/raid1/www/Hosts/bankrupt/TCR_Public/220530.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, May 30, 2022, Vol. 26, No. 149
Headlines
3I AVC LLC: Seeks to Hire Nolan & Associates as Chief Sales Officer
7910 MAIN STREET: Voluntary Chapter 11 Case Summary
A+ REMODELING: Wins Interim Cash Collateral Access Thru June 24
AA FOOD AND COMPANY: Unsecureds Will Get 30% Under Plan
ADVANCED INTEGRATION: S&P Affirms CCC+ ICR, Alters Outlook to Pos.
ADVISOR GROUP: Moody's Affirms 'B3' CFR Amid Infinex Transaction
AEROSTAR AIRPORT: Moody's Withdraws Ba1 Rating on Sr. Secured Bond
AGELESS SERUMS: Seeks to Hire Fox Rothschild as Special Counsel
AKORA GROUP: Seeks to Hire Eric A. Liepins as Legal Counsel
ALLEN & HANDY: Wins Cash Collateral Access Thru June 22
ARMSTRONG FLOORING: Gets Court Okay to Auction Itself In Bankruptcy
ARMSTRONG FLOORING: Russell Represents Utility Companies
ARMSTRONG FLOORING: Wants to End All Post-Employment Benefits
ATKORE INC: Moody's Upgrades CFR to Ba1 & Alters Outlook to Stable
ATLANTIC BROOM: Files Emergency Bid to Use Cash Collateral
BETTY TRANSIT: Unsecureds Will Get 100% of Claims in Trustee's Plan
BLACK NEWS: Ebony Nears Deal to Buy Business Out of Bankruptcy
BUCKARDT TECHNOLOGIES: Taps Springer Larsen Greene as Legal Counsel
BWX TECHNOLOGIES: Moody's Alters Outlook on 'Ba2' CFR to Negative
CARE NEW ENGLAND: Fitch Affirms 'BB-' IDR, Outlook Negative
CENTRO NGD: Court OKs Use of Cash Collateral on Final Basis
CHEMOURS CO: S&P Upgrades ICR to 'BB', Outlook Positive
CHRISTIAN CARE: May Tap $2.5MM of DIP Loan
CITE LLC: Wins Cash Collateral Access Thru June 30
CLEVELAND INSTITUTE: S&P Alters BB Rating to Stable on Rev. Bonds
CNG HOLDINGS: Moody's Cuts CFR to Caa1 & Alters Outlook to Stable
COLGATE ENERGY III: Fitch Puts 'B+' LongTerm IDR on Watch Positive
CORELOGIC INC: Moody's Cuts CFR to B3, Outlook Stable
COVANTA HOLDING: Moody's Affirms Ba3 CFR & Alters Outlook to Neg.
CREATIVE CHOICE: Seeks to Hire Furr and Cohen as Legal Counsel
DARR GROUP: Unsecureds to Get $675 Per Month for 60 Months
DAYCO PRODUCTS: Moody's Lowers CFR to Caa2, Outlook Negative
DCP MIDSTREAM: Fitch Upgrades LongTerm IDRs From 'BB+'
DENTAL LAND: Seeks to Hire Winstead Tax Group as Tax Attorney
DIEBOLD NIXDORF: Creditors Hire Advisers Amid Payment Deadlines
DIOCESE OF CAMDEN: Verified Statement for Fasy Law Claimants Filed
DIVISION MANAGEMENT: Files Emergency Bid to Use Cash Collateral
DLVAM1302: Wins Interim Cash Collateral Access
EISNER ADVISORY: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
EMERALD HOLLOW MINE: Seeks Chapter 11 Bankruptcy
EYP GROUP: Wins Final OK on $5MM DIP Loan from Ault Alliance
FAMILY FRIENDLY: Wins Cash Collateral Access Thru July 31
FILIPINO FLASH: Seeks Cash Collateral Access
FLOOR-TEX COMMERCIAL: Seeks to Hire L&Y Tax Advisors as Accountant
FOGO DE CHAO: Moody's Alters Outlook on 'Caa1' CFR to Positive
GARTNER INC: Moody's Hikes CFR to Ba1 & Alters Outlook to Stable
GARUDA HOTELS: 2 Ithaca, NY Hotels File for Chapter 11 Bankruptcy
GLEASON'S GYMNASTIC: Wins Cash Collateral Access Thru June 30
GLOBAL ALLIANCE: Wins Cash Collateral Access Thru June 2
GRAN TIERRA: Moody's Assigns First Time 'B2' Corp. Family Rating
HEALTHMYNE INC: Files for Chapter 11 to Pursue Sale
HONX INC: Seeks to Hire Kirkland & Ellis as Bankruptcy Counsel
HONX INC: Seeks to Hire Stretto as Claims and Noticing Agent
HOYOS INTEGRITY: May Tap $600,000 of DIP Loan
HOYOS INTEGRITY: Seeks Outside Party for Internal Investigation
INFOW LLC: Asks Court to Approve Employment of Parkins Lee & Rubio
INNOVA INDUSTRIAL: Starts Chapter 11 Subchapter V Case
INSYS THERAPEUTICS: Sales Rep, Doctor Convicted for Kickbacks
JASPER PELLETS: Case Summary & 20 Largest Unsecured Creditors
JEFFERSON-11TH STREET: Taps Weiss Handler as Special Counsel
K.C. LEE 222: Seeks to Hire Scura as Legal Counsel
KRIESEL RENTALS: Court Confirms Second Amended Plan
LAUTERBACH LABORATORIES: Allegheny Wants Trust Fund Taxes in Plan
LAUTERBACH LABORATORIES: UST Says Disclosures Deficient
LEGACY AT WILLOW BEND: Fitch Lowers Issuer Default Rating to 'BB'
LTL MANAGEMENT: Government Wants Big Kat Out of J&J Case
MALLINCKRODT PLC: Wins Cash Collateral Access Thru June 20
MATHESON FLIGHT: Seeks to Hire Culhane Meadows as Special Counsel
MATHESON FLIGHT: Seeks to Hire Donlin Recano & Co. as Claims Agent
MATHESON FLIGHT: Seeks to Hire Nuti Hart as Bankruptcy Counsel
MATHESON FLIGHT: Taps Development Specialists as Financial Advisor
MD HELICOPTERS: Dutch Lien on Factory Denied in Chapter 11 Case
MEDI BROTHERS: Seeks to Employ Larry Vick as Bankruptcy Counsel
MEGA-PHILADELPHIA LLC: Gets OK to Hire CMS Station as Broker
MILLER'S ALE: Moody's Affirms Caa1 CFR & Alters Outlook to Positive
NATIONAL SMALL BUSINESS: Trustee Taps Arthur Lander as Accountant
NAUTILUS POWER: S&P Lowers ICR to 'B' on Revised Capacity Prices
NESV ICE: Wins Interim Cash Collateral Access Thru August
NEW ERA INVESTMENT: Files for Chapter 11 Bankruptcy Protection
NEW YORK OPTICAL: June 29 Hearing on Disclosure Statement
NORTHWEST SENIOR HOUSING: Landlord Asks Court for Loss Protection
NOVA ACADEMY: S&P Alters Outlook to Neg. on 2015 Education Bonds
NOVA CHEMICALS: S&P Raises ICR to 'BB', Outlook Stable
OPELOUSAS GENERAL HEALTH: S&P Cuts 2003 Bond Rating to BB-
P2 OAKLAND: Disclosures Inadequate, US Trustee Says
PADDOCK ENTERPRISES: Court Confirms Reorganization Plan
PANOP CAB: Seeks 60-Day Extension of Plan Approval Deadline
PPI LLC: Gets Court Approval to Hire Auctioneers
PUERTO RICO: PREPA Debt Plan Deadline Extended to July 1, 2022
PWM PROPERTY: HNA Group Owes SL Green $185 Million
RANGER OIL: S&P Upgrades ICR to 'B' on Improving Profitability
RCO INC: Case Summary & 20 Largest Unsecured Creditors
ROCKALL ENERGY: Seeks Confirmation of Settlement Plan
RUBY PIPELINE: Davis Polk, MNAT Represent Noteholders Group
SEARS HOLDINGS: 70 More Sears Hometown Stores to Close
SKINNICITY INC: Wins Cash Collateral Access Thru Aug 30
SOTO'S AUTO: Unsecureds to Get $80K via Quarterly Payments
SPECTRUM BRAND: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
SUSSEX RANDOLPH: June 28 Disclosure Statement Hearing Set
TECOSTAR HOLDINGS: S&P Downgrades ICR to 'CCC+', Outlook Negative
TELINTEL LTD: Wins Final Cash Collateral Access
TEXOMA AUTO: June 30 Plan Confirmation Hearing Set
TUMBLEWEED TINY: Says Plan Deal With FreedomRoads Reached
VCH RANCH: Amends Farm Credit Secured Claim Pay Details
VETCOR PROFESSIONAL: Moody's Affirms 'B3' CFR, Outlook Stable
VOYAGEUR IMAGING: Clinic in Chapter 11 Due to Issues With 7 Medical
WALKER HOSPITALITY: Starts Chapter 11 Subchapter V Case
WALKER SERVICE: Unsecureds Will Get 100% in Trustee's Plan
WELCOME MOTELS II: Ends Up in Chapter 11 Bankruptcy
WEST COAST: Court Confirms Reorganization Plan
WP CPP: Moody's Lowers CFR to Caa2 & Alters Outlook to Stable
ZEN RESTORATION INC: Seeks to Hire Ronald Weiss as Legal Counsel
[^] BOND PRICING: For the Week from May 23 to 27, 2022
*********
3I AVC LLC: Seeks to Hire Nolan & Associates as Chief Sales Officer
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3i AVC LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Missouri to hire Nolan & Associates as Chief
Sales Officer.
The Chief Sales Officer is required to manage all aspects of the
marketing and sale of Debtor's assets, or an equity investment in
Debtor, including: (i) due diligence responses, (ii) interaction
with potential purchasers, (iii) directing Debtor's counsel to
prepare all necessary pleadings and documents necessary or
desirable to fulfill the CSO’s duties, (iv) identification,
compilation and preparation of a database of potential
purchasers/investors, (v) preparation of marketing materials, (vi)
contacting potential buyers/investors and controlling all
information submitted, (vii) qualification of interested parties as
bidders and solicitation of bids (viii) negotiations with
prospective buyers, (ix) interacting with legal, tax and accounting
advisors though closing of any transactions; (x) conducting any
auction or sale of Debtor's assets or equity investment in Debtor
and selecting any winning bid(s) subject to Court approval.
The firm shall receive a $30,000.00 non-refundable retainer fee;
$200,000 success fee; and five percent (5%) of any amount received
over $6,000,000 gross Transaction value.
Brent A. Baxier, managing director of the firm, 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:
Brent A. Baxier
Nolan & Associates
1401 South Brentwood Boulevard, Suite 915
St. Louis, MI 63144
Phone: 314-241-0707
About 3i AVC LLC
3i AVC LLC -- https://blackwidowimaging.com/ -- doing business as
Black Widow Imaging, is an Internet software and services provider
in Wentzville, Missouri.
3i AVI, LLC d/b/a Black Widow Imaging, filed for chapter 11
protection (Bankr. E.D. Mo. Case No. 22-41053) on April 12, 2022.
In the petition signed by Jason Hauk, as managing member, 3i AVC
LLC listed estimated assets between $100,000 and $500,000 and
estimated liabilities of $100,000 and $500,000.
The Debtor tapped David M. Dare, of Herren, Dare & Streett, as the
legal counsel and Nolan & Associates as Chief Sales Officer.
7910 MAIN STREET: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: 7910 Main Street Property, LLC
7910 Main Street
Stanton, CA 90680
Business Description: 7910 Main Street is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: May 27, 2022
Court: United States Bankruptcy Court
Central District of California
Case No.: 22-10877
Judge: Hon. Scott C. Clarkson
Debtor's Counsel: Eric Bensamochan, Esq.
THE BENSAMOCHAN LAW FIRM, INC.
9025 Wilshire Blvd., Suite 215
Beverly Hills, CA 90211
Tel: (818) 574-5740
Fax: (818) 961-0138
Email: eric@eblawfirm.us
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Michael Woolbright as managing member.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/EPYDYBQ/7910_Main_Street_Property_LLC__cacbke-22-10877__0001.0.pdf?mcid=tGE4TAMA
A+ REMODELING: Wins Interim Cash Collateral Access Thru June 24
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Lubbock Division, authorized A+ Remodeling and Construction, Inc.
to use cash collateral on an interim basis in accordance with the
budget through June 24, 2022, or until the final hearing.
The Debtor needs immediate access to cash collateral to purchase
construction materials, pay subcontractors and contract laborers,
purchase other supplies, and pay expenses for continued operations.
The expenses that must be paid within the next 30 days are
reflected on the Budget.
The Debtor has outstanding tax liabilities to the Internal Revenue
Service. The IRS filed a lien against the Debtor to secure the
repayment of the tax liabilities.
The IRS asserts the outstanding tax liability is secured by the
Debtor's inventory, equipment, and accounts receivable. The Debtor
currently reflects on its books and records inventory valued at
$500, equipment valued at $73,000, and accounts receivable from
customers totaling an estimated $58,491.
As adequate protection of the IRS's interests in the cash
collateral being used, the IRS is granted continuing,
post-petition, replacement liens in, to and overall of the Debtor's
property and assets in the same nature, extent, validity, and
priority of IRS's pre-petition liens as of the Petition Date,
including inventory and accounts receivable asserted to presently
secure toe tax liabilities owing to the IRS, in accordance with 11
U.S.C. section 361(2), in the same priority and in the same nature,
extent, and validity as such liens existed pre-petition.
A further hearing on the matter is scheduled for June 22 at 1:30
p.m.
A copy of the order is available at https://bit.ly/3GoTo85 from
PacerMonitor.com.
About A+ Remodeling and Construction, Inc.
A+ Remodeling and Construction, Inc. is a Texas corporation company
which owns and operates a construction business in and around
Lubbock, Texas. The company's sole shareholder is Jerry Bumpas. A+
Remodeling provides construction and remodeling services to
residential and commercial properties. A+ Remodeling uses
subcontractors and other contract labor to perform construction
jobs for its customers.
A+ Remodeling sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-50066) on May 9,
2022. In the petition signed by Jerry Bumpas, president, the Debtor
disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Brad W. Odell, Esq., at Mullin Hoard and Brown, LLP is the Debtor's
counsel.
AA FOOD AND COMPANY: Unsecureds Will Get 30% Under Plan
-------------------------------------------------------
AA Food and Company, LLC, submitted a Chapter 11 Plan and a
Disclosure Statement.
The Debtor was formed in 2015 for the purpose of purchasing a
property and restaurant located at 425 E Main Street, Grand
Prairie, Texas. At the time of the purchase the restaurant was
operating under the name Agua Azul Seafood.
The Debtor was current with its obligations until March 15, 2020
when the restaurant was closed due to the COVID 19 pandemic, and
while later reopened, because of resurgent pandemic issues the
restaurant was forced to close a number of times thereafter. In
February 2021 a severe winter storm hit the area. The Property
suffered extensive damage including roof damage, electrical damage
and broken pipe both inside the building and under the
parking lot.
The Debtor continues to renovate the property from the damages from
the storm. The Debtor has reached an agreement to lease a portion
of the space beginning in June 2022. The Debtor will use the funds
from this lease to make the payments under the Plan. The Debtor
will continue to complete the renovations and once completed shall
lease the remaining portion of the property to provide additional
payment under the Plan.
The Debtor owns a 100% interest in the Property. The Debtor
believes the value of the Property is $700,000 when the renovations
are complete and the furnishing inside the Property are worth
$60,000 upon completion of the renovations. The Debtor bases this
value on its knowledge of the real estate market in Grand Prairie.
The Reorganized Debtor will continue in business until the sale of
the Property. The Plan will break the existing claims into 7
categories of Claimants. These claimants will receive cash payments
beginning on the Effective Date.
Under the Plan, Class 5 Allowed Unsecured Creditors Claims are
impaired and will be paid from the income of the business. The
Class 5 Creditors will receive their pro rata share of 60 monthly
payments of $1,000. The unsecured creditors will receive
approximately 30% of their allowed claims under this Plan. Class 5
is impaired.
Attorneys for the Debtor:
Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 850
Dallas, Texas 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
A copy of the Disclosure Statement dated May 25, 2022, is available
at https://bit.ly/3a2rFhC from PacerMonitor.com.
About AA Food and Company
AA Food and Company, Inc. is a single asset real estate debtor (as
defined in 11 U.S.C. Section 101(51B)). The Debtor owns a real
estate property located at 425 E. Main Street, Grand Prairie, Texas
valued at $700,000.
AA Food and Company filed a petition for Chapter 11 protection
(Bankr. N.D. Texas Case No. 22-30321) on Feb. 28, 2022, disclosing
$887,000 in assets and $1,086,000 in liabilities. Mumtaz Abbasi,
president, signed the petition.
Eric A. Liepins, Esq., serves as the Debtor's legal counsel.
ADVANCED INTEGRATION: S&P Affirms CCC+ ICR, Alters Outlook to Pos.
------------------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on
Advanced Integration Technology L.P. (AIT) and revised the outlook
to positive from developing. At the same time, S&P assigned its
'CCC+' issue-level rating and '3' recovery rating to the proposed
first-lien debt.
The positive outlook reflects S&P's view that debt to EBITDA will
likely decline below 8x in the next 12 months and remain there.
The proposed transaction extends the company's maturities and
improves near-term liquidity. AIT is planning to refinance its
existing revolver due 2022 and term loan due 2023 with a new $45
million revolver and $275 million first-lien term loan due 2027.
The maturity extension alleviates concerns about potential
liquidity issues and should give the company necessary capital to
regrow the business coming out of the COVID-19 pandemic.
The positive outlook reflects the extension of debt maturities and
S&P's expectation that debt to EBITDA will decline below 8x in the
next 12 months.
Upside scenario
S&P could raise its rating on AIT if debt to EBITDA improved to
comfortably below 8x and we expected it to remain there while free
cash flow is positive. This could occur if:
-- Revenue increased significantly as the company worked through
its backlog;
-- EBITDA margins improved due to higher sales volumes and some
cost-reduction efforts; and
-- The company successfully managed working capital.
Downside scenario
S&P could revise the outlook to stable if it believed debt to
EBITDA were likely to remain above 8x or if cash from operations
are materially negative. This could occur if:
-- The backlog shrunk because the company failed to win new
business;
-- The company experienced operational challenges, constraining
EBITDA; or
-- Working capital needs were materially higher than expected.
ADVISOR GROUP: Moody's Affirms 'B3' CFR Amid Infinex Transaction
----------------------------------------------------------------
Moody's Investors Service affirmed Advisor Group Holdings, Inc.'s
B3 corporate family rating, B2 senior secured bank credit facility
rating, B2 senior secured rating and its Caa2 senior unsecured
rating. Advisor Group's outlook remains stable.
The rating action follows Advisor Group's announcement[1] that it
has signed a definitive agreement to acquire Infinex Financial
Holdings, Inc. ("Infinex"), which has a primary focus on supporting
banks, credit unions and financial institution-based financial
advisors and their clients. Advisor Group expects to use a
combination of new debt and existing cash to finance the
acquisition.
Affirmations:
Issuer: Advisor Group Holdings, Inc.
Corporate Family Rating, Affirmed at B3
Senior Secured Bank Credit Facility, Affirmed at B2
Senior Secured, Affirmed at B2
Senior Unsecured, Affirmed at Caa2
Outlook Actions:
Issuer: Advisor Group Holdings, Inc.
Outlook, remains Stable
RATINGS RATIONALE
Moody's said the ratings' affirmation reflects the sound rationale
for the Infinex acquisition and its relatively small scale compared
with Advisor Group's existing activities. The acquisition will
expand Advisor Group's total addressable market through the
addition of a dedicated channel to serve financial institutions and
their clients. Infinex has more than 750 financial professionals
and approximately $30 billion in client assets. This will bring
Advisor Group's total client assets to around $550 billion (on a
pro-forma basis as of December 31, 2021). Infinex's activities are
very similar to Advisor Group's existing businesses, consisting of
various revenue sources such as advisory and commission fees,
account fees and cash sweep income earned on client cash balances.
Advisor Group has a strong track record of successful acquisitions,
as evidenced by timely integrations and realization of synergies.
The company has identified substantial synergies associated with
the Infinex acquisition related to vendor and strategic partner
contract alignments. Given the readily identifiable nature of these
synergies as well as the company's strong track record, Moody's
expect the bulk of these to be realized within a year of the
expected July closing of the transaction.
Based on the number of client assets acquired, the planned
acquisition is modest in size compared to Advisor Group's
transformative February 2020 acquisition of Ladenburg Thalmann.
Advisor Group has improved its trailing-12-months debt / EBITDA
ratio on a Moody's adjusted basis to around 7.0x at December 31,
2021, compared to 10.5x at December 31, 2020. On a pro-forma basis,
including the proposed debt issuance and Infinex's results, Moody's
expects Advisor Group's leverage ratio will be around 6.8x at the
end of 2022.
The ratings affirmation also reflects Advisor Group's strong growth
in client assets, revenue, and more favorable shift toward advisory
fees and away from less predictable and less stable commission
revenue. The broad declines in equity and bond markets so far in
2022 will put some pressure on fees tied to the level of client
assets. However, Advisor Group is strongly positioned to benefit
from rapid increases in interest rates. The Federal Open Market
Committee raised the target federal funds rate range by 25 basis
points (bps) in March and 50 bps in May to 75-100 bps. Moody's
expects there to be further interest rate increases throughout the
rest of the year, which will boost Advisor Group's interest revenue
and profitability. Interest revenue generally accretes
substantially to the firm's bottom-line because of the
rate-insensitivity of client cash balances.
The ratings also reflect Advisor Group's weak (albeit improving)
pretax earnings, sensitivity to interest rates and other
macroeconomic variables, and its ownership by a financial sponsor
which could result in aggressive financial management actions over
time such as further increases in debt leverage.
The B2 rating on Advisor Group's senior secured notes, first lien
senior secured term loan and revolving credit facility reflect
their priority ranking and size in its capital structure. The Caa2
rating on Advisor Group's senior unsecured notes reflects the
notes' secondary ranking and size in Advisor Group's capital
structure.
Advisor Group's stable outlook reflects Moody's expectation that
the Infinex acquisition will not significantly affect its key
financial metrics, that its profitability will continue to benefit
from increasing interest rates, and that its financial policies
with respect to debt leverage will remain unchanged.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Advisor Group's ratings could be upgraded if the company were to
sustainably improve its debt leverage on a Moody's adjusted basis
to below 6.5x. A significant expansion of existing business
activities that generate a sustainable improvement in profitability
could also lead to an upgrade.
Moody's said the ratings could be downgraded were Advisor Group to
suffer a significant deterioration in liquidity resulting in
challenges to its ability to sustain operations at a competitive
level, especially in recruiting and retaining advisors. A sustained
deterioration in the firm's debt leverage on a Moody's adjusted
basis above 7.5x could also lead to a downgrade. Moody's said that
the ratings on Advisor Group's secured debt could be downgraded
were there to be a significant reduction in the amount of unsecured
debt outstanding (resulting in a reduction of the loss absorption
provided by the unsecured debt and lifting the expected loss rate
on the secured debt) or if the amount of secured debt was
significantly increased, becoming a larger proportion of the firm's
overall capital structure.
The principal methodology used in these ratings was Securities
Industry Service Providers Methodology published in November 2019.
AEROSTAR AIRPORT: Moody's Withdraws Ba1 Rating on Sr. Secured Bond
------------------------------------------------------------------
Moody's Investors Service has withdrawn Aerostar Airport Holdings,
LLC.'s senior secured rating and stable outlook.
Withdrawals:
Issuer: Aerostar Airport Holdings, LLC.
Senior Secured Regular Bond/Debenture, Withdrawn, previously rated
Ba1
Outlook Actions:
Issuer: Aerostar Airport Holdings, LLC.
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
Moody's has decided to withdraw the rating for its own business
reasons.
Aerostar Airport Holdings, LLC. (Aerostar) is the project company
selected by Puerto Rico to operate SJU, the largest commercial
airport in Puerto Rico, under a 40-year lease agreement. Aerostar
is jointly owned by AviAlliance Canada Inc. (AviAlliance) and
Aeropuerto de Cancun, S.A. de C.V., which is owned by Grupo
Aeroportuario del Sureste S.A. de C.V (ASUR). AviAlliance and ASUR
acquired a 50% stake in Aerostar from Oaktree Capital Management,
L.P. in May 2017.
AviAlliance acquired 40% out of the 50% and ASUR acquired the
remaining 10%, consolidating ASUR's ownership of Aerostar to 60%.
AviAlliance is affiliated with the Public Sector Pension Investment
Board, one of the largest Canadian pension managers. ASUR currently
operates nine airports in Mexico (including Cancun Airport) and six
airports in Colombia and is the operator at SJU.
AGELESS SERUMS: Seeks to Hire Fox Rothschild as Special Counsel
---------------------------------------------------------------
Ageless Serums LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Texas to hire Fox Rothschild, LLP as
its special litigation counsel.
The firm will represent the Debtor in the California and Texas
litigation against Edge Systems, LLC for contributory trademark
infringement and tortious interference related to the Debtor's sale
of serums to Edge's customers and licensees.
Fox has agreed to a blended hourly rate of $400.
James Doroshow, Esq., a partner at Fox Rothschild, 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:
James E. Doroshow, Esq.
1800 Century Park E Ste 300
Los Angeles, CA 90067-1506
Phone: 310-598-4150
Fax: 310-556-9828
Email: jdoroshow@foxrothschild.com
About Ageless Serums
Ageless Serums, LLC filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-31259) on May
5, 2022, listing up to $100,000 in assets and up to $1 million in
liabilities. Jarrod B. Martin serves as Subchapter V trustee.
Judge Eduardo V Rodriguez presides over the case.
Benjamin Lawrence Wallen, Esq., at Pachulski Stang Ziehl & Jones,
LLP and Fox Rothschild, LLP serve as the Debtor's bankruptcy
counsel and special litigation counsel, respectively.
AKORA GROUP: Seeks to Hire Eric A. Liepins as Legal Counsel
-----------------------------------------------------------
Akora Group, Inc. seeks approval from the U.S. Bankruptcy Court for
the Northern District of Texas to hire Eric A. Liepins, P.C. to
serve as legal counsel in its Chapter 11 case.
The Debtor requires legal assistance to orderly liquidate its
assets, reorganize claims of the estate, and determine the validity
of claims asserted against the estate.
The hourly rates charged by the firm for its services are as
follows:
Eric A. Liepins $275
Paralegals and Legal Assistants $30 - $50
In addition, the firm will seek reimbursement for out-of-pocket
expenses.
The firm received a retainer of $4,000, plus the filing fee.
Eric Liepins, Esq., the sole shareholder of the firm, disclosed in
court filings 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:
Eric A. Liepins, Esq.
Eric A. Liepins, P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Email: eric@ealpc.com
About Akora Group
Akora Group, Inc. filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No.
22-41074) on May 13, 2022, listing up to $50,000 in assets and up
to $1 million in liabilities. Eric A. Liepins, P.C. serves as the
Debtor's legal counsel.
ALLEN & HANDY: Wins Cash Collateral Access Thru June 22
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized Allen & Handy Investments LLC to use cash collateral on
an interim basis in accordance with the budget through and
including June 22, 2022.
The Debtor's use of cash collateral is limited to no more than $100
for repairs. The Debtor will segregate the balance of the cash
collateral as required under 11 U.S.C. Section 363.
As adequate protection for any diminution in its interest due to
the use of cash collateral, Stonington Capital LLC is granted
replacement liens in postpetition assets of the same kind, type,
and nature as the prepetition collateral of Stonington and any
proceeds thereof. The liens will have the same priority as the
prepetition liens of Stonington and will be deemed valid,
enforceable and perfected only to the extent that the prepetition
liens of Stonington are valid, enforceable and perfected. Nothing
constitutes a determination of the validity, enforceability,
perfection or priority of any liens.
The Debtor will by June 17, 2022, submit (a) a reconciliation of
actual income and expenses on a cash basis to the budgeted income
and expenses for the period through June 10, 2022, and (b) if
appropriate, an updated projected budget through September 30,
2022.
A continued non-evidentiary hearing on the matter is scheduled for
June 21 at 11:30 a.m.
A copy of the order is available at https://bit.ly/3z2rVaJ from
PacerMonitor.com.
About Allen & Handy Investments LLC
Allen & Handy Investments LLC owns a three-unit residential
property known and numbered as 84 Esmond Street, Dorchester,
Massachusetts. Based on a 2022 appraisal, the property is estimated
to be worth $1,040,000.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 22-10681) on May 17,
2022. In the petition signed by Peter Handy, manager, the Debtor
disclosed up to $1 million in both assets and liabilities.
Judge Janet E. Bostwick oversees the case.
Michael Van Dam, Esq., at Van Dam Law LLP is the Debtor's counsel.
ARMSTRONG FLOORING: Gets Court Okay to Auction Itself In Bankruptcy
-------------------------------------------------------------------
Steven Church of Bloomberg News reports that Armstrong Flooring
Inc. won court approval to hold an auction for the company as part
of a plan to exit bankruptcy oversight.
Bids for the maker of vinyl sheets, planks and tiles are due June
14, 2022 and the auction would take place days later, company
attorney Jennifer Madden said during a video-based court hearing on
Thursday, May 26, 2022.
Should a buyer emerge, U.S. Bankruptcy Judge Mary Walrath would
hold a hearing later in June 2022 to decide whether to approve the
sale.
Armstrong filed a Chapter 11 bankruptcy after the company spent
months trying to find a buyer and haggling with lenders.
About Armstrong Flooring
Armstrong Flooring, Inc. (NYSE: AFI) is a global leader in the
design and manufacture of innovative flooring solutions that
inspire beauty wherever your life happens. Headquartered in
Lancaster, Pennsylvania, Armstrong Flooring continually builds on
its resilient, 150-year legacy by delivering on its mission to
create a stronger future for customers through adaptive and
inventive solutions. The company safely and responsibly operates
seven manufacturing facilities globally, working to provide the
highest levels of service, quality, and innovation to ensure it
remains as strong and vital as its 150-year heritage. On the Web:
http://www.armstrongflooring.com/
Armstrong Flooring Inc. sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 22-10426) on May 9, 2022. In the
petition filed by Michel S. Vermette, as president and chief
executive officer, Armstrong Flooring disclosed total assets
amounting to $517,000,000 and estimated total liabilities of
$317,800,000.
The case is assigned to Honorable Bankruptcy Judge Mary F.
Walrath.
The Company is represented in this matter by Skadden, Arps, Slate,
Meagher & Flom LLP as legal advisor, Houlihan Lokey Capital Inc. as
its investment bank, and Riveron RTS, LLC as financial advisor.
Groom Law Group, Chartered is the benefits counsel, Friedman Kaplan
Seiler & Adelman LLP is the conflicts counsel, and Robert A. Weber,
Esq. and Aidan T. Hamilton, Esq. are the efficiency counsels. Epiq
Corporate Restructuring, LLC, is the claims advisor.
ARMSTRONG FLOORING: Russell Represents Utility Companies
--------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the Law Firm of Russell R. Johnson III, PLC submitted a verified
statement to disclose that it is representing the utility companies
in the Chapter 11 cases of Armstrong Flooring, Inc., et al.
The names and addresses of the Utilities represented by the Firm
are:
a. Commonwealth Edison Company
Attn: Lynn R. Zack, Esq.
Assistant General Counsel Exelon Corporation
2301 Market Street, S23-1
Philadelphia, PA 19103
b. Constellation NewEnergy - Gas Division, LLC
Attn: Patrick J Vogelei
1310 Point St. l2th Floor
Baltimore, MD 21231
c. Symmetry Energy Solutions, LLC
Attn: TJ Robinson, Esq.
Counsel
9811 Katy Freeway, Suite 1400
Houston, TX 77024
d. West Penn Power Company
Attn: Kathy M. Hofacre
FirstEnergy Corp.
76 S. Main St., A-GO-15
Akron, OH 44308
The nature and the amount of claims (interests) of the Utilities,
and the times of acquisition thereof are as follows:
a. Constellation NewEnergy - Gas Division, LLC and Symmetry
Energy Solutions, LLC have claims against the Debtors arising from
prepetition utility usage.
b. West Penn Power Company held a prepetition deposit that
wholly secured prepetition debt.
c. Upon information and belief, Commonwealth Edison Company
holds a surety bond that secured prepetition debt.
d. For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer to the
Objection of Certain Utility Companies To the Motion of Debtors For
Entry of Interim and Final Orders (I) Approving Debtors' Proposed
Form of Adequate Assurance of Payment; (II) Establishing Procedures
For Resolving Objections By Utility Companies; and (III)
Prohibiting Utility Companies From Altering, Refusing, or
Discontinuing Service filed in the above-captioned,
jointly-administered, bankruptcy cases.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the foregoing Utilities in May 2022. The circumstances
and terms and conditions of employment of the Firm by the Companies
is protected by the attorney-client privilege and attorney work
product doctrine.
The Firm can be reached at:
Russell R. Johnson III, Esq.
LAW FIRM OF RUSSELL R. JOHNSON III, PLC
2258 Wheatlands Drive
Manakin-Sabot, VA 23103
Telephone: (804) 749-8861
Facsimile: (804) 749-8862
E-mail: russell@russelljohnsonlawfirm.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3a12E6m
About Armstrong Flooring
Armstrong Flooring, Inc. (NYSE: AFI) is a global leader in the
design and manufacture of innovative flooring solutions that
inspire beauty wherever your life happens. Headquartered in
Lancaster, Pennsylvania, Armstrong Flooring continually builds on
its resilient, 150-year legacy by delivering on its mission to
create a stronger future for customers through adaptive and
inventive solutions. The company safely and responsibly operates
seven manufacturing facilities globally, working to provide the
highest levels of service, quality, and innovation to ensure it
remains as strong and vital as its 150-year heritage. On the Web:
http://www.armstrongflooring.com/
Armstrong Flooring Inc. sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 22-10426) on May 9, 2022. In the
petition filed by Michel S. Vermette, as president and chief
executive officer, Armstrong Flooring disclosed total assets
amounting to $517,000,000 and estimated total liabilities of
$317,800,000.
The case is assigned to Honorable Bankruptcy Judge Mary F.
Walrath.
The Company is represented in this matter by Skadden, Arps, Slate,
Meagher & Flom LLP as legal advisor, Houlihan Lokey Capital Inc. as
its investment bank, and Riveron RTS, LLC as financial advisor.
Groom Law Group, Chartered is the benefits counsel, Friedman Kaplan
Seiler & Adelman LLP is the conflicts counsel, and Robert A. Weber,
Esq. and Aidan T. Hamilton, Esq. are the efficiency counsels. Epiq
Corporate Restructuring, LLC, is the claims advisor.
ARMSTRONG FLOORING: Wants to End All Post-Employment Benefits
-------------------------------------------------------------
Floor Daily reports that Armstrong Flooring, which filed for
bankruptcy on May 9, hopes to unload debt by eliminating
post-employment benefits.
"Armstrong Flooring wants to end all post-employment benefits,
including life insurance and health insurance to retirees and will
continue to make required payments. As of January 2021, there were
2,043 retirees receiving life insurance and 1,028 retirees, 563
spouses and 72 surviving spouses receiving health insurance,"
Armstrong said, according to Lancaster Online.
"Armstrong Flooring has two pension plans. One is the U.S.
Qualified Pension Plan, which was created in 2016 when Armstrong
Flooring spun off from Armstrong World Industries. The plan has 375
pensioners, according to the bankruptcy filings, and is closed to
new participants. It is insured by the Pension Benefit Guaranty
Corp. and is fully funded with a $23 million surplus." The funds in
this plan are seperate from AFI's corporate accounts and are not
effected by the company's chapter 11 filing.
About Armstrong Flooring Inc.
Armstrong Flooring, Inc. (NYSE: AFI) is a global leader in the
design and manufacture of innovative flooring solutions that
inspire beauty wherever your life happens. Headquartered in
Lancaster, Pennsylvania, Armstrong Flooring continually builds on
its resilient, 150-year legacy by delivering on its mission to
create a stronger future for customers through adaptive and
inventive solutions. The company safely and responsibly operates
seven manufacturing facilities globally, working to provide the
highest levels of service, quality, and innovation to ensure it
remains as strong and vital as its 150-year heritage. On the Web:
http://www.armstrongflooring.com/
Armstrong Flooring Inc. sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 22-10426) on May 9, 2022. In the
petition filed by Michel S. Vermette, as president and chief
executive officer, Armstrong Flooring disclosed total assets
amounting to $517,000,000 and estimated total liabilities of
$317,800,000.
The case is assigned to Honorable Bankruptcy Judge Mary F.
Walrath.
The Company is represented in this matter by Skadden, Arps, Slate,
Meagher & Flom LLP as legal advisor, Houlihan Lokey Capital Inc. as
its investment bank, and Riveron RTS, LLC as financial advisor.
Groom Law Group, Chartered is the benefits counsel, Friedman Kaplan
Seiler & Adelman LLP is the conflicts counsel, and Robert A. Weber,
Esq. and Aidan T. Hamilton, Esq. are the efficiency counsels. Epiq
Corporate Restructuring, LLC, is the claims advisor.
ATKORE INC: Moody's Upgrades CFR to Ba1 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service upgraded Atkore Inc.'s corporate family
rating to Ba1 from Ba2, its probability of default rating to Ba1-PD
from Ba2-PD and the rating on its $400 million senior unsecured
notes to Ba2 from Ba3. At the same time, Moody's upgraded the
rating on the senior secured term loan issued by Atkore
International, Inc. to Baa3 from Ba1. The ratings outlook was
changed to stable from positive.
"The upgrade of Atkore's ratings reflects the significant
improvement in the company's operating performance and credit
metrics and the likelihood they will be sustained at a stronger
level than the past due to its strengthened competitive position
and focus on margin and productivity improvements, as well as its
relatively conservative financial policies," said Michael Corelli,
Moody's Senior Vice President and lead analyst for Atkore Inc.
Upgrades:
Issuer: Atkore Inc.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
GTD Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2
(LGD5) from Ba3 (LGD5)
Issuer: Atkore International, Inc.
Senior Secured First Lien Term Loan B, Upgraded to Baa3 (LGD3)
from Ba1 (LGD3)
Outlook Actions:
Issuer: Atkore Inc.
Outlook, Changed To Stable From Positive
Issuer: Atkore International, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Atkore's Ba1 corporate family rating is supported by its low
leverage, robust interest coverage, high profit margins, large
market share in key products, attractive position in certain end
markets, its focus on core product categories, pricing discipline
and operational efficiencies, and its very good liquidity profile.
The rating also reflects Atkore's moderate scale and limited
diversity versus higher rated companies in the manufacturing sector
and its reliance on non-residential construction activity, which
drives demand for most of its electrical and tubular products. The
rating also considers the highly competitive market in which the
company operates, its limited product differentiation, and its
acquisitive history and plans to consistently grow through
acquisitions in the future.
Atkore's operating performance has materially strengthened over the
past 18 months and is expected to remain robust in the near-term
due to significantly improved product pricing driven by the
company's ability to meet demand despite raw material and product
shortages, particularly in PVC electrical conduit and fittings and
to a lesser extent metal electrical conduit and fittings. This has
enabled the company to substantially widen the spreads between the
cost of its raw materials and its finished products prices, while
also benefitting from the contributions from acquired companies,
productivity improvements and continued high demand in key end
markets such as residential construction, warehouses and data
centers. As a result, Atkore generated adjusted EBITDA of $900
million in fiscal 2021 (ended September 2021) and $635 million in
the first half of fiscal 2022 versus about $340 million in the full
fiscal year of 2020. Moody's anticipate these positive trends will
continue in the second half of the fiscal year and the company will
produce full year adjusted EBITDA in the range of $1.2 - $1.3
billion, which is about 4x as much as the amount generated in
fiscal years 2019-2020.
The strong operating performance along with effective working
capital management enabled the company to generate more than $500
million in free cash flow in fiscal 2021 and to raise its cash
balance to $576 million while repaying $37 million of debt,
repurchasing $135 million of its common stock and completing $43
million of acquisitions. Moody's expect fiscal 2022 free cash flow
to be even stronger and anticipate the company will continue its
balanced capital allocation while maintaining relatively
conservative financial policies. The company has repurchased about
$261 million of its stock and completed $36 million of acquisitions
in 1H22 and has indicated these activities will continue as part of
its commitment to spend $1 billion of cash on capital investments,
acquisitions and share repurchases over the next 2-3 fiscal years.
Atkore's substantially improved operating performance and its debt
paydowns over the prior few years has resulted in materially
stronger credit metrics. Atkore's adjusted leverage ratio
(debt/EBITDA) declined to 0.7x in March 2022 from 2.6x in September
2020 while its interest coverage (EBITA/Interest) rose to 34.9x
from 6.6x. Moody's expect these metrics to strengthen further in
the second half of fiscal 2022 as the company continues to benefit
from the same dynamics as the first half of the year. Its operating
performance is expected to materially weaken in fiscal 2023 as raw
material and product availability improves, product pricing
declines and higher interest rates and inflationary cost pressures
weigh on construction spending. However, its credit metrics are
likely to remain strong for its Ba1 corporate family rating, but
further upside potential will be constrained by its moderate scale
and somewhat limited end market diversity.
Atkore's speculative grade liquidity rating of SGL-1 reflects its
very good liquidity profile and its consistent free cash
generation. The company had $390 million of cash and $313 million
of borrowing availability on its $325 million asset based revolving
credit facility as of March 2022. Atkore had $12 million of letters
of credit issued and no outstanding borrowings on the revolver
which has historically been used for seasonal and cyclical working
capital support and to fund acquisitions, but is unlikely to be
used in the near term considering the company's sizeable cash
balance and strong free cash flow. The ABL matures in May 2026.
The Baa3 rating assigned to the first lien term loan is one notch
above Atkore's Ba1 corporate family rating since it benefits from a
first priority lien on the tangible and intangible assets not
securing the ABL revolver and a second lien on the ABL collateral.
It is also supported by the loss absorbing buffer provided by the
unsecured notes, which is rated Ba2 due to its junior ranking
position in relation to the term loan and the ABL.
Atkore's stable ratings outlook reflects Moody's expectation that
its operating results will remain robust in 2H22 before materially
weakening in fiscal 2023, but that its credit metrics will continue
to support its rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Atkore's moderate scale and somewhat limited end market
diversification versus other higher rated companies in the
manufacturing sector limit its upside ratings potential. However,
the company's rating could be upgraded if its leverage ratio
(Debt/EBITDA) is sustained at less than 2.0x, EBITA margins above
16% and it maintains very good liquidity.
Atkore's rating could be lowered if Debt/EBITDA exceeds 3.25x or
EBITA margins fall below 12% on a sustained basis. A material
contraction in liquidity could also result in a downgrade.
Atkore Inc., headquartered in Harvey, Illinois is a manufacturer of
Electrical products primarily for the non-residential construction
and renovation markets and to a lesser extent the residential
construction market, and Safety & Infrastructure solutions for the
construction and industrial markets. These products include steel
and PVC electrical conduit and fittings, armored and metal-clad
cable and metal framing and support structures such as cable trays,
ladders and wire baskets, as well as galvanized mechanical tubes.
The company operated 42 manufacturing facilities as of September
30, 2021 and has two reportable segments: Electrical (about 75% of
sales) and Safety & Infrastructure Solutions (25%). Atkore's
revenues for the trailing twelve months ended March 25, 2022 were
approximately $3.6 billion. Atkore International, Inc. (Atkore) is
a wholly owned subsidiary of Atkore International Holdings Inc.,
which in turn is 100% owned by Atkore Inc.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
ATLANTIC BROOM: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
Atlantic Broom Service, Inc. and affiliates ask the U.S. Bankruptcy
Court for the District of Massachusetts for authority to use cash
collateral on an emergency basis.
The cash collateral consists of amounts paid by its subsidiary, ATL
Municipal Sales, LLC, to Atlantic Broom pursuant to the Expense
Sharing and Manufacturing Agreement between the parties. Because
the Debtor needs access to cash collateral to make upcoming
payroll, Atlantic Broom requests that the Court schedule a hearing
on June 1, 2022, to consider the Motion.
ATL was formed on October 7, 2021, as a spin-off by Atlantic Broom
as part of an overall effort to reorganize Atlantic Broom's
financial affairs, specifically to provide a vehicle to permit
financing of the enterprise, without which it was a virtual
certainty that Atlantic Broom would not survive, leaving Atlantic
Broom's creditors unpaid.
Under the restructuring, all sales are generated through ATL, which
purchases raw materials which are then used by Atlantic Broom to
manufacture finished product. As a matter of convenience, all
employees initially have remained on the Atlantic Broom payroll,
with ATL contributing its allocable share of wages and employee
benefits.
In order to memorialize the arrangement between Atlantic Broom and
ATL, they entered into an Expense Sharing and Manufacturing
Agreement dated October 7, 2022. Payments under the Expense Sharing
and Manufacturing Agreement are divided into two parts: (1)
payments made by ATL to Atlantic Broom to cover its share of
Atlantic Broom's expenses; and (2) payments made as fair
compensation for Atlantic Broom to manufacture product for ATL.
The Expense Sharing Portion of the Agreement provides for ATL to
cover 70% of the overall payroll, payroll taxes and employee
benefits and 30% of the rent and insurance, subject to a periodic
review to ensure that ATL is paying a fair allocation of its share
of the overhead. Payment for each of the Employee Expenses and the
Occupancy Expenses is due as and when those expenses are incurred.
The Manufacturing Portion of the Agreement provides for ATL to pay
to Atlantic Broom 22% of ATL's sales of product manufactured for
it, with such payment to be made the month following the month in
which the sales are made.
The Expense Sharing and Manufacturing Agreement is essential to the
continued operation of both Atlantic Broom and ATL. If Atlantic
Broom does not pay its employees or its rent, or if it cannot
manufacture product for ATL, ATL will not be able to survive.
Similarly, if ATL cannot purchase inventory for manufacture by
Atlantic Broom then it will not have funds to cover Atlantic
Broom's expenses.
The very sine qua non of the Expense Sharing and Manufacturing
Agreement is that Atlantic Broom must have sufficient funds to pay
its overhead and manufacture costs in order for ATL to be able to
sell product, which in turn generates funds for ATL to cover
additional overhead and manufacturing expenses, with the overall
goal to generate sufficient funds for Atlantic Broom's creditors.
Without the free flow of money from ATL to Atlantic Broom the very
essence of the Agreement fails.
After a slow start, funding from SouthStar is now flowing smoothly,
which the Debtors believe will result in it achieving projections
of the order previously submitted in connection with the borrowing
motion, albeit slightly delayed. This will allow Atlantic Broom to
pay its current expenses, estimated at about $97,000 per month,
with some money left over to permit it to pay its back
post-petition rent, which currently amounts to $28,344. There is an
additional $59,540 of other post-petition obligations of Atlantic
Broom that must also be paid from funds paid by ATL when they
otherwise become payable by ATL.
Atlantic Broom requests that it be able to use amounts paid by ATL
to it under the Expense Sharing and Manufacturing Agreement as
follows:
a. Up to $100,000 per month for ongoing expenses as more fully
detailed in the expense budget;
b. $28,344 to catch up on post-petition rent;
c. $55,671 in payroll taxes; and
d. Up to $59,540 of other expenses
Atlantic Broom proposes to provide secured creditors with a
replacement lien on post-petition assets to the extent of any
diminution of their collateral caused by its usage of amounts paid
to it by ATL pursuant to the terms of the Agreement, with such
liens attaching in the order of priority as they existed as of the
commencement of the case.
A copy of the motion and the Debtors' budget for the period from
May 27 to July 15, 2022, is available at https://bit.ly/3Gse2nP
from PacerMonitor.com.
The Debtor projects $193,678 in total operating expenses for the
period.
About Atlantic Broom Service
Atlantic Broom Service, Inc. offers roadway maintenance products,
including replacement street sweeper brooms, blades and supplies
for snow plows or traffic and highway signage for towns, cities,
contracting companies, property management firms and more.
Atlantic Broom Service filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No.
22-10173) on Feb. 15, 2022, listing up to $500,000 in assets and up
to $10 million in liabilities. Clement G. Kilcy, president, signed
the petition.
Rubin and Rudman LLP serves as the Debtor's legal counsel.
BETTY TRANSIT: Unsecureds Will Get 100% of Claims in Trustee's Plan
-------------------------------------------------------------------
The Chapter 11 Trustee for Betty Transit, LLC., et al., Affiliates
of Walker Service Corp., submitted a Disclosure Statement for the
Joint Chapter 11 Plan of Reorganization for The Walker Service
Corp., et al., the Betty Transit, LLC, et al., and Trot Service
Corp. (collectively, the "Corporate Debtors"), and Sophie Pross
("S. Pross") and Joe Pross (the "Individual Debtors") dated May 24,
2022.
The Corporate Debtors are each owned in whole or in part by Joe
Pross and Sophie Pross, who have been in the taxi medallion
business for over 40 years. Each of the Corporate Debtors own and
operate 2 New York City taxi medallions out of their main location
on Utica Avenue in Brooklyn, New York. On March 27, 2020 (the
"Corporate Debtors' Petition Date"), the Corporate Debtors filed
their Chapter 11 bankruptcy cases (the "Corporate Cases").
The bankruptcy of the Corporate Debtors was precipitated by, among
other things, the advent of competing ride services such as Uber
and Lyft, which led to a steep loss of value of the taxi medallions
that secured the Loans, along with the complete shut down of
services because of the COVID pandemic. On October 13, 2021 (the
"Individual Debtors' Petition Date"), the Individual Debtors filed
a voluntary Individual Chapter 11 petition, titled In re Sophie
Pross and Joe Pross, Ch. 11 Case No. 21-42600 (ESS) (the
"Individual Debtors' Case") to, among other things, facilitate a
global settlement among the Individual Debtors, PenFed and the
Corporate Debtors.
After the filing of the Corporate Debtor cases and the Individual
Case, PenFed and the Debtors engaged in extensive, arm's-length,
good faith negotiations and have reached a settlement (the "PenFed
Settlement Agreement"), which was approved by Order of the Court
dated March 30, 2022. Under the PenFed Settlement Agreement, PenFed
will accept $8.82 Million in full and final settlement of the
claims included therein against the Debtors.
The PenFed Settlement Agreement amicably resolves approximately $20
Million of asserted claims by PenFed and paves the path for the
successful reorganization of the 21 pending bankruptcy cases of the
Corporate Debtors, as well as the Individual Debtors' Chapter 11
Case. The Chapter 11 Trustee is currently holding the $8.557
million, with the remainder held in the TD Ameritrade account, that
is due to be paid to PenFed on the Effective Date, subject to and
in accordance with the terms of the Plan and the PenFed Settlement
Agreement.
Pursuant to the PenFed Settlement Agreement, the Debtors (and
Chapter 11 Trustee, as successor) were required to expeditiously
file and confirm a plan that incorporates the terms of the PenFed
Settlement Agreement for it to be effective among the Parties. The
Plan filed by the Chapter 11 Trustee incorporates the terms of the
Parties' agreement. Significantly, the Chapter 11 Trustee and the
Subchapter V Trustee seek to meet the timeline for confirming the
Plan(s) within the timeframe prescribed in the heavily negotiated
PenFed Settlement Agreement.
Cash reserves have been set aside to fund the Plan and, in
particular, the PenFed Settlement and shall be used to make the
initial distributions required under the Plan by the Chapter 11
Trustee as disbursing agent (the "Disbursing Agent"). The Chapter
11 Trustee is presently holding in an estate account the
approximate sum of $8.557 million, and the remaining funds to be
paid on the Effective Date are held in a TD Ameritrade account,
from which the Chapter 11 Trustee (as Disbursing Agent) shall make
the initial payment(s) to PenFed and the post-Effective Date to the
Professionals.
Subsequent to the Chapter 11 Trustee making the initial
distributions required under the Plan, Sophie Pross will then serve
as Disbursing Agent for post-Effective Date payments pursuant to
and in connection with the PenFed Settlement Agreement. In
addition, ongoing payments to Quorum and other creditors under the
Plan are already being made in the ordinary course of business and
will be paid by the Individual Debtors. The current income of the
Individual Debtors supports these ongoing obligations to creditors
under the Plan.
Class 2 consists of the PenFed Claim against each applicable
Debtor. PenFed filed a claim in each of the Debtors' cases and its
aggregate claim totals approximately $19,453,584,51, plus accruing
interest, fees, expenses and attorneys' fees and costs, consisting
of (a) the PenFed Indebtedness (i.e., $18,934,939.11, plus other
amounts), and (b) the PenFed Austin Indebtedness (i.e.,
$518,645.40, plus other amounts). By Order dated March 30, 2022,
the Bankruptcy Court approved the PenFed Settlement Agreement,
whereby, in exchange for full and final satisfaction, settlement,
release and compromise of the PenFed Claim as against the Debtors,
any and all guarantor(s) and obligor(s), the Holder of the Allowed
PenFed Claim shall be paid the PenFed Settlement Amount (i.e.,
$8,820,000) payable in accordance with, and subject to the terms
of, the PenFed Settlement Agreement.
Class 3 under the Plan consists of the Quorum Claim against the
Individual Debtors. The Quorum Claim was filed in the amount of
approximately $2,964.000.09 as of the Individual Debtors' Petition
Date and is secured by the property described in the Quorum Loan
Documents. The Holder of the Allowed Quorum Claim shall be paid in
accordance with, and subject to the terms of, the Quorum Loan
Documents, which are fully assumed in the Plan. Quorum shall retain
any lien(s) it has on assets of the Individual Debtors and any
third parties.
Class 4 under the Plan consists of the Allowed TD Ameritrade Claim
against the Individual Debtors. The Individual Debtors were
indebted to TD Ameritrade in the amount of approximately
$5,311,726.00 as of the Individual Debtors' Petition Date and the
debtor is fully secured by the property described in the TD
Ameritrade Loan Documents. TD Ameritrade shall be paid in
accordance with the terms and provisions of the TD Ameritrade Loan
Documents, which are hereby fully assumed. TD Ameritrade shall
retain any lien(s) it may have on assets of the Individual Debtors
and any third parties.
Class 5 consists of all Vehicle Accident Claims against a Corporate
Debtor. The Holders of Allowed Vehicle Accident Claims, if Allowed
whether by settlement or judgment, in exchange for full and final
satisfaction, settlement, release and compromise of such Allowed
Claims, shall receive payment thereon up to and including the
available insurance coverage available under the applicable
Corporate Debtor's liability insurance in effect and providing
coverage at the time of the accident, in full satisfaction of their
claims.
Class 6 consists of all General Unsecured Claims against each
applicable Debtor. Each Holder of an Allowed General Unsecured
Claims shall receive, in exchange for full and final satisfaction,
settlement, release and compromise of such Allowed Claim, payment
of 100% of their Allowed Claims, together with interest thereon at
the rate of 3% from the Corporate Debtor's Petition Date or the
Individual Debtors' Petition Date, as the case may be, on the later
of the Effective Date and the date on which any such General
Unsecured Claim becomes an Allowed General Unsecured Claim, or as
soon as reasonably practical thereafter. Class 6 is Unimpaired.
Class 7 consists of all Interests against each applicable Debtor.
The Holders of Allowed Interests shall retain their equity
interests in each applicable Corporate Debtor but shall receive no
other distribution under the Plan.
Cash reserves have been set aside to fund the Plan and, in
particular, the PenFed Settlement Agreement, and shall be used to
make the initial distributions required under the Plan by the
Disbursing Agent (i.e., the Chapter 11 Trustee). The Chapter 11
Trustee is presently holding in an estate account the sum of
approximately $8,557,000 in the Chapter 11 Trustee's estate account
in the Individual Debtors' Chapter 11 Case, and the Individual
Debtors have approximately $1,000,000 in funds in their TD
Ameritrade account above the amounts owed to TD Ameritrade to make
the payments to the Chapter 11 Trustee, the Subchapter V Trustee,
duly retained Professionals and for other amounts due on the
Effective Date, including the initial payment to PenFed.
In addition, ongoing payments to Quorum and other creditors under
the Plan are already being made in the ordinary course of business
and will continue to be paid by the Individual Debtors. In
addition, ongoing payments to Quorum and other creditors under the
Plan are already being made in the ordinary course of business and
will continue to be paid by the Individual Debtors. The current
income of the Individual Debtors supports these ongoing obligations
to creditors under the Plan.
A full-text copy of the Trustee's Disclosure Statement dated May
24, 2022, is available at https://bit.ly/3GtOmHo from
PacerMonitor.com at no charge.
Counsel for the Chapter 11 Trustee:
LaMonica Herbst & Maniscalco, LLP
Adam P. Wofse, Esq.
Jacqulyn S. Loftin, Esq
3305 Jerusalem Avenue
Wantagh, New York 11793
Tel: (516) 826-6500
Fax: (516) 826-0222
Email: awofse@lhmlawfirm.com
jsl@lhmlawfirm.com
Counsel for Corporate Debtors:
Robert J. Spence, Esq.
Spence Law Office, P.C.
55 Lumber Road, Suite 5
Roslyn, NY 11576
Telephone: (516) 336-2060
Facsimile: (516) 605-2084
Email: rspence@spencelawpc.com
Counsel for the Individual Debtors:
WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP
Thomas A. Draghi, Esq
1201 RXR Plaza
Uniondale, New York 11556
Tel.: 516 622 9200 Ext.: 403
Fax: 516 622 9212
Email: tdraghi@westermanllp.com
About Walker Service
Walker Service Corp. and its debtor-affiliates are privately held
companies in the taxi and limousine service industry.
On March 27, 2020, Walker Service Corp. and 21 affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Lead Case No. 20-41759).
At the time of the filing, Walker Service disclosed estimated
assets of $100,000 to $500,000 and estimated liabilities of $1
million to $10 million. Judge Elizabeth S. Stong oversees the
cases. The Debtors tapped Griffin Hamersky LLP and Spence Law
Office, P.C. as legal counsel.
BLACK NEWS: Ebony Nears Deal to Buy Business Out of Bankruptcy
--------------------------------------------------------------
James Nani of Bloomberg Law reports that Ebony Studios LLC, a media
company associated with former NBA player and Ebony magazine owner
Ulysses Lee "Junior" Bridgeman, is nearing a deal to buy television
network Black News Channel LLC out of bankruptcy.
Black News Channel received permission Friday from U.S. Bankruptcy
Judge Karen Specie to have until June 3, 2022, to finish
negotiations and come to an agreement to designate Ebony Studios as
the stalking horse bidder for most of the television network'
assets.
A potential bid price for the network's assets wasn't disclosed.
About Black News Channel
Black News Channel, LLC is a news network and the only provider of
24/7 multiplatform programming dedicated to covering the unique
perspectives, challenges and successes of Black and Brown
communities.
Black News Channel sought Chapter 11 bankruptcy protection (Bankr.
N.D. Fla. Case No. 22-40087) on March 28, 2022. In the petition
signed by Maureen Brown, vice president of finance, Black News
Channel listed estimated assets between $10 million and $50 million
and estimated liabilities between $10 million and $50 million.
Judge Karen K. Specie oversees the case.
Richard R. Thames, Esq., at Thames Markey, P.A., is the Debtor's
counsel.
On April 12, 2022, the U.S. Trustee for Region 21 appointed an
official committee of unsecured creditors. The committee tapped
Norton Rose Fulbright US LLP and the law firm of Michael H. Moody
Law, PA as its counsel.
BUCKARDT TECHNOLOGIES: Taps Springer Larsen Greene as Legal Counsel
-------------------------------------------------------------------
Buckardt Technologies Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to hire Springer Larsen
Greene, LLC to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) consulting with the Debtor concerning its powers and
duties, the continued operation of its business and management of
the financial and legal affairs of its estate;
(b) consulting with the Debtor and with other professionals
concerning the negotiation, formulation, preparation and
prosecution of a Chapter 11 plan and disclosure statement;
(c) conferring and negotiating with creditors and other
parties in interest concerning the Debtor's financial affairs and
property, Chapter 11 plans, claims, liens, and other aspects of the
case;
(d) appearing in court and preparing legal papers; and
(e) providing other necessary legal services.
The firm's hourly rates are as follows:
Richard G. Larsen, Esq. $455 per hour
Joshua D. Greene, Esq. $455 per hour
Thomas E. Springer, Esq. $465 per hour
The Debtor paid $10,000 to the law firm as a retainer fee.
Richard Larsen, 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:
Richard Larsen, Esq.
Springer Larsen Greene, LLC
300 S. County Farm Road, Suite, Suite G
Wheaton, IL 60187
Tel: 630-510-0000
Email: rlarsen@springerbrown.com
About Buckardt Technologies
Buckardt Technologies, Inc., doing business as Konsultek, provides
information technology services. It offers vulnerability
assessment, penetration testing, disaster planning and recovery,
infrastructure lifecycle, and application traffic management
services. Konsultek serves clients worldwide.
Buckardt Technologies sought Chapter 11 bankruptcy protection
(Bankr. N.D. Ill. Case No. 22-04420) on April 18, 2022. In the
petition filed by Judith A. Buckard, as president, Buckardt
Technologies estimated assets up to $50,000 and liabilities between
$1 million and $10 million.
The case is assigned to Honorable Bankruptcy Judge Lashonda A
Hunt.
Richard G Larsen, of Springer Larsen Greene, LLC, is the Debtor's
counsel.
BWX TECHNOLOGIES: Moody's Alters Outlook on 'Ba2' CFR to Negative
-----------------------------------------------------------------
Moody's Investors Service has affirmed all ratings of BWX
Technologies, Inc. ("BWXT"), including its Ba2 Corporate Family
Rating and Ba3 senior unsecured notes ratings. Moody's also
downgraded BWXT's Speculative Grade Liquidity Rating to SGL-3 from
SGL-2 and changed the outlook to negative from stable.
The affirmation of the Ba2 CFR reflects the inherent stability in
the company's core nuclear propulsion business, extremely high
barriers to entry and BWX's sole source position in a generally
growing industry.
The negative outlook reflects weakened liquidity at a time of
elevated execution risk as the company continues to make
significant investments to enter the medical isotopes business.
"BWXT made heavy use of revolver borrowings to cover cash
shortfalls that ensued from capital spending and increased
shareholder returns last year" says David Berge, Moody's Senior
Vice President and lead analyst for the company. "Any unexpected
operating set-backs that delay a return to positive free cash flow,
incremental share repurchases or acquisitions, will further
constrain liquidity and result in leverage remaining elevated
beyond 2022."
The downgrade of the Speculative Grade Liquidity Rating to SGL-3
was prompted by a weakening in BWXT's liquidity, highlighted by
on-going negative free cash generation and minimal cash balances.
Significant growth capital expenditures and share repurchases
resulted in substantial borrowings under the company's revolving
credit facility, which will likely remain outstanding for several
years. Weakening liquidity was a key factor in the change in
outlook to negative, which reflects Moody's expectation for
continued thin free cash flow through 2023 and no material
repayment of debt until 2024.
The following rating actions were taken:
Affirmations:
Issuer: BWX Technologies, Inc.
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba2-PD
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD5 from
LGD4)
Downgrades:
Issuer: BWX Technologies, Inc.
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Outlook Actions:
Issuer: BWX Technologies, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
BWXT's Ba2 Corporate Family Rating reflects the company's unique
position as the sole source provider of nuclear propulsion systems
to US Naval submarines and aircraft carriers, with a sizable
backlog that provides good long-term revenue visibility. As well,
the company is gradually diversifying its revenue sources to reduce
reliance on US Navy contracts (Government Operations segment),
expanding its activities in its Commercial Operations segment that
serves, among others, nuclear power, medical and
radiopharmaceutical customers. The company generates relatively
strong and stable operating margins of 14% to 15%.
However, the company's negative free cash over the past few years
which, along with an unusually large amount of share repurchases in
2021, caused the company to draw heavily on its $750 million
revolving credit facility. As of March 31, 2022, BWXT had $510
million drawn on this facility, leaving only $204 million available
after letters of credit. This is before funding $50 million of
acquisitions, which closed in April 2022. The weak free cash flow
was primarily caused by a planned increase in growth capital
between 2019 and 2022. While about half of the capital campaign was
for investment in naval reactors, about the same was directed
towards growing BWXT's medical radioisotopes business, which
currently only contributes a very small percentage of BWXT's
earnings. While nuclear medicine offers potential growth
opportunities, Moody's believes the disproportionate allocation of
capital to this business entails higher risk with limited near-term
earnings contributions.
Moody's expects negative free cash flow in 2022. But as BWXT's
capital spending campaign winds down, Moody's expects the company
to return to more robust free cash generation in excess of $100
million annually in 2023 and continuing over the next several
years. Moody's believes the company will apply most of the free
cash flow toward repayment of revolver borrowings. However, on
expectations of only moderate earnings growth, Moody's expects only
gradual improvement in leverage, with debt-to-EBITDA remaining
above 3.0x until 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if liquidity were to weaken further,
such as if free cash flow remains substantially negative for the
remainder of 2022, prompting increased drawings on the revolving
credit facility. Debt-to-EBITDA that remains above 3.5x could
prompt lower ratings. Ratings could also be downgraded in the event
that the company undertakes sizeable share repurchases or
debt-funded acquisitions, particularly in the attempt to expand its
position in the nuclear medicine segment.
Ratings could be upgraded if the company successfully executes its
growth strategy, demonstrating healthy returns on its recent
investments. An upgrade would also be supported by a return to
strong free cash flow and a material improvement in liquidity.
Debt-to-EBITDA sustained below 2.5x could also support an upgrade.
BWX Technologies, Inc., headquartered in Lynchburg, VA, is a
specialty manufacturer of nuclear components, primarily serving the
US Navy. The company also participates in the commercial nuclear
sector in Canada, as well as nuclear technology services to the
government and commercial sectors. Revenue is approximately $2.1
billion.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
CARE NEW ENGLAND: Fitch Affirms 'BB-' IDR, Outlook Negative
-----------------------------------------------------------
Fitch Ratings has affirmed Care New England's (CNE) Issuer Default
Rating at 'BB-'. Fitch has also affirmed the Long-Term rating at
'BB-' the following series of bonds issued by or on behalf of CNE:
-- $120.1 million Rhode Island Health and Educational Building
Corporation hospital financing revenue bonds series 2016B
(CNE);
-- $21.6 million CNE taxable series 2016C.
The Rating Outlook is Negative.
SECURITY
The bonds are secured by a pledge of gross revenues, a mortgage
interest in certain hospital facilities and the debt service
reserve fund.
ANALYTICAL CONCLUSION
The affirmation of the 'BB-' acknowledges CNE's improved operating
performance in fiscal 2021 with the health system generating a $16
million gain from operations, following years of lighter
performance, combined with stable leverage and liquidity metrics.
Fiscal 2021 results were supported by stimulus funding with CNE
recording $77 million in grant funding, implementation of
management's growth initiatives, cost management, and a return to
more normalized volume levels on the outpatient side.
However, the Outlook remains negative reflecting operating losses
through the first half of fiscal 2022 ended March 31, 2022 which
were driven by the winter COVID surge, a sharp rise in agency usage
for nursing and elevated fees related to merger discussions with
Lifespan. The Negative Outlook also reflects deterioration in CNE's
liquidity metrics, leaving it with little cushion relative to its
Master Trust Indenture covenants, which include 30 days cash on
hand (DCOH) at the end of the fiscal year. As of March 31, 2022
CNE, had 43 DCOH.
Additionally, the rating and Outlook reflects the Federal Trade
Commission's February decision to block the proposed merger with
Lifespan. Fitch believes that the lingering effects of the pandemic
has put CNE in a vulnerable position underscoring the need for
additional collaboration, whether it be through merger or
affiliation with a larger health system, as necessary for the
long-term viability of the organization. Fitch understands that
management is currently working on several potential partnerships
and expects to know more on the direction the health system will
take over the next 60-90 days.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Second Largest Market Share; Strength in Core Clinical Lines
The midrange assessment reflects the market strength of GYN/OB at
Women & Infants Hospital (W&I), where CNE has approximately 80% of
the market in these services. CNE is also a main provider of
behavioral health in its service area. CNE's overall market share
is approximately 28.5%, which is the second leading market share
behind Lifespan's almost 50% share, in the greater Providence
area.
CNE has approximately 26% of its gross payor mix composed of
Medicaid and self-pay patients and another 33% from Medicare.
However, much of the Medicaid volume originates from pediatric and
neo-natal services at W&I.
The PSA consists of the city of Providence and five other local
communities surrounding the hospital. Population growth in the PSA
and the state has been weak compared to national levels over the
past five years. Fitch expects the service area to continue to have
population growth and median household levels that lag national
levels.
Operating Risk: 'b'
Ongoing Challenges Despite Recent Improvement
CNE's operating risk profile assessment is considered 'weak' based
on the systems historically uneven operating performance and
Fitch's expectation that operating EBITDA is likely to remain below
4% for the foreseeable future. Fiscal 2021 performance showed
meaningful improvement supported by $77 million in cares funding,
improved volumes and cost containment strategies. However, through
the first half of fiscal 2022, results have weakened with CNE
reporting a $35 million loss from operations. Management attributes
the weak performance to the winter COVID surge, driving higher than
expected expenses related to labor, as well as merger costs.
Management reports that they expect expense pressure to persist in
fiscal 2022, but that they have seen improvement in volumes in
February and March, which has helped slowed operating losses.
Management does not expect results to worsen in the remaining
months of 2022 and has several initiatives underway that should
allow for some stability in operating performance, including some
realization of improvements related to its consultant engagement
with Huron.
Deferred capital needs continue to grow and the system is not
expected to have excess cash flow available for significant
strategic investments. Capital spending is expected to be again low
in fiscal 2022 and 2023 due to ongoing cash preservation measures.
CNE's age of plant is very elevated at 17.3 years with capital
spending over the last five fiscal years averaging below
depreciation at approximately 61%. The low levels of capital
spending have been a major concern in recent rating reviews as it
results in a competitive disadvantage for the system.
Financial Profile: 'bb'
Leverage Metrics Affected by Low Cash Positio
CNE's financial profile is weak which primarily reflects its thin
liquidity with $146.2 million of unrestricted reserves (excluding
$20 million of advance Medicare payments and deferred payroll
taxes) as of March 31, 2022, which translates into 43 DCOH and 56%
of adjusted debt. Fitch expects CNE's financial profile will
remained strained but steady in the forward look due to some
expected improvement in cash flow generation and capital spending
that will remain well below depreciation.
CNE's investment allocation is relatively conservative with an even
split, with about half invested in cash and fixed income and the
other half in equities. Fitch views maintenance of liquidity as key
to rating stability.
Asymmetric Additional Risk Considerations
No asymmetric risks were factored into the rating assessment.
RATING SENSITIVITIES
The Negative Outlook reflects the rating pressure caused by
continued margin pressure and limited cash position in the longer
horizon.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A revision to a Stable Outlook may be considered if CNE is
able to demonstrate continued improvement in operating cash
flow with operating EBITDA margins sustained at or above 3%;
-- Clarity surrounding its strategic direction relative to
potential partnerships.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- DCOH that drop to levels that are close to the 30-day covenant
threshold;
-- If operating improvement initiatives do not materialize and
CNE is unable to meet its debt service covenant.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure 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 three 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.
CREDIT PROFILE
Headquartered in Providence, RI, CNE consists of the 247-licensed
bed Women & Infants Hospital, Butler Hospital (psychiatric
hospital, 143 beds), Kent Hospital (359 beds), The Providence
Center (outpatient behavioral health), Kent County Visiting Nurses
Association (VNA) and the Integra Community Care Network, an
accountable care organization. In 2017, the 294-bed Memorial
Hospital was closed except for a small ambulatory clinic and
removed from the OG. The system employs approximately 300
physicians. CNE had operating revenues of $1.12billion in in fiscal
2021. Fitch's analysis and financial ratios are based on
consolidated financial statements.
Revenue Defensibility
There were no additional considerations.
Asymmetric Additional Risk Considerations
No asymmetric risks were factored into the rating assessment. All
of CNE's long-term debt is fixed rate. CNE has no swaps.
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
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.
CENTRO NGD: Court OKs Use of Cash Collateral on Final Basis
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized Centro NGD Holdings, LLC to use cash
collateral on a final basis in accordance with the budget, with a
5% variance.
The Debtor is authorized to use cash collateral, as defined in 11
U.S.C. section 363(a), in the ordinary course of its business
solely to pay the reasonable and necessary expenses for the
maintenance and preservation of the Units, subject to the agreed
upon Budget through and including the Effective Date of the
Debtor's Amended Chapter 11 Plan.
In connection with the Debtor's proposed use of cash collateral and
in order to provide PSF REO, LLC with adequate protection for the
aggregate diminution of the cash collateral resulting from the
Debtor's use thereof, PSF REO has, as of the commencement of the
Chapter 11 case, Replacement Liens pursuant to 11 U.S.C. section
361(2) on and in all property of the Debtor acquired or generated
after the Petition Date. The Replacement Liens will be valid and
perfected without the need for the execution or filing of any
further documents or instruments.
Any Replacement Liens granted to PSF will be at all times subject
and junior to: (i) the fees of the Office of the United States
Trustee pursuant to 28 U.S.C. section 1930; (ii) the fees of the
Subchapter V trustee pursuant to 11 U.S.C. sections 503 and 330(a);
(iii) any court costs, and (iii) the fees and expenses for Court
approved professionals, in the amounts and as set forth in the
Budget, and only in such amounts as may be approved by the
Bankruptcy Court.
The Debtor will pay PSF $3,500 each month effective March 6, 2022
and continuing on or before the sixth day of each consecutive month
thereafter through and including confirmation of the Debtor's
Amended Chapter 11 Plan.
A continued hearing on the Cash Collateral Motion scheduled for
June 13, 2022, is cancelled.
A copy of the order and the Debtor's budget for February to June
2022 is available at https://bit.ly/3MSvKDF from PacerMonitor.com.
The Debtor projects $9,235.46 in cash on hand and $10,008 in ending
cash balance for May 2022. The Debtor projects $10,008 in cash on
hand and $0 in ending cash balance for June 2022.
About Centro NGD Holdings
Centro NGD Holdings, LLC is a Miami-based company engaged in
activities related to real estate.
Centro NGD Holdings filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. 22-10961) on
Feb. 6, 2022, listing as much as $10 million in both assets and
liabilities. Harvey Hernandez, managing member, signed the
petition.
Judge Robert A. Mark oversees the case.
Catherine D. Kretzschmar, Esq., at Akerman, LLP serves as the
Debtor's legal counsel.
CHEMOURS CO: S&P Upgrades ICR to 'BB', Outlook Positive
-------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on The Chemours
Co. to 'BB' from 'BB-' and its issue-level rating on its senior
secured term loan to 'BBB-' from 'BB+'. S&P's '1' recovery rating
on the term loan is unchanged, reflecting its expectation of very
high (90%-100%, rounded estimate: 95%) recovery in the event of
default.
S&P said, "At the same time, we raised our issue-level rating on
the company's unsecured notes to 'BB' from 'BB-'. Our '4' recovery
rating is unchanged, reflecting our expectation of average
(30%-50%; rounded estimate: 40%) in the event of default.
"The positive outlook reflects our view that we could raise the
ratings on Chemours over the next year if the company continues to
deliver on its expected earnings in line with our projections."
The upgrade reflects Chemours' stronger-than-expected operating
results in 2021 and the first quarter of 2022 as it continued to
increase its margins and adjusted EBITDA on positive pricing
actions and the sustained robust demand in its end markets, despite
increased raw material costs and continuing supply chain issues.
S&P said, "The strength in the company's earnings, combined with
its increased margins, will boost its cash flow and leverage
metrics to levels that exceed our previous assumptions.
Specifically, we now anticipate that Chemours' funds from
operations (FFO) to total debt will be about 30% over the next two
years on a weighted-average basis. Despite our view that titanium
dioxide (TiO2) is cyclical in nature, we anticipate future credit
metrics will remain strong due to the long-term secular growth
trends happening in the company's Thermal and Specialized Solutions
and Advanced Performance Materials segments. Although not
incorporated in our base case forecast, the company announced that
it intends to pay down outstanding debt to $3.5 billion by the end
of 2023. Over the past 12 months, Chemours has paid down about $300
million in outstanding debt. We view this as evidence to support
current credit metrics."
S&P said, "We expect that Chemours will increase the combined
earnings from its three major businesses (titanium technologies
[TT], thermal and specialized solutions [TSS], and advanced
performance materials [APM]) by the high-single-digit to
low-double-digit percent area in 2022, despite continuing raw
material shortages and headwinds from automotive original equipment
manufacturer demand related to semiconductor shortages.
Furthermore, we believe Chemours has entirely regained the market
share it lost in the TiO2 segment in 2019 when it shifted to
longer-term contract agreements. We believe these market share
gains, in addition to other factors, will boost the company's 2022
adjusted EBITDA and credit metrics to levels exceeding those it
achieved in 2021. However, we still view Chemours' leverage metrics
as relatively weaker than those of its similarly rated peers, such
as Olin Corp."
The upgrade does not factor in potential increases in environmental
liabilities beyond those already provided for by the company.
In January 2021, Chemours, DuPont, Corteva, and EID, a subsidiary
of Corteva, entered into a binding Memorandum of Understanding,
reflecting the parties' agreement to share potential future legacy
liabilities relating to per- and polyfluoroalkyl substances (PFAS)
arising out of pre-July 2015 conduct. The agreement provides a
framework under which Chemours is responsible for 50% of potential
liabilities for 20 years or $4 billion, whichever is sooner. In
2021, the company placed $100 million in an escrow account and
plans to place an additional $400 million in the account over the
next seven years to cover any associated settlements. S&P said, "We
believe the escrow account will be more than sufficient to cover
any potential settlements and do not anticipate any increase in
these liabilities over the next 12 months. We believe the sharing
agreement with Dupont and Corteva benefits Chemours and therefore
we view it as credit positive, relative to our previous
expectations."
S&P's assessment of Chemours' business risk profile incorporates
its view of its strengths.
The company's strengths include its competitive advantages and the
market-leading positions of its key products in the TT, TSS, and
APM businesses. In particular, Chemours' large scale, low-cost
position, and technological strengths relative to other TiO2
players contribute to its market leadership position. The large
scale of the company's plants and its technological capabilities
enable it to use a variety of inputs that contribute to its
low-cost position. For example, Chemours produces TiO2 using the
chloride process, which generally creates a superior, higher-value
product than the alternate sulfate process.
S&P's assessment of the company's business risk profile also
incorporates its key risks.
Chief among these is the potential for volatility in its adjusted
EBITDA stemming from its exposure to a competitive commodity
product. S&P said, "However, with the significant growth in its APM
and TSS segments, we believe the increased diversity in its earning
sources has somewhat limited this exposure. The demand for its
products is linked to GDP growth and is susceptible to declines
during economic downturns. We believe Chemours' earnings and
margins from its businesses other than TiO2 are good but not
significant enough to fully offset this volatility. Still, we
believe that the company's strengths position it at the high end of
the range relative to other companies that we assess as having fair
business risk profiles."
S&P said, "The positive outlook on Chemours reflects our
expectations for continued robust earnings and credit metrics over
the next year. We project Chemours' metrics such as weighted
average FFO to debt to be about 30%. Our base case scenario assumes
the company will continue to expand adjusted EBITDA and margins
beyond pre-pandemic levels. We base these assumptions on our belief
that demand in key end markets will remain robust and are
positioned to grow in 2022, despite the global economic
uncertainties, exacerbated by the conflict in Ukraine and ongoing
COVID-19-related lockdowns in China. We factor known environmental
and contingent liabilities into our rating and do not, at this
point, assume a sizable increase in these liabilities beyond those
provided. We do not assume any acquisitions, debt-funded
shareholder rewards, or sale of any significant businesses in our
base case.
"We could revise our outlook to stable on Chemours over the next
year if we expect its weighted-average FFO to debt to decline to a
level approaching 20% without a near-term remedy. This could occur
if its earnings declined significantly in 2023 due to raw material
shortages or continued supply chain issues that cause its margins
to fall by over 200 basis points (bps). The company's metrics could
weaken if it faced rising margin pressure due to falling demand in
its end markets. We could also lower our rating if it became
apparent that Chemours' current provisions and accruals for
contingent liabilities were insufficient and it would likely need
to increase them substantially.
"We will consider raising our ratings on Chemours over the next
year if it continues to deliver on its expected earnings of its
three major business segments in line with our projections and
follows through on its announced debt reduction program. Under this
scenario, we expect the company's FFO to total debt to remain about
30%. Furthermore, we would anticipate its adjusted EBITDA margins
to stay in the low- to mid-20% area. However, we would also
consider the volatility of its earnings from the TiO2 business and
assess the sustainability of any improvements before undertaking a
positive rating action. We will review the potential for any credit
risks related to new environmental issues or an increase in risk
related to current issues before considering an upgrade."
CHRISTIAN CARE: May Tap $2.5MM of DIP Loan
------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division, authorized Christian Care Centers, Inc. and
Christian Care Centers Foundation, Inc. to use cash collateral on
an interim basis and obtain postpetition financing.
The Debtors obtained a secured, super-priority, post-petition
financing of $2,500,000 on an interim basis and up to an additional
$3,350,000 on a final basis for a total of $5,850,000,00 funded
with the proceeds of a bond issued under and pursuant to the
Indenture dated as of May 22, 2022 by and between CCCI, as DIP
Issuer, and UMB Bank, N.A., as trustee.
The Debtors are authorized to borrow the Interim DIP Advance
pursuant to the DIP Loan Documents, the Budget, and the Interim
Order.
A critical need exists for the Debtors to obtain funds in order to
fund the operational, capital and administrative needs of the
Campuses, solely to the extent set forth under the Budget and under
the DIP Facility.
The Debtors are obligated to UMB Bank, N.A., in its capacity as
successor trustee under the Bond Indenture, for the benefit of the
beneficial holders of the tax-exempt Bonds authorized and issued by
the Mesquite Health Facilities Development Corporation, including
(i) the Issuer's Retirement Facility Revenue Bonds (Christian Care
Centers, Inc. Project), Series 2014, issued in the original
aggregate principal amount of $30,770,000, and (ii) the Issuer's
Retirement Facility Revenue Bonds (Christian Care Centers, Inc.
Project), Series 2016, issued in the original aggregate principal
amount of $26,205,000. The Bonds were issued pursuant to the
Indenture of Trust dated as of May 15, 2000 between the Issuer and
JPMorgan Chase Bank, N.A., as original bond trustee.
The Issuer loaned the proceeds of the Bonds to the Christian Care
Centers, Inc. pursuant to the Loan Agreement dated as of May 15,
2000, between the Issuer and CCCI.
The proceeds of the Bonds were used to, among other things: (i)
finance or refinance the costs of acquiring, constructing,
equipping or expanding, as applicable, the Campuses; (ii) establish
debt service reserve funds for the Bonds; (iii) fund capitalized
interest on a portion of the Bonds; and (iv) pay certain costs
associated with the issuance of the Bonds.
As of the Petition Date, the Debtors assert the amounts due and
owing by CCCI with respect to the Bonds and the obligations under
the Bond Documents are:
* Unpaid principal on the Bonds in the amount of $50,800,000;
* Accrued but unpaid interest on the Bonds in the amount of
$3,112,574 as of May 16, 2022; and
* unliquidated, accrued and unpaid fees and expenses of the
Secured Party and its professionals incurred through the Petition
Date. Such amounts, when liquidated, will be added to the aggregate
amount of the Bond Claim.
As adequate protection, the Secured Party is granted customary
adequate protection in exchange for its consent to the DIP Issuer's
use of cash collateral and for the priming of its liens by the
liens securing the DIP Bond, including, but not limited to,
replacements liens against the Collateral and superpriority claims,
both to extent of diminution, senior to all other liens and
administrative expense claims, other than those held by the DIP
Lender and subject to the Carve-Out.
The "Carve-Out" means the sum of: a) an aggregate amount not to
exceed the sum of (i) the unpaid dollar amount of the fees and
expenses of professionals retained by the Debtors or a Committee,
if any, to the extent (A) provided for under the Budget and (B)
incurred or accrued prior to and remaining unpaid at such time as
the DIP Lender delivers written notice of an Event of Default, plus
(ii) the dollar amount of the fees and expenses of the
professionals retained by the Debtors to the extent incurred or
accrued after delivery of a Carve-Out Notice, in an aggregate
amount not to exceed $250,000, in each of (i) and (ii) to the
extent allowed by the Bankruptcy Court at any time, whether by
interim order, procedural order, or otherwise, plus (b) the
statutory fees of the United States Trustee pursuant to 28 U.S.C.
section 1930 and the fees of the Clerk of the Court plus any
interest at the statutory rate, plus (c) reasonable fees and
expenses up to $25,000 incurred by any patient care ombudsman
appointed in the Bankruptcy Case.
A copy of the order is available at https://bit.ly/3t3Ch6y from
PacerMonitor.com.
About Christian Care Centers, Inc.
Christian Care Centers, Inc. was incorporated in 1947 as a
nonprofit Texas corporation. The Foundation was incorporated in
1994 also as a nonprofit Texas corporation. CCCI, a faith-based
organization, operates three senior living housing and health care
campuses in the Dallas/Fort Worth Metroplex. In addition, CCCI
owns unimproved real property in Dallas County and Tarrant County,
adjacent to the Mesquite and Fort Worth communities. The Foundation
is a supporting organization that serves as an endowment
organization for CCCI.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-80000) on May 23,
2022. In the petition signed by Mark Shapiro, as chief
restructuring officer, the Debtor disclosed up to $100 million in
both assets and liabilities.
Judge Stacey G. Jernigan oversees the case.
The Debtor tapped Husch Blackwell LLP as counsel, Glassratner
Advisory and Capital LLC d/b/a B. Riley Advisory Services as
restructuring advisor, Houlihan Lokey Capital, Inc. as investment
banker, and Epiq Corporate Restructuring, LLC as claims and
noticing agent.
CITE LLC: Wins Cash Collateral Access Thru June 30
--------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, gave Robert Handler, the Subchapter V Trustee of
Cite LLC, authority to use the cash collateral in which A. Robert
Abboud and Company asserts an interest, in accordance with the
budget, with a 10% variance through June 30, 2022.
The Subchapter V Trustee is authorized to operate the Debtor's
business, primarily including its restaurant, and use cash (a) for
the disbursements set forth under the Trustee Operating Budget or
(b) for any disbursement(s) expressly authorized by separate Court
order, to and including June 30, 2022. The Debtor may use cash in
an amount equal to up to 10% more than a particular corresponding
"category" in the Budget, measured on a cumulative, monthly basis,
provided that cash is available. In the event expenses for a
particular month come in under the amount set forth in the Budget,
the amounts will roll forward and be available in future months and
may be used to offset any overages up to 10% for future months,
provided the overage corresponds to a prior month's underage in the
same expense category.
In the event ARACO consents, in writing, to the use of cash in a
manner or amount which does not conform to the Budget, the Debtor
will be authorized pursuant to the Order to expend cash for the
Non-Conforming Use without further Court approval.
As adequate protection for the Debtor's use of cash collateral,
ARACO and Republic Bank are granted post-petition liens, security
interests and mortgages in and on the property of the Debtor and
its estate, including all property acquired by the Debtor or its
estate after the Petition Date, to the same extent, validity,
perfection, enforceability, and priority of the liens, security
interests, and mortgages of such Secured Creditor in the
Pre-petition Collateral as of the Petition Date.
If and to the extent the adequate protection of the interests of
the Secured Creditors, or either of them, in the Post-petition
Collateral pursuant to the order proves insufficient, the Secured
Creditor(s) will be granted an administrative expense claim under
section 507(b) of the Bankruptcy Code.
As further adequate protection, the Trustee will make the adequate
protection payments to the Secured Creditors indicated in the
Budget, in the amounts of $14,000 per month to Republic Bank and
$7,500 per month to ARACO. The May adequate protection payments
must be received by the Secured Creditors by no later than June
27.
The matter is continued for status hearing on June 29 at 10 a.m.
via Zoom for Government.
A copy of the order and the Debtor's budget for May 29 to July 3,
2022 is available at https://bit.ly/3wURdF0 from PacerMonitor.com.
The budget provides for total cash disbursements, on a weekly
basis, as follows:
$96,861 for the week starting May 29, 2022;
$56,457 for the week starting June 5, 2022;
$79,116 for the week starting June 12, 2022;
$37,256 for the week starting June 19, 2022;
$95,411 for the week starting June 26, 2022; and
$31,635 for the week starting July 3, 2022.
About Cite LLC
Cite LLC, an American restaurant business, filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
N.D. Ill. Case No. 21-13730) on Dec. 3, 2021. In the petition
signed by Evangeline Gouletas, managing member, the Debtor
disclosed $5,517,547 in total assets and $7,945,223 in total
liabilities.
Judge Janet S. Baer oversees the case.
The Golding Law Offices, PC serves as the Debtor's counsel.
CLEVELAND INSTITUTE: S&P Alters BB Rating to Stable on Rev. Bonds
-----------------------------------------------------------------
S&P Global Ratings revised the outlook on its 'BB' rating on Ohio
Higher Educational Facility Commission's series 2018 facility
revenue bonds, issued for Cleveland Institute of Art (CIA), to
stable from negative and affirmed the rating.
The outlook revision reflects S&P's opinion of CIA's financial
profile, which has improved operations and grown available
resources. While the small enrollment remains a credit risk, S&P
expects relatively stable enrollment. CIA does not have any
additional near-term debt plans, further lending credit stability,
in S&P's view.
"We could raise the rating if CIA were to stabilize enrollment,
demonstrate sustained improvement in operating performance, and
maintain available resources to levels we consider commensurate
with higher-rated peers," said S&P Global Ratings credit analyst
Kevin Barry. "We could lower the rating if available resources were
to decrease to levels we no longer consider commensurate with the
current rating, if demand metrics were to weaken, or if CIA were to
issue additional debt without corresponding resource growth."
The stable outlook reflects S&P Global Ratings' opinion that CIA
will likely maintain consistent enrollment and stability in
available resources. We do not expect any new near-term debt.
Due to COVID-19, CIA management implemented remote learning in
spring 2020 to protect its students' health and safety and limit
social risk associated with community spread of the virus. CIA
implemented a hybrid model, with both in-person and remote
learning, for fall 2020 and spring 2021 and returned to primarily
in-person courses in fall 2021. S&P said, "In our view, CIA, like
other higher-education institutions, faces elevated social risk due
to risks from COVID-19. However, in conjunction with a
more-coordinated and effective rollout of the vaccine, we think
management has taken prudent actions regarding the health and
safety of its students, faculty, and staff. Despite elevated social
risk, we posit environmental and governance risks are neutral
credit factors."
Management used series 2018 revenue bond proceeds to acquire a
four-story, 79,000-square-foot student-housing facility and fund a
debt-service reserve. Its general-obligation pledge secures the
bonds. As of June 30, 2021, the latest audited year, total debt
outstanding is roughly $26.8 million, including $9.9 million of
operating leases. CIA does not have any additional debt plans.
CNG HOLDINGS: Moody's Cuts CFR to Caa1 & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service has downgraded CNG Holdings, Inc.'s
corporate family and senior secured ratings to Caa1 from B3. CNG's
outlook was changed to stable from negative.
The following rating actions were taken:
Downgrades:
Issuer: CNG Holdings, Inc.
Corporate Family Rating, Downgraded to Caa1 from B3
Senior Secured Regular Bond/Debenture, Downgraded to Caa1 from B3
Outlook Actions:
Issuer: CNG Holdings, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The downgrade of CNG's ratings reflects Moody's view that CNG's
earning capacity has diminished, with a heightened level of
uncertainty concerning its ability to substantially rebuild capital
over the next 12-18 months.
The company's profitability and capital levels have declined
significantly in the last two years, stemming from a material
decrease in earning assets. This decrease in lending was driven by
diminished customer demand resulting from government stimulus
payments during the coronavirus pandemic and the wind down of the
company's California, Ohio, Virginia, and Nebraska loan portfolios
due to state regulatory restrictions. Although CNG has, in the past
year, demonstrated its ability to grow receivables, and earning
assets have come off their lows with increased demand in the
company's core financial services business due to runoff of federal
stimulus programs and a continued expansion of online lending, loan
balances continue to be significantly below pre-pandemic levels and
uncertainty remains about the pace of prospective growth. Notably,
due to the company's recent cost cutting initiatives, it now
requires a lower balance of receivables than it would have in the
past to achieve comparable levels of profitability.
As of March 26, 2022, gross earning assets for the company stood at
$313 million, substantially lower than $554 million as of year-end
2019, although higher than the $257 million quarter-end low
reported at the end of the second quarter of 2021. Moody's expects
the company to grow its gross earnings assets at a modest rate over
the next 12-18 months.
The company's profitability, as measured by net income to average
managed assets (NI/AMA) has deteriorated due to these lower levels
of earning assets, and was -10.1% loss for the first quarter of
2022 and a -10.9% loss for fiscal 2021, a decrease from US-GAAP
profitability of 3.3% for 2020 and 7.7% for 2019.
The recent net losses have resulted in the company's
capitalization, as measured by tangible common equity to tangible
managed assets (TCE/TMA), decreasing significantly to -10.7%
deficit in the first quarter of 2022 from 5.7% as of year-end 2020,
weakening CNG's ability to absorb unexpected losses.
CNG's stable outlook reflects Moody's assessment that CNG has
sufficient near-term liquidity to execute its strategic plan, but
that its profitability and capital will remain challenged.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
CNG's ratings could be upgraded if it is able to significantly
increase its level of originations and earning assets, such that it
reaches a firm trajectory to improved capitalization and
profitability, with annualized EBITDA above $75 million.
CNG's ratings could be downgraded if its financial performance
substantially further deteriorates, resulting in a further
significant weakening of its profitability. The ratings could also
be downgraded in the event of adverse regulatory or legislative
developments, should this have a significant adverse impact on the
company's operations, profitability and capitalization.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
COLGATE ENERGY III: Fitch Puts 'B+' LongTerm IDR on Watch Positive
------------------------------------------------------------------
Fitch Ratings has placed Colgate Energy Partners III, LLC's
(Colgate or the company) 'B+' Long-Term Issuer Default Rating
(IDR), 'BB+'/'RR1' senior secured reserve-based lending (RBL)
credit facility and 'BB-'/'RR3' senior unsecured notes on Ratings
Watch Positive following the announcement that Centennial Resource
Development, Inc. (CDEV) has entered into an agreement to combine
with Colgate in an all-stock merger of equals transaction.
The transaction creates the largest pure-play exploration and
production (E&P) company in the Delaware basin with approximately
180,000 net acres, 40,000 net royalty acres and pro forma
production of approximately 145 mboepd by 4Q22. The combined entity
will also maintain a strong balance with mid-cycle leverage
forecast below 1.5x. Fitch believes the pro forma size, asset and
leverage profiles are consistent with 'BB-' IDR category E&P
thresholds. Fitch expects to resolve the Rating Watch upon
completion of the transaction, which is currently expected to be in
2H22.
KEY RATING DRIVERS
Credit-Friendly Merger, Strong FCF: The proposed $7.0 billion
merger of equals transaction, which values Colgate at approximately
$3.9 billion, is credit-friendly given the approximately 269
million CDEV shares expected to be issued to current Colgate equity
holders. CDEV will assume all of Colgate's outstanding debt, which
will bring pro forma total gross debt to just over $2.0 billion,
with no near-term maturities until 2026. At Fitch's 2023 base case
price assumption of $76 WTI, the agency forecasts the combined
entity will generate over $800 million of pre-dividend FCF, which
improves to over $1.3 billion at current strip prices.
Enhanced Delaware Position: The merger will materially expand the
combined company's size and scale, creating the largest pure-play
Delaware E&P with approximately 180,000 net leasehold acres, 40,000
net royalty acres, over 15 years of high-quality drilling inventory
and 4Q22 production of approximately 145 mboepd. Management has
highlighted synergy potential through operational efficiencies,
including reduced average spud-to-spud days, margin expansion
through Colgate's lower per-unit operating costs, increased
utilization of water recycling technology, G&A synergies and
accretive debt refinancing potential. Fitch believes most of these
synergies are achievable in the near term given significant acreage
overlap, which should enhance netbacks.
Shareholder-Returns Focus: The combined company expects to remain
committed to shareholder returns through a new plan, which could
include aspects of Colgate's current $25 million quarterly base
dividend and CDEV's $350 million share buyback program. Fitch
believes the shareholder returns focus is supported by the combined
company's robust FCF generation, high-quality inventory, low-cost
structure and strong pro forma balance sheet with leverage forecast
at 1.0x in 2023 and mid-cycle leverage ($50 WTI oil price and $2.50
Henry Hub natural gas price) below 1.5x.
Standalone Competitive Cost Structure: Colgate's position in the
over-pressurized, gas-driven window of the Delaware basin, as well
as its increasing size and scale, help drive operating and
production efficiencies. Since 2019, Colgate has focused on
improving its cost structure, with drilling and completion costs
falling from $1,000/ft to $750/ft in 4Q21 due to new casing
designs, completion optimization and increased pad sizes.
Operating costs have increased since the beginning of 2021, along
with peers, primarily due to higher diesel, steel, proppant and
service prices, but Colgate still remains at the lower end of the
Permian peer average with Fitch-calculated total operating costs of
$9.7/boe in 2021. Fitch believes company's wider well spacing and
higher intensity completions, relative to offset operators,
supports strong well economics, higher IRR's and returns per
drilling spacing unit, but could come at the cost of lower overall
NPV.
Standalone Sub-1.5x Mid-Cycle Leverage: Fitch's base case forecasts
gross debt/EBITDA of 1.0x in 2022, which moderates toward
approximately 1.4x at Fitch's $50 mid-cycle WTI price assumption.
Colgate's total gross debt remains relatively low compared with
similar-sized peers at $1.0 billion and the maturity profile
remains clear until the company's $300 million 7.75% notes are due
in February 2026.
DERIVATION SUMMARY
With 145 Mboepd of production expected in 4Q22, the combined
company will be of similar size to SM Energy Company (B+/Positive;
153.3 Mboepd at 1Q22) and 'BB-' category rated peers Civitas
Resources, Inc. (BB-/Stable; 159 Mboepd) and CrownRock, L.P.
(BB-/Stable; 115 Mboepd at 3Q21).
In terms of cost structure, Colgate's standalone FY21
Fitch-calculated unhedged cash netback of $34.1/boe was in-line
with the Permian peer average, but did not consider the company's
costs and production profile for a full-year pro forma the
acquisitions. Fitch believes the combined company's netback will
trend toward the higher end of the Permian peer average going
forward given Colgate's low operating cost profile and CDEV's high
capital efficiency along with operational and corporate efficiency
synergies expected post-close.
The pro forma combined leverage profile remains consistent with the
Permian peer average in 2023 with Fitch forecast debt/EBITDA of
1.0x and mid-cycle leverage of sub-1.5x, which remains within
Fitch's 'BB' category thresholds.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Closing of the contemplated merger in 2H22;
-- WTI prices of $95/bbl in 2022, $76/bbl in 2023, $57/bbl in
2024, and $50/bbl in 2025 and longer term;
-- Henry Hub natural gas prices of $4.25/mcf in 2022, $3.25/mcf
in 2023, $2.75/mcf in 2024, and $2.50/mcf in 2025 and longer
term;
-- Pro forma average daily production of 145 Mboepd in 2H22
followed by double-digit growth through 2023;
-- Growth-linked capital expenditures throughout the rating case;
-- Excess cash balanced between repayment of RBL, dividends and
share repurchases.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
To resolve the Positive Watch:
-- Completion of the contemplated merger under proposed terms.
To upgrade on a standalone basis:
-- Organic and/or M&A growth resulting in production sustained at
or above 125Mboepd while maintaining unit costs;
-- Maintenance of economic inventory life, reserve life and
continued de-risking of longer-term unit economics;
-- Mid-cycle debt/EBITDA sustained below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- If the transaction closes as contemplated, Fitch believes a
downgrade would be unlikely;
-- Failure to complete the merger as contemplated will result in
removal of the Positive Watch.
To downgrade on a standalone basis:
-- Inability to maintain economic inventory and reserve life that
leads to weakened unit economics;
-- Loss of operational momentum resulting in production sustained
below 75Mboepd;
-- Excessive RBL usage that materially erodes the liquidity
profile and increases refinance risk;
-- Deviation from stated financial policy leading to mid-cycle
debt/EBITDA sustained above 2.5x.
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
Strong Standalone Liquidity: As of 4Q21, Colgate's liquidity
consisted of $210 million cash on hand and full availability under
the company's $500 million RBL credit facility due 2025 ($625
million borrowing base). The cash balance was reduced in 1Q22
following a $200 million special dividend to its equity holders and
the company utilized $450 million of RBL borrowing to fund a hedge
re-strike. Fitch believes the re-strike is supported by strong
near-term FCF and will better position the pro forma company's
hedge book over the next few years.
Clear Pro Forma Maturity Profile: The combined entity's maturity
schedule remains clear with no near-term maturities until CDEV's
5.375% notes and Colgate's 7.750% notes are due in 2026.
ESG CONSIDERATIONS
Colgate Energy Partners III, LLC has a standalone ESG Relevance
Score of '4' for Energy Management reflecting the company's
operational flexibility due to its smaller scale and low basin
diversification, which may expose the company to future energy
transition risks, including limited capital markets access. This
factor has a negative impact on the standalone 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.
CORELOGIC INC: Moody's Cuts CFR to B3, Outlook Stable
-----------------------------------------------------
Moody's Investors Service downgraded CoreLogic, Inc.'s corporate
family rating to B3 from B2, probability of default rating to B3-PD
from B2-PD, senior secured 1st lien revolver, term loan and note
ratings to B2 from B1 and senior secured 2nd lien term loan rating
to Caa2 from Caa1. The outlook is stable.
RATINGS RATIONALE
"The rating action reflects expectation for a greater-than 20%
decline in revenue and profits in 2022 due to a precipitous
expected fall in mortgage refinancing activity versus 2021," said
Edmond DeForest, Moody's Senior Vice President. "In addition to
worsening expected financial results, pressure from about $500
million of debt added during late 2021 to fund several acquisitions
has led to expectations for very high financial leverage and
limited, although still positive, free cash flow over the next 12
to 18 months."
The downgrade of the CFR to B3 from B2 is driven by expectations
for debt to EBITDA to rise to well above 9.0 times in 2022 from
about 7.5 times as of December 31, 2021, while free cash flow will
decline to only about 2% of debt. The B3 CFR also reflects modest
EBITA to interest expected to be below 1.5 times in 2022. CoreLogic
added debt in late 2021 to fund several acquisitions which closed
after affiliates of Stone Point Capital LLC ("Stone Point") and
Insight Partners funded the acquisition of 100% of the common stock
of CoreLogic, Inc. (old) in a go-private transaction in June 2021,
leaving the company poorly positioned for the anticipated decline
in mortgage refinancing activity in 2022. Revenue is expected to
decline by 15% to 20%, while EBITDA margins will likely contract by
300 to 600 basis points since mortgage refinance activity generates
higher profits for CoreLogic than its other business lines.
All financial metrics cited reflect Moody's standard adjustments.
Rating support is provided by stable and predictable business lines
providing "must have" data and services to banks, insurance
companies and the residential real estate industry. A somewhat
narrow market focus leads to some customer concentration, but with
high quality financial institutions. Headwinds from unfavorable
mortgage market conditions and rising interest rates drive Moody's
anticipation of substantial free cash flow deterioration over the
next 12 to 18 months. Moody's expects that the company will no
longer remain a cash tax payer, mitigating the free cash flow
declines. Interest rate risk from an all-floating rate capital
structure will be mitigated in the near term by a hedging strategy
that has converted about half of the floating rate interest
obligations to fixed rates. CoreLogic's unique data and strong
market position within the mortgage settlement services market is
supported by long-standing relationships with many of the largest
financial institutions. Moody's considers revenue and cash flow
generally predictable.
The company maintained solid financial performance through the 2020
and 2008/2009 economic cycles and during the years between,
including years when mortgage originations declined or were weak.
As CoreLogic's financial results reflect mortgage industry
conditions, Moody's considers the company cyclical. Adverse market
conditions, including a more challenging housing market, regulatory
scrutiny, and rising interest rates, is expected to weigh on
operating results. These pressures will be mitigated somewhat by
growing demand for property intelligence and data analytics
solutions, increasing regulation and compliance requirements,
pricing increases and market share gains arising from the mortgage
lending/servicing industry trend towards outsourcing.
As a private company owned by financial sponsors, CoreLogic's
financial strategies are expected to remain aggressive and
opportunistic. The board of directors is controlled by Stone Point
and Insight Partners. Among CoreLogic's expected near term capital
allocation priorities are investing in the business, completing
product-focused acquisitions, financial leverage reduction and cash
returns to shareholders.
Moody's considers CoreLogic's liquidity profile as good. CoreLogic
is expected to maintain at least $200 million of cash to ease the
company's exposure to the housing industry cycle. Moody's also
projects free cash flow of more than $100 million in 2022. There
are $37.5 million of annual required amortization payments on the
senior secured 1st lien term loan, payable quarterly. CoreLogic's
undrawn $500 million revolver provides substantial external
liquidity. The revolver is subject to compliance with a maximum
8.65x First Lien Net Leverage ratio applicable only when 35% drawn
at quarter end. Moody's expects CoreLogic would maintain compliance
with its financial covenant if it were measured for at least the 12
to 15 months. There are no financial covenants applicable to the
term loans or notes.
The ratings assigned to the individual instruments are based on the
probability of default of the company, reflected in the B3-PD PDR,
as well as a family recovery of 50% of debt obligations assumed at
default.
The downgrade of the senior secured first lien credit facilities
and notes to B2 from B1 reflects the downgrade of the PDR to B3-PD
from B2-PD and a loss given default ("LGD") assessment of LGD3,
reflecting their senior most ranking within the capital structure
and first loss support provided by senior secured second lien term
loan and unsecured claims. These facilities are secured on a first
lien basis by substantially all assets and by the stock of the
company's material domestic subsidiaries, which hold the vast
majority of CoreLogic's assets. The credit facilities are further
supported by upstream guarantees from its material domestic
subsidiaries.
The downgrade of the senior secured second lien term loan to Caa2
from Caa1 reflects the downgrade of the PDR to B3-PD from B2-PD and
a LGD assessment of LGD6, reflecting its ranking within the capital
structure behind the senior secured first lien claims and first
loss support provided by the unsecured claims. The senior secured
second lien term loan is secured on a second lien basis by
substantially all assets and by the stock of the company's material
domestic subsidiaries, which hold the vast majority of CoreLogic's
assets, as well as by upstream guarantees from material domestic
subsidiaries.
The stable outlook reflects Moody's expectations for EBITDA margins
of over 25%, around $100 million of free cash flow and debt to
EBITDA above 9.0 times.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects 1) debt to EBITDA
to fall and remain under 7.0 times; 2) free cash flow above 3.0% of
total debt; 4) EBITA to interest above 1.75 times; 4) balanced
financial policies; and 5) good liquidity.
The ratings could be downgraded if 1) revenue visibility or EBITA
margins become pressured by increased competition, regulatory
changes, or other factors; 2) free cash flow to debt is anticipated
to be negligible or negative; 3) liquidity deteriorates; or 4)
CoreLogic pursues aggressive shareholder-friendly financial
policies, including debt-funded acquisitions or shareholder
returns.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
The following ratings/assessments are affected by the action:
Issuer: CoreLogic, Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured 1st Lien Bank Credit Facility, Downgraded to B2
(LGD3) from B1 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Downgraded to Caa2
(LGD6) from Caa1 (LGD6)
Senior Secured Regular Bond/Debenture, Downgraded to B2 (LGD3)
from B1 (LGD3)
Outlook, Is Stable
CoreLogic provides property and mortgage data and analytics, as
well as loan processing and other services. Moody's expects 2022
revenues of about $1.7 billion.
COVANTA HOLDING: Moody's Affirms Ba3 CFR & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service affirmed Covanta Holding Corporation's
Ba3 corporate family rating, Ba3-PD probability of default rating
and the Ba1 rating on its senior secured debt. Concurrently,
Moody's downgraded Covanta's senior unsecured debt rating to B2
from B1. Moody's also changed the outlook to negative from stable.
The change in outlook to negative reflects higher financial risk
associated with Covanta's exposure to volatile wholesale energy
prices and related hedging margin requirements, which pose
liquidity risks, also considering Covanta's modest readily
available cash on hand. Covanta also has high debt leverage above
7x, which limits its financial flexibility. A sharp increase in
power prices correlated with rising natural gas prices has
materially increased the company's margin requirements on its
hedged book and led Covanta to seek additional debt to shore up
liquidity. Accordingly, the company plans to increase its revolver
size to $600 million, from $440 million, of which $135 million was
available as of May 20, 2022.
Moody's understands the credit agreement allows for providing
lien-based security to hedge counterparties, which is among the
company's initiatives to alleviate collateral posting requirements
in cash and/or letters of credit. Moody's notes that converting
any hedge counterparties to a lien-based security would dilute the
security for the existing senior secured lender group, if Covanta
were unable to perform on its energy supply obligations.
The downgrade of the senior unsecured debt to B2, two notches below
the CFR, reflects the increase in the revolver size and Moody's
expectation of a shift in Covanta's go-forward capital structure
with the likelihood of an increase in senior secured debt. The B2
rating incorporates a one-notch downward override under Moody's
loss-given-default analysis.
The following rating actions were taken:
Affirmations:
Issuer: Covanta Holding Corporation
Probability of Default Rating, Affirmed Ba3-PD
Corporate Family Rating, Affirmed Ba3
Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD2)
Downgrades:
Issuer: Covanta Holding Corporation
Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD5)
from B1 (LGD5)
Issuer: National Finance Authority, NH
Senior Unsecured Revenue Bonds, Downgraded to B2 (LGD5) from B1
(LGD5)
Issuer: Niagara Area Development Corporation
Senior Unsecured Revenue Bonds, Downgraded to B2 (LGD5) from B1
(LGD5)
Issuer: Pennsylvania Economic Dev. Fin. Auth.
Senior Unsecured Revenue Bonds, Downgraded to B2 (LGD5) from B1
(LGD5)
Issuer: Virginia Small Business Financing Authority
Senior Unsecured Revenue Bonds, Downgraded to B2 (LGD5) from B1
(LGD5)
Withdrawals:
Issuer: Covanta Holding Corporation
Speculative Grade Liquidity Rating, Withdrawn , previously rated
SGL-2
Outlook Actions:
Issuer: Covanta Holding Corporation
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The affirmation of the Ba3 CFR reflects Covanta's high proportion
of stable waste volumes (about 70% revenue), underpinned by long
term contracts that provide a recurring revenue base, which helps
to offset the volatility from its commodity revenues (energy/power
and recycled metals). Favorable fundamentals and pricing in
Covanta's waste market should drive steady revenue growth, aided by
higher prices with improving demand in its power markets, and
support an improvement in credit metrics into 2023. As a result,
Moody's expects debt-to-EBITDA to fall towards a still high 6x over
the next year, based on expectations of debt reduction beyond
mandatory amortization and improving EBITDA.
Covanta's waste operations are supported by strategically located
infrastructure of waste-to-energy ("WtE") facilities and transfer
stations that make it well-positioned to benefit from growing
demand for its services amid rising landfill disposal costs. Cash
flow will rely on higher contract renewal pricing in the company's
US domestic waste market as well as improved commodity prices (both
energy and metals) in recent months. Covanta's near-term plan to
carve out its European power assets eliminates the prospect of
future cash flows from those assets. Moody's continues to view the
merchant power market as challenging, noting that energy and
recycled metals prices will remain volatile.
Moody's expects Covanta to maintain adequate liquidity over the
next 12-18 months, with modest unrestricted cash balances and
access to the upsized committed credit facility ($600 million)
offsetting weak cash flow in the near term. Free cash flow will be
constrained in the near term by cash collateral requirements for
out of the money hedge positions. The highly contracted waste
revenue, along with favorable pricing and stable plant operating
performance, should drive positive free cash flow (cash flow from
operations after dividends and capital expenditures) in 2023. The
company had $42 million of unrestricted cash at December 31, 2021,
with the majority held by international subsidiaries and not
readily available for near-term liquidity needs. The company is
subject to a springing first lien net leverage covenant, tested if
revolver borrowings exceed 35% of the facility size. Moody's
expects Covanta to remain in compliance.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded with weakening liquidity or if
Covanta's key credit metrics fail to improve from current levels,
including no clear progress of a steady decline in leverage towards
6x. A deterioration in the waste or power market dynamics,
resulting in a contraction in revenue or margins and/or higher cash
flow volatility could also lead to a downgrade. Meaningful debt
funded acquisitions or shareholder friendly initiatives that weaken
the metrics could also drive downwards rating pressure.
The ratings could be upgraded if Covanta mitigates financial,
market and operational risk such that its revenue and cash flow
increase meaningfully and become more consistent and predictable,
or if debt is materially reduced. Stronger metrics, including EBIT
margin sustained above 10% and debt-to-EBITDA expected to remain
below 4x, could also lead to an upgrade. The maintenance of good
liquidity would also be a prerequisite for an upgrade.
The principal methodology used in these ratings was Environmental
Services and Waste Management Companies published in April 2018.
Headquartered in Morristown, New Jersey, Covanta Holding
Corporation is one of the world's largest developers, owners and
operators of waste management infrastructure with 41
waste-to-energy (WtE) projects. Waste and services represented
approximately 70% of consolidated revenues as of December 31, 2021,
while electricity and steam represented 20% and the remainder came
from recycled metals and other businesses. Covanta's total revenue
approximated $2.1 billion as of the same period.
Covanta is a portfolio company of EQT Investors (EQT), a private
equity firm, which has approximately EUR71 billion of assets under
management in 2021.
CREATIVE CHOICE: Seeks to Hire Furr and Cohen as Legal Counsel
--------------------------------------------------------------
Creative Choice Homes XXX, LLC received interim approval from the
U.S. Bankruptcy Court for the Southern District of Florida to
employ Furr and Cohen, P.A. to serve as legal counsel in its
Chapter 11 case.
The firm's services include:
a. providing the Debtor with legal advice regarding its powers
and duties and the continued management of its business
operations;
b. advising the Debtor with respect to its responsibilities in
complying with the U.S. trustee's operating guidelines and
reporting requirements and with the rules of the court;
c. preparing legal documents;
d. protecting the interest of the Debtor in all matters
pending before the court; and
e. representing the Debtor in negotiations with creditors in
the preparation of a Chapter 11 plan.
The firm's hourly rates are as follows:
Attorneys $425 to $675
Paralegals $150
In addition, Furr and Cohen will seek reimbursement for
out-of-pocket expenses.
The firm received a retainer in the amount of $16,634.50.
Robert Furr, Esq., a partner at Furr and Cohen, 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:
Robert C. Furr, Esq.
Furr and Cohen, P.A.
2255 Glades Road, Suite 301E
Boca Raton, FL 33431
Tel: (561) 395-0500
Fax: (561) 338-7532
Email: agoldstein@furrcohen.com
About Choice Homes XXX
Creative Choice Homes XXX LLC, a Florida limited liability company
based in Palm Beach Gardens, was originally formed on Sept. 19,
2002, as a corporation and converted to a limited liability company
on May 11, 2012. It is the general partner of Creative Choice Homes
XXX, LTD., which is a limited partnership that operates a 132-unit
multifamily apartment complex intended for rental to persons with
low and moderate income. The apartment complex is located at 1301
Floating Fountain Circle, Tampa, Fla.
Creative Choice Homes XXX and affiliate, Creative Choice Homes
XXXI, LLC, sought Chapter 11 bankruptcy protection (Bankr. S.D.
Fla. Lead Case No. 22-13550) on May 4, 2022. In the petitions
filed by Yashpal Kakkar, authorized agent, the Debtors listed as
much as $10 million in both assets and liabilities.
Judge Erik P. Kimball oversees the cases.
Robert C. Furr, Esq., at Furr and Cohen, P.A., is the Debtors'
legal counsel.
DARR GROUP: Unsecureds to Get $675 Per Month for 60 Months
----------------------------------------------------------
Darr Group LLC filed with the U.S. Bankruptcy Court for the
District of New Jersey a Small Business Plan of Reorganization
dated May 23, 2022.
The Debtor operates a convenience store and gas station located on
South Salem Street in Randolph, New Jersey. The Debtor commenced
operating the business on January 1, 2018.
The Debtor experienced significant cash flow issues leading into
the COVID pandemic as cash flow crimped due to the overall
reduction in vehicle traffic. The Debtor was required to pay daily
withdrawals from the merchant cash advance lenders, which with
declining business was unsustainable. The merchant cash advance
lenders proceeded to obtain judgments and execute against accounts,
necessitating the filing of the case.
The Plan as three main divisions of creditors: priority tax and
secured tax claims that will be paid in full within 60 months of
the effective date of this Plan. The next division is secured
claims by certain merchant lenders. These, in order of the claims'
perfection, will be paid in decreasing order of priority with the
highest priority claimant receiving its full secured claim and the
other merchant lenders receiving decreasing amounts of their
claims.
The remainder of each secured claim will be treated as general
unsecured claims. The final claim set is general unsecured claims,
which will receive a pro rata share of $675 per month for 60
months.
Class 3 consists of General Unsecured Claims. The Debtor will pay
$675.00 per month in aggregate to all general unsecured creditors
pro rata with their percentage of the total unsecured claims body.
Class 4 consists of Equity Interest holders. The sole member shall
retain his interest in the Debtor.
On the effective date, the Debtor will commence making payments
from cash on hand and thereafter from regular cash flow. The
Debtor will make payment to all creditors, including administrative
creditors in the following order of priority.
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 Interests 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 must submit all or such portion of the future earnings
or other future income of the Debtor to the supervision and control
of the Trustee as is necessary for the execution of the Plan. It is
estimated that the Chapter 11 payments will aggregate $2502.35 per
month including all administrative, secured, priority and unsecured
class payments.
The Debtor's financial projections show that the Debtor will have
an aggregate annual average cash flow, after paying operating
expenses and post-confirmation taxes, of $30,000. The final Plan
payment is expected to be paid on July 30, 2027.
A full-text copy of the Plan of Reorganization dated May 23, 2022,
is available at https://bit.ly/3lPsLzZ from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Law Office of Scott J Goldstein LLC
Scott J Goldstein, Esq.
280 West Main Street
Denville, NJ 07834
Tel: (973) 453-2838
Fax: (973) 453-2869
About Darr Group
Darr Group, LLC, operates a gas station and convenience store at
260 South Salem Street, Randolph, New Jersey.
Darr Group filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 21-19640)
on Dec. 15, 2021.
Scott J. Goldstein, Esq., of the LAW OFFICES OF SCOTT J. GOLDSTEIN,
LLC, is the Debtor's Counsel.
DAYCO PRODUCTS: Moody's Lowers CFR to Caa2, Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded Dayco Products, LLC's
corporate family rating to Caa2 from B3, its probability of default
rating to Caa2-PD from B3-PD and the senior secured term loan
rating to Caa2 from B3. Concurrently, Moody's has withdrawn the B3
rating on Dayco's proposed $470 million term loan. The rating
outlook is negative.
The downgrade of the ratings and the negative outlook reflect
Moody's view that Dayco faces significant refinancing risk in
addressing the May 2023 maturities of its first lien term loan
facility and asset-based lending facility ("ABL"). This risk has
materially heightened following stalled progress in executing a
proposed two-year extension to the facilities, which the company
launched in April 2022. As a result, Moody's believes there is
increased risk that Dayco may pursue a financial restructuring or
distressed exchange.
Moody's believes ongoing capital markets volatility and an
increasingly difficult operating environment for automotive
suppliers in Europe, a region which contributes about half of
Dayco's sales, contributed to the company's inability to execute
its proposed refinancing.
Despite these challenges and uncertainties, Moody's believes
Dayco's operating performance in its fiscal year ending February
2023 will remain consistent with the prior year, including a
Moody's adjusted EBITA margin near 10%, debt/EBITDA below 6x and
modestly positive free cash flow.
Downgrades:
Issuer: Dayco Products, LLC
Corporate Family Rating, Downgraded to Caa2 from B3
Probability of Default Rating, Downgraded to Caa2-PD from B3-PD
Gtd Senior Secured 1st Lien Term Loan, Downgraded to Caa2 (LGD3)
from B3 (LGD3)
Withdrawals:
Issuer: Dayco Products, LLC
Gtd Senior Secured 1st Lien Term Loan, Withdrawn, previously rated
B3 (LGD3)
Outlook Actions:
Issuer: Dayco Products, LLC
Outlook, Changed To Negative From Positive
RATINGS RATIONALE
Dayco's ratings reflect the company's material refinancing risk in
adequately addressing its current May 2023 debt maturities. The
ratings also reflect the company's high financial leverage, modest
scale relative to global competitors in its end markets, and modest
free cash flow. Dayco maintains a good market position with a suite
of engine and drivetrain products, including belts, tensioners and
dampers, for top automotive manufacturers and aftermarket
retailers.
The company's aftermarket business, which historically represents
about 45% of total revenue, provides a stable demand base. New
product development and a refocus of customer relationships in the
aftermarket segment have resulted higher margins over the past
twelve months. Ongoing pricing initiatives and benefits from prior
facilities consolidations should support steady margins despite
higher material, freight and labor costs persisting.
The negative outlook reflects the significant risk Dayco faces in
refinancing its current capital structure, including the potential
the company may engage in a financial restructuring that could
result in a loss to existing creditors.
Moody's views Dayco's liquidity over the next twelve months to be
weak since the company's term loan (approximately $450 million
outstanding) and ABL (approximately $28 million outstanding) are
current and mature in May 2023. The company's current liquidity
sources of at least $70 million in cash (end of April 2022) and
modest free cash flow of about $10 million expected are
insufficient to service the debt absent a refinancing event.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Moody's believes the likelihood
that Dayco will engage in a financial restructuring increases and
recovery prospects for the senior secured term loan deteriorate
from current expectations.
The ratings could be upgraded if Dayco successfully refinances its
May 2023 debt maturities. Moody's would also require Dayco's
liquidity to be adequate following a successful refinancing in
order to upgrade the ratings.
The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.
Dayco Products, LLC, headquartered in Roseville, MI, is a global
manufacturer of engine technology solutions targeted at primary and
accessory drive systems for the worldwide aftermarket, automotive
OE and industrial end markets. Revenue for the last twelve months
ended February 28, 2022 was about $912 million. The company is
owned primarily by a consortium of Oaktree Capital, Anchorage
Capital Group, L.L.C. and TPG Capital.
DCP MIDSTREAM: Fitch Upgrades LongTerm IDRs From 'BB+'
------------------------------------------------------
Fitch Ratings has upgraded DCP Midstream, LP (DCP) and DCP
Midstream Operating, LP (DCP Operating)'s Long-Term Issuer Default
Rating (IDR) to 'BBB-' from 'BB+'. Fitch has also upgraded DCP
Operating's senior unsecured ratings to 'BBB-' from 'BB+'/'RR4',
and the junior subordinated notes have been upgraded to 'BB+' from
'BB-'/'RR6'. DCP's preferred equity ratings are also upgraded to
'BB' from 'BB-'/'RR6'. The Rating Outlook is Stable.
The upgrade and Stable Outlook reflect DCP's continued expected
outperformance spurred by tailwinds from the elevated commodity
price environment. The company remains focused on reducing leverage
(measured as total debt with equity credit to operating EBITDA)
which Fitch forecasts to range between 3.0x-3.3x in 2022 and 2023
before moderating to 3.6x-3.8x in the latter forecast years per the
Fitch commodity price deck. DCP has a diverse asset footprint and
customer base comprised of mostly investment grade customers.
Offsetting these factors are DCP's volumetric risk and higher
commodity price risk relative to midstream peers. Management
maintains a hedging program to partially mitigate exposure to
commodity price drops.
KEY RATING DRIVERS
Scale and Scope of Operations: DCP's ratings reflect the size and
scale, and diversity of its asset base. Also incorporated is its
position as a large producer of natural gas liquids (NGLs) and
processor of natural gas. The partnership has a robust operating
presence in most of the key production regions within the U.S.,
specifically within the DJ Basin and Permian Basin spanning both
the Midland and Delaware Basins. DCP has a diverse set of largely
investment-grade customers and producers with no material customer
concentration.
The size and breadth of DCP's operations allow it to offer its
customers end-to-end gathering, processing, storage and
transportation solutions, giving it a competitive advantage within
the regions where they have significant scale. Excess capacity on
several of DCP's systems provide opportunities for volume growth
with incremental optimization expenses in higher margin regions to
improve utilization.
Volumetric and Commodity Price Exposure: DCP's ratings reflect its
exposure to volumetric and commodity price risks associated with
the domestic production and demand for natural gas and NGLs.
Approximately 50% of DCP's gross margin is provided from the
logistics and marketing (L&M) segment, which generally provides
fee-based cash flows with exposure to volumetric-risk.
Gathering and processing (G&P, approximately 50% of gross margin)
contracts are largely backed by dedicated acreage and are a mix of
non-commodity sensitive fee-based contracts and commodity sensitive
percent-of-proceeds and percent-of-liquids contracts. DCP is
expected to further benefit from its unhedged commodity-price
exposure in 2H22, as higher commodity prices spur increasing
production and DCP completes additional well connects in the DJ
Basin and Permian Basin.
As of 1Q22 approximately 70% of gross margin is fee-based and DCP
has hedged 13% of the remaining margin. The company has taken
advantage of favorable pricing across associated hydrocarbons and
added hedges that reduce its sensitivity to a large drop in prices.
DCP's hedging program contributes to a steady cash flow profile but
also exposes it to longer-term hedge roll-over and commodity price
risks. The company is well hedged for each quarter in 2022.
Improving EBITDA Drives Leverage Decline: Fitch expects leverage to
decline to a range between 3.0x-3.3x in 2022 and 2023 driven by
improving G&P volumes in DCP's key DJ and Permian Basin. (Fitch's
leverage calculation gives 50% equity credit to the junior
subordinated notes and 0% equity credit to the preferred units.)
Producers are expected to ramp production over the next few
quarters given commodity prices levels. DCP is investing in
incremental bolt-on opportunities and optimizations to drive
continued future growth into 2023.
On the L&M side of the business DCP is benefitting from third-party
shippers shifting into ethane recovery and is expected to see
increased throughput in 2H22. As the Fitch price deck returns
closer to mid-cycle leverage in the outer forecast years, leverage
is expected to moderate to 3.6x-3.8x range.
Capital Allocation Strategy: Management has reached their targeted
leverage metric per their bank covenant calculation as of 1Q22 LTM
financials and is expected to continue to produce excess FCF
throughout Fitch's forecast period. Modest growth capex is expected
to continue to fund bolt-on opportunities in their G&P business in
the DJ and Permian basin footprints. Incremental optimization and
investment projects will be aimed at improving asset utilization
and added connectivity to Sand Hills and Southern Hills to better
serve customers. No large-scale M&A is assumed in Fitch's forecast,
and DCP has adequate FCF for a distribution increase in 2H22.
Supportive Ownership: Fitch rates DCP on a standalone basis, with
no explicit notching from its parent companies' ratings; however,
the ratings reflect that its owners have been and are likely to
remain supportive of its operating and credit profile. DCP's
ultimate owners of its general partner, Enbridge, Inc. (ENB;
BBB+/Stable) and Phillips 66 (PSX; not rated) have in the past
exhibited a willingness to forgo dividends. This support was most
recently demonstrated by the approval of the March 2020
distribution cut.
Parent Subsidiary Linkage: There is a parent subsidiary
relationship between DCP and DCP Operating. Fitch determines DCP's
standalone credit profile (SCP) based on consolidated metrics.
Fitch believes DCP Operating has a stronger SCP than DCP. As such,
Fitch has followed the stronger subsidiary path. Legal ring-fencing
is open as there are minimal limitations between the entities.
Access and control is evaluated as open given DCP's 100% ownership
of DCP operating and centralized treasury. Due to aforementioned
rating linkage considerations, Fitch rates DCP Operating on a
consolidated basis and, as such, has assigned the same IDRs to both
DCP and DCP Operating.
DERIVATION SUMMARY
DCP's ratings are reflective of its favorable size, scale,
geographic and business line diversity within the NGL production
and transportation and natural gas G&P space. The ratings recognize
that DCP has greater exposure to commodity prices than other
midstream peers, with approximately 70% of gross margin supported
by fixed-fee contracts. This commodity price exposure has been
partially mitigated in the near term through DCP's use of hedges
for its NGL, natural gas and crude oil price exposure, pushing the
percentage of gross margin, either fixed-fee or hedged, up to 83%
as of 1Q22. This helps DCP's cash flow stability, but exposes it to
longer-term hedge roll-over and commodity price risks.
DCP is slightly smaller in terms of EBITDA generation but more
geographically diversified than NGL focused midstream peer Targa
Resources Corp. (BBB-/Stable). DCP's assets span across several
U.S. regions in multiple basins with significant footprints in the
DJ Basin, Delaware and Midland Basins in the Permian, and
SCOOP/STACK in the Midcontinent region, with volume growth expected
to come from the DJ and Permian assets. Targa's operations are
focused in the Permian Basin. Targa's gross commodity price
exposure is similar to that of DCP as Targa's gross margin is
80%-85% supported by fixed-fee or fee-floor contracts and hedges.
Fitch expects DCP's leverage to be around 3.0x-3.3x through 2023.
Targa's leverage should decline below 3.5x following redemption of
the preferred shares. Both companies' leverage position them well
within the 'BBB-' rating category.
ONEOK Inc (BBB/Stable) is significantly larger in terms of size and
scale in comparison to DCP. ONEOK's NGL transportation network is
larger than that of DCP, with comparable basin diversification.
About 85%-95% of ONEOK's revenues are generated from fee-based
contracts, the majority of which are subject to volume risk. DCP
earns less than half the EBITDA than ONEOK. DCP's leverage is
comparable to that of ONEOK. ONEOK's leverage which is expected to
decline below the company's 4.0x target. ONEOK's limited commodity
exposure and larger size and scale account for the one-notch rating
difference.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Fitch's Rating Case for the Issuer:
-- Base case WTI oil price deck $95/bbl in 2022, $76/bbl in 2023,
$57/bbl in 2024, and $50/bbl in 2025 and beyond; and Henry Hub
natural gas price of $4.25/mcf in 2022, $3.25/mcf in 2023,
$2.75/mcf in 2024, and $2.50/mcf in 2025 and long term. Fitch
expects ethane to be influenced from the natural gas price
deck and the other NGL hydrocarbon movements to be influenced
from Fitch's WTI oil price deck;
-- Growth and sustainable capex in line with management's
guidance;
-- Distribution increase expected in 2H22;
-- No significant acquisitions are included in the forecast;
-- Upcoming debt maturities to be repaid with FCF.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A demonstrated ability to maintain the percentage of fixed-fee
or hedged gross margin at or above 80% while maintaining
leverage (total debt with equity credit/operating EBITDA)
below 3.5x for a sustained period could lead to a positive
rating action;
-- Meaningful increase in scale.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Leverage expected above 4.5x on a sustained basis and may
result in at least a one-notch downgrade;
-- A significant decline in fixed-fee or hedged commodity leading
to gross margin less than 70% fixed fee or hedged without an
appropriate significant adjustment in capital structure,
specifically a reduction in leverage, would likely lead to at
least a one-notch downgrade;
-- A significant change in the ownership support structure from
GP owners ENB and PSX to the consolidated entity particularly
with regard to the GP position on commodity price exposure,
distribution policies and capital structure at DCP, the
operating partnership.
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: As of March 31, 2022, DCP had approximately
$1.2 billion of available liquidity. DCP's liquidity consists of
the undrawn portion of their $1.4 billion senior unsecured
revolving credit facility. There were $172 million of outstanding
borrowings and $17 million letters of credit. DCP's $350 million
accounts receivables securitization facility was fully drawn, and
there was $1 million of cash on the balance sheet.
Maturities are manageable. The nearest maturity is the $500 million
senior unsecured notes due in March 2023, followed by the $350
million accounts receivable facility is set to mature in 2024. The
revolver was recently amended to extend the maturity to 2027. As of
March 31, 2022, DCP was in compliance with all covenants.
ISSUER PROFILE
DCP is a midstream energy company that is a large producer and
marketer of NGLs, and processor of natural gas with operations in
the U.S. The G&P assets span several regions with significant
footprints in the DJ Basin, Delaware and Midland Basins in the
Permian. DCP's general partner is owned 50% by Phillips 66 and 50%
by ENB.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch applies 50% equity credit to DCP's junior subordinated notes
and 0% equity credit to DCP's existing preferred equity in Fitch's
forecasts. Previously 50% equity credit was given to DCP's
preferred units but due to lack of established permanence they now
receive 0%. Fitch typically adjusts master limited partnership
EBITDA to exclude equity interest in earnings from unconsolidated
affiliates but includes cash distributions from unconsolidated
affiliates.
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.
DENTAL LAND: Seeks to Hire Winstead Tax Group as Tax Attorney
-------------------------------------------------------------
Dental Land Pediatrics, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Maryland to employ Winstead Tax Group,
LLC as its tax attorney.
The Debtor requires the assistance of a tax attorney to prepare its
federal and state tax returns for 2019 to 2021.
The firm will charge its standard rate of $300 per hour.
As disclosed in court filings, Winstead does not have interest
adverse to the estate in the Debtor's Chapter 11 proceeding.
The firm can be reached through:
Beverly Winstead, Esq.
Winstead Tax Group, LLC
8101 Sandy Spring Rd, Ste 290
Laurel, MD 20707
Phone: (443) 702-7432
About Dental Land Pediatrics
Dental Land Pediatrics, LLC, a pediatric dental clinic in Bowie,
Md., filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Md. Case No. 22-12169) on April 24,
2022, listing up to $50,000 in assets and up to $1 million in
liabilities. Michael Wolff serves as Subchapter V trustee.
Judge Lori S. Simpson oversees the case.
Frank Morris, II, Esq., at the Law Office of Frank Morris II, is
the Debtor's legal counsel.
DIEBOLD NIXDORF: Creditors Hire Advisers Amid Payment Deadlines
---------------------------------------------------------------
Eliza Ronalds-Hannon of Bloomberg News reports that Diebold
Nixdorf's creditors are organizing and hiring advisers as they
prepare for debt talks with the money-losing ATM maker.
Diebold, which staved off a cash crunch in 2018, is in trouble once
again as it faces a wall of debt coming due as its costs surge amid
supply-chain challenges, pandemic shutdowns in China and the war in
Ukraine. The company's bond prices have plummeted.
A group of creditors hired investment-bank PJT Partners to advise
it. The group, whose members own secured term loans and secured
notes, has also been working with Gibson Dunn & Crutcher, said the
people familiar with the matter.
About Diebold Nixdorf
Headquartered in North Canton, Ohio, Diebold Nixdorf, Incorporated
provides automatic teller machines, financial, and point of sale
(POS) services.
DIOCESE OF CAMDEN: Verified Statement for Fasy Law Claimants Filed
------------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Politan Law, LLC, Fasy Law, PLLC, Tamaki Law
Offices and Law Office of Joseph A. Blumel, III submitted a
verified statement to disclose that they are representing the Fasy
Law Claimants in the Chapter 11 cases of The Diocese of Camden, New
Jersey.
Each of the clients set forth on Exhibit A hereto has retained Fasy
Law, PLLC; Tamaki Law; and the Law Offices of Joseph A. Blumel to
represent him as litigation counsel in connection with, among other
things, abuse claims against the Debtor and other third-party
defendants.
Due to confidentiality, each of the Fasy Law Claimants listed in
Exhibit A has been identified by their Sexual Abuse Proof of Claim
Form number assigned by the Clerk of Court. Exhibit A points only
to two claimants, identified as claimants with Claim Nos. 168 and
169.
Annexed hereto as Exhibit B are exemplars of the engagement letter
used by the Law Firms to engage the Fasy Law Claimants.
The Law Firms contacted Mark J. Politan of Politan Law, LLC
regarding representation as bankruptcy counsel in connection with
the Chapter 11 cases on or about May 11, 2022. On behalf of the
Fasy Law Claimants, Fasy Law, PLLC executed an hourly-rate
engagement agreement with Politan Law, LLC dated and effective as
of May 17, 2022. A true and correct copy of the engagement
agreement between Fasy Law, PLLC and Politan Law, LLC is attached
hereto as Exhibit C.
Counsel to Fasy Law Claimants can be reached at:
POLITAN LAW, LLC
Mark J. Politan, Esq.
88 East Main Street #502
Mendham, NJ 07604
Telephone: (973) 768-6072
E-mail: mpolitan@politanlaw.com
FASY LAW, PLLC
Dan Fasy, Esq.
1752 NW Market St #1502
Seattle, WA 98107
Telephone: (206) 450-0175
E-mail: dan@fasylaw.com
TAMAKI LAW OFFICES
Bryan G. Smith, Esq.
1340 N 16th Ave., Ste C
Yakima, WA 98902
Telephone: (509) 248-8338
E-mail: bsmith@tamakilaw.com
LAW OFFICE OF JOSEPH A. BLUMEL, III
Joseph Blumel, III, Esq.
4407 N Division St. Ste 900
Spokane, WA 99207
Telephone: (509) 487-1651
E-mail: Joseph@blumellaw.com
A copy of the Rule 2019 filing is available at
https://bit.ly/3auqebY at no extra charge.
About The Diocese of Camden, NJ
The Diocese of Camden, New Jersey is a nonprofit religious
corporation organized pursuant to Title 16 of the Revised Statutes
of New Jersey. The Diocese is the secular legal embodiment of the
Roman Catholic Diocese of Camden, a juridic person recognized under
Canon Law.
The Diocese of Camden sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 20-21257) on Oct. 1, 2020.
The petition was signed by Reverend Robert E. Hughes, vicar General
and vice president. At the time of the filing, the Debtor had
total assets of $53,575,365 and liabilities of $25,727,209. Judge
Jerrold N. Poslusny Jr. oversees the case. McManimon, Scotland &
Baumann, LLC, is the Debtor's legal counsel.
DIVISION MANAGEMENT: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------------
Division Management, LLC, asks the U.S. Bankruptcy Court for the
Northern District of Alabama, Northern Division, for authority to
use cash collateral in accordance with the proposed budget and
provide adequate protection.
The Debtor has an immediate need for authority to use the Cash
Collateral in its ongoing business operations. The Debtor requests
that the Court grant the Motion on an Emergency Basis for a period
of not more than 30 days, during which Debtor requests that the
Court schedule a final hearing on the Debtor's Motion for Use of
Cash Collateral.
Pre-petition, the Debtor entered into a credit transaction with the
United States Small Business Administration. The SBA has filed a
UCC-1 financing statement with the Alabama Secretary of State,
thereby perfecting its lien on certain collateral including the
Debtor's accounts and account receivables.
The Debtor seeks authorization, after notice and hearing, to use
the cash collateral pursuant to these terms and conditions:
a. The Debtor will strictly account for all income received
and used by it. All such income will be deposited into the
Debtor-in-Possession bank account. The Debtor may use cash
collateral only to satisfy (i) those expenses reasonable and
necessary to the operation and maintenance of Debtor's business as
shown on the Budget; (ii) the Statutory Fees); and (iii) the
allowed fees and expenses payable under sections 330 and 331 of the
Bankruptcy Code to any professional persons retained by an order of
the Court.
b. As additional adequate protection for the use of the cash
collateral derived from the Debtor's accounts receivable and
proceeds thereof, the SBA is granted, as of the Petition Date, the
following liens, with the same priority as pre-petition, and
without prejudice to its right to assert in the future that its
interest in the cash collateral is not adequately protected or to
seek any other relief in the Bankruptcy Case:
i. Replacement Liens. A perfected security interest under
section 361(2), in all future accounts and accounts receivable of
the Debtor (both pre-petition and postpetition) and proceeds
thereof to the extent and with the same priority that the SBA held
in the Debtor's pre-petition accounts receivable, subject and
subordinate only to the Carveout.
ii. Deemed Perfected. The Replacement Liens granted are in
addition to the liens and security interests existing in favor of
the SBA on the Petition Date and are automatically deemed perfected
as of the Petition Date without the necessity of the execution,
filing or recordation of any financing statements, security
agreements or any other filings with any filing office.
iii. Carveout means (i) the unpaid fees of the Clerk of the
Bankruptcy Court and the Office of the United States Bankruptcy
Administrator pursuant to 28 U.S.C. section 1930(a) and (b) and
(ii) the aggregate allowed unpaid fees and expenses payable under
sections 330 and 331of the Bankruptcy Code to any professional
persons retained by an order of the Court.
A copy of the motion is available at https://bit.ly/3PM63qc from
PacerMonitor.com.
About Division Management, LLC
Division Management, LLC is engaged in commercial and industrial
machinery and equipment rental and leasing business.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ala. Case No. 22-80896) on May 26,
2022. In the petition signed by Eugene R. Sak, manager, the Debtor
disclosed $1,005,874 in assets and $463,781 in liabilities.
Judge Clifton R. Jessup Jr. oversees the case.
Kevin D. Heard, Esq., at Heard, Ary & Dauro, LLC is the Debtor's
counsel.
DLVAM1302: Wins Interim Cash Collateral Access
----------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized DLVAM1302 North Shore, LLC to use the cash
collateral of HMC Assets, LLC on an interim basis, retroactive to
November 1, 2021.
The Debtor is permitted to use cash collateral to pay amounts
expressly authorized by the Court, including payments to the United
States Trustee for quarterly fees; the current and necessary
expenses set forth in the budget plus an amount not to exceed 10%
for each line item, and additional amounts as may be expressly
approved in writing by the Secured Creditors.
As adequate protection, the Secured Creditor will have perfected
post-petition liens against cash collateral to the same extent and
with the same validity and priority as the prepetition liens,
without the need to file or execute any document as may otherwise
be required under applicable non-bankruptcy law.
The Debtor will also maintain insurance coverage for its property
in accordance with the obligations under the loan and security
documents with the Secured Creditors.
The continued hearing on the matter is scheduled for July 14, 2022
at 1:30 a.m.
A copy of the order is available at https://bit.ly/3amvE8R from
PacerMonitor.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.
Judge Catherine Peek McEwen oversees the case.
The Debtor tapped Buddy D. Ford, P.A. as legal counsel.
EISNER ADVISORY: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Eisner Advisory Group, LLC's (Eisner)
Issuer Default Rating (IDR) at 'B'. In addition, Fitch has affirmed
the company's revolver at 'BB'/'RR1' and term loans at 'B+'/'RR3',
including its newly announced incremental debt. The Rating Outlook
is Stable.
Eisner has several acquisitions planned in the coming months and is
raising an additional $75 million, which will be used to fund the
transactions and pay down the revolver, resulting in total debt of
$514 million. In July of 2021, a majority interest in Eisner was
acquired by a group of investors formed by TowerBrook Capital
Partners L.P. (TowerBrook). In connection with the transaction the
firm raised $480 million in new debt to fund the purchase and
provide liquidity. At that time the financing package included a
$40 million super priority revolver, a $400 million term loan B,
and a $40 million DDTL.
Towerbrook has indicated it intends to roll up smaller regional
firms and build scale. Since the LBO Eisner has completed five
acquisitions with several in the pipeline. Eisner's leverage
without the benefit of the newly acquired firms would be above
6.0x, but pro forma leverage will be slightly below 5.0x.
KEY RATING DRIVERS
Middle Market Positioning: Eisner ranks in the top 30 public
accounting firms according to industry estimates. It enjoys a
strong position in the fragmented mid-tier accounting market,
leveraging its widely known brand name while avoiding competition
from the big four accounting firms.
Mid-Single Digit Leverage: Fitch expects leverage to remain
elevated over the rating horizon in the mid-single digits. Although
Towerbrook has not indicated a clear financial policy, Fitch
believes the company will likely continue to pursue acquisitions in
the foreseeable future. With leverage in the mid-single digits
Fitch believes the company is limited to the 'B' rating category.
Highly Recurring Revenue Model: Eisner's credit profile benefits
from highly recurring revenue streams driven by strong customer
retention. For the last 12 months ended Jan. 31, 2021 the company
had a revenue retention rate of 90% and an average client tenure of
approximately nine years. Client retention is aided by cross
selling clients on multiple business lines, leading to deeper
customer relationships.
Diversified Business Lines and Client Base: Eisner services over
18,000 customers with the top 10 customers making up less than 10%
of overall revenues. Additionally, the company has multiple
business lines across audit, tax, and advisory services. The
largest sector, financial services, constitutes 36% of total
revenues with other clients spread across diverse end markets.
Inelastic Demand for Audit Services: Audit and tax services are
legally mandated, and there are no alternatives that can legally
serve as substitutes. Material disruption resulting from
cyclicality is unlikely, given the essential role of audited
financials and tax filings. Fitch believes the demand for advisory
services is more volatile than the demand for the tax and audit
services, but this is somewhat mitigated by the Advisory and
Private Business Services segments making up less than 30% of
overall company revenues.
DERIVATION SUMMARY
Fitch believes the mid-single digit leverage at Eisner coupled with
middle market position limits the rating to the 'B' category. These
factors are partially offset by a high proportion of recurring
revenue and strong positioning in the middle market. The company
should generate significant free cash flow over the rating horizon,
but Fitch expects the cash to be allocated to acquisitions in line
with Towerbrook's roll-up strategy.
KEY ASSUMPTIONS
-- Organic revenue growth in the mid-single digits over the
rating horizon;
-- Current EBITDA margin in the mid-teens stable or expanding
slightly over the rating horizon;
-- No additional debt issuances;
-- No material returns to shareholders.
KEY RECOVERY RATING ASSUMPTIONS
Fitch's recovery analysis assumes the company will be reorganized
as a going concern in the event of the bankruptcy rather than
liquidated. The going-concern analysis assumes a decline in EBITDA
to reflect the stress that provoked the bankruptcy as well as an
amount of corrective action taken before emergence from bankruptcy.
The going-concern analysis contemplates a scenario in which a
high-profile audit mistake drives business away from the company
resulting in revenue declines of 25 to 30% below LTM April 2022
levels, at constant margins. Fitch's estimate of going concern
EBITDA includes a decline from LTM EBITDA to reflect the stress
that provoked a default as well as an increase to reflect
corrective action taken in bankruptcy.
The recovery multiple of 6.0 reflects several factors, including
the following:
Private Equity Purchase Multiple: Fitch believes that in the event
of a bankruptcy the company would experience some kind of discount
to the LBO multiple due to the stress that provoked the default.
Peer Multiples: The 6.0x multiple reflects the stable recurring
revenue nature of the accounting business as well as Eisner's
favorable positioning in the fragmented market for mid-tier
accounting services while also recognizing the low growth nature of
the accounting industry.
The company's debt balance at the time of default is estimated to
be $554 million. Fitch assumes a full draw on the company's $40
million revolver. Using a 6.0x emergence multiple and $72 million
in going-concern EBITDA (30% below pro forma) results in $432
million less administrative claims of $43 million, leaving $389
million available for recovery. Applying this amount to the
super-priority revolver leads to a recovery of 'RR1' with the
remainder being applied to the $514 million in senior secured term
loans for a recovery of 'RR3'. Applying standard notching criteria
to the recommended IDR of 'B' leads to ratings of 'BB'/'RR1' on the
super priority revolver and 'B+'/'RR3' on the company's senior
secured term loans.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch's expectation of leverage, as measured by Gross Total
Debt with Equity Credit/Operating EBITDA maintained below
5.0x;
-- Fitch's expectation of EBITDA margins maintained in the mid-
teens on a sustained basis.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch's expectation of leverage, as measured by Gross Total
Debt with Equity Credit/Operating EBITDA maintained above
6.0x;
-- Fitch's expectation of EBITDA margins falling into the low
teens or single digits on a sustained basis;
-- Interest coverage sustained below 2.0x;
-- Failure to deliver audited financials in a timely manner.
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
Moderate Debt Balance: After issuing incremental debt of $75
million and paying down the revolver, Eisner's facilities will
include a super-senior revolver of $40 million (undrawn) and a
senior secured term loan facility of $514 million maturing in 2028.
Interest is being converted from a LIBOR basis to SOFR +475.
Eisner's advisors estimate pro forma leverage as of January 2022
will be 5.0x.
Adequate Liquidity: Fitch projects that Eisner will generate
adequate free cash flow over the rating horizon, with the potential
of achieving more than $100 million of cash on the balance sheet in
the next two to three years. Eisner will also have full
availability of its $40 million revolver. However, Fitch expects
Towerbrook to continue its roll-up strategy, using available cash
for additional acquisitions.
ISSUER PROFILE
Eisner is a middle-market U.S. professional services firm with a
national platform and global presence. It has a full suite of
accounting, tax and advisory services with over 18,000 clients
across multiple industries.
ESG CONSIDERATIONS
Eisner Advisory Group LLC has an ESG Relevance Score of '4' for
Group Structure due to complexities in the post transaction group
structure of the firm, which has a negative impact on the credit
profile, and is relevant to the rating in conjunction with other
factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
EMERALD HOLLOW MINE: Seeks Chapter 11 Bankruptcy
------------------------------------------------
Emerald Hollow Mine LLC filed for chapter 11 protection in the
Western District of North Carolina.
According to court documents, Emerald Hollow Mine estimates between
1 and 49 unsecured creditors. The petition states that funds will
be available to unsecured creditors.
About Emerald Hollow Mine
Emerald Hollow Mine, LLC operates an Emerald Mine that is open to
the public for prospecting.
Emerald Hollow Mine LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D.N.C. Case No. 22-50116) on May 16,
2022. In the petition filed by Jason Martin, member manager, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Laura T. Beyer oversees the case.
John C. Woodman, Esq., at Essex Richards, PA, is the Debtor's
counsel.
EYP GROUP: Wins Final OK on $5MM DIP Loan from Ault Alliance
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
EYP Group Holdings, Inc. and its debtor-affiliates to use cash
collateral on a final basis and obtain postpetition financing.
The Debtor is permitted to obtain postpetition financing in an
aggregate principal amount of up to $5,000,000 from Ault Alliance,
Inc., a portion of which became available to the Debtors pursuant
to the terms and conditions set forth in the Interim Order.
All draws under the DIP Facility will be either in the amount of
$500,000 or in multiples of $500,000; provided, however, that the
Debtors will not make more than three Draws following entry of the
Final Order.
The Debtors have a continuing and critical need to obtain DIP
financing and continue using the Prepetition Collateral, including
cash collateral, to, among other things, (a) pay the fees, costs,
and expenses incurred in connection with the Chapter 11 Cases, (b)
fund any obligations benefitting from the Carve-Out, (c) permit the
orderly continuation of the operation of their businesses, (d)
maintain business relationships with customers, vendors, and
suppliers, (e) make payroll, and (f) satisfy other working capital
and operational needs.
Prior to the Petition Date, the Debtors, the lenders from time to
time party thereto, and KeyBank National Association, as the
original administrative agent for the Prepetition Lenders, entered
into a Credit Agreement dated as of June 28, 2016; a Security and
Pledge Agreement dated as of June 28, 2016 by and among the Debtors
and the Original Prepetition Agent; Promissory Notes each dated
June 28, 2016 in the original aggregate principal amount of
$62,000,000, payable to the order of the Original Petition Lenders,
the other Collateral Documents, the other Loan Documents, and all
other agreements, documents, and instruments executed and/or
delivered with, to or in favor of the Prepetition Secured Party
evidencing or securing the Prepetition Secured Obligations. As of
the Petition Date, $6,536,441 in principal amount of loans was
outstanding.
In exchange for their consent to (i) the priming of the Prepetition
Liens by the DIP Liens, and (ii) the use of cash collateral to the
extent set forth in the Interim Order, the Prepetition Secured
Party will receive, inter alia, adequate protection to the extent
of any Diminution of their interests in the Prepetition Collateral,
subject to the Carve-Out, as more fully set forth in the Interim
Order.
The Carve-Out consists of the sum of (i) all fees required to be
paid to the Clerk of the Court and to the United States Trustee
under 28 U.S.C. section 1930(a), together with any interest thereon
pursuant to 31 U.S.C. section 3717; (ii) Court-allowed fees and
expenses of a trustee appointed under section 726(b) of the
Bankruptcy Code in an amount not to exceed $25,000, (iii) all
budgeted and accrued but unpaid professional fees and expenses of
attorneys and financial advisors employed by the Debtors and the
Committee, and (iv) Professional Fees and Expenses of (a) the
Debtors in an amount not to exceed $150,000, and (b) the Committee,
if any, an amount not to exceed $25,000, in each case incurred
following the delivery of a Termination Declaration. Proceeds from
the DIP Facility and/or cash collateral in an amount not to exceed
$25,000 in the aggregate may be used to pay the Professional Fees
and Expenses incurred by the Committee, if any, in connection with
the investigation of any other claims or causes of action on
account of the Prepetition Loan Documents.
As a condition to the DIP Facility and the use of cash collateral,
the Debtors have agreed to these milestones:
a. On or before May 11, 2022, an order approving bidding
procedures and the terms of an auction, on terms and in a form
acceptable to DIP Lender, will have been entered by the Court;
b. On or before June 8, 2022, an auction of the Debtors'
assets will have occurred;
c. On or before June 22, 2022, an order approving the
Bankruptcy Sale to the stalking horse bidder or winner of the
auction, as applicable, will have been entered by the Court; and
d. On or before June 30, 2022, or such later date as the DIP
Lender will agree in writing, the Bankruptcy Sale will have been
consummated.
A copy of the order is available at https://bit.ly/3lMNbcI from
PacerMonitor.com.
About EYP Group Holdings
EYP Group Holdings is an integrated design firm specializing in
higher education, healthcare, government and science & technology.
EYP Group Holdings and affiliates sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 22-10367) on April 24,
2022. In the petition filed by Kefalari Mason, as authorized
officer, EYP Group Holdings listed estimated assets between $50
million to $100 million and estimated liabilities between $100
million to $500 million.
The case is assigned to Honorable Bankruptcy Judge Mary F.
Walrath.
The Debtor's counsels are Richard A. Chesley, Esq., Oksana Koltko
Rosaluk, Esq. and R. Craig Martin, Esq. and Aaron S. Applebaum,
Esq., at DLA Piper LLP (US). Hollingsworth LLP is the Debtor's is
the Debtor's special counsel. Carl Marks Advisory Group LLC is its
investment banker, Berkley Research Group, LLC is the financial
advisor, and Berkley Research Group, LLC is the claims agent.
Ault Alliance, Inc., the DIP Lender, is represented by Mintz Levin
Cohn Ferris Glovsky and Popeo, P.C. and Morris Nichols Arsht &
Tunnell LLP.
FAMILY FRIENDLY: Wins Cash Collateral Access Thru July 31
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland authorized
Family Friendly Contracting, LLC to use the cash collateral of Live
Oak Banking Company to pay for operating expenses in the ordinary
course of the Debtor's business for the period from June 1 through
July 31, 2022.
The Debtor is permitted to use cash collateral for the maintenance
and preservation of its assets and the operation of its businesses
by payment of its actual and necessary expenses including, but not
limited to, ordinary and necessary overhead expenses, taxes,
insurance, utilities, payroll, and other routine and necessary
vendors and other expenses as set forth in the Budget.
The Debtor's right to use cash collateral will terminate
automatically upon the first to occur of (i) an Event of Default,
unless waived in writing by Live Oak in its sole discretion; (ii)
the effective date of the Debtor's plan of reorganization; and
(iii) the Debtor's failure to pay the remaining Vehicle Proceeds to
Live Oak on or before June 1, 2022 pursuant to section 5(d) of the
Sixth Interim Order.
The Debtor owed Live Oak under prepetition loan agreements in
original principal amounts of $5,000,000; $500,000 and $250,000.
As adequate protection, Live Oak is granted valid, binding,
continuing, enforceable, fully perfected replacement liens with the
same validity, extent, and priority on the same assets on which it
held prepetition liens and all products and proceeds thereof to the
extent of any Diminution in Value. The Debtor and the Debtor's
estate reserve all its rights and defenses concerning the validity,
extent and priority of any of the alleged liens of Live Oak. In the
event Live Oak's alleged lien on cash collateral is determined to
be invalid, then the adequate protection provided to Live Oak will
be null and void.
To the extent not already granted in the Loan Documents, Live Oak
was previously granted a valid, binding, continuing, enforceable,
fully-perfected, first-priority security interest in and liens on
the proceeds from the sale of all automobiles owned by the Debtor
(the Vehicles) not subject to an existing properly-perfected
prepetition security interest, and second-priority liens on the
proceeds from the sale of any Vehicles which are subject to an
existing properly perfected prepetition security interest (a Prior
Vehicle Lien), to the extent of any Diminution In Value.
The Fourth Interim Order and Fifth Interim Order provided that the
net proceeds from the sale of the Vehicles in the amount of $37,006
were to be paid to Live Oak and applied to the Loans as a principal
curtailment. About $9,252 of the Vehicle Proceeds remain to be
paid to Live Oak. The Debtor will pay the remaining Vehicle
Proceeds to Live Oak such that the proceeds will be actually
received by Live Oak on or before June 1, 2022. The Debtor's
payment of the remaining proceeds to Live Oak satisfies any first
and second priority security interest in and liens on the Vehicles
and/or their proceeds otherwise held by Live Oak under any loan
documents and/or court order(s). For the avoidance of doubt,
nothing will affect Live Oak's security interest in and liens on
the remaining Collateral.
Live Oak agrees to first look to the proceeds of the Vehicle sales
to satisfy any claim for diminution of value of the collateral. In
the event the liens and other rights in the proceeds of the sale of
the Vehicles granted to Live Oak as adequate protection are not
adequate to satisfy Live Oak's claim for Diminution of Value, the
Debtor consents to Live Oak being granted -- and Live Oak will
have, subject to further notice and application to the Court -- an
allowed superpriority claim pursuant to Section 507(b) of the
Bankruptcy Code to the extent of any diminution in value of its
collateral.
The final hearing on the matter is scheduled for July 20 at 2 p.m.
A copy of the order and the Debtor's budget June to July 2022 is
available for free at https://bit.ly/3Gs7cP7 from
PacerMonitor.com.
The Debtor projects $10,000 in accounts receivable and $5,016 in
approximate expenses for the period.
About Family Friendly Contracting LLC
Family Friendly Contracting LLC is a local home improvement,
restoration and contract management company that provides reliable
services to homeowners and commercial properties in Maryland, D.C.
and West Virginia. Its commercial and residential services include
fire and smoke restoration, water and flood damage restoration,
storm and wind damage restoration, remodeling, additions, basement
finishing, and service support for property management companies.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 21-14213) on June 27, 2021.
In the petition signed by Adam Borcz, chief financial officer, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Thomas J. Catliota oversees the case.
Paul Sweeney, Esq., at Yumkas, Vidmar, Sweeney & Mulrenin, LLC is
the Debtor's counsel.
FILIPINO FLASH: Seeks Cash Collateral Access
--------------------------------------------
FilipinoFlash, LLC asks the U.S. Bankruptcy Court for the District
of Nevada for authority to use cash collateral on an interim and
continuing basis in accordance with the budget and provide adequate
protection.
The Debtor seeks leave to utilize the revenue generated by its
investment properties to maintain the properties, management,
provide services to tenants, for payment of maintenance expenses,
real estate taxes, insurance premiums, utilities incurred by the
investment properties, and for no other purposes. The balance of
revenue collected will be segregated and not used for other
purposes.
The Debtor notes that Allrise Financial Group asserts an interest
in the Debtor's cash collateral. In its petition, the Debtor noted
that Allrise has a $2,150,000 unsecured claim, which the Debtor
disputes.
The Debtor's anticipated revenue and expenses for its properties
over the next six months are expected to be more than sufficient to
pay for the maintenance expenses, tenant services, real estate
taxes, insurance premiums, and utilities incurred by the
properties.
The Debtor disputes that any secured creditor has cash collateral
rights, as the only scheduled secured claim is disputed. In
addition, the Debtor does not know that a secured creditor's
alleged claim includes a provision for cash collateral rights.
The Debtor submits that the use of the cash collateral solely for
the maintenance of the properties, tenant services, utilities,
insurance premiums, real estate taxes, and/or fees is in the best
interest of the Secured Creditor, the residents of the investment
properties, and the Debtor's estate.
A copy of the motion is available at https://bit.ly/38K4Pep from
PacerMonitor.com.
About FilipinoFlash LLC
Las Vegas-based FilipinoFlash, LLC filed a petition under Chapter
11, Subchapter V of the Bankruptcy Code (Bankr. D. Nev. Case No.
22-11201) on April 5, 2022, listing up to $50,000 in assets and up
to $10 million in liabilities. Brian Shapiro serves as Subchapter V
trustee.
Judge Mike K. Nakagawa oversees the case.
The Law Office of Seth D. Ballstaedt is the Debtor's bankruptcy
counsel.
Brian Shapiro in Las Vegas has been appointed as Subchapter V
trustee.
FLOOR-TEX COMMERCIAL: Seeks to Hire L&Y Tax Advisors as Accountant
------------------------------------------------------------------
Floor-Tex Commercial Flooring, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire L&Y Tax
Advisors, LLC to provide accounting and financial services.
The hourly fee for Rick Yancy, CPA, tax preparer at L&Y Tax
Advisor, is $350. Associates are billed at $175 to $250 per hour.
As disclosed in court filings, L&Y Tax Advisor is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Rick Yancy
L&Y Tax Advisors LLC
25910 Oak Ridge Dr
Spring, TX 77380
Phone: 281-288-0909
Email: ryancy@yancycpa.com
About Floor-Tex Commercial Flooring
Floor-Tex Commercial Flooring, LLC is a Conroe, Texas-based company
that specializes in residential and commercial flooring
contracting.
Floor-Tex sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Texas Case No. 21-33751) on Nov. 19, 2021, listing as
much as $10 million in both assets and liabilities. Doris
Springer, chief executive officer, signed the petition.
Judge Eduardo V. Rodriguez oversees the case.
Reese Baker, Esq., at Baker and Associates and L&Y Tax Advisors,
LLC serve as the Debtor's legal counsel and accountant,
respectively.
FOGO DE CHAO: Moody's Alters Outlook on 'Caa1' CFR to Positive
--------------------------------------------------------------
Moody's Investors Service affirmed Fogo de Chao, Inc. ("Fogo de
Chao") ratings, including its Caa1 corporate family rating and
Caa1-PD probability of default rating and Caa1 on its senior
secured bank credit facilities. The ratings outlook was changed to
positive from negative.
The change in outlook to positive reflects the substantial
improvement in Fogo de Chao's operating performance and credit
metrics over the past year, which are now above pre-pandemic
levels, and Moody's expectation that these will be sustained
despite increased challenges related to labor and commodity cost
inflation and a potential negative impact on consumers. The rating
is constrained by the company's weak liquidity related to
approaching debt maturities, with its undrawn $40 million revolver
due to expire on April 5, 2023 and $32.5 million incremental term
loan set to mature on August 11, 2023. Fogo de Chao had around
$41.5 million of cash on the balance sheet as of April 3, 2022[1].
However, it paid a $40 million dividend to its sponsor on April 25
and borrowed $11.2 million under its unrated Woodforest Bank Loan
due December 2025. When combined, the dividend and near term
revolver expiration both reduce excess liquidity cushion; which a
key governance consideration and a ratings constraint.
Affirmations:
Issuer: Fogo De Chao, Inc.
Corporate Family Rating, Affirmed Caa1
Probability of Default Rating, Affirmed Caa1-PD
Senior Secured 1st Lien Bank Credit Facilities, Affirmed Caa1
(LDG3)
Outlook Actions:
Issuer: Fogo De Chao, Inc.
Outlook, Changed To Positive From Negative
RATINGS RATIONALE
Fogo de Chao's Caa1 rating is constrained by weak liquidity due to
approaching debt maturities and reduced excess liquidity cushion.
Also considered are its small size and limited product diversity
relative to other rated restaurant chains. Fogo de Chão is also
subject to potential earnings volatility due to exposure to
commodities such as beef, and exposure to currency fluctuations as
4.6% of Q1 2022 revenue was generated in Brazil while all debt is
denominated in US dollars. Fogo de Chão benefits from its strong
operating margins, which are largely attributable to its continuous
service model (gaucho chefs serve tableside) and lower operating
costs relative to peers and brand awareness within its core
markets. The company's geographic diversity in both the U.S. and
Brazil, as well as its unique Brazilian steakhouse customer
experience, help drive same store sales and cash generation.
The positive outlook reflects Fogo de Chao's improved operating
performance and credit metrics that Moody's expects to be sustained
despite increased challenges related to labor and commodity cost
inflation and a potential negative impact on consumers.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company improves liquidity through
a longer term extension of its debt maturity profile while
maintaining solid credit metrics, including debt to EBITDA below
6.5 times and EBIT to interest above 1.0x, and at least break even
free cash flow.
Ratings could be downgraded should there be any deterioration in
liquidity, such as failure to extend its maturity profile well
ahead of its incremental term loan going current, or material
erosion in performance or credit metrics.
Fogo De Chao, Inc. (initially "Prime Cut Merger Sub Inc.") based in
Plano, TX, operates a Brazilian steakhouse ("Churrascaria")
restaurant chain with 48 restaurants in the U.S., 7 in Brazil, 6
franchised restaurants in Mexico and 2 in the Middle East. Revenue
for the twelve month period January 2, 2022 exceeded $430 million.
Fogo De Chao is owned by affiliates of Rhne Capital.
The principal methodology used in these ratings was Restaurants
published in August 2021.
GARTNER INC: Moody's Hikes CFR to Ba1 & Alters Outlook to Stable
----------------------------------------------------------------
Moody's Investors Service upgraded Gartner, Inc.'s corporate family
rating to Ba1 from Ba2, probability of default rating to Ba1-PD
from Ba2-PD and senior unsecured rating to Ba1 from Ba3. The
speculative grade liquidity rating remains SGL-1. The outlook was
revised to stable from positive.
The actions were driven largely by Moody's expectations for Gartner
to maintain balanced financial strategies emphasizing moderate
financial leverage and funding shareholder returns with internally
generated free cash flow. As such, governance was a key
consideration for the upgrade of the CFR to Ba1 from Ba2.
RATINGS RATIONALE
"Moody's expectations for high single digit revenue growth, EBITA
margins settling down to a high teen percentage range, moderate
debt to EBITDA remaining below 3.5 times and robust free cash flow
of at least $700 million drive the rating upgrades," said Edmond
DeForest, Moody's Senior Vice President. "The two-notch upgrade of
the unsecured rating to Ba1 from Ba3 reflects both the CFR upgrade
to Ba1 and anticipation of a declining proportion of secured to
total debt claims as Gartner's unrated senior secured term loan due
2025 is amortized."
The Ba1 CFR reflects Gartner's almost $5.0 billion revenue scale,
global operating scope, and wide span of influence, especially in
its technology research business lines, that make it difficult to
displace. Moody's anticipates recurring, subscription-based
research products and services will represent around 90% of annual
revenues, with very high customer-retention rates -- the
combination of which produces favorable economics (gross margins in
excess of 70%) and high revenue visibility (total subscription
contract value in excess of $4.0 billion as of March 31, 2022). The
consulting and conferences segments are much smaller than research
and suffered revenue and profit declines during the coronavirus
pandemic. However, Moody's expects strong consulting backlog growth
and high consultant utilization rates in 2021 to be maintained over
the next 12 to 18 months, while Moody's also anticipates that
Gartner's conferences business unit should begin generating
meaningful revenue from live events in 2022.
All financial metrics cited reflect Moody's standard adjustments.
The anticipated recovery in revenue from the less-profitable
consulting and conferences segments, as well as pressure from the
relaxation of COVID-era cost containment initiatives, increased
travel, entertainment and recruitment costs and prevailing wage
inflation, leads Moody's to anticipate EBITA margins in excess of
22% for the LTM period ended March 31, 2022 could contract by 300
to 400 basis points in 2022. Profit rates should grow again in 2023
and thereafter, driven by customer expansion and price increases.
Uncertainty regarding the future level of profit rates weighs on
further ratings upside.
As a business services company, Gartner's environmental risks are
considered low. Social risks are moderate, reflecting Gartner's
constant need to recruit and train qualified and scarce personnel
for research, sales, consulting, and other roles also sought by
other information services providers.
Moody's expectations for declining governance risks is a key driver
of the ratings upgrades. Moody's considers Gartner's financial
strategies balanced, consistent and predictable, although still
somewhat opportunistic. Gartner has been an active acquirer of its
own stock, with over $1.7 billion purchased in the LTM period ended
March 31, 2022, but Moody's expects that the company will moderate
the scale of its share repurchases over the next 12 to 18 months.
The 2017 acquisition of CEB, Inc. for $3.3 billion left the company
highly leveraged. Given Gartner's publicly stated financial
leverage target range of 2.0 to 2.5 times as they measure it
(roughly 2.5 to 3.0 times on a Moody's-adjusted basis), Moody's
does not anticipate such large-scale M&A in the future. A large
debt-funded acquisition or share repurchase program could pressure
the Ba1 CFR. That said, Moody's anticipates Gartner will use its
free cash flow to remain acquisitive to complement its product
portfolio and will remain an active acquirer of its own shares. The
company may use incremental debt proceeds to finance acquisitions
and share repurchases, but Moody's anticipates debt to EBITDA could
return to below 3.5 times through EBITDA growth and debt repayment
within a year of any such transaction.
The Ba1 senior unsecured rating incorporates Gartner's overall
probability of default, reflected in the Ba1-PD PDR, and a loss
given default assessment of LGD4, reflecting their subordination to
the senior secured obligations. The senior unsecured notes benefit
from unsecured upstream guarantees from certain current and future
direct and indirect operating subsidiaries. An increase in the
proportion of secured to total debt claims could result in a
downgrade of the senior unsecured rating.
The SGL-1 speculative-grade liquidity rating reflects Gartner's
very good liquidity profile, supported by about $450 million of
cash as of March 31, 2022 and full access to the undrawn $1 billion
revolving credit facility (unrated) expiring in September 2025.
Free cash flow is supported by favorable working capital dynamics
associated with its growing, pre-paid subscription revenue base and
modest GAAP capital expenditures of only around 2% of revenue per
year. Gartner's ample free cash flow and large revolver
availability should provide ample flexibility to fund required debt
maturities consisting of approximately $30 million of annual
amortization required under its $286 million senior secured term
loan (unrated) due September 2025. The company's secured debt is
subject to certain financial maintenance covenants; Moody's
anticipates Gartner will maintain compliance with all covenants.
The stable outlook reflects Moody's anticipation that Gartner will
maintain strong operating performance and balanced financial
strategies, leading to debt to EBITDA remaining below 3.5 times,
EBITA to interest expense approaching 6.0 times and free cash flow
to debt at around 20%.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade may be warranted if Gartner sustains: 1) its strong
market position; 2) profitable revenue growth; 3) EBITA margins
around 20% throughout the business cycle; 4) balanced financial
strategies; 5) greater financial flexibility through a
predominately unsecured debt structure, inclusive of this bank
credit facility; and 6) debt to EBITDA around 3.0 times.
The ratings could be downgraded if Moody's anticipates: 1) debt to
EBITDA will remain around 4.0 times; 2) EBITA margins below 16%; 3)
revenue growth remains in a low single digit range; 4) technology
or competitive shifts weaken the company's market position; 5) a
deterioration in liquidity; or 6) more aggressive financial
policies featuring material debt-funded acquisitions or shareholder
returns.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
The following ratings/assessments are affected by the action:
Issuer: Gartner, Inc.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 (LGD4)
from Ba3 (LGD5)
Outlook, Changed To Stable From Positive
Gartner is a global research and advisory company specializing in
issues including IT, supply chain management, marketing, human
resources and personnel retention, sales, finance, and legal.
Moody's expects over $5.0 billion of revenue in 2022.
GARUDA HOTELS: 2 Ithaca, NY Hotels File for Chapter 11 Bankruptcy
-----------------------------------------------------------------
Garuda Hotels Inc. and affiliate Welcome Motels II, Inc., filed for
chapter 11 protection in the Northern District of New York.
Garuda is the operator of a Country Inn and Suites Hotel and owns
the real property upon which the hotel is located, 110 Danby Road,
Ithaca, NY. The primary demand generator for the Country Inn is
Ithaca College and secondarily Cornell University. Historically,
the Country Inn would generate approximately $2 million in room
revenue per year.
Welcome is the operator of an Econolodge Hotel and owns the real
property upon which the hotel is located, 2303 Triphammer Road,
Ithaca, NY. The Econolodge offers a significant community service
by providing transitional housing for Tompkins County through a
contract with St Johns Community Services. The contract keeps the
hotel 60% occupied during the winter and 50% occupied during the
summer.
As with many other businesses in the hospitality industry, the
COVID-19 pandemic financially devastated the Debtors.
The shutdown of the economy, remote learning Ithaca College and
Cornell University, and downturn in the travel industry generally
were the cause of the Debtors' financial distress. Leisure travel
stopped and business travel diminished to near zero.
In an effort to preserve the remaining value in the hotel
properties, the Debtors are seeking chapter 11 relief. The
Debtors' primary goal is to secure replacement financing for the
Rialto Capital Advisors indebtedness, which will enable the Debtors
to satisfy all of their creditors and realize on their numerous
years of investment and hard work at the hotel properties.
Alternatively, if a refinance cannot be accomplished, the Debtors
will consider another sale transaction.
The Debtors have been trying to resolve their financial issues
outside of Bankruptcy for many months and have unfortunately been
forced to seek Bankruptcy Court intervention to ensure that the
process is fair and commercially reasonable. Proceeding with the
protection of the Bankruptcy Court will help put an end to what the
Debtors believe are at best negligent and at worst bad faith
tactics, achieving the best outcome for all constituencies.
According to court filing, Garuda Hotels estimates between 1 and 49
unsecured creditors. The petition states that funds will be
available to unsecured creditors.
The Sec. 341(a) meeting of creditors will be held on June 15, 2022
at 2:00 p.m.
About Garuda Hotels
Garuda Hotels, Inc., is the operator of a Country Inn and Suites
Hotel and owns the real property upon which the hotel is located,
110 Danby Road, Ithaca, NY. Welcome Motels II, Inc., is the
operator of an Econolodge Hotel and owns the real property upon
which the hotel is located, 2303 Triphammer Road, Ithaca, NY.
Garuda Hotels Inc. and affiliate Welcome Motels II, Inc., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
N.D.N.Y. Case No. 22-30296 and 22-30297) on May 13, 2022. In the
petition signed by Jay Bramhandkar, president, Garuda Hotels
disclosed up to $10 million in both assets and liabilities.
Judge Wendy A. Kinsella oversees the case.
Erica Aisner, Esq., at Kirby Aisner & Curley LLP, is the Debtors'
counsel.
GLEASON'S GYMNASTIC: Wins Cash Collateral Access Thru June 30
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota authorized
Gleason's Gymnastic School, Inc. to use cash collateral on an
interim basis in accordance with the budget through June 30, 2022.
The American Express National Bank and the U.S. Small Business
Administration assert an interest in the cash collateral.
The Debtor may use cash collateral to pay its ordinary and
necessary business and administrative expenses for the items set
forth in the budget.
As adequate protection, the Debtor will grant the Secured Parties
replacement liens, to the extent of the Debtor's use of cash
collateral, in post-petition inventory, accounts, equipment and
general tangibles, with such lien being of the same priority,
dignity and effect as their respective pre-petition liens. However,
such replacement liens will exclude all causes of action under
Chapter 5 of the Bankruptcy Code.
The Debtor will also afford the Secured Parties the right to
inspect the Debtor's books and records and the right to inspect and
appraise any part of their collateral at anytime during normal
operating hours upon reasonable notice to the Debtor and its
attorney.
A continued final hearing on the matter is scheduled for June 29 at
1 p.m.
A copy of the order is available at https://bit.ly/3wU2F5b from
PacerMonitor.com.
About Gleason's Gymnastic School
Gleason's Gymnastic School, Inc., sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Minn. Case No. 22-30690) on
May 2, 2022. At the time of filing, the Debtor was estimated to
have up to $1 million in both assets and liabilities.
Judge Katherine A. Constantine oversees the case.
The Debtor is represented by Thomas H. Olive Law, P.A.
GLOBAL ALLIANCE: Wins Cash Collateral Access Thru June 2
--------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
authorized Global Alliance Distributors, Inc. to use cash
collateral on an interim basis for the period beginning on May 24
and ending on June 2, 2022, to pay actual and immediately payable
expenses essential for the continued operations of the Debtor,
identified in and up to the amounts listed in the budget, up to a
total amount of $158,268 per week as set forth in the Budget.
The Debtor is not authorized to use cash collateral during the
Second Interim Period to pay the three monthly auto finance
payments listed in the Budget that total $1,812 a month.
As adequate protection, all secured parties are granted replacement
liens upon all post-petition assets of the bankruptcy estate, to
the same extent, validity and priority of the secured parties'
pre-petition liens and security interests in the Debtor's assets.
The replacement liens are deemed duly perfected and recorded under
all applicable laws without the need for any notice or filings. The
grant of replacement liens does not limit the right of creditors to
seek additional adequate protection of their interests and will not
be deemed a determination by the court of the sufficiency of
adequate protection provided to creditors.
A further continued hearing on the matter is scheduled for June 2
at 11:30 a.m. Objections are due May 31.
A copy of the order is available at https://bit.ly/3LV1zu5 from
PacerMonitor.com.
About Global Alliance Distributors
Founded in 2010, Global Alliance Distributors Inc. operates a
distribution center that distributes primarily Latino books and
magazines to approximately 250 supermarkets throughout California,
Nevada, Arizona and Florida. It also distributes seasonal items,
including, but not limited to, school supplies, sporting goods and
equipment, snacks and candies. The Company also operates a logistic
business that provides cargo deliveries using independent
contractors. Its logistical clients are two major distribution
companies, A&C, which is currently the largest international
magazine distributor in the world, and Sally Beauty Supplies, a
national cosmetics manufacturer.
Global Alliance Distributors Inc. sought Chapter 11 bankruptcy
protection (Bankr. C.D. Cal. Case No. 22-12552) on May 5, 2022. In
the petition filed by Alberto Fabara, as CEO, Global Alliance
estimated assets between $500,000 and $1 million and estimated
liabilities between $1 million and $10 million.
The case is handled by Honorable Bankruptcy Judge Deborah J.
Saltzman.
Sheila Esmaili, of Law Offices of Sheila Esmaili, is the Debtor'
counsel.
According to court documents, Global Alliance Distributors
estimates between 1 and 49 unsecured creditors. The petition
states that funds will be available to unsecured creditors.
GRAN TIERRA: Moody's Assigns First Time 'B2' Corp. Family Rating
----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
Gran Tierra Energy Inc. ("Gran Tierra") and its up to $600 million
in amortizing Senior Secured Notes due 2029 for the any and all
exchange of the outstanding 6.25% Senior Unsecured Notes due 2025
issued by Gran Tierra Energy International Holdings Ltd. and 7.750%
Senior Unsecured Notes due 2027 issued by Gran Tierra. This is the
first time that Moody's rates Gran Tierra. The rating outlook is
stable.
Assignments:
Issuer: Gran Tierra Energy Inc.
Corporate Family Rating, Assigned B2
Senior Secured Global Notes, Assigned B2
Outlook:
Issuer: Gran Tierra Energy Inc.
Outlook Assigned Stable
RATINGS RATIONALE
The B2 indicative ratings on Gran Tierra and on its proposed notes
are based on the company's small asset base; geographic asset and
production concentration in Colombia (Baa2 stable); as well as
execution risk at existing operations and elevated event risk from
future growth. These factors are balanced by strong assets in
Colombia's Middle Magdalena Valley, which has been in operation for
decades; Moody's expectation of stable production and strong
commodities prices, which support solid cash flow generation and
credit metrics in 2022-23 for the B2 rating category; financial
policies that protect creditors, including oil price hedging and no
dividend payments in the foreseeable future; and experienced
management team. Gran Tierra's ratings also reflect its dominant
land position in the prospective, underexplored Putumayo basin.
Upon closing of the proposed transaction, the new notes will be
Gran Tierra's sole debt.
Moody's expects the company's debt to remain high with respect to
reserves and production in 2022-24, at about $16/barrel of proved
reserves and $25,000 per barrel of production. Leverage should
decline as high commodity prices support EBITDA generation in
2022-23 but would increase again in later years as prices come back
to Moody's mid-term estimates of 50-70 dollars per barrel.
Gran Tierra's operations are small when compared to global rated
peers. In 2021 and 1Q22 Gran Tierra's average daily production of
oil equivalent (boe/d) was 23,748 barrels and 29,362, respectively.
However, in 2021, the company's reserve life was adequate at 7.7
years.
Gran Tierra has interests in 23 blocks in Colombia and three blocks
in Ecuador and operates 24 of the blocks (99% of production). Core
assets are in the Middle Magdalena and Putumayo basins. In Middle
Magdalena, Gran Tierra operates the Acordionero field and other
minor properties. The company exports 100% of its oil production
and uses most of its gas production in its own operations to
generate its own electric power.
Gran Tierra's business strategy consists of efficiently growing and
diversifying its portfolio of exploration, development, and
production opportunities mainly in Colombia but also in Ecuador.
The company expects to grow cash flows from existing assets by
developing reserves and growing reserves through enhanced oil
recovery techniques. Gran Tierra plans to drill 20-25 development
wells and 6-7 exploration wells in Colombia and Ecuador in 2022 and
expects to fund capital expenditures with cash from operations.
Growth strategy includes inorganic expansion.
Proforma for the proposed notes, Gran Tierra has adequate
liquidity: in March 2022 the company had $58 million in cash and
Moody's expects it to generate enough cash flow from operations in
April 2022-December 2023 to cover interest payments of about $104
million and capital spending of around $414 million. Gran Tierra
does not have committed credit facilities and the company's
alternate liquidity is limited since its asset base is small and it
is largely encumbered.
The company's hedging policies include a target of 25-40% of
forecasted production on a rolling basis to reduce exposure to
commodity prices volatility. Moody's expects maintenance financial
covenants on the proposed notes to mirror those at existing 2025
and 2027 notes, that is, leverage should not be above 4x total
debt/EBITDAX and minimum interest coverage should not be lower than
2.5x EBITDAX to interest expenses. The company has never declared
or paid dividends and Moody's understand that it intends to retain
future earnings to support the development of the business.
The stable outlook on the ratings reflects Moody's expectation that
Gran Tierra will successfully execute its operations and expansion
plans, while maintaining sound credit metrics.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Gran Tierra's ratings could be upgraded if the company increases
production to over 50,000 barrels of oil equivalent per day
(boe/d), with minimal deterioration in financial metrics; if its
Leveraged full-cycle ratio, which measures an oil company's ability
to generate cash after operating, financial and reserve replacement
costs, is consistently above 2.5x; if its exploration and
production (E&P) debt/proved developed reserves below $10.0; and if
it keeps a strong liquidity position.
Gran Tierra's ratings could be downgraded if its retained Cash Flow
(RCF, cash from operations before working capital requirements less
dividends) to total debt ratio is below 25% with limited prospects
of a quick turnaround; if interest coverage, measured as
EBITDA/interest expense, is below 4.0x; or if there is a
deterioration in the company's liquidity position.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Gran Tierra is primarily an oil producer and its main assets are
mature. Therefore, it has high exposure to carbon transition and
water management risks, although the company has tackled its
environmental responsibility challenges by lowering the percentage
of water usage by more than 41% over the last five years and by
reducing its global carbon emission by around 55% over the last
year.
As an oil producer, Gran Tierra is exposed to adverse demographic
and societal trends, although its health and safety records are
sound: it achieved its best safety record in 2020, with a Lost Time
Incident Frequency (LTIF) of zero. Between August 2020 and August
2021, Gran Tierra achieved 20 million person, LTI-free hours, a
record for the company. Its Total Recordable Incident Frequency has
consistently declined from 0.3 in 2017 to 0.08 in 2020 and 2021.
Gran Tierra achieved 20-million person, LTI-free hours between the
period August 2020 to August 2021, a record for the company.
Gran Tierra's governance risks are neutral-to-low reflecting its
widely spread ownership, conservative financial policies, good
corporate governance, and an experienced management team. About 88%
of its voting shares are listed in three stock exchanges: New York,
Toronto, and London.
The principal methodology used in these ratings was Independent
Exploration and Production published in August 2021.
Gran Tierra, headquartered in Canada, is an independent
international energy company engaged primarily in oil production in
onshore properties in Colombia. Although it also owns certain
rights to oil and gas properties in Ecuador, the Colombian
properties represented 98% of its proved reserves and 100% of
revenues and EBITDA in 2021, when its assets amounted to close to
$1.2 billion. In May 2022 Gran Tierra had a market capitalization
of $575 million.
HEALTHMYNE INC: Files for Chapter 11 to Pursue Sale
---------------------------------------------------
HealthMyne Inc. filed for chapter 11 protection to pursue a sale of
the assets.
HealthMyne is an innovative leader in radiomics, primarily serving
the oncology market. The Debtor has developed technology-enabled
software solutions with the use of artificial intelligence, which
can convert imaging data into useful tools to treat complex
diseases like cancer.
The Debtor anticipates significant revenue growth over the next 3-5
years
within the $250 billion global oncology market. Radiomics plays a
critical role in personalized oncology care and therapy development
and is essential to meet the growing needs of the market.
The Debtor believes that its products and services have significant
upside
potential and would be a valuable asset for a prospective
purchaser. The Debtor further believes that conducting a sale of
the business through a bankruptcy auction is the best way to
maximize value for the benefit of stakeholders.
In connection with the Debtor's chapter 11 filing, among other
things, an
investor-led group of lenders provided (and further plans to
provide on a post-petition basis) limited financial support in the
form of a subordinate
secured loan to the Debtor, which will enable the Debtor to run a
sale process pursuant to the Bidding Procedures.
The marketing process and proposed timeline under the Bidding
Procedures provide sufficient time for the Debtor to market its
Assets for sale, negotiate a stalking horse agreement (if any),
evaluate all bids, hold an auction, and consummate a Sale;
importantly, doing so within the proposed timeline a ligns with the
expectations of the DIP Lender and the cash needs and resources of
the Debtor.
The proposed Bidding Procedures contemplate a June 17, 2022
deadline for initial bids, a June 22 auction, and a June 24 sale
hearing.
* * *
According to a court filing, HealthMyne Inc. estimates between 1
and 49 unsecured creditors. The petition states that funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
June 15, 2022 at 3:00 P.M. at the office of U.S.T.
About HealthMyne Inc.
HealthMyne Inc. -- https://www.healthmyne.com/ -- provides
end-to-end radionomic data management and analysis. HealthMyne was
founded in 2013 and is headquartered in Madison, Wisconsin.
HealthMyne Inc. sought Chapter 11 bankruptcy protection (Bankr.
W.D. Wisc. Case No. 22-10780) on May 15, 2022. In the petition
signed by Rose Higgins, authorized person, the Debtor disclosed up
to $10 million in both assets and liabilities.
Judge Catherine J. Furay oversees the case.
Justin M. Mertz, Esq., at Michael Best and Friedrich, LLP, is the
Debtor's counsel.
HONX INC: Seeks to Hire Kirkland & Ellis as Bankruptcy Counsel
--------------------------------------------------------------
HONX Inc. seeks approval from the U.S. Bankruptcy Court for the
Southern District of Texas to hire Kirkland & Ellis LLP and
Kirkland & Ellis International LLP to serve as legal counsels in
its Chapter 11 case.
The firms' services include:
(a) advising the Debtor with respect to its powers and duties
as a debtor in possession of the continued management and operation
of its business and property;
(b) advising and consulting on the conduct of this chapter 11
case, including all of the legal and administrative requirements of
operating in chapter 11;
(c) attending meetings and negotiating with representatives of
creditors and other parties in interest;
(d) taking all necessary actions to protect and preserve the
Debtor's estate, including prosecuting actions on the Debtor's
behalf, defending any action commenced against the Debtor, and
representing the Debtor in negotiations concerning litigation in
which the Debtor is involved, including objections to claims filed
against the Debtor’s estate;
(e) preparing pleadings in connection with the chapter 11
case, including motions, applications, answers, orders, reports,
and papers necessary or otherwise beneficial to the administration
of the Debtor’s estate;
(f) representing the Debtor in connection with obtaining
authority to continue using its bank account(s);
(g) appearing before the Court and any appellate courts to
represent the interests of the Debtor's estate;
(h) advising the Debtor regarding tax matters;
(i) taking any necessary action on behalf of the Debtor to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a chapter 11 plan and all documents related
thereto; and
(j) performing all other necessary legal services for the
Debtor in connection with the prosecution of this chapter 11 case,
including (i) analyzing the validity of liens against the Debtor's
assets; and (ii) advising the Debtor on
corporate and litigation matters.
The firms' hourly rates are as follows:
Partners $1,135.00 - $1,995.00
Of Counsel $805.00 - $1,845.00
Associates $650.00 - $1,245.00
Paraprofessionals $265.00 - $495.00
The Debtor paid $500,000 to the firms which constituted as an
advance payment retainer.
Christopher T. Greco, president of the firm, 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:
Christopher T. Greco, Esq.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Tel.: +1 212 446 4734
Email: christopher.greco@kirkland.com
About HONX Inc.
HONX Inc. is a subsidiary of Hess Corporation, a publicly-traded
global energy company. HONX is the corporate successor of Hess Oil
Virgin Islands Corporation, which owned and operated an oil
refinery in St. Croix, U.S. Virgin Islands from the beginning of
its construction in 1965 until a non-operating entity with minimal
assets consisting primarily of a 50% ownership in a joint venture
from 1998 to 2016, and post-2016 it has continued its corporate
existence solely to manage its alleged asbestos liabilities related
to the Refinery.
Honx Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.
Texas Case No. 22-90035) on April 28, 2022. In the petition signed
by Todd R. Snyder, chief administrative officer, the Debtor
disclosed up to $50 million in estimated assets and up to $1
billion in estimated liabilities.
Judge Marvin Isgur oversees the case.
The Debtor tapped Kirkland & Ellis and Jackson Walker LLP as
bankruptcy counsels; Piper Sandler Companies/TRS Advisors, LLC as
financial advisor; and Bates White, LLC as asbestos consultant.
Stretto, Inc. is the claims, noticing, and solicitation agent.
HONX INC: Seeks to Hire Stretto as Claims and Noticing Agent
------------------------------------------------------------
HONX, Inc. seeks approval from the U.S. Bankruptcy Court for the
Southern District of Texas to employ Stretto, Inc. as claims,
noticing and solicitation agent.
The firm will oversee the distribution of notices and will assist
in the maintenance, processing and docketing of proofs of claim
filed in the Debtors' Chapter 11 cases.
Prior to the petition date, the Debtors provided Stretto an advance
retainer in the amount of $75,000.
Sheryl Betance, a senior managing director at Stretto's Corporate
Restructuring, disclosed in court filings that her firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Sheryl Betance
Stretto
410 Exchange, Ste. 100
Irvine, CA 92602
Telephone: (714) 716-1872
Email: Sheryl.betance@stretto.com
About HONX Inc.
HONX Inc. is a subsidiary of Hess Corporation, a publicly-traded
global energy company. HONX is the corporate successor of Hess Oil
Virgin Islands Corporation, which owned and operated an oil
refinery in St. Croix, U.S. Virgin Islands from the beginning of
its construction in 1965 until a non-operating entity with minimal
assets consisting primarily of a 50% ownership in a joint venture
from 1998 to 2016, and post-2016 it has continued its corporate
existence solely to manage its alleged asbestos liabilities related
to the Refinery.
Honx Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.
Texas Case No. 22-90035) on April 28, 2022. In the petition signed
by Todd R. Snyder, chief administrative officer, the Debtor
disclosed up to $50 million in estimated assets and up to $1
billion in estimated liabilities.
Judge Marvin Isgur oversees the case.
The Debtor tapped Kirkland & Ellis and Jackson Walker LLP as
bankruptcy counsels; Piper Sandler Companies/TRS Advisors, LLC as
financial advisor; and Bates White, LLC as asbestos consultant.
Stretto, Inc. is the claims, noticing and solicitation agent.
HOYOS INTEGRITY: May Tap $600,000 of DIP Loan
---------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Hoyos Integrity Corporation to use cash collateral on an interim
basis in accordance with the budget and obtain postpetition
financing. The Debtor is permitted to incur indebtedness and
obligations owing to the DIP Agent and the DIP Lenders during the
Interim Period up to the maximum amount of $600,000, subject, as
applicable, to the Approved Budget.
The Debtor obtained up to $2,500,000 in postpetition financing, but
only up to $600,000 during the Interim Period, pursuant to and in
accordance with the terms and conditions of the Senior Secured,
SuperPriority Debtor-In-Possession Loan and Security Agreement by
and among the Debtor, as borrower, the entities from time to time
party thereto, as lenders, and Manuel A. Varela, in his capacity as
agent.
Green Hills Software LL asserts that on December 15, 2020, the
Debtor, as borrower, and Green Hills, as lender, entered into a
Loan and Security Agreement pursuant to which Green Hills asserts
it agreed to make a loan to the Debtor in the original principal
amount of $4 million and thereafter an additional principal amount
of $105,217. Green Hills further asserts that the obligations under
the Green Hills Loan Agreement were secured by security interests
and liens granted by the Debtor to Green Hills upon the
"Collateral."
The Debtor does not have sufficient available sources of working
capital to operate the Debtor's business in the ordinary course
without the DIP Facility and the ability to use cash collateral.
As adequate protection, Green Hills is granted a valid, binding,
continuing, enforceable, fully-perfected, nonavoidable, senior
additional and replacement security interest in and lien on all DIP
Collateral.
Effective as of the Petition Date, an allowed administrative
expense claim for Green Hills is granted in the amount of any
Collateral Diminution with priority over all other administrative
claims in the Case, which administrative claim will have recourse
to and be payable from all prepetition and postpetition property of
the Debtor.
The Carve-Out means (1) statutory fees payable to the U.S. Trustee
pursuant to 28 U.S.C. section 1930(a)(6) with respect to the
Debtor, (2) the allowed fees and expenses actually incurred by
persons or firms retained by the Debtor or the Creditors Committee
(if appointed) on or after the Petition Date whose retention is
approved by the Bankruptcy Court pursuant to section 327, 328, 363,
or 1103 of the Bankruptcy Code in a cumulative, aggregate sum of
(i) for the period prior to the occurrence of the delivery of a
Carve-Out Trigger Notice, an amount not to exceed the lesser of (A)
the aggregate monthly amounts budgeted to be funded in advance for
each such Professional for such month in accordance with the
Approved Budget (to the extent a Carve-Out Trigger Notice is
delivered mid-week, pro-rated for such month) and (B) the actual
amount of such Allowed Professional Fees for each Professional
incurred on or after the Petition Date up through and including the
date a Carve-Out Trigger Notice is delivered, subject in all
respects to the terms of the Interim Order, the Final Order, and
any other interim or other compensation order entered by the
Bankruptcy Court.
The final hearing on the matter is scheduled for June 21, 2022 at 3
p.m.
A copy of the order is available at https://bit.ly/3lS5QDU from
PacerMonitor.com.
About Hoyos Integrity
Hoyos Integrity Corporation is an information technology company
that specializes in the fields of mobile, security, and
technology.
Hoyos Integrity sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 22-10365) on April 21,
2022. In the petition signed by Frank Tobin, president, the Debtor
disclosed up to $10 million in estimated assets and up to $50
million in estimated liabilities.
Judge Mary F. Walrath oversees the case.
Raymond H. Lemisch, Esq., at Klehr Harrison Harvey Branzburg LLP
serves as the Debtor's legal counsel.
HOYOS INTEGRITY: Seeks Outside Party for Internal Investigation
---------------------------------------------------------------
Dow Jones Newswires reports that Hoyos Integrity Corp., a
security-focused smartphone startup that is trying to reorganize in
chapter 11 bankruptcy, wants to bring in an outside party to
investigate "allegations of malfeasance," a lawyer for the
Florida-based company says.
During a hearing Tuesday, May 24, 2022, at the U.S. Bankruptcy
Court in Wilmington, Del., Hoyos lawyer Raymond Lemisch said there
had been "discord" among management and the board of directors.
About Hoyos Integrity
Hoyos Integrity Corp. is a security-focused smartphone developer
that counts Gary Cohn as adviser and investor.
Hoyos Integrity sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 22-10365) on April 21,
2022. In the petition signed by Frank Tobin, president, the Debtor
disclosed up to $10 million in estimated assets and up to $50
million in estimated liabilities.
Judge Mary F. Walrath oversees the case.
Raymond H. Lemisch, Esq., at Klehr Harrison Harvey Branzburg LLP
serves as the Debtor's legal counsel.
INFOW LLC: Asks Court to Approve Employment of Parkins Lee & Rubio
------------------------------------------------------------------
InfoW, LLC and its affiliates asked the U.S. Bankruptcy Court for
the Southern District of Texas to authorize the employment of
Parkins Lee & Rubio, LLP as their bankruptcy counsel for the period
April 18 to May 15.
Kyung Lee, Esq., a former partner at Parkins Lee & Rubio, will seek
to be retained as the Debtors' counsel in their Chapter 11 cases
through his firm Kyung S. Lee, PLLC, effective May 16.
The hourly rates charged by Parkins Lee & Rubio for its services
are as follows:
Kyung S. Lee $850
R. J. Shannon $625
Other Associate Attorneys $300 - $650
Paralegals $180 - $250
The firm received a retainer of $175,000.
Kyung Lee, Esq., disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Kyung S. Lee, Esq.
700 Milam St Suite 1300
Houston, TX 77002
Phone: 713-715-1660/713-301-4751
Email: contact@kslpllc.com
About InfoW LLC
InfoW, LLC, also known as InfoWars, is an American far-right
conspiracy theory and fake news website that is owned by Alex
Jones.
InfoW and affiliates, IWHealth, LLC and Prison Planet TV, LLC,
filed petitions under Chapter 11, Subchapter V of the Bankruptcy
Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April 18, 2022.
Melissa A. Haselden serves as Subchapter V trustee.
In the petition filed by W. Marc Scwartz, chief restructuring
officer, InfoW listed up to $50,000 in assets and up to $10 million
in liabilities.
Judge Christopher M. Lopez oversees the cases.
Kyung S. Lee, Esq., is the Debtor's legal counsel.
INNOVA INDUSTRIAL: Starts Chapter 11 Subchapter V Case
------------------------------------------------------
Innova Industrial Contractor Inc. filed for bankruptcy protection
under Subchapter V of Chapter 11 of the Bankruptcy Code in Puerto
Rico.
According to court documents, Innova Industrial Contractor
estimates between 1 and 49 unsecured creditors. The petition
states that funds will be available to unsecured creditors.
The 11 U.S.C. Sec. 341(a) meeting of creditors will be held on June
13, 2022, at 2:00 p.m. via Telephonic Conference Information for
AUST/Trial Attys. Proofs of claim are due by July 26, 2022, and
governmental proofs of claim due are due by Nov. 14, 2022.
About Innova Industrial Contractor
Innova Industrial Contractor Inc. is a Puerto Rico-based
construction company.
Innova Industrial Contractor Inc. filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D.P.R.
Case No. 22-01375) on May 16, 2022. In the petition filed by
Gabriel Gonzalez, as president. Innova Industrial estimated assets
between $50,000 and 100,000 and liabilities between $100,000
$500,000.
The case is assigned to Honorable Bankruptcy Judge Enrique S
Lamoutte Inclan.
Jesus Enrique Batista Sanchez, of THE BATISTA LAW GROUP, PSC, is
the Debtor's counsel.
Jose A Diaz Crespo has been appointed as Subchapter V trustee.
INSYS THERAPEUTICS: Sales Rep, Doctor Convicted for Kickbacks
-------------------------------------------------------------
Nate Raymond of Reuters reports that a Florida doctor and a former
sales representative at Insys Therapeutics Inc have been convicted
of conspiring to pay and receive $278,000 in kickbacks and bribes
in exchange for prescribing the drugmaker's addictive fentanyl
spray.
A federal jury in Tampa, Florida, on Tuesday found Dr. Steven Chun
and Daniel Tondre guilty of conspiracy and kickback charges in the
latest trial to result from a scandal that led to Insys' 2019
bankruptcy and the conviction of top executives.
The two are among more than 40 doctors and former executives and
employees of now-defunct Chandler, Arizona-based Insys who have
faced charges over a scheme centered on Subsys, an opioid
medication approved for treating severe pain in cancer patients.
Prosecutors said Insys, before filing for bankruptcy in 2019, paid
doctors kickbacks by arranging for them to participate in "sham"
speaker programs ostensibly meant to educate medical professionals
about Subsys.
Over the course of a 10-day trial, prosecutors said they presented
evidence that Chun received more than $278,000 in illegal kickbacks
and bribes from Insys in connection with sham speaker programs that
Tondre helped arrange.
Tondre paid Chun $2,400 to $3,000 per speaker event in return for
writing Subsys prescriptions, prosecutors said, and Insys also
bribed Chun by hiring his then-girlfriend to work as liaison to
facilitate insurance form approvals.
Mark Rankin, a lawyer for Chun, in a statement said the doctor
"respects the jury's verdict but maintains his innocence. He always
prescribed what was best for his patients without regard for
speaker fees or any other monetary consideration."
Roger Futerman, Tondre's lawyer, did not respond to a request for
comment.
Several of the government's witnesses previously testified at the
2019 trial of John Kapoor, Insys's founder and one-time chairman,
who was accused of overseeing the bribery scheme, and four other
former executives.
Kapoor and four other former executives were convicted in 2020 by a
federal jury in Boston of racketeering conspiracy. Kapoor was
sentenced in 2020 to 5-1/2 years in prison. He denies wrongdoing
and is appealing to the U.S. Supreme Court.
Witnesses at the Florida trial included Michael Babich, Insys'
former chief executive, and Alec Burlakoff, its ex-vice president
of sales, both of whom testified against Kapoor after pleading
guilty and becoming cooperating witnesses.
Babich was originally sentenced to 30 months in prison, but a
federal judge in October reduced his sentence to 22 months.
Burlakoff was sentenced to 26 months.
The case is United States v. Chun, et al, U.S. District Court,
Middle District of Florida, No. 20-cr-00120.
For the United States: Kelley Howard-Allen and Jennifer Peresie of
the U.S. Attorney's Office for the Middle District of Florida
For Chun: Mark Rankin of The Law Office of Mark P. Rankin
For Tondre: Roger Futerman of Roger D. Futerman & Associates
About Insys Therapeutics
Headquartered in Chandler, Ariz., Insys Therapeutics Inc. --
http://www.insysrx.com/-- is a specialty pharmaceutical company
that develops and commercializes innovative drugs and novel drug
delivery systems of therapeutic molecules that improve patients'
quality of life. Using proprietary spray technology and
capabilities to develop pharmaceutical cannabinoids, Insys is
developing a pipeline of products intended to address unmet medical
needs and the clinical shortcomings of existing commercial
products. Insys is committed to developing medications for
potentially treating anaphylaxis, epilepsy, Prader-Willi syndrome,
opioid addiction and overdose, and other disease areas with a
significant unmet need.
As of March 31, 2019, Insys had $172.6 million in total assets,
$336.3 million in total liabilities, and a total stockholders'
deficit of $163.7 million.
Insys Therapeutics and six affiliated companies filed petitions
seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D.
Del. Lead Case No. 19-11292) on June 10, 2019.
The Debtors' cases are assigned to Judge Kevin Gross.
The Debtors tapped Weil, Gotshal & Manges LLP and Richards, Layton
& Finger, P.A., as legal counsel; Lazard Freres & Co. LLC as
investment banker; FTI Consulting, Inc. as financial advisor; and
Epiq Corporate Restructuring, LLC as claims agent.
Andrew Vara, acting U.S. trustee for Region 3, on June 20, 2019,
appointed nine creditors to serve on an official committee of
unsecured creditors in the Chapter 11 cases. Akin Gump Strauss
Hauer & Feld LLP, and Bayard, P.A., serve as the Committee's
attorneys; and Province, Inc., is the financial advisor.
* * *
Insys sold its epinephrine 7mg and 8.5mg unit-dose nasal spray
products and naloxone 8mg unit-dose nasal spray products and
certain equipment and liabilities to Hikma Pharmaceuticals USA Inc.
for $17 million. It sold for $12.2 million to Chilion Group
Holdings US, Inc., its (i) CBD formulations across current
pre-clinical, clinical, third-party grants and investigator
initiated study activities (including any future activities or
indications), (ii) THC programs of Syndros oral dronabinol
solution, and (iii) Buprenorphine products. Insys sold to BTcP
Pharma, LLC for $52 million in royalty payments plus other amounts
all strengths, doses and formulations in the world (except for the
Republic of Korea, et al.). Insys sold to Pharmbio Korea, Inc.,
for $1.2 million in cash specific intellectual property, records
and certain other assets related to strengths, doses and
formulations of the Subsys Product in the Republic of Korea, Japan,
China, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
Philippines, Singapore, Thailand, Timor-Leste, and Vietnam.
After selling substantially all of their assets, the Debtors filed
a Chapter 11 Plan and Disclosure Statement. Judge Kevin Gross on
Jan. 16, 2020, confirmed the Debtors' Plan of Liquidation.
JASPER PELLETS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Jasper Pellets, LLC
523 Nimmber Turf Road
Ridgeland, SC 29936
Business Description: The Debtor is a wood pellet manufacturing
company.
Chapter 11 Petition Date: May 27, 2022
Court: United States Bankruptcy Court
District of South Carolina
Case No.: 22-01409
Judge: Hon. David R. Duncan
Debtor's Counsel: Michael M. Beal, Esq.
BEAL, LLC
PO Box 11277
Columbia, SC 29211
Tel: 803-728-0803
E-mail: ccooper@bealllc.com
Total Assets: $25,119,486
Total Liabilities: $14,422,514
The petition was signed by Charles Knight as managing member.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HC5BECA/Jasper_Pellets_LLC__scbke-22-01409__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. ADP $54,044
PO Box 12513
El Paso, TX 79912
2. Advanced Industrial $108,062
Resources, LLC
PO Box 846
Marietta, GA 30061
3. Andritz Inc. $44,515
PO Box 123236
Dallas, TX 75312
4. Canfor Southern Pine, Inc. $105,039
PO Box 535742
Atlanta, GA 30353
5. Charles Knight Consulting $147,365
Associates LLC
4232 Tillman Bluff Rd
Valdosta, GA 31602
6. Chase Knight $28,615
107 Willow Bend Dr.
Ridgeland, SC 29936
7. Collum's Sawmill, LLC $61,195
Po Box 535
Allendale, SC 29810
8. Dempsey Wood Products $74,664
PO Box 2225
Orangeburg, SC 29116
9. Georgia Pacific $25,520
Po Box 743188
Atlanta, GA 30374
10. Ingredion $26,395
PO Box 409882
Atlanta, GA 30384
11. JJCPA, LLC $80,072
1817 Atlantic Blvd
Jacksonville, FL 32202
12. John Deere Financial $60,753
PO Box 4450
Carol Stream, IL 60197
13. John Deere Financial $44,542
PO Box 4450
Carol Stream, IL 60197
14. LJR Forest Products $138,416
1377 Old Nunez Road
Swainsboro, GA 30401
15. LM Machinery and $73,597
Equipment, LLC
13291 Vintage Way, Suite 108
Jacksonville, FL 32218
16. Parker Poe Adams & $33,492
Berstein, LLP
401 S Tryon St,
Suite 3000
Charlotte, NC 28202
17. The Timbermen, Inc. $47,667
PO Box 107
Camak, GA 30807
18. UPS Trade Debts $50,639
PO Box 809488
Chicago, IL
60680-9488
19. Verna Garvin, Property Taxes $371,669
Jasper County Treasurer
PO Box 722
Ridgeland, SC 29936
20. West Fraser-Newberry $83,892
2900 St. Marys Rd
Saint Marys, GA
31558
JEFFERSON-11TH STREET: Taps Weiss Handler as Special Counsel
------------------------------------------------------------
Jefferson-11th Street, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Columbia to hire Weiss, Handler &
Cornwell, P.A. as its special counsel.
On May 7, 2013, 2724 11th Street NW Tenants' Association, Inc.
filed a petition with the District's Rental Accommodations Division
under the Housing Act alleging that the Debtor was impermissibly
raising rents while the property units were not in substantial
compliance with the housing code.
Amid the litigation with the association, on April 24, 2017, the
Office of the Attorney General commenced a three-count action in
the DC Superior Court against the Debtor, Case No. 2017 CA 002837.
The firm will assist the Debtor in the appeal of two judgments
entered against the Debtor. Its services include representation in
litigation and in any appeals; appearances before the D.C.
Superior Court and D.C. Court of Appeals; and negotiation with all
parties regarding real estate issues, including lease termination.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
William J. Cornwell, Partner $400/hour
Harry Winderman, Of Counsel $400/hour
David Friedman, Sr. Associate $400/hour
Paralegals $210/hour
As disclosed in court filings, Weiss, Handler & Cornwel neither
represents nor holds any interest adverse to the Debtor, creditors
and other parties-in-interest.
The firm can be reached through:
William J. Cornwell, Esq.
Weiss, Handler & Cornwell, P.A.
2255 Glades Road Suite 205E
Boca Raton, FL 33431
Phone: 888-361-6745/561-997-9995
Fax: 561-997-5280
About Jefferson-11th Street
Jefferson-11th Street, LLC is primarily engaged in renting and
leasing real estate properties. The Debtor is the fee simple owner
of a real property located at 2724, 11th St., NW, Washington, DC,
valued at $5 million.
Jefferson-11th Street sought Chapter 11 bankruptcy protection
(Bankr. D.D.C. Case No. 22-00059) on March 31, 2022. In the
petition filed by Francis Hill Parker, managing member, the Debtor
disclosed $5,531,267 in total assets and $1,931,368 in total
liabilities.
Judge Elizabeth L. Gunn oversees the case.
The Debtor tapped McNamee Hosea, PA as bankruptcy counsel.
Blumenthal, Cordone & Erklauer, PLLC and Weiss, Handler & Cornwell,
P.A. serve as the Debtor's special counsel.
K.C. LEE 222: Seeks to Hire Scura as Legal Counsel
--------------------------------------------------
K.C. Lee 222 Realty, LLC seeks approval from the U.S. Bankruptcy
Court for the District of New Jersey to employ Scura, Wigfield,
Heyer, Stevens & Cammarota, LLP to serve as legal counsel in its
Chapter 11 case.
The hourly rates charged by the firm for its services are as
follows:
Partners $425 per hour
Associates $375 per hour
Law Clerk $200 per hour
Paralegals $175 per hour
As disclosed in court filings, Scura is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
David L Stevens, Esq.
Scura, Wigfield, Heyer, Stevens & Cammarota, LLP
1599 Hamburg Turnpike
P.O. Box 2031
Wayne, NJ 07470
Phone: 973-696-8391
Email: dstevens@scura.com
About K.C. Lee 222 Realty
K.C. Lee 222 Realty LLC is a single asset real estate (as defined
in 11 U.S.C. Sec. 101(51B))
K.C. Lee 222 Realty initially filed for Chapter 11 protection
(Bankr. D.N.J. Case No. 20-10370) on Jan. 9, 2020. The Debtor again
sought Chapter 11 protection (Bankr. D.N.J. Case No. 22-13480) on
April 28, 2022. In the petition filed by Kyung Ye Lee, member,
K.C. Lee 222 Realty listed as much as $50,000 in both assets and
liabilities.
Judge Stacey L. Meisel oversees the case.
David L. Stevens, Esq., at Scura, Wigfield, Heyer, Stevens &
Cammarota, LLP is the Debtor's legal counsel.
KRIESEL RENTALS: Court Confirms Second Amended Plan
---------------------------------------------------
Judge Catherine J. Furay has entered an order confirming Kriesel
Rentals, LLC's Second Amended Chapter 11 Plan of Reorganization
dated April 12, 2022.
Under the Plan, unsecured claims in Class 4 will be paid, pro rata,
100% of their allowed claim amortized over three years, and without
interest. The claims in this class are believed be only Anderson
Law Office, and in
an amount of $2,000. The class is impaired.
Debralee Kriesel, the equity holder, will retain her interest in
the Debtor.
A copy of the Second Amended Plan is available at
https://www.pacermonitor.com/view/DLIB7TQ/Kriesel_Rentals_LLC__wiwbke-21-10265__0071.0.pdf
About Kriesel Rentals
Kriesel Rentals, LLC, filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No.
21-10265 on Feb. 12, 2021, listing under $1 million in both assets
and liabilities. Judge Catherine J. Furay oversees the case.
Christianson & Freund, LLC serves as the Debtor's counsel.
LAUTERBACH LABORATORIES: Allegheny Wants Trust Fund Taxes in Plan
-----------------------------------------------------------------
Allegheny County Southwest Tax Collection District filed objections
to Lauterbach Laboratories, Inc.'s Chapter 11 Small Business
Disclosure Statement and Chapter 11 Small Business Plan dated April
4, 2022.
The Collection District points out that the Debtor filed a Chapter
11 Small Business Disclosure Statement and Chapter 11 Small
Business Plan on April 4, 2022. The Disclosure Statement and Plan
do not appear to provide for the payment of delinquent prepetition
trust fund taxes for employer withholding taxes for local earned
income taxes owed to the Collection District.
The Collection District further points out that the Collection
District objects to the confirmation of the Plan in so far as it
does not appear to provide for the Collection District's priority
tax claim for pre-petition trust fund taxes.
Attorney for the Allegheny County Southwest Tax Collection
District:
Jeffrey R. Hunt, Esq.
GRB LAW
525 William Penn Place, Suite 3110
Pittsburgh, PA 15219
Tel: (412) 281-0587
E-mail: jhunt@grblaw.com
About Lauterbach Dental
Lauterbach Dental Lab, Inc. filed a petition for Chapter 11
protection (Bankr. W.D. Pa. Case No. 21-22189) on Oct. 6, 2021,
listing as much as $50,000 in both assets and liabilities. Joseph
W. Lauterbach, president of Lauterbach Dental Lab, signed the
petition. The Debtor tapped Dennis J. Spyra, Esq., as legal
counsel.
LAUTERBACH LABORATORIES: UST Says Disclosures Deficient
-------------------------------------------------------
Andrew R. Vara, United States Trustee, filed an objection to
approval of the Disclosure Statement and confirmation of Plan of
Reorganization Dated April 4, 2022, of Lauterbach Laboratories,
Inc.
The United States Trustee points out that the Disclosure Statement
does not comply with Local Rule 3016-1 which requires the Debtor to
attach (i) a 12-month historic summary detailing net cash flow;
(ii) a 12-month summary of projected net cash flow available to
fund the plan; and (iii) an evaluation of plan feasibility for a
12-month period.
The United States Trustee further points out that the Debtor's
projected 12-month summary is ambiguous and provides for average
revenues of $57,083 per month, average disbursements of $38,000 per
month, and an average net cash flow of $19,083 per month.
According to United States Trustee, the Disclosure Statement does
not contain any feasibility analysis.
The United States Trustee asserts that the Debtor should address
feasibility of the Plan in the Disclosure Statement itself – and
not require creditors to comb through the Court docket or in the
hopes of finding the Debtor's financial information.
The United States Trustee points out that according to the Debtor's
projected summary, it appears that the Plan may be feasible (the
Debtor proposes to plan payments of $3,500 per month) but the
Debtor provides no basis for its substantially higher net cash flow
projections.
The United States Trustee further points out that according to the
proofs of claim, the total secured/priority tax claims total
$226,953.00. In contrast, the Plan proposes to pay $1,500 per month
to said claims at 9.0% interest which equates to only approximately
$72,250.
The United States Trustee asserts that the Debtor states that the
"Plan will be funded from the operation of the Debtor's dental
laboratory business. In the event that the income is insufficient
to make the required payments under the plan, the Debtor's
principal, Mr. Joseph W. Lauterbach, shall make capital
contributions to maintain all required payments." The Debtor's
principal is a debtor in a chapter 13 case pending at docket number
20-20350-TPA. The Debtor does not explain how Mr. Lauterbach could
make any contributions to help fund the Plan while his individual
case is still pending.
According to the United States Trustee, the Disclosure Statement is
presently devoid of any reliable information necessary for
creditors to assess the feasibility of the Plan.
The United States Trustee points out that the Debtor's failure to
file all outstanding tax returns necessarily affects the
computation of the required plan payment but, also, plan
feasibility.
The United States Trustee further points out that to the extent
that the Debtor has failed to file any of its prepetition tax
returns, the Plan cannot be confirmed pursuant to 11 U.S.C.
Sections 1129(a)(2) and 1191(a).
The United States Trustee asserts that the Debtor's Plan is based
entirely on speculation as to its cash flow projections and the
expectation that the secured and priority tax claims will be
substantially lower than the proofs of claim filed in this case.
The United States Trustee complains that the Debtor has not
provided sufficient information to demonstrate a successful
rehabilitation that will not require further liquidation or
reorganization.
According to the United States Trustee, the form of the Plan does
not comply with Local Rule 5005-13 [Document Format and Quality],
which requires that font size be no smaller than 12 Courier of the
equivalent.
About Lauterbach Dental
Lauterbach Dental Lab, Inc., filed a petition for Chapter 11
protection (Bankr. W.D. Pa. Case No. 21-22189) on Oct. 6, 2021,
listing as much as $50,000 in both assets and liabilities. Joseph
W. Lauterbach, president of Lauterbach Dental Lab, signed the
petition. The Debtor tapped Dennis J. Spyra, Esq., as legal
counsel.
LEGACY AT WILLOW BEND: Fitch Lowers Issuer Default Rating to 'BB'
-----------------------------------------------------------------
Fitch Ratings has downgraded The Legacy at Willow Bend's (LWB)
Issuer Default Rating (IDR) to 'BB' from 'BB+'. Fitch has also
downgraded approximately $46 million of series 2016 fixed rate
revenue bonds issued by the New Hope Cultural Education Facilities
Finance corporation on behalf of LWB to 'BB' from 'BB+'. Fitch has
removed LWB's ratings from Rating Watch Negative and assigned a
Negative Rating Outlook.
SECURITY
The bonds are secured by a gross revenue pledge, mortgage pledge,
and debt service reserve fund.
ANALYTICAL CONCLUSION
The downgrade reflects Fitch's expectation that persistent
operating pressures will continue to impair cost management,
eroding the balance sheet and leading to operating performance more
consistent with a 'BB' rating.
Removal of the Rating Watch Negative reflects the release of LWB's
2021 audit with an unqualified opinion. Management secured a waiver
from its bondholders as remedy for its 2021 (YE Sept. 30) DSCR
covenant violation allowing for the release of the audit. Based on
the FY 2022 second quarter results, LWB will likely violate their
2022 DSCR covenant as well. Additional rating pressure is likely if
covenant violations are severe or ongoing.
The Negative Outlook reflects Fitch's expectations for continued
expense pressure coupled with persistently soft revenues from
suppressed healthcare census. The Negative Outlook also considers
LWB's precarious position as a short-term rehab provider during the
coronavirus pandemic. CARES Act funds offset many of LWB's losses
in 2020 and 2021, but no future funding is expected and the
healthcare census has not recovered to pre-pandemic levels. Fitch
expects weak profitability and deterioration of the balance sheet
over the Outlook period.
LWB's unit mix includes more healthcare capacity than the community
has needed over the past few years. Management is considering an
ILU expansion in order to meet demand and adjust the unit mix.
While Fitch recognizes the potential benefit LWB may realize from
additional ILUs, LWB has no debt capacity at the current rating
level and the risks associated with an expansion will further
pressure the rating.
LWB's (DSCR covenant) violation in 2021 was driven by a variety of
operating pressures, some transient and some persistent. The
coronavirus pandemic, a local storm, unexpected entrance fee refund
liabilities and labor pressures have affected LWB's operations to
varying degrees over the past few years. While some of these
pressures have abated, Fitch expects other pressures to persist.
The downgrade to 'BB' reflects Fitch's expectation for continued
increased labor expense and entrance fee refund volatility over the
next several years.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Good Service Area Supports Solid Demand
LWB's ILU occupancy has consistently remained in the mid-90% range
and has only dipped by a few percentage points over the past two
years. LWB is uniquely positioned as the only Jewish-sponsored life
plan community (LPC) in its primary market area. Demographic
indicators are sound, as the Dallas area enjoy population growth
above the national average. However, competition for senior living
is strong in the service area and expected to intensify when a new
community offering 180 ILUs and AL but no SNF opens three miles
away in 2025.
LWB has a sound solid track record of annual increases in both its
monthly service and entrance fees in recent years. Over the past
several years, LWB has increased its fees between 2%-5% annually.
According to Zillow, LWB's weighted average entrance fee of
$513,000 is somewhat higher than average home values in Plano of
$474,000.
Operating Risk: 'bb'
Persistent Operating Pressures Weaken Cost Management
As a predominantly type A contract provider, LWB is limited in its
ability to manage healthcare costs. Under this contract, residents
pay a fixed rate regardless of the level of healthcare they
require. Fitch views this contract type as elevating operating
risk.
LWB's profitability ratios have weakened since 2019 with operating
ratios exceeding 100% in 2020 and 2021, compared to average ratios
in the low 90% range from 2016 through 2019. Similarly, net
operating margin (NOM) decreased below 4% in 2020 and 2021 compared
to average levels near 14% previously. Over the Outlook period,
Fitch expects operating ratios to continue to exceed 105% and the
NOM to remain below 0%.
NOM- Adjusted (NOMA) fell from levels consistently above 20% prior
to 2020 to below 11% in 2020 and 2021. These ratios include $2.6
million CARES Act funding in 2020, and $1.9 million in recognized
revenue from forgiven PPP loan in 2021. Given LWB's limited ability
to manage healthcare costs and ongoing labor pressures, Fitch
expects profitability ratios to remain consistent with the weak
assessment over the next several years, underscoring the downgrade
to 'BB' and Negative Outlook.
LWB's entrance fee refund policy (that the refund is triggered when
the resident leaves the community as opposed to when the resident
leaves the ILU) increases the potential for cash flow disruption
due to refund unpredictability. According to management, LWB
currently has approximately $4 million in entrance fee refund
liabilities associated with residents in licensed care.
The scale and scope of LWB's plans to add ILUs to its campus has
expanded since Fitch's last review. Management recently disclosed
preliminary plans to build 15 to 30 additional ILUs. Plans are
undeveloped and therefore not incorporated into the 'BB' rating.
Given LWB's strong waitlist and IL demand generally, Fitch expects
the project to fill. The additional ILUs would improve LWB's unit
mix and likely strengthen profitability ratios after the project
stabilizes. However, LWB has no debt capacity at the 'BB' rating,
and the risks inherent to expansion will further pressure the
rating.
Capex spending has been below 70% of depreciation historically. An
expansion project would likely increase spending to a midrange
level or above and address LWB's average age of plant of over 12
years.
LWB's capital-related metrics have an historical average
revenue-only MADS coverage of approximately .9x over the past five
years. Debt-to-net available averaged 9.3x over the past five
audited years. MADS represented a moderate 13% of 2021 revenues.
Revenue-only MADS coverage and debt-to-net available were
particularly weak in 2021 at negative .5 times and negative 11.9
times respectively. Fitch expects improvement over the 2021
results, but not to historical levels. Fitch expects
capital-related metrics to remain weak over the outlook period.
Financial Profile: 'bb'
Stable Liquidity
LWB's financial profile is consistent with the 'bb' assessment, in
the context of its midrange revenue defensibility and weak
operating risk assessments. As of Sept. 30, 2021, LWB had
approximately $46 million of debt, including the series 2016.
Unrestricted cash and investments measured approximately $20
million.
Fitch's baseline scenario in the forward looking scenario analysis,
shows LWB maintaining operating and financial metrics that are more
consistent with a 'BB' rating. Net entrance fees are expected to
remain stable and consistent with historical results, and expenses
are assumed to remain flat. Capital spending is expected to remain
consistent with the past three years and does not include any
additional spending associated with an ILU expansion.
In a stress case of the scenario analysis, LWB's cash-to-adjusted
debt and MADS coverage maintain levels consistent with the 'BB'
rating.
Cash has been above 200 days cash on hand (DCOH) over the Outlook
period, and therefore is not an asymmetric risk.
Asymmetric Additional Risk Considerations
No asymmetric risk considerations were relevant to the rating
determination.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Given the current weakness in operations, an upgrade is
unlikely over the Outlook period;
-- Long-term sustained improvement in operating margins leading
to liquidity growth could support a stronger rating.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Cash to debt that approaches 20% without the expectation of a
recovery to a higher level;
-- ILU occupancy that falls below 88% without expectation for
recovery;
-- Failure to meet financial covenants;
-- DSCR near or below .5x;
-- Cash transfers outside the obligated group to support
affiliates.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure 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 three 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.
CREDIT PROFILE
LWB is a Type A LPC located in Plano, TX, approximately 20 miles
north of Dallas. LWB opened in April 2008 and has 114 ILUs (102
apartments and 12 villas), 40 ALUs, 18 memory support suites, and
60 SNF beds. Lifecare residents are primarily on the 90% refundable
entrance fee plan. Management has set aside up to six ILUs to be
used as rentals for residents that do not have the financial
resources for the lifecare contract. LWB is subject to an annual
1.2 times DSCR covenant minimum and a liquidity covenant minimum of
150 DCOH.
LWB's sole corporate parent is Legacy Senior Communities (LSC),
which manages LWB under a management agreement. Fitch's analysis is
based on LWB, which is the only obligated group member.
Sources of Information
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
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.
LTL MANAGEMENT: Government Wants Big Kat Out of J&J Case
--------------------------------------------------------
Kevin Dunleavy of Fierce Pharma reports that the U.S. government
wants the court to block Johnson & Johnson's use of high-powered,
highly paid lawyer Neal Katyal in its unit's Chapter 11 case.
At the powerful law firm of Hogan Lovells, partner Neal Katyal is
decidedly a "rainmaker."
So what does it cost to make it rain? $2,465. Per hour.
That's what it takes to do business with Katyal, 52, formerly the
Acting Solicitor General of the United States during the Obama
administration.
And it's the rate that Johnson & Johnson is willing to pony up in
its controversial bankruptcy case in which it is trying to free
itself from potentially billions in liabilities over its talc
products.
Just one problem: The U.S. government doesn't want to see the Big
Kat in court. In the Chapter 11 case, the U.S. has asked a New
Jersey judge to block LTL Management LLC -- the company J&J has
established in which to funnel roughly 38,000 talc lawsuits -- from
employing Katyal considering his hourly rate is "significantly
higher" than those of the lawyers from seven other law firms who
are litigating the case.
LTL wants Katyal on the job because of his success in federal
appeals cases. But in bankruptcy cases, a claimant's legal fees
must be approved by the court.
J&J got a big win in court in February 2022 when New Jersey judge
Michael Kaplan grudgingly affirmed the company's ability to use
Chapter 11 to hasten a settlement to resolve the talc claims.
But earlier this month, the Third U.S. Circuit Court of Appeals
said it would revisit the tactic, known as the Texas Two-Step. The
ploy has been used by other companies to protect assets and avoid
the cost of litigation and settlements.
About Johnson & Johnson
Johnson & Johnson is an American multinational corporation founded
in 1886 that develops medical devices, pharmaceuticals, and
consumer packaged goods. It is the world's largest and most broadly
based healthcare company.
Johnson & Johnson is headquartered in New Brunswick, New Jersey,
the consumer division being located in Skillman, New Jersey. The
corporation includes some 250 subsidiary companies with operations
in 60 countries and products sold in over 175 countries.
The corporation had worldwide sales of $82.6 billion in 2020.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee
for Regions 3 and 9 reconstituted the talc claimants' committee and
appointed two separate committees: (i) the official committee of
talc claimants I, which represents ovarian cancer claimants, and
(ii) the official committee of talc claimants II, which represents
mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
MALLINCKRODT PLC: Wins Cash Collateral Access Thru June 20
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved the
request of Mallinckrodt, PLC to further extend the outside
termination date under the Order authorizing use of cash
collateral.
The Debtors' cash collateral access is extended to June 20, 2022.
The Court held that, for the avoidance of doubt, on the Effective
Date of the Plan, any claims for payment of any amounts payable
pursuant to the Cash Collateral Order arising after the Effective
Date, including any obligation of the Debtors to pay pursuant to
Paragraph 4(g) or 5(g) of the Cash Collateral Order, any
professional fees, expenses or disbursements of any kind, will be
disallowed.
The entry of the Order is subject to each of the reservations of
rights contained in the Cash Collateral Order. The Cash Collateral
Order will remain in full force and effect in accordance with its
terms.
A copy of the order is available at https://bit.ly/3PF9bUJ from
PacerMonitor.com.
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 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.
MATHESON FLIGHT: Seeks to Hire Culhane Meadows as Special Counsel
-----------------------------------------------------------------
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
seek approval from the U.S. Bankruptcy Court for the Eastern
District of California to hire Culhane Meadows, PLCC as their
special counsel to address government contract issues.
The firm's current rates for the attorneys are:
David Hendel $450 per hour
Mette Kurth $575 per hour
Sal Subasinghe $450 per hour
As disclosed in court filings, Culhane Meadows and its attorneys
are disinterested persons within the meaning of Bankruptcy Code
Section 101(14).
The firm can be reached through:
David P. Hendel, Esq.
Culhane Meadows PLCC
PO Box 736634
Dallas, TX 75373-6634
Direct: 202-683-2022
Email: dhendel@cm.law
About Matheson Flight and Matheson Postal
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
provide short and long-haul transportation, logistics and ground
handling services.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Calif. Lead Case No. 22-21148) on May 5,
2022. In the petitions signed by Charles J. Mellor, chief
restructuring officer, the Debtors disclosed up to $50 million in
both assets and liabilities.
Judge Christopher M. Klein oversees the cases.
Nuti Hart, LLP, Culhane Meadows, PLCC, and Development Specialists,
Inc. serve as the Debtors' bankruptcy counsel, special counsel, and
financial advisor, respectively.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on May 25,
2022.
MATHESON FLIGHT: Seeks to Hire Donlin Recano & Co. as Claims Agent
------------------------------------------------------------------
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
seek approval from the U.S. Bankruptcy Court for the Eastern
District of California to hire Donlin, Recano & Company, Inc. as
their claims, noticing and solicitation agent, and administrative
advisor.
The firm will oversee the distribution of notices and will assist
in the maintenance, processing and docketing of proofs of claim
filed in the Debtors' Chapter 11 cases.
The firm's hourly rates are as follows:
Executive Management No charge
Senior Bankruptcy Consultant $158 - $194 per hour
Case Manager $144 - $158 per hour
Consultant/ Analyst $117 - $140 per hour
Technology/Programming Consultant $86 - $108 per hour
Clerical $35 - $45 per hour
Donlin will also seek reimbursement for out-of-pocket expenses
incurred.
Nellwyn Voorhies, executive director of Donlin Recano, disclosed in
court filings that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
Donlin can be reached at:
Nellwyn Voorhies
Donlin, Recano & Company, Inc.
6201 15th Avenue
Brooklyn, NY 11219
Tel: (800) 591-8236
About Matheson Flight and Matheson Postal
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
provide short and long-haul transportation, logistics and ground
handling services.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Calif. Lead Case No. 22-21148) on May 5,
2022. In the petitions signed by Charles J. Mellor, chief
restructuring officer, the Debtors disclosed up to $50 million in
both assets and liabilities.
Judge Christopher M. Klein oversees the cases.
Nuti Hart, LLP, Culhane Meadows, PLCC, and Development Specialists,
Inc. serve as the Debtors' bankruptcy counsel, special counsel, and
financial advisor, respectively. Donlin, Recano & Company, Inc. is
the Debtors' claims, noticing and solicitation agent, and
administrative advisor.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on May 25,
2022.
MATHESON FLIGHT: Seeks to Hire Nuti Hart as Bankruptcy Counsel
--------------------------------------------------------------
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
seek approval from the U.S. Bankruptcy Court for the Eastern
District of California to hire Nuti Hart, LLP as their bankruptcy
counsel.
The firm's service include:
a. advising the Debtors with respect to the powers and duties
under the Bankruptcy Code and execution of their Chapter 11 plan;
b. analyzing and recovering assets of the Debtors' estate;
c. analyzing and prosecuting actions arising under Chapter 5
of Title 11;
d. prosecuting or defending any other litigation or contested
matters that may arise in the course of the Debtors' bankruptcy
cases;
e. preparing legal papers and appearing in court; and
g. performing all other necessary legal services for the
Debtors.
The hourly rates charged by the firm's attorneys are as follows:
Gregory C. Nuti $575
Christopher H. Hart $575
Kevin W. Coleman $575
As disclosed in court filings, Nuti Hart and its attorneys are
disinterested persons within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Gregory C. Nuti, Esq.
Nuti Hart, LLP
411 30th Street, Suite 408
Oakland, CA 94609
Tel: 510-506-7153
Email: gnuti@nutihart.com
About Matheson Flight and Matheson Postal
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
provide short and long-haul transportation, logistics and ground
handling services.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Calif. Lead Case No. 22-21148) on May 5,
2022. In the petitions signed by Charles J. Mellor, chief
restructuring officer, the Debtors disclosed up to $50 million in
both assets and liabilities.
Judge Christopher M. Klein oversees the cases.
Nuti Hart, LLP, Culhane Meadows, PLCC, and Development Specialists,
Inc. serve as the Debtors' bankruptcy counsel, special counsel, and
financial advisor, respectively.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on May 25,
2022.
MATHESON FLIGHT: Taps Development Specialists as Financial Advisor
------------------------------------------------------------------
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
seek approval from the U.S. Bankruptcy Court for the Eastern
District of California to hire Development Specialists, Inc. as
their financial advisor.
The firm's services include:
a. assisting in the preparation of the bankruptcy schedules,
statement of financial affairs, and other documents;
b. negotiating with the Debtors' lender the terms of a cash
collateral agreement, and assisting the Debtors and the lender in
drafting and filing such agreement; and
c. performing other necessary financial advisory services for
the Debtors.
The hourly rates charged by the firm for its services are as
follows:
Senior Managing Director $585 - $775
Managing Director $475 - $560
Director $375 - $450
Associate $160 - $395
Development Specialists received a retainer in the amount of
$150,000.
As disclosed in court filings, Development Specialists is
disinterested within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Nicholas R. Troszak
Development Specialists, Inc.
333 South Grand Avenue, Suite 4100
Los Angeles, CA 90071
Telephone: 213-617-2717
Fax: 213-617-2718
Email: ntroszak@DSIConsulting.com
About Matheson Flight and Matheson Postal
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
provide short and long-haul transportation, logistics and ground
handling services.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Calif. Lead Case No. 22-21148) on May 5,
2022. In the petitions signed by Charles J. Mellor, chief
restructuring officer, the Debtors disclosed up to $50 million in
both assets and liabilities.
Judge Christopher M. Klein oversees the cases.
Nuti Hart, LLP, Culhane Meadows, PLCC, and Development Specialists,
Inc. serve as the Debtors' bankruptcy counsel, special counsel, and
financial advisor, respectively.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on May 25,
2022.
MD HELICOPTERS: Dutch Lien on Factory Denied in Chapter 11 Case
---------------------------------------------------------------
Vince Sullivan of Law360 reports that the government against
bankrupt aviation company MD Helicopters did not attach to the
Debtor's manufacturing facility in Arizona, saying state law there
classified leasehold interests as personal property rather than
real property.
During a Zoom hearing, Judge Karen B. Owens of the U.S. Bankruptcy
Court for the District of Delaware said that even though the
parties agree that the Dutch have a valid enforceable judgment lien
against MD Helicopters that attaches to the debtor's real property,
the Debtor only leased the premises in Mesa where its factory
sits.
As reported in the May 23, 2022 edition of the TCR, the government
of The Netherlands argued in support of its $15.5 million priority
lien against bankrupt MD Helicopters Inc., saying Arizona law
governing leases on real property clearly weighed in favor of the
nation's claim on the debtor's Mesa manufacturing facility. MD
Helicopters argue that the Debtor's leasehold interests in the
20-acre property consist of personal property that cannot be
subject to a lien. According to the Dutch, treatment of leases as
real property interests appears consistent throughout the Arizona
statutes.
About MD Helicopters
MD Helicopters Inc. is a global manufacturer and supplier of
commercial and military helicopters, spare parts, and related
services. The Company's sole manufacturing facility is located in
Mesa, Arizona.
MD Helicopters sought Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 22-10263) on March 30, 2022.
MD Helicopters estimated assets between $100 million to $500
million and liabilities between $100 million to $500 million.
Suzzanne Uhland, Esq., Adam S. Ravin, Esq., Brett M. Neve, Esq.,
Tianjiao (TJ) Li, Esq., Alexandra M. Zablocki, Esq., at Latham &
Watkins LLP are the Debtors' counsel. Moelis & Company LLC are the
Debtors' investment bankers. AlixPartners, LLP is the restructuring
advisor. Prime Clerk LLC is the notice, claims and balloting
agent.
MEDI BROTHERS: Seeks to Employ Larry Vick as Bankruptcy Counsel
---------------------------------------------------------------
Medi Brothers LLC seeks approval from the U.S. Bankruptcy Court for
the Southern District of Texas to hire Larry A. Vick to serve as
legal counsel in its Chapter 11 case.
Mr. Vick shall provide the following services:
(a) analyzing the financial situation and rendering advice and
assistance to the Debtor;
(b) advising with respect to the Debtor's rights, duties, and
powers in the case;
(c) representing the Debtor at all hearings and other
proceedings;
(d) preparing and filing all appropriate petitions, schedules
of assets and liabilities, statements of affairs, answers, motions
and other legal papers as necessary to further the Debtor's
interests and objectives;
(e) representing the Debtor at any meeting of creditors and
such other services as may be required during the course of the
bankruptcy prcoeedings;
(f) representing the Debtor in all proceeding before the Court
and in any other judicial or administrative proceeding where the
rights of the Debtor may be litigated or otherwise affected;
(g) preparing and filing a Disclosure Statement and Chapter 11
Plan of Reorganization;
(h) assisting the Debtor in analyzing the claims of the
creditors and in negotiating with such creditors;
(i) assisting the Debtor in any matters relating to or arising
out of the captioned case; and
(j) prosecuting and, as the case may be, defending the Debtor
in litigation as attorney for the Debtors in possession.
Mr. Vick shall receive an hourly rate of $450.00.
The Debtor paid Mr. Vick the amount of $7,500.00 as a retainer fee.
Based on a court filing, Mr. Vick disclosed that he is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
Mr. Vick can be reached at:
Larry A. Vick
13501 Katy Freeway, Suite 1460
Houston, TX 77079
Tel.: (832) 413-3331
Fax: (832) 202-2821
Email: lv@larryvick.com
About Medi Brothers
Medi Brothers LLC, doing business as Best Care Pharmacy, is a
community/retail pharmacy in Houston, Texas.
Medi Brothers LLC sought for chapter 11 protection (Bankr. S.D.
Tex. Case No. 22-31085) on April 25, 2022. In the petition filed by
Henry Nguyen, as managing member, Medi Brothers LLC listed total
assets amounting to $1,662,167 and total liabilities of $696,982.
The case is assigned to Honorable Bankruptcy Judge Christopher M.
Lopez. Larry A. Vick is the Debtor's counsel.
MEGA-PHILADELPHIA LLC: Gets OK to Hire CMS Station as Broker
------------------------------------------------------------
Mega-Philadelphia, LLC and M.S. Acquisitions & Holdings, LLC
received approval from the U.S. Bankruptcy Court for the Middle
District of Florida to employ CMS Station Brokerage in connection
with the sale of their radio stations in Philadelphia, Pa.
Mega operates these radio stations: WEMG 1310 AM and FM 105.7 in
Philadelphia; and also rebroadcasts in Millville and Atlantic City,
N.J.
CMS charges $120 per hour for its services. The total fee cap is
$4,200.
For a sale of the stations, CMS will get a commission of 5 percent
if the stations are sold for more than $500,000 but less than $3
million, plus 2 percent on any amount exceeding $3 million. CMS
will get a 10 percent commission if the stations are sold for
$499,999 or less.
As disclosed in court filings, CMS is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Roger H. Rafson
CMS Station Brokerage
1439 Denniston St.
Pittsburgh, PA 15217
Phone: +1 412-421-2600
Email: roger@rafson.com
About Mega-Philadelphia and
M.S. Acquisitions
Mega-Philadelphia, LLC is a music and radio station business that
provides radio broadcasting services in Philadelphia, South New
Jersey, and Atlantic City, N.J. Based in Naples, Fla.,
Mega-Philadelphia generates advertisement revenue through broadcast
radio and live promotional events. M.S. Acquisitions & Holdings,
LLC is the 100% owner and sole member of Mega-Philadelphia.
Mega-Philadelphia and M.S. Acquisitions filed petitions under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla.
Lead Case No. 22-00340) on March 25, 2022. Amy Denton Harris serves
as Subchapter V trustee.
In the petitions signed by Michael Sciore, chief executive officer,
Mega-Philadelphia listed $346,574 in assets and $2,285,961 in
liabilities while M.S. Acquisitions listed $196,427 in assets and
$5,526,926 in liabilities.
Judge Caryl E. Delano oversees the Debtors' cases.
Brett Lieberman, Esq., at Edelboim Lieberman Revah, PLLC and
KapilaMukamal, LLP serve as the Debtors' legal counsel and
financial advisor, respectively.
MILLER'S ALE: Moody's Affirms Caa1 CFR & Alters Outlook to Positive
-------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Miller's Ale
House, Inc. including its Caa1 corporate family rating and Caa1-PD
probability of default rating. In addition, Moody's affirmed
Miller's Caa1 senior secured bank credit facility rating, and
assigned a Caa1 rating to its $20.5 million senior secured add-on
term loan that was added in February 2020. The ratings outlook was
changed to positive from stable.
"The change in outlook to positive reflects Miller's improving
performance and credit metrics," stated Moody's Vice President,
Mike Zuccaro. "Despite increased challenges related to labor and
commodity cost inflation and a potential negative impact on
consumers, Moody's believe the company can sustain its enhanced
credit profile", Zuccaro added. Liquidity is adequate, supported by
balance sheet cash and positive free cash flow. However, should any
shortfall arise over the coming year, excess liquidity cushion is
limited due to the May 30, 2023 expiration of its undrawn revolving
credit facility.
Affirmations:
Issuer: Miller's Ale House, Inc.
Corporate Family Rating, Affirmed Caa1
Probability of Default Rating, Affirmed Caa1-PD
Gtd Senior Secured Term Loan B, Affirmed Caa1 (LGD3)
Gtd Senior Secured Revolving Credit Facility, Affirmed Caa1
(LGD3)
Assignments:
Issuer: Miller's Ale House, Inc.
Gtd Senior Secured Term Loan, Assigned Caa1 (LGD3 )
Outlook Actions:
Issuer: Miller's Ale House, Inc.
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Miller's Caa1 CFR reflects its modest scale and high geographic
concentration in Florida coupled with its adequate liquidity.
Miller's liquidity cushion is limited by the May 30, 2023
expiration of its revolving credit facility. While Moody's expects
cash flow needs to be supported by moderate cash and operating cash
flow, the current operating environment is challenging, and
shortfalls that required revolver borrowing would become due and
payable upon expiration and recent improvement in credit metrics
could be pressured. Miller benefits from its reasonable level of
brand awareness evidenced by its high average restaurant sales
volumes, good day-part distribution and product mix with a
relatively high margin alcohol percentage.
The positive outlook reflects Miller's improving operating
performance and credit metrics. Despite increased challenges
related to labor and commodity cost inflation and a potential
negative impact on consumers, Moody's expects the company to
sustain its enhanced credit profile and improve its liquidity
profile.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company improves liquidity through
a longer term extension of its revolver while maintaining solid
metrics, including debt to EBITDA below 6.5 times and EBIT to
interest above 1.1x, and at least break even free cash flow.
Ratings could be downgraded should there be a deterioration in
liquidity or material erosion in performance or credit metrics.
Miller's, with headquarters in Orlando, Florida, owns and operates
97 casual dining restaurants in Florida and Eastern US. Revenue for
the latest twelve month period ended March 2022 exceeded $500
million. Miller's is majority owned by affiliates of Roark Capital.
The company is not required to release financial statements
publicly.
The principal methodology used in these ratings was Restaurants
published in August 2021.
NATIONAL SMALL BUSINESS: Trustee Taps Arthur Lander as Accountant
-----------------------------------------------------------------
Marc Albert, the Chapter 11 trustee for National Small Business
Alliance, Inc., seeks approval from the U.S. Bankruptcy Court for
the District of Columbia to employ Arthur Lander CPA PC as his
accountant.
The firm's services include:
a. compiling books and records, and preparing and filing all
necessary tax returns on behalf of the estate;
b. advising the trustee of his duties and responsibilities
under the Internal Revenue Code;
c. assessing the estate's financial condition; and
d. other matters that arise in the administration of this
estate in bankruptcy relating to accounting matters.
The hourly rates charged by the firm for its services are as
follows:
Arthur Lander, CPA $450 per hour
Thai Ton $170 per hour
Chris Mueller $170 per hour
Bookkeeping $85 per hour
Arthur Lander, Esq., president of Arthur Lander CPA, 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:
Arthur Lander, Esq.
Arthur Lander, C.P.A., P.C.
300 N. Washington St. #104
Alexandria, VA 22314
Phone: (703) 486-0700
Email: law@businesslegalservicesinc.com
About National Small Business Alliance
National Small Business Alliance, Inc. --
http://www.nsbamembers.org-- is a small business owners'
membership association that provides a variety of critical services
to thousands of small businesses.
National Small Business Alliance sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D.D.C. Case No. 21-00031) on Jan.
31, 2021, listing as much as $10 million in both assets and
liabilities. Michael Holleran, director and chief executive
officer, signed the petition.
Judge Elizabeth L. Gunn oversees the case.
Law Group International Chartered, led by Eric Nwaubani, Esq.,
serves as the Debtor's legal counsel.
Marc Albert is the Chapter 11 trustee appointed in the Debtor's
bankruptcy case. Stinson, LLP and Arthur Lander CPA, PC serve as
the trustee's legal counsel and accountant, respectively.
NAUTILUS POWER: S&P Lowers ICR to 'B' on Revised Capacity Prices
----------------------------------------------------------------
S&P Global Ratings lowered its rating on Nautilus Power LLC's
(Nautilus') senior secured debt to 'B' from 'B+' and removed the
rating from CreditWatch, where S&P placed it with negative
implications on Feb. 16, 2022. The recovery rating is unchanged at
'3', indicating its expectation for meaningful recovery (50%-70%;
rounded estimate: 65%).
The negative outlook reflects financial underperformance risk if
the project is unable to capitalize on the currently favorable
energy market conditions. S&P could also lower its rating if it
views Nautilus' liquidity as becoming constrained, which could
result from the project not being able to extend its revolving
credit facility (RCF) due May 2023.
Nautilus comprises a power portfolio of about 2.2 gigawatts in the
Eastern Mid-Atlantic Area Council (EMAAC) zone of the PJM and in
the ISO New England (ISO-NE) regional transmission organization
(RTO). The portfolio consists of the assets listed below.
Materially lower projected clearing prices will have a significant
impact on Nautilus' cash flows. S&P said, "We now anticipate that
capacity prices in PJM-EMAAC, will be materially lower over the
long term. Capacity payments constitute a significant portion of
Nautilus' gross margin (more than 60%); therefore, we expect the
project will experience the effects of lower capacity prices
throughout its life, including the refinancing period, compared
with previous assumptions. Our new price assumptions result in a
forecast loss of approximately 20% in capacity revenue from 2022 to
2044 compared with our previous forecast. Under our refinancing
assumptions, we assume that the remaining TLB debt, about $442
million, is repaid entirely by 2044 via an amortizing structure,
although these payments are sized to the strength of the project's
cash flows. Based on our revised base-case scenario, we now project
a minimum debt service coverage ratio (DSCR) of 1.17x, which occurs
during the refinancing period (2024-2044). We previously expected a
minimum DSCR of 1.32x."
S&P said, "Our updated forecast incorporates the currently strong
energy market and the likelihood of the project's relatively
efficient assets (Newington and Lakewood) capture above-average
energy margins. However, given the project's asset base is heavily
tilted toward capacity cash flows, we believe that the uplift in
market sparks will not be sufficient to offset the potential
decline in capacity revenue under our forecast capacity prices.
"A combination of factors drives our outlook lower for PJM capacity
market. About 75% of Nautilus' capacity revenue comes from its PJM
assets. We assume a separation in the prices for the EMAAC zone at
$95/MW-day relative to those for the RTO. This is a modest decline
from the outcome of the last auction. However, we believe the price
could be modestly lower still at about $80/MW-day. We expect the
EMAAC clearing price will remain rangebound, mostly because of
continued lower expected offers for nuclear capacity resources that
are now receiving financial support. We expect these units will be
offered on a price-taking basis. The increase in EMAAC values comes
from a combination of a lower capacity energy transfer limit (CETL)
and a modestly higher expected peak load. However, due to revisions
to the market seller offer cap (MSOC) rules, our longer-term
expectations are now significantly muted and increase to only
$120/MW-day by 2026/2027.
"The negative outlook incorporates financial underperformance risk,
largely linked to a potential inability to capture higher energy
margins. Because Nautilus has a diversified portfolio that has
combined cycle units capable of dispatching energy, our base-case
expectation is that the project will benefit to some extent from
higher spark spreads given the current commodity prices and will
realize above-average energy margins. However, this expectation is
subject to execution risk, and if the portfolio is unable to
capitalize on the currently favorable market conditions, or if
energy prices normalize sooner than we expect, Nautilus' cash flows
could be weaker than we forecast. Without any mitigating factors,
this could result in a downgrade."
Nautilus has hedged a portion of its expected generation for 2022
and 2023 at attractive margins. Given the favorable market
dynamics, Nautilus has opportunistically hedged some of its
expected generation through spark spread hedges for 2022 and 2023.
S&P considers this credit positive, as stronger energy margins will
likely absorb some of the cash flow loss from lower capacity
revenues.
The negative outlook reflects the risk of weaker-than-expected
financial performance, largely in the context of softer power
prices. S&P said, "Our analysis assumes that the project's
dispatching assets will realize above-average profitability due to
currently favorable market dynamics Any material weakness in power
prices and spark spreads or an inability to capitalize on the
currently attractive market conditions would lead to a downgrade.
Under our base-case forecast, we expect minimum DSCR of 1.17x and
TLB outstanding at maturity of $442 million."
The negative outlook also reflects the project's upcoming debt
maturities including the RCF, which matures in May 2023. If the
project is not able to extend its RCF or if S&P expected the
project to face difficulty in refinancing the TLB, it would take a
negative rating action.
S&P would lower the rating if it expects the project's minimum DSCR
to fall below 1.1x. This could be a result of several factors,
including a further decline in capacity prices, lower-than-forecast
energy margins, or lower-than-expected sweeps, which would lead to
higher debt outstanding at TLB maturity.
S&P could revise the outlook to stable if the project achieves a
minimum DSCR of 1.2x through its life, including the refinancing
period. This would be spurred by improved capacity prices or
higher-than-forecast energy margins.
NESV ICE: Wins Interim Cash Collateral Access Thru August
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Eastern Division, authorized NESV Ice, LLC and its
debtor-affiliates to use cash collateral in the ordinary course of
business substantially in accordance with the budget, with a 10%
variance through the commencement of the continued hearing on the
motion.
SHS ACK, LLC asserts a security interest in Ice's property,
including the cash proceeds thereof, and Ice's deposit accounts.
As adequate protection, SHS is granted replacement liens in and to
all property of the kind presently securing the prepetition
obligations of Ice to SHS. The Replacement Liens will only attach
to and be enforceable against the same types of property, to the
same extent, and in the same order of priority as existed
immediately prior to the Petition Date.
Ice is directed to pay the City of Attleboro real estate taxes and
other municipal charges as they become due postpetition, as well as
interest on prepetition amounts. In addition, Ice will maintain its
insurance policies and remain current postpetition on any premiums
that must be paid.
A continued hearing on the Debtor's request is scheduled for August
8, 2022, at 1:30 p.m.
Ice's authority to use cash collateral will terminate upon the
occurrence of any of these events, unless waived by SHS in
writing:
a. Default by Ice in reporting the information specified in
section 6 above, if such default will remain uncured for three
business days following written notice from SHS to Ice;
b. Reversal, vacatur, or modification of the Sixth Interim
Order; or
c. Dismissal of the case or conversion of Ice's case to
chapter 7.
A copy of the Court order and the Debtors' budget is available at
https://bit.ly/3MSWML1 from PacerMonitor.com.
The budget provided for total cash disbursements, on a weekly
basis, as follows:
$60,113 for the week ending May 20, 2022;
$3,300 for the week ending May 27, 2022;
$53,712 for the week ending June 3, 2022;
$22,711 for the week ending June 10, 2022;
$75,211 for the week ending June 17, 2022;
$4,700 for the week ending June 24, 2022;
$49,432 for the week ending July 1, 2022;
$13,814 for the week ending July 8, 2022;
$75,211 for the week ending July 15, 2022;
$300 for the week ending July 22, 2022;
$37,986 for the week ending July 29, 2022;
$17,748 for the week ending August 5, 2022;
$40,883 for the week ending August 12, 2022;
About NESV Ice, LLC
NESV Ice, LLC and affiliates NESV Swim, LLC, NESV Field, LLC, NESV
Hotel, LLC, NESV Tennis, LLC, NESV Land, LLC, and NESV Land East,
LLC, offer fitness and sports training services. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Mass. Case No. 21-11226) on August 26, 2021. The petitions were
signed by Stuart Silberberg as manager.
Judge Christopher J. Panos oversees the case.
William McMahon, Esq., at Downes McMahon LLP is the Debtor's
counsel.
NEW ERA INVESTMENT: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
New Era Investment Properties LLC filed for chapter 11 protection
in the Southern District of Florida.
New Era Investment Properties owns a single family residence. It
owns one of a kind property at 10395 SW 67TH Avenue, Miami, Florida
33156 on an expansive lot in Pinecrest. 7 BD/5 BA home situated on
over 1.5 acres and 10,689 sq ft of living space. It has a two
story open living area with abundant natural light, large eat-in
kitchen, and spacious master suite complete with fireplace. Perfect
for entertaining, the property is equipped with movie theater, game
room, large pool and basketball court. The property has close
proximity to Dadeland Mall, Pinecrest schools, shopping and more!
Valued at $6 million.
The Debtor filed for bankruptcy due to a state court litigation.
According to court documents, New Era Investment Properties
estimates between 1 and 49 unsecured creditors.
A telephonic meeting of creditors under 11 U.S.C. Sec. 341(a) to be
held on June 17, 2022 at 2:30 p.m.
About New Era Investment Properties
New Era Investment Properties sought Chapter 11 bankruptcy
protection (Bankr. S.D. Fla. Case No. 22-13834) on May 14, 2022.
In the petition filed by Angel Bermudez, as MGM, New Era Investment
Properties estimated assets between $1 million and $10 million and
estimated liabilities between $1 million and $ 10 million.
The case is assigned to Honorable Bankruptcy Judge Laurel M.
Isicoff.
Joel M. Aresty, Esq., of JOEL M. ARESTY PA, is the Debtor's
counsel.
NEW YORK OPTICAL: June 29 Hearing on Disclosure Statement
---------------------------------------------------------
Judge Scott M. Grossman will convene a hearing on the Amended
Disclosure Statement of New York Optical-International, Inc., on
June 29, 2022 at 1:30 p.m. in U.S. Courthouse, 299 E. Broward
Blvd., Courtroom 308, Ft. Lauderdale, FL 33301.
Objections to the Amended Disclosure Statement must be filed and
served with the Court on June 22, 2022. Any objecting party must
confer with the plan proponent's counsel at least three business
days before the disclosure hearing in an effort to resolve any
objections to the Amended Disclosure Statement.
About New York Optical-International
New York Optical-International, Inc., is a Davie, Fla.-based
company that offers optical products. It conducts business under
the name Tuscany Eyewear.
New York Optical-International filed a petition for Chapter 11
protection (Bankr. S.D. Fla. Case No. 20-17961) on July 22, 2020,
listing as much as $10 million in both assets and liabilities. New
York Optical-International President Wayne R. Goldman signed the
petition.
Judge Scott M. Grossman oversees the case.
David W. Langley, Esq., is the Debtor's bankruptcy attorney while
Leto Law Firm and Alexander Duve, Esq., serve as the Debtor's
special counsel. Connolly Wasserstrom & Castillo, LLC, is the
Debtor's accountant.
NORTHWEST SENIOR HOUSING: Landlord Asks Court for Loss Protection
-----------------------------------------------------------------
Rick Archer of Law360 reports that the landlord of the bankrupt
Edgemere retirement community in Dallas asked a Dallas bankruptcy
judge Thursday, May 26, 2022, to find it has an interest in its 400
housing units and that it should get guarantees against the risk
the debtor will allow the property to drop in value.
The daylong hearing saw Edgemere operator Northwest Senior Housing
Corp. and landlord Intercity Investment Properties Inc. clash over
whether Intercity has a claim on the Edgemere facilities for
protection against what Intercity claims are mounting tax
liabilities and possible maintenance shortfalls.
About Northwest Senior Housing Corp.
Northwest Senior Housing Corporation, doing business as Edgemere,
is a Texas non-profit corporation and is exempt from federal income
taxation as a charitable organization described under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
Northwest Senior Housing Corporation was formed for the purpose of
developing, owning and operating a senior living community now
known as Edgemere.
Northwest Senior Housing Corporation and its affiliates sought
Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Lead Case No.
22-30659) on April 14, 2022. The petitions were signed by Nick
Harshfield, treasurer. At the time of the filing, Northwest Senior
Housing listed $100 million to $500 million in both assets and
liabilities.
Judge Michelle V. Larson oversees the cases.
Polsinelli, PC and FTI Consulting Inc. serve as the Debtors' legal
counsel and business advisor, respectively. Kurtzman Carson
Consultants, LLC, is the Debtors' notice, claims and balloting
agent and administrative advisor.
NOVA ACADEMY: S&P Alters Outlook to Neg. on 2015 Education Bonds
----------------------------------------------------------------
S&P Global Ratings revised the outlook to negative from stable and
affirmed its 'BB' long-term and underlying ratings for credit
program on Clyde Education Facilities Corp., Texas' series 2015
education revenue refunding bonds issued for Nova Academy (Nova or
the school).
"The negative outlook reflects our view of Nova's weakened
enterprise profile, with material enrollment declines in five of
the past six years, from a high of 962 students to 674 students in
fall 2021," said S&P Global Ratings credit analyst Alexander
Enriquez. Though management is budgeting for flat enrollment in
fall 2022, S&P views these projections as optimistic and believe
that further enrollment declines could pressure the school's
operations when Elementary and Secondary School Emergency Relief
(ESSER) funds expire. The school's lingering academic concerns also
contribute to the negative outlook, although a downgrade is
currently precluded by the school's current positive relationship
with its authorizer, the Texas Education Agency (TEA), and a
charter contract that extends through June 2023.
S&P said, "We believe Nova's governance risks are elevated due to
vulnerabilities within its governance structure and lack of risk
management and oversight that we capture under our environmental,
social, and governance factors (ESG). These vulnerabilities include
legal issues, senior leadership team turnover, the post-conviction
bonus payment to the former CEO, bond covenant violations, and the
continuity of leadership at the board level. Social risk for the
sector remains elevated due to health and safety risks posed by the
COVID-19 pandemic, and we have considered this under our ESG
factors, due to potential effects on enrollment amid the emergence
of COVID-19 variants and shifts in per-pupil funding beyond the
near-term support provided by additional federal relief, which
could affect school operations over time. Despite the elevated
governance and social risks, we analyzed the environmental risks
and consider them neutral in our credit rating analysis.
"We could lower the rating during the outlook period if enrollment
or demand metrics continue to weaken, if the school posts material
operating deficits, or if liquidity deteriorates significantly. We
would also view negatively continued governance issues or movement
in the management team.
"We could revise the outlook to stable should the school
demonstrate a trend of enrollment stability with the school meeting
all state and authorizer academic standards, if positive operating
surpluses continue, and if liquidity is maintained near current
levels."
NOVA CHEMICALS: S&P Raises ICR to 'BB', Outlook Stable
------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Nova
Chemicals Corp. and its issue-level rating on the company's senior
unsecured notes to 'BB' from 'BB-'. The '4' recovery rating is
unchanged.
The stable outlook reflects S&P's view that the company's adjusted
average FFO-to-debt ratio will average about 30% over its forecast
period, and the company will maintain sufficient liquidity.
S&P said, "Despite our expectation for margin compression, we
believe the company's adjusted FFO-to-debt ratio will average 30%
over our forecast period. Solid product demand and supply
bottlenecks supported elevated polyethylene (PE) prices in 2021,
resulting in significant improvement in Nova's cash flows and
leverage metrics. Specifically, adjusted FFO increased to US$2.2
billion from US$520 million in 2020 and adjusted FFO to debt
improved to 62% from 14% over the same period. While PE prices
remain resilient due to stronger demand and price increases
implemented by producers, we expect margins will compress in 2022
and 2023, due to gradual normalization of the supply chain and
meaningful new capacity additions, primarily in PE. As a result, we
expect the adjusted FFO-to-debt ratio will decline to about 25% in
2022, but gradually improve in 2023 and 2024 as capital spending
moderates meaningfully. We also believe the new capacity will be
absorbed and with limited capacity additions beyond 2023, margins
and cash flows should improve beyond 2023. Based on these factors,
we project adjusted FFO to debt to average 30% over the next three
years, in line with our previous upgrade trigger, and this
underpins the rating action. Our estimates also incorporate our
expectation for increased production as the second advanced
SCLAIRTECH facility (AST2) is completed--a 20% rise in PE volumes
once the facility ramps up by 2024.
"We project material free cash flow generation beyond 2022, lending
support to the strength in credit measures. Post completion of the
AST2 facility (85% construction completed as of December 2021) and
Corunna expansion in 2022, we assume capital spending will
significantly fall and believe it will primarily consist of
maintenance and turnaround expenses. Although there may be some
discretionary spending related to operational and environmental,
social, and governance (ESG)-related initiatives, we expect these
to be modest. Accordingly, we estimate free cash flows of close to
US$250 million in 2022 but believe they will increase meaningfully
in the US$800 million to US$900 million range annually in 2023 and
2024. We also assume continued dividends to the parent of about
US$700 million in 2022 and US$500 million annually thereafter;
however, we believe the absence of aggressive growth spending and
low likelihood of material litigation-related payments should limit
deterioration in credit measures to the extent witnessed during
fiscal 2019, when adjusted FFO to debt averaged 15%. The company
also has a fully available credit facility of US$1.5 billion that
provides it with a strong mechanism to withstand temporary market
disruptions. Accordingly, we believe Nova can sustain credit
measures within our current rating threshold even if product prices
further weakened relative to our expectations.
"Our business risk assessment reflects the company's relatively
good market position, scale, and structurally advantageous cost
position; however, Nova lacks scope and diversity compared with
larger peers. Nova has a good market position in the North American
ethylene and PE industry, which has favorable growth prospects. In
our view, the company's scale and market position will further
strengthen following completion of the new PE facility in Sarnia,
Ont. (950,000 pounds capacity) and expansion of its Corunna cracker
by approximately 50%. Our assessment also factors in Nova's
cost-advantaged position in North America, given access to
lower-cost natural gas relative to global peers that use naphtha as
an input. In addition, we believe the company's diversified
feedstock access and conversion of the Corunna facility to use up
to 100% ethane from the Marcellus and Utica shale basins have
improved profitability. We estimate Nova's EBITDA margins on a
five-year, weighted-average basis at about 35%, in the top quartile
of our commodity chemicals peer group.
"Partially offsetting these strengths is Nova's relatively limited
product and operational diversity. We believe the company has less
comprehensive scale, scope, and diversity than peers have, such as
Westlake Chemical Corp. and LyondellBasell Industries N.V., which
are significantly larger and have better product diversification.
"Our ratings incorporate a one-notch uplift for group support. We
continue to view Nova as moderately strategic to direct parent
Mubadala Investment Co. (MIC), as part of the government-related
entity Mamoura Diversified Global Holding PJSC (AA/Stable/A-1+),
because we believe the parent is likely to provide indirect
support, if needed. While we expect Nova to make meaningful
dividend payments to the parent, these are largely from free cash
flow generation. Accordingly, our rating on Nova receives one notch
of uplift due to our perception of parental support under our group
rating methodology criteria.
"The stable outlook reflects our view that despite industry
capacity additions, Nova should be able to generate an adjusted
FFO-to-debt ratio averaging 30% over the next three years.
Supporting this assumption is our expectation that post AST2
completion in late 2022, management will not pursue any aggressive
growth projects, resulting in meaningful free cash flow generation
lending support to the credit measures.
"We could lower the rating over the next 12 months if Nova's
three-year, weighted-average adjusted FFO-to-debt ratio (2022-2024)
fell below 20% on a sustained basis. We believe this could occur if
demand weakened or PE prices declined more than our expectations
due to industry capacity additions. We could also lower the rating
if we revised our assessment of Nova's strategic importance to its
parent. This could occur if, in our view, the parent was unlikely
to lend support to Nova during conditions of stress.
"We could raise the rating if we expect the company's adjusted
FFO-to-debt ratio to approach and sustain at the stronger end of
30%-45%. We believe this could occur if oil and product prices
improved better than our expectations and management articulated a
corporate strategy that clearly supported the maintenance of credit
measures at this level."
ESG credit indicators: E-3, S-2, G-3
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of Nova, due to
increasing need by petrochemical producers to address challenges
regarding plastic pollution and CO2 emissions. The company's
absolute emissions increased by 14% from 2016 to 2020 primarily
from acquired assets, although intensity declined by 3% over the
same period due to improvement in combustion efficiency. The
company is taking steps toward a smaller environmental footprint
but the health and environmental impact related to plastic
pollution and inherent volatility in commodity pricing limit any
improvement in the business risk profile. Governance factors are
also a moderately negative consideration and are weaker relative to
the broader industry given the recent litigation-related payments
(about US$1.5 billion) to Dow Chemicals, which had an adverse
impact on cash flow metrics."
OPELOUSAS GENERAL HEALTH: S&P Cuts 2003 Bond Rating to BB-
----------------------------------------------------------
S&P Global Ratings lowered its long-term rating on Opelousas
General Hospital Authority, La.'s series 2003 hospital revenue
bonds issued on behalf of Opelousas General Hospital, doing
business as Opelousas General Health System (OGHS), to 'BB-' from
'BB'. The outlook is negative.
"The downgrade and negative outlook reflect OGHS's significant
balance sheet deterioration in fiscal 2021 and through the
seven-month interims ended Jan. 31, 2021," said S&P Global Ratings
credit analyst Matthew O'Connor. While we expect additional
Medicaid upper payment limit payments received through year-end
should support improved unrestricted reserve levels, metrics remain
challenged in an uncertain operating environment. "The negative
outlook reflects operating margin deterioration through March,
creating some uncertainty regarding fiscal 2022 results," added Mr.
O'Connor.
The rating and outlook reflect declining unrestricted reserves as
measured by days' cash on hand and unrestricted reserves/long-term
debt. While operations have remained positive through fiscal 2021
and the interim period, results have been supported by significant
COVID-19 stimulus funding. This followed a weaker fiscal 2020 that
resulted in covenant violation on the 2009 bonds (not rated by S&P
Global Ratings) with debt service coverage below the 1.1x
threshold, although the covenant violation was cured by a
consultant call in. The 2009 bonds also have a 75 days' cash on
hand requirement. S&P said, "Management expects to meet the 75
days' covenant in fiscal 2022; however, there is no cross-default
provision between the series 2003 bonds we rate, which carry a debt
service reserve requirement. Also pressuring the rating is our
continued view of OGHS' vulnerable enterprise profile,
characterized by modest market share and considerable outmigration
in a small primary service area (PSA) with weak economic
fundamentals. Additionally, the organization has a very high
average age of plant, which will require capital investments over
the near term. OGHS has identified capital needs that it could
finance with a debt issuance. However, we have not incorporated
this into our analysis given the uncertainty around the timing and
size of the new issuance. In our view, the hospital has very
limited flexibility at the current rating for the issuance of
additional debt without marked corresponding improvement in
financial performance."
P2 OAKLAND: Disclosures Inadequate, US Trustee Says
---------------------------------------------------
Tracy Hope Davis, United States Trustee for Region 17, filed an
objection and reservation of rights to approval of the P2 Oakland
CA, LLC's Second Amended Disclosure Statement.
The United States Trustee objects to the approval of the Second
Amended Disclosure Statement because it does not meet the
requirements of section 1125 of the Bankruptcy Code and should not
be approved for dissemination to creditors until it is amended to
provide adequate information.
Specifically, according to the UST, the Disclosure Statement (i)
does not contain adequate information regarding the payment to
professionals, (ii) does not adequately explain the executory
contract the Debtor intends to assume, and (iii) provides virtually
insufficient information about the financial wherewithal of the
Debtor, including income to be derived from the Debtor's principal,
Bruce Loughridge, that is proposed to fund the Second Amended Plan.
This information is critical to assessing the feasibility of the
Second Amended Plan. Absent amendment, creditors and parties in
interest may be unable to understand whether to vote in favor of
confirmation of the Plan. Moreover, the Second Amended Plan does
not appear to contain sufficient information for the Court to
determine that the plan meets the requirements of Section 1129 of
the Bankruptcy Code.
About P2 Oakland CA
P2 Oakland CA, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Cal. Case No. 21-40717) on May 25,
2021, listing up to $50,000 in assets and up to $10 million in
liabilities. Bruce Loughridge, manager, signed the petition. Judge
William J. Lafferty oversees the case.
The Debtor tapped the Law Offices of E. Vincent Wood as legal
counsel and the Law Offices of Donald Charles Schwartz as special
counsel.
PADDOCK ENTERPRISES: Court Confirms Reorganization Plan
-------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware has
confirmed the Plan of Reorganization of Paddock Enterprises.
The Plan is jointly-proposed by Paddock Enterprises, parent O-I
Glass, Inc., the court-appointed legal representative for all
Future Demand Holders and the Official Committee of Asbestos
Personal Injury Claimants.
More than 99% of Paddock's asbestos claimants voted in favor of the
Plan.
The Plan contains certain releases, exculpations, and injunctions
in furtherance of the Plan. The Plan also contains a channeling
injunction that permanently channels all Asbestos Claims against
the Debtor and each other Protected Party to a trust established
pursuant to section 524(g) of the Bankruptcy Co de. In addition,
the Plan contains an injunction that permanently enjoins the
pursuit of any claim against or interest in the Debtor, the
Reorganized Debtor, the Asbestos Trust or any of their respective
property to the extent that such claim or in terest has been
discharged, released, waived, settled, or deemed satisfied in
accordance with the Plan (other than the enforcement of any right
pursuant to the Plan) .
The asbestos trust will be funded with $610 million cash and other
consideration.
Paddock is next seeking the District Court's affirmation of the
Bankruptcy Court's order. The company expects to emerge from
Chapter 11 in mid-2022.
As of the Petition Date, the Debtor had been named as a defendant
in personal injury and/or wrongful death or property damage actions
seeking recovery for damages allegedly caused by the sale of,
manufacture of, presence of, or exposure to, asbestos or
asbestos-containing products. Prior to the Petition Date, the
Debtor was annually subject to hundreds of new claims and lawsuits
alleging personal injuries and death from exposure to Kaylo-related
asbestos, and the Debtor was also aware of approximately 850-900
asbestos-related personal injury lawsuits pending against it as of
the Petition Date asserting liability for damages caused by its
legacy asbestos-related liabilities.
The Debtor initiated chapter 11 proceedings on Jan. 6, 2020 to
utilize Section 524(g) of the Bankruptcy Code to establish and fund
a trust that would provide for the fair and equitable treatment of
all current and future asbestos-related claims and demands.
About Paddock Enterprises
Paddock Enterprises, LLC's business operations are exclusively
focused on (i) owning and managing certain real property and (ii)
owning interests in, and managing the operations of, its non debtor
subsidiary, Meigs, which is developing an active real estate
business. It is the successor-by-merger to Owens-Illinois, Inc.,
which previously served as the ultimate parent of the company.
Paddock Enterprises is a direct, wholly-owned subsidiary of O-I
Glass.
Paddock Enterprises sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 20-10028) on Jan. 6, 2020.
At the time of the filing, the Debtor disclosed assets of between
$100 million and $500 million and liabilities of the same range.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Richards, Layton & Finger P.A. and Latham &
Watkins LLP as legal counsel, Alvarez & Marsal North America LLC as
a financial advisor, Riley Safer Holmes & Cancila, LLP as special
counsel, and David J. Gordon of DJG Services, LLC as a chief
restructuring officer. Prime Clerk, LLC is the claims, noticing,
and solicitation agent and administrative advisor.
PANOP CAB: Seeks 60-Day Extension of Plan Approval Deadline
-----------------------------------------------------------
Panop Cab, Corp., et al., filed a motion to extend the time to
confirm their Plan of Reorganization.
The Debtors are a small business Debtors as defined in Bankruptcy
Code section 101(51D).
The Debtor requests a brief extension of the time by which a Plan
of Reorganization should be confirmed for an additional one 60
days, through and including August 27, 2022.
This request is not made for the purposes of delay. The Settlement
agreement with the main Creditor National Credit Union
Administration Board has been reached and approved by the
Bankruptcy Court. The order, approving the Settlement agreement
was entered by the Court on March 1, 2022.
This requested extension of the time period for confirmation, is
necessary due to the fact, that the time to confirm a plan is set
to expire on June 28, 2022, and the Debtors need an additional time
to amend a plan of reorganization and disclosure statement
incorporating the terms of the said settlement agreement. The
Debtors are currently working on the amended Plan and Disclosure
and will file them shortly. The Debtors will respectfully request
to schedule a combined hearing on amended disclosure statement and
plan of reorganization.
Thus, according to the Debtors, this extension of the time period
for confirmation will allow the Debtor to amend and to confirm a
Chapter 11 plan without violating the Bankruptcy Code and to
provide a treatment to its Creditors.
Attorney for the Debtors:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
About Panop Cab, et al.
Panop Cab, Corp., et al., are taxi mini fleet corporations located
at 1620 Caton Avenue, Brooklyn, New York 11226.
Panop Cab, Corp., based in Brooklyn, NY, and its debtor-affiliates
sought Chapter 11 protection (Bankr. E.D.N.Y. Lead Case No.
19-47710) on Dec. 26, 2019.
In their petitions, the Debtors estimated these assets and
liabilities:
Total Assets Total Liabilities
------------ -----------------
Panop Cab, Corp. $310,200 $1,135,000
Matreiya Trans Corp. $157,164 $330,000
222 East Corp. $314,700 $1,135,000
Rainee Trans, Corp. $312,752 $1,135,000
MLS Managment Corp $311,692 $1,135,000
The petitions were signed by Michael L. Simon, president.
The LAW OFFICES OF ALLA KACHAN, P.C. serves as bankruptcy counsel.
PPI LLC: Gets Court Approval to Hire Auctioneers
------------------------------------------------
PPI, LLC received approval from the U.S. Bankruptcy Court for the
Eastern District of Michigan to hire Cincinnati Industrial
Auctioneers, Inc. and Investment Recovery Services, Inc.
The firms will render these services:
-- catalog and inventory the Debtor's assets;
-- send notices and information to prospective purchasers;
-- place advertising in appropriate journals, newspapers and
magazines;
-- take other appropriate action to promote the sale;
-- provide personnel for the sale, including auctioneers,
bookkeepers, clerks and others;
-- conduct an auction within 60 days after court approval of the
auction sale agreement and there being no appeal of such approval
filed;
-- collect deposits from purchasers and assist in the collection
of full payment from purchasers;
-- provide a complete and accurate accounting of all material
aspects of the sale within 21 business days after the sale;
-- pay net proceeds of the sale to the Debtor upon approval of the
accounting, and
-- guarantee that the sale shall net the Debtor at least $150,000
before the expenses to be paid by the Debtor (and pay a deposit of
$50,000 to Debtor towards that obligation). Such deposit shall not
be paid until the expiration of the applicable period to appeal the
363 Order and there being no appeal filed.
The auctioneers may retain up to $35,000 from gross sales proceeds,
provided that the Debtor receive at least $150,000. In addition,
all proceeds after payment of the Guaranteed Proceeds will be split
80 percent to the Debtor and 20 percent to the auctioneers. The
auctioneers shall charge all buyers an 18 premium purchasers'
premium as additional compensation.
As disclosed in court filings, both firms are "disinterested
persons" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firms can be reached through:
Jerom Luggen
Cincinnati Industrial Auctioneers, Inc.
2020 Dunlap St
Cincinnati, OH 45214
Phone: (513) 241-9701
Fax: (513) 241-6760
-- and --
Britton New
Investment Recovery Services
3421 N Sylvania Ave
Fort Worth, TX 76111
Phone: +1 817-222-9848
Email: britton@irsauction.com
About PPI LLC
PPI, LLC, doing business as PPI Aerospace, is a large Nadcap
accredited chemical process and surface engineering facility
focused on serving the specific needs of suppliers to the Aerospace
and Defense industries. The company is based in Warren, Mich.
PPI, LLC filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 21-49385) on
Dec. 2, 2021, listing up to $1 million in assets and up to $10
million in liabilities. Scott W. Thams, chief financial officer
and manager, signed the petition.
Judge Lisa S. Gretchko oversees the case.
Max J. Newman, Esq., at Butzel Long, a Professional Corporation,
represents the Debtor as legal counsel.
PUERTO RICO: PREPA Debt Plan Deadline Extended to July 1, 2022
--------------------------------------------------------------
Michelle Kaske of Bloomberg News reports that Puerto Rico utility,
Puerto Rico Electric Power Authority (PREPA) debt plan deadline
extended to July 1, 2022.
The judge overseeing the bankruptcy case for Puerto Rico's electric
utility extended to July 1, 2022 a deadline to submit details on a
possible agreement to slash the agency's debt.
U.S. District Court Judge Laura Taylor Swain Friday, May 27, 2022,
postponed a June 1 due date to July 1, 2022 after Puerto Rico's
federally appointed financial oversight board requested the
extension. This is the second postponement for the parties
following an initial May 2 deadline.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
* * *
The two Title III plans of adjustment have been confirmed to date,
for the Commonwealth and COFINA debtors.
PWM PROPERTY: HNA Group Owes SL Green $185 Million
--------------------------------------------------
Celia Young of Commercial Observer reports that an arbitrator has
ruled that the HNA Group-backed entity, PWM Property Management,
that owns 245 Park Avenue owes SL Green Realty a payout to the tune
of $185 million.
The arbitrator, former judge L. Priscilla Hall, found last April
2022 that SL Green was entitled to the money because its contract
to invest in and manage the 47-story tower protected SL Green from
potential losses due to a bankruptcy. Hall also ruled that SL Green
should be reimbursed for $856,000 in attorney and arbitration fees,
according to New York state court documents made public Friday and
first reported by the Wall Street Journal.
The bankruptcy filing initiated the less-than-amicable end to the
relationship between SL Green and HNA affiliate PWM Property
Management. PWM, which owns the New York City tower between East
47th and East 46th streets and a building at 181 West Madison
Street in downtown Chicago, filed for bankruptcy in November and
pinned part of the blame on SL Green for failing to replace Major
League Baseball (MLB) with another tenant at 245 Park.
SL Green, which invested $148 million in the building in 2018,
denied the allegations, previously telling Commercial Observer that
it was PWM's own failure to renovate and add amenities to the
property that led to the bankruptcy. Separately, PWM's parent
company HNA was placed into bankruptcy administration in China last
year due to its large debt load.
“The allegation that [SL Green] deliberately did not find a
replacement tenant for MLB, which was a very important tenant at
the building … [is] a nonsensical argument that has absolutely no
basis in fact, and the arbitrator agreed,” said Mark Ressler, a
partner at Kasowitz Benson Torres who represented SL Green in the
arbitration proceedings.
PWM also alleged in bankruptcy filings that SL Green wanted to fail
in replacing the baseball organization so it could take over the
property. SL Green owns a 49 percent equity interest in one of 245
Park's debtor companies, 245 Park JV LLC, which holds half of the
$568 million in outstanding mezzanine debt and is the servicer of
the loans, CO previously reported.
Early in the Chapter 11 process, PWN announced plans to cut ties
with SL Green. A bankruptcy court judge ruled in December PWM
could reject its leasing and property management agreement with SL
Green, and PNW replaced the firm with Newmark. The judge also ruled
that PWM had legitimate reason to fear a forced sale and could
remain under court protection.
The agreement was a win for the cash-strapped PWM, which no longer
had to pay out its contract with SL Green. The firm carried $2.53
billion in assets compared to $2.19 billion in liabilities at the
time and could have been forced to pay $19 million to its mortgage
lender if it didn't find a tenant to replace MLB. The Rockefeller
Foundation took part of the MLB's offices in 2020, but the
organization’s lease expires this year with no known replacement
on the way, The Real Deal reported.
The latest arbitration decision represents a pretty penny for the
struggling HNA, but Ressler expects the ruling to be approved and
SL Green to be paid, because it sued an HNA-entity that has not
declared bankruptcy.
HNA has previously argued that the bankruptcy filing should prevent
SL Green from recouping its investment. But Hall found that, while
bankruptcy filings do routinely pause legal action against
businesses, it was not a requirement. She also said HNA had failed
to show that the bankruptcy court did issue a payment pause, known
as a stay order, for the nonbankrupt entity.
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.
RANGER OIL: S&P Upgrades ICR to 'B' on Improving Profitability
--------------------------------------------------------------
S&P Global Ratings raised the issuer credit rating on Houston-based
oil, natural gas liquids (NGLs), and natural gas exploration and
production (E&P) Ranger Oil Corp. to 'B' from 'B-' and the
issue-level rating on the senior unsecured debt to 'B+' from 'B'.
The recovery rating on the unsecured notes remains '2'.
S&P said, "The stable outlook reflects our expectation that low
price differentials and favorable crude oil prices will help
sustain strong financial measures during the next 12 months,
including FFO to debt comfortably above 60%, while maintaining
adequate liquidity levels. We expect Ranger to follow a disciplined
financial policy that focuses on generating free cash flow and
keeps shareholder distributions within cash flows."
Strong hydrocarbon prices have supported improving profitability,
cash flow, and financial performance.
S&P said, "We expect Ranger Oil Corp. to maintain strong financial
measures over the next 12 months under our base case assumptions,
including FFO to debt of about 100% and debt to EBITDA of 1x or
less. In addition to robust oil and natural gas prices, we expect
Ranger's financial performance will benefit from its low cost
structure, debt reduction, and focus on free cash flow while
keeping returns to shareholders. Up to $100 million in share
repurchases within cash flows have been approved. Our expectation
for ongoing strong performance under our price assumptions supports
the upgrade."
Hedges on about 65% of its expected oil production and 45% on
expected natural gas production for the remainder of 2022, provide
cash flow stability while allowing Ranger to capture upside to
higher prices.
Ranger's hedging program, utilizing both swaps and collars, should
provide some cash flow stability while allowing for upside over the
next two years. Additionally, Ranger's realized oil price in the
first quarter of 2022, which was greater than 98% of New York
Mercantile Exchange West Texas Intermediate (NYMEX WTI), supports
its above-average profitability and cash flow. Combined with its
low debt leverage, S&P would expect current financial strength to
be more sustainable should commodity prices return to their more
historical levels.
Ranger's production is smaller than some other 'B' rated peers,
which is offset with relatively in line proved developed reserves,
and its liquids-weighted production, which provides for
above-average profitability.
Ranger's production of about 39,000 barrels of oil equivalent to
day (boe/d)-41,000 boe/d is smaller than some other 'B' and 'B+'
rated peers such as Centennial Resource Development Inc., Magnolia
Oil & Gas Operating LLC, and Matador Resources Co.. However,
Ranger's proved developed reserves are relatively in line with the
peer group and its liquids-weighted production of 85%-90% is higher
than the peer group supporting its above-average profitability
relative to the broader exploration and production (E&P) sector.
S&P said, "The stable outlook reflects our expectation that
Ranger's low price differentials and favorable crude oil prices
will help sustain strong financial measures during the next 12
months, including FFO to debt comfortably above 60%, while
maintaining adequate liquidity levels. We expect Ranger to follow a
disciplined financial policy that focuses on generating free cash
flow and keeps shareholder distributions within cash flows."
S&P could lower the rating if:
-- Ranger pursues a more aggressive financial policy than
anticipated, such as large debt-financed acquisitions or
debt-funded shareholder returns;
-- FFO to debt falls below 45% with no near-term remedy; or
-- Liquidity materially weakens.
S&P could raise its rating on Ranger if:
-- It further expands its production and developed reserves to
levels comparable with those of higher-rated peers; and
-- Maintains at least adequate liquidity and FFO to debt
comfortably above 45%.
ESG credit indicators: E4, S2, G3
S&P said, "Environmental factors are a negative consideration on
our credit rating analysis on Ranger Oil Corp. as the exploration
and production industry contends with an accelerating energy
transition and adoption of renewable energy sources. We believe
falling demand for fossil fuels will lead to declining
profitability and returns for the industry as it fights to retain
and regain investors that seek higher return investments. To help
address these concerns, Ranger Oil has reduced flaring, transports
a majority of its oil and a portion of its water via pipelines, and
has one of the lowest emissions intensity rates of any operator in
the Eagle Ford basin. Governance is a moderately negative
consideration, as is the case for most rated entities owned by
private-equity sponsors. We believe the company's highly leveraged
financial risk profile points to corporate decision-making that
prioritizes the interests of the controlling owners. This also
reflects the generally finite holding periods and a focus on
maximizing shareholder returns."
RCO INC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------
Debtor: RCO Inc.
d/b/a Royal RC Construction
6229 S. 90th Street, Suite B
Omaha, NE 68127
Business Description: RCO Inc. is a remodeling contractor serving
commercial and residential clients.
Chapter 11 Petition Date: May 26, 2022
Court: United States Bankruptcy Court
District of Nebraska
Case No.: 22-80398
Judge: Hon. Brian S. Kruse
Debtor's Counsel: Patrick R. Turner, Esq.
TURNER LEGAL GROUP, LLC
139 S. 144th Street
Omaha, NE 98010
Tel: 402-690-3675
Email: pturner@turnerlegalomaha.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Chad Trout as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/KI2MJHQ/RCO_Inc__nebke-22-80398__0001.0.pdf?mcid=tGE4TAMA
ROCKALL ENERGY: Seeks Confirmation of Settlement Plan
-----------------------------------------------------
Rockall Energy Holdings, LLC, et al., submitted an Amended Joint
Chapter 11 Plan.
On April 27, 2022, after extensive, arms'-length negotiations over
many weeks, the Debtors, the DIP Lenders, the Secured Parties, and
the Creditors Committee were able to reach a consensus on the
Global Settlement, which resolved various actual and potential
disputes between the Global Settlement Parties, including the
objections to various motions and the motions for standing and
reconsideration filed by the Committee. Key terms of the Global
Settlement, which are incorporated into the Amended Plan, include:
* making a cash pool of at least $3.75 million available for pro
rata distributions to Holders of General Unsecured Claims;
* appointing a GUC Trustee selected by the Committee, funded
with $250,000 to reconcile and administer General Unsecured Claims
and make distributions on account thereof;
* waiving any deficiency claims of the Secured Parties on the
Effective Date;
* waiving non-Insider Avoidance Actions by the Debtors;
* retaining certain potential claims and causes of action
against Krewe Energy, LLC and its affiliates, which will be
transferred to the Intercreditor Agent on the Effective Date;
* including the Committee members and Professionals in any Plan
releases and exculpation provisions, provided that the Committee
members will be released and exculpated solely in their capacities
as members of the Committee;
* the Committee agreeing to withdraw its objections, withdraw
its motion for reconsideration of the bidding procedures, not
commence any challenge of the Secured Parties' prepetition liens,
not pursue any litigation against the Secured Parties, not object
to the DIP Facility (including the "roll-up"), and support
confirmation of the amended Plan and the sales
process; and
* the Global Settlement Parties agreeing to procedures to
solicit votes of the Holders of General Unsecured Claims.
Scott Pinsonnault, a Senior Managing Director at Ankura Consulting
Group, LLC, says that each component of the Global Settlement is
reasonable and appropriate and in the best interests of the Debtors
because:
-- the Global Settlement guarantees a recovery to Holders of
General Unsecured Claims that is substantially higher than they
would otherwise be entitled to;
-- absent the Global Settlement, the Debtors and the other Global
Settlement Parties would be forced to engage in expensive and
time-consuming litigation with uncertain outcomes for all, which
would have invariably been a distraction from the sale process;
-- resolving these disputes through the Global Settlement
enhanced the Debtors' ability to achieve a value-maximizing sale of
substantially all of the Debtors' assets; and
-- the Global Settlement provided a clear path towards the
Debtors’ expeditious emergence from chapter 11.
Under the Plan, holders of Class 4 General Unsecured Claims will
receive either its Pro Rata share of (i) the GUC Global Settlement
Amount or (ii) the beneficial interests in the GUC Trust. Class 4
is impaired.
"GUC Global Settlement Amount" means, in the aggregate, (i) $3.75
million in Cash, plus (ii) 3.0% of any Net Sale Proceeds in excess
of $130 million, plus (iii) any unused amounts from the Vendor Pot,
plus (iv) any portion of the $2 million allocated for payment of
Committee Professionals under the Global Settlement that has not
been, and will not be, paid to the Committee Professionals.
"GUC Trust" means the trust established pursuant to Article IV.B of
the Plan to, among other things, hold the GUC Trust Assets and make
distributions pursuant to the Plan.
The Reorganized Debtors will fund distributions under the Plan from
cash on hand/DIP facility borrowings and exit facility.
Attorneys for the Debtors:
Michael A. Garza, Esq.
Matthew J. Pyeatt, Esq.
Trevor G. Spears, Esq.
VINSON & ELKINS LLP
2001 Ross Ave., Suite 3900
Dallas, TX 75201
- and -
David S. Meyer, Esq.
George R. Howard, Esq.
Lauren R. Kanzer, Esq.
VINSON & ELKINS LLP
1114 Avenue of the Americas, 32nd Floor
New York, NY 10036
A copy of the Plan dated May 25, 2022, is available at
https://bit.ly/3aefiPp from PacerMonitor.com.
About Rockall Energy Holdings
Rockall Energy Holdings, LLC, is a mid-sized oil exploration and
production company.
Rockall Energy and its affiliates sought Chapter 11 bankruptcy
protection (Bank. N.D. Tex. Lead Case No. 22-90000) on March 9,
2022. In the petition filed by David Mirkin, as chief financial
officer, Rockall Energy Holdings listed $100 million and $500
million in both assets and liabilities.
The cases are handled by Honorable Judge Mark X. Mullin.
The Debtors tapped Vinson & Elkins, LLP as legal counsel; Lazard
Freres & Co., LLC as investment banker; and Ankura Consulting
Group, LLC, as restructuring advisor. Stretto, Inc. is the claims
agent.
On March 18, 2022, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee tapped
Pachulski Stang Ziehl & Jones LLP as its counsel and Riveron RTS,
LLC, as financial advisor.
RUBY PIPELINE: Davis Polk, MNAT Represent Noteholders Group
-----------------------------------------------------------
In the Chapter 11 cases of Ruby Pipeline, LLC, the law firms of
Davis Polk & Wardwell LLP and Morris, Nichols, Arsht & Tunnell LLP
submitted verified statement under Rule 2019 of the Federal Rules
of Bankruptcy Procedure, to disclose that they are representing the
Ad Hoc Group of Noteholders.
In or around February 2021, a group formed by certain holders of
6.00% notes due 2022 issued pursuant to that certain indenture,
dated as of February 15, 2012, by and among the Debtor, as issuer,
and Wilmington Savings Fund Society, FSB as successor to Wilmington
Trust, National Association, as indenture trustee engaged Davis
Polk to represent it in connection with a potential restructuring
of the Debtor. In or around March 2022, the Ad Hoc Group of
Noteholders engaged MNAT to represent it as Delaware bankruptcy
counsel.
Counsel represents the Ad Hoc Group of Noteholders. Counsel also
separately represents Wilmington Savings Fund Society, FSB, as
successor indenture trustee, as special counsel and special
Delaware counsel, respectively. The Trustee is also represented by
Kilpatrick Townsend & Stockton LLP and Morris James LLP.
Counsel does not represent or purport to represent any other
entities in connection with the Chapter 11 Case. Each member of the
Ad Hoc Group of Noteholders is aware of, and has consented to,
Counsel's "group representation" of the Ad Hoc Group of Noteholders
and representation of the Trustee.
The Members of the Ad Hoc Group of Noteholders, collectively,
beneficially own, or are the investment advisors or managers for
funds or entities that beneficially own $424,234,302.96 in
aggregate principal amount of the 2022 Notes.
As of May 27, 2022, members of the Ad Hoc Group and their
disclosable economic interests are:
AIG Asset Management (U.S.), LLC
28 Liberty Street 47th Floor
New York, NY 10005
* $86,363,636.37 in aggregate principal amount of the 2022 Notes
BlackGold Capital Management, LP
3231 Audley Street
Houston, TX 77098
* $43,419,030.30 in aggregate principal amount of the 2022 Notes
Cigna Investment Management
900 Cottage Grove Road
Bloomfield, CT, 06002
* $31,666,666.71 in aggregate principal amount of the 2022 Notes
MacKay Shields LLC
1345 Avenue of the Americas
New York, NY 10105
* $120,823,303.05 in aggregate principal amount of the 2022 Notes
Northwestern Mutual Investment Management Company, LLC
720 East Wisconsin Avenue
Milwaukee, WI 53202
* $43,181,818.00 in aggregate principal amount of the 2022 Notes
The TCW Group, Inc.
865 South Figueroa Street Suite 1800
Los Angeles, CA 90017
* $98,779,848.53 in aggregate principal amount of the 2022 Notes
Counsel to the Ad Hoc Group of Noteholders can be reached at:
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
Robert J. Dehney, Esq.
Matthew B. Harvey, Esq.
Matthew O. Talmo, Esq.
1201 North Market Street, 16th Floor
Wilmington, DE 19801
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
E-mail: rdehney@morrisnichols.com
mharvey@morrisnichols.com
mtalmo@morrisnichols.com
- and -
DAVIS POLK & WARDWELL LLP
Damian S. Schaible, Esq.
Elliot Moskowitz, Esq.
Darren S. Klein, Esq.
Aryeh Ethan Falk, Esq.
450 Lexington Avenue
New York, NY 10017
Telephone: 212-450-4563
Facsimile: 212-701-5563
E-mail: damian.schaible@davispolk.com
elliot.moskowitz@davispolk.com
darren.klein@davispolk.com
aryeh.falk@davispolk.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3lSXGeB and https://bit.ly/3x1MKAG
About Ruby Pipeline
Ruby Pipeline, LLC, a Houston-based natural gas pipeline company,
sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No.
22-10278) on March 31, 2022. In the petition filed by Will W.
Brown, as commercial vice-president, Ruby Pipeline listed $500
million to $1 billion in both assets and liabilities.
Judge Craig T. Goldblatt oversees the case.
Richards, Layton & Finger, P.A., is the Debtor's bankruptcy counsel
while PJT Partners, LP is the investment banker. Kroll
Restructuring Administration, LLC, formerly known as Prime Clerk,
LLC, is the claims and noticing agent and administrative advisor.
Counsel to the Ad Hoc Group and Special Counsel to the Indenture
Trustee are Morris, Nichols, Arsht & Tunnell LLP, and Davis Polk &
Wardwell LLP.
SEARS HOLDINGS: 70 More Sears Hometown Stores to Close
------------------------------------------------------
Kelly Tyko of Axios reports that dozens of Sears Hometown stores
are closing and holding liquidation sales, according to Facebook
posts from the shuttering locations.
Sears and Kmart have closed thousands of stores and cut around
250,000 jobs over the last 17 years.
The two iconic retailers were owned by Sears Holding, which filed
for Chapter 11 bankruptcy protection in 2018 and escaped
liquidation when Eddie Lampert's Transformco acquired them out of
bankruptcy.
Transformco also acquired Sears Hometown stores in 2019.
Sears Hometown was touted in a November 2019 news release as a
"network of more than 400 independently-owned and operated,
dealer-managed smaller-format stores" selling "a range of home
products, including appliances, lawn & garden, tools and sporting
goods."
Transformco did not provide a list of the closing locations or how
many will remain, but stores around the country posted
announcements on their Facebook pages, viewed by Axios. An
unverified list was also posted on the message board
TheLayoff.com.
The store closing or liquidation sales will vary in length and
discounts, according to the social media posts.
Transformco did not respond to Axios' request for comment.
As of April 2022, there were three remaining Kmart stores in the
continental U.S.
What they're saying: "Very sad to announce but our Sears hometown
store at 126 Buchanan street N in Cambridge MN is closing.
Everything on the floor must go!!," the store in Cambridge,
Minnesota, posted on its Facebook page.
"This is your last chance to save! Check out our Store Closing
Liquidation event in-store at select locations only through 6/27,"
the Sears Hometown store in Kilmarnock, Virginia, posted to its
Facebook page.
"Unfortunately we must announce the closing of our Sears Hometown
Store. It is not a decision that we have made lightly. We have
loved all of our time that we have been able to spend with you over
these last 10 years. Our last day that we are open is June 23,
2022," the store in Luling, Louisiana, posted on Facebook.
Sears Hometown shoppers are advised to check Facebook pages or call
stores to confirm they are still open.
About Sears Holdings Corp.
Sears Holdings Corporation (OTCMKTS: SHLDQ) --
http://www.searsholdings.com/-- began as a mail ordering catalog
company in 1887 and became the world's largest retailer in the
1960s. At its peak, Sears was present in almost every big mall
across the U.S., and sold everything from toys and auto parts to
mail-order homes. Sears claims to be is a market leader in the
appliance, tool, lawn and garden, fitness equipment, and automotive
repair and maintenance retail sectors.
Sears and Kmart merged to form Sears Holdings in 2005 when they had
3,500 US stores between them. Kmart emerged in 2005 from its own
bankruptcy.
Unable to keep up with online stores and other brick-and-mortar
retailers, a long series of store closings has left it with 687
retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin
Islands as of mid-October 2018. At that time, the Company employed
68,000 individuals, of whom 32,000 were full-time employees.
As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total
assets, $11.33 billion in total liabilities and a total deficit of
$4.40 billion.
Unable to cover a $134 million debt payment due Oct. 15, 2018,
Sears Holdings Corporation and 49 subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15,
2018. The Hon. Robert D. Drain is the case judge.
The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel;
M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as
investment banker; DLA Piper LLP as real estate advisor; and Prime
Clerk as claims and noticing agent.
The U.S. Trustee for Region 2 appointed nine creditors, including
the Pension Benefit Guaranty Corp., and landlord Simon Property
Group, L.P., to serve on the official committee of unsecured
creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP
as legal counsel; FTI Consulting as financial advisor; and Houlihan
Lokey Capital, Inc. as investment banker.
The U.S. Trustee for Region 2 on July 9, 2019, appointed five
retirees to serve on the committee representing retirees with life
insurance benefits in the Chapter 11 cases.
* * *
In February 2019, Bankruptcy Judge Robert Drain authorized Sears
Holdings approval to sell the business to majority shareholder and
CEO Eddie Lampert for approximately $5.2 billion. Lampert's ESL
Investments, Inc., won an auction to acquire substantially all of
Sears' assets, including the "Go Forward Stores" on a going-concern
basis. The proposal would allow 425 stores to remain open and
provide ongoing employment to 45,000 employees.
SKINNICITY INC: Wins Cash Collateral Access Thru Aug 30
-------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Skinnicity Inc., A Professional
Nursing Corp., to use cash collateral through August 30, 2022, to
pay expenses as set forth in the budget.
The Debtor is permitted to deviate and pay any particular line item
contained in the Budget in an increase of no more than 15% of the
amount contained in that particular line item in the Budget
(provided the Debtor does not pay any expenses outside any of the
approved categories).
The Debtor must segregate and hold in its cash collateral DIP bank
account all revenue and other income exceeding the amounts needed
to pay the expenses as specifically authorized in the Order.
In addition to the adequate protection offered to the U.S. Small
Business Administration pursuant to the SBA Stipulation, if at any
time the Debtor violates any provision of this Order, the SBA may
give written notice of the default to the Debtor's counsel. If the
Debtor fails to cure the default with 21-days of the notice, the
SBA will be entitled to a hearing requesting relief from the
automatic stay pursuant to 11 U.S.C. section 362 on an expedited
basis.
As adequate protection for the SBA:
a. The Debtor will remit payments to the SBA as set forth in
the applicable SBA Loan documents.
b. Retroactive to the Petition Date, the SBA will receive a
replacement lien on all postpetition revenues of the Debtor to the
same extent, priority and validity that its lien attached to the
cash collateral. The scope of the replacement lien is limited to
the amount that cash collateral diminishes postpetition as a result
of the postpetition use of cash collateral by the Debtor. The
replacement lien is valid, perfected and enforceable and will not
be subject to dispute, avoidance, or subordination, and this
replacement lien need not be subject to additional recording. The
SBA is authorized to file a certified copy of any cash collateral
order and any other necessary and related documents to further
perfect its lien. The replacement lien will continue in full force
and effect in the event of a dismissal of the case.
c. The SBA will be entitled to a super-priority claim over the
life of the Debtor's bankruptcy case, pursuant to 11 U.S.C.
sections 503(b), 507(a)(2) and 507(b), which claim will be limited
to any diminution in the value of the SBA's collateral, pursuant to
the SBA Loan, as a result of Debtor's use of cash collateral on a
post-petition basis.
A copy of the order is available at https://bit.ly/3yZ6LtZ from
PacerMonitor.com.
About Skinnicity Inc.
Skinnicity Inc. provides services relating to medical and aesthetic
dermatology, focusing on skin and aesthetic concerns. It has a
single storefront in West Los Angeles, where its customers received
treatment. Dianne Bedford is the sole shareholder, director, and
officer. Skinnicity has one staff employee.
Skinnicity sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-12306 on April 25,
2022. In the petition signed by Bedford, the Debtor disclosed up to
$500,000 in assets and up to $1 million in liabilities.
Judge Julia W. Brand oversees the case.
Matthew D. Resnik, Esq., at RHM Law, LLP is the Debtor's counsel.
SOTO'S AUTO: Unsecureds to Get $80K via Quarterly Payments
----------------------------------------------------------
Soto's Auto & Truck Repairs Service, Inc., submitted an Amended
Plan of Reorganization for Small Business dated May 23, 2022.
The Debtor anticipates that the Plan will be confirmed in July of
2022, distributions to administrative, priority and secured
creditors will be paid quarterly with the first quarterly payments
to begin on October 1, 2022.
Payments to Class 7 unsecured creditors shall be made quarterly
commencing October 1, 2024, and ending September 1, 2027. The
Debtor projects that total distributions to unsecured creditors
will be approximately $80,001.00. The distributions under the Plan
will be derived from (i) existing cash on hand on the Effective
Date and (ii) revenues generated by continued business operations.
This Plan of Reorganization proposes to pay creditors of Soto's
Auto & Truck Repair Service, Inc. from its net disposable income.
Class 6 consists of the secured portion of the claim of the United
States Small Business Administration ("SBA"), which is secured by a
lien on a majority of the Debtor's assets, including its accounts
receivable. The SBA filed a secured claim, Claim No. 1, in the
amount of $155,208.90.
The United States Small Business Administration filed Claim No. 1
as a secured claim in the amount of $155,208.90. The Debtor filed a
Motion to Determine Secured Status with respect to Claim No. 1, and
the SBA and the Debtor have agreed to date that the Debtor's assets
securing the SBA's claim will be valued at $211,938.20 (including
$179,320 in inventory, furniture, fixtures and equipment and
$32,618.20 in accounts receivable) for purposes of the Motion to
Determine Secured Status. This will result in $35,815.30 of the
SBA's claim to be treated as a secured claim, with the remaining
$119,393.60 to be treated as a Class 7 non priority unsecured
claim.
Class 7 consists of all non-priority unsecured claims. The Debtor
estimates that Class 7's claims will total approximately $80,001.
This class will receive distributions beginning October 1, 2024.
Every holder of a non-priority unsecured claim against the Debtor
shall receive its pro-rata share of the Debtor's projected
disposable income after payment of administrative, priority tax,
and secured claims. Payments shall be made quarterly commencing on
or about Oct. 1, 2024. The Debtor projects that total
distributions to unsecured creditors will be approximately
$80,001.00. Class 7 is impaired by the Plan.
Payments required under the Plan will be funded from (i) existing
cash on hand on the Effective Date and (ii) revenues generated by
continued operations.
Attorneys for Debtor:
Becky Ferrell-Anton
Stichter Riedel Blain & Postler, P.A.
110 East Madison Street, Suite 200
Tampa, FL 33602
Phone: (813) 229-0144
Email: bfanton@srbp.com
About Soto's Auto & Truck Repairs
Soto's Auto & Truck Repairs Service, Inc., is a family-owned diesel
truck repair company founded in March 2004. The Company provides
heavy-duty truck repair and maintenance services, including engine
repairs, overhauls, and replacements, as well as mobile truck
repair and maintenance services.
v sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Fla. Case No. 21-04131) on Aug. 6, 2021. In the
petition filed by John Soto, president, the Debtor estimated up to
$500,000 in assets and up to $1 million in liabilities.
Judge Roberta A. Colton oversees the case.
Emily S. Clendenon, Esq., at Stichter, Riedel, Blain & Postler,
P.A., is the Debtor's counsel.
SPECTRUM BRAND: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Spectrum Brand Inc.'s and SB/RH
Holdings, LLC's Long-Term Issuer Default Ratings (IDRs) at 'BB'.
Fitch has removed the Rating Watch Positive that was assigned
following the announced proposed sale of the company's Hardware and
Home Improvement (HHI) business and has assigned a Stable Outlook.
The company has since announced a number of other transactions,
including the February 2022 acquisition of the appliance and
cookware business of Tristar Products, Inc. and its decision to
pursue strategic alternatives for its Home and Personal Care
business (HPC, including the acquired Tristar businesses). While
the company announced a new target of managing net leverage below
2.5x, down from 4.0x historically, in conjunction with the sale of
its HHI business, Fitch has removed the Positive Watch given the
various moving parts and lack of clarity around the company's
business strategy, including the pro forma business profile,
capital structure and cash flow characteristics over the next 24
months.
KEY RATING DRIVERS
HHI Sale to Drive Deleveraging: For the past several years,
Spectrum has operated across four segments: HHI, HPC, Home and
Garden (H&G) and Global Pet Care (GPC). Combined, these categories
generated approximately $4.6 billion of revenue in 2021 and
company-calculated EBITDA of $689 million which, as of fiscal
year-end (September 2021) debt of $2.4 billion, would have resulted
in leverage of approximately 3.5x.
Spectrum has announced several deals and initiatives since
September 2021 that have the potential to meaningfully reshape its
portfolio. In September 2021, Spectrum announced the proposed sale
of the HHI business to ASSA ABLOY Group for $4.3 billion, or
approximately 14.5x estimated fiscal 2021 (ending September 2021)
EBITDA of $297 million, with expected net proceeds of $3.5 billion.
In conjunction with this announcement, Spectrum revised its target
net leverage range to 2.0x to 2.5x, down from a prior range of
3.0x- to 4.0x. At the time of the announcement, Fitch anticipated
this would require debt reduction of around $1.5 billion to reach
its leverage target.
Tristar Purchase, HPC Spin Further Shape Portfolio: In February
2022, Spectrum announced the proposed (and since completed)
acquisition of the appliance and cookware business of Tristar
Products, Inc. for $450 million in cash (inclusive of $125 million
in potential earnouts) or approximately 7x calendar 2021 adjusted
EBITDA of $63 million. Given company-calculated pro forma calendar
year 2021 EBITDA (including the Tristar acquisition) and
management's guidance of 2.5x gross leverage following the
transaction, Fitch expects around $2.1 billion to $2.2 billion of
debt paydown from April 2022 debt levels with sale proceeds
yielding pro forma debt in the $1.0 billion to $1.1 billion area.
In conjunction with the announcement of the Tristar acquisition,
Spectrum also disclosed its intention of exploring strategic
alternatives for the proforma HPC business (including Tristar)
including a potential sale, IPO or spinoff to its shareholders.
Should the company complete the sale of the HHI business and HPC be
separated from Spectrum such that its financials are no longer
consolidated, Fitch estimates company-calculated proforma fiscal
2021 EBITDA of around $335 million. This would require total debt
paydown of around $2.4 billion, bringing debt down to around $800
million from $3.2 billion currently in order to maintain leverage
of 2.5x.
Reasonably Diverse Portfolio: Spectrum's current portfolio is
highly diverse given four distinct verticals and significant
breadth within each. In the case that both the HHI sale and HPC
splits are consummated, Spectrum's business profile would still be
reasonably diverse with a portfolio similar to that of Central
Garden and Pet Company (BB/Stable) with adequate diversification
across both the Pet Care (67% of pro forma 2021 revenue, excluding
HHI and HPC) and H&G verticals (33%). Within pet care, the
portfolio consists of products for dogs, cats, birds, fish and
small animals, including food, treats, habitats, health products
and grooming supplies. Within H&G, the portfolio includes cleaning
supplies, pest and weed control solutions, and insect repellents.
While the potential divestitures reduce the company's business
scope, the portfolio provides reasonable operating diversity if any
given product category or brand sustains some weakness. The
diversification is supported by lack of significant cyclical
volatility.
Topline Tailwinds Slowing, Headwinds Increasing: Spectrum's recent
topline results have been positive given consumer spending trends,
which have benefitted most of its business lines. Revenue,
excluding HHI, was up over 14% in fiscal 2021 (ended September
2021) though growth has slowed to the low-single-digits in fiscal
1H22 driven by price increases to offset cost inflation.
Supply chain issues and inflationary pressures have increased in
recent quarters, pushing Fitch-calculated EBITDA margins down to
the 7.5% area in 1H22 from the low-to-mid teens in 1H21. Fitch
expects price increases to start catching up to cost pressures in
fiscal 2H22 resulting in Fitch-calculated fiscal 2022 EBITDA around
flat yoy (excluding HHI) at around $365 million despite over seven
months' contribution from the Tristar acquisition. Though organic
revenue could decline in the mid-single-digits in fiscal 2023 on
challenging comps, growth could return to the low-single-digits
beyond fiscal 2023 with margins improving to the low-to-mid teens.
Elevated Uncertainty: Spectrum's portfolio shaping has created
elevated uncertainty regarding the company's capital structure and
portfolio composition during a period of challenging operating
conditions. The company's capital structure and portfolio
composition remain unsettled as the company works to close the sale
of HHI and considers various options for HPC. Meanwhile, the
company's operating trajectory has come under meaningful pressure
given the supply chain and inflation impacts described above. Fitch
has removed the Positive Watch as Fitch awaits clarity on these
issues.
DERIVATION SUMMARY
Spectrum's 'BB' rating reflects the company's diversified portfolio
and historical track record of maintaining gross leverage around
4.0x. The rating also reflects expectations for modest long-term
organic revenue growth, reasonable profitability and positive FCF.
Spectrum is similarly rated to ACCO Brands Corporation (BB/Stable),
Central Garden & Pet Company (BB/Stable), Mattel, Inc.
(BB+/Positive) and Tempur Sealy International, Inc. (BB+/Stable).
ACCO's ratings reflect the company's historically consistent FCF
and reasonable gross leverage, which trended around 3.0x prior to
operating challenges in 2020 related to the coronavirus pandemic.
The ratings are constrained by secular challenges in the office
products industry and channel shifts within the company's customer
mix, as well as the risk of further debt-financed acquisitions into
faster-growing geographies and product categories.
Central's 'BB' rating reflects the company's strong market
positions within the pet and lawn and garden segments, ample
liquidity including robust FCF and moderate leverage offset by
limited scale with EBITDA in the low $300 million range. While
Central could give back some of the strong revenue gains over the
past two fiscal years as consumer behavior normalizes
post-pandemic, Fitch expects modest organic revenue growth over the
long term supplemented by acquisitions, with EBITDA margins in the
10% area and annual FCF of $100 million to $200 million. Over time,
Fitch expects the company to manage leverage within its targeted
range of 3.0x to 3.5x.
Mattel's 'BB+' rating reflects the company's meaningfully improved
credit metrics achieved through better than expected execution on
both the top and bottom line as well as discretionary debt paydown.
While Fitch expects the company to surrender some of the revenue
and margin gains achieved in 2021 as the tailwinds from the
pandemic dissipate, the Positive Outlook reflects Fitch's view that
improved competitive positioning, cost cuts and debt reduction
could result in post-pandemic credit metrics and an operational
profile supportive of an investment grade rating over time.
Tempur Sealy International, Inc.'s (TPX) Long-Term IDR of 'BB+'
reflects its continued strong operating momentum that began
pre-pandemic that has exceeded Fitch's expectations for 2021. TPX's
improved operating performance has been driven by expanded
distribution and market share gains supported by operating
initiatives that expanded TPX's omni-channel presence, enhanced the
brand/product portfolio and improved manufacturing capabilities.
TPX has also benefitted from share losses by a large distressed
peer. Fitch believes this has led to a sustainable competitive
advantage with increased confidence in TPX's ability to sustain
EBITDA of over $1 billion. Fitch expects gross leverage will be
1.6x to 1.7x in 2021. Barring any large debt financed acquisition,
Fitch projects TPX will maintain long-term gross leverage in the
low 2x range.
KEY ASSUMPTIONS
-- Fitch's base case is proforma for the sale of HHI and assumes
the HPC business, including Tristar, remains with Spectrum.
-- Revenue is forecast to grow around 14% in fiscal 2022 to $3.4
billion, largely due to the acquisition of the Tristar
business as price increases to offset inflation are largely
offset by volume declines as the company laps heightened
demand in fiscal 2021. Revenue in fiscal 2023 could be around
flat as the contribution from the Tristar acquisition is
largely offset by organic sales declines in mid-single-digit
area as pricing retreats from inflation-driven highs. Organic
growth could return to the 1% to 2% range beginning fiscal
2024.
-- Fitch-calculated EBITDA in fiscal 2022 could be flat around
$365 million as the addition of the Tristar business is offset
by margin pressure due to supply chain challenges, inflation
and fixed cost deleverage as organic volumes decline. Margins
could return to the 12% to 13% range beginning in fiscal 2023
as inflationary pressures subside resulting in EBITDA trending
in the low-to-mid $400 million range.
-- FCF in fiscal 2022 could be in the negative $100 million range
given Fitch's EBITDA projections due to restructuring and
transaction related spending and heavier than normal capex due
to IT investments. FCF could return to the positive $100
million to $200 million range beginning fiscal 2023 assuming
around $240 million of lost EBITDA from the HHI sale (net of
around $60 million contribution from Tristar) is somewhat
mitigated by reductions to interest expense, capex, and total
dividends (given a lower share count following share
buybacks). Fitch expects Spectrum to use around $2.1 billion
to $2.2 billion of the expected $3.5 billion in net sale
proceeds for debt reduction, with a meaningful portion of the
remainder used for share repurchase.
-- Gross leverage is expected to be around 3.1x in fiscal 2022
and decline to the mid-2x range in fiscal 2023 given Fitch's
EBITDA and debt repayment projections. Over time, Fitch would
expect Spectrum to operate with gross leverage around 2.5x,
given its recently updated financial policy targeted net
leverage in the 2.0x to 2.5x range and assuming limited cash
on hand. The company could use cash on hand, including asset
sale proceeds, and FCF to fund acquisitions; debt issuance is
a potential financing source but Fitch would expect the
company to manage gross leverage around 2.5x over time.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch would not consider a positive rating action until the
HHI sale and the HPC separation processes are complete;
-- Should the HHI sale not close, a positive rating action could
result if Spectrum sustained positive organic growth and gross
debt/EBITDA below 4.0x;
-- Should the HHI sale close, Fitch would consider a positive
rating action after a demonstrated commitment to a consistent
operating and financial strategy with gross debt/EBITDA
expected to sustain below 3.0x. The tighter leverage
sensitivity reflects EBITDA under $500 million.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Should the HHI sale not close, a negative rating action could
result from an extended period of operating weakness yielding
EBITDA trending below $550 million and gross debt/EBITDA
sustaining above 4.5x. A change in financial policy and/or
another debt-financed transaction that reduced Fitch's
confidence in Spectrum's ability and/or willingness to return
gross debt/EBITDA below 4.5x within two years after the
transaction would also be a rating concern;
-- Should the HHI sale close, a negative rating action could
result from lower than expected debt paydown and/or worse than
expected operating trends resulting in gross debt/EBITDA
sustaining 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
Adequate Liquidity Would be Enhanced by Transaction Proceeds:
Liquidity was adequate at $502 million as of April 3, 2022,
consisting of $194 million of cash and equivalents and $308 million
of availability on its $1.1 billion revolving credit facility net
of $775 million in outstanding borrowings and $17 million in LOCs.
Spectrum recently increased its revolver from $600 million to $1.1
billion due June 2025 in February. Should the HHI sale close, Fitch
expects the company to repay the revolver borrowings with the
proceeds of the sale. The company could also consider downsizing
the revolver should the HHI sale close.
As of April 3, 2022, Spectrum's capital structure also included a
$396 million secured term loan due March 2028, approximately $1.55
billion of senior unsecured notes maturing between 2025 and 2031,
and EUR425 million of unsecured euro notes maturing in October
2026. Total debt across these instruments was approximately $3.19
billion.
Spectrum expects to generate approximately $3.5 billion in net sale
proceeds from the HHI business after taxes on a $4.3 billion gross
sale price. Given company-calculated pro forma calendar year 2021
EBITDA (including the Tristar acquisition) and management's
guidance of 2.5x gross leverage following the transaction, Fitch
expects around $2.1 billion to $2.2 billion of debt paydown from
April 2022 debt levels with sale proceeds yielding pro forma debt
in the $1.0 billion to $1.1 billion area. The remaining proceeds
could be used for a combination of share buybacks and strategic
investments, including acquisitions.
Recovery Considerations
Fitch has assigned Recovery Ratings (RRs) to the various debt
tranches in accordance with Fitch criteria, which allows for the
assignment of RRs for issuers with IDRs in the 'BB' category. Given
the distance to default, RRs in the 'BB' category are not computed
by bespoke analysis. Instead, they serve as a label to reflect an
estimate of the risk of these instruments relative to other
instruments in the entity's capital structure. Fitch assigned the
first-lien secured debt a 'BBB-'/'RR1', notched up two from the IDR
and indicating outstanding recovery prospects given default.
Unsecured debt will typically achieve average recovery, and was
thus assigned a 'BB'/'RR4'.
ISSUER PROFILE
Spectrum Brands is a diversified consumer products company which
currently competes in a number of segments, including pet care,
home and garden, personal care, hardware and home improvement.
SUMMARY OF FINANCIAL ADJUSTMENTS
Material financial adjustments include stock-based compensation,
safety recalls, divestitures, legal and environmental remediation
reserves, inventory step-up and other non-operating expenses.
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.
SUSSEX RANDOLPH: June 28 Disclosure Statement Hearing Set
---------------------------------------------------------
Judge Stacey L. Meisel has entered an order within which June 28,
2022 at 11:00 A.M. in Courtroom 3A, United States Bankruptcy Court,
50 Walnut Street, Newark, New Jersey 07102 is the hearing on the
adequacy of the Disclosure Statement of Sussex Randolph Building,
L.P.
In addition, written objections to the adequacy of the Disclosure
Statement shall be filed no later than 14 days prior to the
hearing.
A copy of the order dated May 23, 2022, is available at
https://bit.ly/3z2CKJS from PacerMonitor.com at no charge.
Counsel for the Debtor:
Jay L. Lubetkin, Esq.
RABINOWITZ, LUBETKIN & TULLY, LLC
293 Eisenhower Parkway, Suite 100
Livingston, New Jersey 07039
Tel: (973) 597-9100
About Sussex Randolph Building
Sussex Randolph Building is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)). It owns a commercial
retail building of approximately 8,000 square feet located at 1204
Sussex Turnpike, Randolph, New Jersey.
Sussex Randolph Building previously sought bankruptcy protection
(Bankr. D.N.J. Case No. 14-34505) on Dec. 3, 2014. On Dec. 18,
2015, SRB obtained confirmation of its first modified plan of
reorganization in its prior bankruptcy proceeding, which, inter
alia, resulted in the reinstatement of the mortgage due VNB's
predecessor in interest, Oritani, requiring monthly installments of
$12,578.85. However, BOWM stopped paying rent, due in large part
due to the COVID-19 pandemic that affected all retail business
enterprises from and after March 2020.
In order to delay VNB's eviction action and to restructure the
mortgage indebtedness with VNB, Sussex Randolph Building, L.P.,
again sought Chapter 11 protection (Bankr. D.N.J. Case No.
22-11369) on Feb. 22, 2022. The Debtor is represented by
Rabinowitz, Lubetkin & Tully, LLC.
TECOSTAR HOLDINGS: S&P Downgrades ICR to 'CCC+', Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings lowered all of its ratings on TecoStar Holdings
Inc., including its issuer credit rating, by one notch to 'CCC+'
from 'B-'.
The negative outlook reflects the risk that the current operating
headwinds will extend beyond 2022, which could lead to sustained
cash flow deficits and further difficulty in refinancing its
maturities in May 2024.
S&P said, "The downgrade reflects our view that TecoStar will
continue to face heightened operational challenges in 2022 and
require favorable operating conditions to sustain its capital
structure. Although we forecast an increase in orthopedic
procedures and a recovery in orders from the company's main
customers, we anticipate that higher-than-usual employee turnover
and supply chain challenges will continue to pressure its operating
margins and cash flow generation. TecoStar produces critical inputs
for medical devices and other high-precision products and can
typically pass along input cost increases to its customers, though
the increase in its labor expenses and high turnover are more
difficult to fully offset through price increases. Higher labor
expenses and manufacturing inefficiencies could make it difficult
for the company to return its margins toward its 2019 levels even
as its demand returns. Additionally, TecoStar has a highly fixed
cost structure and its demand remains below 2019 levels, which is
pressuring its margins. Based on our expectation for higher
expenses, we anticipate the company will generate a larger cash
flow deficit in 2022. We are also uncertain whether it will be able
to resolve its staffing and revenue challenges by 2023."
TecoStar's first-quarter results indicate that revenue growth alone
is insufficient to boost its EBITDA and cash flow to meet its fixed
charges. Although its revenue increased by about 18% relative to
the first quarter of 2021, the company's S&P Global
Ratings-adjusted EBITDA margins improved only modestly to 12.8%
(from 12.1%) mainly due to its higher-than-usual employee turnover,
which results in manufacturing inefficiencies. Because of the
increase in its revenue, TecoStar reported high working capital
outflows of about $18 million, which resulted in a $23 million free
cash flow deficit.
S&P said, "We also note that the company recorded a material
goodwill impairment in its 2021 results of $202.2 million. Although
a non-cash charge, it indicates lower business performance
expectations.
"Although we expect procedure volumes will continue to recover from
their trough during the pandemic, our base-case scenario assumes
the company's revenue will still lag its pre-pandemic levels in
2022. We also believe that the recovery could be uneven if, for
example, there is another surge in coronavirus infections or
inflationary pressures reduce the affordability of medical
procedures. We also expect that the ongoing operating headwinds
will persist at least until the end of 2022, which will limit
TecoStar's ability to recover its EBITDA margins. Specifically, we
forecast S&P Global Ratings-adjusted EBITDA margins of about 14% in
2022 (up from 12% in 2021), though these are still materially below
its 2019 levels of about 23%.
"We expect the company's credit metrics to remain weak in 2022 and
2023 and assume its cash flow deficits may continue into 2023.We
expect TecoStar's S&P Global Ratings-adjusted leverage will improve
to 14x in 2022 and above 10x in 2023 after spiking to 19x in 2021.
However, we no longer believe the company will be able to
materially improve its free cash flow in 2022 due to its higher
operating expenses. In 2023, we see substantial risk to our
forecast for break-even cash flow given the uncertain timing for an
improvement in its operating conditions, rising interest rates, and
its need to refinance its debt (likely at a higher spread).
"The negative outlook on TecoStar reflects the risk that its
current operating headwinds will persist beyond 2022 and slow the
improvement in its leverage metrics and liquidity position. The
company's upcoming maturities in May 2024 compound this risk
because of our expectation for higher interest rates.
"We could lower our ratings on TecoStar if its operating
performance does not improve such that we expect more pronounced
cash flow deficits and difficulty in refinancing its debt, which
would increase the near-term likelihood of a default or distressed
exchange.
"We could revise our outlook on TecoStar to stable if its annual
free cash flow increases to near breakeven on improving demand and
labor dynamics. This would likely occur when the company's sales
volumes rise close to 2019 levels and its S&P Global
Ratings-adjusted EBITDA margins recover to about 18%, demonstrating
its success in managing its various operating headwinds. Before we
would consider revising our outlook, the company would have to
successfully refinance its 2024 maturities."
ESG credit indicators: E-2; S-2; G-3
TELINTEL LTD: Wins Final Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, authorized Telintel, Ltd. to use cash
collateral on a final basis, in accordance with the budget, with a
10% variance.
The Debtor is permitted to continue using cash collateral to
operate in the ordinary course of its business as provided in the
Debtor's Revised Operating Budget, with a 10% variance through the
earlier of (i) the Effective Date of the Chapter 11 Plan
Confirmation, or (ii) the occurrence of an Event of Default. The
Operating Budget may be modified at any time during the Cash
Collateral Term without further Court order, upon written agreement
between the Debtor and Decathlon Alpha III, L.P.
As adequate protection for the use of cash collateral, alleged
secured creditors are granted a post-petition security interest and
lien in, to and against any and all assets of the Debtor to the
extent of the diminution resulting from use of cash collateral, to
the same extent and priority the Alleged Secured Creditor held a
properly perfected pre-petition security interest in such assets.
The replacement liens and security interests granted to the Alleged
Secured Creditors will be deemed attached, perfected, and
enforceable against the Debtor and all other persons including
without limitation any subsequent Trustee (if appointed under
Chapter 7 or Chapter 11 of the Bankruptcy Code), without the filing
of any financing statements or other compliance with non-bankruptcy
law.
These events constitute an "Event of Default:"
a. Failure of the Debtor to timely comply with any obligation
contained in the Order; or
b. Entry of an order converting or dismissing the case or
appointing an operating trustee or examiner.
A copy of the Court's order and the Debtor's Revised Operating
Budget dated May 22 is available at https://bit.ly/3wRyCuL from
PacerMonitor.com.
The Debtor projects $179,449 in gross profit and $162,861 in total
expenses.
About Telintel Ltd
Telintel, Ltd., a Weston, Fla.-based provider of telecommunication
services, filed a petition for Chapter 11 protection (Bankr. S.D.
Fla. Case No. 21-22154) on Dec. 30, 2021, listing $751,038 in
assets and $4,996,862 in liabilities. Mario Acosta, chief executive
officer, signed the petition.
Judge Peter D. Russin oversees the case.
The Debtor tapped Thomas L. Abrams, Esq., at Gamberg & Abrams as
legal counsel and Kaufman Rossin & Co., PA as accountants.
TEXOMA AUTO: June 30 Plan Confirmation Hearing Set
--------------------------------------------------
On May 20, 2022, debtor Texoma Auto Remarketing, LLC filed with
the U.S. Bankruptcy Court for the Eastern District of Texas a Plan
of Reorganization under Subchapter V.
On May 23, 2022, Judge Brenda T. Rhoades ordered that:
* June 28, 2022 is fixed as the last day for submitting
written acceptances or rejections of the Debtor's proposed Chapter
11 plan.
* June 26, 2022 is fixed as the last day for filing and
serving written objections to confirmation of the Debtor's proposed
Chapter 11 plan.
* June 16, 2022 is fixed as the last day for a creditor to
make an election under 11 U.S.C Sec. 1111(b).
* June 30, 2022 at 10:00am., Bankruptcy Courtroom, 660 North
Central Expwy, Third Floor, Plano Texas 75074 is the hearing to
consider the confirmation of the Debtor's proposed Chapter 11
Plan.
A copy of the order dated May 23, 2022, is available at
https://bit.ly/3z4W9tJ from PacerMonitor.com at no charge.
About Texoma Auto Remarketing
Texoma Auto Remarketing, LLC, a company in Bonham, Texas, filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Tex. Case No. 22-40323) on March 15, 2022,
listing up to $50,000 in assets and up to $10 million in
liabilities. Dustin Ford, managing member, signed the petition.
Judge Brenda T Rhoades presides over the case.
Eric A. Liepins, PC, is the Debtor's legal counsel.
TUMBLEWEED TINY: Says Plan Deal With FreedomRoads Reached
---------------------------------------------------------
Judge Kimberly H. Tyson has entered an order that the deadline for
FreedomRoads to object to the Disclosure Statement of Tumbleweed
Tiny House Company, Inc., is extended until a new deadline is reset
by the Debtor or the Court.
FreedomRoads and the Debtor have been engaged in settlement
discussions and on May 23, 2022 reached agreement on a framework on
matters which would result in a consensual plan, which framework
contemplates further modifications to the Debtor's plan of
reorganization and filing a revised disclosure statement.
Because the Debtor contemplates filing and noticing an amended
disclosure statement, FreedomRoads requested and Debtors agreed to
generally extend the deadline for FreedomRoads to object to the
Disclosure Statement.
About Tumbleweed Tiny House Company
Tumbleweed Tiny House Company, Inc., a manufacturer of tiny house
RVs, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Colo. Case No. 20-11564) on March 4, 2020. At the time
of filing, the Debtor estimated between $500,000 and $1 million in
assets and between $1 million and $10 million in liabilities.
Judge Kimberley H. Tyson oversees the case.
Wadsworth Garber Warner Conrardy, P.C., and Gerard Fox Law, P.C.,
serve as the Debtor's bankruptcy counsel and special counsel,
respectively. Stockman Kast Ryan + Company is the Debtor's
accountant.
VCH RANCH: Amends Farm Credit Secured Claim Pay Details
-------------------------------------------------------
VCH Ranch - Florida, LLC, submitted an Amended Subchapter V Plan of
Reorganization dated May 23, 2022.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of approximately $65,000 to
$134,000 on average per month in order to fund its Chapter 11 Plan.
The final Plan payment is expected to be paid within 5 years of
the Effective Date of the Plan.
This Plan of Reorganization proposes to pay creditors of VCH Ranch
from the sale proceeds relating to the sale of cattle.
This Plan provides for 5 classes of secured, priority, non priority
unsecured claims, and equity interest holders. 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 claims.
Class 3 consists of the secured claim of Farm Credit who filed
Claim No. 3 in the amount of $83,134, which is secured by Debtor's
cash relating to the sale of cattle.
Based upon an agreement with Farm Credit, the Debtor shall pay Farm
Credit $5,000 per quarter beginning on June 1, 2022 and continuing
thereafter on September 1, 2022; December 1, 2022, and March 1,
2023 and each year thereafter through June 1, 2027 pursuant to the
budget until paid in full. Otherwise, the loan documents between
Farm Credit and the Debtor (and TOT Cattle, LLC) remain unaffected
and in full force and effect. Farm Credit shall have the right to
inspect its collateral, wherever located, and its lien shall be
superior in right and dignity to any and all other liens, including
any applicable landlord.
Like in the prior iteration of the Plan, the Debtor shall pay the
claims of the general unsecured creditors of Class 4 in the
approximate amount of $230,194 in full by making 60 equal monthly
payments of $3,837 each beginning on the Effective Date of the Plan
and continuing each month thereafter for 60 months.
All equity interests will be retained by the Debtor's equity
security holder upon confirmation.
This Plan of Reorganization proposes to pay creditors of VCH Ranch
– Florida, LLC from the sales proceeds of cattle calf sales.
A full-text copy of the Amended Subchapter V Plan dated May 23,
2022, is available at https://bit.ly/3wWEfrM from PacerMonitor.com
at no charge.
Debtor's Counsel:
Alberto "Al" F. Gomez, Jr., Esq.
Johnson Pope Bokor Ruppel & Burns, LLP
401 East Jackson Street #3100
Tampa, FL 33602
Tel: 813-225-2500
Fax: 813-223-7118
Email: al@jpfirm.com
About VCH Ranch - Florida
VCH Ranch - Florida, LLC, filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 22-00129) on Feb. 1, 2022, listing up to $1 million in
assets and up to $500,000 in liabilities. Alberto F. Gomez, Jr.,
Esq., at Johnson Pope Bokor Ruppel & Burns, LLP, serves as the
Debtor's legal counsel.
VETCOR PROFESSIONAL: Moody's Affirms 'B3' CFR, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service affirmed the ratings of VetCor
Professional Practices LLC, including the B3 Corporate Family
Rating, B3-PD Probability of Default Rating, the B2 ratings on the
company's senior secured first lien credit facilities, and the Caa2
rating on the senior secured second lien term loan. The outlook
remains stable.
The affirmation of the B3 Corporate Family Rating reflects VetCor's
very high financial leverage and aggressive financial policies,
reflecting a debt financed roll-up acquisition strategy and private
equity ownership. These risk considerations are partially offset by
the company's diversified geographic footprint and favorable
long-term trends in the pet services industry. VetCor's solid
liquidity profile, and proven track record of successfully
consolidating independent veterinary practices also supports the
ratings.
Following is a summary of Moody's rating actions for VetCor
Professional Practices LLC:
Affirmations:
Issuer: VetCor Professional Practices LLC
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD3)
Senior Secured 2nd lien Bank Credit Facility, Affirmed Caa2
(LGD5)
Outlook Actions:
Issuer: VetCor Professional Practices LLC
Outlook, Remains Stable
RATINGS RATIONALE
VetCor Professional Practices LLC's ("VetCor") B3 Corporate Family
Rating reflects its very high financial leverage with
Moody's-adjusted debt-to-EBITDA of 7.4x for the LTM period ended
March 31, 2022. Moody's anticipates that VetCor's aggressive
financial policies will persist, reflecting the company's debt
financed roll-up acquisition strategy and private equity ownership.
Moody's expects increased competition for acquisitions from other
veterinary hospital aggregators to keep acquisition multiples
elevated, which may increase the risk of the company's acquisitive
strategy over time.
VetCor benefits from the company's broad geographic footprint with
over 520 locally branded animal hospitals across 38 states. The
ratings are also supported by favorable long-term trends in the pet
services industry that underpin healthy same-store sales growth
prospects in the low-to-mid-single digit percent range. VetCor's
ratings also benefit from strong recurring revenue supporting
consistent positive free cash flow generation, and a proven track
record of successfully consolidating independent veterinary
practices.
Social and governance considerations are material to VetCor's
credit profile. Growth in the number of US households that own pets
provides for a favorable long term trend in the pet care sector
that underpins healthy same-store sales growth. Among governance
considerations, VetCor's financial policies under private equity
ownership are aggressive, reflected in its ongoing strategy to
supplement organic growth with primarily debt-funded acquisitions.
VetCor's very good liquidity profile is supported by a track record
of consistent free cash flow generation. Moody's expects the
company to produce free cash flow in the range of $80 to $90
million over the next 12 months, providing sufficient coverage for
the required 1% mandatory amortization of its first lien term loan
of approximately $12 million, annually. VetCor's liquidity is
further supported by $14 million in cash, and an undrawn $75
million revolving credit facility expiring in 2024.
The stable outlook reflects Moody's expectation that financial
leverage will remain very high as VetCor will continue to use debt
to fund acquisitions of private veterinary practices, but that the
company's relatively stable business profile along with sustained
positive free cash flow will support the company's very good
liquidity profile.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company delivers sustained
revenue and earnings growth and continues to be successful in
integrating acquisitions. A moderation of aggressive financial
policies, including debt/EBITDA sustained below 6.5 times, as well
as sustained very good liquidity, could also support an upgrade.
The ratings could be downgraded if operational performance
deteriorates or liquidity weakens. Inability to manage its rapid
growth, or if EBITA-to-interest falls below one times, could also
put downgrade pressure on the company's ratings.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Based in Norwell, Massachusetts, VetCor Professional Practices LLC
("VetCor") is a national veterinary hospital operator offering a
range of medical products and services, with over 520
locally-branded animal hospitals in 38 states. The company also
offers ancillary services including boarding and grooming, and the
sale of pet food and other retail pet care products. VetCor
generated revenues of approximately $957 million for the twelve
months ended March 31, 2022. The company is private, and is
majority-owned by Harvest Partners.
VOYAGEUR IMAGING: Clinic in Chapter 11 Due to Issues With 7 Medical
-------------------------------------------------------------------
Health Care Business Voyageur Imaging LLC filed for chapter 11
protection in the District of Minnesota.
Dr. Steven Johnson is a nationally renowned radiologist and is the
100 % owner and managing member of two related LLCs. The Debtor,
Voyageur Imaging, LLC, was founded in 2011 and operates an MRI
clinic at its office in St. Paul, Minnesota. It typically has
$1,500,000 to $2,000,000 in income yearly. Voyageur Radiology, LLC
was founded in 2008 and is located in Stillwater Minnesota.
Voyageur Radiology provides the reading of radiological scans,
X-Rays, MRIs and CT Scans which are taken remotely throughout
various clinics in the other states, transmitted to Voyageur
Radiology through the use of specialty hardware and encrypted
software, and then read and reported on by Voyageur Radiology.
Starting in the mid 2010s, Voyageur Radiology began using the
services of a third party, 7 Medical Systems, LLC, and its two
principals, Jason Studsrud and Hunt Russell, to assist Voyageur
Radiology in its practice. 7 Medical and its two principals
performed various services for the Voyageur Radiology at various
times including the billing of patients, marketing, including the
finding of new clinics to use Voyageur Radiology's services, and
assistance with financing of the specialty equipment and
proprietary software the remote clinics needed to be able to use
Voyageur Radiology's services. Beginning in 2017, 7 Medical began
purchasing hardware and software for the benefit of Voyageur
Radiology's business. This equipment would be financed by contracts
with various entities throughout the country on lease-to-own
transactions. 7 Medical insisted, however, that the Debtor, and
not Voyageur Radiology be the principal entity signing on these
financial contracts. In some instances, Voyageur Radiology and Dr.
Johnson personally executed guarantees for the financing.
Eventually, the Debtor
became obligated on financing for 12 contracts with various
financial entities having obligations in excess of $2,000,000 and
payments of more than $40,000 per month.
Dr. Johnson trusted 7 Medical to handle the business affairs of
Voyageur Radiology and, because of his extremely busy schedule,
would trust that the documents he was signing on behalf of the
Debtor were, in fact legitimate, financing deals where equipment
and software was being purchased and sent to remote site radiology
offices to be used in connection with Voyageur Radiology's
business.
However, while 7 Medical did provide hardware and software to
several clinics around the country, eventually Dr. Johnson came to
suspect that 7 Medical Systems was not, in fact, purchasing all of
the medical equipment or software that he agreed to pay for, but
was instead providing phony invoices to financing companies,
pocketing the money and sticking the Debtor with debts for
fictitious equipment.
For example, in February of 2020, 7 Medical arranged for financing
through NewLane Finance Company of Philadelphia, Pennsylvania for
equipment and software for remote imaging to be delivered to the
Debtor. The Debtor, as a walk-in MRI facility, has no need for
such equipment and never received such equipment. The financing
was provided by NewLane Finance Company in the approximate amount
of $100,000 in reliance on invoicing from 7 Medical, the proceeds
of which 7 Medical and its principals converted for their own use.
When 7 Medical was asked to provide a list of all clinics who had
received the equipment and software it allegedly purchased on
behalf of Voyageur Imaging, they obfuscated and delayed their
responses. The Debtor has to this day no idea of what was actually
purchased and delivered by 7 Medical. Once 7 Medical presented
Debtor and Dr. Johnson with paperwork to sign with the financing
companies 7 Medical was invoicing, neither the Debtor nor Dr.
Johnson nor Voyageur Radiology had any further involvement with the
equipment and software allegedly acquired by 7 Medical.
7 Medical was in frequent financial distress. In one instance, the
principals asked Dr. Johnson and the Debtor to obtain $400,000 in
financing from Hewlett Packard Corporation for the purchase of
computer equipment. 7 Medical provided written assurances to Dr.
Johnson that it would reimburse the Debtor for all payments made to
Hewlett Packard. However, 7 Medical failed and later refused to
pay Hewlett Packard, forcing the Debtor to pay back the obligation
to Hewlett Packard.
Although 7 Medical represented to the Debtor that they were the
creators of the proprietary software that allows for encrypted
medical scans to be delivered to Voyageur Radiology, in fact 7
Medical purchased the software from a third-party developer and
failed to pay the developer what they owed for the software. As a
result 7 Medical confessed judgment to the third-party developer
and owed hundreds of thousands of dollars in early 2020, without
telling Dr. Johnson, at the time it asked Dr. Johnson and the
Debtor to obtain millions of dollars of equipment lease financing.
Eventually, because of continuing financial pressures, upon
information and belief, 7 Medical sold its assets in an Article 9
sale to a related third party and ceased doing business, leaving
the Debtor to pay on 12 financial contracts, some of which were
complete frauds.
The Debtor has spent the past two years paying on the 12 contracts,
paying over $800,000 in total during that time. The Debtor
believes that if they had not had to pay the debts of 7 Medical and
had actually had the additional revenue from all of the contracts
that 7 Medical said were being sold to new clinics, that they would
not be in financial distress. The Debtor has sought to satisfy its
contractual obligations to the finance companies by entering into
various forbearance and restructuring deals, but the weight of the
financing has made satisfaction of all of the financing companies
impossible. Litigation was recently begun by NewLane Financing and
based on that suit and the threats of additional suits by some of
the other finance companies, the Debtor made the decision to file
for Chapter 11 reorganization.
Other than the crushing payments to the finance companies, the
Debtor operates a profitable MRI clinic with few other debts and
believes that it will be able to file a plan in 90 days that will
result in paying off the debts to the financing companies and other
creditors in full
* * *
According to court filing, Voyageur Imaging estimates between 1 and
49 unsecured creditors. The petition states that funds will be
available to unsecured creditors.
A video/teleconference meeting of creditors under 11 U.S.C. Section
341(a) is slated for June 9, 2022 at 2:00 P.M.
About Voyageur Imaging
Voyageur Imaging LLC is a medical diagnostic imaging center in
Saint Paul, Minnesota
Voyageur Imaging LLC sought Chapter 11 bankruptcy protection
(Bankr. D. Minn. Case No. 22-30753) on May 16, 2022. In the
petition filed by Steven Johnson, MD, as CEO, Voyageur Imaging LLC
estimated assets between $1 million and $10 million and estimated
liabilities between $1 million and $10 million.
Th case is assigned to Honorable Bankruptcy Judge William J
Fisher.
Kenneth C. Edstrom, of Sapientia Law Group, is the Debtor's
counsel.
WALKER HOSPITALITY: Starts Chapter 11 Subchapter V Case
-------------------------------------------------------
Walker Hospitality LLC filed for chapter 11 protection in the
Southern District of Texas.
The Debtor disclosed $153,600 in assets against $153,399 in
liabilities in its schedules.
Walker Hospitality estimates between 1 and 49 unsecured creditors.
The petition states that funds will not be available to unsecured
creditors.
About Walker Hospitality
Walker Hospitality LLC, doing business as Prohibition 52, filed a
petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-80095) on May 13,
2022. In the petition filed by M.P. Walker, as owner, Walker
Hospitality estimated assets between $100,000 and $500,000 and
estimated liabilities between $100,000 and $500,000.
The case is overseen by Honorable Bankruptcy Judge Jeffrey P
Norman.
Erica Robin Aisner, of Kirby Aisner & Curley LLP, is the Debtor's
counsel.
WALKER SERVICE: Unsecureds Will Get 100% in Trustee's Plan
----------------------------------------------------------
The Chapter 11 Trustee for Walker Service Corp., et al., submitted
a Disclosure Statement for the Joint Chapter 11 Plan of
Reorganization for The Walker Service Corp., et al., the Betty
Transit, LLC, et al., and Trot Service Corp. (collectively, the
"Corporate Debtors"), and Sophie Pross ("S. Pross") and Joe Pross
(the "Individual Debtors") dated May 24, 2022.
The Corporate Debtors are each owned in whole or in part by Joe
Pross and Sophie Pross, who have been in the taxi medallion
business for over 40 years. Each of the Corporate Debtors own and
operate 2 New York City taxi medallions out of their main location
on Utica Avenue in Brooklyn, New York. On March 27, 2020 (the
"Corporate Debtors' Petition Date"), the Corporate Debtors filed
their Chapter 11 bankruptcy cases (the "Corporate Cases").
The bankruptcy of the Corporate Debtors was precipitated by,
amongother things, the advent of competing ride services such as
Uber and Lyft, which led to a steep loss of value of the taxi
medallions that secured the Loans, along with the complete shut
down of services because of the COVID pandemic. On October 13, 2021
(the "Individual Debtors' Petition Date"), the Individual Debtors
filed a voluntary Individual Chapter 11 petition, titled In re
Sophie Pross and Joe Pross, Ch. 11 Case No. 21-42600 (ESS) (the
"Individual Debtors' Case") to, among other things, facilitate a
global settlement among the Individual Debtors, PenFed and the
Corporate Debtors.
After the filing of the Corporate Debtor cases and the Individual
Case, PenFed and the Debtors engaged in extensive, arm's-length,
good faith negotiations and have reached a settlement (the "PenFed
dated March 30, 2022. Under the PenFed Settlement Agreement, PenFed
will accept $8.82 Million in full and final settlement of the
claims included therein against the Debtors.
The PenFed Settlement Agreement amicably resolves approximately $20
Million of asserted claims by PenFed and paves the path for the
successful reorganization of the 21 pending bankruptcy cases of the
Corporate Debtors, as well as the Individual Debtors' Chapter 11
Case. The Chapter 11 Trustee is currently holding the $8.557
million, with the remainder held in the TD Ameritrade account, that
is due to be paid to PenFed on the Effective Date, subject to and
in accordance with the terms of the Plan and the PenFed Settlement
Agreement.
Pursuant to the PenFed Settlement Agreement, the Debtors (and
Chapter 11 Trustee, as successor) were required to expeditiously
file and confirm a plan that incorporates the terms of the PenFed
Settlement Agreement for it to be effective among the Parties. The
Plan filed by the Chapter 11 Trustee incorporates the terms of the
Parties' agreement. Significantly, the Chapter 11 Trustee and the
Subchapter V Trustee seek to meet the timeline for confirming the
Plan(s) within the timeframe prescribed in the heavily negotiated
PenFed Settlement Agreement.
Cash reserves have been set aside to fund the Plan and, in
particular, the PenFed Settlement and shall be used to make the
initial distributions required under the Plan by the Chapter 11
Trustee as disbursing agent (the "Disbursing Agent"). The Chapter
11 Trustee is presently holding in an estate account the
approximate sum of $8.557 million, and the remaining funds to be
paid on the Effective Date are held in a TD Ameritrade account,
from which the Chapter 11 Trustee (as Disbursing Agent) shall make
the initial payment(s) to PenFed and the post-Effective Date to the
Professionals.
Subsequent to the Chapter 11 Trustee making the initial
distributions required under the Plan, Sophie Pross will then serve
as Disbursing Agent for post-Effective Date payments pursuant to
and in connection with the PenFed Settlement Agreement. In
addition, ongoing payments to Quorum and other creditors under the
Plan are already being made in the ordinary course of business and
will be paid by the Individual Debtors. The current income of the
Individual Debtors supports these ongoing obligations to creditors
under the Plan.
Class 2 consists of the PenFed Claim against each applicable
Debtor. PenFed filed a claim in each of the Debtors' cases and its
aggregate claim totals approximately $19,453,584,51, plus accruing
interest, fees, expenses and attorneys' fees and costs, consisting
of (a) the PenFed Indebtedness (i.e., $18,934,939.11, plus other
amounts), and (b) the PenFed Austin Indebtedness (i.e.,
$518,645.40, plus other amounts). By Order dated March 30, 2022,
the Bankruptcy Court approved the PenFed Settlement Agreement,
whereby, in exchange for full and final satisfaction, settlement,
release and compromise of the PenFed Claim as against the Debtors,
any and all guarantor(s) and obligor(s), the Holder of the Allowed
PenFed Claim shall be paid the PenFed Settlement Amount (i.e.,
$8,820,000) payable in accordance with, and subject to the terms
of, the PenFed Settlement Agreement.
Class 3 under the Plan consists of the Quorum Claim against the
Individual Debtors. The Quorum Claim was filed in the amount of
approximately $2,964.000.09 as of the Individual Debtors' Petition
Date and is secured by the property described in the Quorum Loan
Documents. The Holder of the Allowed Quorum Claim shall be paid in
accordance with, and subject to the terms of, the Quorum Loan
Documents, which are fully assumed in the Plan. Quorum shall retain
any lien(s) it has on assets of the Individual Debtors and any
third parties.
Class 4 under the Plan consists of the Allowed TD Ameritrade Claim
against the Individual Debtors. The Individual Debtors were
indebted to TD Ameritrade in the amount of approximately
$5,311,726.00 as of the Individual Debtors' Petition Date and the
debtor is fully secured by the property described in the TD
Ameritrade Loan Documents. TD Ameritrade shall be paid in
accordance with the terms and provisions of the TD Ameritrade Loan
Documents, which are hereby fully assumed. TD Ameritrade shall
retain any lien(s) it may have on assets of the Individual Debtors
and any third parties.
Class 5 consists of all Vehicle Accident Claims against a Corporate
Debtor. The Holders of Allowed Vehicle Accident Claims, if Allowed
whether by settlement or judgment, in exchange for full and final
satisfaction, settlement, release and compromise of such Allowed
Claims, shall receive payment thereon up to and including the
available insurance coverage available under the applicable
Corporate Debtor's liability insurance in effect and providing
coverage at the time of the accident, in full satisfaction of their
claims.
Class 6 consists of all General Unsecured Claims against each
applicable Debtor. Each Holder of an Allowed General Unsecured
Claims shall receive, in exchange for full and final satisfaction,
settlement, release and compromise of such Allowed Claim, payment
of 100% of their Allowed Claims, together with interest thereon at
the rate of 3% from the Corporate Debtor's Petition Date or the
Individual Debtors' Petition Date, as the case may be, on the later
of the Effective Date and the date on which any such General
Unsecured Claim becomes an Allowed General Unsecured Claim, or as
soon as reasonably practical thereafter. Class 6 is Unimpaired.
Class 7 consists of all Interests against each applicable Debtor.
The Holders of Allowed Interests shall retain their equity
interests in each applicable Corporate Debtor but shall receive no
other distribution under the Plan.
Cash reserves have been set aside to fund the Plan and, in
particular, the PenFed Settlement Agreement, and shall be used to
make the initial distributions required under the Plan by the
Disbursing Agent (i.e., the Chapter 11 Trustee). The Chapter 11
Trustee is presently holding in an estate account the sum of
approximately $8,557,000 in the Chapter 11 Trustee's estate account
in the Individual Debtors' Chapter 11 Case, and the Individual
Debtors have approximately $1,000,000 in funds in their TD
Ameritrade account above the amounts owed to TD Ameritrade to make
the payments to the Chapter 11 Trustee, the Subchapter V Trustee,
duly retained Professionals and for other amounts due on the
Effective Date, including the initial payment to PenFed.
In addition, ongoing payments to Quorum and other creditors under
the Plan are already being made in the ordinary course of business
and will continue to be paid by the Individual Debtors. In
addition, ongoing payments to Quorum and other creditors under the
Plan are already being made in the ordinary course of business and
will continue to be paid by the Individual Debtors. The current
income of the Individual Debtors supports these ongoing obligations
to creditors under the Plan.
A full-text copy of the Trustee's Disclosure Statement dated May
24, 2022, is available at https://bit.ly/38U0pBC from
PacerMonitor.com at no charge.
Counsel for the Chapter 11 Trustee:
LaMonica Herbst & Maniscalco, LLP
Adam P. Wofse, Esq.
Jacqulyn S. Loftin, Esq
3305 Jerusalem Avenue
Wantagh, New York 11793
Tel: (516) 826-6500
Fax: (516) 826-0222
Email: awofse@lhmlawfirm.com
jsl@lhmlawfirm.com
Counsel for Corporate Debtors:
Robert J. Spence, Esq.
Spence Law Office, P.C.
55 Lumber Road, Suite 5
Roslyn, NY 11576
Telephone: (516) 336-2060
Facsimile: (516) 605-2084
Email: rspence@spencelawpc.com
Counsel for the Individual Debtors:
WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP
Thomas A. Draghi, Esq
1201 RXR Plaza
Uniondale, New York 11556
Tel.: 516 622 9200 Ext.: 403
Fax: 516 622 9212
Email: tdraghi@westermanllp.com
About Walker Service
Walker Service Corp. and its debtor-affiliates are privately held
companies in the taxi and limousine service industry.
On March 27, 2020, Walker Service Corp. and 21 affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Lead Case No. 20-41759).
At the time of the filing, Walker Service disclosed estimated
assets of $100,000 to $500,000 and estimated liabilities of $1
million to $10 million. Judge Elizabeth S. Stong oversees the
cases. Debtors tapped Griffin Hamersky LLP and Spence Law Office,
P.C. as legal counsel.
WELCOME MOTELS II: Ends Up in Chapter 11 Bankruptcy
---------------------------------------------------
Welcome Motels II Inc. filed for chapter 11 protection in the
Northern District of New York.
According to court documents, Welcome Motels II Inc. estimates
between 1 and 49 unsecured creditors. The petition states that
funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for
June 15, 2022 at 2:00 p.m. at the office of the U.S.T.
About Welcome Motels II Inc.
Welcome Motels II Inc. is part of the traveler fee simple owner of
a property located at 2303 Triphammer Road, Ithaca, NY, valued at
$3.35 million.
Welcome Motels II Inc. sought Chapter 11 bankruptcy protection
(Bankr. N.D.N.Y. Case No. 22-30297) on May 13, 2022. In the
petition filed by Jay Bramhandkar, as president, Welcome Motels II
estimated assets between $1 million and $10 million and estimated
liabilities between $1 million and $10 million.
The case is assigned to Honorable Bankruptcy Judge Wendy A.
Kinsella.
Erica Robin Aisner, of Kirby Aisner & Curley LLP, is the Debtor's
counsel.
WEST COAST: Court Confirms Reorganization Plan
----------------------------------------------
Judge David W. Hercher has entered an order confirming the Plan of
West Coast Agricultural, Construction Company with various
amendments.
The interest rate for secured creditor, Columbia State Bank, is
amended from 5% per annum to 6% per annum.
Class 1 – Impaired Secured Claim of Columbia Bank secured by a
Promissory Note and UCC filing against all of Debtor’s assets has
been reduced by $523,000 from a DIP loan to which the loan is
subordinated. The Debtor will pay the balance of the claim in the
amount of $883,282.20 with interest with monthly payments of
interest only for 60 months and then a balloon payment of the
entire principal balance
Class 5 – Impaired Unsecured Claims total $30,893,515. The
unsecured debt will receive nothing under the Plan as the secured
and priority debt leaves no money available to the unsecured debt
based upon cash flow or liquidation value.
Under the Plan, the source of funds to be received by the estate
for distribution to creditors will be from Debtor's income from
sales, design, manufacturing and installation of equipment.
A copy of the Plan filed Jan. 20, 2022, is available at
https://www.pacermonitor.com/view/JUE44II/West_Coast_Agricultural_Construction__orbke-21-61099__0132.0.pdf?mcid=tGE4TAMA
Attorney for the West Coast Agricultural Construction Company:
Ted A. Troutman, Esq.
TROUTMAN LAW FIRM P.C.
5075 SW Griffith Dr., Ste 220
Beaverton, OR 97005
Tel: (503) 292-6788
Fax: (503) 596-2371
E-mail: tedtroutman@sbcglobal.net
About West Coast Agricultural Construction
Salem, Ore.-based West Coast Agricultural Construction Company
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Ore. Case No. 21-61099) on June 24, 2021, listing as much as $10
million in both assets and liabilities. Brandt N. Hayden, president
of West Coast Agricultural Construction Company, signed the
petition.
Judge David W. Hercher oversees the case.
The Debtor tapped Ted A. Troutman, Esq., at Troutman Law Firm, PC
as legal counsel and Downing & Caba, LLC as accountant.
WP CPP: Moody's Lowers CFR to Caa2 & Alters Outlook to Stable
-------------------------------------------------------------
Moody's Investors Service downgraded its ratings for WP CPP
Holdings, LLC ("CPP"), including the corporate family rating to
Caa2 from Caa1 and the probability of default rating to Caa2-PD
from Caa1-PD. Concurrently, Moody's downgraded the senior secured
first lien credit facilities to Caa1 from B3 and the senior secured
second lien term loan to Ca from Caa3. The ratings outlook has been
changed to stable from negative.
The downgrades reflect CPP's high financial leverage, weak credit
metrics and poor track record of cash generation. The downgrades
also incorporate Moody's concerns about CPP's underlying ability to
restore positive free cash flow generation in the face of Moody's
projected negative operating cash flow and elevated capital
expenditures through 2023. The annual interest expense burden is
significant and will run at more than $100 million in upcoming
years.
The following is a summary of the rating actions:
Issuer: WP CPP Holdings, LLC
Corporate Family Rating, Downgraded to Caa2 from Caa1
Probability of Default Rating, Downgraded to Caa2-PD from Caa1-PD
Senior Secured First Lien Credit Facility, Downgraded to Caa1
(LGD3) from B3 (LGD3)
Senior Secured Second Lien Term Loan, Downgraded to Ca (LGD6) from
Caa3 (LGD5)
Outlook, changed to stable from negative
RATINGS RATIONALE
The Caa2 corporate family rating balances CPP's modest scale, mixed
operating history, and highly levered balance sheet against the
company's incumbency position on multiple key aerospace and
military platforms that have significant barriers to entry. CPP's
debt-to-EBITDA of 11x as of December 2021 is very high and Moody's
expects financial leverage to remain elevated (in the high
single-digits) through at least 2023. This high leverage will
accompany Moody's view that liquidity will be weak through 2023
because of ongoing negative free cash flow.
CPP's large exposure to commercial aerospace markets made the
company particularly vulnerable to reductions in commercial
aerospace build rates over the last two years. Moody's expects the
on-going recovery in commercial aerospace markets to support sales
and earnings growth going forward. That said, Moody's expects
improvements in CPP's metrics will be gradual and extend over a
number of years, such that metrics will remain weak well into
2023.
Moody's recognizes CPP's expanding set of capabilities and
technologies that have translated into meaningful content wins on a
number of growth platforms across commercial aerospace, military
and industrial gas turbine markets. These wins coupled with CPP's
recent investments in capacity should support sales and earnings
growth over the intermediate period.
The stable outlook reflects Moody's expectations that operating
cash flow will gradually improve, helping to mitigate further
pressure on liquidity. Modest earnings expansion will lead to
improving financial leverage although it will remain above 8x
through much of 2024. That the debt capital does not begin maturing
until April 2025 further mitigates liquidity risk and also supports
the stable outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade include sustained earnings
growth, improvements in the quality of earnings such that there are
fewer add-backs to EBITDA and improvements in cash generation.
Factors that could lead to a downgrade include an inability to grow
earnings or negative free cash flow is sustained beyond 2023.
Headquartered in Cleveland, Ohio, WP CPP Holdings, LLC - d/b/a
Consolidated Precision Products (CPP) - is a castings manufacturer
of engineered components and subassemblies for the commercial
aerospace, military and defense and energy markets. The company is
majority-owned in equal parts by private equity firm Warburg Pincus
and Berkshire Partners.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
ZEN RESTORATION INC: Seeks to Hire Ronald Weiss as Legal Counsel
----------------------------------------------------------------
Zen Restoration Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to hire the Law Firm of Ronald
D. Weiss, P.C. to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) providing legal advice with respect to the powers and
duties of the Debtor-in-Possession in the continued management of
its property;
(b) representing the Debtor before the Bankruptcy Court and at
all hearings on matters pertaining to its affairs, as
Debtor-in-Possession, including contested matters that may arise
during the Chapter 11 case;
(c) advising and assisting the Debtor in the preparation and
negotiation of a Plan of Reorganization with its creditors;
(d) preparing necessary or desirable applications, motions,
answers, orders, reports, documents, and other legal papers; and
(e) performing other legal services for the Debtor which may
be desirable and necessary.
The firm's hourly rates are as follows:
Attorneys $450.00
Paralegals $250.00
The Debtor has agreed to compensate the firm the amount of
$15,000.00, which includes the $1,738.00 court filing fee.
Ronald Weiss, 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:
Ronald D. Weiss, Esq.
Law Firm of Ronald D. Weiss, P.C.
734 Walt Whitman Rd., Suite 203
Melville, NY 11747
Tel.: 631-203-1730
Email: weiss@ny-bankruptcy.com
About Zen Restoration
Zen Restoration Inc. -- https://www.zengeneral.com/ -- is a full
service construction company that specializes in restoration and
repair of high-rise and residential buildings.
Zen Restoration Inc. sought Chapter 11 bankruptcy protection
(Bankr. E.D.N.Y. Case No. 22-40809) on April 19, 2022. In the
petition filed by Bernard Sobus, as president, Zen Restoration Inc.
listed estimated assets between $1 million and $10 million and
estimated liabilities between $10 million and $50 million.
The case is assigned to Honorable Bankruptcy Judge Nancy Hershey
Lord.
Ronald D Weiss, of Ronald D. Weiss, P.C., is the Debtor's counsel.
[^] BOND PRICING: For the Week from May 23 to 27, 2022
------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
Accelerate Diagnostics AXDX 2.500 58.500 3/15/2023
Accuray Inc ARAY 3.750 85.593 7/15/2022
American International
Group Inc AIG 2.742 95.500 3/15/2037
BPZ Resources Inc BPZR 6.500 3.017 03/01/2049
Basic Energy Services Inc BASX 10.750 3.212 10/15/2023
Basic Energy Services Inc BASX 10.750 3.212 10/15/2023
Buckeye Partners LP BPL 6.375 80.915 1/22/2078
Buffalo Thunder
Development Authority BUFLO 11.000 50.000 12/09/2022
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 32.420 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 6.625 18.486 8/15/2027
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 33.810 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 35.375 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 6.625 19.437 8/15/2027
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 33.810 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 32.132 8/15/2026
Diebold Nixdorf Inc DBD 8.500 49.389 4/15/2024
EnLink Midstream
Partners LP ENLK 6.000 72.023 N/A
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Transfer LP ET 6.250 82.250 N/A
Enterprise Products
Operating LLC EPD 4.875 83.923 8/16/2077
Envision Healthcare Corp EVHC 8.750 31.516 10/15/2026
Envision Healthcare Corp EVHC 8.750 32.337 10/15/2026
Exela Intermediate LLC /
Exela Finance Inc EXLINT 11.500 34.601 7/15/2026
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 66.250 7/15/2023
Exela Intermediate LLC /
Exela Finance Inc EXLINT 11.500 34.778 7/15/2026
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 64.549 7/15/2023
GNC Holdings Inc GNC 1.500 0.834 8/15/2020
GTT Communications Inc GTTN 7.875 7.750 12/31/2024
GTT Communications Inc GTTN 7.875 9.000 12/31/2024
General Electric Co GE 4.200 78.750 N/A
General Electric Co GE 4.000 72.387 N/A
INNOVATE Corp VATE 7.500 99.850 06/01/2022
Invacare Corp IVC 4.500 99.000 06/01/2022
Lannett Co Inc LCI 4.500 26.962 10/01/2026
LendingTree Inc TREE 0.625 99.750 06/01/2022
MAI Holdings Inc MAIHLD 9.500 29.962 06/01/2023
MAI Holdings Inc MAIHLD 9.500 29.962 06/01/2023
MAI Holdings Inc MAIHLD 9.500 29.962 06/01/2023
MBIA Insurance Corp MBI 12.304 11.818 1/15/2033
MBIA Insurance Corp MBI 12.304 11.818 1/15/2033
Macquarie Infrastructure
Holdings LLC MIC 2.000 95.503 10/01/2023
Macy's Retail
Holdings LLC M 6.900 99.984 1/15/2032
Macy's Retail
Holdings LLC M 6.900 99.984 1/15/2032
Macy's Retail
Holdings LLC M 6.900 99.984 1/15/2032
Medtronic Inc MDT 3.500 101.160 3/15/2025
Morgan Stanley MS 1.800 80.650 8/27/2036
Nine Energy Service Inc NINE 8.750 61.873 11/01/2023
Nine Energy Service Inc NINE 8.750 61.846 11/01/2023
Nine Energy Service Inc NINE 8.750 61.928 11/01/2023
OMX Timber Finance
Investments II LLC OMX 5.540 0.783 1/29/2020
Plains All American
Pipeline LP PAA 6.125 77.137 N/A
Renco Metals Inc RENCO 11.500 24.875 07/01/2003
Revlon Consumer
Products Corp REV 6.250 19.041 08/01/2024
RumbleON Inc RMBL 6.750 48.044 01/01/2025
Sears Holdings Corp SHLD 8.000 2.050 12/15/2019
Sears Holdings Corp SHLD 6.625 1.472 10/15/2018
Sears Holdings Corp SHLD 6.625 1.771 10/15/2018
Sears Roebuck
Acceptance Corp SHLD 7.000 1.131 06/01/2032
Sears Roebuck
Acceptance Corp SHLD 7.500 0.922 10/15/2027
Sears Roebuck
Acceptance Corp SHLD 6.750 0.578 1/15/2028
Sears Roebuck
Acceptance Corp SHLD 6.500 1.037 12/01/2028
TPC Group Inc TPCG 10.500 37.037 08/01/2024
TPC Group Inc TPCG 10.500 36.731 08/01/2024
Talen Energy Supply LLC TLN 9.500 47.000 7/15/2022
Talen Energy Supply LLC TLN 9.500 61.000 7/15/2022
Talos Petroleum LLC SGY 7.500 100.000 5/31/2022
TerraVia Holdings Inc TVIA 5.000 4.644 10/01/2019
Trousdale Issuer LLC TRSDLE 6.500 26.500 04/01/2025
Wayfair Inc W 0.375 98.150 09/01/2022
Wesco Aircraft Holdings WAIR 8.500 52.955 11/15/2024
Wesco Aircraft Holdings WAIR 13.125 36.463 11/15/2027
Wesco Aircraft Holdings WAIR 8.500 48.076 11/15/2024
fuboTV Inc FUBO 3.250 30.236 2/15/2026
*********
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
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