
retainer fee of $1,500.
Gary Fink, Esq., the firm's attorney who will be providing the
services, disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Gary Fink, Esq.
Reza Athari & Associates
3365 Pepper Lane, Suite 102
Las Vegas, NV 89120
Tel: (702) 727-7777
Fax: (702) 458-8508
Email: rezaathari@atharilaw.com
About SN Team LLC
SN Team, LLC is a Nevada limited liability company with principal
place of business in Clark County, Las Vegas. It owns and manages
real properties in Henderson and Las Vegas.
SN Team filed a petition for Chapter 11 protection (Bankr. D. Nev.
Case No. 20-10812) on Feb. 13, 2020, listing up to $1 million in
assets and up to $500,000 in liabilities. Wendy J. Merrill,
managing member, signed the petition.
Judge August B. Landis oversees the case.
The Law Office of Timothy P. Thomas, LLC and Reza Athari &
Associates serve as the Debtor's bankruptcy counsel and special
counsel, respectively.
SOTO'S AUTO: Gets OK to Employ Moecker Auctions as Appraiser
------------------------------------------------------------
Soto's Auto & Truck Repairs Service, Inc. received approval from
the U.S. Bankruptcy Court for the Middle District of Florida to
hire Moecker Auctions, Inc. to appraise its personal properties,
including furniture, fixtures and equipment.
The firm will be paid between $1,350 and $1,875 for its services.
David Dybas, the firm's appraiser who will be providing the
services, disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
David D. Dybas
Moecker Auctions, Inc.
1883 Marina Mile Blvd., Suite 106
Fort Lauderdale, FL 33315
Phone: 954-252-2887
Fax: 954-252-2791
Email: info@moeckerauctions.com
About Soto's Auto & Truck Repairs Service
Soto's Auto & Truck Repairs Service, Inc. is a family-owned diesel
truck repair company founded in March 2004. It provides heavy-duty
truck repair and maintenance services, including engine repairs,
overhauls, and replacements, as well as mobile truck repair and
maintenance services.
Soto's Auto & Truck filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
21-04131) on Aug. 6, 2021, disclosing up to $500,000 in assets and
up to $1 million in liabilities. John Soto, president, signed the
petition.
Judge Roberta A. Colton oversees the case.
The Debtor tapped Stichter, Riedel, Blain & Postler, PA as legal
counsel and Accounting & Business Partners, LLC as accountant.
SPRING VALLEY: Seeks to Hire Tirelli Law Group as Legal Counsel
---------------------------------------------------------------
Spring Valley NY Realty, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Tirelli Law Group, LLC to serve as legal counsel in its Chapter 11
case.
The firm's services include:
(a) advising the Debtor concerning the administration of its
bankruptcy case;
(b) advising and preparing all necessary applications and
motions required to resolve the pending controversy concerning
mortgage liens on the Debtor's three parcels of property located at
33 Summit Ave., Spring Valley, N.Y.;
(c) advising and preparing all necessary applications and
motions required to resolve the pending controversy concerning all
other property the Debtor lists on its Chapter 11 schedules;
(d) preparing all necessary applications and motions as
required under the Bankruptcy Code, Federal Rules of Bankruptcy
Procedure, and Local Bankruptcy Rules;
(e) preparing a disclosure statement and plan of
reorganization; and
(f) performing all other necessary legal services.
The firm's hourly rates are as follows:
Linda Tirelli, Esq. $550 per hour
Senior Associate attorneys $450 per hour
Paralegals $250 per hour
Legal Assistants $175 per hour
The Debtor paid $12,500 to the firm as a retainer fee.
Linda Tirelli, Esq., the firm's attorney who will be providing the
services, disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Linda Tirelli, Esq.
Tirelli Law Group LLC
50 Main Street, Suite 1265
White Plains, NY 10606
Tel: (914) 732-3222
Email: LTirelli@TirelliLawGroup.com
About Spring Valley
Spring Valley NY Realty, LLC filed a petition for Chapter 11
protection (Bankr. S.D. Tenn. Case No. 21-22541) on Sept. 24, 2021,
listing up to $500,000 in assets and up to $1 million in
liabilities. Berl Brown, manager and sole member, signed the
petition.
The Debtor tapped Tirelli Law Group, LLC as legal counsel.
TARGA RESOURCES: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service upgraded Targa Resources Corp.'s (Targa)
Corporate Family Rating to Ba1 from Ba2, Probability Default Rating
to Ba1-PD from Ba2-PD, and secured bank facility rating to Ba3 from
B1. Targa's Speculative Grade Liquidity (SGL) Rating remains SGL-2.
Concurrently, Moody's upgraded Targa Resources Partners LP's (TRP,
wholly owned by Targa) senior unsecured notes rating to Ba1 from
Ba2. The outlook was changed to stable from positive for both Targa
and TRP.
"The upgrade reflects remarkable improvement in Targa's credit
metrics and our expectation the company will maintain solid metrics
even with the buy-in of its development company joint ventures
(DevCo)," said Arvinder Saluja, Moody's Vice President. "Targa has
generated positive free cash flow and has focused on strengthening
its balance sheet, both of which we expect to continue even in a
scenario where the Permian production volumes affecting Targa's
assets remain flat over the medium term."
Upgrades:
Issuer: Targa Resources Corp.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Senior Secured Revolving Credit Facility, Upgraded to Ba3 (LGD6)
from B1 (LGD6)
Issuer: Targa Resources Partners LP
Senior Unsecured Global Notes, Upgraded to Ba1 (LGD4) from Ba2
(LGD4)
Outlook Actions:
Issuer: Targa Resources Corp.
Outlook, Changed To Stable From Positive
Issuer: Targa Resources Partners LP
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
The upgrade of Targa's CFR to Ba1 reflects the company's strong
operational and financial performance augmented by the resurgence
in NGL prices, meaningful free cash flow generation, and
maintenance of supportive leverage, which by strengthening Targa's
financial profile will bolster its capacity to withstand negative
credit impacts from carbon transition risks. While financial
performance of Targa will continue to be influenced by industry
cycles, compared to historical experience Moody's expects future
profitability and cash flow in this sector to be less robust at the
cycle peak and worse at the cycle trough because global initiatives
to limit adverse impacts of climate change will constrain the use
of hydrocarbons and accelerate the shift to less environmentally
damaging energy sources.
The Ba1 CFR reflects Moody's expectation that credit metrics will
remain solid even in a scenario where the Permian production
volumes affecting Targa's assets remain flat over the medium term.
The Ba1 CFR is also supported by its sole ownership of TRP, its
scale and EBITDA generation which remained sizeable despite
volatile and low 2020 commodity prices, its track record of strong
execution of growth projects, and the meaningful and growing
proportion of fee-based margin contribution. Targa has increased
its geographic diversification, along with a significant presence
in the Permian Basin, and improved business diversification. Its
dividend and capital spending reductions have increased free cash
flow and the company has substantially reduced its debt in 2021.
These positive attributes are tempered by its material exposure to
the gathering and processing business, volatility inherent in
natural gas liquids (NGL) prices that makes earnings on its
commodity sensitive contracts less predictable, and volume risk.
Furthermore, Targa has a complex corporate structure with assets
held in joint ventures, including those with Stonepeak Lonestar
Holdings LLC (Lonestar, B1 stable). Moody's expect Targa will use
free cash flow and revolver borrowings to exercise its call option
to purchase the DevCo JV interests for roughly $925 million in
early 2022.
The SGL-2 rating reflects Moody's expectation of good liquidity
through at least 2022. At June 30, 2021, Targa had $209 million of
cash, as well as full availability under its $670 million senior
secured revolver due June 2023. TRP had about $2 billion of
availability under its $2.2 billion revolver which is also due June
2023. Targa is solely reliant on distributable cash flow from TRP
to fund its common and preferred unit distributions. Moody's expect
Targa to use its revolver to only partially fund the DevCo buy in
as it will continue to generate positive free cash flow aided by
substantial cuts to Targa's capital spending and dividends. Both
Targa and TRP were in compliance with the covenants governing their
revolving credit facilities. The Targa revolver requires that
consolidated debt/EBITDA be no greater than 4x. Covenant
calculations exclude TRP debt, and Moody's expect Targa will
maintain compliance. The TRP revolver requires maintenance of
EBITDA to interest expense of at least 2.25x and debt to EBITDA no
greater than 5.5x. TRP's leverage covenant calculations exclude the
secured debt at Targa and borrowing under its accounts receivable
securitization. Secondary liquidity is limited as the majority of
the partnership's assets are pledged to the senior secured
creditors.
The Ba1 rating on TRP's unsecured senior notes reflects Moody's
expectation of low revolver usage compared to higher usage in the
past when Targa was completing its growth projects. TRP's senior
notes are unsecured and the creditors have a subordinated claim to
TRP's assets behind the senior secured revolving credit facility
and the accounts receivable securitization facility. The
obligations of the revolving credit facility and receivable
securitization facility should not be material in size relative to
the unsecured notes to warrant notching below the Ba1 CFR, and
therefore the senior unsecured notes are rated Ba1, in line with
the CFR.
Targa's senior secured credit facility is rated Ba3, and is secured
by substantially all of Targa's assets, which are essentially its
equity ownership interests in TRP. The Ba3 rating, two notches
lower than the CFR, more appropriately reflects that the debt at
Targa is structurally subordinated to all of TRP debt than the
outcome suggested by Moody's Loss Given Default for
Speculative-Grade Companies methodology.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Targa's ratings could be upgraded if it continues to build a track
record of demonstrating conservative financial policies, further
simplify its capital and organizational structures, keep its
consolidated leverage below 4x and strong dividend coverage, and
decrease its exposure to commodity price risk. The ratings could be
downgraded if consolidated leverage exceeds 4.5x or if the
company's business profile or financial policy becomes more
aggressive.
Targa Resources Corp., through its wholly-owned subsidiary Targa
Resources Partners LP, operates a portfolio of midstream energy
assets that include, gathering pipelines, gas processing plants,
NGL pipeline, NGL fractionation units, and a marine import/export
facility on the Gulf Coast.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
TELIGENT INC: Creditors Objected to Proposed Bankruptcy Financing
-----------------------------------------------------------------
Leslie Pappas of Law360 reports that the unsecured creditors of
generics pharmaceutical company Teligent Inc. objected Tuesday,
Nov. 2, 2021, to the company's proposed bankruptcy financing,
calling a proposed roll-up of $42.7 million in prepetition debt for
two of its lenders "skewed" and "unfair.
"The topical cream manufacturer failed to tell the court that,
before filing for Chapter 11 protection, it had already permanently
shut down its operations, making the current debtor-in-possession,
or DIP, financing proposal unreasonable, the committee of unsecured
creditors said in a filing with a bankruptcy court in Delaware.
"These undisclosed facts push what was already a questionable DIP
proposal beyond the pale," the filing says.
About Teligent Inc.
Teligent, Inc., a specialty generic pharmaceutical company,
develops, manufactures, markets, and sells generic topical, branded
generic, and generic injectable pharmaceutical products in the
United States and Canada. The company was formerly known as IGI
Laboratories, Inc. and changed its name to Teligent, Inc. in
October 2015. Teligent, Inc. was founded in 1977 and is based in
Buena, N.J.
Teligent and three affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-11332) on Oct. 14, 2021. The cases are
handled by Judge Brendan Linehan Shannon.
As of Aug. 31, 2021, Teligent had total assets of $85 million and
total debt of $135.8 million.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP and K&L
Gates, LLP as legal counsel; Raymond James & Associates, Inc., as
investment banker; PharmaBioSource Realty, LLC as real estate
consultant; and Portage Point Partners, LLC as restructuring
advisor. Vladimir Kasparov of Portage Point Partners serves as the
Debtors' chief restructuring officer. Epiq Corporate
Restructuring, LLC is the claims and noticing agent and
administrative advisor.
TELKONET INC: All Proposals Approved at Special Meeting
-------------------------------------------------------
Telkonet, Inc. held a Special Meeting of Stockholders at which the
stockholders:
(1) approved an amendment to Telkonet's Amended and Restated
Articles of Incorporation to increase the authorized shares of
common stock of the company from 190,000,000 shares to 475,000,000
shares;
(2) approved the issuance of shares of Telkonet common stock and
the warrant and warrant shares to VDA Group S.p.A., an Italian
joint stock company, pursuant to the terms of the Stock Purchase
Agreement dated as of Aug. 6, 2021, between the companies; and
(3) approved an adjournment of the special meeting, if
necessary, to solicit additional proxies if there are not
sufficient votes in favor of the proposals.
About Telkonet
Headquartered in Waukesha, WI, Telkonet, Inc. is the creator of the
EcoSmart and the Rhapsody Platforms of intelligent automation
solutions designed to optimize energy efficiency, comfort and
analytics in support of the emerging Internet of Things. The
platforms are deployed primarily in the hospitality, educational,
governmental and other commercial markets, and is specified by
engineers, HVAC professionals, building owners, and building
operators.
Telkonet reported a net loss attributable to common stockholders of
$3.15 million for the year ended Dec. 31, 2020, compared to a net
loss attributable to common stockholders of $1.93 million for the
year ended Dec. 31, 2019. As of June 30, 2021, the Company had
$6.97 million in total assets, $5.72 million in total liabilities,
and $1.25 million in total stockholders' equity.
Minneapolis, Minnesota-based Wipfli LLP, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated March 31, 2021, citing that the Company has suffered
operating losses, has negative operating cash flows and is
dependent upon its ability to generate profitable operations in the
future and obtaining the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. These conditions raise substantial
doubt about its ability to continue as a going concern.
TIANJIN JAHO: Unsecured Creditors Will Get 100% of Claims in Plan
-----------------------------------------------------------------
Tianjin Jaho Investment Inc. submitted an Amended Disclosure
Statement describing Second Amended Chapter 11 Plan of
Reorganization dated October 28, 2021.
The Debtor is a corporation incorporated under the laws of Texas
and is authorized to do business in the state of Washington.
Tianjin City Zhongxinjiahe Real Estate Brokerage Co., Ltd., owns
60%, and Daxi Inc. owns 40% of the equity interests in the Debtor.
The Debtor's primary asset is the newly completed 42-unit apartment
complex located at 10111 9th Avenue West, Everett, Washington 98204
(the "Real Property"). The rents generated by the Real Property
comprise the Debtor's income.
The Plan provides for three classes of secured claims, one class of
non-priority unsecured claims, and one class of equity interest
holders. Non-priority unsecured creditors holding allowed claims
will receive distributions that the Debtor has valued at
approximately 100 cents on the dollar. This Plan also provides for
payment of administrative claims.
The Plan will treat claims as follows:
* Class 1 consists of the claim of the Snohomish County
Treasurer to the extent allowed as a secured claim. For purposes
of voting only, the Debtor estimates that the Class 1 claim may be
allowed in the amount of $27,944.33 and is secured by the Debtor's
Real Property. Following the Effective Date, the Class 1 claimant
will receive 24 equal monthly payments of $518; on the 25th month
from the Effective Date, the Class 1 claimant will receive a
balloon payment of $19,265 (Class 1 claim amortized over 5 years at
4.25% with a balloon payment of all remaining principal and
interest in the 25th month). Class 1 claimant shall retain its lien
until paid in full under the Plan.
* Class 2 consists of the claim of Construction Loan Services
II, LLC to the extent allowed as a secured claim. For purposes of
voting only, the Debtor estimates that the Class 2 claim may be
allowed in the amount of $11,694,665 and is secured by the Debtor's
Real Property (as well as non-estate real property). Following the
Effective Date, the Class 2 claimant will receive 24 equal,
monthly, interest-only payments of $41,420 (or, that amount equal
to the monthly interest payment on the Class 2 claim at 4.25% per
annum); on the 25th month from the Effective Date, the Class 2
claimant will receive a balloon payment of $12,893,369 (or, that
amount equal to the future value of the Class 2 claim using a 5%
discount rate as measured from the Effective Date). Class 2
claimant shall retain its lien until paid in full under this Plan.
* Class 3 consists of the claim of SYS Construction to the
extent allowed as a secured claim. For purposes of voting only, the
Debtor estimates that the Class 3 claim may be allowed in the
amount of $1,089,716 and is purportedly secured by the Debtor's
Real Property. Following the Effective Date, the Class 3 claimant
will receive 24 equal, monthly, interest-only payments of $3,860
(or, that amount equal to the monthly interest on the Class 3 claim
at 4.25% per annum); on the 25th month from the Effective Date, the
Class 3 claimant will receive a balloon payment of $1,201,500 (or,
that amount equal to the future value of the Class 3 claim using a
5% discount rate as measured from the Effective Date). Class 3
claimant shall retain its lien until paid in full under this Plan.
* Class 4 consists of the non-priority unsecured claims.
Following the Effective Date, Class 4 claimants will receive their
pro rata share of 24 equal monthly payments of $3,378; on the 25th
month from the effective date of this Plan, Class 4 claimants will
receive their pro rata share of a balloon payment of $95,320 (or,
that amount equal to the future value of the remaining amount due
on the Class 4 claims using a 5% discount rate as measured from the
Effective Date). This class is impaired and may vote on the Plan.
Percentage of
Claimant Estimated Amount Total Payout
-------- ---------------- ------------
Zhao CPA PC $6,750.00 4.04%
Kwang Keun Son $98,419.35 58.87%
Zhiqiao He $62,000.00 37.09%
----------- -------
Total $167,169.35 100.00%
* Class 5 consists of the claim of Xiaoyun Sui, to the extent
allowed under section 502 of the Code, is the sole claim in Class
5. The Debtor estimates the Class 5 claim will be allowed in the
amount of $649,917. On the 25th month from the Effective Date,
Class 5 claimant will receive a balloon payment of $716,534 (or,
that amount equal to the future value of the remaining amount due
on the Class 5 claim using a 5% discount rate as measured from the
Effective Date). The Reorganized Debtor may pre-pay principal owing
at any time without penalty.
* Class 6 consists of the equity interests in the Debtor.
Equity interest holders may not vote on the Plan. Equity interests
will receive all remaining funds, if any, after payment in full
under the Plan to Classes 1 through 5.
Plan payments will be funded by cash on hand, income generated by
the Real Property, and the proceeds of a sale or refinance of the
Real Property. The sale or refinance is expressly contemplated to
occur prior to the 25th month following the Effective Date. Upon
sale or refinance, all payments due under this Plan shall be
completed. The Debtor projects that there will be sufficient funds
from the foregoing sources to pay in full each class of claims.
A full-text copy of the Amended Disclosure Statement dated October
28, 2021, is available at https://bit.ly/3nNsduZ from
PacerMonitor.com at no charge.
About Tianjin Jaho Investment
Houston-based Tianjin Jaho Investment, Inc., filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Wash. Case No. 21-11047) on May 26, 2021. Charles Xi,
president, signed the petition. At the time of filing, the Debtor
had between $10 million and $50 million in both assets and
liabilities.
Judge Christopher M. Alston presides over the case.
The Law Office of Marc S. Stern and Paul Taggart serve as the
Debtor's legal counsel and accountant, respectively. The Rental
Connection Inc. is the property manager and leasing agent.
TIANJIN JAHO: Wins Cash Collateral Access Thru Dec 31
-----------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
has authorized Tianjin Jaho Investment Inc. to use cash collateral
through December 31, 2021, as set forth in the Amended Budget
appended to the Reply, ECF No. 135-1.
The Debtor may move the Court to extend the authorization granted.
As previously reported by the Troubled Company Reporter, the
entities that assert an interest in the cash collateral are
Construction Loan Services II, LLC, SYS Construction, and the
Snohomish County Treasurer.
The Debtor intends to collect and utilize income generated from
leasing its apartment units. According to the Budget, the 42 rental
units generate more than $60,000 in monthly gross revenue and net
close to $50,000 on a monthly basis. At the inception of the case,
construction on the Real Property had only recently been completed,
so only 13 units were leased on the Petition Date and monthly gross
income was one quarter of what it is today.
A copy of the order is available at https://bit.ly/3CGHQdE from
PacerMonitor.com.
About Tianjin Jaho Investment
Houston-based Tianjin Jaho Investment, Inc. filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Wash. Case No. 21-11047) on May 26, 2021. Charles Xi,
president, signed the petition. At the time of filing, the Debtor
had between $10 million and $50 million in both assets and
liabilities.
Judge Christopher M. Alston presides over the case.
The Law Office of Marc S. Stern and Paul Taggart serve as the
Debtor's legal counsel and accountant, respectively. The Rental
Connection Inc. is the property manager and leasing agent.
VERITY HEALTH: Sues MultiPlan, Other Insurers for Price-Fixing
--------------------------------------------------------------
Lawyers representing a bankrupt California health system, Verity
Health System, are suing MultiPlan and some of the country's
largest health insurance companies, alleging they conspired to
underpay for out-of-network services to the tune of about $10
billion per year.
The liquidator for Daily City-based Verity Health System, a
not-for-profit company that operated six hospitals, argues that the
cost-management company MultiPlan gathers reams of pricing data
from insurers and sets uniform prices for out-of-network services
regardless of geography. The lawsuit alleges major insurers
including UnitedHealthCare and Cigna unlawfully agreed to the
scheme by virtue of their contracts with MultiPlan.
MultiPlan believes the lawsuit has no merit and will vigorously
contest the "baseless claims against us and our clients," the
for-profit company said in a statement.
The complaint, filed in the Superior Court of California for the
County of San Francisco in September 2021, alleges violations of
state's Cartwright Act antitrust law in the forms of price-fixing
monopolization and horizontal market allocation. The plaintiffs
also claim MultiPlan engaged in unlawful horizontal and vertical
exchange of competitively sensitive business information.
About Verity Health System
Verity Health System -- https://www.verity.org/ -- operates as a
non-profit health care system in the state of California, with
approximately 1,680 inpatient beds, six active emergency rooms, a
trauma center, and a host of medical specialties, including
tertiary and quaternary care. Verity's two Southern California
hospitals are St. Francis Medical Center in Lynwood and St. Vincent
Medical Center in Los Angeles. In Northern California, O'Connor
Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton
Medical Center in Daly City and Seton Coastside in Moss Beach are
part of Verity Health. Verity Health also includes Verity Medical
Foundation.
With more than 100 primary care and specialty physicians, VMF
offers medical, surgical and related healthcare services for people
of all ages at community-based, multi-specialty clinics
conveniently located in areas served by the Verity hospitals.
Verity Health System was created in a transaction approved by
California Attorney General Kamala Harris and completed in December
2015.
Verity Health System of California, Inc., and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition
signed by CEO Richard Adcock, Verity Health estimated assets of
$500 million to $1 billion and liabilities of $500 million to $1
billion.
Judge Ernest M. Robles oversees the cases.
The Debtors tapped Dentons US LLP as their bankruptcy counsel;
Berkeley Research Group, LLC, as financial advisor; Cain Brothers
as investment banker; and Kurtzman Carson Consultants as claims
agent.
The official committee of unsecured creditors formed in the case
retained Milbank, Tweed, Hadley & McCloy LLP as counsel.
The Debtors, the Official Committee of Unsecured Creditors, and the
Debtors' Prepetition Secured Creditors proposed a Modified Second
Amended Joint Chapter 11 Plan (Dated July 2, 2020). On August 14,
2020, the Court entered an order confirming the Plan.
VICTORY BUYER: Moody's Assigns 'B3' CFR & Rates New Term Loan 'B2'
------------------------------------------------------------------
Moody's Investors Service has assigned initial ratings to Victory
Buyer LLC (dba Vantage Elevator Solutions; "Vantage"), including a
corporate family rating of B3 and a probability of default rating
of B3-PD. Concurrently, Moody's assigned a B2 rating to the
company's proposed senior secured first lien revolver ($85 million)
and term loan ($525 million). The ratings outlook is stable.
Proceeds from the proposed debt facilities, in addition to a new
$210 million second lien term loan (unrated) and new and rollover
equity, will be used to fund the acquisition by Ontario Teachers'
Pension Plan Board. The existing equity owner, Golden Gate Capital
("GGC") will maintain an equity interest in the company.
Assignments:
Issuer: Victory Buyer LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured First Lien Revolving Credit Facility, Assigned B2
(LGD3)
Senior Secured First Lien Term Loan, Assigned B2 (LGD3)
Outlook Actions:
Issuer: Victory Buyer LLC
Outlook, Assigned Stable
RATINGS RATIONALE
Vantage's B3 CFR is constrained by its high financial leverage and
modest revenue scale. Vantage also faces broader manufacturing
sector related headwinds, including supply chain constraints, as
well as inflationary pressures brought on by elevated commodity,
transportation and labor costs. Failure to effectively pass on
these higher costs through price increases would result in margin
pressure. Other risks include increased competition from the large
OEM elevator companies or consolidation of Vantage's fragmented
customer base which could result in future pricing pressure.
The B3 is supported by Moody's expectation that the company will
maintain strong EBITDA margins and consistently positive free cash
flow going forward. Vantage's strong EBITDA margins are reflective
of its brand strength and importance to independent elevator
maintenance and safety service providers. Further, the large
aftermarket portion of revenue and non-discretionary nature of
Vantage's products contributes to a relatively stable, recurring
revenue stream. Favorable industry dynamics include: an aging
installed base of elevators and need for modernization, increased
outsourcing by large elevator OEMs for parts, and the regulated
nature of the elevator industry.
Although initial financial leverage is high (with Moody's Adjusted
debt/EBITDA of 10.0x based on the trailing twelve months ended
September 30, 2021), Moody's Adjusted debt/EBITDA will improve to
the 7.0x range by the end of 2022. Moody's expects this improvement
to be driven largely from earnings growth as the company passes on
price increases to cover its higher costs, recovers from some COVID
related revenue disruption and benefits from cost savings. The high
level of initial leverage signals an aggressive financial policy
and corporate governance given the private equity ownership. That
said, Moody's recognizes the significant equity contribution being
made by Ontario Teachers' Pension Plan Board as part of the
transaction.
Moody's expects that Vantage will maintain good liquidity over the
next twelve to eighteen months, underscored by healthy free cash
flow generation, ample availability under the company's $85 million
revolving credit facility and expectation of good covenant
compliance.
The proposed first-lien debt's B2 rating, one notch above the
company's B3 CFR reflect its priority in the capital structure
above the second lien term loan.
Following are some of the preliminary credit agreement terms, which
remain subject to market acceptance.
The first lien credit facility contains provisions for pari passu
incremental capacity up to the greater of the dollar equivalent of
(1) 1.00x Consolidated EBITDA at close of the transaction and (2)
1.00x Consolidated LTM EBITDA , plus unused amounts under the
general debt basket, plus amounts subject to the greater of (a)
closing date First Lien Leverage Ratio, and (b) the most recent
First Lien Leverage Ratio (if pari passu secured to the first
lien). Amounts up to the dollar equivalent of 1.00x of closing date
EBITDA and 1.00x of EBITDA may be incurred with an earlier maturity
than the initial term loans.
The credit agreement does provide for investments in unrestricted
subsidiaries, albeit subject to a cap. There are no express
"blocker" provisions which prohibit the transfer of specified
assets to unrestricted subsidiaries; such transfers are permitted
subject to carve-out capacity and other conditions.
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees, with no
explicit protective provisions limiting such guarantee releases.
The proposed terms and the final terms of the credit agreement may
be materially different.
The stable outlook is based on Moody's expectation that the
company's revenue and earnings will grow over the next 12 to 18
months, resulting in significant deleveraging versus current
levels. The outlook also reflects Moody's expectation that the
company will maintain good liquidity including healthy free cash
flow and ample revolver availability.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company successfully expands
its revenue scale and realizes anticipated cost savings. Consistent
positive free cash flow, debt/EBITDA that declines below 6.0 times
and EBITA/interest of greater than 2.5 times could also support an
upgrade.
Conversely, the company's ratings could be downgraded if the
company is not able to successfully manage through the current
challenging supply chain and inflationary cost environment through
price increases and operational efficiencies. Further, if liquidity
weakens such that Moody's expects annual free cash flow to turn
negative, debt/EBITDA is expected to be sustained above 7.0 times
or if EBITA/interest were to trend towards 1.0 times, ratings could
be downgraded. Debt-financed dividends or acquisitions could also
exert downward ratings pressure.
Headquartered in the Bronx, New York, Vantage Elevator Solutions,
the collective operating entities under Victory Buyer LLC, is an
independent manufacturer of elevator components and systems for new
equipment applications, equipment upgrade projects, and service
replacement parts. Annual revenues approximate $325 million.
The principal methodology used in these rating was Manufacturing
published in September 2021.
VICTORY BUYER: S&P Assigns 'B-' ICR, Outlook Stable
---------------------------------------------------
S&P Global Ratings assigned our 'B-' issuer credit rating to
Victory Buyer LLC (d/b/a Vantage). At the same time, S&P assigned
its 'B-' issue-level rating and '3' recovery rating to the
company's proposed revolving and first-lien term loan facilities.
Ontario Teachers' Pension Plan Board (OTPP) entered into a
definitive agreement to acquire independent manufacturer of
non-proprietary elevator parts Victory Buyer LLC (d/b/a Vantage).
OTPP will fund the transaction with an $85 million senior secured
revolving credit facility (undrawn at close), $525 million
first-lien term loan, and $210 million second-lien term loan.
S&P's 'B-' rating on Vantage reflects its high initial S&P Global
Ratings-adjusted leverage, niche position in the elevator parts
market, and limited geographic footprint. Moreover, the company's
scale is small relative to peers we rate similarly in the capital
goods sector. Partially mitigating these weaknesses are its
long-standing relationships with customers and good customer
diversification, as well as its significant aftermarket exposure
that carries higher margins due to the nature of the products.
Vantage is a New York-based manufacturer of non-proprietary parts
primarily used in recurring elevator service/repair and
modernization of the installed base.
S&P said, "We expect reasonable deleveraging over the next 12-18
months given return-to-work and elevator modernization trends. For
2021, we expect Vantage's S&P Global Ratings-adjusted leverage to
be above 10x. Our calculation does not include a number of pro
forma adjustments the company believes are one-time in nature,
which it has implemented or plans to implement within 12 months. We
expect sales to increase in the mid-single-digit percentages in
2021 as a result of a strong outlook for Vantage's customers given
the ongoing return-to-work and elevator modernization trends. In
our view, these factors, among others, will allow the company to
reduce leverage to the mid- to high-8x area in 2022 and further
strengthen credit metrics in 2023. Additionally, we believe many
cost initiatives will be realized over the next 12-18 months and
increase adjusted EBITDA margins.
"Our view of Vantage's business incorporates the volatility in the
elevator market. Based on its 2020 results, the company derived the
majority of its revenues from modernizations and repairs and
maintenance. We believe more modernization and repair and
maintenance provides some stability to mitigate the volatility of
the new installation business. Amid the COVID-19 pandemic, however,
many new installation and modernization projects were put on hold
and stay-at-home orders somewhat curtailed the level of repairs.
That said, we expect all three segments to perform well in 2021 and
2022 as they rebound from the pandemic and benefit from the
reopening of economies globally.
"Historically, Vantage's profitability has been solid, but we
believe it has further room to improve. Like most capital goods
companies, Vantage's modernization and repair and maintenance
segments, both aftermarket businesses, feature higher margins. We
expect these businesses to exhibit greater stability than its new
installation business, which has stronger competition from the
original equipment manufacturers (OEMs). In our view, the company's
limited size and competition from other independent part
manufacturers (IPM), as well as the OEMs, somewhat offset margin
potential. However, over the next 12 months, we believe higher
volumes and Vantage's focus on cost-saving initiatives will help
increase EBITDA margins. We view this level of profitability as
being above average compared with other similarly rated capital
goods peers. We believe the higher profitability is attributable to
the low cost of Vantage's products relative to the total cost of
elevator service.
"Vantage benefits from long-standing relationships with its
customer base and good customer diversification relative to peers
despite limited geographic reach. More than 90% of company's
revenues are derived from North America. We view this as relatively
limited diversification compared to higher rated peers. However,
under new ownership, we expect the company to prioritize expanding
its national and global footprint. Vantage also has good customer
diversification, with its top customer accounting for just 2% of
total revenues (looking through to the branches of larger OEM
customers). Furthermore, we believe it maintains strong
relationships with customers, including ISPs and branches of OEMs.
Positively, we believe that Vantage's customers are likely to
replace existing parts within its own parts, creating some
stickiness. At the same time, we believe this dynamic makes it
difficult to significantly expand market share.
"We expect Vantage to maintain adequate liquidity, supported by its
$85 million revolving credit facility. While the company does face
some headwinds in 2021 and 2022 from working capital due to strong
demand and increased interest expense from the higher debt burden,
we still expect it to generate positive free operating cash
flow(FOCF). In addition, we expect its capital spending needs to be
manageable.
"The stable outlook on Vantage reflects our expectation that an
aging installed base will accelerate modernization initiatives. We
also believe the return-to-work trends will improve performance,
enabling the company to generate meaningfully higher EBITDA and
modest FOCF in 2021 and 2022. We believe these factors will allow
the company to reduce S&P Global Ratings-adjusted leverage below 9x
over the next 12-18 months."
S&P could lower its ratings on Vantage if:
-- Demand trends slow materially, resulting in sustained negative
cash flow generation; or
-- S&P believes Vantage's capital structure has become
unsustainable in the long term, which could result from meaningful
underperformance, aggressive debt-financed acquisitions, or
incremental costs that reduce revolving availability.
Although unlikely over the near term given elevated leverage above
10x, S&P could raise its ratings on Vantage if:
-- It meaningfully outperforms our base-case expectations; and
-- Its owners commit to financial policies (including potential
acquisitions and shareholder returns) that enable it to sustain
debt to EBITDA well below 6.5x.
VINE ENERGY: S&P Raises ICR to 'BB-' on Acquisition by Chesapeake
-----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Vine Energy
Inc. to 'BB-' from 'B-' and removed it from CreditWatch, where S&P
placed it with positive implications on Aug. 12, 2021, and
subsequently withdrew its issuer credit rating on Vine.
S&P said, "At the same time, we raised the issue-level rating on
Vine's senior unsecured notes to 'BB-' from 'B-', in line with the
unsecured debt ratings on Chesapeake Energy Inc., and removed it
from CreditWatch.
"We withdrew the rating on the second lien senior secured term loan
which was repaid at the close of the acquisition.
"The rating actions follow the closing of Chesapeake's acquisition
of Vine Energy for a combination of stock, cash and the assumption
of debt. We raised our issuer credit and unsecured issue ratings on
Vine to 'BB-' from 'B-', to equalize them with those of Chesapeake
because we now consider Vine to be a core entity of the company. We
subsequently withdrew the issuer credit rating on Vine."
VOYAGER AVIATION: DBRS Hikes Long-Term Issuer Rating to B(low)
--------------------------------------------------------------
DBRS, Inc. has upgraded the Long-Term Issuer Rating of Voyager
Aviation Holdings, LLC, along with its primary debt issuing
subsidiary, Voyager Finance Co. to B (low) from 'SD'. The trend on
all ratings is Stable. Voyager's Intrinsic Assessment (IA) is B
(low) and its Support Assessment is SA3 resulting in the Company's
final rating being equalized with its IA.
KEY RATING CONSIDERATIONS
The ratings action considers Voyager's modest franchise in a niche
market of commercial aircraft leasing and its aircraft portfolio of
largely young, widebody aircraft that are on long-term lease with
flag carriers. Also, the ratings action factors in the Company's
improved leverage profile following the May 2021 debt restructuring
as well as modest near-term funding requirements given the largely
matched funding base. Ratings also take into account Voyager's weak
earnings generation ability, highly concentrated customer base, and
narrow funding profile.
The Stable trend considers DBRS Morningstar's view that the global
aviation industry's recovery from the Coronavirus Disease
(COVID-19) pandemic is underway but will be a gradual and uneven
recovery with international, long-haul travel the last market
segment to recover. We see Voyager's strengthened balance sheet
following the debt restructuring as well as modest near-term lease
expirations and debt maturities as affording the Company the time
necessary to strengthen the Company's franchise and scale while
rebuilding its earnings through this challenging operating
environment.
RATING DRIVERS
Further development of the franchise that includes growth in the
aircraft portfolio, as well as diversification of the customer
base, while maintaining sound credit and asset performance would
result in a ratings upgrade. Sustained positive operating leverage
resulting in consistent earnings generation and diversification of
funding, including lower asset encumbrance, would also result in
ratings upgrade of the ratings.
Given the concentrated customer base, any meaningful customer
default or restructuring resulting in a material loss would result
in a ratings downgrade. A sustained, material increase in leverage
or inability to secure financing to capitalize on opportunities to
acquire aircraft would lead to a ratings downgrade.
RATING RATIONALE
Voyager has a modest franchise that focuses on operating a
portfolio of mostly young, technologically advanced in-demand
widebody aircraft on long-term leases. We see Voyager as having
acceptable technical and asset management capabilities in wide-body
aircraft across both Airbus and Boeing models. With a portfolio of
18 aircraft and a net book value of $1.6 billion, on June 30, 2021,
Voyager is smaller than many other global lessors. Over time, we
anticipate that Voyager will broaden its portfolio to include
in-demand narrowbody aircraft, which comprise the largest component
of the global commercial aircraft fleet. A successful execution of
this strategy would be positive for the credit profile of Voyager.
We view Voyager's strengthened capitalization following the debt
restructuring as affording the Company the time necessary to
navigate the challenging operating environment while strengthening
its franchise and rebuilding earnings. Voyager's tangible common
equity-to-tangible asset ratio was a solid 18.3% on June 30, 2021.
Voyager's earnings generation ability is weak, having been impacted
by the pandemic, elevated costs, as well as the portfolio
repositioning initiative completed in 2019. Voyager reported an
$82.4 million loss in 1H21, reflecting a 36% year-on-year decline
in rental revenues, a $30.5 million asset impairment charge, a
notable increase in the reserve for doubtful accounts, as well as
higher other expenses largely driven by non-recurring costs
associated with the restructuring. This loss follows annual losses
in both 2020 and 2019. With the challenging operating environment,
DBRS Morningstar sees Voyager as facing a gradual rebuild of its
earnings ability. However, the addition of five aircraft on
sale-leaseback with Breeze Airlines beginning in early 2022 should
contribute to the initial stages of the rebuild.
While modest in size, Voyager's aircraft portfolio is comprised of
young widebody aircraft with long attached leases to flag or
sovereign-backed carriers, which in the current challenging
environment has been a positive for the risk profile. The Company's
risk profile also benefits from the absence of a new aircraft order
book, as well as minimal aircraft placement risk over the near term
with the Company's next lease expiration not scheduled until late
2022. However, the portfolio continues to be more concentrated by
customer, geography and aircraft type than many of its industry
peers, which exposes Voyager to potential losses should an airline
customer default or rent deferrals be requested from a material
portion of the customer base. Indeed, Voyager has three Boeing
777-300ERs on least to Philippine Airlines (PAL), which filed for
bankruptcy protection in September 2021, and accounted for
approximately 20% of the Company's rental revenue. Following
negotiations, Voyager will be taking back one of the aircraft from
PAL, which Voyager is already deep in the remarketing process while
the remaining two aircraft will remain in PAL's resized fleet. We
view the proposed outcome from the PAL bankruptcy as neutral to
Voyager's credit profile given the disjointed market for widebody
aircraft as a result of the pandemic.
Voyager's funding profile is considered narrow given its reliance
on secured forms of wholesale funding. While funding is limited, we
do note that the Company's secured debt generally has an
amortization profile that is closely aligned with the lease revenue
generated by the aircraft collateralizing the debt. Given its
modest near-term funding requirements, including the absence of an
order book, we see liquidity as reasonable. On June 30, 2021,
Voyager had $32.2 million of cash on its balance sheet.
Notes: All figures are in U.S. dollars unless otherwise noted.
YELLOW POPLAR: 1928 Case Set to Close as $325K Sale Okayed
----------------------------------------------------------
Daniel Gill of Bloomberg Law reports that Beauleo Minerals LLC will
buy the rights to the oil and gas found on long-defunct Yellow
Poplar Lumber Co.'s former property, resolving the fate of the last
remaining asset from a 1928 bankruptcy case.
Judge Paul M. Black's Monday, November 1, 2021, order approving the
$325,000 sale is the last step before the Chapter 7 trustee
overseeing Yellow Poplar's bankruptcy case can make final payout
distributions to creditors and close the case a second time.
Yellow Poplar's 1928 bankruptcy case originally closed in 1931.
But the U.S. Bankruptcy Court for the Western District of Virginia
reopened it in 2015, following a separate lawsuit.
About Yellow Poplar Lumber Co.
On July 17, 1928, White Oak Lumber Company filed a petition in the
U.S. District Court for the Western District of South Carolina to
have Yellow Poplar Lumber Company Inc. adjudged a bankrupt. Yellow
Poplar, a lumber company in Chicago, was adjudged a bankrupt and
the bankruptcy case was closed in 1931.
More than 80 years later, on May 29, 2012, Plum Creek Timberlands,
L.P., filed a Complaint in the Circuit Court for Buchanan County,
Virginia, asking the Circuit Court to declare it the owner of gas
rights in a 3,877 acre tract located in Buchanan County, Virginia,
and remove a cloud on its title. Plum Creek's claim is based on
an interpretation of a deed dated Sept. 21, 1929, executed by
Yellow Poplar's trustee in bankruptcy under the authorization of
the United States District Court of South Carolina.
Four different parties claimed an interest in some or all of the
gas rights in the 3,877-acre tract: (i) Plum Creek; (ii) gas
companies EQT Production Company and Range Resources-Pine Mountain,
Inc. ("Gas Companies"); (iii) certain individual deed holders; and
(iv) certain heirs of shareholders of the Yellow Poplar.
In 2013, the Gas Companies removed the case to the U.S. Bankruptcy
Court for the Western District of Virginia (Plum Creek Timberlands,
LP v. Yellow Poplar Lumber Company, Inc. et al, Bankr. W.D. Va.
Case No. 7:13-ap-07026) under the theory that Plum Creek's claims
potentially implicated Yellow Poplar's assets. Later, at the
request of the plaintiff, the District Court withdrew reference of
this removed declaratory judgement action from the bankruptcy
court. On Dec. 13, 2013, the court appointed John M. Lamie to
serve as the Guardian ad Litem ("GAL") on behalf of the unknown
successors in interest to Yellow Poplar.
Thereafter, with the agreement of the parties, the U.S. District
Court for the District of South Carolina reopened Yellow Poplar's
bankruptcy case and transferred it in its entirety to the U.S.
District Court for the Western District of Virginia.
On Aug. 24, 2015, the Virginia Court appointed Mr. Lamie as
replacement trustee for Yellow Poplar. The court later authorized
the appointment of Mr. Lamie in his capacity as an attorney, along
with his law firm, Browning, Lamie & Gifford, P.C., as counsel for
the Trustee.
In January 2017, the parties notified the Virginia court that they
had reached a settlement of the ownership claims. An order
approving the settlement and quieting title to the subject property
was entered in June 2017. Based on the court's approval of the
settlement, it is anticipated that the bankruptcy estate of Yellow
Poplar will receive approximately $2 million of gas royalties now
being held in escrow by the Virginia Gas and Oil Board. In
addition, it is likely to receive ongoing royalty payments.
The Virginia District Court ruled that the bankruptcy court is in
the best position to administer Yellow Poplar's bankruptcy estate,
and on June 30, 2017, it entered an order referring Yellow Poplar's
bankruptcy case to the U.S. Bankruptcy Court for the Western
District of Virginia (Bankr. W.D. Va. Case No. 17-70882). Judge
Paul M. Black is the bankruptcy judge.
ZAREPHATH ACADEMY: Continued Operations to Fund Plan
----------------------------------------------------
Zarephath Academy Inc. submitted a First Amended Plan of
Reorganization under Subchapter V dated October 28, 2021.
The Debtor proposes the Plan for the resolution of the outstanding
claims against and equity interests in the Debtor. The Debtor is
the proponent of the Plan within the meaning of Sec. 1129 of the
Bankruptcy Code.
The Plan will treat claims as follows:
* Class 1 (Secured Tax Claims of the Internal Revenue
Service). Beginning on the date that is the first annual quarter of
the Effective Date, the Internal Revenue Service shall receive, 20
quarterly payments in satisfaction of its Allowed Class 1 Claim,
Cash equal to the allowed amount of such Claim. The Class 1 Secured
Claim shall bear interest at 3% in accordance with the current rate
of the Internal Revenue Service. The Debtor shall be responsible
for making all required payments to Class 1, and such payments
shall not be made via the Subchapter V Trustee.
* Class 2 (Priority Tax Claims of the Internal Revenue
Service). Each holder of an Allowed Priority Tax Claim will
receive, in full satisfaction of its Priority Tax Claim, quarterly
payments equal to the full amount of such Priority Tax Claim, with
such quarterly payments beginning within 45 days of the Effective
Date and ending 5 years after the Petition Date. The Debtor shall
be responsible for making all required payments to Class 2, and
such payments shall not be made via the Subchapter V Trustee.
* Class 3 (Regions Bank). Class 6 consists of a PPP loan from
Regions Bank. It is anticipated the loan comprising this Claim will
be forgiven and require no repayment. If any or all of the loan is
not forgiven, the Plan will be amended to facilitate payments on
the Allowed Class 6 Claim.
* Class 4 (The Florida Department of Agriculture and Consumer
Services). The Debtor shall continue to fund the settlement
agreement entered into between Zarephath Academy Inc. in accordance
with its terms. The Debtor shall be responsible for making all
required payments to Class 7, and such payments shall not be made
via the Subchapter V Trustee.
* Class 8 (General Unsecured Claims). As of the date of this
Plan the Debtor have no General Unsecured Claims. To the extent the
Debtor have any General Unsecured Claims, such claims will be paid
in full.
* Holders of Class 9 Interests will receive no distributions
under the Plan.
The Plan is premised upon the continued operations of the Debtor'
operations, including most specifically the school, and (i) the
receipt of grant money through the Emergency NonPublic Assistance
School Program, and (ii) loans from affiliated churches.
A full-text copy of the First Amended Plan dated October 28, 2021,
is available at https://bit.ly/3GI8WDM from PacerMonitor.com at no
charge.
Attorney for Zarephath Academy, Inc., and Apostolic Assemblies:
THE LAW OFFICES OF ERIC N. MCKAY
Florida Bar No. 0010215
3948 3rd Street South, Suite 297
Jacksonville Beach, Florida, 32250-5847
Tel: (904) 651-8256
E-mail: eric@ericmckaylaw.com
About Zarephath Academy
Zarahath Academy Inc. ("ZAI") is a Christian based specialty school
founded in 2006 by Bishop James Brant Jr. and his wife, Dr. Denise
Brant. ZAI operates from its facilities and offices located at
1028 E. 10th Street, Jacksonville, Florida.
ZAI provides education to low income students from grades pre-k
through 12. In its role as an education provider, ZAI fills an
essential need to the community and offers students a path forward
toward success and self-fulfillment.
Zarephath Academy Inc. and affiliate Apostolic Assemblies of Jesus
Christ Inc. filed voluntary petitions for Chapter 11 protection
(Bankr. M.D. Fla. Lead Case No. 21-01792) on July 21, 2021, listing
up to $1 million in assets and up to $10 million in liabilities.
Jerry Brand, president, signed the petitions.
Judge Roberta A. Colton oversees the cases.
The Debtors tapped Eric N. McKay, Esq., at The Law Offices of Eric
N. Mckay as legal counsel; Jessica Leonard of Legacy Financial
Services and Business Solutions, LLC as bookkeeper and financial
advisor; and Keith Johnson as accountant.
[*] Fairness Advocates Target Pre-Bankruptcy Executive Pay
----------------------------------------------------------
Daniel Gill of Bloomberg Law reports that large companies' awards
of millions in executive bonuses on the eve of bankruptcy are
drawing renewed congressional focus.
Bankrupt companies need court approval to award executive bonuses.
But there isn't a similar restriction on pre-bankruptcy bonuses, a
loophole that's been increasingly used by some big-name companies,
such as Hertz Global Holdings Inc. and Chesapeake Energy Corp.
Companies argue bonuses are crucial in retaining key employees at a
critical time. But extravagant compensation for the executives who
may have contributed to their companies' decline is unfair while
creditors and employees are often left holding an empty bag,
critics say.
A recently introduced House bill aims to close the loophole,
reflecting more attention paid to the issue at a time when
headline-grabbing bankruptcies increasingly face creditors and
other stakeholders’ complaints about hefty "pre-petition"
bonuses.
Hertz paid more than $16 million in bonuses three days before its
May 2020 Chapter 11 filing, and just a month after laying off
10,000 workers.
Chesapeake Energy paid $25 million ahead of its June 2020 filing.
Sears Holdings Corp., Neiman Marcus Group Inc., and Whiting
Petroleum Corp. also handed out hefty executive bonuses shortly
before their bankruptcies.
In fiscal year 2020 alone, 42 distressed companies awarded a total
$165 million in retention bonuses shortly before filing Chapter 11,
according to a recent Government Accountability Office report.
"Workers don't usually get bonuses when they screw up, but that's
what happens to the executives here," Rep. Cheri Bustos (D-Ill.),
who introduced the bill (H.R. 5554), told Bloomberg Law.
'Emotional Response'
In the wake of public outcry over bonuses awarded to Enron Corp.
and WorldCom senior managers, Congress in 2005 amended the
bankruptcy code to require court permission before a bankrupt
company could offer such compensation.
"The amendment was an emotional response and never calibrated to
deal with the real problem," said Jared Ellias, a bankruptcy law
professor at the University of California, Hastings and visiting
professor at Harvard Law School.
Executives who helped drive their companies into bankruptcy -- but
still in control of the Chapter 11 process -- found ways to get
around the bonus limits, he said.
They were able to get court approval of proposed bonuses more
easily by characterizing them as performance incentives rather than
retention measures, Ellias said.
Awarding bonuses ahead of the bankruptcy filing -- in some cases
just one or two days beforehand -- was another workaround they
found to avoid court scrutiny.
According to Bustos, pre-bankruptcy executive bonuses -- often paid
within days, and always less than six months before a Chapter 11
filing -- averaged $833,000 in fiscal year 2020, with some as high
as $6 million.
J.C. Penney Co. paid its top executives $10 million in bonuses just
days before filing Chapter 11, which contributed to massive stores
closing and layoffs. Meanwhile, its creditors received only a
fraction of their claims. The retailer's Chapter 11 plan paid
unsecured note holders less than 1% of a total $1.3 billion in
claims. General unsecured creditors recovered less than 1% of the
more than $700 million they were owed.
Other stakeholders also have been vocal. A group of retired Hertz
executives told the bankruptcy court in a filing in September 2020
that the company's pre-petition bonuses have "inappropriate
parameters, potentially squander limited resources without adequate
purpose or beneficial result for creditors."
Seeking Fairness
Bustos, who commissioned the GAO report, is hoping that the bill
she introduced last month will put a stop to that workaround.
The No Bonuses in Bankruptcy Act would prevent companies that have
declared bankruptcy from handing bonuses to employees earning
$250,000 or more.
The bill doesn't bar pre-bankruptcy bonuses. But it's intended to
authorize the Justice Department’s bankruptcy watchdog to recover
similar bonuses paid within 180 days prior to the bankruptcy
filing.
The measure has bipartisan support.
"This bill is really about doing what's fair. The vast majority of
people up here would have a hard time voting against it," said Rep.
Tim Burchett (R-Tenn.), a co-sponsor of the measure.
"Everyone I've talked to about the bill has given the affirmative
nod," he told Bloomberg Law. "But the devil's in the details and
every other cliché you can think of."
Purdue's Chapter 11 case, filed to handle billions in legal claims
stemming from the company's role in the opioid crisis, has drawn
congressional attention to how large corporations are handling the
bankruptcy system.
Last 2020, several U.S. senators complained that Purdue CEO Craig
Landau was slated to get a $3.5 million bonus despite evidence that
he presided over "significant criminal activity." The proposed
bonus, part of a total $9.8 million executive bonus package,
followed a prior, court-approved executive bonus worth $38
million.
'Mechanical Restriction'
Some bankruptcy law watchers question whether eliminating bonuses
for high-earning employees is the answer.
"A mechanical restriction" on bankrupt companies' ability to pay
executives "could inhibit the ability of those firms to get the
best possible talent they need to reorganize," Ellias said.
Such a no-bonus restriction might lead companies to avoid Chapter
11, which provides tools to restructure debt and operating expenses
in order to survive, he said.
"You don't want to live in a world where companies can't use the
bankruptcy system because it would cripple their ability to get the
best talent," he said.
Instead, an early bankruptcy court hearing on executive
compensation may be the better option, Ellias suggested.
The new bill "dovetails with a rising sense that some workers are
treated significantly better than others," said Pamela Foohey, a
professor at Cardozo School of Law. "Executives are paid well and
will continue to be paid well and shouldn't need millions to stay
with the company."
"A company in bankruptcy—everyone is in it together," she said.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Universal Funding Group, LLC
Bankr. D.S.C. Case No. 21-02778
Chapter 11 Petition filed October 26, 2021
See
https://www.pacermonitor.com/view/YFIZI4Q/Universal_Funding_Group_LLC__scbke-21-02778__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert Pohl, Esq.
POHL, P.A.
E-mail: Robert@POHLPA.com
In re SourceOne Holdings LLC
Bankr. N.D. Ala. Case No. 21-02536
Chapter 11 Petition filed October 27, 2021
See
https://www.pacermonitor.com/view/EUCACRY/SourceOne_Holdings_LLC__alnbke-21-02536__0001.0.pdf?mcid=tGE4TAMA
In re Coeptis Equity Fund LLC
Bankr. N.D. Cal. Case No. 21-30726
Chapter 11 Petition filed October 27, 2021
See
https://www.pacermonitor.com/view/PRFMB4I/COEPTIS_EQUITY_FUND_LLC__canbke-21-30726__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re 27646 T. G., LLC
Bankr. D. Colo. Case No. 21-15421
Chapter 11 Petition filed October 27, 2021
See
https://www.pacermonitor.com/view/DEUYDEY/27646_T_G_LLC__cobke-21-15421__0001.0.pdf?mcid=tGE4TAMA
represented by: Bonnie Bell Bond, Esq.
LAW OFFICE OF BONNIE BELL BOND, LLC
E-mail: bonnie@bellbondlaw.com
In re Ross Elmer Davis
Bankr. M.D. Ga. Case No. 21-50996
Chapter 11 Petition filed October 27, 2021
represented by: Wesley Boyer, Esq.
In re Nexel Services, LLC
Bankr. S.D. Tex. Case No. 21-33475
Chapter 11 Petition filed October 27, 2021
See
https://www.pacermonitor.com/view/7UEVN7Y/Nexel_Services_LLC__txsbke-21-33475__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert Chamless Lane, Esq.
THE LANE LAW FIRM
E-mail: notifications@lanelaw.com
In re United Dispenser Services, Inc.
Bankr. S.D. Fla. Case No. 21-20340
Chapter 11 Petition filed October 28, 2021
See
https://www.pacermonitor.com/view/I5WNTAQ/United_Dispenser_Services_Inc__flsbke-21-20340__0001.0.pdf?mcid=tGE4TAMA
represented by: Chad Van Horn, Esq.
VAN HORN LAW GROUP, P.A.
E-mail: chad@cvhlawgroup.com
In re Joshua S. Armstrong
Bankr. W.D. Wash. Case No. 21-11983
Chapter 11 Petition filed October 28, 2021
In re Joey B Calloway, Jr. and Cynthia Calloway
Bankr. M.D. Ala. Case No. 21-31917
Chapter 11 Petition filed October 29, 2021
represented by: Stuart Memory, Esq.
In re Anh Tuyet Nguyen
Bankr. C.D. Cal. Case No. 21-12606
Chapter 11 Petition filed October 29, 2021
represented by: Vi Nguyen, Esq.
In re Direct Discount Lighting, LLC
Bankr. C.D. Cal. Case No. 21-18339
Chapter 11 Petition filed October 29, 2021
See
https://www.pacermonitor.com/view/VSRZHLQ/Direct_Discount_Lighting_LLC__cacbke-21-18339__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric Goldberg, Esq.
DLA PIPER LLP (US)
E-mail: eric.goldberg@us.dlapiper.com
In re Huntington Park Clinica Medica General Medical Center, Inc.
Bankr. C.D. Cal. Case No. 21-18333
Chapter 11 Petition filed October 29, 2021
See
https://www.pacermonitor.com/view/ZRSVK5Y/Huntington_Park_Clinica_Medica__cacbke-21-18333__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel Rapaport, Esq.
E-mail: jrapaportlaw@gmail.com
In re Thuan B. Truong
Bankr. C.D. Cal. Case No. 21-12607
Chapter 11 Petition filed October 29, 2021
represented by: Vi Nguyen, Esq.
In re Benard Queen, Jr. and Nichole Jones Queen
Bankr. N.D. Ga. Case No. 21-11003
Chapter 11 Petition filed October 31, 2021
represented by: David Levy, Esq.
In re Gregory Hnarakis
Bankr. D. Md. Case No. 21-16860
Chapter 11 Petition filed October 31, 2021
represented by: Steven Goldberg, Esq.
MCNAMEE HOSEA, PA
In re El Monte Clinica Medica General Medical, Inc.
Bankr. C.D. Cal. Case No. 21-18361
Chapter 11 Petition filed November 1, 2021
See
https://www.pacermonitor.com/view/22RAMCI/El_Monte_Clinica_General_Medical__cacbke-21-18361__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel Rapaport, Esq.
E-mail: jrapaportlaw@gmail.com
In re Los Angeles Clinica Medica General Medical Center, Inc.
Bankr. C.D. Cal. Case No. 21-18362
Chapter 11 Petition filed November 1, 2021
See
https://www.pacermonitor.com/view/AGZK7II/Los_Angeles_Clinica_Medica_General__cacbke-21-18362__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel Rapaport, Esq.
E-mail: jrapaportlaw@gmail.com
In re Sunero Group, Inc.
Bankr. C.D. Cal. Case No. 21-12622
Chapter 11 Petition filed November 1, 2021
See
https://www.pacermonitor.com/view/VKR4GZA/Sunero_Group_Inc__cacbke-21-12622__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re The Valley Clinica Medica General Medical Center, Inc.
Bankr. C.D. Cal. Case No. 21-11802
Chapter 11 Petition filed November 1, 2021
See
https://www.pacermonitor.com/view/DNWAHZI/na_na__cacbke-21-11802__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel Rapaport, Esq.
E-mail: jrapaportlaw@gmail.com
In re Wet Bandits, LLC
Bankr. E.D. Cal. Case No. 21-23773
Chapter 11 Petition filed November 1, 2021
See
https://www.pacermonitor.com/view/OEW3FLY/Wet_Bandits_LLC__caebke-21-23773__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Ronald James Gagstetter
Bankr. D. Conn. Case No. 21-50672
Chapter 11 Petition filed November 1, 2021
represented by: Sujata Rai, Esq.
In re Leslie Ingrid Marie Rivett-Prescott
Bankr. M.D. Fla. Case No. 21-02572
Chapter 11 Petition filed November 1, 2021
In re Ocean Realty Partners LLC
Bankr. D. Mass. Case No. 21-11593
Chapter 11 Petition filed November 1, 2021
See
https://www.pacermonitor.com/view/M6U47WY/Ocean_Realty_Partners_LLC__mabke-21-11593__0001.0.pdf?mcid=tGE4TAMA
represented by: Neil Kreuzer, Esq.
LAW OFFICE OF NEIL KREUZER
E-mail: nkreuzer@aol.com
In re Richard L. Arnold and Joan D. Arnold
Bankr. E.D.N.C. Case No. 21-02440
Chapter 11 Petition filed November 1, 2021
represented by: Danny Bradford, Esq.
In re Paula Sue Wenstrom
Bankr. N.D. Tex. Case No. 21-31978
Chapter 11 Petition filed November 1, 2021
represented by: Joyce Lindauer, Esq.
In re Ross G. Suozzi and Corinna Jean Suozzi
Bankr. D. Ariz. Case No. 21-08186
Chapter 11 Petition filed November 2, 2021
represented by: Thomas Allen, Esq.
ALLEN BARNES & JONES, PLC
In re Jerry Alvin Foster
Bankr. W.D. La. Case No. 21-80421
Chapter 11 Petition filed November 2, 2021
In re Church of the Disciples
Bankr. D. Md. Case No. 21-16932
Chapter 11 Petition filed November 2, 2021
See
https://www.pacermonitor.com/view/5LDG2ZQ/Church_of_the_Disciples__mdbke-21-16932__0001.0.pdf?mcid=tGE4TAMA
represented by: Aryeh E. Stein, Esq.
MERIDIAN LAW, LLC
E-mail: astein@meridianlawfirm.com
In re Garvey D Jonassaint
Bankr. E.D. Pa. Case No. 21-12978
Chapter 11 Petition filed November 2, 2021
represented by: Robert Lohr, Esq.
LOHR & ASSOCIATES, LTD.
In re Timothy Wayne LaQuay and Linda Fisher LaQuay
Bankr. S.D. Tex. Case No. 21-60087
Chapter 11 Petition filed November 2, 2021
represented by: Boniface Brittany, Esq.
*********
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
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however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
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